Lords Sitting of 11 July 1932

Preamble
The House met at a quarter past four of the clock, The LORD CHANCELLOR on the Woolsack.
The Lord Harris—Sat first in Parliament after the death of his father.
The Viscount Harcourt—Sat first in Parliament after the death of his father.

THE CHAIRMAN OF COMMITTEES.
THE SECRETARY OF STATE FOR WAR (VISCOUNT HAILSHAM): My Lords, I am sorry to say that the noble Earl, Lord Onslow, is unable to be present this afternoon owing to some trouble at home. My noble friend Lord Stanmore is willing to act in his place this afternoon if your Lordships agree, but I think it is necessary that you should give your formal approval to that. I therefore move that Lord Stanmore do act as Lord Chairman of Committees during to-day's sitting.
Moved, That Lord Stanmore be appointed to take the Chair in the Committees of the Whole House this day in the absence of the Chairman of Committees.—(Viscount Hailsham.)
On Question, Motion agreed to, and ordered accordingly.

MARRIAGES PROVISIONAL ORDER (No. 2) BILL.
House in Committee (according to Order) on re-commitment of the Bill: Bill reported without amendment.
NEWCASTLE-UPON-TYNE FIRE BRIGADE PROVISIONAL ORDER BILL.
House in Committee (according to Order) on re-commitment of the Bill: Bill reported without amendment.

BUSINESS OF THE HOUSE.
VISCOUNT HAILSHAM VISCOUNT HAILSHAM rose to move, That Standing Order No. XXXIX be
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considered in order to its being suspended until the House do adjourn for the Recess. The noble Viscount said: My Lords, I beg to move the Motion standing in my name. Your Lordships will appreciate that at this period of the Session it is important to get all stages of Bills now before your Lordships' House. I do not think there is any in regard to which it can be said that there will be anything detrimental to the discussion or consideration of them if the Motion is carried.
Moved, That Standing Order No. XXXIX be considered in order to its being suspended until the House do adjourn for the Recess.—(Viscount Hailsham.)
On Question, Motion agreed to, and ordered accordingly.

SUNDAY ENTERTAINMENTS BILL.
Amendments reported (according to Order).
Clause 1:
Provisions as to cinematograph entertainments.
(5) This section extends to every area in which places licensed by the authority having power in that area to grant licences under the Cinematograph Act, 1909, were, within the period of twelve months ending on the sixth day of October, nineteen hundred and thirty-one, opened and used on Sundays for the purpose of cinematograph entertainments, in pursuance of arrangements (not being arrangements relating only to specific occasions) purported to have been made with the authority, and shall also extend to any borough or county district to which it may be extended by an order laid before Parliament in accordance with the provisions of the Schedule to this Act, and approved by a Resolution passed by each House of Parliament.
LORD RHAYADER LORD RHAYADER had given Notice to move to insert the following new subsection:
"(6) This section shall also extend to every county area in which places licensed by the authority having power in that area to grant licences under the Cinematograph Act, 1909, were within the period of twelve months aforesaid opened and used on Sundays for the purposes aforesaid for occasional performances conditional upon the profits being applied to charitable purposes provided that no licences for such occasional performances shall be granted in excess of twenty-four in any one year."
The noble Lord said: My Lords, the Amendment which I put on the paper I do not propose to move, though it was designed to meet a point raised in Committee on the Bill. Further consideration made it appear that perhaps it opened the door more widely than is desired. I therefore propose to move it in an amended form. I propose to leave out of subsection (5) the words "(not being arrangements relating only to specific occasions)" and to insert at the end of the subsection:
"Provided that, if in any area the arrangements in pursuance of which places were so opened and used as aforesaid related only to specific occasional entertainments, then, unless and until it is extended to that area by such an order as aforesaid, this section shall extend to that area subject to the modification that the powers thereby conferred shall not be exercised with respect to more than two Sundays in any year."
The Amendment in its new form will enable the Middlesex County Council and other county councils who have been issuing occasional licences for Sunday performances to continue that practice. There seems to be no real reason to deprive them of a power which they have exercised discreetly in the past and I put this Amendment down in the hope that it would be more acceptable to the Government and that they would be willing to agree with it in another place. It does not extend the powers of the councils, but merely enables them to continue doing what they have been in the habit of doing. Unless this Amendment or something like it is in the Bill the County Councils of Middlesex and the West Riding and others will be deprived of powers they have exercised in the past. I beg to move.
Amendment moved—
Clause 1, page 4, line 2, leave out from ("arrangements") to ("purported") in line 3 and at the end of line 8 insert the said proviso.—(Lord Rhayader.)
VISCOUNT HAILSHAM: My Lords, as the noble Lord says, the Government are able to meet the difficulty which was brought forward on the Committee stage by accepting this manuscript Amendment which does not go so far as the original one, but which, I think, goes far enough to remove the grievance to which attention was called. As your Lordships appreciate, the point is that in certain areas there had been a practice of granting a special licence for a particular Sun-
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day without there being any general Sunday opening, and it is desired to preserve that power because otherwise the effect of the Bill would be that any area in which there had been such an occasional licence would have to go without the privilege or else use the machinery in the Bill to obtain leave to open on every Sunday. It is to avoid that difficulty that the Amendment is brought forward. The power conferred is limited to two Sundays in the year so that I do not think it is capable of abuse, and it does help such a case as that of Birmingham, where there is the Cinema Hospital Sunday, without altering the whole of their procedure. I hope your Lordships' House will think we have met the difficulty fairly. I understand that our concession meets the approval of Middlesex and the West Riding Councils, and I believe of the other areas which are concerned, and I would respectfully commend it to your Lordships' acceptance.
LORD FAIRFAX OF CAMERON: My Lords, I should like to thank the noble and learned Viscount for having met us in such a gracious way. We are most grateful to him. I should like to have had three times, but still twice in the year is very satisfactory. We appreciate how much this means in the West Riding of Yorkshire, where 30 per cent. of these takings go to the hospitals and 20 per cent. go to the poor children's outings, in these difficult times, and we thank the noble Viscount.
VISCOUNT ULLSWATER: My Lords, speaking on behalf of one of the charities assisted by these occasional licences for cinematograph performances I desire to thank the Government, and the noble and learned Viscount, for the concession which has been made. I felt on the last occasion when this matter was before the House that it resulted very unfairly to the charities that had been in the habit of obtaining benefit from these occasional performances, and although I quite realised the strong arguments put forward by the noble and learned Viscount, in opposition to the Amendment then moved, I felt that it left the charities in some considerable difficulty, and I am glad to think that this Amendment will relieve them of that. Therefore I beg to thank the noble Viscount.
On Question, Amendment agreed to.
Then (Standing Order No. XXXIX having been suspended) Bill read 3a, with the Amendments, and passed, and returned to the Commons.

