HL Deb 06 December 1938 vol 111 cc345-62

had given Notice that he would ask the Secretary of State for Foreign Affairs whether he will now give information as to the results of the action which in his speech in the House of Lords on July 27, 1938, he indicated he was taking for the protection of British trade in China; whether His Majesty's Government contemplate any further actions in this respect in view of the fact that British trade interests in China are daily growing worse, and that Japan by various measures is gradually monopolising trade of all kinds as well as currency in that country; and move for Papers.

The noble Viscount said: My Lords, may I be permitted to change to another war: to leave the war on rabbits in order to deal with the war which is being waged by Japan in China to-day? Although this is the third time that I have initiated a debate on this subject in the past year, the position of our trade interests in China has gone from bad to worse. I am sorry that the noble Viscount, Lord Halifax, is not in his place to-day, but I quite understand the reason for his absence. I received a courteous message from him saying that he was going on a well-earned holiday; and I am sure that we all agree that he has earned that holiday through the hard, useful and able work which he has performed for the country during the past two months. He informed me that the noble Earl, Lord Plymouth, would take his place in the debate. That has this advantage, that the noble Earl has already dealt with this matter, for he replied to the first debate which I raised on this subject in February of this year.

One of the reasons why I am raising this debate to-day is that in the last debate my noble friend the Secretary of State for Foreign Affairs indicated that His Majesty's Government were dealing with many of the points which I raised then, and had also made special representations through His Majesty's Ambassador at Tokyo. He actually said in that debate: … pending the outcome of these discussions, which quite obviously touch very closely British rights and interests that the Japanese Government have promised to respect, the noble Lord will not expect me to go into precise details, but I shall bear in mind the wish which he expressed that at the earliest moment the result of these discussions should be made public. He also informed the House that strong representations had been made at Tokyo in regard to the Tsingtao harbour position, and he hoped for very early remedial action. I think we are entitled, to-day, to hear the results of those measures which he proposed to take, and also of those representations. So far as we are concerned, those of us who are in touch with conditions in the Far East see no amelioration at all; in fact, things have been growing worse, and we are very disappointed indeed about the whole situation.

What do we find? We find that in no single point mentioned in my speech in July has there been any amelioration. In Tsingtao a Japanese Naval Commission is in charge, and not a single British ship is allowed to enter the harbour or lie alongside the wharf, and this in spite of the strong representations of His Majesty's Government. The Yangtse River is still closed to all foreign shipping, and Hankow, a very important city on that river, is now wiped out as a trading centre for an indefinite period. At Tientsin the Japanese monopoly on wools and hides is now fully effective, and this prevents any purchase or sale of these commodities by any British firms. The same applies round Shanghai. The Japanese have set up a monopoly on cotton, and the Chinese farmers are forbidden to sell any cotton to foreigners. In addition to this they have commandeered all public utilities throughout North China—telegraphs, telephones, water and power works, and railways, including the Peking-Mukden Railway, which is a security for a British loan.

Their latest act of economic aggression is an import tax of one dollar on foreign tobacco, as against a tax of 60 cents. on Japanese tobacco. This new tax is severely affecting British trade in that quarter. The fact is that the Japanese are leaving no stone unturned in order to bolster up their own fallen economic system and injure British trade, by getting into their own hands all Chinese export and other trade. This is, no doubt, one of the reasons for the Japanese capture of Canton, which creates possibilities of the gravest danger to Hong Kong trade, which is so bound up with Canton and South China. In the speech to which I have already referred, Lord Halifax said: The Japanese Government claim that the action which they are taking is in defence of their interests in China, and we have every right to recognise that if they have certain interests to protect we have the same, and are not unmindful of our responsibilities, which we have every intention to discharge. I subscribe whole-heartedly to that expression of intention, but I would like to know what the Government propose to do in order to carry it into effect. No one in this country has any idea of retaliation in the military sense, but there are a great many who do believe that if we were to retaliate in an economic sense we should at least make some impression upon the Japanese.

