RAW MATERIALS.

HL Deb 13 April 1938 vol 108 cc677-706

LORD MARLEY had given Notice that he would ask His Majesty's Government what steps are being taken towards meeting the inequalities in international distribution of raw material to which attention was called in the Report of the Raw Materials Committee of the League of Nations; and move for Papers. The noble Lord said: My Lords, the Motion standing in my name is intended to draw the attention of your Lordships' House to the disabilities under which a number of nations are suffering with regard to access to raw materials and markets, and to suggest that that is possibly one of the causes of international tension in the world. Therefore it is perhaps worth spending a short time this afternoon to consider the possibilities of remedying these defects. The matter has received considerable publicity in this country and the United States of America in recent months, and in particular the United States Government, by Secretary Cordell Hull's policy of international economic appeasement, have made a very considerable contribution towards the solution of the problem.

If we examine some of the causes of the tensions and wars existing to-day, we notice that the various Peace Treaties have often been blamed for much of the trouble. I do not think I entirely agree with the most reverend Primate, who said a few days ago that they were vindictive and arbitrary. At least I do not look at them entirely in that way. It could, however, be said with truth that they were concerned apparently almost entirely, or at least mainly, with political rather than economic settlements. Mr. Ernest Bevin, the trade union leader, said the other day that the League had a great political head but no economic body. That is probably substantially accurate. At any rate one of the causes of the international tensions which exist has been the neglect of the economic results of the political decisions of the Peace Treaties. That is why we have seen the use of direct action in many of the methods of modifying the Peace Treaties in recent years. It would be reasonable to say that no nation desires war; yet it seems that nations, or Governments, will take risks of war in order to solve their economic difficulties. In all our minds there will be a number of recent examples of the use of force in the world for the purpose of resolving economic difficulties. I am not unaware that there are many other causes of these tensions.

I know that prestige in the tensions between nations is very important. The other day I came across a statement in which Dr. Goebbels, the Minister of Propaganda in Germany, pointed out that Germany is the only great Power without Colonies. The noble Marquess, Lord Londonderry, in a book which he has recently published, quotes Herr von Ribbentrop as saying that Germany wanted the return of her Colonies partly for raw materials but mainly for prestige. So we cannot deny that prestige is an important factor. Of course, we have another example: the spirit of nationalism which is affecting Europe to-day so seriously in the minority question. Each of these, however, had an economic basis, something to do with raw materials or with markets. So far as that is so, it would perhaps be useful to examine the possibility of economic redistribution. If in fact there is injustice in regard to accessibility to raw materials and markets by various nations, it would be as well to solve that problem in advance. It should be remedied merely because it is just and sane to give access to raw materials to all nations, and we should not wait until there is the threat of war, the threat of direct action or force, in attempting to remedy a state which may be unjust. I think it should be done—I hope the Government will agree with this—regardless of what nations are affected and regardless of any threats of aggressive action, merely because it is sane and just, and because until such action is taken it would appear that we cannot get rid of the tension which is affecting all Europe and in fact the whole world.

The Colonial demands of Germany are largely for this monopoly possession of raw materials, and the Raw Materials Committee of the League, which reported last September, have drawn attention to two factors in connection with these questions of Colonies and raw materials which I think are well worth studying. In the first place they say that the total present production of all commercially important raw materials in all Colonial territories is no more than about three per cent. of world production. In other words, if all the Colonies in the world were made available for an industrial country such as Germany they would be inadequate to supply the raw material requirements of that country. The Raw Materials Committee go on to say: The difficulties now experienced by certain States in paying for raw materials would immediately be alleviated if they would reduce their present armament expenditure. Those two statements, taken out of this very interesting Report, seem to show that the Colonial demand is perhaps less one of an economic nature than one of prestige. And, also, I think that the mere return of ex-German Colonies to Germany would not in fact satisfy her demands for access to raw materials and markets; in other words, it is a: bigger problem than the mere Colonial problem. It is possible that if the peoples of so-called totalitarian States feel that they are unjustly treated as regards access to raw materials, that fact might explain the volume of support which they give to the aggressive policies of their Governments. They believe that they are economically unfairly treated. The reason for their poverty—resulting in point of fact, I think it will be agreed, from the policy of economic selfsufficiency—is, they are told, due to the wickedness of democratic countries who possess these raw materials.

If we examine the unhappy condition of the world, to-day, we find, for example, that Japan is attacking China because she claims that she wants the raw materials and the markets in that country, and very little is said about the military conditions underlying Japanese action. So in Europe Italy claims to have seized Abyssinia for her raw materials and markets, and nothing much is said of the strategic value of that country, or of the prestige which results from the growth of a great overseas empire. Just the same, we see the German interests in Spain claimed to be for the raw materials in that country. Equally there is the recent iron agreement, a £3,000,000 contract for the supply of iron from Egypt to Italy. Very little is said about the strategic value of Spain to Germany and Italy, or the strategic value of Egypt to those countries in connection with the Far East. The latest example is the demand in Poland for Colonies. The Polish people are going through what they call a "Colony week," which started six days ago and comes to an end to-day—a "Colony week," in which they are making demands for Colonies. I see in The Times of April 8 last a quotation from a Polish political leader, General Kwasniewski, who said that Poland may not expect the actual possession of oversea Colonies, but it must have free access to oversea raw materials and markets "which are now so jealously guarded by their rich owners." The Times correspondent goes on to say that unless some concessions are made in this accessibility Poland will join Germany in the demand for the possession of actual oversea Colonies sufficient to give these raw materials. I suppose we should not be very far wrong in saying that perhaps only equality of opportunity in access to these raw materials would meet the demands—whether they are pretended or whether they are real—of the peoples and undermine their support for these aggressive policies.