ISLE OF MAN (CUSTOMS) (No. 2) BILL.
Read 3a (according to Order), and passed.

PUBLIC WORKS LOANS BILL.
House in Committee (according to Order): Bill reported without amendment.
Then (Standing Order No. XXXIX having been suspended), Bill read 3a, and passed.

IRISH FREE STATE (SPECIAL DUTIES) BILL.
THE LORD CHANCELLOR acquainted the House, That the Bill had been endorsed with the certificate from the Speaker that the Bill is a Money Bill within the meaning of the Parliament Act, 1911.
Order of the Day for the Second Reading read.
VISCOUNT HAILSHAM: My Lords, I hope that I shall not be misunderstood in any quarter of the House if I preface the remarks that I have to make this afternoon by saying that it is with extreme regret that I find myself in the position of having to bring this Bill before your Lordships to-day. It so happens that something less than ten years ago I made my maiden speech in the House of Commons on the Second Reading of the Bill to give effect to the Irish Treaty, and I recall that on that occasion, in commending the Bill on behalf of the Government to the House of Commons, I observed that:
"…every member of this House will regard this Bill as a measure of good will to the people of Ireland, as an indication that Great Britain does intend to implement her obligations to the full, and that even those who are opposed to the Treaty recognise it and desire to adopt it, and by enacting it to carry it out. His Majesty's Government and the people of Great Britain as a whole will loyally and faithfully observe its terms, with a full hope and prayer that it may turn out for the blessing of the people of Ireland, and the cultivation of friendship and amity between that Kingdom and ourselves."
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For nearly ten years since that Treaty has had the force of law that aspiration seemed to be likely to be fulfilled. Certainly it may undoubtedly be said that the undertaking which we then gave, that we were going loyally and faithfully to observe the terms to which we had put our hands, has been fully carried out, in the spirit as well as in the letter, by every Government and by the people of this country as a whole. Unhappily it would seem that an Irishman, at any rate, does not desire to observe the obligations which the Irish Free State has undertaken if they should prove in his opinion inconvenient to carry out. The Bill which I am putting before your Lordships this afternoon is a Bill which is designed to remedy that unhappy state of affairs. It deals only with financial matters, and it deals, primarily at any rate, with the dispute with regard to the payment of annuities.
It can hardly be necessary in this House to recall to your Lordships in any detail the story of the land purchase legislation in Ireland. In all the tangled skein of the history of the relations during many years between England and Ireland there is one strand which, I think, by common consent reflects nothing but credit on the people of this country, and that is the attitude which we have adopted with regard to this question of land purchase. Your Lordships will remember how in the latter part of the last, century difficulties arose owing to the feeling in Ireland that the peasantry were being unfairly treated, that they were being given no opportunity to satisfy that hunger to own their own land which was said at any rate to be very largely felt. Your Lordships will remember the grievances which were set out by which, as the peasants claimed, there were many instances in which rack-rents were being exacted beyond their capacity to pay, and in which improvements which they had made in the land they had rented were made a reason for demanding a higher rent. By a succession of Acts of Parliament the Government of the United Kingdom took steps to remove those grievances.
I think the history of land purchase goes back as far as the year 1870, but at any rate during the years 1891 to 1909 successive Governments, first Conservative, then Liberal, passed a number of Acts of Parliament which, while they

