Lords Sitting of 3 August 1939

Preamble
The House met at three of the clock, The LORD CHANCELLOR on the Woolsack.
SOLICITORS (DISCIPLINARY COMMITTEE) BILL.
Brought from the Commons; read 1a; and to be printed.
PUBLIC HEALTH (COAL MINE REFUSE) BILL.
Returned from the Commons, with the Amendments agreed to.
LONDON GAS UNDERTAKINGS (REGULATIONS) BILL. [H.L.]
Returned from the Commons, agreed to, with Amendments: the said Amendments considered and agreed to.

BARLEY SCHEME, 1939.
3.5 p.m.
THE PARLIAMENTARY SECRETARY OF THE MINISTRY OF AGRICULTURE AND FISHERIES (THE EARL OF FEVERSHAM): My Lords, you will recall that the Agricultural Development Act contained a provision for the preparation of a temporary subsidy scheme for barley to operate for this year's crop, for the 1939 crop only. The scheme has been circulated to your Lordships in a White Paper issued last week. The scheme is of the levy-subsidy type, and as I devoted some little time in my Second Reading speech to a general explanation of the detail and machinery of the scheme, I do not think I need detain the House by going into details at the present stage. The essence of the scheme is that contributions are paid into a Subsidy Fund by brewers, by importers of beer and by manufacturers of pot-still whisky. These contributions are supplemented by an Exchequer contribution of a sufficient amount to provide for an acreage subsidy of the amount stated in the scheme to be paid to growers of barley in the United Kingdom.

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Brewers and importers of beer will contribute to the Fund a levy varying from 1d. to 1s. a standard barrel of beer, according as the average market price of all kinds of home-grown barley in England and Wales varies between 9s. 11d. and 8s. 1d. per cwt. The levy on manufacturers of pot-still whisky will vary from 1d. to 4d. per proof gallon. There are a number of other users of barley for malting purposes, but the quantities used are relatively small, and there are a number of complications in devising machinery to include this type of manufacturer; therefore it has not been possible to include them within this purely temporary scheme. But I wish to make it quite clear that the omission of this type of manufacturer is entirely without prejudice to its inclusion within the long-term scheme which we hope to devise during the autumn. When the Exchequer contribution has been added, the whole Fund will be distributed among growers of barley at a rate varying from 2s. 6d. to 30s. per acre according as the average price of barley falls from 9s. 11d. to 8s. 1d. per cwt.
On the basis of the existing output and imports of beer, and the acreage under barley in 1938, contributions from the brewers and from the importers at the maximum rate of levy would yield about £,950,000, while the Exchequer contribution, in order to pay the maximum rate of subsidy of 30s. per acre, would be about £450,000. The trade interests will therefore provide about two-thirds to the scheme and the Exchequer about one-third. At the express wish of farmers and distillers in Scotland, provision is made under which distillers may be exempt from the payment of levy subject to the observance of certain conditions contained in the scheme.
The farmers who secure the minimum price mentioned in paragraph 12 of the scheme will not receive subsidy on that part of their crop so sold. The scheme includes provision regarding negligent cultivation, which I know will be a matter of interest to my noble friend Lord Phillimore, whom I see in his place, and in spite of the lateness of the season it is our intention to inspect as many farms as possible on which barley has been grown this spring—that is, as soon as the scheme has received the approval of Parliament. I think the House will agree that it is very satisfactory that an agreed
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measure of assistance to barley growers has been prepared in time to come into operation for this year, and the ready co-operation that has existed between the farmers and the manufacturing interests, which has been shown in the negotiations which have recently taken place, has shown what a hopeful augury there is for the long-term negotiations which it is intended will open at a later stage this autumn. I beg to move.
Moved, That the Special Order, as reported from the Special Orders Committee yesterday, be approved.—(The Earl of Feversham.)
LORD PHILLIMORE: My Lords, I should like to thank the noble Earl for his very clear statement, and to say how glad I am that the levy-subsidy principle has proved so far to be effective. I think we may congratulate ourselves also that, since the levy operates inversely to the price of barley, it is very unlikely there will be any serious effect on the price of beer.
On Question, Motion agreed to.

SENIOR PUBLIC ELEMENTARY SCHOOLS (LIVERPOOL) BILL.
House in Committee (according to Order) on re-commitment of the Bill: Bill reported without amendment.
Then, Standing Order No. XXXIX having been suspended in pursuance of the Resolution of the House of Monday, July 24, Bill read 3a, and passed.

BRITISH OVERSEAS AIRWAYS BILL.
Reported without amendment, and recommitted to a Committee of the Whole House forthwith.
Moved, That the House do now resolve itself into Committee.—(The Marquess of Zetland.)
On Question, Motion agreed to.
House in Committee accordingly:
[LORD STANMORE in the Chair.]
Clause 1:
Establishment and constitution of Corporation.
1.—(1) So soon as may be after the passing of this Act, there shall be established for the