I suggested in my last speech on this subject that we should denounce the Anglo-Japanese Trade Agreement of 1911, with a view to excluding Japanese exports from our Colonies, or reducing the quotas of their exports going to those Colonies. That was urged in another place, and I understood from the reply made in another place that the Government were considering that measure. A second way of retaliation would be to close Hong Kong to all Japanese ships and cargo between Japan and South China. This would effectively block Chinese trade with Canton and the West River. Another way to do it would be the closing of all Indian and Straits Settlement ports to Japanese coastal shipping. Those are three ways, and there is yet a further way, having regard to the desperate need of Japan, to-day, for foreign exchange and credits. I am credibly informed that the Japanese gold reserves are down to £30,000,000 and that their local production has reached as low a level as £12,000,000 per annum. These facts obviously increase our ability to bring economic pressure to bear upon Japan; that is, if we really have the will and the determination to do so.

I venture to urge that as they will not listen to reason, the time has arrived when we definitely should take special economic steps to enforce our point of view, and avoid being driven out of the field altogether. There is very little doubt that there is an entire change of outlook in Japan to-day towards China and her trading problems, and more significant than all is the statement emanating from the London Times correspondent in Tokyo, in the issue of December r, which referred to "The new order in East Asia." We learn from that communication that there has been a Conference, which sat before the Emperor, and considered and approved a new policy for Japan towards China, which must change the whole face of the Far East. This will involve the abandonment of the open-door policy, whilst the Nine-Power Treaty, signed at Washington in 1922, is already regarded as obsolete. It appears that foreign influence and foreign trade are to play a very small part indeed in the future in the economic situation in China.

As a result of the anxiety felt by foreign trading interests in China, owing to the new developments, there was, on November 25, at Shanghai, a meeting of representatives of all the foreign chambers of commerce and foreign associations. They represented Great Britain, America, Canada, Denmark, France, Norway and Sweden, who for the first time combined to form a united front in order to try and meet this new situation. This is the first time that nationals of those countries have met in Shanghai in a common conference and made identical representations to their various Governments as to what should be done in order to resist Japanese trade aggression in China. To such an extent do they feel that action is necessary that, although they know that any retaliatory action might mean serious inconvenience to them, they are prepared to face it for the sake of the future of foreign trade in China.

There is yet another aspect of this question of which I believe sufficient notice is not taken—namely, the attitude of China towards this country. I have reason to believe that strong feelings are being engendered in China against this country because we have done nothing whatever to assist them in their extremity. China is beginning to regard this attitude on our part as at least unfriendly, and from all I have heard I believe that if the Chinese were successful in this war British trade might suffer equally as if Japan were the victor. I wish to urge His Majesty's Government with all the force I can muster that something be done to help China in her trouble. I have heard it said we should not do this because it would be a breach of neutrality, and the situation in Spain has been compared with the situation in China. But the two cases are entirely different. In Spain you have civil war, in China you have a war of aggression by another country, which is not only decimating China but is also destroying all British interests there. Therefore when I advocate help to China I believe I am doing so on perfectly sound grounds.

One final word. Recently there has been concluded between His Majesty's Government and the United States of America a Trade Agreement which most people regard with the greatest gratification, but many of us see behind that Agreement a matter of more political importance, and that is the question of closer collaboration between the two countries. I suggest that a special occasion has now arisen in China, and that there should be close collaboration between these two countries so far as China is concerned. It is sometimes said that we ask the United States to pull our chestnuts out of the fire. In no way can that be said in this instance, because the chestnuts which are to be pulled out of the fire are equally valuable to the United States as to ourselves, So I venture to ask His Majesty's Government whether, if they have not already done so, they will approach the United States in this matter, and I again urge His Majesty's Government before it is too late to take some retaliatory action in this serious situation, the vital importance of which does not seem to be fully recognised in every direction. I beg to move.


My Lords, I am sure we are grateful to my noble friend for raising this question, and I realise that he does so with a genuine concern for British interests in China. He is entitled to have a deep feeling of grievance about what has been done in Eastern Asia, but, while we may agree that the present state of things in that part of the world is one which we can indeed deplore, it is well to remember that it is best to deal with things realistically. Of course, we are all aware that there are many who feel that the action which has been taken by Japan in China is not one which the majority of industrialists and the majority of thinkers in Japan regard as being in the best interests of Japan herself. Again, on the other side it is realised by the Chinese that resistance must be continued to the utmost of their resources. But the point I want to make is that, the situation being as it is, it is better to try to find a realistic solution.