It is interesting that all political Parties in this country support this type of proposal. I believe it is right to say that all political Parties believe that peace can only be lasting if it is based on justice. I know that justice is extraordinarily difficult to define, and I doubt whether it is possible to get political justice, because there are always two sides to all political solutions, and our justice is perhaps not the same as the justice of the other side. But I do not believe it is impossible to get economic justice, because I think economic justice is almost susceptible of a mathematical solution—a solution which at least can be accepted as reasonably fair. The Prime Minister, speaking on March 24—and a similar speech was made by the Foreign Secretary in your Lordship's House—dealt with this question of political problems, but he hardly mentioned I think, or at least hardly mentioned seriously, the economic solutions to which I have tried to draw attention. In his speech he used these words: Great Britain has repeatedly borne witness to the principles on which she considers the peace of the world depends.… The first is that differences between nations should be resolved by peaceful settlement and not by methods of force. The second, admittedly of no less importance, is that a peaceful settlement, to be enduring, must be based on justice. I suppose that that would be the economic suggestion contained in that very important speech. At any rate, we know that the Government have that in mind.

The Labour Party has always stood for this definitely. In the last of their policy publications they say they stand for equality of economic opportunity in access to markets and raw materials; and my noble friend who leads the Opposition, speaking in the debate to which I have referred, a few days ago said: We want an attempt made to face the grievances that exist, and we believe that if that policy were held aloft it would draw all men to it. And of course traditionally the Liberal Party has always supported this line of approach.

Perhaps it is also vitally important that we should realise that the United States feels extremely strongly on this matter. There has not been full support in the United States for the political policy of the Government, but there can be no doubt that there would be widespread popular support for any economic development along the lines I have suggested. Secretary Hull, dealing with this matter in February last in one of those amazing Government broadcasts which are so popular in the United States, and might possibly be developed in this country, said this: The economic warfare … has been in large measure responsible for the alarming disintegration of all international relationships which the world has recently witnessed. The world desperately needs international order based upon … a re-dedication of mankind to a utilisation of the unbounded resources which nature has given us. And he went on to say: Only as such an international order is firmly established, as its moral and economic foundations become strong, will the hope of lasting peace assume an aspect of attainable reality. No Government"— he said, and in that he meant no Government— in any part of the world can refuse participation in this vital task without betraying the best interests of its people.

It is not unreasonable to ask whether this problem provides some explanation of the failure of collective security. We may ask ourselves why the democratic Powers have failed to unite against what has been admittedly a use of force against the best interests of the international comity of nations. I venture to suggest that perhaps the masses of the people in the democratic countries have an instinctive feeling that they are not being asked to unite to make the world safe for democracy, but rather to preserve monopoly ownership of these essential raw materials. As a result, they have feared that they are being led up the garden, so to speak, in supporting this so-called collective security. At any rate, it has not happened, and, whatever may be the explanation, that is possibly one of the explanations for the failure, or the partial failure at any rate, of this system. I should think that it is also fear of this monopoly control that has united the totalitarian Powers—the "Have-not" Powers. The Government understand the position perfectly well, and we are indebted to the leaders for many of the valuable utterances which have finally gone into obscurity and been forgotten.

Let me draw out of the dusty pigeon hole, if I may, the speech of a former Foreign Secretary, Sir Samuel Hoare, made at Geneva in 1935, in which he referred to the abundant supplies of raw materials which appeared to give, he said, particular advantages to the countries possessing them. He went on to say this: The view of the United Kingdom Government was that the problem was economic rather than political and territorial. It was the fear of monopoly—of the withholding of essential raw materials—that was causing alarm. It was the desire for a guarantee that the distribution of raw materials would not be unfairly impeded that was stimulating the demand for further inquiry. The United Kingdom Government would be ready to take their share in an investigation of these matters. That investigation took place, and everyone is grateful to the Government for aiding in making possible the production of the Raw Materials Committee's Report. Action was promised. The Prime Minister, speaking in another place a few months ago, said this: The Government are fully prepared to play their part in the search for a solution of the world's major economic difficulties, and are taking definitely positive action"— whatever that means. It would be interesting to know what this "positive action" is. It is sometimes said that Mr. Chamberlain fiddles while Rome burns down the rest of the world.

What action has, in fact, been taken? Apart from the Report of the Raw Materials Committee in September last and the Report of the Economic Committee of the League in December, it is not publicly known what other action has been taken. I would ask His Majesty's Government to explain exactly what the Council did with that Report and what other action in this connection is contemplated. We had, of course, the van Zeeland Report dealing indirectly with this matter, and that was a valuable and most interesting document. It was discussed in another place in February of this year, and there appeared to be some difficulty as to what should be done. The Government said they were going to take preliminary soundings, but they could not do anything because the French Government were also involved. The French Government also were taking preliminary soundings. It would be interesting if we could know whether these joint preliminary soundings have reached bottom and whether, as the result of these soundings, some action is contemplated. In the past action has so often been too late. We have waited until it is too late to get the value from action which might have prevented the use of direct action in the world; might have prevented these threats and disturbances which are so upsetting. If, in fact, Germany, Italy, or other nations refuse co-operation, that is no reason for not going through with a scheme of redistribution. It is no reason why we should not go through with such a scheme if it is, in fact, sane and just.

It is not of course possible for me to suggest what action should be taken. I would like to see the Economic Section of the League turned into a sort of International Economic Organisation not dissimilar to the International Labour Organisation which exists to-day and which has functioned so well since 1922. The advantage of that would be that nations which are not members of the League could become members of the Economic Organisation and could contribute to its work. The work might possibly be an examination of various individual economically-important raw materials—production on the one hand arid consumption on the other, and the allocation of quotas at a fixed price of these raw materials to a legitimate extent to all the important industrial nations. I am not unaware of the immense difficulties in any such solution, and this is a mere tentative suggestion to which one hopes the Government will perhaps give some consideration. I know the difficulties; but I do not forget that in the past there were tremendous difficulties in connection with the international regulation of hours of labour, yet these were overcome, and now the Washington Convention on Hours of Labour is functioning not badly.

