§ VISCOUNT TEMPLETOWN rose to move to resolve, That a Permanent British Control be established on the Dead Sea, and the subsidiary industries arising therefrom; and that any group to whom the concession is granted shall be required to have British finance and British control and have no connection, direct or indirect, with the German potash monopoly. The noble Viscount said: My Lords, I should like to say at the beginning that in bringing this matter forward it is not my intention to attack races, nationalities or individuals, or their religious beliefs. As your Lordships are aware, the Dead Sea is to-day the centre of a drama destined to rivet the attention of nations. Situated in the world's most historic land, it has been for many years a magnet for chemists, whose labours have now revealed great potential powers, which, allied with the enterprise of science and civilisation, will transform a place of desolation into beneficent activity; and Palestine, which once lay at the cross roads of ancient civilisation, becomes anew the highway between east and west.
§ There is potash, magnesium, bromine, in millions of tons. From the waters of the Dead Sea alone the amount of potash, so essential both to agriculture and to war, would supply the world with one million tons a year for 2,000 years. The values are enormous, and enormous still, were they (to suit the matter-of-fact British imagination) reduced a thousandfold. The Dead Sea has no outlet, and lies in a cleft 1,300 feet below sea level. Six million tons of water pour into it every day, and a fierce sun has promoted the process of evaporation through countless years. Great subsidiary fertiliser and chemical industries will arise. Soap and glass industries will flourish, railways will be built, and potash can be brought to London at £4 10s. a ton, to bring a renaissance to revive our British agriculture, which, due to the German monopoly and government neglect, has been the Cinderella of English industrial 732 life. "Whoever holds the Dead Sea holds the Key of the Middle East." It might be said that the Haifa Harbour, and the electrification and irrigation of the Jordan Valley, and the Dead Sea, constitute a unique industrial trilogy, which can unlock to the world great beneficent powers, and revive again an active civilisation from the River of the Nile to the River of the Euphrates.
§ These long vistas of development lay a heavy responsibility upon England as the Mandatory Power, and much interest naturally exists as to how the sacred trust to civilisation for the well-being and development of Palestine is to be fulfilled. It has to be remembered that the boundary line between Palestine and Transjordania runs through the middle of the Dead Sea, and that half the Dead Sea, therefore, belongs to Transjordania, a wholly Arab country, and the other half to Palestine, at present 85 per cent. Arab and 15 per cent. Jewish. Palestine was possessed by the Arabs many centuries before the Jews entered, and the land is rich in historic association to Arab and Christian as well as Jew, and is sacred to the three great World religions, Christian, Moslem, and Jewish.
Article 22 of the Covenant of the League of Nations states:—
To those Colonies and Territories which as a consequence of the late War, have ceased to he under the Sovereignty of the States which lately governed them, there should be applied the principle that the well-being and development of such peoples form a sacred trust of civilisation.
To the Arab peoples, Great Britain has given the MacMahon pledge of 1915, later endorsed by the British Prime Minister in 1919. "The Arab Forces have redeemed the pledges given to Great Britain, and we should redeem our pledges," and Mr. Churchill on June 14, 1921, stated:—
In order to gain the support of the Arabs against the Turks we, in common with our Allies, made, during the War, another series of promises to the Arabs of the reconstitution of the Arab nation and as far as possible of the restoration of Arab influence and authority in the conquered provinces.
And the same spirit of benevolent guardianship was embodied, even after the Balfour Declaration, in the Allies' declaration of November 7, 1918, in the Proclamation posted in every village throughout Palestine and Syria.
The War is to assure the complete and final liberation of the people so long oppressed by the Turks, and the establishment of Government and administration deriving their authority from the initiative and free desire of the native population. They are far from wishing to impose any form of Government against their will.
Then there is also the Balfour Declaration of November 17, 1917:—
His Majesty's Government view with favour the establishment in Palestine of a National Home for the Jewish people, and will use their best endeavours to facilitate the achievement of this object, it being clearly understood that nothing shall be done which may prejudice the civil and religious rights of existing non-Jewish Communities in Palestine or the right and political status enjoyed by Jews in any other country.
§ In a situation so complicated, permanent British control becomes essential, in order that we may fulfil to all these people the obligations by which we are bound. Only a British control can do justice amid the varied interests and ensure for this great wealth the development due to the inhabitants. It therefore becomes a matter of grave concern to the British public in what way, and under what influence, the Dead Sea and the most strategic areas of Palestine are being dealt with. The Rutenberg Concession, which gave a Russian Jew a stranglehold on the economic life of Palestine and Transjordania, for 70 years, in spite of determined protests in both Houses of Parliament, indicates the undue influence of Zionists and international financiers. In the question of the Dead Sea, which, owing to its vast wealth and power, is the key of the Middle East, the same undue influences are at work, and in spite of the fact that first-rate British plans have been available since 1918, it has been announced that Mr. Novomeysky has been chosen as the favoured applicant.
§ Who is exerting pressure on His Majesty's Government to prevent their action in this most important matter according to the dictates of common justice and fair dealing? England still stands for justice and fair dealing, and the rights of the weak, and once the English people understand this question, they will realise their national honour is at stake. Not only Palestine's future, but England's destiny lies in this question. Whatever the wording of my Resolution may be, I hope it is not in any way 734 against what I have said or am going to say. I want to point out that my only reason for standing here to-day is to say that we have given the pledges which I have read out, and our honour is at stake in fulfilling them. If they are not fulfilled I want to know what the Government propose to do to fulfil them.
I referred to a British group. I have been handed a statement not long before I came here showing exactly what was done in reference to this British group. I should like to read this statement. Though I have not been able to verify every point of it, I have received it from people in whom I have every confidence, and I therefore venture to put it before your Lordships:—
In response to the nation's urgent need at a critical time in her history, Dr. Homer and Mr. Bicknell in 1916 turned their attention to the illimitable deposits in the Dead Sea. They were specially interested in breaking the power of the German potash monopoly and from 1916 to 1918 worked steadily on their research and plans and finally presented their schemes to the Ministry of Potash. The Potash Controller, after expert examination of the schemes, gave his sanction for them to proceed with the application for a concession, and certain assistance was promised. They also asked to send a Commission of Experts to the Dead Sea to verify in situ.
