§ LORD ISLINGTON rose to ask His Majesty's Government to state what progress has been made towards the settlement of the Dead Sea Concession; whether His Majesty's Government is now prepared to give the names of the group backing Mr. Novomeysky and Major Tulloch, and, if it still exists, to what extent that group are prepared to finance the undertaking; further, to ask what consideration His Majesty's Government are giving to an application for developing the enterprise on the basis of a "merger" of interests under British control, made to them in February last by a powerful British group with the necessary capital and willing to accept conditions more favourable than any yet put forward; and to move for Papers.
§ The noble Lord said: My Lords, some six months have elapsed since this question of the concession for the salts in the Dead Sea was raised in this House. On that occasion my noble friend Lord Lovat, in whose charge the reply on behalf of the Government was entrusted, stated that the concession had been granted to two gentlemen of the names respectively of Mr. Novomeysky and Major Tulloch, that these gentlemen represented a group working with them, and that His Majesty's Government were satisfied that they possessed the necessary qualifications, both financial and otherwise. My noble friend also stated in the course of his speech that applications for this concession had been all sent in on notice from the Colonial Office at the end of 1926, and that of the several 263 applicants the gentlemen whose names I have just given were those who were selected. Presumably, therefore, these gentlemen and the group with them have possessed the option of this concession for something like a year or a year and a half. In these circumstances I make no apology for again raising this question.
§ This concession is a very protracted business. It has been under close consideration since 1923 and before that time investigations were going on. So far as I have been able to read the reports of those scientific investigations, both official and otherwise, they have shown the great potential value of these salts and deposits in and around the Dead Sea. They have also shown that, as far as can be gathered from an investigation of this character, they can be mined on an economic basis, and that no physical or scientific obstacles were found to be present that could not be overcome. I merely say, therefore, that surely the time has now arrived, taking into view the period that has elapsed since the commencement, and taking into view the work that has been applied to this enterprise, when we are justified in asking in Parliament why a settlement has not been come to, and when a settlement is to take place. It may be asked what is the peculiar interest attached to this concession. I venture to answer that question by saying that this is no ordinary concession. It possesses features beyond those ordinarily applied to a mere commercial enterprise. There is, first of all, of course, the great potential intrinsic value of these salts, the widespread demand for these salts—potash and the allied chemicals—practically all over the world; but, apart from this, I venture to say that the circumstances surrounding the enterprise, and the locality in which the enterprise is situate, introduces far-reaching problems of political significance. These cannot be, and I hope are not being, ignored by His Majesty's Government, both with regard to the terms and conditions that should be imposed in connection with this concession, and also to the constitution of the group that should carry out the concession.
§ May I ask your Lordships' indulgence while I briefly state what would appear 264 to me, after a very close investigation of the subject, to be the overriding considerations which should guide the decision of His Majesty's Government in granting this concession? First and foremost is the fact that Great Britain is the Mandatory Power over Palestine; in virtue of that position Great Britain possesses sovereign rights of control. She therefore has to act in matters of this character as a wise, equitable and comprehensive trustee of all the interests concerned and these interests are both numerous and, in many instances, very delicate. Therefore, both those who are to carry out the work and the terms under which they should carry it out should be such as to be acceptable first and foremost to the people of Palestine as a whole. It must be remembered—and I hope it will never be forgotten—that Palestine is composed of a population of which no less than 87 per cent. are Arab whilst 10 or 12 per cent. are Jewish. It must equally be borne in mind that half the area that will form this Dead Sea concession lies outside the confines of Palestine in the territory of Trans-Jordania, a country wholly Arab in population and under an entirely different jurisdiction from that of Palestine.
Mr. Winston Churchill, when Secretary of State for the Colonies, visited that country and as a result he issued a White Paper (Cmd. 1700) which was an elaborate explanation of the Mandate for Palestine. Those of your Lordships who are interested in this subject, as well as people outside this House, might well obtain a copy of this White Paper and study it. I am going to confine myself to one short paragraph, which in my judgment, as I hope in that of your Lordships, summarises the position in Palestine and the duties of the Mandatory Power. The Report was published in June, 1922. Mr. Churchill says:—
They would draw attention to the fact that the terms of the Declaration referred to do not contemplate that Palestine as a whole should be converted into a Jewish National Home, but that a Home should be founded in Palestine."
I hope your Lordships will mark the very great distinction between those two, and it is upon that distinction that I base my case this afternoon. The whole of that White Paper breathes the view that the responsibility of the Mandatory
Power is first and foremost to mete out even justice and equity in all matters and interests, political, social or economic, to the people of Palestine as a whole, and not to any minority or section within the confines of that territory. If this enterprise proves a success—and there appear to be very fair prospects that when it is undertaken, if it is undertaken efficiently, it will prove a success—it will probably become the greatest economic factor in the future welfare of Palestine and its people. It is therefore of the first importance that the group selected should be so constituted as to enjoy the confidence of the people of Palestine as a whole.
§ There is a second consideration that should guide His Majesty's Government in granting this concession. These salts and their allied chemicals—and the latter, let me say, are of the highest value in most important branches of industry—will constitute a great and a new source of supply of a much needed product throughout the world. To-day the main supply is in the hands of a great German cartel by which it is worked mainly around Strasbourg and in Alsace. It constitutes what every one knows to be practically a world monopoly in regard to those products. The result is that the users of potash, to-day, have to pay the very high price of £9 10s. a ton for this product, while this product, not to mention the allied chemicals, is one of the very first importance for fertilisation in many of the chief lines of agriculture. Here is an opportunity which rests in the hands of His Majesty's Government to place potash and its allied chemicals on the market in healthy competition, free and independent of any present monopoly. If this object is to be achieved the group that operates it must be quite independent of any existing monopoly; it must not possess any inclination or power to work in conjunction with any existing monopoly, directly or indirectly. Then, of course, it must possess an unquestioned financial backing of its own. It should be a backing of such dimensions as to be free and independent of any other source, either in this country or outside it, and should be able to do its work unassisted. And finally it should be ready to comply with such terms as will satisfy the people of Palestine as a 266 whole, and of Trans-Jordania, to whom, after all, this valuable property really belongs.