There would be objections to any such proposal. One realises that. We should be told, of course, that we are doing harm to certain interests in various countries, but it is necessary that we should educate people to understand that international interests must come before national interests, and national interests before sectional interests, if we are to establish peace in the world. We should be told that the making available of these raw materials is a victory for Germany or for Italy. Does it matter? If it is right, and if it lays the foundations for better understanding, far better let that be said than base our existence upon something which is fundamentally unsound. We should be told that we are helping the rearmament of aggressor countries. On the contrary, I believe that by settling a cause of tension we are diminishing the need for armaments and may be even laying the foundations for a reduction of armaments.

We should be met with the facile statement that these countries can, after all, buy any raw materials they want. That is not the case. This matter has been examined exhaustively, and probably one of the best reports was that produced by the Royal Institute of International Affairs on "Raw Materials in Colonies," in which they pointed out that the governing power in practice enjoys marked advantages—advantages of language, of currency, of the nationality of the administrative staff, and also of the nationality of the settlers, who deal usually with the Mother Country with which they have long-standing business and cultural connections. It is true, of course, that Germany, Italy, and other totalitarian Powers might not be satisfied with any such solution. I do not suppose they would, but there is this possibility, that the peoples of these countries would be less inclined to support a war which is claimed to secure a redistribution of raw materials if, without a war, they are offered the very raw materials for which they are asked to fight.

It seems to me not unreasonable to think that one might undermine popular support for aggressive action by some such line of approach as I have attempted to indicate. It would have the further advantage that the peoples of the democratic countries would at least be able to unite with a clean heart, knowing they were not merely supporting a monopoly position with regard to these raw materials. I believe very sincerely that if the Government were able to initiate action in this direction there would be tremendous support in the country for such a policy. I believe such a policy might lay the foundations for a fairer international economic structure. I believe that such a policy might make for a better understanding amongst peoples, and I believe it would be possible on these foundations to complete the edifice of a just and lasting peace. I beg to move for Papers.

VISCOUNT SAMUEL

My Lords, I trust your Lordships will agree that the noble Lord who has just spoken has rendered a useful service in bringing to the atten- tion of this House the matter that forms the subject of his Motion. The whole world is filled with anxiety and, indeed, alarm at the tension that prevails between nations, and when we examine the causes of the present lamentable and dangerous situation we find that there is an immense complex of intertwined causes which gives rise to this condition of stress and strain. Examining further, we see that if we wish to alleviate the position we must try to disentangle these various tendencies and endeavour so far as we can to secure practical solutions for each part of this immensely complex situation. Without doubt the economic factor is a very important one, and if we could pick out at one time the various economic considerations contributing to the animosities between nations and to the dangerous condition of the world and try to find a settlement of even one part of that economic problem, we should be contributing towards the ultimate aim of all of us.

The noble Lord who has just spoken referred to a speech made at Geneva by Sir Samuel Hoare when he was Foreign Secretary, on September 11, 1935. At that time that speech made a profound sensation not only at Geneva but throughout the world. The greatest attention was drawn to it everywhere, and it was said: "Here, it may be, is the first step towards practical measures being taken by one of the Powers chiefly concerned towards a solution of international difficulties." The noble Lord quoted some sentences from Sir Samuel Hoare's speech, but he did not quote one which appears to me to be of great interest and importance, and with your Lordships' permission I will read it. Sir Samuel Hoare ended his reference to this matter by saying: The Government that I represent will, I know, be prepared to take their share in any collective attempt to deal in a fair and effective way with a problem that is certainly troubling many people at present and may trouble them even more in the future. The problem is that which, as the noble Lord has already said, relates to the distribution of essential Colonial raw materials, and it was thought, when Sir Samuel Hoare said that, that it was perhaps the beginning of the application of the policy of what is called "peaceful change"; the great democratic Powers, not waiting for pressure, for threats of war, but, on their own initiative, seeing what is required and taking active practical steps to supply it.

Undoubtedly the British Commonwealth has the chief responsibility in this particular matter for the reason that, as the outcome of history, the British Commonwealth controls one quarter of the land area of the whole of the globe, while a country such as Germany, or a country such as Poland, has no territory at all outside its own European frontiers. Following upon that speech of Sir Samuel Hoare the League of Nations appointed a Committee to examine the question, a very authoritative body. The representatives of sixteen nations, I think, sat upon it, all of them experts, the British representative being the principal economic adviser to the Government, Sir Frederick Leith-Ross. They published their Report seven months ago, so there has been ample time for its consideration. A little later, it will be within the recollection of your Lordships, the Governments of Britain and France invited the very distinguished Prime Minister of Belgium, as he then was, M. van Zeeland, to make an inquiry into the whole of the economic situation of the world and to propose any measures that seemed to him practicable for relieving the difficulties of the present situation. He made that inquiry. It extended over several months. His Report was also presented in January of this year, and there have been three months now during which the Government might have been able to consider it.

I would draw the attention of your Lordships to the specific proposals made in those two very important documents. The noble Lord who has just spoken has proposed a plan on his own initiative which is not included in either of those Reports. While I very warmly support the initiative of the noble Lord in bringing this matter before your Lordships' House, I cannot express any support of the particular plan that he has sketched. He suggests that the League of Nations Economic Section should be turned into a kind of executive body which should survey the production and consumption of the principal raw materials and then allocate the distribution of them in quotas, as he says on some legitimate principle, to the various consuming countries at a fixed price. When I envisage the application of that principle and how it would work in actual practice I confess that it seems to me one that could not be adopted with success. These products of course vary in their supply from year to year according to the nature of the crops and to the circumstances affecting their production. It would therefore be necessary to re-assess each year the distribution of these various commodities. It would also be necessary to say, for example, to the wool producers of Australia: "So much of your product is to go to Germany, so much to Great Britain, so much to other countries," and, similarly, to say the same to the wool producers of South Africa; and if there were any export trade, say from Great Britain or Ireland, of any commodity, our export would similarly have to be allocated.

