Lords Sitting of 21 May 1924

Preamble
The House met at a quarter before four of the clock. The LORD CHANCELLOR on the Woolsack.

GREAT WESTERN RAILWAY (ADDITIONAL POWERS) BILL.
THE CHAIRMAN OF COMMITTEES (THE EARL DONOUGMORE): My Lords, I beg to move that Standing Order No. 93 be considered in order to its being dispensed with with respect to a Petition of Sir Rhys Williams, Baronet.
Moved accordingly, and, on Question, Motion agreed to, and leave given to present the Petition.

LONDONDERRY AND LOUGH SWILLY RAILWAY BILL. [H.L.]
Read 2a.
AIRE AND CALDER NAVIGATION BILL. [H.L.]
Read 3a, and passed, and sent to the Commons.
RAWTENSTALL CORPORATION BILL.
Read 3a, with the Amendments, and passed, and returned to the Commons.

THE HEJAZ RAILWAY.
LORD RAGLAN: My Lords, I wish to ask His Majesty's Government whether they have presented to the King of the Hejaz that part of the Hejaz Railway which lies in Trans-Jordan, and, if so, on what grounds.
THE UNDER-SECRETARY OF STATE FOR THE COLONIES (LORD ARNOLD): My Lords, the answer to the first part of the Question is in the negative. The position is that King Hussein has set up at Medina a Board of Control for that section of the Hejaz Railway which lies within the Hejaz. At a recent interview with the High Commissioner for Palestine, he made various suggestions for the future control

545
of those sections of the Hejaz Railway which lie in Trans-Jordan and the Hejaz. These suggestions are now being considered by His Majesty's Government, but no final arrangement has been made. At the present time the railway as far south as Amman is being administered under the direction of the High Commissioner for Palestine. The remaining portion of the line is being temporarily administered with the Hejaz section.
LORD RAGLAN: Would the noble Lord say whom he regards as the actual owners of this railway? He knows, no doubt, that part of the Hejaz Railway is in Palestine.
LORD ARNOLD: I think the noble Lord has been fully informed on the points he raised.
LORD RAGLAN: The noble Lord said nothing about the ownership of the railway.
LORD ARNOLD: There is nothing in the Question about ownership. If the noble Lord wishes to have a precise statement on that point perhaps he will be good enough to put down a Question.

OTTOMAN PUBLIC DEBT: BONDHOLDERS' RIGHTS.
LORD BANBURY OF SOUTHAM LORD BANBURY OF SOUTHAM had the following Notice on the Paper:—
To ask His Majesty's Government—

1.Whether His Majesty's Government, when they occupied Palestine and Iraq, seized the sums in the hands of the agencies of the Council of Administration of the Ottoman Public Debt; that they subsequently suppressed these agencies, and that between 1918 and 1920 they collected and appropriated the revenues assigned to the bondholders in these territories?

2. Have His Majesty's Government declined to refund to the bondholders the sums so collected or to recognise the bondholders' rights thereto?

3. Have not His Majesty's Government in the past consistently opposed any interference with the revenues assigned as security to the bondholders, for instance, in the case of the occupation of Turkish territory by Balkan States in the war of 1912–13, and of the occupation of Eastern Anatolia by Russia in 1914?

546

4. Have not the French Government respected the rights of the bondholders since their occupation of Syria, and abstained from appropriating the assigned revenues?

5. Whether the action of His Majesty's Government is not directly contrary to Article 46 of the Ruling of the Hague Convention of 1907, and the principles of International Law?

6.Are not the Turkish Government, in spite of the statement made in another place by Mr. Graham on 5th May last, at present violating practically all the conditions of the Decrees of 1881 and 1903 governing the contracts with the bondholders which were officially communicated to the Signatory Powers of the Treaty of Berlin?

The noble Lord said: My Lords, the facts relating to the Question are as follow. Some years ago, the Turkish Government then being in default, the Turkish bondholders accepted in lieu of their just rights a very diminished sum in consideration of the Turkish Government handing over to them the proceeds of certain revenues and on the understanding that a Council of Administration, administered by certain gentlemen appointed by various sections of the bondholders, should have these revenues paid over to them. The revenues were always assigned to the Council of Administration of the Ottoman Debt until the war, and among those revenues in Iraq assigned were certain revenues in Iraq and Palestine. When His Majesty's forces took possession of those countries they collected the revenue which had been assigned to the bondholders and held it in suspense. Finally, instead of handing it over to the bondholders to whom it belonged, they handed it over to the Governments of Palestine and Iraq. In addition to that, the Turkish Government are at the present moment refusing to recognise the Council of Administration of the Ottoman Public Debt and are directing that the revenues in Turkey itself, which should go to the Council of Administration—a right which, as I understand, was preserved by the Treaty of Lausanne—should not be paid in the future to that Council.
The Council of Foreign Bondholders, of which I am a member, are acting on behalf of the English holders of this Debt, and I think I should be able to put the

547
matter before your Lordships in a very short way if I were to read the correspondence which has taken place between the Council of Foreign Bondholders and His Majesty's Government. On December 19 last the Council of Foreign Bondholders wrote to the Government as follows:—
"In virtue of the Decree of the Turkish Government of December 20, 1881, known as the Decree of Muharrem and of the Decree-Annex dated September 14, 1903, both of which were officially communicated to the Signatory Powers of the Treaty of Berlin, the holders of the obligations of the Turkish Unified Debt have been absolutely and irrevocably constituted the owners, up to the extinction of the Debt, of certain Turkish revenues called 'the conceded revenues' and collected in the whole of the territory subject to Ottoman sovereignty at the time of the promulgation of the first of the above-named Decrees.
"By these same Decrees which lay down the terms of the agreements made with the bondholders, the Ottoman Government made over to an International Council composed of representatives of the bondholders, the management, administration and collection of the conceded revenues and also the application of the product of such revenues to the service of the said obligations.
"Into this situation the Treaty of Peace signed at Lausanne on July 24, 1923, has introduced certain modifications necessitated by the partial dismemberment of Turkey and which also apply to the territories detached from her. Article 46 of the Treaty provides that the Ottoman Public Debt shall be partitioned between Turkey and the States which hare acquired Turkish territories since 1912. Article 48 imposes on these last-named States the obligation to give to the Council of the Ottoman Public Debt in replacement of the cessions or assignments of revenues as stipulated in the Decrees or Loan Contracts, guarantees sufficient to secure the payment of the annuities appertaining to them respectively. Article 53 determines the dates from which these annuities shall be reckoned to be due.
"As regards the States newly formed out of the territories of the Ottoman Empire, paragraph 2 of Article 53 specially provides that the annuities payable by them shall be due from March 1, 1920. In these territories therefore it is this last-named date which marks the starting point of the new régime, of the Ottoman Public Debt."
That is elaborated, but I do not think I need read what follows. The rest of the letter points out what I have already told your Lordships—that in Palestine and Iraq the Government, when the English forces entered those countries, took the money belonging to the bondholders, held it in suspense and then handed it over to people to whom it did not belong.
I am leaving out a good deal of this correspondence because it is rather long, but if necessary I could complete the letter. On February 2, 1924, the Foreign Office replied as follows:
"SIR,
"With reference to your letter of December 19 last relative to the revenues assigned by the Decree of Muharrem, etc. to the Council of the Ottoman Debt, which were collected prior to March 1, 1920 in territories detached from Turkey by the Treaty of Lausanne, I am directed by Mr. Secretary Ramsay MacDonald to inform you that the various questions raised therein have been carefully considered in consultation with the other Departments of His Majesty's Government concerned.
"2. I am to point out that, in accordance with Article 46 of the Treaty of Lausanne, Turkey is not to be held responsible, at; from March 1, 1920, for the shares of the Ottoman Public Debt for which Syria, Palestine and Iraq are liable …."
We have never disputed that. All that we have said is that the sums belonging to the bondholders, which were collected in those countries by the English Government, should be handed over to the people to whom they belong, and not to somebody to whom they do not belong.
The letter continues—
"3. If the revenues assigned to the Ottoman Debt Council, which were collected by the authorities administering Iraq and Palestine prior to March 1, 1920, and which have been retained by those administrations, were, as now proposed by your Council, to be paid over to the Council of the Ottoman Debt, the liability of the territories in question would in effect be dated back, not to March 1, 1920, as laid down by the Treaty of Lausanne, but to the dates in 1917 and 1918 when the territories were first occupied, and a heavy additional financial liability will thus be placed upon those territories"—
That financial liability has been always on those territories and it was never in any kind of way removed—
"4. It should perhaps be understood that the Turkish Delegation at Lausanne originally proposed that the date fixed for the assumption of responsibilities for these revenues by the Governments of the detached territories should be, not March 1, 1920, but October 30, 1918. This proposal was resisted by the Allied Delegates, and was eventually abandoned by General Ismet Pasha in his letter of February 4 last.
"5. The settlement finally agreed upon applies to Syria in the same way as to Iraq and Palestine, and the assigned revenues paid over to Syria during the Armistice period prior to March 1, 1920, will be credited to the Syrian Government and will go to reduce future payments. … It would appear therefore that your Council

549
are misinformed, in so far as it is implied in your letter that the French Government (as Mandatory for Syria) propose to deal with the bondholders more favourably than the British Government, as Mandatory for Iraq and Palestine."
I think we have already said that we have recognised our liability to America, and I think we ought to continue that and to give an example. The last paragraph of the letter is as follows:
"6. The Treaty of Lausanne has now been ratified by the Turkish Government, and there can be no question of reopening the settlement on the subject of the distribution of the pre-war Ottoman Debt in the manner proposed by your Council, nor of imposing further liabilities upon the Exchequers of the Governments of Iraq and Palestine over and above their existing liabilities in respect of their share of the pre-war Ottoman debt."
The Council of Foreign Bondholders acknowledged that letter in a long reply, which I do not propose to read unless I am asked to do so. They disagree with the majority of the statements made in the reply of His Majesty's Government. Then there is a letter from the Treasury signed "O. E. Niemeyer," and dated April 26, 1924, which is as follows:—
"SIR,
"I have laid before the Lords Commissioners of His Majesty's Treasury your letter of the 18th ultimo to the Foreign Office on the subject of the assigned revenues collected prior to March 1, 1920, in territories detached from Turkey.
"In reply I am to request you to inform the Council of Foreign Bondholders that, after the most careful consideration, their Lordships do not feel able to modify the decision conveyed to you in the Foreign Office letter of February 2.
"The contentions advanced at (a) and (b) of your letter do not represent the intention of the Treaty nor, as they are advised, its legal effect. My Lords regret that they are equally unable to accept the reasoning of the rest of your letter"—
would your Lordships kindly mark this?—
"and in any case there are no funds at their disposal from which a claim of the kind advanced could be met."
That is to say, if I take money belonging to somebody else and spend it and the owner of that money says to me: "I want my money," I am to be excused by saying that I am very sorry that I have no funds with which to meet his just claim.
That is not all. I have been given by a member of your Lordships' House a
550
further statement as to what has been done in Baghdad, where the same sort of thing seems to have happened. According to the statement which has been given to me, certain people in England advanced to the Municipality of Baghdad a loan of £30,000 which was to be repaid with interest in seven years. Up to the outbreak of war the interest and sinking fund were duly paid. The capital amount now outstanding, including interest and sinking fund, is £35,000 odd, re-payment of which has been unsuccessfully claimed so far.
In March, 1917, Baghdad was occupied by His Majesty's forces and the administration of the finances of the city came under the control of the British authorities. The same thing happened there as happened in the cases I have mentioned—the, money was taken by His Majesty's representatives and handed by them to the Municipality of Baghdad. After offering the owners £23,000 instead of £35,000, His Majesty's Government now say that they cannot pay anything, that it is entirely in the hands of the Municipality of Baghdad, and that as the offer of £23,000 was not accepted the English people who have advanced this money to the Municipality of Baghdad are to go without anything at all.
It seems to me that we are setting an extremely bad example to the various nations of Europe. We are also preventing the lending of money by private individuals to foreign countries or foreign municipalities. I understand from the newspapers this morning that His Majesty's Government are anxious that we should lend money to Russia. It is surely very unlikely that people here who have money, in view of what took place when money belonging to them was actually in the hands of His Majesty's Government, are going to lend money to foreign countries, and certainly I should have thought not to Russia, when apparently His Majesty's Government do not protect the interests of English people who advance money, but seem to prefer to protect the interests of the debtor, even though that debtor is a foreigner and not an Englishman.
LORD ARNOLD: My Lords, I am afraid it will be necessary in replying to the noble Lord for me to speak at some length, but I think your Lordships will recognise that it is impossible within the confines of brevity adequately to deal