§ Now if this set of essential conditions which should determine the granting of this concession is a reasonable and correct one, I should like to ask my noble friend if he will state, when he replies for the Government, what progress His Majesty's Government have made towards a settlement, and whether in working towards that settlement they have been guided throughout by considerations such as those which I have outlined. I ask this question advisedly and deliberately. His Majesty's Government have been constantly interrogated regarding this concession in another place. I have read these Questions put by members in the House of Commons, and I have also read the answers made by representatives of the Government. The Questions have teen quite clear and direct, seeking for this very information to which I have been alluding—namely, as to what the group is, and what are the terms under which the group is working. I am bound to say that never in a Parliamentary experience of now, I am sorry to say, upwards of 35 years, can I recollect, an occasion when a set of Questions has been put more directly, or a set of answers made more, evasively.
§ There would appear to be, I do not know why, some organised practice on the part of His Majesty's Government to conceal by evasion, subterfuge, and every means in their power the identity of this anonymous group that stands behind the names of Mr. Novomeysky and Major Tulloch. I cast no reflection, whatever upon these gentlemen with whom I am not acquainted; but, from all I have been able to gather in inquiring into this subject, I would say that neither on the ground of scientific knowledge nor of financial capacity can either of them be said to hold a great locus standi as concessionaires in this enterprise. Therefore, it comes to be a question as to the group behind them. An increasing number of people are asking why there is this mystery about the group. What occult reasons can there be for secrecy on the part of His Majesty's Government regarding the names and constitution of a group which is to operate an undertaking of first-class national and Imperial importance? In regard to this matter, Parliament 267 has a direct right to know to whom this great enterprise is to be entrusted and all the details connected with it.
§ Those who have watched recent events—and I am sure some of your Lordships will agree with me in this—must have observed, as I have, a growing, and I think a dangerous, tendency on the part of certain public Departments to interpret their administrative duties and functions far beyond the proper limits that should prevail under our Parliamentary system. There are too many instances too frequently occurring of transactions behind the folded doors of a Department and of Parliament only becoming cognisant of the details and the facts when the thing is a fait accompli. Many of these instances have proved subsequently to be not too wisely conceived and, in their results, not too equitably worked out in the interest of those concerned. I will not deal with them: I will only mention three instances which will occur immediately to your Lordships' mind. There are the recent events and debates in regard to Ireland; recent events in regard to the rubber industry; and I would add (and I listened with very close attention to the debate upon the matter), the transactions which took place regarding the so-called settlement of the Basle Mission. Knowing a good deal about that in former days when I was a member of His Majesty's Government, I shall be surprised if more is not heard hereafter of the last named subject.
§ The case of this concession is even more important, because one might say that these other matters deal in the main with internal questions which can be fought out by our own people. But any unwise arrangement with regard to this concession will stretch itself out beyond the borders of internal policy and may come abreast of very grave questions of policy of an external character. Many people are very apprehensive to-day, and I think naturally, that an unwise arrangement will be effected without the full cognisance of Parliament. Arrangements may be come to that may give grave dissatisfaction to the people of Palestine and which may stretch beyond the borders of Palestine and Trans-Jordania throughout the whole of the Mahomedan community in the East. I will give an instance of the kind of interpretation of this policy of evasion that is given outside, and in 268 my judgment it is a very striking instance. A month ago, on April 22 I think it was, Mr. Weizmann, the President of the Zionist Organisation, addressed that organisation at a public meeting. He dwelt for some time upon the internal difficulties which beset the organisation, difficulties connected with finance and with the very grave dissensions within its ranks. However, with a view to placing a more favourable picture before the meeting he proceeded to enumerate the assets which had been obtained for the Zionist Organisation. He mentioned two or three and then came to the salts in the Dead Sea. That is a very striking remark. What does it mean? It means that Mr. Weizmann thinks, or knows apparently, or thinks he knows, what the British Parliament, representing the Mandatory Power, is not allowed to know. I think this is a most unsatisfactory situation, and one that should receive the earnest consideration of Parliament.
§ I will not discuss the somewhat speculative mind of Mr. Weizmann. We know that since he was brought into contact with Palestine he has certainly shown on many occasions acquisitive propensities. Therefore, I do not suggest for a moment that what he said is correct and I hope my noble friend will be able to say it is incorrect. At the same time it shows that he thinks either that this concession will be made to a group which is so closely connected with the Zionist movement that it may claim it for its own, or failing that, that so long as the chief concessionnaire, Mr. Novomeysky, who is in close touch with the Zionist Organisation, remains in that position, it will be a guarantee that this property will come into very close association with the Zionist movement. This is the kind of claim that is constantly made and has been made ever since the beginning of what I regard as the unfortunate experiment which is known as the Zionist Home in Palestine. As I said in your Lordships' House when I opposed it—and, with great foresight and judgment, if I may say so, your Lordships condemned it by an overwhelming vote—it would lead to all kinds of anomalies, incongruities, and misinterpretations and would make government difficult in that small country. As it stands to-day, and from all I hear of it, 269 I think it has constituted itself a kind of chronic impediment to that pleasant harmony which previously existed amongst an agricultural people.
§ At any rate, I am glad that in this White Paper the duties of the Mandatory Powers are clearly defined. They are precise and clear. Those Powers have complete and absolute authority in dealing with all these matters, and I say that in a concession of this character, which borders so closely on great world economic questions, and grave political issues, it is incumbent on His Majesty's Government as the instrument of the Mandatory Power, through Parliament, to see to it that a wise and equitable scheme is evolved. In view of the situation which has been created in no small measure by the evasions of the past months in the House of Commons, creating as they were bound to do contention and in many instances suspicion—the possibility on one side of the risk that this concession is to be tied up in the meshes of the Zionist organisation, and on the other side the risk of this concession passing into the hands of a group which may be so closely connected with international capitalists that it would bring it into direct conformity with the existing monopolies for this much-needed product—I say that it is the absolute duty of Parliament to see that these two dangers are avoided and that a concession is granted to a group that stands so completely independent and outside of any dangers of that character that the proper work of the enterprise may be carried through for the benefit of the world and without any danger to ourselves as the Mandatory Power.