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varied in their details, provided in each case that the tenants of land in Ireland should have the right, if they wished, to buy the land they were renting, and to pay for it by annuities spread over a long number of years—annuities which would in any case represent a payment of capital and a payment of interest, the interest being calculated at a very low rate indeed. And, in order to enable that transaction to be carried through, the Government of the United Kingdom issued Irish land stock, sometimes to the landlord in immediate payment of the purchase price, at other times to subscribers for such stock in order to provide the cash to pay the landlords; but in either event the stock was issued with the guarantee of the British Government, in one case both as to capital and interest, and in two cases as to interest only. And further, in order to render the transaction feasible, provision was made for certain excess payments by way of bonus, or by way of compensating for the discount at which the stock might stand owing to its low rate of interest; and those excess payments were borne exclusively by the United Kingdom Exchequer.
It is, I think, sufficient to say as illustrating the extent of the benefits which were then conferred upon the Irish lessees, that in the Irish Free State alone the Commissioners reported last year that as a result of this land legislation the tenants on farms which had been purchased under these provisions were paying by way of annuities £3,500,000 a year instead of £7,500,000, which they would have been paying by way of rent, and which would, of course, have given them no title to the land for which the rent was paid. It is difficult to conceive a more striking illustration of the beneficence of this legislation to the people of Ireland.
When self-government was conferred upon the Irish Free State obviously it was necessary that some arrangement should be made with regard to the collection of annuities. Before that happened the position was that the tenants paid the annuities every year to the Irish Land Commissioners and that the amount necessary to pay the interest on the land stock was paid out by the Irish Land Commissioners, any deficiency being made good out of the British Exchequer; and it is right and fair that I should say
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now that, in fact, the Irish tenants who took advantage of that legislation have most loyally and faithfully carried out their bargain, and that there has been no repudiation so far as they are concerned. In effect, as your Lordships see, the Land Commissioners were collecting the annuities, collecting the purchase price from the tenants, and were paying over the sum so collected to the landlords or to the people who had subscribed for the stock which paid for the landlords' interest.
It was inconvenient when self-government was granted to the Irish Free State that the British Government or any representatives of the British Government should be collecting these annuities from people in Ireland, and accordingly some plan had to be devised to get over that difficulty. The Treaty contained no reference to the annuities, but in the Heads of Working Arrangements which were discussed between the Irish representatives and the British representatives there was a stipulation that the annuities should be paid by the Irish Free State to Great Britain, and at the time when these Heads of Agreement were being discussed the Irish representatives not unnaturally, owing to the complications of the position, desired time to consider what should be done in that regard.
The matter was considered, and in February, 1923, six weeks after the Irish Free State had been set up, an Agreement was signed between Mr. Cosgrave, the President of the Executive Council of the Irish Free State, and Major Hills, the Financial Secretary to the Treasury, on behalf of the two countries in which provision was made by Clause 1 in these terms:
"The Free State Government undertake to pay at agreed intervals to the appropriate fund the full amount of the annuities accruing due from time to time, making themselves responsible for the actual collection from the tenant-purchaser."
In 1926 there was what was called an Ultimate Financial Settlement, and by Clause 1 of that Ultimate Financial Settlement the same undertaking was repeated. And it is fair to say that from that time, in other words from the time when the Irish Free State Government undertook the collection of these annuities until the present year, the annuities have been faithfully and regularly paid

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over in accordance with those undertakings. The amount is in round figures about £3,000,000 a year.
As your Lordships know, at the beginning of this year there was a General Election in the Irish Free State which resulted in a change of Government, and on the 22nd of March of this year Mr. de Valera, the new President of the Executive Council of the Irish Free State, made a speech in Ireland in which he stated that his Government did not intend to continue to make these payments. It is curious that, although on the same day that he was making that speech, he was sending a Despatch to the Dominion Secretary in which he announced his intention no longer to implement the obligation contained in the Treaty to maintain the Oath of Allegiance for all persons elected to the Irish Free State Parliament, in that Despatch he made no reference to this matter of the annuities. However, the question having been raised, inquiry was made as to whether this in fact represented the attitude of the Irish Free State Government, and His Majesty's Government in the United Kingdom were assured that it did represent that intention.
Your Lordships may know that within a very short time of that happening two of His Majesty's Ministers, the Dominion Secretary and myself, went over to Dublin to see the President in order to see whether any adjustment could be reached of the differences which had arisen between the two countries, and four days later a return visit was paid by the President with the Vice-President, another of his Ministers, in order to dismiss with some of us in London the difficulties which had arisen. At that meeting there was a suggestion put forward by His Majesty's Government that if the Irish Free State Government really believed that these annuities were not properly payable this, which after all was a matter of legal difference, ought to be adjusted as matters of legal difference should, in modern times, be adjusted between two honestly differing people —namely, by the method of arbitration. It was pointed out that not only in the Treaty itself had there been a proposal in certain events to arbitrate some matters before a citizen of the British Empire, but that in 1930, when the Imperial Conference of that year was meeting, there had been a considerable dis-
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cussion between the representatives of various Dominions and of this country as to what should happen in the event of just such a difference arising, and the view had been formed and formulated that the right course in such an event was to set up an Imperial tribunal consisting of two representatives of each of the countries in difference with a neutral Chairman chosen from some other part of the British Empire, who should adjudicate upon the dispute. It seemed to us that that formed a very happy and useful precedent for application to the present difficulty.
Unfortunately, the suggestion which we put forward did not commend itself to the Irish Free State, and a few days after the meeting in Downing Street a Despatch was received—I think on the 16th of June—from the Irish Free State Government, which accepted the principle of arbitration, and agreed that a tribunal of the general characted outlined in the Report of the Imperial Conference of 1930 would be suitable, but stated that they were unable to agree to the restriction of the personnel of the tribunal solely to citizens of the States of the British Commonwealth. The Despatch went on to say:
"The Government of the Irish Free State is of opinion that in justice to the people of the Irish Free State the matters to be submitted to the tribunal for determination must include not merely the land annuities"—
which up to that moment were the only matters in dispute—
"but also the items of the other annual payments to the British Government by the Government of the Irish Free State, except those made in pursuance of agreements formally ratified by the Parliaments of both States."
I do not pause to argue that very extraordinary proposition, which, apparently, leaves it open to any country to repudiate any treaty which is made on its behalf unless the treaty has been formally ratified by the Parliament of the State. I do not quite know how many agreements which this country has entered into could be repudiated at our option if that doctrine were ever incorporated into International Law.
Your Lordships will see first of all that that Despatch refused to limit the personnel to the British Empire, and, further, that that document came to include, in justice to the people of the Irish