Passions are strong, indignation is great, the British interests concerned will naturally be impatient and hopeful that strong action will be taken by His Majesty's Government. My noble friend puts forward some practical suggestions as to the way in which pressure could be applied, but in all these matters it is well to get the right perspective. Let us just remember that as long as there was active co-operation between Great Britain and Japan there was no interference with foreign interests in China. Anti-foreignism, so to speak, only developed from the moment there was a clear possibility of driving a wedge between Great Britain and Japan and preventing them from acting in co-operation. It is well to remember that somewhere around 1925 the attitude of China was just as damaging to British trade as is the attitude of Japan to-day. The result was the sending of the Expeditionary Force to China at the cost of the British taxpayer—and it is still there at the cost of the British taxpayer. It may be assumed indeed that whatever the conditions in China were, it would be necessary to maintain that Force there in order to protect foreign interests against the action of the Chinese themselves.

It is alleged that the intention of the Japanese is to take over a large part of the territory of China and apply it to their own use. There have been repeated assertions by the Japanese, however, that they have no desire for territorial aggrandisement in the southern part of China. Whatever may be the actual facts, it would seem wiser to wait before we doubt these reiterated statements—I mean, to wait until the termination of hostilities. It is characteristic of British sympathy for the weaker side that in this case sentiment should be largely with China. On the other hand surely it is natural that there should be suggestions in Japan that active help has been given to China by Great Britain, which naturally cause misgivings and suspicions, however inaccurate they may be. That does encourage the Chinese to believe that if they wait long enough they may expect British intervention. Surely there have been often enough statements by responsible Japanese statesmen, which coincide with the actual facts, that the main desire of Japan is to assure a stabilised government in China. Its aim is to make sure that the Government shall be free from all Communistic influence, shall be free from anti-Japanese activities, and we naturally hope too, having a vivid recollection of 1925, that it will also be free from any anti-British feeling.

When I say that, I do not wish to give the impression of any lack of sympathy with China. This is essentially a moment when in any debate here there should be strict impartiality, giving encouragement to neither side but giving the aspect of resolution to insist on our own rights and at the same time of a desire to exert patience until the situation, difficult as it is, resolves itself. It is suggested that when the military operations reach a point at which the reconstruction of the country will become a matter of active concern, the aim of the Japanese is to exclude all foreign interests from China. Frequent have been the reiterations of that. Again, I suggest, we should look at it from the angle of practical common sense. Is it possible to conceive that China can be reconstructed, involving the requirements of a reconstructed currency as a fundamental to trade, by China herself, or by China and Japan together, to the exclusion of all foreign interests? Common sense shows that there will be a need of foreign assistance, and obviously the assistance most sought after will be that of Great Britain.

In order to appreciate what the problem is, may I just give one suggestion. The coast line of the United States of America, from the Canadian line to the Mexican line, is 1,200 or 1,400 miles. Those of us who are familiar with the United States can picture that it will be a formidable task to attempt to conduct even the volume of trade which must have existed 80 years ago with that vast territory. Japan may hold the key cities and the coastline, but the actual distance, I believe, from Vladivostok to South China is 2,400 miles. That in itself is a picture of its size. Again I understand the total trade of this country with China amounts to about 2 per cent. of our total trade. In the case of the United States their import trade from this country is only about 6 per cent. Two per cent. of our total trade is not a vital thing for this country, but it is obvious that the trade of Japan with the Asiatic Continent is a vital thing for Japan, and, whatever may be the temporary inconvenience and loss caused to those who trade with China, it is well to remember that patience is a thing which is justified here.


You are an optimist !