551
with all the complicated points which the noble Lord has raised in his Question. In reply to the first part of the Question, the British military authorities, when they occupied Mesopotamia and Palestine, retained so far as possible the machinery and personnel of the Ottoman Debt Administration and kept separate accounts of the proceeds of the assigned revenues. There was, of course, no question of actually paying over these revenues to the Ottoman Debt Council at Constantinople, which then consisted of enemy nationals and which was withholding payment from all Allied bondholders while continuing to pay enemy bondholders. Subsequently it became clear that these territories would not in future form part of the Ottoman Empire, and the continuance of separate agencies for the collection of a part of the revenue of these territories could not have been justified. The receipts in respect of the assigned revenues were treated until 1920 as forming part of the general revenues of the territories in question.
I must next allude to the provisions in regard to the Ottoman Debt contained in the Treaty of Peace with Turkey. It will be remembered that the conditions of peace were first drawn up early in 1920 and the Treaty of Sevres was signed on August 9, 1920, but was never ratified, and after three years of negotiation, during which the political situation in Turkey underwent, not once but several times, the most complete transformation, the Treaty of Lausanne was signed on July 24, 1923, and has been ratified by Turkey and will shortly be ratified by His Majesty's Government and the other Allied Powers. The financial clauses of the Treaty of Lausanne provide for dividing the liability for the pre-war Ottoman Public Debt between Turkey and the territories detached from the Ottoman Empire after the Balkan wars of 1912–13 and after the great war of 1914–1918.
Under these provisions the date from which Palestine and Iraq are to assume responsibility for a portion of the prewar Ottoman Public Debt is fixed, as the noble Lord indicated, at March 1, 1920. In this respect the Treaty of Lausanne does not differ from the Treaty of Sevres. The question of the date from which the liabilities should start under the plan of division of the Ottoman Public Debt was a matter of considerable controversy
552
during the Lausanne Conference. On the one hand, it was argued that Turkey should be responsible for the whole of the Debt until the Treaty, under which. Iraq and Palestine and other territories were formally detached from Turkey, came into force. On the other hand, it was urged that these territories had been actually detached at least as early as the Armistice of October 30, 1918, and that the division should start from this date. Your Lordships will note that in the result the solution agreed to was a compromise between these two views. The question at issue was not whether or no the bondholders should be deprived of part of their rights but whether they should be entitled for the period in question to look to Turkey alone on the one hand or to Turkey and the other States concerned on the other hand.
In reply to the second part of the noble Lord's Question, the Council of Foreign Bondholders, in December last, applied to the Foreign Office for the restitution of the revenues formerly assigned to the Ottoman Public Debt, which were collected in the occupied territories of Turkey up to March 1, 1920. Correspondence on the matter has subsequently passed between the Council of Foreign Bondholders and the Treasury and Foreign Office. The reply returned to the Council of Foreign Bondholders was that there could be no question of re-opening the settlement on the subject of the division of the pre-war Debt in the manner proposed by them nor of imposing further liabilities upon the Exchequers of the Governments of Iraq and Palestine, over and above their existing liabilities, in respect of the share of the pre-war Ottoman Debt assigned to them. From this position the Government are unable to depart; the Treaty of Lausanne was finally drawn up after three years of most difficult negotiations and the Government cannot for a moment contemplate the possibility of re-opening the settlement reached on this particular point.
The liabilities to be undertaken by Iraq and Palestine in respect of their share of the pre-war Ottoman Public Debt will impose a heavy burden on those countries, and I think the noble Lord who asks these Questions scarcely gives sufficient recognition to the fact that these liabilities imposed by the Treaty of Lausanne should be of material benefit to

553
the bondholders. I would observe that the Treaty provisions in regard to the Ottoman Public Debt are in certain respects very favourable to the bondholders. For the first time in the history of Turkey, practical effect is given to the principle that States to which Turkish territory is ceded should assume responsibility for a share of the Ottoman Public Debt. This is a principle that has been constantly advocated by the Ottoman Debt Council and the bondholders for over forty years, but hitherto in vain. The attitude of the present Turkish Government in regard to the Ottoman Debt, to which I shall refer later, reveals clearly how important an advantage it is to the bondholders that Turkey is no longer their only debtor, but that responsibility for the Debt is now shared by other Governments.
LORD BANBURY OF SOUTHAM: Is it not a fact that the Council of Administration of the Ottoman Public Debt has now been dissolved by the Turkish Government?
LORD ARNOLD: I am going to deal with the position with regard to the Turkish Government later. It comes under the sixth part of the noble Lord's Question. But the noble Lord is not content with the Treaty. He wishes us, I presume, to assume a further liability which the Treaty does not place upon us, and to invite the British Parliament to vote money to the bondholders to make good revenues which the Debt Council might have expected to receive if there had been no war. His Majesty's Government certainly do not feel justified in asking the British taxpayers, who have already made such serious sacrifies in connection with the Turkish settlement and the military occupation of Constantinople for a number of years, to provide funds for the satisfaction of the present claim of the Council of Foreign Bondholders. I need scarcely remind your Lordships that all these various promises were given before the present Government came into power. The position of the present Government is that it sees no reason to depart from what was done and arranged by their predecessors in regard to these matters. I may add that the Allied Delegates on the Council of Foreign Bondholders have been fully
554
aware of the provisions of the Treaty in question ever since they were first drafted, and no protest was received from the Council of Foreign Bondholders or from the Ottoman Debt Council on the matter until five months after the end of the Lausanne Conference, or some three and a half years after the proposal to make these provisions was first known.
In reply to the third part of the Question, it is the case that the British Government in the past has consistently upheld the rights of the British holders of Ottoman Public Debt, and in December, 1912, informed the belligerent Balkan States that the revenues assigned to the Ottoman Public Debt were under the protection of the great Powers. It must be observed, however, that the case of the Balkan war of 1912–13 referred to in the Question was in one respect essentially different from the case of the great war. During 1912–13, the bondholders were not of the nationality of any of the belligerent parties and there was no good reason why the assigned revenues should not continue to be paid to the Ottoman Debt Council. During the great war, as I have already explained, it was out of the question to pay over assigned revenues collected by British authorities to the Ottoman Debt Council, as those revenues would have passed at once into the hands of the enemy. It is the case that in 1916—not in 1914 as stated in the Question—the British Government authorised the British Ambassador at Petrograd to associate himself with the French Ambassador in representing to the Government of Russia the desirability of respecting the rights of holders of the pre-War Ottoman Public Debt under the Decree of Muharrem; but, of course, it was not the intention of the French and British Governments that the assigned revenues should be paid over to enemy hands.
In reply to the fourth part of the Question, the Government have received no information from the French Government as to the method in which assigned revenues collected in Syria have been dealt with and it is not therefore possible for me to give the noble Lord any information on this point.
In reply to the sixth part of the Question. I regret to say that according to information recently received from the British representative at Constantinople,

555
it is the case that the action taken by the Turkish Government towards the Ottoman Debt Council violates the conditions laid down by the Decree of Muharrem in spite of the fact that, as stated by the Financial Secretary to the Treasury in another place on May 5, there is nothing in the Treaty of Lausanne which justified such action on the part of the Turkish Government. Under the Decree of Muharrem of 1881 and the Decree-Annex of 1903, certain revenues were assigned to the Ottoman Debt Council. In March, 1920, the Angora Government set up a public Department under which the agencies of the Ottoman Debt Administration in Anatolia and in Thrace (while under Turkish authority) were placed. These agencies ceased to pay any revenues to the Ottoman Debt Council or to receive any instructions from them. Numerous protests were made by the Ottoman Debt Council and certain promises were received from the Turkish Government, but nevertheless a week or two ago the Turkish Government removed from the control of the Debt Council those agencies which were still responsible to the Council (namely, those in Constantinople and its neighbourhood), and accordingly no part of the assigned revenues is now received by the Ottoman Debt Council. I understand that the Ottoman Debt Council have themselves in the first instance taken up the matter with the Turkish Government, and I think it would be premature to make any statement at this moment as to what action His Majesty's Government, in concert with the other Governments concerned, may deem it desirable to take in the matter hereafter should the intervention of those Governments become necessary.
As regards the fifth part of the Question, I may say that having regard to the advice which His Majesty's Government have received on that point the answer is in the negative.
LORD BANBURY OF SOUTHAM: May I ask the noble Lord this question? Am I to understand that in certain events His Majesty's Government will, in conjunction with other Powers, take some steps to protect the rights of the bondholders?
LORD ARNOLD: The noble Lord is now dealing with the sixth part of his
556
Question. I have said that in the first instance I understand that the Ottoman Debt Council have themselves made representations, and I think it would be premature to make any further statement at the moment as to what steps may be considered desirable. The matter is one for consideration.
LORD BANBURY OF SOUTHAM: May I remind the noble Lord that he has not answered my question with regard to Baghdad? Can he give me any information on the matter?
LORD ARNOLD: There is nothing in the Question about Baghdad, and if the noble Lord wants precise information as to what has happened there perhaps he will put down another Question.

EMPIRE WIRELESS FACILITIES.
LORD LAWRENCE: My Lords, I beg to ask His Majesty's Government if they will lay on the Table the correspondence which has passed between them and the Dominions and India in regard to the provision of improved Empire wireless telegraphic facilities?
LORD MUIR MACKENZIE: My Lords, the answer with which I have been furnished from the Post Office is as follows. The Government fully recognise the importance of improving the facilities for wireless telegraphic communication, and since the present Government came into office a Commission has been appointed of an advisory character who have presented a Report. The Report of this Committee has been published, and those of your Lordships who are interested in the subject have probably seen it. The recommendations made in that Report have been communicated to the Dominions and correspondence with them is still proceeding. His Majesty's Government do not think it desirable at the present stage to lay the correspondence on the Table, but a statement upon the subject will presently be made and the question as to whether Papers should be laid can be dealt with at that time. It will be borne in mind that in any event the correspondence with the Dominions can only be published with the assent of the various Governments concerned.