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Free State, a number of other matters in regard to which we do not even now know what is alleged to be the matter in dispute. It is at least open, under such a Despatch as that, for the claim to be made that what is really sought is not arbitration as to what agreements have been made between the two countries, which obviously is a proper matter for judicial decision, but arbitration as to what sort of agreement ought to have been made between the two countries, regardless of what agreements actually were made, which, I imagine, is a matter that no member of your Lordships' House would think was proper to be brought to arbitration.
In reply to that Despatch—I do not want to trouble your Lordships by reading a number of documents all of which have been made public—another communication was sent to the Irish Free State in which we expressed our willingness to accept any form of tribunal provided that it was limited to the British Empire. It seemed to us to be wholly unjustifiable to seek to bring into a dispute between two members of the British Commonwealth of Nations, as I think we are pleased to call it in these days, other persons who do not form part of the British Commonwealth of Nations, and to suggest, as apparently is suggested by the Irish Free State, that it is not possible to get a fair or impartial decision from any member of the British Commonwealth seems to us to be an insult to our fellow citizens and to be a wholly unjustifiable attitude to adopt. With regard to the suggestion as to widening the sphere of the arbitration to include all these other matters, we expressed our willingness to consider that, provided always we knew what it was that was challenged and what was the matter about which arbitration was really sought. I am sorry to say that our attempts to get this matter disposed of by arbitration have failed. The Irish Free State have remained obstinately determined so far that there shall be no arbitration unless it be before some arbitrator or umpire chosen from outside the British Commonwealth of Nations, and, apparently, unless it shall include some unspecified matters with regard to which at present we know nothing as to the grounds of dispute.
Under those conditions, and while that dispute was pending, the time came for
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the payment of these annuities to be made. The moneys were due to be paid out to the holders of the Irish land stock on July 1. Some of those holders live in Great Britain, and many of them live in the Irish Free State. The British Government was not going to allow any failure by the Irish Free State to hand over the moneys which they had collected, or any repudiation by them of their obligations, to prevent our loyal performance of the guarantee which we had given to the holders of the stock, and, accordingly, on July 1, the payments were made to every person who was entitled to receive them, just the same as if the annuities which the Irish Free State had collected had been handed over as they had been in the past. The result is that £1,500,000 has been paid out for which no budgetary provision has been made, and when January 1 comes, presumably, if the Irish Free State persists in its present attitude, another sum of £1,500,000 will have to be paid out and the Treasury—which means of course the taxpayers—will be finding £3,000,000 which the Irish Free State Government bound themselves to pay over, which the Trish Free State Government have collected from the principal debtors—namely, the holders of the land—and which they are holding, in breach, as it seems to us, of every consideration either of law or of equity.
His Majesty's Government did not think, and do not think, that it is justifiable for us to impose that burden in these days upon the taxpayers of this country, and accordingly it became necessary to consider what means could be taken to collect that sum from the Irish Free State. I need not say that the consideration of any attempt at forcible collection never crosed the mind of any one of us. That is not a method which any one in this House could conceivably adopt. But we have considered all the alternatives which occurred or were suggested to us, and it seemed to us that the right method, the method which we ask your Lordships to approve to-day, was the method of giving authority to the Treasury to impose duties on goods imported from the Irish Free State sufficient to compensate for the amount which was being wrongly withheld from this country.
Accordingly, the Bill which has passed another place and which is now sub-

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mitted to your Lordships for approval is a Bill which provides that:
"If it appears to the Treasury that any failure of the Government of the Irish Free State to implement their obligations has resulted, or is likely to result, in a direct loss to the revenue of any public fund of the United Kingdom or in an additional charge on ally such fund then, subject to the provisions of this Act, the Treasury, with a view to the making good of the loss or the additional charge, may, after consultation with any Government Department which appears to the Treasury to be interested, by Order made for the purposes of this Act, direct that there shall be charged on the importation into the United Kingdom of articles of any class or description imported from the Irish Free State, or exported from the Irish Free State to any other country and thence brought into the United Kingdom, such duties of customs as may be specified in the Order.…"
There is a provision that the duties to be charged
"(a) may be charged by reference to value or to weight or to any other measure of quantity as may be provided in the Order; and
"(b) shall not exceed one hundred per cent. of the value of the articles."
The Bill goes on to provide that these special duties shall be additional to any other ordinary Customs Duties chargeable on the articles and that any Orders made under the Act or any regulations made under the Act shall be laid before the House of Commons as soon as possible after they are made and shall expire unless they are approved by Resolution of the House of Commons within twenty-eight sitting days after they have been so laid. Then there are provisions as to valuation and so on which are copied from the existing Customs law of this country.
In another place it was stated by the Secretary of State for the Dominions that he did not intend to state, for obvious reasons, what use was going to be made of these powers. It would go a long way to defeat their usefulness if we were so foolish as to announce in advance on what particular articles we are going to impose duties or exactly what those duties were likely to be. Those are matters which remain for the future. The Secretary of State for the Dominions said in another place, and I have no hesitation in repeating it here, that, if your Lordships pass this Bill as I hope you will this afternoon, the Government does intend to use these powers for collecting whatever sums the Irish Free State Government wrongfully
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withhold from the promised payments to this country. We do not intend to use them to collect any further sums than those payments amount to, we do not intend to use them in any penal sense to inflict or to attempt to inflict any sort of penalties, but it is intended to prevent so far as it lies in our power to do so the taxpayers in this country being saddled with obligations which the Irish Free State Government fail to implement.
The Bill really speaks for itself. In describing its effect I have read almost the greater part of its language. I profoundly regret that it should be necessary to introduce this legislation. I have no illusion. Duties of this character must inflict hardship in individual cases, but I think for a Government to allow a unilateral repudiation of obligations solemnly entered into for no reason except that the repudiating party preferred not to carry them out, to allow the Irish Free State Government to collect these moneys for the purpose of paying these annuities and then to put them into their own pocket instead of handing them over to us who have to pay out the corresponding sums to the holders of land stock, is a course which is an impossible one in International Law or equity and is one which this country would not tolerate from any Government of any complexion at all. In these circumstances I have to move that this Bill be read a second time. It is, of course, a certified Bill and I am hoping that your Lordships will give your assent to the Second Reading and also take the Third Reading in order to ensure its passage this afternoon. I hope and expect that, if unhappily the Irish Free State Government do not see their way to modify the attitude they have taken up, the powers which are given by this Bill will be exercised at no distant date.
Moved, That the Bill be now read 2a.— (Viscount Hailsham.)
LORD PONSONBY OF SHULBREDE: My Lords, the Bill which is now before your Lordships' House is one of great importance and may be fraught with very grave consequences. I make no objection whatsoever to the procedure to be followed of passing it through all its stages in your Lordships' House to-day. In the first place we are very close to the end of the Session, and in the second place this is a certified Bill over which