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purposes thereof a corporation to be known as the British Overseas Airways Corporation (hereafter in this Act referred to as "the Corporation").
3.15 p.m.
LORD STRABOLGI LORD STRABOLGI moved, in subsection (1), to leave out "British Overseas Airways" and insert "British Airways (1939)." The noble Lord said: I would like, if I may, to move on behalf of my noble friend Lord Marley this Amendment which stands in his name. I will move it formally, because it may be possible by agreement to get some other form of words which will meet the situation. Your Lordships will be aware that both in another place, and also in the speech of my noble friend Lord Marley on the Second Reading, objection was taken to the proposed title. I understand that in another place the Secretary of State for Air said that if agreement was reached about a better title he would be prepared to support it. It has been conveyed to me that there might be agreement either on the title proposed by my noble friend, or even more perhaps by altering the title to "Royal Airways." Another alternative would be "Royal British Airways." There is a feeling that the word "Royal" should be brought in. There is a precedent for that in the Koninklijke Luchvaart Maatschappij, the Royal Dutch Air Line. I understand also that the Corporation itself, or the Imperial Airways, would welcome that title, but if there is any difficulty perhaps you might leave this question of the title for further negotiation. It is rather late in the Session, and we do not want to delay the House in view of the fact that my noble friend Lord Snell is initiating a very important debate. I have here, as an alternative to my noble friend's Amendment, a manuscript Amendment to leave the title to the Secretary of State to direct later. Perhaps if the noble Marquess will give his views on the subject I may keep my manuscript Amendment in reserve. I formally move the Amendment on behalf of my noble friend Lord Marley.
Amendment moved—
Page 1, line 1, leave out ("British Overseas Airways") and insert ("British Airways (1939)").—(Lord Strabolgi.)
THE SECRETARY OF STATE FOR INDIA (THE MARQUESS OF ZETLAND): I appreciate the fact that there is a certain difference of opinion as to the best title
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for this Corporation, but I am bound to say that my right honourable friend, the Secretary of State for Air, and others, have given this matter very careful consideration. They have considered every possible title, but for one reason or another they have proved to be impracticable. The initials of other titles that have been considered, for example, represent other institutions already in existence. The noble Lord, Lord Marley, proposes to alter the title from "British Overseas Airways" to "British Airways (1939)." There are certain objections to that title. To begin with it is the title of one of the two companies which are to be merged in the Corporation, and it is the smaller of the two companies. It would certainly be likely to give to many people the impression, if the new Corporation were to be called "British Airways (1939)" that this was merely a reconstruction of the existing smaller company. I should rather hope that your Lordships would be prepared to accept the title already in the Bill. After all, what is the objection to "British Overseas Airways"? It describes with complete accuracy the nature of the task which the Corporation is to undertake, and it seems to me that in those circumstances it is certainly the most appropriate title for the new Corporation. I do not wish to say anything with regard to the suggestion that the noble Lord, Lord Strabolgi threw out as an alternative, but so far as the Amendment of Lord Marley is concerned, for the reasons which I have given I hope the noble Lord will not press it.
LORD STRABOLGI: In view of that answer, I certainly do not press it. I felt the objection that the noble Marquess has stated when my noble friend showed me the Amendment. I thought then that to take the title of one of the existing airways would be rather invidious. The trouble, of course, is the initials, and B.O.A. to many people's minds represents a great snake. To me it represents the adornment of a woman's neck. In my younger days my mother wore a boa, which was very becoming. So I do not feel the same objection as some people do to that title, but I have handed in a manuscript Amendment dealing with this matter, and I ask leave to withdraw this Amendment.
Amendment, by leave, withdrawn.
3.22 p.m.
LORD STRABOLGI LORD STRABOLGI moved, in subsection (1), to leave out "as the British Overseas Airways Corporation," and insert "by such title as the Secretary of State may direct." The noble Lord said: This has been suggested to me by a certain honourable member in another place, who takes a great interest in this matter. I see the difficulty with regard to the title, but I presume that can be got over, and this is only a suggestion. I understand that even in Imperial Airways it is realised that there might be a better name than the one in the Bill. Apart from this idea of the boa constrictor, "British Overseas Airways" is not a very good title. It does not sound right to my ears, and many other people say the same. It is rather clumsy, and we like the idea of bringing in the word "Royal." The Corporation is now, after all, a semi-Government organisation. I do not know what reception this proposal will have, but at any rate, I beg to move.
Amendment moved—
Page 1, line 10, leave out from ("known") to ("hereafter") in line 11, and insert ("by such title as the Secretary of State may direct").—(Lord Strabolgi.)
THE MARQUESS OF ZETLAND: The only result, I feel sure, of accepting this Amendment, would be that the Secretary of State would at once decide that the Corporation should be called "British Overseas Airways Corporation," and we should therefore be precisely where we now are. Surely it is reasonable that, since this is a Parliamentary measure, Parliament should accept responsibility for the title which they give to the Bill. I hope your Lordships will allow the clause to stand as it is.
LORD STRABOLGI: I presume we can always change the name later on, and I dare say there will be other mergers and amalgamations and Bills dealing with this important service. I thank the noble Marquess for the interest he has taken in the matter, and I beg leave to withdraw.
Amendment, by leave, withdrawn.
Clause 1 agreed to.
Clauses 2 to 31 agreed to.
Clause 32:
His Majesty's aircraft to have free use and benefit of aerodromes and other facilities.
32. The Corporation shall, without making any charge therefor, afford to any aircraft
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which is being used in His Majesty's service the use of any aerodrome controlled by the Corporation, and the benefit of any housing, wireless or other facilities which the Corporation have available:
Provided that the Corporation shall not by virtue of this section be under an obligation to afford the use of any aerodrome or the benefit of any facility in circumstances in which any interference with the discharge of the functions of the Corporation would be occasioned by their so doing.
3.25 p.m.
THE MARQUESS OF ZETLAND THE MARQUESS OF ZETLAND moved to leave out Clause 32. The noble Marquess said: Perhaps I might take this Amendment and the Amendment to insert a new clause after Clause 33 together, because they deal with one problem—namely, the provision by the Corporation of aerodrome and other facilities to other than their own liners. This Amendment is really moved in order to meet certain representations which were made to my right honourable friend in another place. The omission of Clause 32 is made good later on in the proposed new Clause 33. Subsection (1) of the proposed new Clause 33 provides that the Corporation may make facilities available to other people, and may make such reasonable charges as they think fit for so doing. It is, I understand, quite possible that the power to make their facilities available to other persons may be implicit in Clause 2 of the Bill, but it was considered desirable, when dealing with the question of reasonable charges and the power of the Secretary of State to direct the Corporation to make their facilities available to others, to deal directly in this clause with the Corporation's power to afford the facilities.
Then subsection (2) of the proposed new clause reproduces in effect the substantive part of Clause 32, which I am moving to omit. Subsection (3) gives effect to the undertaking of the Secretary of State, by providing that he may direct the Corporation to afford to the aircraft of others, at reasonable charges, the benefit of the Corporation's facilities. The words "aircraft flown by, or in the service of, such persons or classes of persons as may be specified in the direction" are intended to enable the Secretary of State to discriminate in the direction in favour of any British aircraft or non-commercial aircraft. Subsection (4) reproduces in a modified form the proviso of Clause 32 in the Bill as it left another place, and