AIRSHIP POLICY.
LORD GORELL LORD GORELL had given Notice to ask His Majesty's Government whether they are in a position to make a statement as to their airship policy; and to move for Papers. The noble Lord said: My Lords, when I first desired to raise this subject I put it down in the form of a Question with no other object than that of eliciting information. I understood that a decision had been reached by His Majesty's Government and it seemed to me desirable that this should be made known to your Lordships. But since then two events have taken place, and I have now put it down in the form of a Motion so that we may see, if your Lordships accept it, what Papers there are on the subject and have our doubts cleared up.
A week ago there appeared in The Times a lengthy statement from their Parliamentary correspondent with the heading "By Airship to Australia," and a secondary heading "The Burney Scheme Amplified." Many details were set out, apparently with knowledge and authority. In the afternoon of May 14 a statement was made in another place by the Prime Minister. He said:
"After careful examination His Majesty's Government have decided to reject the scheme put forward by the Airship Guarantee Company—commonly known as the Burney scheme."
Therefore between the Prime Minister's statement and the statement in the Press there is a definite discrepancy; and it is difficult to understand how anything which deals with only a limited number of airships can possibly be said to be an amplification of a scheme which did deal with a considerable number.
This is a question of Imperial and public policy which has long been debated and discussed. In the spring of 1922, when I was at the Air Ministry, we came to the conclusion that in the then pressure of financial circumstances such money as could be gained for air matters must be devoted to heavier-than-air craft, and from that point of view, and that alone, we decided that it was necessary to close down the airship stations and dismantle the airships. It was said by some of the critics at that time that we were actuated by indifference, if not by hostility, to an airship service. That is certainly not the case. I can personally
558
vouch that our decision was taken solely on the ground of finance. Considerable public interest was aroused in that decision, and in view of that we held over our decision for a good many months in order to see whether it would not be possible for private enterprise, subsidised by the State, to take on these airships. The scheme so put forward, and associated with the name of Commander Burney, was considered in detail by the then Air Council, but we came to the conclusion that the financial conditions were unduly onerous and that an insufficient margin was laid down for unforeseen contingencies. We were still discussing this when the Coalition Government came to an end. There are other noble Lords much better able to speak as to the mind of the late Government, but it was generally understood that a fresh scheme was submitted to them, which they either had accepted or were about to accept.
THE MARQUESS OF SALISBURY: Had accepted.
LORD GORELL: Then we come to the position of the present Government who naturally re-examined the whole question Now, through the lips of the Prime Minister, they have announced what is described in the Press report to which I have referred as a "judicial blending of State and private enterprise." I gather from the statement made by the Prime Minister that decisions have been reached, (1), to recondition one airship for experimental purposes; (2), to build another of 5,000,000 cubic feet capacity, and, (3), to subsidise the Airship Guarantee Company in building another. I notice also that the Prime Minister says that the Air Ministry will undertake the construction of terminal and intermediate bases overseas. It was not explained further in that statement what he meant by those words, and I hope that the noble Lord, the Secretary of State for Air, will be able to give us more full and definite information on that point. We held very strongly that it was impossible to inaugurate an Imperial Airship Service without proper shed facilities in Egypt, that an attempt to establish it merely with a mooring mast in Egypt was bound to meet with failure, and that Egypt must be regarded as the link of the whole scheme, one line going on to Australia,

559
another to India, and a third bending down to South Africa.
We are told, further, that the expenditure which will be involved during the next three years will amount to £1,200,000. I should like to know from the noble Lord, the Secretary of State for Air, what exactly the country is going to get for this expenditure. It is fairly obvious that it is not going to get an Imperial Airship Service. You cannot have an Imperial Airship Service with two airships, and I should like to hear very much more from the noble Lord upon that question. I must confess that, at first sight, so far from being a judicious blending of State and private enterprise, it seems to me that a compromise has been arrived at of a very illogical character. I would suggest that only two courses were possible in dealing with this airship problem. The first was the course that we adopted in saying that, however desirable an Imperial Airship Service might be from an Imperial and commercial point of view, nevertheless the claims of the heavier-than-air craft must come first, and we could not have both. That was the position we took up. It may not have been right, but at any rate it could be quite logically defended. The other course, which I gather from the remark of the noble Marquess was the line that the late Government intended to adopt, was to inaugurate a full airship service.
I think it has been pointed out that a very considerable amount of knowledge exists as to what an airship can do. There is no question that an airship can fly to Egypt under proper conditions. But for the purpose of an Imperial Airship Service it is necessary to inaugurate a full scale trial, which must obviously be a very expensive thing. The present position of the Government appears to me to be quite different. It is merely that there shall be further testing, experimenting and so forth, with airships. Without fuller information, I very much question whether the country is going to get value for the money expended. I understand that it is by way of being only a beginning that these two very large airships are to be built, one under the Ministry, and the other under what I can only describe as a rather hybrid arrangement. If that is to be the programme for three years, when the three years are over those airships will not be new ones.
560
We shall have learnt a considerable amount, but we shall then again be faced with the problem of whether we are really going to inaugurate an Imperial Airship Service. I understand that the noble Lord, the Secretary of State for Air, is now in a position to answer fully upon this important question, and I hope that he may be able to resolve the doubts which I must confess that I feel at present as to the wisdom of the decision arrived at by His Majesty's Government. I beg to move.
THE SECRETARY OF STATE FOR AIR (LORD THOMSON): My Lords, last week, as the noble Lord has stated, the Prime Minister made in another place a general statement in regard to the airship policy of His Majesty's Government. I will to-day endeavour to answer some of the questions which the noble Lord has put, and to bring to the notice of your Lordships some additional details and explanations. In the first place, let mo repeat the assurance given by the Prime Minister last week that His Majesty's Government recognise fully the necessity, on Imperial, commercial, naval and military grounds, of proceeding with the development of lighter-than-air vessels. Our reasons are very simple. As a nation we cannot lag behind either France or the United States in this respect. In fact, our need is greater than that of any other country. An improvement of Imperial communications, which would bring India within five days and Australia within fourteen days of our shores, is obviously a matter of extreme importance, while, if airships can be operated in all climates, and even under adverse weather conditions, not only will there be a great commercial future for them, but by their means it may be possible to effect considerable economies in the Naval and Air Estimates.
I may remind your Lordships that the late Government decided to develop airship construction by private enterprise, and that negotiations with that end in view were carried to an advanced stage with Commander Burney, who had put forward the so-called Burney scheme. One of my first acts on becoming Secretary of State was to investigate the Burney scheme, as a Bill was necessary before it could be put into operation. As a result, a Sub-Committee of the Cabinet was set up, whose conclusions form the basis of

561
the statement which I shall make to your Lordships to-day. I propose to begin by giving your Lordships a brief outline of the Burney scheme.
A guarantee and construction company was to be formed, with an authorised capital of £500,000 (£300,000 in cash) to acquire all the necessary patents and secret processes, and to procure the formation of an operating company with a subscribed capital of £200,000. All existing airships and airship material were to be transferred to the operating company free of cost. The only remaining Government airship stations, Cardington and Pulham, were to be leased to this company at a peppercorn rent, with an option to the company of purchasing for £500,000. Development was to be carried out by the operating company, and divided into three stages.
In the first stage, the operating company was to undertake, through the agency of the guarantee and construction company or otherwise, the construction of one 5,000,000 cubic feet airship, with the necessary mooring masts, etc., and it was to receive a subsidy of £400,000 during the first year, provided that £200,000, representing its share of the capital, had been subscribed. When a flight to India in not more than seven days had been accomplished the second stage was to begin, during which a further sum of £150,000 was to be raised by the operating company, while the Government provided £1,200,000; that is to say, £400,000 per annum over a period of three years. In this period of three years sufficient construction was to have been carried out to establish a weekly service to and from India. When the operating company had maintained this weekly service for three months the third stage was to be entered upon, a further sum of £150,000 being raised by the company and a further subsidy of £1,200,000 being paid by the Government in three yearly instalments, each of £400,000, in return for a bi-weekly service to and from India. On the completion of the third stage, that is to say, about the end of the seventh year, the period of fee payments began, and the Government was to pay for six airships in commission an annual fee payment of £250,000 for a period of eight years. Thus the total sums paid in fee payments would amount to £2,000,000 sterling. That was the Burney scheme.
562
I will now summarise the payments to be made to the company out of public funds. Over a period of at least seven years—that period might have been extended to eight, because I question whether the first airship would have been built within twelve months—£2,800,000 was to be paid in subsidies. For this sum six airships were to be constructed, say, for purposes of calculation, £350,000 a ship, leaving £700,000 for ground facilities, sheds, mooring masts, etc. Now £350,000, according to my advisers, is a fair price for a first airship, but for subsequent airships, which would be made with many of the same materials—the same shed might be used for one or two of them, and the same gas plant used-it seems a rather excessive price. The sum of £350,000 is, in fact, the price which His Majesty's Government at the present moment are offering to pay to buy an airship outright, but I would remind your Lordships that under the original Burney scheme those airships, which cost £350,000 apiece, leaving £700,000 for ground facilities, remain the property of the company which built them. Further than that that company had the free use of the valuable properties of Cardington and Pulham, which are perhaps the finest properties in the whole world, where there are vast quantities of consumable stores, engines seven and, at most, eight years old, and a large amount of material, and sheds, which, although not large enough for building these giant airships, are capable of enlargement for that purpose. The sum of £2,800,000 was to be paid in subsidies, and six ships were to be provided.
Now I come to the fee payments. Over a subsequent period of eight years £2,000,000 was to be paid in fees,' and for this sum six airships would be operated on the Indian route. But these ships would only be available for other purposes in return for special charter rates. The whole currency of the agreement is thus fifteen years, and the total sum payable from public funds £4,800,000. To this sum must be added the value of the properties at Cardington and Pulham, together with the airships, machinery and plant at those stations. A. conservative estimate of their total value is £500,000, this being the sum mentioned in the agreement as the option price. I do not know whether any of your Lordships have visited either of those

563
aerodromes, but I am sure that if you have you will agree with me that they are very valuable properties, and that the sum mentioned is a small one in comparison to their value. I should say that provision was made for repayment of the subsidies—the £2,800,000—and the purchase price of the aerodromes, supposing the option to be exercised, out of profits. Half the net profits of the company each year were to be set aside for this purpose and there was a security offered. The security consisted of debentures not bearing interest. It has been calculated that at least sixty years would be required, with profits averaging 20 per cent. per annum, before the total amount of £3,300,000 could be repaid. It is a very simple calculation, and it has been made for me by experts in this matter.
A very successful business man, of wide experience in contracts, while talking to me about this matter—he had not come to see me about it, but he had seen a description in the newspapers—made a remark which impressed me at the time. What struck him most was not the very heavy rate of remuneration to be paid to the company during the constructional stage, the initial stage, and later during the operational stage, but the position that that company would occupy at the end of those fifteen golden years. Quite obviously, that company would have a virtual monopoly. It seems impossible to me that any other airship constructing firms in this country could possibly compete with it, in view of the immense, sums of public money with which it would have been endowed, and in view of its possession of those unique stations at Cardington and Pulham. It would not only have a monopoly, but a monopoly created, nourished and sustained by State funds.
As I see it, that company would, under the original agreement, have become almost a State Department, disposing of these enormous funds merely on the fulfilment of certain not very onerous conditions. And what troubled me when I examined this question was the difficulty of control. This group would become the one and only airship provider in the country, and, provided the conditions were fulfilled, while disposing, through its associated company, the guarantee and construction company, of large sums of money, would enjoy complete freedom to
564
conclude contracts with other Powers, and would enjoy also a most enviable independence of Treasury control. It would have time, opportunity and money enough to disregard rivals in the commercial world, and fix its own prices.
It may be said that the Government would have been able to exercise control over the operating company, on which there were to be two Government directors, but there were no Government directors on this guarantee and construction company; and, in practice, it seems to me that control by the Government would merely have extended to insisting on certain results being forthcoming at the end of each of the three stages. If the scheme went well very little interference would be justifiable on technical or any other grounds. If, on the oilier band, it went ill—if, for example, at the end of the fourth year, a weekly service to and from India had not been established—the Government would almost certainly be obliged to bolster up the enterprise, and even to make further payments, rather than forfeit whatever benefits might accrue from former outlay. Once committed to an arrangement of this nature it would, in my view, be very difficult for any Government to extricate itself.
I now pass to another objection to this scheme. Although the Air Ministry had accepted the principle of the Burney scheme, expert opinion in the Ministry was not satisfied in regard to certain technical matters at the stage negotiations had reached when the present Government came in. Whether or not the guarantee company would have accepted amendments and additional provisions in the agreement which would have been necessary to make it acceptable to the experts is a matter for conjecture, but (he general impression left on all concerned in the negotiations was definitely that Commander Burney, as representative of the guarantee and construction company, was averse to any tightening of the agreement to meet the technical objections of the Air Ministry experts. For example, a grave technical objection was the fact that, in his latest proposals, Commander Burney did not propose to construct what the Air Ministry considered suitable bases in India and at an intermediate station before his first flight to the former country was undertaken. He, indeed,