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your Lordships' House has no control. I desire, however, to place before your Lordships the reasons which make the Opposition regard this Bill as unnecessary and precipitate. I have a difficult task because in another place, in the course of a debate which took several days, my honourable friends and colleagues in that House were able in a number of speeches to put all the points, whereas I, not intending to delay your Lordships for any length of time, shall have to give your Lordships an epitome of our observations.
Moreover, in another place my honour able friends were able to deal very effectively with the pronouncements and the frequent interruptions of the Secretary of State for the Dominions, whereas I have to follow the noble and learned Viscount the Leader of the House, who is known to excel in clear, succinct and telling exposition of a case. Nevertheless, ill equipped as I am for such a task I desire to place before your Lordships some of the very grave considerations which we consider to be involved in the passage of this measure. There is a slight inclination—certainly it was very noticeable in the debates in another place —to regard Ireland as the same Ireland under the same form of government as it was twenty years ago. But there has been a very great change in the course of those years and Southern Ireland now exists as the Free State, a Dominion with an independent and autonomous Government.
I should like to clear away at the outset any idea that we are what is called taking Mr. de Valera's side. We are not doing anything of the kind. Mr. de Valera has adopted methods which I think in some ways are unprecedented, but I do not think we should allow his unusual and maladroit methods to interfere with our sense of fair play. He is not versed in the methods of diplomacy. He has blurted out in public what he should have approached us with in private and he has adopted methods which we regard as quite unsuited for the discussion of so grave a matter as this. I am prepared to admit fully that if Mr. de Valera had approached His Majesty's Government and said: "We consider these matters should be the subject of revision, they are matters which my Government think no longer hold the same obligation on us as
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hitherto, will you come and discuss them?" I am sure His Majesty's Government would have met them and, would have been ready to discuss the matter. I am not at all approving of his method, but when a person is using the wrong sort of method we must be careful not to make that in itself an objection to his case.
Further, we must take into account the general world atmosphere. It is a disturbed world, a world suffering from severe economic dislocation and from political agitation and a world in which there is much talk of the lightening of the burden of debt, the revision of agreements and the forgiving of debt. We have to take that into account because every newspaper every day has some paragraph regarding those questions which are under discussions between the nations of the world. Then we have further to take into account the extraordinarily anomalous Constitution of the British Commonwealth of Nations. It is like the British Constitution itself, which is a mass of anomalies. We claimed in 1919 that the Dominions should have votes as independent nations on the League of Nations. That was conceded and they were regarded as absolutely, from the point of view of voting power, on an equal footing with any other autonomous independent sovereign State. At the same time, when it came to the signing of the Optional Clause, we made a reservation that inter-Imperial disputes should be submitted to a tribunal within the Empire and not to the International Tribunal at The Hague. Yet in contradiction of that the Irish Treaty was registered at Geneva just in the same way as any instrument between two autonomous independent sovereign States.
VISCOUNT HAILSHAM: If the noble Lord will forgive me that is not quite accurate. The Irish Free State sought to register it at Geneva, but instead of its being registered in the same way as an agreement between two autonomous independent States we registered a protest on the very ground that it was not suitable.
LORD PONSONBY OF SHULBREDE: Of course I accept the noble and learned Viscount's correction, but although our protest may have been made the Treaty was registered.
LORD DANESFORT: Most improperly.
LORD PONSONBY OF SHULBREDE: It was our opinion that it was improper, but it shows the beginning of the difficulty of allowing the Dominions complete votes as independent sovereign States and yet making reservations in other directions. I am not criticising those reservations as either right or wrong. I simply say they exist.
I come now to the recommendations of the Imperial Conference and if I take this particular course in my arguments, not following the noble and learned Viscount in his very clear account of the history of the land annuities, it is because the question of the payment of the land annuities is not really the question in point. As I will presently show, the differences between His Majesty's Government and the Free State Government have been fined down to a very small point. The Imperial Conference of 1930, following on a Conference which was called together on the operation of Dominion legislation in which for a short time I took part, recommended a tribunal within the Empire for disputes that might arise between the members of the Commonwealth. The fact that there was not agreement amongst the members of the British Commonwealth of Nations to such a tribunal being set up either temporarily or set up ad hoc for particular disputes is shown by the fact that it was not included in the legislation which subsequently came before the various Parliaments of the Empire. Mr. Thomas in another place said it could not have been included in the Statute of Westminster. However that may be, if there had been agreement between the members of the British Commonwealth of Nations on this point of a tribunal concurrent legislation would certainly have been introduced at the time of the Statute of Westminster setting up such a tribunal or providing facility for an ad hoc tribunal when needed. There is no obligation on the part of any Dominion to have recourse to this Imperial tribunal. Had it been set up this dispute would have gone automatically to it, but the fact remains that it was not set up and that must be kept in mind.
Now, my Lords, however clumsily this question may have been raised there are differing opinions with regard to the question of the binding nature of the
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Ultimate Financial Agreement—that is to say, the Churchill-Blyth Agreement—and therefore, as to the binding obligation of the Free State Government to pay the land annuities. In our opinion there is no doubt about it that the obligation rests with them. They fulfilled it for ten years and should continue to do so. That is not their view, and they are supported by a great number of legal luminaries in the Irish Free State. As to what value is to be attached to their opinion I do not desire for a moment to examine. I simply want to bring before your Lordships the fact that this is not a merely frivolous objection, but one which they are prepared to place before an arbitral tribunal. They declare in their Despatch of April 5 that:
"the British Government can rest assured that any just and lawful claims of Great Britain, or of any creditor of the Irish Free State, will be scrupulously honoured by its Government."
And in Mr. Dulanty's letter to the Dominion Secretary, read in another place, it became perfectly clear that they were prepared to submit their case to arbitration, and that in the meantime the moneys collected were going to be paid into a suspense account, and were not, as I think perhaps the noble and learned Viscount stated by a slip, being taken by them and put into their pockets as a Government.
So we come down to the narrow point of the constitution of this arbitral tribunal. The attitude of the Free State is in all probability wrong—I am not entering into that question—but it is admitted that if there was a dispute, say, between Canada and South Africa, and they wished an arbitral award to be made, say, by a Swede, they would be perfectly at liberty to call in a foreign authority. Mr. Thomas has reiterated a great many times a sentence from which I will only refer to one quotation. It is: "We cannot and will not allow this matter to go outside the Empire." That "we" means His Majesty's Government, and our argument is that the Government would be in a very much stronger position if that "we" meant the Imperial Conference.
Before I come to the specific suggestion which we, the Opposition, desire to make, let me say a passing word about this legislation. Considering, as I think I have shown, that the dispute is now about the arbitral tribunal, and not about the