The plan seems to me at first glance—of course we have not had time to consider it—to be the Import Board proposal which has long been adopted by the Labour Party sublimated to an international scale. It would be hard enough to establish a system of import boards to regulate the whole of the importation into this country, but to have a world import board which would fix quotas for everyone everywhere of all the principal products, would, I venture to suggest, be a task beyond the possibility of practical accomplishment. How are they to decide? Which among many competing Powers is to receive any particular quota of any individual commodity? Price is not to determine it. It is to be settled on some "legitimate principle," but what would be that legitimate principle? This super-international board, which is to distribute the economic resources of the world, would naturally be subject to immense political pressure from all the various countries that were anxious to receive additional supplies, whether for the purpose of armaments or for any other purpose, and if the allocation is not to be determined by the price that they would be willing to pay, if the same price is to be charged everywhere and to be decided at the centre, if the price is not to be fixed at the price that they are willing to pay, then it would probably be settled by the pressure that they would be able to exert. No, my Lords, in rising to speak on this matter I am not prepared to support the particular plan that has just been laid before your Lordships' House, but rather to draw attention to what are the actual proposals of these two authoritative Reports.

The League of Nations Commission point out that the problem consists of two parts, the facilities for the supply of these commodities and the possibility of the purchase of these commodities. The latter, they say, far transcends in importance the former—that is to say, the great difficulty consists not in supplies being released from the various Colonies but in the ability of the consuming countries to find the exchange or other resources to enable them to buy the commodities. It is not on the selling side that the principal difficulty occurs but on the buying side. At the same time they do say that there are certain difficulties that might arise, and certain fears that do exist with regard to restrictions on supply from the Colonial end. They suggest among other matters that the Governments of the countries with Colonial possessions should make it a general rule of their policy, publicly declared, that they would not use the power of restricting supplies of raw materials so as to put pressure on other countries. They say that if that were made part of the practice of the nations of the world that would relieve the anxieties of some of the consuming Powers who now fear that at any moment any great Colonial Power such as Britain or France might cut off the supply of some essential raw material and thereby inflict grave detriment on the interests of their people.

The first question that arises is, will His Majesty's Government give an affirmative answer to that suggestion, which is specific and definite? If it is found that there is willingness on the part of Colonial Powers to give assurances that they will act according to economic considerations and not withhold supplies as a means of exerting political pressure, that would be at all events one step in the direction that is desired. Further, the Commission of the League of Nations draw attention to the restriction schemes that have been adopted with regard to certain commodities. As your Lordships are well aware, the principal commodities are rubber, tin, copper, sugar, and tea. The Commission do not condemn these schemes, which they find have been adopted for purely economic reasons, and on the whole with good results, but they do urge that in any such scheme the interests of the consumer should be fully considered; that it should be made a definite rule that in every such case the consuming public, no matter in what country, should have a voice in determining the nature and the operation of the scheme; and furthermore, that the authority which is in control of the scheme should be required to give the fullest publicity to all the facts relating to the commodities and to its own activities. Therefore the second question that arises from the Report of the Commission of the League of Nations is whether His Majesty's Government are prepared to adopt that recommendation, and to require that so far as British interests are concerned in the formation of any such scheme of restriction of raw materials these two conditions suggested by the Commission should be given effect. To use their own words, it would go far "towards allaying the apprehensions of less-well-endowed countries."

Turning to the buying end, to the question of exchanges, the Commission point out that this is the real crux of the matter. It is more important than any of the considerations which I have so far mentioned. Only when the exchange problem has reached a full solution will this problem of the purchase of raw materials also find a solution. Here again they make certain suggestions. The possibility of the purchase of goods from abroad depends obviously very largely upon the possibility of exporting one's own goods to the countries that produce these raw materials. The difficulty of Germany and other countries buying from Colonies is to some extent a difficulty of Germany being able to sell her own goods to those Colonies. Therefore the restrictions that we put upon imports into the British Empire touch closely and directly the ability of other countries to buy the raw materials they need from our Empire. If we do not allow them to sell to us they find they cannot buy from us. So we get back to the old problem of Imperial preference. That principle was deliberately adopted in order to canalise trade within the British Empire, and, so far as it is possible, to encourage inter-Imperial trade by duties which must thereby discourage extra-Imperial trade. By instructions from Whitehall tariffs were put all round our Colonial Empire for the first time in 1932 which restricted the sale of goods within our Empire and consequently restricted the purchase of goods from our Empire by other countries.

On that the League of Nations Commission, of which the principal economic adviser of His Majesty's Government was a member, made some observations which I will venture to read. They say: Any preferential system must tend to have some adverse effects in the countries to which it does not apply;"— that is, countries outside the Empire concerned— nevertheless, its restrictive effects on trade should not be exaggerated. For example, the British Colonial Empire as a whole sends 50 per cent. of its exports to foreign countries and takes 58 per cent. of its imports from those countries. But the development of preferential systems does not accord with present efforts to mitigate restrictions on international trade, and, in certain cases, it may cause indirect difficulties for countries requiring raw materials. It is to be hoped"— this is the recommendation to which I would draw special attention— that the Governments concerned will be willing to consider such cases as part of a general effort to relax trade restrictions. That, therefore, is the next point which demands the attention of His Majesty's Government. Will they take this factor into account in revising that complex of agreements, the Ottawa treaties, now due to come up for revision?