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it provides that the Corporation shall not be bound to allow the use of their facilities either to aircraft in His Majesty's service, or to other aircraft, in circumstances which would occasion interference with the discharge of their own duties. I believe that the Amendment does meet the representations which have been made to my right honourable friend, and I beg to move.
Amendment moved—
Leave out Clause 32.—(The Marquess of Zetland.)
LORD STRABOLGI: This Amendment is an important one. We consider it an improvement to the Bill and welcome it. It prevents the formation of a possible monopoly.
On Question, Amendment agreed to.
Clause 33 agreed to.
THE MARQUESS OF ZETLAND: I beg to move the new clause.
Amendment moved—
Page 22, line 27, after Clause 33, insert the following new clause:
Provision by Corporation of aerodrome and other facilities.
(".—(1) Subject to the provisions of this section, the Corporation may afford to aircraft not being used in the service of the Corporation the use of aerodromes controlled by the Corporation and the benefit of housing, wireless or other facilities available to the Corporation, and may make in respect of any such use or benefit such reasonable charges as they think fit.
(2) The Corporation shall, without making any charge therefor, afford to any aircraft which is being used in His Majesty's service the use of any such aerodrome and the benefit of any such facilities as aforesaid.
(3) The Secretary of State may direct the Corporation to afford, at reasonable charges, to aircraft flown by, or in the service of, such persons or classes of persons as may be specified in the direction the use of such aerodromes controlled by the Corporation, or the benefit of such facilities available to them, as may be so specified.
(4) The Corporation shall not, by virtue of subsection (2) of this section, or of any direction of the Secretary of State under subsection (3) of this section, be under any obligation to afford the use of any aerodrome or the benefit of any facilities in circumstances in which any interference with the discharge of functions of the Corporation would be occasioned by their so doing").—(The Marquess of Zetland.)
On Question, Amendment agreed to.
Clauses 34 to 38 agreed to.
Clause 39:
Continuance of compassionate allowances.
39. Where immediately before the appointed day—

(a) a person who was formerly in the employment of either of the existing companies; or

(b) the widow or dependant of a deceased person who was formerly in such employment,

is in receipt of a pension or a superannuation or other allowance from that company granted in pursuance of customary practice and not as a matter of legal right, then that person or, as the case may be, his widow or dependant shall be entitled to receive from the Corporation the same pension or allowance and on the same conditions as previously obtaining.
3.29 p.m.
THE MARQUESS OF ZETLAND THE MARQUESS OF ZETLAND moved, after "entitled," to insert "for the remainder of the period for which the pension or allowance was granted." The noble Marquess said: I understand that there was some doubt whether the clause as it at present stands gives effect to the intention of Parliament. The last four lines of the clause, as I propose to amend them by the two Amendments standing in my name, will read as follows:
"that person or, as the case may be, his widow or dependant, shall be entitled for the remainder of the period for which the pension or allowance was granted to receive from the Corporation the same pension or allowance as a matter of legal right, but otherwise on the same conditions as previously obtaining."
They are to a large extent drafting Amendments to make quite clear the intention of the clause.
Amendment moved—
Page 24, line 10, after ("entitled") insert ("for the remainder of the period for which the pension or allowance was granted").—(The Marquess of Zetland.)
On Question, Amendment agreed to.
THE MARQUESS OF ZETLAND: The next Amendment is consequential.
Amendment moved—
Page 24, line 11, leave out ("and") and insert ("as a matter of legal right but otherwise").—(The Marquess of Zetland.)
On Question, Amendment agreed to.
Clause 39, as amended, agreed to.
Remaining clauses agreed to.
First Schedule [Supplementary provisions as to the Corporation]:
THE MARQUESS OF ZETLAND: This is a purely drafting Amendment, and I beg to move.
Amendment moved—
Page 29, line 10, leave out ("section") and insert ("paragraph").—(The Marquess of Zetland.)
On Question, Amendment agreed to.
First Schedule, as amended, agreed to.
Second, Third, and Fourth Schedules agreed to.
Fifth Schedule [Provisions as to wages, etc.]:
THE MARQUESS OF ZETLAND: My Amendment, in paragraph 2, to leave out "trade societies," and insert "associations representative of employees" is to make clear the meaning of the phrase "trade societies." It has been asked whether by "trade societies" are meant trade unions. The answer to that is that that is so, but that "trade unions" do not necessarily cover the whole ground. There may be some parts of the world where trade unions do not exist in the form in which we know them, and it is proposed therefore, in order to make the intention of Parliament quite clear, to use instead of either "trade societies" or "trade unions" the phrase "associations representative of employees." That will make it perfectly clear that these people are to have the right for which they are asking of being recognised by the management for the purposes of the discussion of questions between employer and employee.
Amendment moved—
Page 43, line 18, leave out ("trade societies") and insert ("associations representative of employees").—(The Marquess of Zetland.)
LORD STRABOLGI: I wonder if the noble Marquess would be so good as to inform me—I have to confess my ignorance of this—whether this Amendment satisfies the trade union representatives who raised the point in another place. I have not myself had time to consult them.
THE MARQUESS OF ZETLAND: So far as I know, it does. It certainly should do so because the new phrase has a wider meaning than "trade unions." It covers employees of all kinds employed by the
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Corporation, not necessarily in this country but in other parts of the world.
LORD STRABOLGI: I am much obliged. I apologise for asking, but we have rather a pressure of work at this time of the Session, and I have not been able to consult with my friends in another place. These words are much wider, and they would cover the greatest trade union in the world—the trade union to which the noble and learned Lord belongs, the great trade union of the law. I am sure the noble Lord would welcome the Amendment.
THE LORD CHANCELLOR (LORD MAUGHAM): I do not belong to it.
LORD STRABOLGI: You are ipso facto a member.
On Question, Amendment agreed to.
Fifth Schedule, as amended, agreed to.
Remaining Schedule agreed to.
House resumed.
Then, Standing Order No. XXXIX having been suspended, in pursuance of the Resolution of the House of Monday, July 24:
THE MARQUESS OF ZETLAND: My Lords, I beg to move that the Report of Amendments be now received.
Moved, That the Report of Amendments be now received.—(The Marquess of Zetland.)
On Question, Motion agreed to, and Amendments reported accordingly.
THE MARQUESS OF ZETLAND: My Lords, I beg to move that the Bill be now read 3a.
Moved, That the Bill be now read 3a.—(The Marquess of Zetland.)
On Question, Bill read 3a, with the Amendments, and passed, and returned to the Commons.