565
thought of utilising the untried method of mooring masts on monitors, a procedure which, in the opinion of the Air Ministry experts, would have involved unwarrantable risks. Another objection was that these commercial airships, even if suitable for defence requirements and naval reconnaissance, would not be available for other purposes, such as tests that the Air Ministry has in mind, without additional payments and dislocation of the Indian service.
I have dealt so far with the objections to the Burney scheme. Justice demands that I should refer to its advantages. Under its provisions, if everything went well, a fleet of six commercial airships might have been provided within seven or eight years, and the presumption that a not inconsiderable sum would have been staked in the success of the enterprise might have served as an incentive to energetic efforts. In this connection I may say that the enthusiasm, optimism, and driving power of Commander Burney have been remarkable. He has kept alive interest in airship development when others doubted, though in my opinion he took too much for granted, quite possibly owing to the possession of those qualities I have mentioned, and I think he, was naturally inclined—I mean this in the least offensive sense—to survey the prospects of the company through the rose-tinted spectacles of a man who for the moment was a company promoter.
I will now submit to your Lordships certain general considerations in regard to airship construction, as they have occurred to me during two months' rather close study of the question. My general conclusions are as follows. In this sort of enterprise two risks are involved—a commercial risk and a technical risk. In regard to the commercial risk I find a very widespread opinion that until airships have been properly tried out, and their safety and convenience proved, they are not likely to be of much commercial value. The trying out process involves a period which is both costly and unremunerative. The cost of an airship is not confined to that of the ship itself; there are many other charges, such as sheds, machinery, and gas plants, all of which require maintenance, and involve recurrent expenditure. For these reasons, the leading firms likely to be interested in airship construction—and
566
there are at least three or four, besides the group in which Commander Burney is interested—many firms, in fact, all of them, with the sole exception of Commander Burney's group, have held back.
In such circumstances some form of State assistance is essential to encourage this form of enterprise. Firms interested in airship construction will either require a subsidy or an order for a ship, the payment for which must be, especially for the first ship, on a most liberal scale. In the first case very large subsidies are required, both during the constructional stage and later, through the Initial operation period, to induce constructors to start work. If the latter course is pursued, that is to say, if a ship is ordered by contract, then the Government must make itself responsible for the costly and unremunerative stage of experiment and research. Moreover, it must limit its commitments to that stage. When the practicability of airships has been proved there is little doubt in my mind, and in the minds of my advisers, that a number of firms in England will come forward, and that the industry will be put upon a national and, indeed, upon an Imperial basis.
In regard to the technical question, to which I have already referred, I should like to draw the attention of your Lordships to the physical and material difficulties encountered in the past, which have been illustrated by so many terrible disasters. I have here a list of airships constructed in recent years with notes as to what eventually became of them. It is tragic reading. It is not the less tragic because in cases of this kind it is always difficult to ascertain the exact causes of failure, since as a rule those principally concerned in design and construction are among the victims. For example, when the R.38 broke its back over Hull many of the foremost airship experts in this country perished with it. The Dixmude disaster is another case. From the official report it would appear that the experts attribute the cause of this disaster to the lack of sufficient ground facilities. As I have already said, I have been advised that this important feature did not receive sufficient consideration in the original Burney scheme.
In view of these technical risks, which will only be increased by the fact that enterprising and optimistic individuals,

567
seeking to make profits, might have a tendency to rush through the experimental and non-remunerative stages without due regard to safety, the need for Government control in a matter of this kind seems to me to be imperative. To ensure safety is, as I conceive it, the paramount responsibility of the Air Ministry, which cannot be devolved on any group of individuals. Indeed, I cannot see how the Air Ministry can in any circumstances free itself from responsibility for results, and it certainly cannot buy immunity with public funds
I will now outline to your Lordships the scheme which His Majesty's Government propose to put into effect. In the first place, the Air Ministry will proceed with airship research and experiment, including flying trials, full scale trials, with one of the existing ships which will be reconditioned for the purpose. It will also construct at Cardington an airship of a capacity of about 5,000,000 cubic feet. This is an increase of 2,250,000 cubic feet on the size of the largest rigid airship hitherto constructed in this country. In designing this vessel regard will be had to Service requirements, including naval reconnaissance. The Air Ministry will also undertake the provision of the necessary ground facilities in England and India and at some intermediate station, for the operation of airships of these dimensions, I cannot state precisely for the moment where those intermediate stations will be fixed.
Simultaneously we propose, provided satisfactory arrangements can be concluded, that the Air Ministry shall place a contract with the interests represented by Commander Burney for the construction of an airship also of a size of approximately 5,000,000 cubic feet, this ship being designed for commercial purposes. All the data which become available as the result of the program of research and experiment to be carried out by the Air Ministry will be placed freely at Commander Burney's disposal to assist him in the construction of this ship. At the same time the Air Ministry hope to sot useful data from Commander Burney's past experiments; we hope, in fact, to pick each other's brains. Commander Burney has done a great deal of useful work and carried out a great deal
568
of experiment, and we hope as a Government and as a Department to get some benefit from it.
THE DUKE OF ATHOLL: The noble Lord will, perhaps, permit mo to interrupt him. Does he also intend to pick Commander Burney's patents as well?
LORD THOMSON: The noble Duke has asked me a rather difficult question. That will appear in the contract. I may say that a White Paper has been promised giving details of these matters. It is rather difficult for me to give a definite answer to the noble Duke-because, as a matter of fact, negotiations are still in progress between the Air Ministry and Commander Burney. All I can say is that they are of a most friendly and encouraging nature. I cannot for the moment commit myself to a definite statement about patents, but that answer shall be fully given in the White Paper which has been promised. We are in negotiation with Commander Burney on this matter, and I am not unhopeful that we may be able to conclude a satisfactory agreement. Failing agreement with his group, the same offer will be extended to other airship constructors.
Your Lordships will agree, I think, that Commander Burney's past services in regard to airship development deserve some recognition. The form which that recognition has taken is to make him the first offer of the construction of the commercial airship. At the same time this offer in no way gives him a monopoly. All other airship constructors will in the later stages of development be invited to make their tenders and will equally have the benefit of the research and experimental work carried out by the Air Ministry. Lastly, we propose to make provision in the contract for the Burney interests to take over this airship from the Air Ministry at a reduced price in the event of their requiring it for the operation of an approved commercial airship service.
In regard to design, to ensure proper co-ordination two Advisory Boards are to be set up. The first of these Boards is to deal with the broader aspects of airship development and will comprise representatives of the Treasury, the Admiralty, the War Office, the Air Ministry, the Colonial Office and the Post Office. The second Board will be purely technical

569
in character and will include representatives of the Air Ministry, the Admiralty and the War Office, with power to co-opt such other outside technical experts as may be found desirable. This second Board will be the consultant body for the construction of both airships. Certain questions affecting the training of personnel and the relations between the Admiralty and the Air Ministry in regard to airship development are being referred to the Committee of Imperial Defence.
These proposals should enable two airships to be placed in commission in a shorter period than under the original scheme, since a Government airship and a commercial airship will be laid down simultaneously. They will also result in the maintenance of two separate airship manufacturing plants and other ground facilities on a scale that would admit of rapid expansion. Moreover, the valuable existing airship stations at Cardington and Pulham will remain State property instead of passing into private hands, whilst the ownership of the new bases to be constructed overseas will also be vested in the State.
In regard to the financial aspect of this scheme, under these proposals it will not be necessary to incur from the outset the very heavy commitments already mentioned, amounting to £4,800,000 over a period of fifteen years. A three years' programme only will be authorised in the first instance, and no decision will be necessary as to further development until this programme is nearing completion when much fuller data will be available than at present. It is estimated that, allowing for the repurchase of the second ship by its constructors, the net expenditure involved in 1924–25, 1925–26, and 1926–27 will not exceed £1,200,000. The figures I have given the House have been sufficiently tedious, but I have really given them to enable your Lordships to compare in some sort of way the cost of these two schemes.
Other comparisons are very difficult to establish, for the reason that two fundamentally different principles are involved. In the one case a new development full of risk is entrusted to private individuals. and at the same time it offers them big financial inducements both immediately and during the later stages of operation, in order not only to induce those individuals to undertake the unremunerative stages of experiment and research, but
570
also to accept at least a part, and it seems to me to be a very large part, of the responsibility for results. The other principle is that in a work of this nature, with its manifold risks, the responsibility in the first instance lies with the State. Those who maintain this principle are opposed to endowing private enterprise with public moneys to such an extent as first to give it a monopoly, and later to sustain it.
With a view to meeting some of the criticisms of the Government schema which have appeared in the Press, and to-day have been put forward by the noble Lord, Lord Gorell, I will trespass on your Lordships' time a little further in order to give some additional explanations. The first criticism I anticipate is under the head of "Value for money." It may be said that the Government are spending £1,200,000 in the first three years, and that while the commercial airship will cost about £350,000 the building of the Government airship will run to close upon £1,000,000. Those are. in fact, the figures in round terms. The latter sum may be considered extravagant and cited as an example of the bad business methods associated by some people with Government control.
My answer is that for the money so expended the Government will provide, in less than three years, extended experiment and research which should be of the greatest value and clear up many points in airship construction which at present are obscure. In the second place, a new airship of the largest size will be provided suitable for Air Ministry purposes and naval reconnaissance, which will always be available for the most exhaustive tests, including, of course, full-scale trials. Thirdly, a reconditioned airship will also be available for experimental and other purposes. Fourthly, an air highway to the East will be provided suitable for airships of the largest size, providing harbour accommodation and repairing facilities which will be open to all. This item for India alone is estimated to cost close on a quarter of a million pounds. Here let me repeat—because it is most essential—that these facilities on the air highway were markedly absent from the first stage of the original Burney scheme, and their absence was a source of grave misgiving to my expert advisers. All this, I submit,