On this M. van Zeeland has some definite suggestions to make. As many of your Lordships know, his Report refers to this matter and he makes four suggestions. First, he says that the system of the open door which prevails in principle in what is called the Congo Basin—the Belgian Colony of the Congo and certain adjoining territories—is of great value and he says: … it would perhaps be opportune to seek for the means of generalising the system of the open door which obtains in the Conventional Basin of the Congo, a system the general result of which it is impossible to criticise. Do His Majesty's Government concur in that observation? M. van Zeeland goes on to say: In those Colonies where such a régime cannot be organised, certain circles have recommended that the possibility be examined of creating privileged companies, whose activities would be strictly limited to the economic sphere and whose capital would be divided internationally in such a way as to offer real guarantees of impartiality. There is a very important suggestion. Apart from any territorial readjustment or any reallocation of sovereignties, would His Majesty's Government give facilities to some of the "Have-not" Powers to create companies which would be able directly to develop, and thereby possibly pay for with their own currencies, industries and production within Colonies that are parts of the British Empire?

Thirdly, M. van Zeeland says: With regard to raw materials a most interesting proposal has been formulated tending to the supply of Colonial goods in exchange for industrial products. An agreement would be concluded between a Colony and an industrial State, and Colonial goods supplied would be carried to an account and paid for by the execution in return of important public works—bridges, railways, ports, &c. The intermediate finance would be provided by the metropolitan State. There is another practical, specific proposal made on the authority of M. van Zeeland himself, appointed by His Majesty's Government and the Government of France to examine these very matters. His fourth point is: Lastly, the rules of International Law might, in the opinion of many, be specified and re-enforced in such a way as to secure from seizure or confiscation in every case, even in time of war, private property held in Colonial territories, whatever the nationality of the owner. Those are the proposals that have been made, and clearly, coming from such authorities, they merit the immediate and most careful consideration of the Government of this country.

The question arises whether we are prepared to do anything along those lines, whether we realise our own responsibility in the matter; since, as I say, this Commonwealth owns one-fourth of the land surface of the earth and these proposals concern us more, for that reason, than they concern any other Power. Are we going to do something in these matters, or nothing? No doubt there are those who think that it is unnecessary, and some who think that it is not advisable, to take any steps along lines such as these. It is said—the noble Lord quoted the fact—that the Commission of the League of Nations report that only 3 per cent. of the world's consumption of imported raw materials comes from Colonial territory. Therefore it would appear at first sight that a matter that affects only 3 per cent. is unimportant and that what matters is the 97 per cent. of the production, which comes from other countries which are not Colonies. But the 3 per cent., translated into terms of quantities, represents an enormous amount, and when that 3 per cent is applied to particular commodities the percentage is, of course, very much greater than three. In certain raw materials the Colonial production is of a much higher order; but I do not want to trouble your Lordships with statistics. Apart from that, as the Commission point out in their Report, it is a question not only of quantity but also of indispensability. In our bodies we have vitamins which as a percentage of our bulk are infinitesimal, and yet without them we sicken and die. Some of these raw materials coming from Colonial territories are of prime importance and are, indeed, indispensable to the nations concerned.

Secondly it is said, why should we trouble about these matters? If these countries would only devote their energies to production and to the purchase of raw material for industry, and of foodstuffs, and not devote their chief energies to the manufacture of armaments with a view to war, they would not find themselves in these difficulties. There is, of course, great truth in that argument. It is true that they might greatly relieve their exchange difficulties by a policy of that sort. The fact is; however, that the other countries insist upon having armaments, and since the democratic countries did not disarm in accordance with the pledges which they gave at the time of the Peace Conference, it is not to be a matter for surprise that the other countries refused to be unilaterally disarmed. We always said that unilateral disarmament was unthinkable for ourselves, but we endeavoured to impose it upon a great and proud country in Europe, with results that were disastrous.

Then, again, it is said, why should we assist a militarist country to increase its economic power, with the result merely that it would become more formidable to all the neighbours that it threatened? Why should we endeavour to supply raw materials to a country which may use certain of those materials to manufacture armaments which very likely would be used against ourselves? Further, it is said that in any case measures such as these will not satisfy the demands of Germany and certain other Powers; it is with them a matter of prestige more than an economic question, and it is the territorial issue which has to be decided. There is great force, undoubtedly, in all those arguments, as we must all admit. Here once more, as in all these questions of international policy, we have to choose between two very distinct courses. One is to say that war is probably inevitable; that in any case we must envisage certain countries primarily as possible enemies, keep them as poor as we can and as weak as we can, and refuse any requests that emanate from those countries who are animated by that policy. The other is to say that war need not be inevitable, that our duty is to remove causes that would tend to war, and that we should do what is reasonable to meet any legitimate requests, no matter from where they may come. Those are the two distinct policies, and this nation is really divided in opinion between the one and the other, and the nation has to choose.

The Prime Minister, for his part, gave the choice of His Majesty's Government, and it appears to me to be absolutely right. He said, speaking at Birmingham a few days ago, on April 8: Our policy is based upon two conceptions. The first is this: that, if you want to secure a peace which can be relied upon to last, you have got to find out what are the causes of war and remove them. You cannot do that by sitting still and waiting for something to turn up. You have got to set about it. You have got to inform yourself what are the difficulties, where are the danger spots, what are the reasons for any likely or possible disturbance of the peace; and, when you have found that out, you must exert yourself to find the remedy. And he said: The second conception is this: in any armed world you must be armed yourself. He then dilated upon that point. I submit to your Lordships that what the Prime Minister said was sound wisdom and should be accepted by the nation, irrespective of Party, as our aim; and not the doctrine that we have to keep any country which is a potential enemy as weak as we can, as poor as we can—and therefore as discontented as we can and as hostile and antagonistic as we can.