The British plans were on a wide scale and included schemes for (1) the exploitation of the minerals of the Dead Sea and the locality; (2) the development of hydroelectric power from the Jordan and by bringing Mediterranean water by canals and tunnel to the cliffs overhanging the Ghor; (3) the irrigation of the Jordan Valley and (4) the development of subsidiary chemical industries, using local raw material.
The first formal application, together with a scheme, was made to the Foreign Office on October 4, 1918. The Foreign Office reply was to the effect that His Majesty's Government had then no power to deal with Palestine Concessions, and the necessary passport for proceeding to Palestine were withheld. Subsequently, verbal applications were made to the Colonial Office for a concession. To all the above applications, the same official reply was given, that, until Peace with Turkey was signed, no investigations of any kind could be carried out in situ, and no commercial concessions could be granted in Palestine.
As Peace with Turkey was not signed until 1926 it would be interesting to know, first, why Mr. Novomeysky was allowed to work in situ, whereas the repeated requests of Dr. Homer's group, from 1918 to 1926, to send out commissions to work in situ
were as often refused. Nevertheless, although Dr. Homer's group was not allowed to work in Palestine, the results of their many years of expert investigations and researches still stand, and have been verified by the Government's own Commissions and others. Secondly, why was a concession granted to Mr. Rutenberg in 1920 to produce hydro-electric power in Palestine, a request that had been included in the British group's application of 1918 et sequor, and had been refused several times?
By official request some of the British group's papers relating to the scheme were sent out to the High Commissioner at Jerusalem, where they remained for several months during the winter and spring of 1920 and 1921. The papers were subsequently returned with the remark that nothing could be done in the matter until Peace with Turkey was concluded. A Government Commission of Inquiry and investigation of the Dead Sea scheme was instituted in 1923–1925. The findings of the Commission, consisting of two Reports, of which the one was printed, but the latter one was only typed, fully confirmed the intensive researches and assertions of Dr. Homer's group in 1918 et sequor.
The Crown Agents made advertisements for tenders for a concession, the closing date being October, 1925. Dr. Homer and her associates, being surprised at the above action, interviewed the officials of the Colonial Office and the Crown Agents for the Colonies. It was explained to Dr. Homer's group that, in the years that had intervened since the said group had approached the British Government, several applicants for a concession had come forward, some of them being nationals of other countries. It was, therefore, deemed politic to throw this concession open to public tender. However, Dr. Homer's group, now usually referred to as the British group of tenderers, were strongly advised by the officials of the Departments concerned to send in a tender. They were assured that, if they had a reasonable scheme to propose, they would have preference, as their applications had been on the table for so many years. Dr. Homer, acting on the above assurance, forthwith gave up all other work to formulate a tender to meet the requirements of the Governments concerned.
The British group's fourth formal application for a Dead Sea concession was registered with the Crown Agents on October 24, 1925. The British group's 1925 tender was designed on lines calculated to offer every prospect of commercial success, and at the same time offered a generous royalty plus 50 per cent. share of the surplus profits to the countries possessing the Dead Sea. It was proposed to start operations on a preliminary scale for producing 125,000 tons KCI per annum, and the other salts in amounts required by the markets. After a period of five years the scale of operations was to be increased to an ultimate output of 1,000,000 tons of KCI per annum. A scale on which the power of the German potash
monopoly would be broken! The fully developed schemes would also include the initiation of important subsidiary chemical industries.
Between 1925 and 1926 the British group of applicants were asked to furnish further information in regard to their tender. In April, 1926, it was intimated to the British group, verbally, at the Crown Agents for the Colonies, that their tender was the best of those that had been submitted. In July, 1926, the British group offered to send out forthwith their proposed preliminary Commission to report on the local conditions, the prelude to the development of the first stage of their scheme. On October 27, 1926, the Crown Agents for the Colonies officially informed the British group that they were prepared to consider further the propositions made in the group's 1925 tender. The British group was asked to disclose its financial support, etc. The Crown Agents officially informed certain of the other groups of tenderers that their 1925 tenders were unacceptable; the Crown Agents for the Colonies invited these groups to send in revised tenders or to form an Association of Tenderers.
On November 2, 1926, the British group was asked to absorb Mr. Novomeysky. In November, 1926, a meeting took place between Mr. Novomeysky and two members of the British group to discuss the suggested fusion. Mr. Novomeysky adopted the attitude that in case of fusion with the British group he and his financial associates (not disclosed)—
I should very much like to know who they are—
would want control.
In November, 1926, the British group informed the Crown Agents that Mr. Novomeysky's demand could not be entertained by their financial associates. The British group continued discussion with the Crown Agents, inserting in their tenders the alterations required by the Governments concerned. Amongst other changes, the Government insisted on the insertion of an experimental stage, although neither Dr. Homer nor her technical associates could see what could be effectively gained from the course that was advocated. The British group were urged to present their altered tender with estimates by the end of November, or as early as possible in December, whereas the other groups' revised tenders were not called for before December 31, 1926. The representatives of the financial supporters of the British group gave their verbal assurances to the Crown Agents and to the Colonial Office on December 20, 1926.
The revised tenders from the various groups of applicants were submitted to the Crown Agents on December 31, 1926. The British tender still remains the best. This was acknowledged verbally at the Crown Agents' in 1927. It has also been officially acknowledged in reply to pertinent questions
by Colonel Howard-Bury in the House of Commons. It was also privately acknowledged by a partisan of Mr. Novomeysky at a debate on Concessions in Palestine on November 13, 1928.
