HL Deb 30 November 1927 vol 69 cc404-12

LORD ISLINGTON rose to ask His Majesty's Government if they are now in a position to make a statement as to the following points in regard to the Dead Sea salts concession:—

  1. (1) Whether they have received applications for the concession and from what quarters.
  2. (2) Whether they have in contemplation the selection of any one applicant as suitable for negotiation, and if so, whom.
  3. (3) Whether, in view of the great value and the important nature of the products, His Majesty's Government can state what conditions they intend to impose for the protection of all the interests concerned, and to ensure the adequate development of the enterprise.

The noble Lord said: My Lords, this Question deals with a subject which, I understand, has been under the consideration of His Majesty's Government now for some time past, and if the Reports in the public Press be true, the consideration has extended to certain negotiations that have taken place with individuals. If the reports are only approximately correct which have been made by expert chemists of high repute, confirmed also by an expert Departmental Committee of the Government, in regard to the salt deposits in and around the Dead Sea, I think there is little doubt in the mind of anyone who has studied these reports that, both in regard to quantity and quality, there exist in that area deposits of quite immense value, and importance. It is stated that the deposits in and around the Dead Sea are similar in character to those now mined by the Germans in the Strasfurt and Alsace districts, so that, with capable scientific administration, it may be presumed that these salts around the Dead Sea can be mined with even greater facility than is done by the Germans, and at a considerably lower cost.

This concession undoubtedly is one of quite exceptional importance. It is not only important in regard to the potential value of the deposits intrinsically, but it is of great importance for reasons of a very far-reaching character, both political and economic. So far as the political aspect is concerned, these deposits lie partly in the mandated territory of Palestine and partly in the mandated territory of Trans-Jordania. The line of demarcation, I believe, between those two territories, under mandatories of whom the British Government are the trustees, lies right down the centre of the Jordan and the Dead Sea. It may be assumed, therefore, that any concession that is granted will have to lie across these two respective countries. I should like to point out, by way of emphasising this political aspect of the matter, that these two territories, although under British mandatories, are controlled under quite different jurisdictions. You have in the one case in Palestine a British Government and a British and Jewish executive, with a population in which Arabs largely preponderate, whilst in Trans-Jordania you have an Arab king, King Abdullah, with a practically wholly Arab population. It is obvious, therefore, I think, that to whomsoever this concession is granted most careful provision should be made that the claims of these two countries and of their people should be protected and satisfied. In considering a concession of this character, therefore, there will inevitably arise questions of a political and racial character, which may develop into matters of very serious moment. The situation in that event, I would add, would not be confined within the areas of those two countries, but would unquestionably extend far away to the East.

There is one other very important aspect of this concession. This deposit, with its immense amount of chloride potassium, which, I believe, is estimated by experts to represent something around 1,000,000,000 tons of potash, to say nothing of the other auxiliary chemicals of the greatest possible value, that are to be found in this area, contains products which are daily becoming more necessary for fertilising agricultural land over the whole world. In this country undoubtedly, if the cost of this particular fertilising product could be brought within reasonable dimensions, it would be of the greatest possible value, especially in the cultivation of beet and other agricultural products. It is in very great demand at the present time in many other parts of the Empire, in Australia, in Canada, and in the Sudan. And if the price of this potash became more reasonable, I have no doubt it would find its way with great advantage into practically all the countries of the Empire. At present, as many of your Lordships are aware, the supply of potash is almost exclusively in the hands of a German monopoly and, in correspondence with that monopoly, the cost of potash to agriculturists is extremely high. It is, I believe, somewhere round about £8 10s. a ton at the present time, with the prospect of an increase in the early future.

During the War this monopoly was used by the Germans as a very formidable weapon against us, with the result that potash increased in cost until in the extreme periods of the War it was something over £100 a ton. I have alluded to this aspect of the question because I venture to suggest to His Majesty's Government regarding a matter which I am sure they have taken into full consideration, that to whomsoever the concession is granted, the group ultimately selected shall have no connection direct or indirect with the German monopoly, but shall be in essence a British group and one which can stand outside all existing undertakings, so that the market may be freed and more reasonable prices assured. This deposit is undoubtedly a matter of very great importance to our Empire and, I might add, of immense importance, therefore, to the whole of the consumers of the world. Under all the peculiar circumstances surrounding this concession, seeing that it stands in a different category from many concessions which are granted, and that so many interests of vital importance are concerned, I urge that it should not be dealt with exclusively as a Departmental matter. The interests are so various that consideration should be given to the granting of this concession by the Departments which administer those different interests. In fact I would suggest very respectfully that it may become of such immense importance to the Empire and the world that it should stand quite outside of Departmental consideration and should be most carefully considered and ultimately decided upon by His Majesty's Government as a whole.