And that is the question which has been brought forward to-day by the noble Lord, Lord Marley. Here is one of the cases in which we have to decide whether we are to proceed along that line, or whether we are merely to talk about proceeding along that line. Here we have a whole series of specific proposals, which I have enumerated, made by two of the weightiest authorities which could be found anywhere in the world: a Commission of experts chosen by the League of Nations, representing sixteen States and including the principal economic adviser of our own Government; and M. van Zeeland, chosen by two great Powers to make inquiry on their behalf. Will this Government—and this is the question that we ask them to-day—be content merely to enumerate the difficulties in taking action, as they are usually accustomed to do? Will they merely dwell upon the fact that only 3 per cent. of the total production of raw material is from Colonial territory? Will they emphasize the fact that exchange is a more difficult and a more important matter than supply? Will they say that nothing will satisfy Germany except dealing with the territorial as apart from the economic issue? Will they say, as they so often do, in the usual formula, that they are ready to consider sympathetically any reasonable proposal that may be made—which of course means that they intend to do nothing whatever—or will they say: "We have had seven months in which to consider the recommendations of this Commission, and three months in which to consider the recommendations of M. van Zeeland. We have now arrived at a definite decision, and we are prepared to take definite action. We recognise that there is here a problem serious and urgent, and, in the words of the Prime Minister, we are prepared to exert ourselves to find a remedy"?

THE PARLIAMENTARY UNDERSECRETARY OF STATE FOR FOREIGN AFFAIRS (THE EARL OF PLYMOUTH)

My Lords, I fully agree with the noble Viscount who spoke last that the matter which the noble Lord opposite has raised, to-day, is one of the very greatest importance, and that we consequently owe him a debt for having done so. His 'Majesty's Government would not for a single moment attempt to minimize its importance, and I do not think anybody can justifiably accuse them of having been backward in raising this subject and pursuing its examination, and indeed drawing the attention of the public opinion of the world to it. As both noble Lords who have spoken to-day have pointed out, this matter was first raised at the Assembly of the League of Nations by Sir Samuel Hoare, when he was Foreign Secretary, in September, 1935—the first time that the attention of the League had been called to the matter. But, in spite of what both noble Lords have said during the course of their remarks, and in spite of the fact that His Majesty's Government fully realise the importance of this matter and are anxious to pursue it as urgently as possible, I think that both noble Lords have failed to make reference to the real difficulties which do stand in the way of a practical solution of this problem.

These difficulties are very real ones, and although the noble Viscount at the end of his speech rather banteringly suggested the line that the Government's answer might take on this occasion, I would venture to point out that, at the same time, he himself did not allude to these difficulties or make any suggestions as to how they might be solved. This subject is a very complicated one indeed, and there are one or two matters to which I should like to refer before I go on to explain what action has been taken in regard to the matter, and the position which has been now reached. There are definitely certain fallacies which are prevalent in regard to this subject. For instance, it is often thought that the problem of accessibility to raw materials is one which is capable of solution by individual action on the part of His Majesty's Government. Indeed, one could not help feeling, when listening to both noble Lords who have spoken this afternoon, that they were to a certain extent under that impression themselves. Surely this is not the case by any manner of means. This is a problem in regard to a very important matter connected with international trade, and I think it is perfectly obvious that it can only be solved by nations acting in co-operation with one another in order to deal with it.

The noble Lord who initiated this debate argued that the fact that certain nations had adopted an autarchic policy with regard to these matters—that their lack of co-operation should not prevent us from pursuing the subject and presenting a practical solution. I am afraid I cannot accept that statement without a good deal of qualification. I do venture to say, what I think the noble Lord opposite did not realise or appear to realise in the course of his remarks, that the co-operation of nations in a matter of this kind is vitally necessary if you hope to achieve success in the matter. The noble Viscount who spoke last made certain criticisms which seemed to me to be directed towards the fact that the Government had not taken unilateral action themselves, in one way or another, in order to attempt to deal with this question. I do not know whether he thinks we should have done so or not, but I venture to say that nothing that we could do could by itself alone have produced any real, far-reaching result. Neither noble Lord actually suggested that we should call a conference together to deal with this matter. Nevertheless it is perfectly obvious that this is a matter in which the co-operation of all nations, if possible, should be sought. But, after all, we have had experience of conferences of this kind, and one thing that has quite clearly emerged is this: that before you do hold a conference to deal with a complicated matter such as this it is absolutely essential that you should prepare the ground beforehand very carefully indeed, and that you should assure yourself that a considerable measure of agreement exists between the nations concerned.

It may, of course, be argued that this question of accessibility to raw materials is more restricted in scope than the more general matters which have been discussed this afternoon, and it may be argued, as I think it has been this afternoon, that this country, with its widespread resources and connections, to some extent holds in its hands the solution of this particular problem. Let us just for a moment examine that proposition. I think a study of it will prove rather revealing. Indeed, some of the facts have been revealed by other speakers, although I may not be able to arrive at the conclusions which they arrived at on those facts. In spite of what the noble Viscount has said, it cannot possibly be argued that this question of accessibility to raw materials is really predominatingly a Colonial one. That is a very general impression as a matter of fact, but it is definitely not the case. And although I quite agree with the noble Viscount that certain of the raw materials which are produced in the Colonies, in tropical Africa and other Colonial territories, are of vital importance, yet at the same time it cannot be argued that the whole difficulty of accessibility to raw materials is going to be solved by dealing merely with Colonial raw materials by themselves.

The Raw Materials Committee of the League of Nations which was set up puts that far more clearly than I can hope to do myself, and it uses these words: Some part of public opinion appeared to consider that the problem was predominantly a Colonial one … The Committee reached the conclusion that most raw materials are produced wholly, or to a great extent, in sovereign countries. In fact, the raw materials which are typically Colonial (i.e., those which Colonial territories alone produce or are in a position to produce) number only three—viz., palm oil, rubber and copra. Of these, rubber is a raw material of major importance for all industrial countries. The other two, palm oil and copra, form part of the large group of vegetable oils and fats … some of which are produced in many countries … A fourth product is found in abundance, but not exclusively, in the Colonies—viz., tin. As the noble Lord pointed out, it is estimated that, including production for domestic consumption and export, the total present production of all commercially important raw materials in all Colonial territories is no more than 3 per cent. of world production. Therefore, in spite of what the noble Viscount said, the force of which I readily admit, it cannot be argued that the solution of the Colonial aspect of this difficulty would necessarily make any great contribution towards the solution of the greater one.