571
is "real value for money," and an indispensable preliminary for what may eventually become an Imperial Airship Service and a world-wide Airship Service also.
Another criticism which the noble Lord has levelled at me to-day may come from two very different quarters. From both these quarters the Government will be accused of embarking upon a compromise. One set of critics will object to any form of Government control as being the thin end of the wedge for the eventual introduction of State Socialism. These critics, apparently, overlook the fact that the vast proportion of the capital in the Burney scheme would have been provided out of national funds, and that this enterprise in its early stages could not possibly have been self-supporting. Another set of critics may object to any taint of private enterprise. I have received many criticisms under that head already. My answer to them is that, for the present anyhow, I see no prospect of the Air Ministry running a commercial airship service. My immediate object is to enlist the co-operation of private enterprise in these early stages, not so much in competition with the Air Ministry but rather in a spirit of emulation.
The history of aviation is largely based on combinations of this sort. There is, or ought to be, something which elevates men's minds in this new form of transport. If you look back, you will see that the efforts of the early pioneers prove my statement. They wanted to make money, but they also made many sacrifices. They tried and failed, and tried again, while the world looked on much as Robert the Bruce watched the persevering habits of the spider. But as time went on these early pioneers not only proved their case but many of them made their fortunes, and the world's scepticism turned slowly into wonder. I may be mistaken, but I will take the risk of assuming that even the keenest business men are not inspired by wholly sordid motives, when they co-operate with the Government in the conquest of the air. The whole history of the past shows that. I admit frankly that this scheme is a compromise, but with good will it should become a fruitful compromise, linking up individual effort with authoritative and informed control on the part of the Air Ministry.
572
Moreover, during my conversations with Commander Burney, I was much impressed by the possibilities of establishing commercial relations with foreign countries for the building of airships. The firm, or firms, with which Commander Burney is associated have world-wide connections, and if Britain could become the leading country of the world for the construction of airships the many advantages which would ensue are sufficiently obvious. We should not only relieve unemployment in this country, but we should go far to make this Island a great air port, as it has been the greatest seaport in the past. Further, we should build up reserves of men and material whose value to the country there is no need to stress. It is largely for these reasons that commercial airship construction has been linked up with the construction of a Government airship from the outset.
In conclusion, let me say that in this, as in other branches of aviation, a great amount of patience and imagination is required. These are seldom found in combination. I do not know whether I am using the right word when I say "patience," but I mean he power to discriminate and wait, and not let oneself be rushed. Patience is required to play very often the ungrateful part of brake, to regulate enthusiasm and yet not discourage it, to ensure safety and yet not stifle enterprise. The second, imagination, is needed to give vision. My own vision is not sufficiently distant to enable me to foresee the time when the debentures under the original scheme would be repaid, but I do very often have a sort of vision as to what aviation will be in the future, and I can foresee the time when noble Lords will leave this House and the terrace in gliders with light engines, winging their way westward along the valley of the Thames, northward to Scotland, and southwards to Hampshire, Berkshire and Kent.
On their way—and this is my main point—they will need to rest, perhaps they may call in at some great flying caravanserai in order to take a rest or greet a friend, and that great caravanserai may be one of these giant airships floating serene and safe high up and far removed from terrestrial dirt and noise. Under a private enterprise scheme there would be no guarantee as to these airships, but under the scheme which the

573
Government put forward each airship would have a certificate of air worthiness, and if any of your Lordships ever should perch on one of these, officially you will be safe, and I sincerely hope you will also feel safe.
But that is not the sort of proposition which one can even contemplate at the moment. To what can we look ahead? On what can we safely count? What are the practical possibilities of the immediate future? Well, in three years' time I hope, and indeed believe, that we shall have accomplished much in the way of airship research, and shall have in the air two airships based on that research suitable for their respective functions in the future, and I trust they will represent the greatest advance yet made in this form of aviation, though we shall be by no means at the end of the development of this form of aviation. In ten years' time I hope to see at least half a dozen airship constructors competing for orders in this country and building up a great and growing-industry, serving the purpose of Imperial communications, bringing the peoples not only of our Empire but of the whole world closer together, and carrying freight as well as mails. That is a consummation which I am sure all your Lordships must desire devoutly.
The scheme put before you to-day is far from perfect. It is tentative, it is experimental. All schemes in connection with airship development are bound to he that. It is extraordinary how much ignorance there is on this subject, how many doubts, how much pessimism, and how much fear. But in its way I believe this scheme is the surest way of achieving that consummation. It may or may not prove somewhat slower, but it runs fewer risks than any scheme yet presented and will, I trust, provide a broad foundation whereon to build.
THE MARQUESS OF SALISBURY: My Lords, I am sure your Lordships will he extremely grateful to the noble and gallant Lord for so clear a statement; indeed, I do not think in all my experience I have ever heard a clearer statement made in this House. He dealt with an intricate and important matter, and personally I did not fail to understand a single word he said. In any criticism I may venture to make on the speech I hope he will understand that it is not that I
574
wish to depreciate the effort which His Majesty's Government are making for the provision of an airship service or that I disbelieve their keenness in the matter. I do not think their plan is quite as good as the plan for which we were responsible, and I shall give a few reasons for that view; but in the main outlines we are, of course, agreed. There is no Party question about the subject of Imperial defence. We all hope for the development of an airship service and the only difference between us is as to the precise method by which it is to be achieved.
The noble and gallant Lord spoke of patience, and he took considerable credit to himself and his colleagues for the patience with which they proposed to deal with the question of airship development. Patience is a great quality, caution is a great quality, but in the matter of the provision of aircraft I think there has been too much patience. When the late Government came to be responsible for affairs they found that so much patience had been exerted that we were almost deprived of an air service altogether. By the delays, the hesitation and the false economy of their predecessors, they were left in a very difficult position as regards the air defence of this country. I do not desire to say a word against our predecessors in that matter. They made mistakes, as we are all liable to do. But at any rate do not let us make the mistakes again. Do not let us, in the provision of an airship service, imitate the failure which took place in the provision of lighter-than-air craft in those years. We may hesitate too much, and I think, if I may say so, that the noble and gallant Lord was full of hesitation. He was afraid to go forward, he wanted to be tentative, he wanted patience and he also had great confidence in official work in respect of the provision of airships.
I would not say one word against officials who are splendid public servants, especially the officials at the Air Ministry, but, broadly speaking, I do not think that if you are looking for enterprise you find it so freely amongst officials as amongst outsiders. No doubt you have certain advantages in relying upon officials, and, in some matters connected with Imperial defence, you must, of course, rely entirely upon official work. But where you are experimenting, where you want what the noble Lord very properly called imagination, where you want enterprise, then I

575
believe that you are much more likely to find what you seek amongst unofficial servants than amongst officials. And I do not think the reason is difficult to see. Officials are responsible for the expenditure of public money, they are not, I am glad to say, in any way financially' interested in the success of their enterprise, and they naturally err upon the side of caution in the advice which they give and in the work which they carry out.
This is a very excellent thing in its way, but if you are anxious to be ahead of time in airship construction, which I believe to be of vast importance—I quite agree with that which fell from the noble Lord as to the future which lies before it—then I should naturally turn towards private enterprise in the first instance. All that the noble Lord is going to provide are two airships. That is all that he proposes to do. His caution carries him to that point. Afterwards, no doubt, he would go on, but, so far as his programme is concerned, while there is an experimental airship which is to be reconditioned, of actual operative airships there are to be only two.
LORD THOMSON: Will the noble Marquess allow me to correct him? I am providing two airships in the period in which, under the original scheme, only one was provided.
THE MARQUESS OF SALISBURY: I am coming to that in a moment. In the noble Lord's three years' programme he is going to provide only these two airships. They are very expensive airships. I do not desire on the present occasion to enter very deeply into the financial side of the question, but I merely note that the airships which he is to provide are very much more expensive than the airships which wore to be provided by private enterprise. Why should not private enterprise make these enperiments? Why should not private enterprise bear the loss or the failures in experiments if it can be persuaded to do so? You are engaged in the process of what the noble and gallant Lord calls trying it out. I am all for private enterprise trying it out, and for preventing the financial responsibility falling upon the British taxpayer. That seems to me to be obvious common sense.
May I say one further word? I rather distrust official work in this respect,
576
because I do not believe—the noble and gallant Lord will, of course, correct me if I am wrong—that there is in the Air Ministry very much experience of airship work at all.
LORD THOMSON: I may tell the noble Marquess that the same experts are employed in both cases. The same body would have existed in any circumstances. There are only a few such men in the country.
THE MARQUESS OF SALISBURY: But the noble Lord was anxious all the time to impress your Lordships with the fact that his officials would have the care and the control of the matter and, if they liked, the operating of one of the airships. That might be a very good plan, but they will have to buy all their experience. They start, I do not say in a condition of absolute ignorance, but in a state of comparative ignorance. If it were a question of heavier-than-air craft, there would, of course, be a great deal of knowledge available, and many very highly trained men, but, so far as these airships are concerned, in practice they know very little, whereas in private enterprise there is already a considerable body of experience which has been acquired.
Compare the results which our scheme would have produced. The noble Lord proposes two airships in the first three years. We looked beyond the first three years, and our plan would have provided six airships in all. I am going to say a word or two about what the noble Lord called, I think, the financial commitments of that scheme, but I am confining my observations for the moment to the results that would have followed if our plan had been adopted and had succeeded. We should have had six airships.
LORD THOMSON: In seven or eight years.
THE MARQUESS OF SALISBURY: That is quite true, but the arrangement would have contemplated six airships, and they would have been definitely assigned to special tasks. First of all, there would have been an Egyptian service, and then, as the plan developed, there would have been an Indian service—first a weekly service, and then a bi-weekly service. The whole matter was thought out. Those

577
of us who were sanguine looked to a further development even beyond India. At any rate, we thoroughly contemplated the development I have described. The noble Lord appeared, I think, to feel that his plan was much less risky than ours. I do not quite agree with him. After all, from his own point of view, to build two airships at the same time, as he is going to do, will deprive him of the experience afforded by the one in connection with the building of the other. That is one way in which he incurs more risk than we did. But that is a small point. We proposed by our arrangement that these airships should be built in stages, as the noble Lord told your Lordships, but I do not think he quite brought home to your Lordships that which was of the very essence of our scheme—namely, that we should not have proceeded to the second stage until we had been thoroughly satisfied of the success of the first stage, and that we should not have proceeded to the third stage until we had been thoroughly satisfied of the success of the second stage.
The noble Lord said that we should have committed the country to an expenditure of £4,800,000. Nothing of the kind! Our only commitment at the first stage was to have been £400.000. There was to have been what the noble Lord called a subsidy. It was not very accurately called a subsidy, for it was more in the nature of a loan of £400,000. The loan was to have been made for construction in the first year. He said truly that that might have taken a little longer than one year, but until we were satisfied that the company could have produced a service to Egypt nothing more would have been done. That would have been the end of the commitment. So far from the large figures which the noble and gallant Lord gave, the only absolute commitment of that Government would have been £400,000, until they were satisfied that the company could carry out its engagements and could produce a service to Egypt.
When that had been achieved, then there would have been something to go upon. There would have been none of the doubt, which beset the noble and gallant Lord's mind, as to whether this company could succeed. We should have had actual practical proof of its success before we had gone another step, so cautious were we in the arrangements we
578
made. Then, when it came to the second stage, being quite satisfied that an airship service to Egypt could be carried out, we should no doubt have contributed in the three next years £400,000 each year, £1,200,000 in all, but only when we were satisfied that a service to India could be carried out—a weekly service to India. Similarly, on the third stage, money was not to be given until we were satisfied as to a bi-weekly service to India. So each step was to be tried as we went along. We did not propose to make a forward step in the matter of committing the country to any expenditure, until we were satisfied by actual proof of experience that the company was competent to do the very thing which it had engaged to do. Therefore we combined with, I think, all the adequate caution which could be demanded, a plan under which, if it succeeded, as we had every hope it would, we should in seven years have had a bi-weekly service of airships from this country to India.
That was the programme of the late Government, with no real risk to the taxpayer of this country, because each step would have been tried before the next was taken. That is the plan which the present Government have discarded. I said just now that the noble and gallant Lord had been, I thought, betrayed into a slight inaccuracy in saying that these sums of £400,000 were subsidies. They were not subsidies, but loans. There was a responsibility upon the company to repay them—if they made a profit, of course. I agree it was not certain that they would be repaid, but it is inaccurate to call them a subsidy. If they had succeeded in making a profit out of their enterprise, then they would have had to repay every penny of the several sums of £400,000 which the Treasury advanced to them. The risk was not so very great because, I will remind the noble and gallant Lord again, we were only going to proceed if satisfied that the initial experiment had been successful. Therefore there was great security, not only from the defence point of view but from the financial point of view also. Those points the noble and gallant Lord had, I think, forgotten. I believe that that scheme would have been successful, and I regret that the Government have not adopted it.