The noble Viscount says I am an optimist. It is well to be practical. I repeat that those of us who have been there, who know the territorial area of what is attempted to be achieved, realise that it is not practicable to contemplate that this reconstruction can be achieved without foreign aid. It is for this reason that one has a confident hope that in collaboration with the United States of America, who themselves have large interests subsidiary to ours, we shall observe patience and avoid misconstruction being aroused in Japan as to the grounds on which righteous indignation is expressed from here, regard also being had to the fact that for home consumption very often a good deal has to be said in Japan which, when repeated over here, as in the case of all foreign countries where difficulties exist, take on an entirely different complexion. Incidents reprehensible and regrettable have occurred. It is well to remember that for Japan this activity is in their belief vital to their interests. They believe that in the effort they are making they have their backs to the wall, and tempers run high when criticisms are made of their attitude. Surely what we want to remember is that the spirit of understanding is one which will best help the situation.

Remember that reconstruction has got to come, and we have a great opportunity to collaborate in it. As far as debates in this House or expressions in the Press are concerned, surely what we wish, above all, is to avoid producing a situation which is going to make a settlement more difficult. By showing understanding we shall get a better response when the moment comes, and, after all, what is the practical thing we want? It is a better "break" for our own trade with China.


My Lords, the noble Viscount who initiated this debate made allusion to a debate which was held in your Lordships' House in July last, in which these matters were discussed and during the course of which my noble friend the Secretary of State for Foreign Affairs stated that the position was under discussion with a view to seeing what steps should be taken to remedy the position so far as British interests in trade in China were concerned. The noble Viscount has asked what the result of those deliberations has been, and has alluded to certain matters in respect of which he maintains, and I think maintains perfectly rightly, that British interests are receiving unfair treatment at the hand of the Japanese Government. I think that perhaps the best thing that I can do is to make reference quite shortly to some of the matters to which he referred, and to state what the position is in regard to these particular questions. I regret that I am not able to report satisfactory progress, but I should like to inform your Lordships as to the position in regard to these particular matters.

First of all I think the noble Viscount referred to the position at Tsingtao. I am afraid the situation there is still very unsatisfactory. The restrictions which were enforced on shipping there constitute in the eyes of His Majesty's Government a deliberate discrimination against British interests. They consider that there is no valid reason whatsoever why British ships should not be admitted into the inner harbour there. Repeated representations have been made to the Japanese naval and civil authorities as well as to the Japanese Government in regard to this, and His Majesty's Government trust that before long we shall obtain fair treatment in this respect for our ships. Meanwhile I can assure the noble Viscount that we shall continue to press matters vigorously in regard to this question.

Another question which he referred to was that of navigation of the Yangtse River. Here again I regret to say that the Japanese are continuing the restrictions which they have imposed upon British shipping generally, in common, of course, with the shipping of other foreign nations, and the movement of British ships and goods on that River. The excuse that they continue to give for continuing these restrictions is that they do so on grounds of military necessity. On November 7 last the Governments of the United States and France and His Majesty's Government all made representations to the Japanese Government regarding their ships on the Yangtse. We drew attention to the fact that a regular and steadily increasing trade was being developed by Japanese vessels on that river. The reply we got from the Japanese Government was a denial of the fact that such trade actually existed. Now His Majesty's Ambassador has produced further additional evidence to support our contention in this matter, which is being brought to the attention of the Japanese Government. I can only say that, in view of the repeated undertakings by the Japanese Government that the restrictions would be removed as soon as military operations against Hankow concluded, we expect a great deal of improvement in the situation.

Another of the points that the noble Viscount referred to was the position in regard to trade at Tientsin and in North China. It is quite true that some time ago an embargo was placed on the export of all hides from North China, but last July and August important categories were withdrawn from the scope of that embargo as the result of representations made by His Majesty's Government and by other Governments. Recently, however, I am sorry to say, a further embargo has been imposed—namely, on the export of wool and hemp from Tientsin. His Majesty's Government, in common with the German Government and the United States Government, have made protests in regard to this. No settlement has been reached, but I think it is relevant to mention in this connection that the Monopoly Association which had been formed to control the internal sale of wool in North China has now been dissolved. The noble Viscount also mentioned the question of discriminatory taxes upon tobacco. I can only say that so far we have received no information whatsoever in regard to that matter.