WATER UNDERTAKINGS BILL. [H.L.]
Amendments reported (according to Order).
3.37 p.m.
VISCOUNT BRIDPORT: My Lords, all the Amendments on the Paper in my name, up to and including the Amendment to the First Schedule on Page 45, are drafting Amendments. With your

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Lordships' approval, I propose to move that these drafting Amendments be agreed to.
Amendments moved—
Clause 7, page 13, line 1, leave out ("amend") and insert ("make an order, in like manner and subject to the like provisions as the original order, amending")
Clause 12, page 19, line 37, after ("river") insert ("or any")
Clause 23, page 29, line 13, after ("protection") insert ("or benefit")
Clause 23, page 29, line 14, after ("person") insert ("or class of persons")
First Schedule, page 32, line 11, after ("includes") insert ("supply")
First Schedule, page 33, line 13, leave out ("it has")
First Schedule, page 33, line 22, after ("means") insert ("an")
First Schedule, page 34, line 40, after ("or") insert ("other conduit or")
First Schedule, page 35, line 23, leave out ("or on") and insert ("on or over")
First Schedule, page 35, line 25, leave out ("or on") and insert ("on or over")
First Schedule, page 35, line 29, after ("apply") insert ("as respects any highway")
First Schedule, page 35, line 29, leave out ("in any highway")
First Schedule, page 40, line 19, after ("pipes") insert ("or other")
First Schedule, page 40, line 21, after the first ("or") insert ("other")
First Schedule, page 41, line 17, after ("pipes") insert ("or other")
First Schedule, page 42, line 16, after ("pipe") insert ("or other")
First Schedule, page 45, line, after ("a") insert ("service").—(Viscount Bridport.)
On Question, Amendments agreed to.
First Schedule:

FIRST SCHEDULE.
Part VI:—Breaking open streets, &c.
Application of Part VI to highways not maintainable at the public expense.
32.—(1) …
(2) In the application of Sections twenty-seven, twenty-eight, thirty and thirty-one of this Part of this Schedule, to a street not maintainable at the public expense, the expression "persons having the control or management" shall be deemed to include the authority by whom the street would be maintainable if it became a highway maintainable at the public expense and, accordingly, any notice required by Section twenty-seven of this Schedule and a copy of the plans referred to in Section twenty-eight thereof shall be served on that authority.
Part VIII:—Supply of water for public purposes.
Undertakers to fix and maintain fire-hydrants on pipes.
36. The undertakers shall, at the request of the fire authority concerned, fix fire-hydrants on the pipes belonging to them at such places as may be most convenient for affording a supply of water for extinguishing any fire which may break out within the limits of supply, and shall keep in good order and from time to time renew every such hydrant.
VISCOUNT BRIDPORT VISCOUNT BRIDPORT moved, at the end of subsection (2) in Clause 32, to insert "but the authority shall not take any action under subsection (2) of the last preceding section except at the request and on behalf of the other persons having the control or management of the street, bridge, sewer, drain or tunnel in question." The noble Viscount said: My Lords, subsection (2) of Clause 32 of the First Schedule as it stands in the Bill gives a local authority some control in respect of streets likely to become maintainable by the inhabitants at large—for example, they must receive plans of mains to be laid in the street and have some say as to the manner of carrying out works. The Amendment secures that such control shall not extend to proceedings against a water undertaker except on behalf of the owners of the street, and thus avoids the possibility of actions by two parties in respect of the same offence. I beg to move.
Amendment moved—
Page 48, line 9, at end, insert the said words.—(Viscount Bridport.)
On Question, Amendment agreed to.
VISCOUNT BRIDPORT VISCOUNT BRIDPORT moved, in Clause 36, to leave out "the pipes belonging to them" and insert "their mains (other than trunk mains within the meaning of that expression as used in Section thirty-four of this Schedule)." The noble Viscount said: My Lords, trunk mains, as defined in Section 34 of the First Schedule, would frequently be quite unsuitable for the fixing of fire hydrants, and it would be inappropriate therefore to place any duty on water undertakers to fix hydrants on these mains. The Amendment would still enable arrangements to be made for fixing hydrants on such mains in suitable cases. I beg to move.
Amendment moved—
Page 49, line 23, leave out ("the pipes belonging to them") and insert the said new words.—(Viscount Bridport.)
On Question, Amendment agreed to.
VISCOUNT BRIDPORT: My Lords, the next Amendment with all the subsequent Amendments up to and including the one on page 78, line 20, are all drafting, and with your Lordships' approval I beg to move that these drafting Amendments be agreed to.
Amendments moved—
Page 50, line 14, leave out ("streets") and insert ("highways")
Page 54, line 4, leave out from the second ("of") to ("as") in line 6 and insert ("laying, inspecting, repairing, altering, renewing and removing service pipes with any necessary stopcocks and fittings and of breaking open the street for that purpose").
Page 57, line 38, leave out ("by the consumer")
Page 58, line 26, after ("more") insert ("houses or other")
Page 58, line 28, leave out ("building") and insert ("of them")
Page 58, line 29, leave out ("the building") and insert ("it")
Page 61, line 1, leave out ("a water")
Page 64, line 23, leave out ("pipes or other")
Page 66, line 7, leave out ("pipe or other")
Page 66, line 17, leave out ("pipe or other")
Page 66, line 29, leave out ("away")
Page 66, line 29, leave out from ("water") to ("for") in line 30.
Page 68, line 34, after the first ("and") insert ("service")
Page 71, line 5, leave out ("the clear profits of their undertaking") and insert ("revenue")
Page 78, line 20, after ("may") insert ("subject to any express provisions in this Act to the contrary").—(Viscount Bridport.)
On Question, Amendments agreed to.
Second Schedule [Amendments of the Public Health Act, 1936]:
VISCOUNT BRIDPORT VISCOUNT BRIDPORT moved to insert:
"In the proviso to subsection (3) of Section one hundred and twenty-seven the words 'can be drawn off into a receptacle at one point only and' shall be omitted".
The noble Viscount said: My Lords, this Amendment is to bring subsection (3) of Section 127 of the Public Health Act, 1936, into line with this Bill as amended by the Joint Committee. I beg to move.
Amendment moved—
Page 81, line 26, at end insert the said words.—(Viscount Bridport.)
On Question, Amendment agreed to.
Then, Standing Order No. XXXIX having been suspended in pursuance of the Resolution of Monday, July 24:
VISCOUNT BRIDPORT: My Lords, I beg to move that this Bill be now read a third time.
Moved, That the Bill be now read 3a.—(Viscount Bridport.)
On Question, Bill read 3a.
An Amendment (Privilege) made; Bill passed, and sent to the Commons.

FOREIGN AFFAIRS.
3.44 p.m.
LORD SNELL LORD SNELL rose to call the attention of His Majesty's Government to the present position of foreign affairs; and to move for Papers. The noble Lord said: My Lords, in inviting your Lordships to consider the Motion on the Order Paper which stands in my name I beg to assure the noble Viscount (Viscount Halifax) that it is not put there in order to cause him any inconvenience or to embarrass him in the very many serious tasks that he daily has to face, but one of the essential conditions of democracy is that the nation as well as the Government should be satisfied in public affairs, and as we are about to adjourn for two months it seems appropriate for me to ask the noble Viscount for any information respecting foreign affairs that he thinks he can properly give. I submit that the Government have no real grounds for complaint in regard to the questions that we ask in this and in another place, although in another place the Prime Minister appears to display an irritation and a petulance on these matters which would be appropriate in a vain anti ample spinster who was unsuccessfully trying to slim. But here we are bound to perform a public task as we see it, for we, too, have responsibilities, and I ask your Lordships to remember that we work more or less in the twilight, for, apart from a dribble of somewhat reluctant information that we get from the other side of the Table, we have to rely upon tendentious reports that all too frequently appear in the Press.
Now our reticence in these matters has brought upon us a very solemn reprimand