In view of the very grave and important considerations which, necessarily, I have but briefly touched upon, in view of the situation of the deposit, in view of its political aspects, in view of the prospective magnitude of the enterprise and the great and many interests concerned, both political and economic,, I think I may reasonably ask that the subject should receive very careful consideration and that a full statement may be forthcoming. Perhaps I shall not be regarded as unreasonable if I suggest that in the public interest on a matter of such importance, before the concession is granted and before the conditions are applied—because your Lordships will have seen from the few remarks I have made that the conditions applying to the concession are of immense importance—a statement may be made to Parliament and to the country so that Parliament and the country may be taken into the confidence of His Majesty's Government.

LORD DANESFORT

My Lords, I desire to associate myself most strongly with everything that the noble Lord, Lord Islington, has said. It appears to me that the country and your Lordships' House should be grateful to him for having brought to notice this exceedingly important question. It seems to me to be a vital question not only in the interests of the mandated territories concerned but of this country and of our Empire as a whole. May I, with your Lordships' permission, state very briefly why it appears to me to be so important. Amongst these deposits in the Dead Sea there are vast quantities of potash. Potash is of extreme importance, in the first place, as a fertiliser of foodstuffs and other products, especially, perhaps, wheat and cotton. It is also important in many chemical industries such, to give only one or two illustrations, as the production of aniline dyes, soaps, bleaching, and weaving. It is also of great value for war purposes.

Before the War Germany, with that eye on the future which was one of her greatest national assets, saw the vast importance of creating a monopoly in potash if it were possible. The Germans had the opportunity of doing so. There were great deposits in German territory, and they succeeded in establishing the most powerful monopoly and a world-wide market. What happened in the War? They had, of course, foreseen this and their preparations were no doubt made with a view to what they knew was impending. The effect of the German monopoly was that throughout the whole War Germany had a plentiful and cheap supply of potash, whereas the other nations of the world, especially those opposed to Germany, were driven to the sorest straits in order to get an adequate supply of potash. The result was that the price of potash soared in every other country. In the United States from a pre-War £8 10s. it rose to something like £70 and in some cases £112 a ton. In this country the price went up from about £9 5s. to £60 and £80 during the War. That ought to serve as a warning. Germany's control of and monopoly in potash was a war weapon of the utmost importance.

What has happened since the War? I understand that a certain group of French industrialists endeavoured to develop the potash which was known to exist in the Province of Alsace. The Germans undersold these French industrials and, if my information is right, the French industrials who were developing Alsace were forced to enter into an agreement with the German monopolists, the effect of which was to leave potash very largely to this large German monopoly. I believe the Germans control something like 70 per cent. of the market and the French perhaps something like 30 per cent. As far as America is concerned, they endeavoured, no doubt with a certain degree of success, to establish potash industries in that country, but it would appear that Germany has largely regained the American market and is now forcing prices up with a view to killing all competition. As was said by Lord Islington, we want potash in this country and in our Dominions. We want it for agriculture and we want it for chemistry. Fortunately for us there is this new great supply which will be available.

I think it was about 1819 that some British investigators, by their energy and initiative, proved the enormous value of the salt deposits, potash chiefly, in the Dead Sea, and various inquiries have been made since. The amount and the value of these products are almost incalculable and if they can be kept out of the German monopoly, or any other monopoly, they would prove of the utmost value to us and to the Empire for agriculture, for the cultivation of cotton and for chemical industries. Let us not lose these opportunities. According to my information, which quite agrees with what Lord Islington has said, the amount of potash is almost unlimited. A million tons a year can be produced for something like a thousand years or more. If it can get into proper hands and if the development of that vast industry is not hampered and "cabined, cribbed, confined," to use a well-known phrase, by monopolists, it will be of inestimable value.