§ That brings me to the last part of my Question, whether His Majesty's Government have considered an application made to them in the early days of last February? That application comes from a group of British financiers and commercial men of high prominence and stability, joined with scientific men, offering British capital to work this concession, not only to work the potash but all the subsidiary chemicals (which are of the first importance) connected with these salts and deposits. This group is prepared to carry out at once a complete "merger" of all the subsidiary interests, British, Arab and Jewish, and to include those applicants who have to a large extent in previous years borne the heat 270 and burden of the day in bringing this scheme to the stage that it has now reached. They have available—and this is an important branch of the work—one of the very best selling organisations in this country, built up over a period of 25 years, with branches all over the world and especially in those parts of the world where, in the early days of marketing, potash and all these fertilisers will find the readiest market. They are a selling organisation that has been dealing specifically in fertilisers and chemicals during these years. This group is ready to commence at once. There is no secrecy about it and there is no need for secrecy. I have the full authority, if this House desires it, to give the names of that group. All I say here is that in view of all that has taken place and in view of the delicacy of this position, I strongly commend to His Majesty's Government an early and favourable consideration of that application.
§ I will say one last word. I beg of His Majesty's Government that they will no longer regard this question as a mere departmental transaction. The enterprise is not so well known in this country as I believe it will be hereafter. I am convinced that it is an enterprise of great significance and importance and I hope that what I have said this evening may commend that view to some of your Lordships who have been present. It certainly is not a matter that should be dealt with as a departmental transaction, still less behind closed doors. It is a matter that both the Government and Parliament should consider and approve before final judgment is passed, because it will only be by this means, I believe, that you may ensure what all must desire, that this great enterprise, that these far-reaching political and economic issues, may be set in motion to the reasonable satisfaction of the various interests concerned. I beg to move.
§ LORD THOMSON
My Lords, I think we are indebted to the noble Lord, Lord Islington, for having drawn the attention of the House for the second time to this very important matter. He has dealt with the mystery which apparently surrounds this concession. I propose to confine my remarks to the delay which has attended it ever since its inception. That there has been delay no one can deny. The first formal application for this concession was made in the year 271 1918 and was duly registered by the Potash Controller. Since then various applicants for the concession have appeared and put in their applications. Some have been considered, among others those of the two gentlemen who are at the present moment in the foreground with regard to it, but, so far from the matter having been settled during these nine years, to judge by answers given in another place it is not even settled yet. Major Tulloch and Mr. Novomeysky have not yet got the concession, as I understand the answer given by the right hon gentleman the Secretary of State for the Colonies last February. He said merely that negotiations for the lease of this concession are now being carried on.
I have often asked myself what are the reasons for this delay and, until last year, I am bound to say I thought there was a reasonable pretext for delay owing to the fact that it might not be quite clear whether we, as the Mandatory Power in Palestine and Trans-Jordania, had the right to grant a concession of this vast importance; but, with the passing of the Merchandise Marks Bill through your Lordships' House, under the provisions of which goods proceeding from mandated territories and Protectorates were to be marked "Empire," I felt certain that this matter had been gone into, that all these difficulties had been faced and that His Majesty's Government were firmly of opinion that they had the right to grant these concessions if, indeed, they were going to mark the goods coming from such territories with the word "Empire." There are very few goods that come from these regions that would be worth marking "Empire," except potash. Moreover, having studied carefully all the documents which bear upon this subject—namely, the Covenant of the League of Nations, the Memorandum to which the noble Lord has referred and the Mandates for Mesopotamia and Palestine—in spite of various answers in the House of Commons referring to Clause 18 of one of them, Clause 16 of another, and Clause 11 of a third, it does seem to me quite clear that the British Government have a perfect right to grant a concession for these valuable deposits, always providing that it is in the interests of the inhabitants of the country concerned, and of the majority of those inhabitants 272 rather more than of the minority. Of course, in this particular instance the majority of the inhabitants are Arab. That being so, and if a just concession, or if just terms for a concession, were arranged, so far from there being any difficulty at Geneva in regard to this matter, I should have said it would be entirely in accordance with the views and principles of the League of Nations.
There is another explanation of this delay. It has been very widely suggested. It is that a monopoly policy is at work which aims at holding up the production of the Dead Sea and its shores in order to keep up the price of potash. In other words, it is a policy inspired by certain interested groups and combinations. I should be the last person in the world to accuse this or any other British Government of favouring or countenancing such a policy, but what does seem to me to be possible, and indeed to have happened in the past, is that the excellent principle of hastening slowly has been carried a little bit too far in this connection. It is perfectly true that exaggerated claims have been made for these products. The world demand for potash and fertilisers is, after all, limited. It would be impossible, even if it were practicable, to put all this potash on the market at once, and the other by-products, so to speak, of the Dead Sea salts would take a long time for their exploitation. But if the statements made in regard to these deposits have often been exaggerated, and sometimes wild, there are many cogent reasons why the policy of hasten slowly should not be carried too far in that connection.
After all, we as a country and the world at large have suffered very considerably in the past from a monopoly policy. In the early stages of the War, throughout its course, and even in the first years after it, the fact that there was a potash monopoly in the world caused the price of that commodity to rise to dizzy heights. I think I am correct in saying that the price of potash was, at one time, from £60 to £80 a ton. In my view the chief justification for energetic action in regard to the development of the Dead Sea and its resources is that we should, so far as it lies within our power, make it impossible for such a monopoly ever to be established again. And we have it in our power at this 273 moment. What would be the effect, for example, of a continuance of this hasten-slowly policy in regard to the Dead Sea and its products, and its salts? As I see the matter, it might result in the whole of these valuable resources being absorbed slowly by existing groups and combinations dealing in potash; that they might develop to a certain extent but not in really energetic fashion; that they would permit a slow trickle to come from that direction of this commodity which is so much needed by farmers in every part of the world, but that the trickle would be regulated carefully so as to keep up the price of potash.
There is another aspect of that situation. If the state of affairs that I describe should be allowed to come into existence, then if ever we were again faced by a similar emergency to that which arose in 1914, our position would be precisely the same as it was then and we as a nation would be seriously embarrassed. We should be perfectly helpless, as we were then, and dependent for supplies of potash for its various uses from sources overseas at great distance and at great cost. I should like also to remind your Lordships that potash is not the only thing that comes out of the Dead Sea. There are very many other products. There is, of course, sodium chloride, or common salt, which might be of great use in Arabia and various parts of the British Empire. There is also magnesium chloride, or the metal magnesium—I understand that is what is meant by the metal magnesium, that is the scientific term. That is found in almost fantastic quantities among the precipitates of the Dead Sea water—thousands of millions of tons. If that is true, if magnesium can be produced in these quantities, and at a reasonable price, a metal possessed of such lightness and such tensile strength as magnesium will play a very important part in the development of aviation and be of considerable advantage, not only to the British Empire but to the world.