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annuities at all, we are both prepared that this question shall go before arbitration. Therefore the dispute about the land annuities, or any other money due, is not the point at issue. The point at issue is the nature of the tribunal. In these circumstances it seems to us a most mistaken action that we should get legislation in order to have, so to speak, a big stick with which to enforce our view of the dispute. We consider that this legislation is injudicious, unnecessarily precipitate, and calculated to exacerbate opinion and aggravate the situation. Mr. de Valera has a very narrow majority in the Irish Free State. If the powers given to the Government by this measure are used Mr. de Valera's majority may assume very large proportions.
Mr. Thomas, the Dominions Secretary, is well-known as a negotiator. He has conducted very many negotiations in his day, and often with considerable success. But Mr. Thomas has been accustomed to negotiate on the weaker side. Difficult that is, but it is not nearly so difficult as when you are negotiating on the stronger side, and when, as now, you have got the whip hand. It is then that patience has to be exercised. It is then that self-restraint has to be exercised. It is so easy to take a short cut and get the big stick and say, "We will teach you," but it is more difficult to keep a level head and take a reasonable attitude. It is quite easy to be reasonable with people who are reasonable. It is very difficult to be reasonable with people who are unreasonable. That is the task which Mr. Thomas has got to fulfil now, and while he exercised patience when with the noble and learned Viscount he went over to Ireland, and when he received Mr. de Valera here, and exchanged letters, there seems to have come a moment when he lost his patience, and instead of taking advantage of the very near sitting of the Imperial Conference he took advantage of the approaching Prorogation or adjournment of Parliament. That was a vital mistake. If ever there was a question—not of the annuities, may I remind your Lordships every time, but a question of the constitution of this tribunal—which should go before the Imperial Conference, it is obviously this one.
In passing let me say a word about the nature of the big stick for which the Government is asking. I am afraid, my
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Lords, it is not a big stick but a big boomerang. It is going to inflict probably every bit as much hardship on this side of the Irish Channel as on the other. There is a large trade concerned. Imports from the Free State reached the high figure of £36,000,000 and exports from this country £30,000,000. We may for a while penalise the Irish producers, but eventually, undoubtedly, the burden to a large extent will fall upon the British consumer. At any rate it is bound to lead to retaliation, and we shall suffer very much from that. An instance was given of the enormous quantity of our manufactured goods that went over to Ireland, and if they are going to be shut out by a tariff from the shores of Ireland there will be suffering and further unemployment in this country. Economic warfare and the dislocation of trade—surely there is enough dislocation and enough hardship without adding to it just for the sake of getting Mr. de Valera to say that he will not have a foreigner on an arbitration board?
Let me put our proposal as clearly as I can before your Lordships. This is essentially a justiciable dispute. By a curious chance the Imperial Conference happens to be going to sit at Ottawa very shortly. Mr. Thomas, in an interruption in another place when it was suggested that this was a matter to go before the Imperial Conference, said: "It is a matter of dispute between ourselves and the Irish Free State, and other members of the Commonwealth should not be drawn in." He was thinking about this dispute, about the annuities; but that is not the question which we want to place before the Imperial Conference. We do not want to go to the imperial Conference and ask it to say who is right and who is wrong with regard to the payment of these annuities. We want to go to the Imperial Conference at Ottawa and say to them: "The last time the Conference was sitting there was no clear decision made with regard to the establishment of a tribunal before whom disputes between the various Dominions should be adjudicated. It was a mistake. Here a dispute has arisen; this omission must now be rectified. It rests with all of us to settle on some form of arbitral board before whom disputes of this sort can go, and you must settle it now, because here is a dispute."