During December, 1926, January, February and March, 1927, an intensive political and financial intrigue was engineered against the British group. Doubts were widely circulated as to the technical feasibility of the scheme. These emanated from German and other sources. It is understood that the British group's plans were under discussion in Berlin. On February 14, 1927, the British group informed the Crown Agents that, as the above-mentioned financial support had been with-drawn, they were negotiating elsewhere for guarantees. While the British group was still negotiating in other quarters the Dead Sea concession was offered to Mr. Novomeysky and Major Tulloch in April, 1927.
It is to be deplored that official utterances and criticisms of the value of the deposits and the feasibility and potentiality of the scheme were such as to shake the confidence of British capitalists. Until after February 14, 1927, the British group were restricted to British financial support, and it was only after the sudden withdrawal of their supporters' guarantees that the stringent conditions with regard to finance were lightened and only British control was insisted upon. The reason behind the official desire to give the impression that the scheme was of a doubtful or a speculative nature is difficult to fathom, as neither the Palestine nor the Imperial Governments was asked to contribute towards the capitalisation of the scheme.
§ Moreover, the attitude of the Colonial Office in insisting on a preliminary period of experimentation has had a depressing effect on British financiers who are likely to be interested in the development of the scheme. It is interesting and significant to know that the German Potash Syndicate, through its agents, has been trying to stop American investors from having anything to do with the scheme. It is difficult to understand why the British group, which admittedly had the best tender, were not given a reasonable time in which to furnish their guarantees; whereas up to date—that is to say, after a period of nearly two years latitude—the Novomey-sky-Tulloch Group apparently have not yet satisfied the Government on certain essentials. This "secret diplomacy" may possibly be useful in a squabble over 738 the building of a parish pump; but when Great Britain is being publicly challenged to do common justice to the nationalities under her Mandate, it looks to me like "secret diplomacy" run to seed. If mischief is done under the terms of the Concession we are not to be informed of them until the Concession is a fait accompli.
§ What is required, and what I feel sure your Lordships will insist upon, is a clear statement of the basic principles to be laid down and maintained for the safeguarding of Arab rights to the satisfaction of the British people. England stands before the world, I need hardly say, as the champion of justice and fair play, and of the rights of the weak. Her word has ever been her bond all the world over, and I do not doubt for a moment that your Lordships will see to it that her high reputation shall not be tarnished by a wrong done to those that she is bound in honour to protect.
§ Moved to resolve, That a Permanent British Control be established on the Dead Sea, and the subsidiary industries arising therefrom; and that any group to whom the concession is granted shall be required to have British finance and British control and have no connection, direct or indirect, with the German potash monopoly.—(Viscount Templetown.)
§ LORD DANESFORT
My Lords, the noble Viscount has called attention to a question of very grave importance, as it appears to me. It has been debated already several times in your Lordships' House, and rightly so, because this concession is one of exceptional importance, not only by reason of the great and serious financial questions which are involved and the great value of these deposits of which the concession has been given, but of the far-reaching political consequences which may follow from the granting of this concession. Fortunately, there are some points on which we are all agreed in this matter. In the first place, there is general agreement, and His Majesty's Government do not for a moment dispute it, as to the immense value of these deposits of Dead Sea potash especially and other chemicals of great value. Then we are all agreed that especially in the matter of potash there is grave danger of the supply falling into the hands of a monopoly. We know what happened in the War. During the 739 War potash was chiefly in the hands of a German monopoly. The price of potash went up in this country from something like £8 10s. a ton to £80 or £90, and it rose in the United States from something like £7 a ton to £100 or £120.
That strong German control of the supply of potash of the world has not yet ceased. I am informed that they control something like 70 per cent. or more of the potash of the world. Therefore, it is absolutely essential in the interests of this country, of our Dominions, and of the world at large, that if there is to be this new and immense supply of potash and other chemicals there should be safeguards and restrictions to prevent that supply falling into monopolistic hands.
As I said before, there is general agreement. My noble friend has mentioned what rather lies at the root of the whole discussion—that the Dead Sea is half in the region of the mandated area of Palestine and half in the area of the mandated territory of Transjordania, for both of which we have the Mandate. In the case of Palestine the percentage of Arabs in the population is something like 87. In the case of Transjordania, which is under an Arab King, practically the whole of the population is Arab. When I come to speak, as I shall in a few moments upon the question of the Mandate, I think your Lordships will agree that those proportions of Arab population in the two countries are of considerable importance.
Such being the agreed facts, I ask your Lordships to consider for a moment what has happened. His Majesty's Government have told us that provisionally, at any rate (I do not know whether it is final or not), they have granted this concession to two persons, a Major Tulloch and a Mr. Novomeysky. It is not without importance to remember that Major Tulloch is now nothing but a mere name. I understand that by power of attorney or otherwise he has handed over all his interest in this concession to Mr. Novomeysky, who is the controlling power in the concession, if he can get it. Therefore, it becomes exceedingly important to ascertain who this Mr. Novomeysky is. My noble friend Lord Islington and others made several attempts during previous discussions in your Lordships' House to find out something about Mr. Novomeysky. We were vouchsafed no information; and at any rate I and those with whom I am concerned know nothing 740 about him. Indeed, His Majesty's Government knew very little about him as late as May last. They may have found out since, and we shall, perhaps, hear. In May last the Secretary of State for the Colonies said this in reply to a question in another place:—Whether Mr. Novomeysky is in a satisfactory position to carry out the terms of the tenure"—I think he means "concession"—is a matter still under discussion.Still under discussion! They apparently knew nothing about it themselves; at any rate, they did not give any information either in another place or in your Lordships' House. But I hope we shall receive a little more enlightenment today.