579
I should, however, like to say one or two general words, if I may, upon the subject. I think, even if there were a great deal more risk in what we undertook than there was, we should have been justified in undertaking it, because the value of this airship service, if it can be accomplished, is almost immeasurable. I thought that the noble and gallant Lord spoke with undue depreciation of the commercial value of these airships. Perhaps it was necessary to his case, because if he had admitted that their commercial value was likely to be high, that would have been a very strong argument for leaving their construction and operations in the hands of a private commercial enterprise. Certainly I do not share his views. I see no reason in the world why, commercially, they should not be of great value. Apart from the actual carriage of goods, in the passage to and fro of individuals connected with trade, and information connected with trade, they would be of immense value. Do your Lordships realise what the saving in time would really be? I think the noble and gallant Lord spoke of seven days to India. My information is that it would be more rapid than that. Five days is the figure I had in mind.
LORD THOMSON: A hundred flying hours.
THE MARQUESS OF SALISBURY: Two and a half days to Egypt, and five days to India, with ten days to Australia. That would be the splendid vista before us if the scheme succeeded. Its importance commercially would be very great. Politically its importance would be still greater. The weakness of the British Empire, as everybody knows, is its immensely scattered character. If its parts can be drawn together, as the development of airship services would draw them together, then great political advantages would ensue. Of course, I am not thinking merely in terms of this one contract with the company, if that came off. No doubt the noble and gallant Lord is perfectly right in saying that if this enterprise succeeds the builders of airships will not be merely this company but a great many companies, and we shall see large developments on those lines.
It would be both commercially and politically of the greatest value, and there is yet one, other department in which it
580
would be of great value. The noble and gallant Lord spoke of it with great reserve and I will follow his example. It would toe of great military value too, and that is not a matter to be discussed at great length—at least, I noticed that the noble and gallant Lord did not say much on the subject—but both for reconnaissance purposes, and also for the purpose of establishing posts far flung forward from the shores of this country, an airship service, when it is completed, will be of the greatest value. I believe that that is the future which is in store, and I congratulate your Lordships and the country that at any rate in this the present Government and ourselves are in entire agreement. We are determined to do out utmost to make our country the first in the development of airship construction and operation. In so doing we shall at any rate do something to make good the deficiency in other aircraft which has beset us in the past, and we shall be able to supplement the great weapons which we already wield, the great commercial equipment with which we are already provided, by an efficient and enterprising airship service.
THE DUKE OF ATHOLL: My Lords, the noble Marquess has dealt so fully with the subject, and with the questions raised by the noble and gallant Lord, that I do not feel it necessary to go into many points, especially financial ones. Nor do I want to argue with the noble and gallant Lord on questions of State Socialism, or to accuse him of going in for State Socialism, because I think that the two noble Lords whom I see opposite me have, in the matter of the armaments of this country, saved us to a great extent from what we, rightly or wrongly, expected from Socialism.
But I should like to join issue with the noble and gallant Lord on another question—namely, the early history of aeroplanes and the people who are supposed to have made fortunes out of them. He quoted King Bruce and the spider. I want to inform him that I myself was one of the spiders. Another of the spiders is sitting on the Woolsack, and I do not remember that we made fortunes over it. I certainly remember losing a few thousand pounds over experiments which I helped to carry out and to nurse for the noble and learned Viscount on the Woolsack, but I did not

581
grudge it. The Government did not believe in it at all at that time, I do not think the noble and learned Viscount altogether believed in it. He was taking a cautious line, and he took a line exactly opposite to that which the Government is taking to-day; he did what he could to get private enterprise to nurse the baby industry. Many men lost their lives, they were such keen pioneers. They spent an enormous amount of money, and I do not suppose that the noble and gallant Lord can tell us of more than two men who made their fortunes. I can tell him of many who went bankrupt, and who received no recognition of any sort from the State. The noble and gallant Lord is a Scotsman, from his name. I am one also, though not a visionary one, and I am not looking forward in the far future to luncheon parties in the sky and landing at these high class hotels about which he spoke. All that I care about is that we should try to keep in the forefront of aviation, that we should make all the necessary experiments, and make them in the most efficient way, and at the least cost to the country.
There was one point, I think, that was not made altogether clear in the noble and gallant Lord's speech. From what I have read in the Press and from the various statements made by the Prime Minister, I believe that under the Burney scheme, at all events in the initial stage, some £400,000 was to be spent to see if a flight could be made. The Government under this new scheme propose to spend £1,350,000 on an exactly similar scheme. To that extent I should say the Burney scheme would appear to be the better of the two, and all I want is the best scheme—I am not in the least interested otherwise. But I really think that the Government are not making a good bargain. Although they would be perfectly right in making the experiments at a later stage, I think they are unwise at this precise moment, until things have gone a little further, to go to this vast expense, when they can get a commercial firm which possesses all the patents and all the knowledge of construction and which has studied the subject, to make the experiments and to stand a very great part of the loss if things went wrong.
Prom what the noble Marquess said just now the Government would have been perfectly safe with the Burney
582
scheme, because, if it failed, the money was only a loan, and the Government had the first charge on all the assets of the company. That being so, they would easily have got their £400,000 back. On the other hand, under the present scheme, if it goes wrong, the Government lose the whole sum of £1,350,000.
The next point that the noble and gallant Lord raised was the question of monopoly. I wonder whether he thinks there are thousands of people walking up and down Oxford-street and elsewhere who want to build airships. How many people wanted to build? And how many offers did he get to take over the ground at Cardington, when it was advertised? I think he will find there is not so much keenness to go into a business which will quite possibly lead to financial disaster, although we hope it will not. Whilst speaking about monopoly he referred to the rivals who would rise up and build elsewhere, but, if there were rivals, I do not see how there is going to be a monopoly. If the rivals were abroad, probably it would be a very good thing if we had a pretty good company in this country supported by the Government, more especially as our company would have been able to compete and to make tenders against companies in other countries on such advantageous terms that probably these other countries would be bound to accept the tenders of our company. And it would be a great advantage, from the military point of view, if we got the chief part of airship construction in this country, and consequently the knowledge with regard to it.
Then there, was an idea that the guarantee and construction company, having a monopoly, would be able to bleed the Government. I think that was very unlikely. I do not think you will find buyers for airships hanging on every gooseberry bush. The Government itself would probably be the only buyer, and would be able, to that extent, to make its own terms. The noble, and gallant Lord shakes his head. He thinks there would be a great many others.
LORD THOMSON: I think there are several other people wanting to buy air ships already at the present time—other countries and other private institutions.
THE DUKE OF ATHOLL: That as exactly the point that I wanted the noble

583
and gallant Lord to make, because, if it is going to be such a good thing, and it so many people want airships, the business will pay so well that you will find there will not be a monopoly for long, but other commercial firms will go into the business. The guarantee and construction company, I think, was not to make a profit exceeding 10 per cent. of the net cost. Ten per cent. on an enterprise of this nature, I think it will be agreed, is hardly a commercial profit. A far greater percentage is expected in most commercial enterprises of a safer kind than this.
Mention was made, I think, of two Government directors on the board of the operating company. That is so, is it not? They would surely safeguard the interests of the Government, to a certain extent at any rate, on the company of which they were directors. I think also that the operating company, which was tantamount almost to a Government-owned company under that scheme, was to have, one might say, the free use of all the patents owned by the guarantee company. Under this new scheme it appears to me that the Burney Company will have the Government in the hollow of its hands to a very great extent, and that by letting them down the Government have lost a very good opportunity. Had the Government not let them down I think the Burney Company would probably have dealt with them in a very much better way. Seeing, as the noble Lord has just said, that there are so many other people wanting airships, why should the Burney Company particularly give up their secrets to the British Government, which, as we are told, is only going to compete in friendly emulation against them? It would hardly pay them to do so. I do not think you can expect quite so much charity from any company as seems to be expected from them. They are, of course, patriotic, but patriotism must be tempered with wisdom.
Then there is the question of the terminal and the intermediate bases overseas. Under the Burney scheme. I think these bases were required to be built out of the £400,000. I do not know whether the various sums that we have heard that the Government are going to spend, or that the noble Lord suggested they were going to spend, include these terminal bases and whether those sums include also what, for want of a better word, I
584
may perhaps call the various landing stages on the way. As it is the noble Lord asks what is the good of this company making airships without having terminal bases, and having to land practically anywhere on a mast? I want to put it in this way. I am only talking of the initial stages, and I do not think it would be wise to construct very expensive bases all over the world before you are quite certain that you have airships that can go to them. It is absurd. It is exactly the reverse of what is done in the Navy. There you make your bases after you have your ships. The noble Lord shakes his head; I know the argument on the other side, but I am talking of the general principle. I am referring to existing vessels that we know can go the distance, not to the first ships made. That is too far back; but we do not know yet that we can make, airships which will fly the distance. Therefore, it does not seem to be a very sound practice to build expensive bases a long way off. For that reason I think a mooring mast would probably be sufficient at the beginning, and even if it did mean the loss of a ship, the loss involved would probably be smaller than the cost of making these bases for airships that may never come into existence. My argument may be all wrong, but that is only a private opinion.
We have heard a good deal about a base in Egypt that is going to be made. The noble Lord, I think, said something about Egypt. I suppose the noble Lord has got, a lease from Zaghlul Pasha, but no doubt we can hear about that at another time. This is not the place to discuss it. The result of the retirement of the Government from the virtual bargain that was made by the last Government simply means that they have left the commercial company in the air, and I am perfectly certain that if this enterprise is to succeed at all it must succeed through the realms of commerce and not by means of military experiments at Cardington or elsewhere. Military experiments may be necessary later on, and I think there will be lots of time in which to make them, but the Government ought to encourage any firm that will undertake to run a line of these airships, because they will obtain an enormous amount of experience in that way and gradually train builders and workmen in this country. They will always have a call on the ships.