May I, in conclusion, suggest to His-Majesty's Government two points which I doubt not they will bear in mind when they are considering this matter? In the first place they should consider who should have these concessions, and in the second place what should be the terms on which they should have them. I suggest to His Majesty's Government that they should, so far as possible, grant these concessions to responsible people, and so far as possible British, due regard being had no doubt to the interests of the mandated territories. In the second place, I think it is vital to make provision, when you are granting those concessions, so that the concessionnaires shall not be allowed to join up with Germany or any other monopoly. If they did the value of these enormous deposits in the Dead Sea would be largely lost. It would be quite easy, as I conceive, to put into the terms of the concession a provision that there should be no amalgamation with any large group of monopolists, or that there should be no working agreements with monopolists which would have the effect of continuing the terrible and disastrous monopoly in potash which now exists. I feel certain that the Government will pay due regard to all these points and I cordially support what was said by Lord Islington. This is not merely a Departmental matter; it is a matter which involves large political, economic and other considerations which should be taken account of by His Majesty's Government as a whole.

THE PARLIAMENTARY UNDERSECRETARY OF STATE FOR DOMINION AFFAIRS (LORD LOVAT)

My Lords, His Majesty's Government is fully aware of the great importance of the Dead Sea deposits. They are fully aware of their importance not only in themselves but of their possibilities and also of the political questions which may arise in working them. They are further alive to the agricultural world interest which those deposits have as a possible means of breaking down the monopoly which exists at the present time, but I do not wish noble Lords to go away with the belief that there is absolute certainty as to the extent to which these deposits can be worked. After all, we are at the experimental stage in this matter and much has to be proved and worked out before we are certain that the deposits can be developed to the extent which noble Lords suggest. His Majesty's Government, naturally, is also aware of the strategic importance of the product. We all know what we suffered during the War on account of this monopoly and, especially with a gentleman like Lord Plumer in partial charge of arrangements, the noble Lord may be quite certain that this question will not be overlooked.

The noble Lord asked certain specific questions. He asked whether applications had been received for the concession, and from what quarter. Applications were received in 1925. The offers that were then submitted were not regarded as acceptable and the applicants were informed that they might have to the end of 1926 to revise their applications. These applications were then considered. The applicants included Dr. Norton, of the Palestine Salts Corporation, Mr. Maitland Edwards and Major Henry, Messrs. Tottie and Bicknell, Major Tulloch and Mr. Novomeysky. After careful consideration of all the applicants, of their financial position and of their knowledge and connections, the Government have decided in principle to grant a concession to Major Tulloch and to Mr. Novomeysky, based on the offer which they have put before them. May I say that there is nothing signed or sealed yet. The question is in negotiation and therefore I cannot do more than indicate the general lines on which such agreement, if it is come to, will be made. May I say in this connection that in considering to whom this concession should be given, it is of the first importance that the group receiving the concession should be in a position to work it? They must have capital, they must have knowledge, and they must be tied by the concession so that they are certain to carry on this work.

LORD ISLINGTON

May I intervene to ask if the noble Lord can tell me whether the Government are satisfied that these qualifications are possessed by the two gentlemen whose names he gave as being probably the recipients of the concession.

LORD LOVAT

They are satisfied that these gentlemen and the group who are working with them, the financial backing they have, are suitable for carrying out the work. As I have stated, the object of His Majesty's Government is to get the work done and to get it done independently of any combines which exist at the present time. A feature of the concession, in whatever form it ultimately takes, will be the allocation of a share of profits to the countries concerned, which His Majesty's Government regard as the most satisfactory way of dealing with a concession of this kind and which to a great extent may eliminate, or at all events lessen, some of those political difficulties to which the noble Lord has referred. I do not think it would be advisable, in fact it is certainly not advisable at this stage, to go any further into the actual conditions surrounding the contract or agreement, but I would assure the noble Lord that His Majesty's Government have no intention of confining themselves to a single Department if they require advice, as they no doubt will require advice, on any portion of the contract. They are anxious that this should be a real live concern which will compete with the existing monopoly. They attach the very greatest importance to it, and they have taken full time to consider who would be the best group to carry on the work and the terms under which they can achieve the objects which they have in view.