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from the Leader of the Liberal Party in another place. He accuses us, because of our consideration, of having kept the present Government in office. If that were true it would be a responsibility that all of us would dread to have upon our consciences, but I do not think that the accusation can be sustained. The noble Viscount, Lord Halifax, is, however, the beneficiary of our natural and perpetual amiability in this matter. I take this opportunity to say with what gratification I, and I think all your Lordships, see that his health and strength are maintained under a weight of responsibility that I, at least, am thankful that I have not to bear. Not since Sir Edward Grey has a Foreign Secretary had to face issues of such sustained gravity. No man is more adept at putting a polish on a dull case than the noble Viscount, and his admonitions to me, which are usual on these occasions, are always given with such lofty moral distinction that I feel I ought to have said grace before I received them. For his own sake and for the public good I hope he will have a peaceful and sustained holiday.
There are one or two questions I desire to ask. I have not put this Motion upon the Paper in order to address your Lordships at any length, but the situation changes so rapidly that information of even a few days ago becomes somewhat out of place, and perhaps the noble Viscount will be able to add to the information that we have recently had in another place. I desire to put to him one or two questions respecting China and the position in the Far East. I should like to know what the present position is there, and what is the immediate outlook. I hope he will be able to assure us that the policy of His Majesty's Government in China has not been and is not likely to be changed and that the Government will continue to support the Chinese currency. I should like him also, if he will, to give to us an interpretation of the formula which has been arrived at in discussions with Japan. That seems to me to be a vague and perplexing document. It recognises "the actual situation." Now what precisely does "the actual situation" mean? It may mean the recognition of Japan as having conquered certain portions of Chinese territory, and the Japanese themselves appear
812
so to interpret it. It concedes to the Japanese that they have
"special requirements for the purpose of safeguarding their own security and maintaining public order in regions under their control"
and says that
"His Majesty-'s Government have no intention of countenancing any act or measure prejudicial to the attainment of the above-mentioned objects by Japanese forces."
That seems to go nearer to offering aid and comfort to the invader of China than any British Government ought to go. I suggest that it is no business of ours to assist an invader of a friendly country, especially a country in which we have vast interests.
I should like to ask the noble Viscount if he can assure us that His Majesty's Government are not going to surrender the four prisoners to Japan who are at present under their charge, without at least very conclusive evidence that they are guilty of the crimes alleged against them. There appears to be no reciprocity on the part of Japan for these apparent concessions. Japan appears daily to repay these considerations with shameful humiliations and sometimes with indignities to British women that no previous British Government would have tolerated. The position of Japan appears to be that if we do not now support her after having made these promises, we shall be guilty of the same faithlessness of which we accused the German Chancellor after the talks in Munich. Both the Japanese and the Axis Powers insist that we have capitulated before the Japanese demands. I should like to ask whether normal trade relationships are to be maintained with Japan in these circumstances in order that she may keep her gold reserves and otherwise help her. In my judgment this is not an occasion for practising the philosophy of "Business as usual." I should like to ask, too, whether the Nine-Power Treaty still stands, and I beg to draw your Lordships' attention to what that Treaty involves. We are to respect the sovereign independence and the territorial and administrative integrity of China, so that it would appear that we have a specific obligation to China in this matter. I should like also to ask whether the Government are in regular contact with the United States of America. I do not put the embarrassing question of what we are going to do in this matter, but I hope that in the Far East

813
at least, our reputation for reliability will be maintained.
In regard to the Polish loan, I understand some accommodation is being arranged, and I should like to ask if any explanation can be given. In regard to Russia, the situation appears to be continuously disappointing. I am not going to assume that Britain is alone responsible for the delay. I have not the facts and I have no right to make assertions, but I cannot help noticing the speed with which the formula at Tokyo was arranged and contrasting it with the exasperating delays that have taken place at Moscow in regard to this arrangement. There may be many reasons to justify what is being done, but Parliament at present does not know what they are. I would like, too, to ask in regard to the position at Danzig whether the noble Viscount will give us any information that he feels it right to divulge. My remarks to-day have been rather in the nature of an interrogation than of a criticism, and I conclude by reminding the House that British citizens, rich and poor, are being asked to make very great sacrifices for the nation's good. They have submitted with a grim courage to the invasion of their traditional liberties. They have proved in a hundred ways that they are ready to support the Government in any rightful stand that they may take against aggression. Party controversies have, in great part, been suspended. It seems to me, therefore, due to the nation that, as far as possible, it should be sustained by such information as the Government can rightfully supply. I beg to move.
3.58 p.m.
VISCOUNT CECIL OF CHELWOOD VISCOUNT CECIL OF CHELWOOD, who had given Notice that he would ask if His Majesty's Government can give to the House any further information as to the position in the Far East; and move for Papers, said: My Lords, some little time ago, I ventured to place on the Order Paper the Notice which stands in my name. At the request of my noble friend the Foreign Secretary I postponed bringing that before your Lordships and left it on the Paper without any day fixed. I found that my noble friend Lord Snell was going to bring forward his Motion dealing with foreign affairs, and I thought it would be desirable that your Lordships should be asked to consider the questions
814
rising under the Motion of which I have given Notice at the same time. Though, of course, I cannot move that Motion, it so happens that everything I wanted to say upon it can be equally said upon the Motion of my noble friend Lord Snell.
I shall not attempt to deal with the whole question of foreign affairs. There are, of course, many topics which I have no doubt are exercising the minds of your Lordships, as they are of everybody else, but in the interests of brevity and other things, I do not propose to touch on anything except the Far Eastern question. What I want to ask my noble friend is whether he can give a rather more specific and clearer explanation of what is the policy of the Government in the Far East. The matter was raised in another place, and the Government then declared by the mouth of the Prime Minister that they would not reverse their policy at the request of another Power. That is no doubt a satisfactory statement as far as it goes, though I should have preferred that it should stop at the word "policy." However, that is probably a smaller matter, because, as far as I have been able to follow the declarations of the Government, that is what they mean: they are not going to reverse their policy. But that leaves some little doubt, in my mind at any rate, as to what that policy which they are not going to reverse really is. In the same declaration made by the Prime Minister I find that the only other indication of the policy is a phrase in which he stated that their goal was to find out some just and equitable settlement of the struggle—that is, the struggle between China and Japan.
I am not, I admit, very much encouraged by that statement. It looks a little to my mind—I hope I am wrong—as if there were a tendency on the part of the Government to put China and Japan on equal terms in connection with this struggle. I cannot conceive any just and equitable settlement of what is going on in the Far East which did not make its foundation the repelling of the Japanese invasion. That invasion I believe to be one of the least justifiable events that has ever taken place in the history of the world. The excuse for it was of the flimsiest description; the way it has been carried on has been a scandal and an outrage to every conception of civilisation. We have read accounts, which have not