The noble Lord during the course of his speech made reference to the demands that had been made by a number of countries for greater accessibility to raw materials. Whether he had in mind Colonial raw materials alone, or raw materials generally, I do not know. But I think that the facts which he quoted himself, and which I have repeated, go to show that, although I do not deny that the Colonial aspect is an important one, at the same time its solution in itself could not sweep away the whole of the difficulties, or any large part of the difficulties, with which those countries are at present faced. I repeat that the best hope in this matter is international co-operation, universal if possible, based upon careful study of the very intricate problems which are involved.

May I now shortly examine the position which has been reached in regard to the examination of these questions? As your Lordships know, and as has already been said to-day, this question was first raised by Sir Samuel Hoare at Geneva in September, 1935. At the Assembly in 1936 it was resolved to appoint a Committee to study the question of equal commercial access for all nations to certain raw materials. That Committee was set up early in 1937, and I should like to point out that it was composed not only of League countries, but it also contained representatives of countries that were not members of the League of Nations, including Brazil, Japan, the United States of America, and others. It was unfortunately not possible to obtain German collaboration in regard to this matter, but I think that it will be seen that the League itself realised the importance of the collaboration of as many countries as possible. I think we are all agreed that the collaboration of the United States of America is particularly important, and we are glad to know that it has always been the practice of the Government of the United States to assist so far as possible in the work of the financial and economic organisations of the League.

Well, this Committee reported last September, and its conclusions were approved generally by the Assembly. The noble Viscount has referred in some detail to the findings of this Committee, and he has pointed out that it has divided that Report more or less into two parts—first, the question of supply of raw materials, and, secondly, the question of the payment for raw materials. The Committee pointed out that the actual supply did not in their view present any great difficulties. The Report said: It will be seen that the two kinds of difficulties discussed in the preceding chapters of the Report are of very different magnitude. No doubt certain difficulties in regard to supply exist; but none of them is insuperable. The Committee has proposed that certain points relating to these difficulties should be examined by the parties concerned and it desires to emphasize the necessity for this examination. The difficulties in regard to payments vastly transcend in importance those in regard to supply, and the Committee would be failing in its duty if it held out any hope of an easy solution of them. This part of the Report was referred by the Assembly to the Economic Committee of the League. This Committee accordingly formulated certain principles regarding commercial access to raw materials to which they recommended Governments should conform. These were enumerated by the noble Viscount.

In answer to his question as to what the position of His Majesty's Government was in regard to this matter, I am able to inform him and the House that the Government have now sent a reply to the League, in which they say that they are in general agreement with the principles formulated by the Committee, with which in fact their policy conforms. It would be necessary to know the views of the other Governments concerned before deciding whether the time is ripe for international action in the matter. I think it is quite clear that no Convention embodying principles such as these could be of any real value unless the principal Governments concerned agreed to participate and to give effect to those principles. That is why His Majesty's Government have pointed out that before deciding whether international action in the matter is possible at this moment it is necessary to know what the views of other Governments may be.

Then there is the second part of the Report, dealing with the question of the payment for raw materials. As the noble Lord has pointed out, in the Committee's opinion this is the real crux of the difficulty. The Committee say that they recognise that a solution of the present difficulties in regard to the payment for raw materials is in large part bound up with the solution of wider economic problems which requires concerted action to restore freer circulation of capital, goods, and labour. That of course opens up a very wide vista indeed. I do not think I need quote any further, but although the Committee say that they do not think it is within their province to make concrete suggestions on this fundamental monetary problem, which is closely linked with economic and political problems of great importance, they do in fact make certain suggestions and mention certain directions in which they think remedy might be found. They express generally the view that action should be taken to lower trade barriers, and they sum up their conclusions by saying that the only general and permanent solution of the problem is to be found in a restoration of international exchanges on the widest basis. In other words, the Committee take the view that the raw materials problem is essentially part of the much wider problem of the resuscitation of international trade in general.

This part of the Report of the Raw Materials Committee was referred to the Financial Committee of the League, which is now considering it in conjunction with the Economic Committee; that examination is continuing at the present moment. Broadly speaking, as I see it, the view of the League is that the raw materials problem should not be regarded as a separate question but rather as part of a general problem of the obstacles which at the present moment are obstructing the natural flow of international trade. They consider that particularly important are questions of the removal of systems of exchange control and clearings, and they refer to other obstacles and obstructions as well. I do not think the House would expect me to discuss in any detail these very wide and extremely technical questions. I will only say this, that in our view the chief obstacle to the solution of this difficulty at present appears to be the declared intention of certain Powers which now practise exchange control to persist in programmes of autarchy which are frankly more or less incompatible with freer trade. In respect of this aspect of the question it must be clear that the difficulty is not one which isolated action on the part of His Majesty's Government can by itself remove.

A number of references have naturally during the course of the debate been made to the Report of M. van Zeeland, a very important document in regard to which we owe M. van Zeeland a very great debt of gratitude. The noble Viscount asked me I o answer certain specific questions which are raised in that Report. He alluded to them, as I understand, as proposals that had been made by M. van Zeeland himself, and which therefore come with his whole authority behind them. There I think the noble Viscount is under a misapprehension. As I understand it, the Report states that they are some of the suggestions which M. van Zeeland elicited during his visit to various Capitals. Therefore it is perhaps not strictly true to say they were his own suggestions made with the full authority of his opinion behind them.

VISCOUNT SAMUEL

He presents them for the consideration of Governments.