May I ask the noble Earl whether he will have inquiry made into that, because I believe that what I stated is perfectly true?


I will certainly have an inquiry made into that point. There is just one other matter that I would like to mention, though I cannot say the noble Viscount specifically referred to it to-day. It is a matter that has been the subject of discussion on a number of occasions in your Lordships' House, and that is the very unsatisfactory position which has existed, and still does exist, in the northern district of the International Settlement of Shanghai. Some slight progress has been made in this respect in the direction of obtaining additional permits for factories to be opened and for Chinese workmen to go into that district to do their work, but the progress made is very limited. I can assure your Lordships, however, that we are continuing to press this matter as strongly as possible.

Now, if I may perhaps speak a little more generally, I should like to say something of a somewhat wider character than it is possible to do when discussing particular grievances of the kind that we have been so far discussing. As was, I think, mentioned by the noble Viscount, pronouncements, as your Lordships know, have recently been made in Tokyo regarding the formation of an economic and political bloc which was to comprise Japan, Manchukuo and China, and in which, of course, Japan was to be the predominant partner. I wish to say quite categorically that His Majesty's Government cannot possibly subscribe to this attitude, and I would like to make clear what the position is. The position of Great Britain in this matter is governed by the Washington Treaties and by other international agreements to which His Majesty's Government, in conjunction with a large number of other Governments, are parties.

In particular I should like to recall to your Lordships that the parties to the Nine-Power Treaty, signed in Washington in February, 1922, bound themselves to respect the sovereignty, independence, and territorial and administrative integrity of China, to provide the fullest opportunity to China to develop and maintain effective and stable government, to use their influence to maintain the open door in China and to refrain from taking advantage of conditions in China in order to seek special rights or privileges which would abridge the rights of subjects or citizens of friendly States. His Majesty's Government could not consider any alteration in the position as defined by the treaties which had been brought about by unilateral action. In this matter our stand is the same as that of the United States Government as set out in their statement to the Press on November 4; and I might go so far as to say that this statement would serve equally to define the attitude of His Majesty's Government in the matter of the Washington Treaties.

The noble Lord asked me what further action His Majesty's Government had in contemplation to deal with the situation. I do not think your Lordships can expect me in present circumstances to give a full or complete answer to that question. It is not necessary for me, I think, to emphasize the consequences which would result from the adoption on the part of the Japanese Government of an exclusionist policy such as the one which has already been referred to during the course of the debate—the formation of a bloc of a political and economic character. I feel sure that the Japanese Government must realise that this policy would inevitably have incalculable repercussions in other parts of the world, with consequences to which I think it would be impossible to set a limit. Therefore we trust that they will agree with His Majesty's Government that the interests of both countries lie in other directions than that one.

I fully admit that the present position is an unsatisfactory one, and it is so for reasons which must be only too readily present to the minds of your Lordships and for reasons at which my noble friend Lord Barnby hinted during the course of his speech. I can assure your Lordships that the question of what steps can be taken to protect British interests is under the constant review of His Majesty's Government and that the Government are prepared to consider all possible measures to safeguard them. The noble Viscount made a number of suggestions during the course of his speech as to the kind of action that His Majesty's Government might take to deal with the situation. I can tell him that none of these proposals has escaped the attention of His Alajesty's Government. He went further and suggested that it was now time that we should give active help to the Government in China. I do not know exactly what the noble Viscount had in mind, but I can say this, that a number of proposals are now under examination for assistance to China in connection with export credits, and His Majesty's Government will certainly ex- amine with sympathy these and any similar requests which may be made to them by the Chinese Government.

In discussing these questions I think it is only right that I should say that any action on lines such as those contemplated by the noble Viscount would be of no use whatsoever unless it was effective. Unless there was some guarantee that action such as that suggested by the noble Viscount was going to be efficacious, I venture to say that it would do more harm than good. I merely want to mention in this connection that we constantly keep in mind the question of consulting with other Governments with a view to the possibility of taking parallel action in order to protect our respective interests in China.