There was another question raised in your Lordships' House, and I think in another place also, as to who were the financial group behind Mr. Novomeysky. I think it is agreed on all hands that he was not in a position himself to finance a gigantic concession of this character, and we were told that there was a group behind him. On the last occasion when there was a discussion in your Lordships' House, namely in May last, the noble and learned Earl, Lord Birkenhead, whose absence we deeply regret to-day, told us that there was this group. And he said this—The names of the group will be given publicly before any binding agreement is signed.I hope my noble friend Lord Plymouth, who will probably answer for the Government, will be in a position to-day to give us the long-desired and anxiously awaited names of this group. It is of very great importance, because I suggest that we want to he perfectly satisfied before this concession is granted that the group behind Mr. Novomeysky will have no probability and no chance of dealing with the concession in a manner that would favour a monopoly, and thereby greatly injure this country and the Dominions and the world as regards potash and other chemicals. Therefore we have to know the names of the group.
An important Question was put and answered in another place as recently as Monday last. I think I ought to call your Lordships' attention to that Question, and the answer given by the 741 Colonial Office, because it bears very closely upon the points I raise to-day. The Question was:—CAPTAIN CAZALET asked the Secretary of State for the Colonies whether the final agreements now being considered by the Palestinian Government in regard to the Dead Sea Concessions contained provisions to ensure permanent British control and the avoidance of a monopoly control by any group or organisation interested in the production or sale of potash.May I ask the close attention of your Lordships to the answer given by the Under-Secretary of State for the Colonies? He said:—In view of the terms of the Mandate"—meaning the Palestine Mandate—my right hon. friend does not think that it would be practicable to enact such provisions as are indicated in the first part of the Question.In other words he does not think it would be practicable to have British control. I will say a word of two about that in a moment. As regards the second part—the avoidance of monopoly control, the answer was—Any concession that is granted will provide that the operating company shall not, without the previous written consent of the Palestine and Transjordan Governments, enter into any arrangement for the restriction of output, or the raising or keeping up of prices, in such a manner as to restrict output.That was not the question. The question was: Would there be a restriction to prevent this concession getting into the hands of monopolists? and he merely said there would be a restriction upon the price. That really was not the question he was asked, and it is not the question which is of vital importance, because there are a great many ways in which monopolists, if they get this concession into their hands, could use it in a most prejudicial way to all concerned, besides some temporary raising of prices which it might be difficult to control.
May I say a word upon the two points which were raised by the reply of the Under-Secretary. First of all, I should like to know why the Mandate makes it impracticable to ensure British control. So far from being impracticable I should ask your Lordships to say that, according to the terms of the Mandate, it is the only way of getting a proper control. The British Government is Mandatory, and, as Mandatory, it is trustee primarily, 742 as I think, for the inhabitants of both Palestine and Transjordania, but it is also a trustee of this country, and, to a certain extent, of the whole world which is interested in having a cheap supply of potash and these other chemicals. The British Government are trustees, and I think no one in this House will dispute that they cannot delegate their trust to see that this concession is given to proper persons, with proper restrictions. They cannot delegate their trust to any other body whatsoever. It is quite true that by Article 11 of the Palestine Mandate the Administration of Palestine—that is the British Government—may consult with the Jewish Agency as to developing the material resources of the country. Quite true, they may consult, but there is nothing to compel them to consult, still less is there any compulsion upon the British Government to accept the advice, if it is given, of either a Jewish Agency or of a Zionist organisation. Therefore I suggest to your Lordships that there is nothing whatever in the Mandate to prevent this concession being kept under British control. I entirely agree with my noble friend who introduced this Motion that this is the only way by which you can get a just, beneficent administration of this great concession. Once let it out of British control, once let it out of the hands of the trustees who have been appointed by the League of Nations—that is ourselves as the Mandatory Power—once let it get into other hands and under other control and you are not carrying out your duty as trustees, and I think you are guilty of a breach of trust which may have disastrous results upon those for whom you are trustees.
So much for the Palestine Mandate. May I say one word about the Transjordan Mandate, remembering that half the Dead Sea is in Transjordania. The Transjordan Mandate differs in some very remarkable respects from the Palestine Mandate. The way that the administration is put into British hands and that the British are really trustees is the same, but all mention of the Zionist organisation or of the Jewish agencies or as to consulting one or the other, is totally and entirely absent from the Transjordan Mandate, so that that consideration does not come into that Mandate at all. More than that, the British Government made an agreement on February 20 743 of last year with the Emir—the King of Transjordania—and by Article 16 of that Agreement it was provided that the Emir will be guided by the advice of His Majesty's Government in all matters concerning the granting of concessions and the exploitation of national resources. So that we have in this matter to act fairly and properly and justly in the interest of all parties—not only the inhabitants themselves, not only all those others who are concerned in this concession, but the Emir himself, who has undertaken to be guided by our advice, naturally, I presume, because he thinks the British Government are worthy of confidence.
So much for the suggestion that British control is inconsistent with the Mandate, either of Palestine or of Transjordania. I will now deal with the other point which was raised by the Under-Secretary for the Colonies when he was asked whether he would take steps to avoid a monopoly control. He merely said that without the previous consent of the Governments of Palestine and Transjordania the operating company could not make any arrangements for the restriction of output. I venture humbly, but as strongly as I can, to submit that that assurance is wholly insufficient. What we really want, if this concession is to be properly worked in the interests of all parties, is some restrictions placed upon the concessionnaire, or upon any group or operating company into whose hands the concession may come. We want some restriction placed upon them so that they cannot join with any monopoly interest which already [...]xists or which may be hereafter established; and to tell me that they are going to try and prevent an alteration of output is really—disagreeable as it is to say—almost playing with the question. I ask the Government if they will, in any concession they may grant, take steps on this paramount question to prevent the concessionnaires joining with any monopoly; and I would also ask—this has been urged before in your Lordships' House, and I think it is a perfectly reasonable request—that before any concession of this enormous magnitude and far-reaching importance is granted, they will undertake to place it before Parliament, so that Parliament may either give its consent or suggest modifications in it. If the concession is a reasonable one, and such as ought to be 744 sanctioned by Parliament, I urge upon His Majesty's Government that they ought to have no hesitation in taking the opinion of Parliament. It is a right and proper thing to do and it would satisfy all those numerous people and interests who are very anxious as to how this matter will be dealt with. I trust that the Government statement on the matter will satisfy some of the doubts and difficulties which have arisen.