585
It is really rather beyond the mark to talk about the difference between commercial airships and military airships. No doubt a specialised military type will be evolved in time, but for practical and present purposes the commercial airship will give you all that is required. After all, it is not as fighting airships that these airships are to be used. They will act as long-distance scouts and patrols, and almost as advanced watch-dogs. Therefore it is not so necessary or so urgent that the Government should make these experiments and lose money in making them, as it would have been in the case of the aeroplane. The aeroplane is essentially a short-range weapon, though its range is gradually increasing, and it was absolutely necessary that money should be spent in order to counter what other people were doing elsewhere. But from the military point of view we have not to meet such a tremendous amount of competition in airships as we had formerly in aeroplanes, and I think that the airship ought to be used for commercial purposes. I think the sort of general idea is that the Government would not be able to train men for the Air Force because they have not got an airship of their own. Under the Burney scheme, Government officers and ratings were to have been trained in those airships, and every possible advantage would have been given them.
Then, it was said, I think, that a monopoly would be given to this company as against other companies that might want to do the same thing. After all, the Burney group were the first in the field. They are only proposing to run one comparatively small line in the British Empire. There are plenty of other people to whom the Government can entrust other lines on the same basis. The Burney group happened to be the first. If you are going to discourage the first firm you may be quite certain that no ether commercial firm will be started in order to be treated in the same way. That is what I think, though I do not say it in any aggressive fashion
I prefer to leave the question of finance to other noble Lords, but I should like to say that I think the Government have adopted the most costly and the least effective method. The noble Lord said that he was advised by his expert advisers. Was he talking of his expert financial advisers or of his expert air advisers? If he was referring to his expert air
586
advisers, may I ask him whether the expert air advisers who advise him now are not exactly the same expert air advisers who advised the late Government a very short time ago, and what is the reason why they have so suddenly changed their mind? I do not blame the noble Lord, and if the money was to be had there is nothing on which I should prefer to see it spent, but I think the truth is that he is a great schemer or a great dreamer, and that he sees in the air this wonderful fleet which he will have founded by his drive, his genius, and his methods of getting at the Treasury and other people. He told us a great deal about what he expected to see in the far future. He talked of gliders with light engines and various other things of that sort. But it seems to me that though he may hereafter be numbered among the saints, the noble Lord will not be numbered among the prophets.
LORD MONTAGU OF BEAULIEU: My Lords, I will detain you for a few moments only. First of all, I would like to say that I should have much preferred the scheme prepared by the late Government to this one, but, on the principle that half a loaf is better than no bread, I am obliged to the noble Lord for the encouragement he intends to give to airship construction. The noble Lord said that we had had an unfortunate record in regard to airships. That, no doubt, is perfectly true so far as the large airship is concerned, but he knows, now that he is at the Air Ministry, that more than a million miles were flown by the smaller type of airship with great advantage to our commerce in the war. At sea these smaller airships protected our commerce from the attacks of submarines, and in the million of miles that were flown there were no casualties. You must put that against the casualties which occurred to the larger type of airship.
Everyone knows that in the first stages of the development of inventions of this kind you are bound to have failures and accidents. It has been so in anything that has been invented, and always will-be so. In the case of the air an accident which would be negligible on the ground, or at sea, is fatal. The noble Lord, so far as airships are concerned, no doubt has reflected that the fuel of the future will almost certainly be heavy oil, which will largely get rid of the risks from fire. We shall probably some day

587
have a non-inflammable gas, which, again, will reduce the risks of fire. Already, as the noble Lord knows, there are improvements in the metal duralumin which was largely used by the Germans in the war, and in fact was called the Zeppelin metal. Improvements have already taken place in this metal as the result of experiments both here and in Germany, and new airships ought to be able to be built with increased strength in the metal work for the same weight. We are progressing in this matter all the time.
Of course, at the start airships will not be of any very great service. It is no use pretending that they will. I look forward to their first use for postal purposes to distant parts of the Empire. The noble Viscount (Viscount Chelmsford) who was Viceroy of India, and under whom I served, will remember that six or seven years ago he did me the honour of taking the chair, at a lecture at Delhi which I delivered on the subject. I then put the postal advantages of quick transit between this country and India in the forefront of my address. When you reflect that it is only 3,600 miles from the North-West Frontier of India to London you will realise that if an airship averages fifty miles an hour it will do the journey from India to England in seventy-two hours—that is assuming the countries in between are in a more or less settled state, and that if anything happened to the airship the occupants would not be liable to be murdered.
I instance that merely to show that it is not beyond the bounds of possibility to go from here to India in from three to four days. That would be such an enormous advantage from every point of view that I think it is worth almost any risk to try to achieve it. The noble Lord knows that when a flight was made by aeroplane to Australia the distance was about 11,800 miles. It is conceivable, therefore, that the journey from India to Australia might be done in another three, or three and a half days. If you could bring Australia within seven or eight days of this country for postal purposes, there would result the most magnificent welding together of the Empire that has ever taken place.
I was very glad to hear what the Government had to say on the subject. I am sure we can look forward to the
588
noble Lord with his great military experience seeing that the military side is also considered in this matter. Personally I consider that this very large airship will be intensely vulnerable, in war, and that probably smaller types of airship will be more effective for war purposes. But I am glad the Government have taken up the large airship, and I hope their experiment will be crowned with success. At any rate, we shall reap the benefit of the experiments which are to be made. Though private enterprise is not at the moment much favoured. I hope that in the future private enterprise will be induced to take part in the developments.
THE EARL OF BALFOUR: My Lords, before the noble Lord replies, may I ask him one question? I listened with great interest to the picture drawn by the Secretary of State for Air of all the blessings that were to come to this country if his—I will not say his dreams, but his prophecies of the future come true. Among those advantages was a very great increase of employment for the British working man, and a great opportunity for the investment of British capital. Do the Government contemplate, therefore, that all the airships built in the future for commercial purposes shall be built in this country, or do they propose to carry out the true doctrine of Free Trade, and allow other nations to compete in providing us with the necessary fleet of airships which are to perform all these wonders in the future?
THE FIRST LORD OF THE ADMIRALTY (VISCOUNT CHELMSFORD): My Lords, I am not replying on behalf of the Government, but am merely intervening as a Minister who is very deeply interested in this question of airships. Before I come to the position of the Navy in this matter, may I say one or two words with respect to some of the speeches that have been made from the other side of the House? I do not think that either the noble Marquess (the Marquess of Salisbury) or the noble Duke (the Duke of Atholl) sufficiently appreciated the high sense of responsibility which my noble friend the Secretary of State for Air feels in this matter, and consequently they did not do sufficient justice to that desire on his part to supervise experiment and research. The noble

589
Marquess, in particular, asked: Why should not private enterprise run the risk of losses through experiment and research? It is precisely because of those possible losses, and of money, apparently, being thrown away, that my noble friend, in bringing forward this scheme, is anxious to secure that experiment and research should take place under any and all conditions, and that he should be quite sure, with that responsibility which he has for matters in the air, that private experiment and research are progressing.
The noble Marquess, again, rather twitted my noble friend with putting forward an official scheme, but I think he will find, when my noble friend replies, that the experts in this matter may, after all, almost be counted in England on the fingers of two hands, and that all the experts in this country are willing to place themselves at his disposal for the working out of this so-called official scheme. The noble Marquess criticised the proposal that two airships should be built simultaneously, and said that one might derive improvements and progressive development from the experience of the other. May I tell him that at the present moment the Admiralty have put forward a proposal for the construction of two destroyers, because, as destroyer development and replacement will have to come in the future, we are anxious to be quite sure that we choose the better of the two types. Therefore we are going to endeavour, by variations in the construction of these two destroyers, to find out which is the best type. Though these airships are to be constructed under the general control of the two boards, advisory and technical, which my noble friend described in his opening speech, there will be room for the idiosyncracies of Commander Burney on the one hand and the Air Ministry on the other.
THE MARQUESS OF SALISBURY: Will the noble Viscount allow me to say that naval example is not comparable? The Admiralty is full of expert knowledge of the highest kind, but in airship construction it is all experimental.
VISCOUNT CHELMSFORD: Yes, but in this case we are going to have two strings to our bow, and we hope that at all events
590
one will be successful. That is the answer to the argument put forward, and of course it is argument and opinion on the one side and the other. Now I come to the attitude which I take up as another member of the Government very intimately connected and interested in this matter. May I say at once on behalf of the Admiralty, that we want airships and we want them quickly? We shall be glad to have the Government airship—I pass by the question as to who will have control of it—and we also want, what we hope we shall get, a reserve of commercial airships upon which we shall be able to draw in the same way as the Admiralty are able to draw upon the great reserve of mercantile marine. We hope to have both the Government and the commercial airship upon which to draw.
As regards the exact position of the relations between the Admiralty and the Air Ministry in regard to airship development that matter is still being considered and will come before the Committee of Imperial Defence, who will ultimately make its award. My noble friend and I do not want a repetition of what happened on a previous occasion. I feel sure that my noble friend the Earl of Balfour, who gave a decision some years back on the question of the control of heavier-than-air craft as between the Admiralty and the Air Ministry, will be glad to hear—I was in despair when I found that I had inherited this question—that most amicable conversations are going on between the Admiralty experts and the Air Ministry experts. I hope, nay, I am confident, that conclusions are going to be arrived at which will be regarded as satisfactory to both parties and that there will be an end to that unprofitable controversy. At all events my noble friend and I want to come to agreement on this matter, so that there shall not be a repetition of what was an unfortunate incident.
May I say a word as to why we think these airships will be of great value? My noble friend in his statement told us that they would be so for reconnaissance purposes. May I give you some interesting figures which have been furnished me as to the relative capacity, from the point of view of reconnaissance, of a light cruiser and an airship. Noble Lords will understand that this is assuming that

591
everything goes well for both. A light cruiser has a speed of twenty knots and a visibility of fifteen miles. An airship will have a speed of fifty knots and a visibility of forty miles. Therefore, if you consider the area which can be searched by a light cruiser and an airship respectively you will find that in a period of ten hours a light cruiser can cover some 6,000 square miles whereas an airship in the same time can cover an area of 45,000 square miles. I do not want to suggest that we have come to finality in this matter. The problem has to be thrashed out, and it is by no means certain how far the airship is going to have such a value for the purpose of reconnaissance that it is going to replace the light cruiser as the eyes of the Fleet.
Your Lordships are familiar with certain historical instances. I believe it is a fact that the Germans had several airships up at the Battle of Jutland, but they were not able to inform them as they never saw the approach of the Grand Fleet. As against that, on the next day an airship was visible which did see the Grand Fleet and was able to inform the German High Fleet of the exact position of the British Fleet. You have on one side occasions when they see nothing, and on the other you have occasions when they are of the most inestimable value. Only the other day in our Fleet manœuvres in the Western Mediterranean the opposing forces were searching for each other. Aeroplanes were up, and light cruisers were out, and the light cruisers gave information as to the position of the hostile forces two hours before the aeroplanes gave similar information.
THE MARQUESS OF SALISBURY: Was it thick weather?
VISCOUNT CHELMSFORD: No. I will not mention names here. It was an admirable day, but apparently there was an indefinable haze at a little distance in the air. Looking at it from below it appeared as if there was no haze at all, but from the point of view of the air it was an impenetrable mist through which vision could not pierce. From the experience of the war and our own manœuvres we must be careful against coming to a hasty conclusion that the construction of airships is going to stand in the place of the construction or re-
592
placing of cruisers. We have great hopes at the Admiralty that it may, and from the figures I have given your Lordships with regard to the area ranged by an airship as compared with a light cruiser, it is obvious that the Admiralty will be only too delighted to have airships if they can be sure that they can rely on them as a secure and safe alternative to the light cruiser. These are the reasons why, from the point of view of the Admiralty, over which I have the honour to preside, I strongly support my noble friend's proposals.
THE DUKE OF SUTHERLAND: My Lords, it is not my intention to make a long speech to-night. Most of the important points in regard to the Burney scheme have already been dealt with, but as I was at the Air Ministry during the time when the airship question was very prominently before the public I should like to touch on one or two interesting matters, which have not been sufficiently dealt with to-day. I would associate myself with the Marquess of Salisbury in saying how glad I am that His Majesty's Government have taken up the question of airships and have agreed to build at any rate two airships, though I do not agree in any way with the manner in which they propose to arrange for their construction.
I look at it from this point of view. How will this new scheme encourage the aerial development of the Empire as compared with the old Burney scheme? From that point of view my own opinion is that the new scheme will not come up in any way to the old scheme. Lord Thomson has told us how the Burney Imperial airship scheme was to have been brought out in three stages, ultimately leading up to the production of six airships for a weekly service in India, and Commander Burney assures me that those airships would all have been built and operating under that scheme within the space of four years. Lord Thomson also agreed that the whole sum of £2,800,000 due to be paid back eventually out of profits to the Government under the Burney scheme would, with any ordinary luck, be so paid back, and the ultimate cost, therefore, in regard to this liability might be very little or nothing at all. In addition, private capital to the extent of £500,000 would have been risked in this stage of the Burney scheme, which would undoubtedly have