I am sorry that I can say little more this afternoon in regard to the situation. I would only say in conclusion that, while His Majesty's Government continue to treat the protection of British interests in China as one of the cardinal points of their policy in the Far East, they consider that this end can best be achieved by an early and equitable settlement of the Sino-Japanese conflict. With a view to securing a settlement which would be fair and just to both sides, and take all proper account of the interests of third parties, His Majesty's Government have indicated to the Chinese and Japanese Governments that they are ready at all times to use their good offices and they will not hesitate to take all necessary steps as soon as the moment appears to be appropriate. I must, however, admit that there are no present indications that that moment is close at hand.


My Lords, before the noble Viscount replies, may I make a brief comment on the important statement that has been given to your Lordships by the noble Earl? I apologise to the noble Viscount for having been called out of the House when he was speaking. As a matter of fact, I was called out to see a very important continental merchant who gave me a lot of information about what is going on in China at the present moment. He is net an English merchant, but an important merchant from another country. He told me that his trade with China was dying but that Japanese competitive trade in Europe in the goods with which he was concerned was also lower, which shows that war does no one any good in the long run. The noble Earl—I hope I shall not embarrass or offend him by saying this—has given the most satisfactory statement that we have heard from the Government Bench for some years. As my noble friend Lord Snell remarked, it looks as if the national worm has at last turned, by which of course he meant the National Government. Without intending to be disrespectful I hope that is the case. The noble Earl said that it is proposed to grant export credits to China. Well, if that is done on a sufficiently generous scale, that will really take the form of a commercial loan to China.


I did not quite say that. What I said was that we were examining certain proposals for the granting of export credits to China and that we were prepared sympathetically to consider those proposals and any others that might be made with that object in view. That is not quite the same thing.


I was afraid that my unexpected praise might alarm the noble Earl, and I am sorry if I read more into his remarks than was intended. If export credits are granted to China under long-term arrangements that will have the effect of a commercial loan. It will enable China to import more from this country and to make up some of the falling off in exports from this country that has unhappily taken place as described by the noble Viscount who introduced this very useful Motion, and I only hope that the Government's examination will lead to action in that direction. But may I ask another question? I do not ask for a reply immediately, because I quite understand that in an important matter of this kind the noble Earl speaking for the Foreign Office must only give very considered statements, but perhaps he would be so kind as to find out whether we are simultaneously examining the question of discouraging the supply of credits and raw materials to Japan. I am not suggesting a Government boycott, but ways and means are open to the Government to bring pressure to bear on those who are supplying Japan with credits and raw materials at the present time to desist from doing so. A Government boycott would, of course, be impracticable undertaken by ourselves; everyone realises that.

The noble Earl referred to the Nine-Power Treaty. I fail to understand why, if we collaborate with France and the United States, as he has told us and as we know is the case, in protesting, the other signatory Powers are not called into collaboration. I do not quite understand that. Now I am going to make another suggestion, if I may. The Nine-Power Treaty was drawn up in February, 1922, at Washington, as the noble Earl has reminded your Lordships. At that time two countries which have immense interests in China were "off the diplomatic map," if I may use the expression. They were Germany and Russia. Germany was not called to Washington because of events of which we all know. Russia was still in the throes and turmoil of the revolution. Now, we know, both those countries are within the diplomatic map. Russia is in the League of Nations, and Germany is in close collaboration with His Majesty's Government, France and Italy on various problems of common concern. I should have thought that a new Washington Conference was due. The Powers with interests in China, other than Japan, are the original signatories plus Germany and Russia. There have been many complaints that, in the recent events ending in what has come to be known as the Pact of Munich last September, Germany has received very many diplomatic and other benefits at the hands of His Majesty's Government. Complaints are made, and I think justly, that it is our turn to ask for something in exchange.

The policy of appeasement, I suggest, should be a two-way policy, and we should have the right now to ask something in the way of appeasement to ourselves. The appeasement we should most value at the present time is anything to help our trade. We are a trading nation; so is Germany. When all is said and done, the Germans are a great manufacturing and exporting nation, and in China our interests as merchants are absolutely identical. Forget for a moment the Anti-Comintern Pact, the triangle of Rome, Berlin and Tokyo, and other fantasies of that kind. These things will pass. What will remain are our mutual interests as trading and mercantile nations. Those interests are threatened, as the noble Earl has said, by the proposals to which His Majesty's Government take such well-merited objection.