§ LORD MELCHETT
My Lords, I should not have intervened in this debate had it not been that perhaps I know more about the Dead Sea and about the chemical industry than some of the noble Lords who have addressed the House. I think it is a very dangerous thing that statements should be made in this House which may be used afterwards by company promoters and groups of financiers, some of them none too scrupulous, to lure unwary investors into the idea that there is a golden fortune in Dead Sea potash. There has been a great deal of exaggeration, both as to the monopoly in potash and as to the scarcity of potash. Potash, as a matter of fact, is a mineral of which there is a large surplus in the world. It is only by very great restrictions and reduction of output of German potash to-day to something like 50 per cent. of capacity that the price has been kept at a fairly moderate figure. Anyone, therefore, who sets out to make and deliver potash in any part of the world, in Europe or anywhere else, in competition with German potash has to remember that, if any serious competition threatened, the price would probably drop at least £2 a ton, and what might appear to be a profitable business would be turned into a loss. There are large deposits of potash in France and in Spain, in some of which I have been asked to take an interest, and there are large deposits in Poland, which are only now being seriously developed. Therefore the picture of a German potash monopoly is one of exaggeration.
Having said that, I would say that the Dead Sea is an interesting proposition. I know it well myself. I have been there often, and I have discussed these matters with experts who have done some work there. I know Mr. Novomeysky, and I have discussed the matter with German, French and English experts. None of them recommend that large financial groups should invest in Dead Sea 745 potash. It does seem a curious fact that we hear a great deal about this concession, and yet not one important group of financiers in the whole world, in either hemisphere, has thought it worth while to claim a concession. Noble Lords seem to have allowed themselves to be carried away by information which must have been supplied to them, and on which they can have no personal or technical knowledge. I say that is dangerous. They draw pictures which, if formulated in a prospectus, might lead people with insufficient knowledge to embark money in what I must describe as a somewhat speculative enterprise. I do not know the group to which the noble Viscount referred. I have never heard of it, although I have had many people approach me on the subject, and although many financial friends in many countries have asked me whether I thought they ought to take this matter up.
The attack of the noble Viscount is rather unfair to Mr. Rutenberg. I happen to be a director, with the noble Marquess opposite, on a company formed to supply Palestine with cheap electricity. Why was that concession given to that gentleman? It was given because he happens to be a very competent electrical engineer, who applied for it. The noble Viscount cannot know the years of difficulty we had to find the necessary capital, and cannot know how Mr. Rutenberg was thanked by three successive High Commissioners. I think he might withdraw the kind of expression he used. Might I ask whether no Palestinian subject is to have a concession in Palestine, because both Mr. Rutenberg and Mr. Novomeysky are Palestinian subjects? To have a concession in Palestine you must apparently be a subject of another nation. Surely such a claim cannot be substantiated. It is time people recognised that there is such a thing as a Palestinian nation. It is not true to say that Mr. Rutenberg is a Russian Jew. He is a Palestinian Jew. I must enter a protest against the endeavour to create prejudice against men who have gone to develop Palestine, and who have become Palestinian subjects.
I am not advocating that a concession should be given to anybody. I personally have no interest in anybody's concession—I want to make that clear—but I must enter a protest, and ask how in the name of Heaven we can appear before the Mandates Commission at Geneva and 746 gravely inform them that all the members of the League of Nations are quite incapable of fairly administering anything except ourselves. What kind of reception would the noble Lord have if he went to the League of Nations Council and made such a statement? Such a statement may be accepted within these hallowed walls, but it would not be received with acclamation in a very difficult body like tae League of Nations Mandates Commission. Palestine is mandated to us. It is not a British Dominion. For many reasons I wish it were, but you have to face the fact that it is mandated territory and it is before the Mandates Commission that the concession has to go.
The Palestine Government has the greatest of difficulties to-day, and I know difficulties have arisen lately because of endeavours to allow nothing except the freest international competition for any contract or tender or concession in that country. To say that a concession should only be given to British financial interests is to advocate something which is impossible The noble Lord suggested that unless this concession was given it would seriously affect the price of potash in Great Britain. You cannot bring potash all the way from the Dead Sea to the Mediterranean and then on to this country at a cheaper rate than we can get it from Germany. The German people will see that that does not happen. I have studied this problem on the spot. The problem is not going to be such a difficult one, and I am quite certain that the Government cannot accept the Resolution in the terms in which it has been put. It has neither the power nor the authority to do so. I hope that, if this concession is given to anybody, it will be seen to that it is given to people who are financially capable of carrying it out, who will see that it is not just hung up, but properly worked. That is a very important point. For the rest, the position of the Government is quite clear, and the whole matter is really elementary. It is well known for what we are responsible as trustees. It is quite another question how far we can be responsible, in addition to the terms of the concession, for the details of its management and working. I am sorry to have taken up so much of your Lordships' time, but this is a matter which has got so much into 747 the realm of fiction and phantasy during the last few years that I thought it might be useful to bring it back to the few simple facts of which it really consists.
§ LORD THOMSON
My Lords, while I cannot support the Resolution standing in the name of the noble Viscount, Lord Templetown, I think that he has rendered public service in once again calling your Lordships' attention to this matter. I cannot agree with the Resolution because, in spite of all the eloquence of the noble and learned Lord, Lord Danesfort, I do not accept his interpretation of the Mandate as justifying us in insisting upon entirely British control in a mandated territory. I entirely agree with Lord Melchett upon that point, but I submit that the vacillation of the Government in this matter is certainly worthy of condemnation. An almost incredible amount of time has been wasted over this matter of the Dead Sea concession. Ten years have elapsed since the matter was first mooted. I doubt if there has ever been a parallel case of delay, except perhaps that of Lot's wife, who was turned into a pillar of potash for very much the same sort of conduct. Time and again various groups have put in their applications for this concession and some excuse has been found for delaying the matter. Only the day before yesterday, in the House of Commons, when the matter was again raised, this is the answer that was given by the Under-Secretary for the Colonies:My right hon. friend hopes to be in a position to make a definite offer to the prospective concessionnaires at an early date. If it is accepted, and if other connected matters are satisfactorily arranged, the concession will be duly signed.That is what may happen within a period of two months, but it is by no means certain, and I have therefore several definite questions to put to the noble Earl who will answer for the Government.