Speaking as a layman and with the utmost diffidence on scientific matters, with which I am not really sufficiently acquainted to use technical terms, I would say that there are two main directions in which greater activity should be displayed in regard to these sources of supply. Those two directions are 274 research and transport. There is a great deal of guessing going on about what there is in the Dead Sea, but I think there is sufficient justification for elaborate research. I am told that that research involves large scale operations and a considerable sum of money. If half the claims that are made for the contents of the Dead Sea are justified, they are well worth the expenditure of that money, and they are well worth the immediate expenditure of large sums of money. The other direction, in my view, is transport. We might have all the riches of the world in the Dead Sea, and if we were unable to get them away they would be of no use to us. Transport involves the construction of, at least, one railway across very difficult country. That railway will not be constructed on a hasten-slowly policy, or on the policy which has been pursued during the last nine years. A railway is not the sort of thing that comes into existence by itself. It requires careful engineering, much outlay and many years to complete. For the moment, so far as my information goes, literally nothing has been done. It is perfectly true that haphazard appliances might suffice to get away the small amount of potash which will provide the 10 per cent. required to meet the extension of the world's market, but I submit to your Lordships that we require something much more energetic and vigorous in the way of a policy. Both of these lines of advance should be started in good time. Delay is most dangerous, because we may find ourselves losing all control of this concession sooner or later, and every day that passes postpones the time when this research work can be commenced and the plan for a railway laid.
Those, to my mind, are the most important considerations in this matter and, if there is a group of financiers ready to put down the money and to reveal their names, if they are ready to start the necessary research work and to make the railway, it seems to me, if I may say so, almost a shortsighted and foolish policy on the part of His Majesty's Government not to accept their terms. At the present moment, as I understand the matter, literally nothing on any scale at all is being done. There may be two reasons for the delay that has occurred. 275 It may be on account of the difficulty of the Mandates, or on account of this policy of monopoly or, to be more exact, this hasten-slowly policy. I am sure that we shall be very grateful to the noble Lord who will reply for the Government if he can say whether that policy of hasten slowly is the policy of His Majesty's Government or, if not, what the real reason is.
THE PARLIAMENTARY UNDERSECRETARY OF STATE FOR DOMINION AFFAIRS (LORD LOVAT)
My Lords, in dealing with the question that Lord Islington has raised, I am sure that he will not wish me to follow him into those general accusations against the Government's administration in dealing with rubber and other matters. I think that we must content ourselves to-day with dealing with the subject before us, and leave for another time a debate as to whether this or any other Government may have been dealing with such matters behind closed doors to a greater extent than appears desirable. Some of the matters that the noble Lord has raised are not the responsibility of this Government, but concern also the last Government and the Coalition Government, of which I believe the noble Lord was a supporter. I should like to preface my remarks by saying that it is obvious that, where you have to deal with a company or companies, especially when you are not dealing independently but have partners on your side of the table, matters cannot be published to the same extent as would be possible if you were dealing with a single party. It is equally obvious, I think, that there must be delay if one has to consult at every turn, as it is only right that one should, the interests of Governments representing two such different outlooks as those of Trans-Jordania and Palestine. Surely some of the arguments of the noble Lord are mutually destructive. If, on the one hand, he wishes us to see that the Arab interest is thoroughly safeguarded, he cannot at the same time argue that we should push forward with negotiations with extreme rapidity when we have to consult others at every turn—and this must necessarily mean delay.
Let me deal very briefly with some of the points that the two noble Lords have raised. In the first place I should like to correct certain dates. The noble 276 Lord will remember that it was in 1925 that the advertisement inviting applications for a grant of this concession was first issued. He will remember also that the applicants were informed that the High Commissioner of Palestine was unable to accept these offers, as they were unsuitable, and accordingly the whole matter had to be opened again. I would humbly represent to the House that it was not the fault of the Government if sufficiently strong groups did not come forward to take urn the offer, and if the commercial interests of this country were not prepared to do so. The matter was again brought up in January, 1927, and the claims of certain parties were thoroughly gone into. Dr. Norton was one of them, representing the Palestine Salts Corporation, and Mr. Maitland Edwards and Major Henry, Messrs. Tottie & Bicknell and Dr. Homerg and Major Tulloch and Mr. Novomeysky were others. These applications were carefully considered, not only here but also by the Palestine and Trans-Jordanian Governments, and in April, 1927, or shortly after, Major Tulloch and Mr. Novomeysky were informed that, after full consideration here and on the other side, including Trans-Jordania and the Arab interests, it was decided that they were the people who should be selected, and negotiations were begun, not on January 1, as one would almost imagine from the remarks of the noble Lord, but in September, 1927, by the Crown Agents. These negotiations have gone on, and I can assure the noble Lord that the utmost care has been taken to protect the points that have been raised.
Before I go back to those particular points, perhaps it will be simpler if I continue my history. When the question was last raised in the House negotiations were in progress. These negotiations have been referred to the Palestine and Trans-Jordanian Governments, and the Secretary of State, as he announced the other day in the House of Commons, is awaiting their reply. If the reply is satisfactory, then I have no doubt that full information can be published, but until this authority has been given and the negotiations are approaching a conclusion, I submit that it would be most unfortunate if the whole of the lines of those negotiations were stated, as it is obviously a question of give and take in 277 certain directions before you can make a deal of this sort. I can assure the noble Lord of two things. As regards terms, the noble Lord, Lord Islington, stated that it was most important that the group should have neither the inclination nor the power to unite with any other combine. Could you put that into any document? I ask your Lordships whether it is possible to put into any deal that you make with any firm, whether British or otherwise, however strong and independent it may be, a stipulation in black and white—
§ LORD ISLINGTON
May I interrupt the noble Lord for one moment? I may not have made myself understood to my noble friend and possibly to the House. I spoke of any other combine which by association would extend and develop the existing monopoly.
We all know that the selling agency of the German combine is nearly world-wide, and I think it would be almost impossible to tie anybody, so that for certain districts they did not come to a particular agreement as to selling areas and the rest. In all these big questions the matter of selling agencies is most important, and I fail to see how you could tie a body in such a way that they could come to no understanding with another cartel. As regards backing, may I assure the noble Lord that the backing is considered sufficient for what must be regarded as the exploratory or initiatory stage. I think it is always taken in this House as a fact that the Dead Sea products are something which are not absolutely proved. I think the term which we have in the English language, "Dead Sea fruit," conveys that something which is expected to be there may not turn out to be as anticipated.