815
been contradicted, of how hundreds of Chinese women have been raped and outraged, not by the casual violence of soldiers maddened with slaughter, but as part of a regular organisation of the Japanese Army. We have read accounts of the wholesale destruction of non-combatants, of women and children, in cities which were not fortified, and of how those cities and many others have been deliberately burned by the Japanese forces. We are told, again without any contradiction that I have seen, that a particular direction was made by the Japanese incendiary forces against the Universities and seats of learning which had been established by the Chinese. It is not only the incidental ferocity of the proceedings, but we know that this is all part of a much larger policy advocated by the dominant party in Japan.
Your Lordships will remember statements that were made during the war as to what the policy of Japan really was, which were repudiated. But I observe in the quotations given from the public statements in Japan that it has been repeatedly re-asserted that the object of Japan is to dominate China in the first place and Asia in the second, and at any rate to exclude all European nations and all European individuals from any part of or from any trade in Asia. No doubt that is a policy of long view. I do not suggest that that is a thing that can happen, certainly in my lifetime, nor in all probability in the lifetime of the youngest member of your Lordships' House. But in estimating the present situation it is well, and I believe essential, to keep in mind the whole policy of which it is a part. One cannot help noticing the curious resemblance there is between this policy of Japan—or I should say, for I do not know how far it is accepted by the whole of Japan, the policy of the military party in Japan—and the policy of the present régime in Germany. I do not say that they are identical; they are not, but there is a very strange resemblance between the two policies. It may be partly accounted for by the fact, as I have always understood, that the Japanese Army was trained by German officers, and it may be that they gave them not only their military skill but also their views on political and international affairs.
I cannot imagine that there is any question in the mind of any of your Lordships as to what, broadly speaking, our interest and our duty are in the face of that policy. They are, I venture to think, quite apart from those special interests—and they are very considerable, as your Lordships know—in the Far East which are subsidiary to our main purpose. Our main purpose must be the maintenance of peace and submission to some form of orderly proceedings in international affairs. In this case our position, which I take it is, or ought to be, universally true in all our dealings in international matters, becomes perhaps exceptionally clear in view of our treaty obligations and international declarations. My noble friend referred, I think, to the Nine-Power Treaty, and your Lordships will perhaps forgive me if I make a very short further reference to that Treaty. It was signed, as your Lordships know, seventeen years ago, in 1922. It was signed by the United States, Belgium, the British Empire, China, France, Italy, Japan, the Netherlands and Portugal.
The first paragraph of its first Article binds the Powers
"to respect the sovereignty, the independence, and the territorial and administrative integrity of China."
Article 2—this is what seems to me to have a considerable bearing on the present state of things—reads:
"The Contracting Powers agree not to enter into any treaty, agreement, arrangement, or understanding, either with one another, or, individually or collectively, with any Power or Powers, which would infringe or impair the principles stated in Article 1."
That is to say, we are bound, not only to the other fellow-signatories of this document but also to China, to respect her sovereignty, independence, territorial and administrative integrity, and not by any declaration or other document to infringe or impair the principles of that guarantee. It does not stand there only. Since this war began more than two years ago various international declarations have been made to which the British Government assented, and indeed in some cases actively moved. Thus, on October 6, 1937, they agreed that
"the military operations carried on by Japan against China by land, sea and air can be justified neither on the basis of existing legal instruments, nor on that of the right of self-defence, and that (they are) in contravention of Japan's obligations under the Nine-Power Treaty … and under the Pact of Paris."

817
That was what they said on October 6, 1937.
On September 30, 1938, a very little time ago, the Council of the League further agreed—and the British Government were represented—that the Members of the League were entitled to act on the basis of the finding that Japan's proceedings were unjust and also other findings which they had made; and also to adopt individually the measures provided for in Article 16, and they recommended that Members of the League
"should refrain from taking any action which might have the effect of weakening China's power of resistance, and thus of increasing her difficulties in the present conflict, and should also consider how far they can individually extend aid to China."
I ought to have mentioned that they had previously, on May 14 of last year, or just after the present Government came into office, earnestly urged the Members of the League "to do their utmost to give effect to the recommendations" contained in the resolutions that I have just read.
They further proceeded to say that:
"Although the co-ordination of the measures that have been, or may be taken by Governments cannot yet be considered, the fact none the less remains that China, in her heroic struggle against the invader, has a right to the sympathy and aid of the other Members of the League. The grave international tension that has developed in another part of the world cannot make them forget either the sufferings of the Chinese people or their duty of doing nothing that might weaken China's powe of resistance, or their undertaking to consider how far they can individally extend aid to China."
Finally, on May 22 of this year, the Council again agreed, with the assent of the British Government, to a declaration in favour of China. Noting, they said, with satisfaction, that a number of States had taken certain measures in aiding China, they earnestly expressed the hope that such measures would be continued, and that the resolutions previously adopted by the Assembly and Council would be further implemented. That, of course, is all in addition to the general obligation which the Government have undertaken that they will respect and preserve as against external aggression—that is to say, in this case as against Japanese invasion—the territorial integrity and political independence of China. That is the position, quite apart from the general interest that we have,
818
as I think, in the maintenance of peace everywhere, and I think one may say particularly in the Far East.
I must admit that I am exceedingly anxious to be reassured that there is nothing in the declaration agreed to at Tokyo which is inconsistent with the obligations and declarations to which I have called your Lordships' attention. I hope that is so, but I am, I admit, anxious on this subject. In the first place the Prime Minister of Japan has made a statement which I read to your Lordships a day or two ago, and I need not read the whole of it again. He said, in the first place, that these arrangements did not apply only to Tientsin, but to the whole of China, and he said:
"The basic arrangement established between Japan and Great Britain did not only prove a big shock to the Chungking Government, but will serve as a favourable factor in disposing of the China incident"—
that is to say, the victory of Japan. He goes on to say—and this seems to be in complete conflict with the views of His Majesty's Government—that he does not think the British Government would assist General Chiang Kai-shek's régime by granting credits or otherwise, and that if she did her action would be considered as hostile to Japan. It is true that this statement comes from the daily Press. It was a statement, as I understand it, to newspaper representatives in Japan, but as far as I have been able to observe it has never been repudiated or contradicted since it appeared.
That is the view of Japan about this agreement. What is the view of China? I have no official information, except that I have seen a speech delivered by General Chiang Kai-shek in which he regards it as unthinkable that the British Government should enter into any kind of compromise with Japan. But since that has occurred I have received, and I dare say other members of your Lordships' House have received, a considerable number of telegrams from bodies, some in China itself, some in Singapore and the Malay Peninsula—Chinese bodies—and even in Manila, protesting earnestly against this agreement, on the ground that it has at any rate the appearance of favouring or being favourable to Japan.
It is not only so, but I admit I was very much struck by a statement which was published in a paper which we all respect,