My questions are these. What are the connected matters? Are they concerned with other claims to this concession, claims even more remote than the particular one that is referred to as that of the "prospective concessionnaires"? Is it a fact that a purely British group has made an offer to merge the various claims, if any, that may be substantiated? There are claims that go back to 1914. If 748 this be so, would the Government entertain such a proposal? My reason for asking that question is that, if there are other claims that may be pushed by influential people, or even foreign Governments, before the International Court of Justice at The Hague, the British might find themselves in a very difficult position, involved not only in litigation but possibly in large compensation. If there are these other claims—and the rumours are to that effect—surely it will be worth while to have this matter cleared up now. Has the Government in mind the necessity for safeguarding the position of the inhabitants, and notably of the Arabs? Will the Government make sure that, whoever the concessionnaires may be, they will be able to undertake the work on an adequate scale, and that the concession will result eventually in no group holding a virtual monopoly in potash?
The noble Lord, Lord Melchett, has made some rather discouraging remarks about potash. From his account I gather that this commodity in a drug in the market; that those who purvey it do so as philanthropists; that they are presumably selling it at a loss; that in any case there is no point in either discouraging the development of potash or of encouraging it; that there are millions of tons of potash readily available within close distance of these shores; and that the Dead Sea deposit really amounts to nothing as a factor. That may be so. I should be the last person in the world to cross swords with the noble Lord on these chemical matters. I am sure that he knows a great deal more than any of us about the position in potash. But, if this concession is so utterly worthless, why has it not been possible for the Government to deal with it earlier? Why has so much attention been directed to it from all parts of the world? To hear the noble Lord, Lord Melchett, one would think that only a born fool would develop the Dead Sea, and yet we have seen reports upon the Dead Sea which show that it contains not only potash but other substances of very great value. I hesitate again to make a suggestion on this subject to the noble Lord, but I was personally attracted to this matter by the report, on very high chemical authority, that magnesium was obtainable 749 from the Dead Sea salts, even in paying quantities and as a commercial proposition. I need hardly say to your Lordships, still less to the noble Lord, that if magnesium is obtainable it is going to make a very great difference in various forms of engineering. I admit that we cannot claim that these deposits should be put under purely British control but, if I may say so with respect, there was a good deal in what the noble Lord, Lord Danesfort, said that appealed to me. I believe that, as regards the Trans-Jordan part of the Mandate, there certainly is justification for British control and development on that side of the frontier line.
What appeals to me most in this matter is the consideration that we want to safeguard ourselves against a possible repetition of what happened in the early part of the War, when potash went up—however valueless it may be in the eyes of the noble Lord, Lord Melchett—to the fabulous price of £80 a ton. We do want to stop that, and it seems to me that if we are going to give a concession, and if we ought to give a concession, the first object in view should be the carrying out of large scale experiments, to find out what is the real value of these deposits, to know exactly where we stand with regard to them, and also to provide transport, so that should an unforeseen emergency arise we shall not be victimised again as we were in 1914. I am sorry that I was not able to give fuller notice of these questions to the noble Earl, who I understand will reply, but I really think he would be doing a public service if he would give definite answers to the questions which I have put to him.
THE EARL OF HALSRURY
My Lords, I had not intended to enter into this debate, and my only excuse is that the noble Viscount who raised the subject sent, me an amount of literature which convinced me that I was quite unable to vote in his favour, and when I heard the noble Lord, Lord Thomson, say that among the chemicals said to be found in this locality was magnesium, I could not help wondering who was responsible for the statement. When I also see that it is stated that there is a considerable amount of sodium bromide, which would make tear gas easier to manufacture in 750 the next war, one wonders whether the person who puts that forward does so as a person familiar with the subject. Surely the answer to Lord Thomson is that you have not only got to see that you have these particular chemicals there, but also whether it is commercially possible to bring them back, and, as Lord Melchett said, in his opinion—and we must all assume that he knows what he is talking about—it is very doubtful. Can Lord Thomson wonder why the Government have taken ten years, and may take considerably longer, before they think it is worth while to give a concession? What do we know about it? Yet we are asked to resolve that there should be permanent. British control—if we have any power to do it, and I rather doubt it, and Lord Melchett, I think, showed quite clearly that we have not.
We are also asked to resolve that any group to whom the concession is granted shall be required to have British finance and British control, and have no connection with the German potash monopoly. Where are you going to get that British finance and control? We only know, from the papers which we have received from the noble Viscount, that the British financiers who thought at one time that they would be prepared to go into it, when they were told by the British Government that there might be difficulties, withdrew their financial help, and I have not heard of any other financiers going into it. Yet we are to resolve that there shall be British finance, and if we cannot get it we are to have the minerals unworked, and there is to be no connection with the German potash monopoly. Assuming that was a possibility, is it to be said that under no circumstances might it be advisable to take two companies, or rather two groups, for the purpose of working the potash for the world at large, although such two groups might be quite prepared to enter into some sort of rapprochement? Ought it to be said that the whole thing is to fall through because there is a Resolution by this House that under no circumstances should a British group and a German group help one another? I should have thought that a Resolution of this kind really on the face of it was such that none of your Lordships could possibly support it.