Is not the time ripe for us to ask of Germany some appeasement along these lines? Why should we not, as a commercial nation, ask the Germans to join with us and other signatory Powers of the Washington Treaty, and Russia, in making joint representations? Surely that would have far more effect than simply ourselves, the United States and France protesting. I throw out that suggestion to the noble Earl for consideration. I know the great interest he has always taken in matters in the Far East, and his great knowledge of the subject. I do not see that it is at all impossible, and I believe that if that could happen, if you could get Germany and Russia to join with the other seven Powers—leaving out Japan and China for the moment—insisting on the open door being maintained, which is, after all, what we all want, it would do more to get rid of what Mr. Pirow called last night, when he gave his interview to the newspapers, the "psychology of war," than anything else that could happen anywhere. If you could call together in our mutual interest as traders, ourselves, the United States, Germany and Russia—the two great democracies and the two great dictatorships—I believe that would create a revolution in men's minds which would certainly have effects in Japan. It might hurt the feelings of the noble Lord, Lord Barnby, whose sympathy for the Japanese militarists is so well known; but I am glad to think he is a lone voice in your Lordships' House.


May I just interrupt? In the course of my remarks—the noble Lord was not here—I was careful in saying that a very large part of the thinkers of Japan were not in sympathy with the military action on the mainland.


Then the noble Lord is in sympathy with the Liberals of Japan, or with those of importance who are left alive; and I share his sympathy. I gather that he is as hostile to the militarists of Japan as is the noble Earl, Lord Plymouth; therefore there is no split in the Conservative Party on that score. I have broken the usual rule of speaking after the Government representative, but the only reason why I have done so is, as I say, to have the rare pleasure of congratulating the noble Earl on the statement of policy. May I also thank the noble Viscount for the Motion, which I am sure is most valuable? I am speaking as a member of the Labour Party, and we are as anxious as any other Party in the State to see the trade of this country flourish and extend. We are a great trading nation, and we have to do everything we can to protect our merchant shippers, wherever their interests lie, all over the world. Everything we can do in collaboration with the Government to that end—I am sure I am speaking for all my colleagues—we shall be only too glad to do.


My Lords, first of all I should like to acknowledge Lord Strabolgi's intervention in this debate. I do not think it requires any apology on his part that he should have spoken after the noble Earl. In fact, I often think that the best contributions to a debate are made after the spokesman on the Front Bench has made his statement.


And cannot reply!


And cannot reply. But I should like to clear up one point which the noble Lord, Lord Strabolgi, made at the beginning of his remarks, with regard to the Japanese trade in foreign places being reduced in competition, as well as foreign trade in Japan being reduced in competition. I think I can explain that through the fact that the exchange and credits available to-day for Japan for the purchase of raw materials outside Japan are growing less and less. In fact, I referred to that matter in my speech. Consequently, factories are being closed down in Japan because of lack of raw materials, and I admit that that is reducing competition from inside Japan with other places. Nevertheless, be that as it may, that is not due to anything that this country has done or that any other foreign country has done, but is due to the fact that Japan is carrying on a war of aggression in China, and using up all her resources to that end. Consequently, it in no way detracts from any of the remarks that I made in the course of my speech.

May I thank the noble Earl, Lord Plymouth, for his reply? I know the great difficulties under which His Majesty's Government suffer in this country, but together with Lord Strabolgi I welcome this definite statement on the part of the Government that at last they are going to take a stand over something in the East—that they should take a stand in connection with the open-door policy, and on the fact that they disagree with the Japanese Government in that the Nine-Power Treaty of Washington is not obsolete. In my judgment that is a definite step forward. On all the other matters that I dealt with in my speech I am not sure that I can say I am so content with the reply, but at any rate we do know from what my noble friend has said that the Government have all these matters under earnest and, I hope, continuous consideration, and will do all they can to alleviate the difficulties of a problem which from some points of view seems almost insoluble. I beg leave to withdraw my Motion.

Motion for Papers, by leave, withdrawn.