593
led up to definite Imperial development and would have established a continuity of policy regarding airship trade throughout the British Empire which, I think your Lordships will agree, is hardly to be found in the new scheme.
It has been pointed out by several speakers this afternoon that in the event of the failure of our scheme the cost to the Government would have been only £400,000, but a further point to which attention was not paid is that in the event of success the total cost to the Government in fifteen years would have been only £1,500,000. In the event of the success of the Burney scheme, the total scheme would have eventually cost the Government £4,800,000, spread over fifteen years, less £3,300,000, which is made up of £2,800,000 returned out of profits and £500,000 paid for the bases taken over. Consequently, with ordinary luck, if the scheme were successful it would cost the Government in fifteen years only £1,500,000 to produce a service of six airships. A point was made in another place, and was referred to by the Secretary of State for Air this afternoon, that the Government particularly wished to retain the bases at Cardington and Pulham, but I should like to point out that under the arrangement proposed in the Burney scheme it was clearly laid down that the Government could take over those bases if, by any chance, the company failed. Further, the bases could not be taken over by the company until they had paid £500,000 in cash.
The Duke of Atholl raised the question of monopoly. As one who attended the meetings of the Sub-Committee of the Committee of Imperial Defence that considered this question of airships last summer, I know how glad we should have been to find the representatives of any firm bringing forward any serious, practical or tangible proposal on the lines of the Burney scheme. But I remember well that there was nobody who could bring forward any practical proposal whatsoever during the whole time the Committee was sitting. A few people who did come to the Committee on these occasions had vague and very filmy ideas about what should be done. The only practical scheme that was brought forward was that of Commander Burney and his associates. Committee after Committee have considered this scheme,
594
and I think your Lordships know that, until the last Committee reached its conclusions, they all came to the same decision—that to make a success of a scheme of this kind the initiative and the driving power of great commercial firms, with private capital invested and risked, were essential. I think all the Committees came to that conclusion, with the exception of the last. They also realised that they must make a working agreement with the shipping companies that carry our Eastern mails and our Eastern trade.
On the other hand, the scheme of the present Government, which we are discussing to-day, means an expenditure of £1,200,000 to produce two airships in three years. There seems to me to be no definite programme or continuity of policy for the eventual aerial development of the Empire, or for a weekly service to India on commercial lines. I am assured on very high authority that without a weekly service to India, which requires a minimum of six airships to keep up, no service—such as, say, a monthly service—could be a commercial success, or even pay its way. It requires a weekly or at least a bi-weekly service to be commercially successful. It is essential, therefore, that six ships should be built before the undertaking can become a really commercial proposition. As I read the agreement, considerably more than £1,200,000 may be spent by His Majesty's Government over the two airships. If by any chance the airship guarantee company were to decline to buy from the Government the airship which they constructed, which I understand—though I may be wrong—they are fully entitled to do under the agreement, it may cost the Government a very great deal more than the £1,200,000 mentioned.
I do not believe that a concern directed, owned and controlled by the Government can ever pay in the same way as a commercial concern. The only claim to success of such concerns in the past has been the eating up of the taxpayers' money, and I am very much afraid that, if this airship scheme were to be a definite failure, the eventual discouragement of the public mind regarding airship development and an Imperial Air Service would be the very grave and sad result. As I read the present policy of His Majesty's Government, it seems to me that they are starting a system of aerial doles somewhat

595
similar to those which they give to the unemployed. This strikes one as being unbusinesslike, wasteful and unlikely to achieve the results which would have been achieved under our scheme.
Another point to which, I think, the Duke of Atholl referred, as well as other speakers, was the question of research. I think this could quite easily be made compulsory by the Air Ministry, and inspected by officials of the Ministry, even if conducted under the auspices of a private company. I am certain that under the Barney scheme the Air Ministry would have insisted upon the company doing a certain amount of necessary research. I understand that the private company at the present moment has the best engineers and experts in their employment and—though I may be wrong in this respect—has to that extent an advantage over the Air Ministry. Such, at any rate, is their claim, and in that case I think research could be more easily carried out by the private company than by the Air Ministry. A private company that has to fly to India safely with 100 passengers in 100 hours before it receives its second subsidy, would not be liable to neglect research, upon which the very basis of their safe journey and the safety of their passengers would depend. The Air Ministry could be sure that they did not neglect it, by their system of inspection and compulsion. Therefore I do not think that re search, from the Air Ministry's point of view, is essential, provided the Air Ministry can insist upon it, as they can. Another reason why research can be carried out better by a commercial company is that practical knowledge in air ship navigation and use can be gained far more rapidly from the actual flying of a line of airships round the world than by any amount of theoretical and workshop research at home.
We are also told that the Air Ministry have to have their own airship, and Lord Chelmsford has told us that the Navy want their own airship. My own view is that that is hardly necessary, if private firms are prepared to build them in accordance with the Air Ministry or Naval regulations and conditions, both as regards the personnel and machinery and construction, and, of course, with the full understanding that they become the Government's property in time of war, or at any time when the Government wish
596
to take possession of them. Under those conditions, in peace time these commercial airships are saving the taxpayer's money by earring their keep and possibly making a profit, whereas in war time they become military machines for use with the Fleet or Air Forces.
I should also like to ask the noble and gallant Lord why, if the Government disapprove of the Burney scheme, they support and bless the new national aeroplane company—the imperial Airways I think it is called—which the late Secretary of State for Air started, and which is run purely on commercial lines, under a scheme very similar financially to our Imperial airship scheme, known as the Burney scheme. If they do not believe in that method why have they blessed and supported the Imperial Airways? Perhaps they have a good reason, but one would like to know what it is.
I only wish to add this. Since the Government have definitely decided upon this line of advance in regard to lighter-than-air construction and development, may I hope, for the sake of the. air interests of the Empire, that they will be successful and that I may be wrong in my surmises? I believe most strongly, however, that they will eventually have to trim their sails more on the lines which our scheme laid down, if they wish to see "Imperial airships commercially successful, and becoming the great and potent factor for drawing the Empire nearer together that we believe they can be. I am sure the Secretary of State for Air, as a former General of His Majesty's Forces, has that great Imperial ideal as much at heart as any of us here, and I feel sure lie realises the tremendous importance for the Empire's sake of the success or failure of the Imperial airship scheme.
LORD GORELL: My Lords, I think one may at any rate say that we have had an extraordinarily interesting debate, and not less interesting for the intervention of the First Lord of the Admiralty, who has told us what the present relations are between the Admiralty and the Air Ministry. I should like to associate myself with what fell from the noble Marquess, as to the clearness of the statement made by the Secretary of State for Air, but if one thing does emerge, it is that the Burney scheme has been jettisoned, and that what the Government now proposes is not anything which can be put up in contrast with it, because the

597
Burney scheme was at any rate an air service of an Imperial character. The Government's plan is not. It is an instalment, and according to the prophecy of the noble and gallant Lord, the Secretary of State for Air, it will be ten years before there will be a service on a commercial basis carrying freight and mail. He stopped at the end of three years, and he gave us no clear indication of what was in his mind between the end of the three years and the tenth year, when he hoped there would be a full service. There is one other point which I should like to mention. The Secretary of State for Air did not quite appreciate what I said with regard to a full-scale trial. I did not mean a trial by a full-scale airship, but what I meant was the trial of a full-scale service, which can only be done by a regular fleet of airships.
LORD THOMSON: My Lords, I can only speak again with the permission of the House. When I informed the noble Lord, Lord Gorell, that I was prepared to lay Papers, a request was made in another place for a White Paper on the subject, which will be prepared in the course of the next few days and laid. It will contain a general synopsis of the contract to be drawn up for a commercial airship, and will give some further explanations. I believe it is unusual to publish the terms of a contract, but so far as the Air Ministry are concerned they have no reason to be ashamed, and are anxious to conceal nothing, and they have no objection to the contract being published.
With regard to the questions that have been raised in the debate, I think a great many of them were answered in advance in my own speech. For instance, I did deal with what the noble Duke has referred to—namely, that this was a loan instead of a subsidy. I pointed out that undoubtedly this large sum of money, £2,800,000, was a loan, that it, together with the £500,000, payment for Carding-ton and Pulham, was to be repaid, and that there was a provision in the agreement to that effect. I also pointed out, however, that it would require profits at the rate of 20 per cent. per annum, and sixty years at least, before those sums could possibly be repaid. That is, I think, really almost a worthless form of debenture, because it seems to me exceedingly unlikely that a commercial airship
598
service can possibly begin to pay for several years, and 20 per cent. is a very large profit even when those profits begin.
There has been a good deal of talk about experts Everybody has claimed to have experts at his beck and call during the discussion, and the curious thing is that all the parties in dispute have been referring to practically the same experts. Several of the members of the Advisory Board are actually, at the moment, in the Air Ministry, and these same men the construction and guarantee company have had an eye on, and in fact have made approaches to them. The number of experts can in fact be numbered on the fingers of one's two hands—the real experts. There are a certain number of people of the stamp of works managers and others of that kind; but the number of real experts is extraordinarily limited. We at the Air Ministry have just as much power of getting hold of these people as anybody else. In fact, I have seen lists drawn up by the guarantee and construction company, which contained names that we would not have accepted, and which contained names that were already on our list. The Advisory Boards will, I think, be common to all airship constructors in the immediate future.
The noble Earl, Lord Balfour, asked me whether His Majesty's Government were going to forsake their Free Trade doctrines, and make it necessary for all airship construction throughout the world to be carried on in this island. I cannot pledge myself ahead. All I can say is that I sincerely hope the vast majority of airships constructed in the world will be constructed in this island As many as I can secure will be—it is one of the reasons why I have been so anxious to link up this Government service with a commercial airship service.
One last word. We have kept these properties, and we have gut these experts. The thing that weighs tremendously with me in that connection is this. Supposing the first stage of the Burney scheme had completely crashed. Supposing his airship on its way to India broke its back, there would be £400,000 gone, and despair, and the Government not ready with anything. Supposing one of our first two airships crashes, or supposing

599
both do—we have still got the experts in Government employ, we have still got the air highway, we have still got the power of employing people and giving out contracts, we have still got the determination to go on, and the immense resources of a Government behind us.
THE DUKE OF ATHOLL: Of course it will cost £1,500,000.
LORD THOMSON: No, £1,350,000 at the outside. That perhaps is thought extravagant, but I thought I explained, possibly at undue length, what was provided for by that. Really we are putting two stages into one. Commander Burney's scheme in the first stage would have produced one airship, it is true. We produce two airships, and we provide this immense air highway as well. As soon as Commander Burney has produced one airship and sent it to India he becomes entitled to £1,600,000, and during that second stage he has not got to produce six ships. The noble Duke can say
600
that he would have produced six ships, but the, agreement only binds him to produce enough ships to give a weekly service to India.
THE DUKE OF SUTHERLAND: Six ships is a minimum.
LORD THOMSON: A weekly service.
THE DUKE OF SUTHERLAND: In the event of Commander Burney's firm not buying the airship they construct, would not that increase the figure?
LORD THOMSON: The figure is £1,350,000.
THE DUKE OF SUTHERLAND: That includes it?
LORD THOMSON: But I believe that there will be many offers for that airship.
On Question, Motion agreed to.
House adjourned at live minutes past seven o'clock.