§ LORD BLEDISLOE
My Lords, I do not profess to know anything about the claims made on one side or the other as to the value of these deposits, but I speak simply as a farmer, and one who for many years presided over the oldest and most important agricultural research station in this country, whose business it is to demonstrate to the agriculturist of this country the value of potash and other artificial fertilisers. I want to say this, and I say it a propos of what fell from Lord Melchett, when he suggested that there was no longer, or ever had been, any potash monopoly in the world: I venture to tell your Lordships that long before the War and the results of War conditions upon the price of potash, which came to he required for War purposes, there was undoubtedly a monopoly in Germany and Alsace—a world monopoly of potash, which operated most detrimentally to the scientific agriculturist and progressive agriculturist, not merely in this country but throughout the world.
It is common knowledge, and your Lordships know it perfectly well, that potash is absolutely indispensible to the raising of one of the chief crops throughout the world, namely, potatoes, and also to the maximum output of such leguminous crops as peas and beans; and we know also that the more intensive becomes your system of agriculture, the more potash is likely to be employed, because it is the chief plant medicine. It is particularly necessary when plants are raised under abnormal conditions, such as in glass houses. The agricultural community, not merely in this country but throughout the Empire, will look with a jealous eye upon the development, or possible development of another German potash world monopoly. I do not say—and after what Lord Melchett has said I should not venture to say—that you have here the making of another such monopoly, but we have had a monopoly which has operated very seriously to the disadvantage of agriculturists of the world in the past, owing to the main supplies of potash being under the control of the German Government, and we have to thank those who have secured, as a result of the War, that Alsace passed into the hands of France and out of the control of Germany. I am certain of this, that the 752 supplies in Spain, Tasmania and elsewhere have not sufficed in days past to prevent a great and serious monopoly being in the hands of Germany which has operated to the disadvantage of the farmers of the world.
§ THE PARLIAMENTARY UNDERSECRETARY OF STATE FOR DOMINION AFFAIRS (THE EARL OF PLYMOUTH)
My Lords, I make no complaint whatever of the words in which the noble Viscount, Lord Templetown, recommended his Resolution to your Lordships, but he did go at very considerable length into the past history of this question, which is admittedly a very complicated and rather difficult one. I would prefer to address myself, at any rate to begin with, to the actual terms of the Resolution which he has set down upon the Paper. There are various reasons why the Government are unable to accept this Resolution. In the first place, there is this difficulty, which has already been emphasised this evening: The waters of the Dead Sea are divided equally between Palestine and Transjordania, both territories in respect of which His Majesty has accepted a mandate. In this Mandate it is provided that His Majesty shall see that there is no discrimination against the nationals of States, Members of the League, as compared with nationals of the Mandatory Power, and other foreign Powers, in so far as the exercise of commerce and industry in those territories is concerned. Therefore, even if His Majesty's Government and the Governments of those two territories were completely free at the present moment, I think it would be impossible, in view of the terms of the Mandate, to accept the first part of the Resolution of the noble Viscount
Nor would it be possible for them to require that any person, to whom the concession may be granted, should be financed and controlled by British interests. It is right and it is intended that, of any public issue that may be made to raise capital for the company which is to operate this concession, Palestinian citizens and Transjordanian nationals shall have a prior right of allotment to a certain percentage. But to insert a similar provision for giving preferential treatment to British sub- 753 jects would quite clearly be contrary to the provisions of the Mandate I have mentioned. In the second place, the Palestine and Transjordan Governments are committed in principle to the grant to Major Tulloch and Mr. Novomeysky of a concession based on an offer made by them at the end of 1926 in response to a public advertisement. Negotiations in regard to the terms and conditions of the proposed concession and in regard to the provision of satisfactory financial guarantees are now approaching conclusion and, unless and until these negotiations prove to be abortive, no alternative offer for the disposal of the concession can be entertained. That really answers the second question which the noble Lord opposite put to me. Though, as I have said, it is not possible for His Majesty's Government to insist upon British control, we are informed that it is the intention of Major Tulloch and Mr. Novomeysky, if granted the concession, to provide in the Articles of Association that the chairman of the company shall be a British subject, and that British subjects or British subjects and Palestinian citizens shall form a majority of the board of directors of the company.
In reference to the last part of the noble Viscount's Motion, it is suggested that the group to which the concession is granted should be required to have no connection, either direct or indirect, with the German potash monopoly. This aspect of the problem has from the first received very careful consideration at the hands of His Majesty's Government, but they are advised that it would not be possible to discriminate by name against a German undertaking. There are various difficulties. There is the difficulty which has already been referred to, namely, the fact that it would be practically unworkable. In the second place, I very much doubt whether any group of persons would have taken up a concession of this kind if they had been restricted and limited by such a condition. That is the point to which the noble Lord, Lord Banbury, referred when he spoke when this matter was last raised in this House. Thirdly, there is the point that in a matter relating to mandated territories, discrimination against a particular firm or combine would be almost impossible to defend 754 unless it was proved at the same time that, the interests of the natives of those territories were being deleteriously affected.
If you approach the matter from the point of view of the interests of the natives of the territories concerned, the question resolves itself into one of framing conditions for insertion in the concession which would safeguard the interests of Palestinian citizens and Transjordanian nationals. It is quite clear that, if the company which operates the Dead Sea concession were to enter into an arrangement for the restriction of output or the raising or keeping up of prices in such a manner as to restrict output, or if the company were to make such arrangements for the disposal of their products as to deprive the Government improperly of any of the profits in which they would otherwise have participated, their action would prejudice the interests of the natives of the mandated territories, which will in a large measure take the form of the receipt of revenues derived from this concession by way of royalties and a share of the profits. It is therefore intended to provide in any concession that may be granted that the company which operates it shall not, without the previous written consent of the Governments of Palestine and Transjordan, enter into any arrangements of such a character. The Government are advised that conditions of this character, when taken in conjunction with the draft concession as a whole, afford such measure of control by the Government as is possible to prevent the company which will operate the concession from making arrangements which would have the effect of retarding the full development of the resources of the Dead Sea. It is for these reasons that the Government feel they are quite unable to accept the Resolution proposed by the noble Viscount.