I have great sympathy with the points which Lord Thomson raised about research and transport, but here again his arguments are almost mutually destructive, because Mr. Novomeysky is a man who with his group has done most work there, and unless the noble Lord is going to advocate the policy that for every great enterprise such as this the British Government should come forward and pay the very large sums which may be necessary for the development, I am afraid that I cannot follow him. Surely if the Government were to embark upon 278 a policy by which they were to pay a large sum of money for such questions as liquid fuel research, the expense to the taxpayer would be very considerable. Surely the better policy, if possible, is to get the private entrepreneur to undertake the preliminary stages which are necessary to show whether a scheme will be a success or not.
We have not yet reached an agreement, and that cannot be done until the Governments of Palestine and Trans-Jordania come to an agreement that the bodies selected are suitable. As regards the transport question, which I agree is most important, surveys have been made and certain prospects for railways considered which might put the Dead Sea more nearly in touch with communications than it is at present. The noble Lord's second point was as to why the Government refused the offer, or refused to entertain the offer, of the firm of chartered accountants who, he assures us, have very strong lacking—which we do not deny—for getting on behalf of British interests the power of a "merger" for dealing with the whole of the Dead Sea question. I would like to ask the noble Lord whether it is really equitable that we should allow anybody who conies in at the eleventh hour to take the work done by others, whether it be a question of raising capital or preliminary research, and compel those others to come into an agreement, while those who come in at the eleventh hour have in the meantime been doing nothing. I submit that that is hardly fair.
If they had the wish to come in, surely it is a commercial transaction which takes place every day? A certain group put in for a particular option and get the option, or at any rate a right to have their claims considered. If another body then wishes to come in, surely their line is to approach the first body and see what deal they can put through with them, and then for both to come to the concessionnaire and see if the concessionnaire will agree. Most certainly I cannot imagine the Government refusing, if two strong groups get together to make a really go-ahead policy possible. I can 279 hardly imagine a refusal being given, provided that the terms given to the original concessionnaire, who came forward at the time when the chance to come in was given, are complied with. Surely no Government tender would be worth while attempting, if at the last moment a third party could come in and demand a right to be considered, merely because they had great financial backing or more support in the other House.
I have dealt with the question of delay. The negotiations started in September last with parties as widely separated as Palestine, Great Britain and Trans-Jordania, and I cannot see how it was possible to conduct them more quickly. It is not as if the whole question of the Dead Sea was a certainty. It is a question of trying out first of all these processes on a commercial basis. What is proved in a laboratory very often does not work out in practice on a commercial basis. It is necessary to go into these questions before the construction of railways and other things can be considered. The group which has been selected has sufficient backing, the Government are satisfied, to carry out this work, and as we had the offer from this group when no other bodies came forward, the Government are clear that, provided the Governments of Trans-Jordania and Palestine approve of it, they will proceed with their negotiations.
§ VISCOUNT HALDANE
My Lords, I have listened to this debate with no special knowledge, I have not been approached by anybody, and yet I have derived an uncomfortable impression. To my knowledge this subject—I am not speaking of negotiations—has had the attention of the Government directed to it for a good many years. It is not a new subject. Everybody knew about the Dead Sea products, and about the necessity of a railway, and everybody knew that there were commercial groups anxious to make a bargain years ago. The noble Lord who has spoken for the Colonial Office as he talked increased in courage, and finally came down to September, 1927, as the date from which negotiations had taken place, but in the earlier part of his speech he referred to January, 1927, as the definite date at which matters came under consideration.
My point is this, that it is all very well to say that this matter 280 has been under consideration by commercial shareholders and others, but I thought I made it quite clear—and if not I should like to make it clear now—that while it was announced that these tenders could be made in 1925 no tenders were made which were thought in any way suitable. That is hardly the fault of the Government.
§ VISCOUNT HALDANE
At any rate it is clear that some years have passed since the Government were asking for tenders, and they have been considering the matter all this time. I have an uncomfortable impression that that has happened which very often happens in Government Departments—a subject taken up, attended to perhaps by an eminent permanent official, looked into, then put aside, the papers laid by, and the matter not gone into again for several weeks. Well, if you repeat that process you get to a very substantial amount of delay. I am speaking from what I have observed myself and tried to check when I was in office as an administrator, and it is what very often happens. I have no hesitation in saying that in this case it ought to have been possible to come to a decision long ago—certainly by September last. The scientific problems are not problems which have to be solved before an arrangement is made. All the Government had to do was to satisfy itself that this concession would be properly dealt with. Again, the matter of the railway was not a matter which should have given rise to any great difficulty. The whole question was: Should a bargain be made, and with whom? You may say that is not simple, but it is comparatively simple. It is a matter which can be put through if a resolute administrator puts his mind to it, and goes into it with determination and the will to get something done. I cannot but feel an uncomfortable suspicion that in this case the Colonial Office has been very dilatory, and I am not satisfied that the reasons which have been put forward to-day by the noble Lord are reasons which wholly excuse them.
§ LORD GAINFORD
My Lords, I should like to make one suggestion to His Majesty's Government of a business character. I agree with the noble and learned Viscount that this debate has already left a somewhat uncomfortable 281 taste in one's mouth. There has been a mystery in regard to who was being consulted in connection with the claim which may have been put forward, and who were behind the individuals mentioned in the Question. But I think that what Parliament has to do in a matter of this kind is to look after the interests of the public, and especially of the agriculturists in Trans-Jordania, and the Arab population who are the main population in the part of the world where these great potash deposits exist. What we are often afraid of in the case of amalgamations is that they may create much greater difficulty even than occurs when small concerns of an unstable character are competing unduly one against the other. The danger of a trade amalgamation is that a monopoly is secured, and prices are raised by restricting the supply of a commodity which is wanted in the interests of the community. Here is a case where you can produce a fertiliser of immense value to agriculturists, and what we are afraid of in this country is that a large amalgamation may raise prices and prevent agricultural interests from securing a fertiliser at a reasonably cheap rate. What the Government ought to do is to see that a monopoly is not created, and is not assisted by the terms which they arrange.