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If the Imperial Conference then decided that an inter-Imperial tribunal should be set up, and that on no occasion—not on this occasion nor on any other—should any foreign element be introduced into the board, that would have to be accepted. We would place the case of the land annuities before the tribunal. If the Free State refused to accept that tribunal they would be judged against in default. The judgment would be with us, and then we should come to Parliament and ask for powers to enforce payment. But until that is done, until we have placed this narrow point of the constitution of the arbitral board before the Imperial Conference the Government cannot say that they have explored every avenue and that they have taken pains to prevent a breach at the last moment.
I regret to have kept your Lordships so long, but I wanted to make the matter as clear as I could and cover the ground which, after all, is very complicated, and, so far as it is a legal matter, beyond my capacity to deal with. But this hurried legislation at the end of a Session, with everybody rather tired and wanting to go away, not quite grasping the full significance of what we are doing, is one of those fatal mistakes which we may regret later. The waving about of this stick, the threatening which it involves—the very passage of this Bill is a threat-prevents that calm atmosphere its which alone the settlement of a dispute can be arrived at. We believe that the possibilities of conciliation have not been exhausted. We believe that this action is precipitate. We believe that the powers that the Government are asking Parliament to give them should not be of the nature prescribed in this Bill—and may I say in passing that one of the worst features of this Bill is that again Parliament is ignored? The Treasury is going to decide what duties are to be paid and on what articles those Duties are to be paid—not Parliament, not the House of Commons, but the Treasury. It is left entirely to the Treasury. This is another instance of strengthening the Executive and weakening the Legislature. I cannot help thinking that the question is now narrowed down, that it is rather a question of amour proper, and that there is a reluctance to "give in" as it is called. Being fairminded is never "giving in"; it is acting with wisdom. And it is in the interests of good govern-
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ment and friendly relations with our neighbours, for whom we all have a very close affection, that I have put these objections to your Lordships and tried to place before your Lordships' House the considerations which, as those associated with me think, make this Bill objectionable at the present time.
LORD DANESFORT: My Lords, may I be allowed to congratulate the noble Lord upon one thing? He made not the remotest attempt to justify the action of the Irish Free State in what they have done. He did not justify their repudiation of these solemn agreements by which they undertook to pay annuities justly due, nor did he justify their attempted repudiation of the payments that they undertook to make—namely, payment of the Royal Irish Constabulary pensions and so on. In that the noble Lord exercised a discretion which was rather absent from the utterances of his colleagues in another place, because, if I read those utterances aright, they lent themselves to the quite impossible task of attempting to justify or apologise for the doings of the Irish Free State. That is a point I have no doubt about myself, though it is not the issue at the moment, but I confess I was astonished that the colleagues of the noble Lord in another place followed a practice which is exceedingly regrettable—namely, that of offering excuses for the enemies of England, whether in Moscow or the Free State, rather than of supporting the interests of their own countrymen in this country.
After the speech of the noble and learned Viscount who leads the House it is quite unnecessary to go into the facts of the case. They are plain and palpably beyond dispute, and I was a little surprised to hear the noble Lord speak of the methods of Mr. de Valera as unusual and maladroit. I think in this country the repudiation of legal obligations—what I may call state robbery—deserves somewhat stronger language to condemn it than the expression "unusual and maladroit." However, I suppose the noble Lord was bound to let his friends down somewhat lightly. That he did not approve of them was, I think, quite clear. The only other point in the noble Lord's speech to which it is necessary to refer is this. He says it is a very narrow point, and that the only question is whether there should be arbitration by men within

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the Empire or arbitration which is to be conducted by arbitrators outside the Empire. I should have thought the decisions of the Imperial Conference of 1930 were quite sufficient to settle that question, because although a tribunal has not been set up, what the Imperial Conference of 1930 did say was that if a dispute does arise between members of what personally I prefer to call the British Empire rather than by that long-winded title of the British Commonwealth of Nations, it shall, if possible, be referred to arbitration within the Empire. This is exactly that case; and the fact that a tribunal has not yet been set up appears to me to be no reason whatsoever why this recommendation of the Imperial Conference as to the nature of the tribunal should not be followed.
I very carefully read all the correspondence that has passed between the British Government and the Free State Government on this question, and if any complaint is to be made about the action of the British Government it is that they have been almost unduly kind and tolerant of the extraordinary attitude which has been taken up by the Free State. They have given them every loophole of getting out of impossible positions; they have made every possible suggestion by which the Free State might withdraw, or at any rate might get a solution which would be desirable in everyone's interest; and I cannot see how the British Government could go further. The method that has been adopted, it seems to me, is a most reasonable one. Are we to stand by and allow the Free State Government to rob us of £3,000,000 a year and to call upon the British taxpayer to pay that £3,000,000 a year because the Free State will not pay it? It is quite obvious that such a thing would be a betrayal of our interests, and if we are not going to betray our interests in that way would the noble Lord suggest any other way by which the British taxpayer could be reimbursed that £3,000,000 of money which the Free State have deprived them of? The noble Lord was very wisely and very significantly silent upon that point, and if there is no other way that he can suggest, or that anyone else can suggest, by which the British Government can recoup itself for the £3,000,000 it ought to get from the Free State, I should be very glad to hear of it, but up to now we have not heard
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either in this House or in another place any alternative method.
LORD MOUNT TEMPLE: My Lords, I only want to say one word on this very ticklish and distressing subject, and it is this. I do not think that the debate ought to close without someone at any rate paying tribute to the loyal agreement of Mr. Cosgrave and his Government over those ten years. Many of us were deeply apprehensive when the Irish Treaty was made that this country had committed a grave error, but the way in which obligations were honoured and law and order maintained by the late Government was really remarkable, and the way in which the Irish tenant farmer has paid his annuities has exceeded all expectations; in fact I think I am right in saying that a decimal of one per cent. only have not met the obligations they undertook to carry out. Therefore, let us hope, as indeed we think we can hope with confidence, that this ephemeral Government, with an exiguous majority and with an extraordinary President at its head, may soon pass away, that this Bill will not be translated into fact for a very long time, and that we shall see a stable Government soon re-established in Ireland with which we can deal and with which we can loyally co-operate. I am quite sure that the Free State population, as a whole, have no sympathy with the antics of their present Government, and only wish for a return of Mr. Cosgrave.
VISCOUNT HAILSHAM: My Lords, I desire only to say a few words in courtesy to the noble Lord opposite who stated the case for the Opposition with singular moderation and absolute clearness. I only want to answer not so much for the purpose of convincing your Lordships, because I rather hope that is no longer necessary, but because, after all, the debate which is taking place here may have a wider audience than this Chamber. The noble Lord began by referring to the atmosphere in which we now live and the general inclination to lighten debt burdens upon nations. I should like at once to point out that this question has no analogy at all to the War Debts and Reparations which are agitating public opinion at this moment. This money is money which the Irish Free State is collecting from the farmers, who are paying it for the very purpose of