The noble Viscount has gone in considerable detail into the past history of this question. He delivered his speech at such a rapid rate that I found it very difficult to make a note of all the points he made in the course of it. I am quite unable to accept a number of the statements which he made. He implied that Mr. Novomeysky and Major Tulloch had been granted preferential treatment as against what is now known as the British 755 group. I should like very shortly to explain what took place, and what events led up to the present position. I need go no further back than 1924. In July of that year, Mr. Thomas, who was then Secretary of State for the Colonies, decided that a public notice should be issued inviting applications for the grant of a concession for the extraction of salts from the Dead Sea. In May, 1925, an advertisement was inserted in the newspapers. The offers submitted in response to that advertisement were found to be unacceptable, and the applicants were informed that the High Commissioner for Palestine was unable to accept their offer but that consideration would be given to any revised offers which they might submit before January 1, 1927.
Revised offers were made, and these were carefully considered, and the Palestine and Transjordan Governments. acting on the advice of the Secretary of State, decided in principle to grant a concession to Major Tulloch and Mr. Novomeysky based on their offer. It is quite true that in certain respects the offer of what is known as the British group was most satisfactory, but at the time they made that offer they were unable to furnish the evidence required as to their financial resources. On February 14, 1927, Mr. Tottie, who was then associated with the group, wrote saying thatthe financial guarantees which we, namely, myself, Mr. Bicknell and Dr. Homer, believed at that time to have been arranged have been withdrawn for reasons over which we have no control. It has therefore become necessary for us to negotiate otherwise.Later on, in April, 1927, Mr. Tottie wrote to the Crown Agents in the following terms:—I have to say that various difficulties have arisen at this stage with regard to guaranteeing the money required, the chief being the doubt on the part of high technical authorities on the commercial side as to the feasibility of producing potash profitably on the lines indicated. This doubt renders the whole undertaking speculative, and appears to lend strength to the statement in the Government report in this sense.Under these circumstances my friends decline to consider guaranteeing the money until after the concession has been granted and the proposed Commission has reported on various points which are at present in doubt.756 Obviously, my Lords, it was impossible for the Government to accept those conditions, and I wish to assure your Lordships that the only reason, the only ground on which this application, this offer, of the British group could not be considered was that they could not produce, when it came to the point, the necessary financial guarantee.
Various points have been raised during the course of the debate. One was with regard to the interest of the Arab race in Transjordania. I should like to point out to your Lordships that the concession will be granted equally by the Palestine Government and the Transjordan Government. The Transjordan Government is entirely Arab, and has throughout been consulted, and has agreed to the present proposal as being the best in the interest of the territory. Another point referred to by the noble Viscount during the course of his speech was an allegation that Major Tulloch really had no further concern now with Mr. Novomeysky in the concession they have asked for. As a matter of fact, that is not strictly true. They are still joint partners in the undertaking. Mr. Novomeysky merely has a power of attorney to enable him to negotiate on behalf of both partners, and that is necessary because Major Tulloch happens to live away from London.
I should like to address myself for a moment to the points raised by the noble Lord opposite. He referred to answers which were given in another place the day before yesterday, and asked what the connected matters had been which were referred to in connection with the arrangements that are still to be made before the final agreement can be come to. I can assure him that they are not concerned with any other claim. They are really one or two small matters still outstanding, and when these matters are settled, as we hope they will be shortly, the revised draft concession will be communicated officially to Major Tulloch and Mr. Novomeysky for acceptance or rejection, but not as the basis of further negotiations. And the matters that are raised are, I think, in connection with the directorate and similar matters of that kind. The second question asked by the noble Lord I answered, I think, in the first part of my speech. He also wanted to know whether the financial backing of Major Tulloch and Mr. Novomeysky was satisfactory. I am able to say that the 757 Government are satisfied with the financial backing behind Major Tulloch and Mr. Novomeysky. It is impossible at the present stage, whilst there are one or two small matters outstanding, for me to give the actual names of those who are behind them; but I would remind your Lordships of this fact, that during the course of the last debate on this subject in your Lordships' House an undertaking was given that the list of the financial supporters of Major Tulloch and Mr. Novomeysky would be laid upon the Table before the final agreement was signed, and that undertaking., of course, holds good. I have endeavoured to answer the numerous points which have been put in connection with this very complicated matter. I trust your Lordships will agree that the Government have behaved perfectly correctly in the matter, and that in the circumstances it is not possible for the Government to accept the Resolution which the noble Viscount moved.
§ LORD DANESFORT
My Lords, may I ask my noble friend whether he could tell us when he can give us the names of the group behind Mr. Novomeysky? In other words, how long before the final agreement is to be signed shall we get the names? Can he give us any satisfactory assurance on that?
§ THE EARL OF PLYMOUTH
Obviously, my Lords, it is impossible to give a definite answer to that. I cannot say how long before; but the undertaking is that the names shall be laid on the Table of the House before the agreement is signed.
My Lords, I have to thank my noble friend who spoke on behalf of the Government for the kind way in which he replied to the Motion which I made. I have been criticised with regard to a good deal that I said, but that leaves me quite unabashed. I dare say that I made mistakes here and there, as many of us do in dealing with very complicated questions with very little time in which to do it. But I am impressed by one thing—that the power under the Mandate is simply power to His Majesty's Government to obliterate themselves altogether from the control of this matter. It would be unfair to ask any further questions to-night, but on another occasion I shall 758 ask whether the ultimate power of the syndicate or company will or will not rest with Mr. Novomeysky and his associates. I think I shall be able to supply a few facts which, if they do not completely refute what has been said on behalf of the Government, will show at least that there are some criticisms made by the Government which are not altogether without the possibility of a reply. I do not know whether any other noble Lord is going to speak, but having regard to the evident sense of the House I propose to ask your Lordships to permit me to withdraw the Motion.
§ Motion, by leave, withdrawn.