The case of the railways affords a simple illustration. It was quite possible for railway companies, which got concessions from Parliament, to raise rates so as to prevent the public enjoying the full advantage of the facilities which that concession provides. But Parliament has sanctioned a system by which that opportunity has been denied to railway companies; tribunals have been established in order to prevent railway rates from being raised unduly against the travelling public. In the same way, when you are producing a valuable article like a fertiliser, it is very important that it should not be in the hands of one world-wide organisation which will restrict the supply. I suggest that in a matter of this kind Parliament ought to be informed before the matter has been finally dealt with, and be placed in such a position as to be able to secure proper safeguards in the interests of the community.
§ LORD DANESFORT
My Lords, I have listened to the explanations of the 282 Government, and I also listened to the debate in November last, and I confess that the Government have not given us much snore information to-day than they gave us in November. In fact, I think their very reticence in answer to the Question of my noble friend Lord Islington has caused in the minds of many of us, including the noble and learned Viscount and Lord Gainford, a considerable degree of apprehension as to their intentions. Upon the main question involved they give us no assurance of any value. The great question is whether the Government are going to give tilt concession to persons whom they can trust, and whether they can assure us that those concessionnaires will not combine with any monopolist firms or companies in this or any other country, so as to enhance the price of potash and the other very valuable chemicals that can be obtained from the Dead Sea. That point has been strongly urged by my noble friend Lord Gainford.
There are certain points on which we are all agreed. The first is that there are in the area of the Dead Sea deposits of potash and other chemicals of immense value and in very large quantities. Those deposits of potash and other chemicals are vital to agriculture and other industries. Another point upon which I think we are agreed is that the grant of this concession, the persons to whom it is granted, and the mode in which it will be worked when granted, are matters of great political and economic importance. Several noble Lords to-night have spoken of a monopoly, and some facts were referred to showing how that monopoly can be used in a time of strain and stress to, this country. The noble Lord, Lord Thomson, gave some figures which really put the case rather lower than it could be put. Before the War the Germans had a practical monopoly of potash. We suffered from that during the War. I have no doubt that the German Government, or the German firms, with that extraordinary foresight which they displayed, knew that this monopoly would be of vast importance to them in the event of hostilities, and it turned out to be so. During the War the price of potash in the United States rose from £8 10s. per ton, which was the price before the War, to something like £112 283 or even more. In this country the pre-War price of £9 5s. per ton rose to something like £80 per ton. The danger of that monopoly is not over yet. If my information is correct, the German firms still hold a practical, though not quite so complete a monopoly as they had before the War. If I am rightly informed, they control about 70 per cent. of the total supply of potash in the world.
The noble Lord, Lord Islington, and the noble Lord, Lord Thomson, also, I think, referred to the importance of considering the interests of the Arab. Half of the area of these deposits is in Palestine, where the Arab population is 87 per cent. of the total population. The other half is in Trans-Jordania, where the population is almost, if not entirely, Arab. We have not heard to-day or indeed on any other occasion from His Majesty's Government, that the interests of those Arabs will be carefully preserved in any concession that may be granted. Having regard to these facts, I suggest to your Lordships that it is of vital importance to us in this country, to our Dominions, and to everyone concerned throughout the world, that these concessions should be in the hands of persons whom we can trust; that those persons should be bound down by very careful conditions not to allow this to become a monopoly; and that those conditions should provide that the concession should not pass in any respect whatever into the hands of monopolists or persons who would exploit the concessions to their own advantage and to the prejudice of British and other interests.
What has happened? I will not go into ancient history; I will confine myself to what has happened since the early part of 1926. The noble Lord, Lord Lovat, told us that new tenders became necessary then. I gather that tenders were sent in even in January, 1927—I think that was the date he gave. A tender came in, as understand it, from Major Tulloch and Mr. Novomeysky in April. It is strange that it was impossible to decide upon the merits of those tenders until September of that year. It seems rather a long time to inquire into the merits of tenders, bearing in mind that when you have selected your concessionnaires you immediately involve yourself in protracted negotiations with them as to the terms of the concession. On November 30 last 284 there was a debate in your Lordships' House, and the Government stated that they had decided, in principle, to grant a concession to Major Tulloch and Mr. Novomeysky. Incidentally, I may say that Major Tulloch is now nothing more than a mere name. The predominant and, as I have said, the dominant partner as regards these two is Mr. Novomeysky. A little later in that debate the Government stated that the concessionnaires—and this, I venture to think, commends itself to us all—must have capital and knowledge to work the concession, and that this was of the first importance. They said, further, that the Government were satisfied that these gentlemen and the group working with them were suitable for carrying out the work.
My noble friend Lord Islington, very properly, if I may say so, asked His Majesty's Government who are the group who are working with Novomeysky. Is it not important that Parliament should be informed in good time who the group are with whom these persons are working? I call the attention of your Lordships to the fact that it was said that the Government were satisfied that these gentlemen and the group they are working with are suitable for carrying out the work. That is a very definite statement. On May 7 the Government were questioned in another place as to the qualifications of these gentlemen, and it appeared, somewhat to the surprise of many of us, that the Government were not even then satisfied that Mr. Novomeysky was in a position to carry out the work; because I find in the report of what took place in the House of Commons on May 7 that Mr. Amery said this:—Whether that applicant"—that is Mr. Novomeysky—is in a satisfactory position to carry out the terms of the tender is a matter still under discussion and, if he cannot satisfy us on this point, then the matter will be opened again.That is in the Commons' OFFICIAL REPORT. That seems very strange after the declaration of the Government in November last that they were satisfied that these gentlemen were in a position to carry out the work. If my noble friend has an opportunity, perhaps he will explain these two somewhat conflicting statements.
285 May I suggest that as a corollary to that, it would be most advisable that before His Majesty's Government enter into any concession involving this very grave series of consequences, they should now give us an undertaking that the terms of the concession will be laid before Parliament for consideration, and that the names of the group with whom the concessionnaires are to operate immediately will also be announced to Parliament? This is not a matter for a Department or the Government. It is a matter for the country at large, and I urge the Government, and perhaps the noble Earl, who may reply upon this debate, will be able to give us a positive undertaking which would relieve the minds of a great many of us that the terms of this concession, and the names of the group operating with these two gentlemen, Major Tulloch and sir. Novomeysky, will be laid before Parliament, and that the concession will not be finally granted until Parliament is in possession of the full terms of it and the names of the persons to whom it is granted. That, I venture to think, would be only right and reasonable.