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buying their farms and for handing over the money to those from whom the farms have been bought—that is to say, holders of the Irish land stock. What is happening is not that an impossible burden is being placed on the Irish Free State, but that the Irish Free State Government are collecting money which belongs to the holders of land stock, which they are bound to hand over to us to pay to the holders of land stock, while they are leaving us to pay the holders of that stock, and are keeping the money with which that debt ought to be paid in their own pockets, I care not whether it is called by a suspense account or whatever name they may give it.
Then my noble friend suggested that the action of the Government was precipitate and injudicious. How much longer does he think we ought to wait? It was in March that we learned from Mr. de Valera's speech that he was not going to pay the money. We asked him if that information was true. In April we first learned that it was true. We went to Ireland to see him about it. We invited him to Downing Street to see us. We have written Despatches; we have had communications. The 15th of June arrived when, according to practice, the money ought to have been paid. It was not paid. Still we took no action. We waited until July, when we had actually to pay the money out ourselves, and still we found ourselves unable to reach an agreement. How much longer were we to wait and what was the good of waiting when Mr. de Valera definitely took up the attitude that, right or wrong, he was not going to pay unless we accepted the sort of arbitration which he had envisaged that some foreigner should determine the question, and that the question to be determined should be an infinitely wider matter than the one which is at present in dispute?
The noble Lord also suggested that the legislation was faulty in character because Parliament had been ignored. If he looks at the Bill he will see that is a mistake. Parliament is not ignored. It is quite true that the Order which is to impose the duties is to be made by the Treasury, within the limits sanctioned by Parliament, but it is also true that that Order has to be approved by an affirmative Resolution of the House of Commons within twenty-eight days after the Order is made, and so the House of
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Commons, which is after all the financial authority, retains complete control over any Order which the Treasury makes, and can, if it see fit, reject it.
Then the noble Lord suggested that no sort of tribunal for Imperial disputes had been agreed, as I understood him, at the Conference in 1930. I was not a member of the Conference, and therefore he has an advantage over me, but I have at any rate the printed record of what is said to have happened, and your Lordships will find, if you refer to pages 22 and 23 of the Summary of Proceedings, that consideration was given, on the recommendation of the 1929 Committee, to the question of the establishment of such a tribunal, and the Conference found themselves able to make certain recommendations with regard to it. This is what they were able to do. First of all, they would not recommend the constitution of a permanent court, but decided to seek a solution along the line of ad hoc arbitration proceedings. Secondly, in the absence of general consent to an obligatory system, it was decided to recommend the adoption of a voluntary system. That explains why there was no legislation at the time the Statute of Westminster was passed. If there had been an obligatory system set up there would have been legislation, but, this being voluntary and ad hoc, there is no need for legislation until a dispute has arisen and the voluntary submission has taken place.
The Summary of Proceedings goes on to say:
"It was agreed that it was advisable to go further, and to make recommendations as to the competence and the composition of an arbitral tribunal."
They deal first with competence. Where, according to this, a dispute falls within that recommendation, they say:
"As to the composition of the tribunal it was agreed:

(1) The tribunal shall be constituted ad hoc in the case of each dispute to be settled.

(2) There shall be five members, one being the Chairman; neither the Chairman nor the members of the tribunal shall be drawn from outside the British Commonwealth of Nations,"

What is the good of the noble Lord opposite saying there has been no decision of the Imperial Conference? They have decided it and there is a

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record of what they decided. That is all we are standing by to-day.
LORD PONSONBY OF SHULBREDE: A recommendation, not a decision.
VISCOUNT HAILSHAM: That is all the Imperial Conference can do. I was coming to that, because it is the fundamental fallacy which underlies the positive proposals of the noble Lord. He says that we ought to go to Ottawa and ask the Ottawa Conference to decide what form this tribunal shall take and, says he, if the Ottawa Conference decide that there should be arbitration by an All-British tribunal in all justiciable disputes then we should proceed to go before such a tribunal, we should get judgment in default and then we should have the right to coerce the Irish Free State if it did not abide by the decision. That is indeed the disruption of the British Empire. That is indeed claiming for the Imperial Conference an authority which it has never had. If it were once suggested it would destroy its existence and disrupt the Empire from top to bottom. Does any one suppose that under the present Constitution of the British Commonwealth of Nations or the British Empire, whichever you may like to call it, it is competent for the Imperial Conference without the assent of one of the parties to decide what form the tribunal shall take and say that if one party does not accept it and go before it judgment can be passed by default? That is the noble Lord's policy. The Imperial Conference has no authority to make a decision which shall be binding in that way. The Imperial Conference is not a deciding body. It confers in order to reach agreement, not to impose decisions.
When the noble Lord makes a positive proposal that we shall go to Ottawa and ask Ottawa that other sister nations in the British Commonwealth of Nations shall join us in agreeing that an Imperial tribunal shall be set up, that it shall be of a particular composition and that judgment shall go by default against any member of the British Commonwealth of Nations who refuses to accept its decision, then in my judgment at any rate he is going dead in the teeth of the whole theory of our British Constitution and is embarking upon a course which if persisted in would drive every Dominion into secession. It seems to me
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an impossible proposal and one that His Majesty's Government could not for a moment entertain. The fact that that is the only alternative is perhaps the strongest argument in favour of the course we are proposing. As I said in my opening speech I regret this course and I am very sorry that it is necessary to take it. I do not disguise that, as the noble Lord said, it is going to impose hardship on many people not immediately parties to the dispute, but there is no alternative if the Free State Government refuses to carry out its obligations and continues in default, between this course and leaving the British taxpayers to pay a burden which the Government could not entertain and which I cannot believe this House or the country would support.
On Question, Bill read 2a: Committee negatived.
Then (Standing Order No. XXXIX having been suspended), Bill read 3a, and passed.