THE EARL OF PLYMOUTH

That is so. Naturally we are prepared to consider any suggestions made by M. van Zeeland, but that puts a rather different aspect on these actual words. I am sorry I am not in a position in any case to answer these questions this afternoon. M. van Zeeland himself deals in his Report with the questions of clearing and exchange control to which I was referring a moment ago, and he points out that no country can really prosper which is not prepared to trade freely with its neighbours. He argues on these lines, and these are propositions with which we should all agree. He also refers to the political obstacles that lie in the way of a solution of these problems, and he emphasizes how serious these political obstacles are. I am afraid it is only too clear that economic problems of this nature cannot be entirely divorced from political ones, and that fact works in two ways.

It is perfectly true that if you could achieve a satisfactory solution of major economic difficulties it would react very favourably upon the political situation generally. Therefore, the desirability of achieving a settlement of that nature is perfectly obvious. But the opposite is the truth too, and that is that it is essential for the solution even of economic problems that relations between one country and another should be free from fears and free from anxieties and suspicion and all the rest of it, and that a spirit of mutual confidence should prevail. Unfortunately it cannot be denied that recent events have rendered an immediate general settlement of these economic problems even more difficult than it was before. I am afraid we cannot deny that fact, but I want to make it quite clear that that does not mean that His Majesty's Government have given up hope of the solution of many international economic difficulties on the lines which M. van Zeeland has adumbrated in his Report. On the other hand, His Majesty's Government are hopeful that the atmosphere may improve very quickly, and that it may be possible at no very distant date once again to explore and pursue these difficult questions. Although I am not able to say more this afternoon, they still hope before long to be able to find by that means and through that channel a way to bringing about a far-reaching settlement of the problem of world trade.

LORD SNELL

My Lords, before this most interesting debate terminates I think I ought to say on behalf of my noble friends—and I will not detain your Lordships for more than a minute or two—that the speech to which we have just listened from the noble Earl is of a most disappointing and melancholy character. Nobody is unaware that the difficulties he has mentioned exist. Everybody knows that the difficulties are manifold, but what is clear from the speech of the noble Earl is that His Majesty's Government have no intention at all of facing those difficulties. If anything can be derived from the generalities of the noble Earl's speech it means that, in spite of the importance and the urgency of this fundamental problem, His Majesty's Government propose to do nothing at all. Some day conditions may be more favourable, and in that day then His Majesty's Government will hope that other nations will see the error of their ways and something may be done.

I wish just to say this. We have never asked for individual action by His Majesty's Government, but we do think that His Majesty's Government might initiate an inquiry as to whether it is impossible for these things to be done. We are aware, as we have been reminded by the noble Earl, that the co-operation of all nations is necessary to secure a solution, but, being placed as we are, we have a special responsibility, and the co-operation of all nations will not be obtained by waiting for the spontaneous advance of other nations. Somebody has to take the lead, and it seems to us in our inexperience that it would be possible for His Majesty's Government to ask that in some form or other this matter should be explored. That is all we have asked, and I can only say that I am intensely disappointed that there is no more response than we have heard to the Report that M. van Zeeland presented. I fear that Report, too, is going to be put into a pigeon hole and forgotten, and that nothing at all will be done. My noble friend in introducing this debate spoke with balance and restraint, and the speech of the noble Viscount has emphasized the very great importance of the debate to which we have been listening. I cannot help even again hoping that His Majesty's Government will consider this matter as one deserving their immediate and very serious attention.

THE SECRETARY OF STATE FOR FOREIGN AFFAIRS (VISCOUNT HALIFAX)

My Lords, I should not have intervened in this debate, even with a sentence, if it had not been that what the noble Lord who has just spoken said seemed to me so wholly to misrepresent what fell from the noble Earl who spoke for the Government and the attitude of His Majesty's Government. It seems to me impossible to leave it without one word of correction. The noble Lord who has just spoken, it seemed to me, failed—I was going to say to place any emphasis upon, but it will be more true to say, I think, that he failed to give any recognition to the fact on which my noble friend laid some weight—namely, that in this matter it is quite impossible, whether by taking the initiative or in any other fashion, for real progress to be made unless all the Governments, or a substantial number of Governments, can make that progress together, and, however satisfactory it may be for any narrow purpose, it is quite useless to endeavour to blame one Government, even if it be His Majesty's Government, for what is a failure of a great many Governments, or the Governments of the world as a whole.

I do not need to remind the noble Lord opposite that many Governments of the world during the last few months have been themselves engaged in no mean domestic difficulties, and for all these difficulties due allowance has to be taken. There is one other thing, I think, to which reference, perhaps in a sentence, might be made. If any one who was ignorant of the matter were to read what the noble Lord has just said, he would be left perhaps under the impression that His Majesty's Government had made no effort and had taken no step to explore or to develop the opportunities that had been opened whether by the inquiry of the League of Nations or by the inquiry of M. van Zeeland. Any such conclusion as that, I would ask your Lordships to take it from me, would be very far indeed from the truth. I do not think that any useful purpose would be served by me, as it would not have been served by my noble friend, in going into details, which indeed it is impossible for me to do, upon the action that His Majesty's Government have taken in a good many quarters in a sense that would not, I think, be at all other than the sense the noble Lord opposite would wish. I only rose for the sake of correcting an impression that would, I think, have been a false one, and one therefore that I am sure the noble Lord opposite would not have wished to convey, that His Majesty's Government had either been indifferent or inactive.

LORD MARLEY

My Lords, it only remains for me to join my noble friend in saying how disappointed I feel at the reply of the Government. He is so kindhearted that he always puts his criticism in a very gentle way, whereas I would have been inclined, wrongly no doubt, to say very much more than he did. I am very glad to know that some action is being taken, though we are not able to learn what it is, and one hopes that that action will not be paralysed in the same way that political action has, at least to some extent, been paralysed by recent events. It is quite clear that the Government have no Papers to lay in this connection, and, therefore, I beg leave to withdraw my Motion.

Motion for Papers, by leave, withdrawn.