It appears that these people, Mr. Novomeysky and his friend, in whom the Government said last November that they had confidence, have not even yet satisfied the Government that they are in a position to carry out the work. Having regard to the nature of the questions involved and to the wide interests in this country, in Palestine and in Trans-Jordania, I hope that the Government will be candid, fair and open with Parliament and will give them the information which is absolutely necessary before they can set their seal to any agreement.
§ VISCOUNT BERTIE OF THAME
My Lords, the noble Lord has said that there can be no restrictive clause preventing any concessionnaire from selling his concession or entering into an amalgamation with other parties without the consent of the Government. Has the noble Lord forgotten the case of the Anglo-Persian contract in which a special clause was inserted stipulating that the company should not sell its concern or enter into an amalgamation without the consent of the Government? If it can be done in that case surely this is also a proper case for such a provision.
THE DUKE OF BUCCLEUCH
My Lords, I do not quite understand the position. Just now I understood my noble friend Lord Lovat to say it is quite impossible to put in a clause of this nature and then I rather gathered that it was in. I hope my noble friend Lord Birkenhead, who is to reply, will give us an assurance on this point. I am in agreement with the noble and learned Viscount opposite that we have really had given to us the minimum of information. It seems almost as if my noble friend Lord Lovat was not in a position to give your Lordships any real information on this point. I hope that before this licence, or whatever it is, is given to people our interests will be safeguarded. I gather from my noble friend below me (Lord Lovat) that he thinks there is considerable importance in this enterprise in regard to potash. If it comes up to only a small portion of what is claimed for it, it will undoubtedly be of great importance, particularly to the agricultural industry. Potash is dear at the present time and if it can be reduced in price it will help not only this country but every other country in the world.
I think your Lordships should be told something about this gentleman. I do not know whether he is a Russian Jew or what he is. I have noticed that a certain number of people seem to think that Jews have a historical right to Palestine. I have always imagined that the only part to which they had any historical right was Judea, which is a comparatively small portion of Palestine. Some people consider the British race to be descended from the lost tribes. I remember the late Lord Fisher telling me that although the Government made mistakes we were bound to win the War because we were descended from the lost tribes. But the real point that concerns us and the rest of the world, is that the company receiving the concession should have sufficient technical skill and should not be mixed up with any other body or any other country which controls the sale of potash throughout the world.
§ LORD BANBURY OF SOUTHAM
My Lords, I have listened to the whole of this debate and, so far as I can understand, the chief object of the noble Lord opposite is to ensure that if any body 287 of persons invests money in this undertaking they are not to combine with any other body of persons in order to secure what they think is a fair and reasonable price for their products. I have had some experience of business and I do not think any body of men would enter into such an agreement. It has to be remembered that it is by no means certain that this enterprise is going to be commercially successful. If there is a risk, the persons undertaking the risk must provide that they shall be suitably remunerated, if the undertaking is successful in the long run. If you run a risk you must also have the chance of making a profit. I do not think that so far as the proceedings have gone at present the Government are in any kind of way to blame. I would like to say that I hope the concession, when given, will be given to an English firm, and possibly some clause may be inserted that in the event of war something might be arranged as to the price of the product. I am rather inclined to think that my noble friend Lord Danesfort is right when he says it would be advisable to put the agreement, when it is arrived at, before your Lordships and before the members of another place.
§ THE SECRETARY OF STATE FOR INDIA (THE EARL OF BIRKENHEAD)
My Lords, first as to the point of suggested delay. I really think that that charge has been founded upon a failure to understand the sequence of events, though my noble friend Lord Lovat, I thought, very clearly described them. In 1925, as he told your Lordships, an advertisement was issued inviting applications for the grant of this concession. I suppose it was no fault of the Government upon which you could found an imputation of delay that not one single satisfactory response was made to that invitation. I do not know why the chartered accountants who are acting on behalf of a British group which very much later in the day—in February of the present year, I believe—for the first time indicated its desire to take part in this activity, could not have competed in the year 1925. They would have saved us a great deal of trouble if they had. I have not the slightest doubt, if the chartered accountants representing solvent English members had given a satisfactory answer in 1925, that their 288 claim would have been most carefully considered.
Consider again the question of delay. When the Colonial Office failed in 1925 they perceived at once, as Lord Banbury has shrewdly indicated, that you cannot easily get everybody to undertake a business of this kind founded upon no certain prospect and involving great certainty of expense and, accordingly, they adopted what seems to me to be the very sensible course of saying that they would give consideration to any revised offers which were received before January 1, 1927. If there was no enthusiasm during 1925 it seems a reasonable inference as a business matter that a rather extended period should be given. How that could be considered a circumstance which should three times in his speech make the noble and learned Viscount uncomfortable, I really do find myself in a difficulty to understand. In response to this invitation revised applications were considered and the principal negotiators in that matter were Major Tulloch and Mr. Novomeysky. I was rather sorry to hear the observations that were made about these gentlemen in debate in an assembly where they cannot make any reply and where, of course, the observations and criticisms made are completely protected by privilege. It was said Major Tulloch was nothing. I do not know, but at any rate he seems to have reached field rank, I presume in His Majesty's Army. I should be surprised if this statement made in his absence behind his back could be supported by examination. I confess I myself have no certain or definite knowledge. The noble Duke who spoke last animadverted unfavourably upon Mr. Novomeysky's name. It is not a name with which I am particularly enamoured or which I desire to bear, but the only argument which the noble Duke used was in the first place that he was a Jew.
§ THE EARL OF BIRKENHEAD
It was mere conjecture then that he was a Jew of Polish extraction. If I were to attach any real importance to the most interesting anecdote that the noble Duke told us as to what Lord Fisher said to him as the reason why we should win the War, I 289 should imagine the noble Duke would rather have regarded this as an augury of the happiest kind for the future of this concession that this gentleman's nationality was as indicated. This invitation to submit a revised offer was followed by the provision which is at the present moment under consideration.
When we are asked as to the solvency and respectability of these people, I think it is reasonable to bear in mind that the Colonial Office is an extremely experienced Department. It consists not only of its administrative chief but also of a large number of very experienced men, experienced in matters comparable to this, matters, that is to say, in which the commercial development of various parts of the Crown Colonies or mandated territory has been involved, and it does seem to me to be a most unreasonable inference to draw, in the first place, that they would have gone even as far as they had—and I remind your Lordships it is not very far—without very careful consideration. The Crown Agents are the persons who are the special advisers of the Colonial Office in these matters and the Crown Agents again are men of very great business capacity and experience. They most carefully examined this matter before they even entered into correspondence with the Palestine and Trans-Jordan Governments. Now those Governments may be presumed to have as much knowledge of the districts with which they are concerned as any member of this House, and there was, of course, long correspondence between those Governments upon the very matters which have been raised to-day.
In those circumstances the next thing to be discovered was whether or not an agreement satisfactory both in principle and in detail could be reached. Accordingly, in September, 1927—no real delay at all in a matter of this importance—the Crown Agents for the Colonies were authorised by the Colonial Office to open negotiations on behalf of the Palestine and the Trans-Jordan Governments for the conclusion of an agreement laying down terms and conditions for the grant of the concession. Those discussions are still in progress. It is a matter necessarily somewhat prolonged, and I assure your Lordships that the considerations which have been urged in this House to-day will not only be placed before my right hon. 290 friend in case they have up to this point escaped his attention, but I am quite certain that all those considerations must have been examined and re-examined, and possibly at the present moment are being subject to examination by the negotiators who are discussing the question to-day.
As to the names of the persons who are concerned, the discussion, as I have said, is continuing at this moment, but if any of your Lordships have any anxiety on that point, I will undertake that these names shall be laid before your Lordships before any binding agreement is signed. I cannot undertake that the form and terms of the agreement shall be laid before Parliament before that agreement is signed. It has never been the practice to do so, nor could any agreement of this kind be arrived at, an agreement involving considerations of the utmost delicacy and nicety, if it were necessary to have a discussion in both houses of Parliament. It has never been the practice of our great offices, it is not my practice at the India Office, in delicate negotiations. If other interests possibly might come to members of your Lordships' House and urge the adoption of their claims and argue reasons against the terms of any agreement elsewhere, no business of any kind would be possible, and I am sure your Lordships would not insist upon anything so unreasonable. The noble Lord has moved for Papers. Of course such a Motion could only be agreed to if the noble Lord indicated precisely what Papers he asked for. I should be very sorry if that involved the Government in the necessity of saying, as it easily might, that the Papers asked for could not, in the public interest at this moment, be disclosed. It has not been the practice of your Lordships, who are very considerate of the difficulties of the Government in affairs like this, to insist upon Papers where the Minister in charge of the particular matter has stated that at this stage in his view their production might be unwise.
My Lords, there is one question which has been raised which the noble Earl has not dealt with. Without giving the actual words of the agreement I think I can say that it has been very clearly brought out that the company would be absolutely prohibited, without the consent of the Government, from 291 entering into a contract or arrangement, or understanding, with any company or person for the restriction of output or the raising of price. That has been put in a form which is considered the best to achieve that result. I need hardly say that it is almost impossible, as I have said before, to put into any document of this sort a form of words which would absolutely safeguard any contingency and prevent alliance with another company. I think my noble friend Lord Banbury brought that point out quite clearly, but I can assure the noble Lord that, as far as it is possible by means of a form of words, that is the intention of the Government.
§ LORD DANESFORT
My Lords, may I ask the noble Earl whether he would be prepared to give an undertaking on behalf of the Government that the terms of this concession will be laid before Parliament?
§ LORD ISLINGTON
My Lords, it is a matter of great reluctance to me that I find myself obliged to ask the House to divide. I put down a Motion for Papers. What would have been very much more satisfactory, and would have avoided anything of a controversial nature, would have been for the noble Lords who have spoken on behalf of His Majesty's Government to have told the House, what I venture to say is quite in accordance with Parliamentary and constitutional procedure, that the agreement when it is completed would be submitted to the Houses of Parliament and should receive their approval. That surely is not unconstitutional in a matter of this very wide importance, with its far reaching issues, with the effect it may have on the world as users of potash and with the political effect which has
§ been alluded to in the debate. I think that really justifies the request.
§ THE EARL OF BIRKENHEAD
If the noble Lord will allow me to interrupt, I want to understand his suggestion. Is it that the agreement when completed should be laid upon the Table in the House?
§ LORD ISLINGTON
The negotiators should act in the full knowledge that the agreement would undergo ratification by Parliament and be subject to Parliament. I think that is perfectly fair. I had really hoped that the Government would not have been unreasonable in a matter of this importance, especially in view of this debate. We have been informed there is a monopoly of potash now in existence which holds up the price of potash to all the farmers throughout the world, and yet we are told that there is no form of language that can be introduced into this agreement which would protect users and force this new group to enter upon this enterprise in the full breadth of open competition, so that the price may be regulated in accordance with that open competition. I am afraid the time has gone by when I can appeal to the Government, because the noble Earl has given a very precise answer. I would like to make it quite clear that while I am asking technically for Papers, what I think really is of more importance for the welfare of this country and of Palestine and of all concerned, is that those who are negotiating in this matter should realise that when the agreement is concluded it will be subject to the approval of Parliament. That means that this undertaking, when it is completed, shall be laid on the Table in both Houses of Parliament. Unless the Government can accede to this, I feel obliged, with great regret, to press my Motion.
§ On Question, Whether the Motion for Papers shall be agreed to?
§ Their Lordships divided: Contents, 25; Not-Contents, 38.293
|Montagu of Beaulieu, L.
|De La Warr, E.
|Muir Mackenzie, L.
|Doncaster, E.(D. Buccleuch and Queensbury.)
|Islington, L. [Teller.]
|Sudley, L. (E. Arran.)
|Monk Bretton, L.
|Thomson, L. [Teller.]
|Hailsham, L. (L. Chancellor.)
|de Clifford, L.
|Bertie of Thame, V.
|FitzAlan of Derwent, V.
|Gage, L. (V. Gage).
|Hutchinson, V. (E. Donoughmore.)
|Banbury of Southam, L.
|Howard of Glossop, L.
|Lucan, E. [Teller.]
|Clanwilliam, L. (E. Clanwilliam.)
|Ponsonby, L. (E. Bessborough.)
|Plymouth, E. [Teller.]
On Question, Motion agreed to.
§ Resolved in the negative, disagreed to accordingly.