819
The Times—a statement by its diplomatic correspondent yesterday. I cannot tell, of course, what authority the correspondent had, but it is a statement made with what I think our friends abroad will regard as semi-official authority. I do not know whether that is accurate or not. The correspondent sets out the announcement of the Chancellor of the Exchequer that the Government's views "as to the desirability of maintaining the Chinese currency in the interests of this country" and of other countries, remain unaltered, and he also cites—though I do not quite see the relevance of that—with great gratification, the arrangements that have been made to enable traders to supply goods, that is to say, to enable them to get payment for goods sent, to China. Then there is this rather striking comment:
"They show again the British Government's determination not to change their policy towards China, while seeking with no lack of good will to establish a working arrangement with the Japanese soldiers in North China."
I confess that I should find it very difficult to say that I have no lack of good will for the Japanese soldiers in any part of China.
Now what are we to do in this situation? Your Lordships may well ask me, though it is not my business to say what ought to be done. Still, you may say: "You express doubts as to these things, what would you have us do?" We have seen what the Administration of the United States have recently done. They have formally given notice that they will not be bound by their commercial treaty with Japan after a period of six months, which is the notice they are bound to give. I observe that when this was called to the attention of the Prime Minister he said (I forget the precise phrase) that they did not feel it was essential for them to do exactly the same thing as the United States, but that their policy was parallel. I hope my noble friend will be able to tell us what parallel step the Government think of taking in reference to this very striking declaration of the American President. And what other steps are they going to take; what, in fact, is their policy in this matter? That really does seem to me to be what we have to recognise. What do we want? We certainly cannot want the victory of Japan. But do we
820
not realise that if we do not want the victory of Japan, we must want the victory of China? There is nothing else. It is not a case of two armies meeting on the frontier of one or other of these two countries. This is a case where the Japanese Army has invaded and occupied large tracts of Chinese soil, with the methods I have alluded to, and therefore the first thing must be the withdrawal of Japan if we are not to favour the utterly indefensible actions of that country.
Of course, everybody knows the difficulties of the present situation, and I quite understand that it may be—I do not know at all whether it is—that the Government regard it as a matter of extreme importance not to do anything which will lead to Japanese retaliation. Certainly I should regret that as much as anybody, but I am quite sure that the most dangerous thing you can do in circumstances of that kind is to show that you are afraid of Japanese retaliation. It is the old case of the savage dog. As long as you can show a bold face to the dog I understand that he seldom attacks you, but the moment you turn tail or run away or even show anxiety, the danger of an attack becomes much greater. It is much better to be quite frank about these things, and I quite recognise that for us to face, it might be, a universal attack on our possessions in the Far East, would be extremely awkward for us. That is quite possible, but your Lordships must consider that if there is a Japanese victory the whole of our possessions in the Far East will be unquestionably swept away. No reasonable man can doubt that that would be the result. We cannot doubt—because we have always been on good terms with the Chinese and because we are there on sufferance—that the moment the Japanese decide that they have got overwhelming power and are no longer troubled by the grave difficulties in which they are no doubt placed at this moment, the moment they have destroyed China they will certainly turn and destroy us. That seems to me a matter which is well worth the Government's consideration in deciding how far they will risk the present safety of those possessions.
Then I presume that the conception is, that, by coming to some such agreement as apparently we are still discussing in Tokyo, we shall conciliate Japan.

821
I cannot see on what ground that anticipation is based. It was my fortune to have something to do with Japanese diplomacy in 1931. I found that every concession you made to Japan simply invited them to make further demands, and to base their further demands on what they had already got. There seems to me very little sign of any conciliation at present. There is a tremendous campaign against this country going on in Japan. There are reports in the Press of further indignities offered to British subjects. There is the very significant fact that, according to our papers, a large part of the Japanese propaganda is based on the thesis that we are quite powerless to resist. I can only say that it seems to me foolish to imagine that by anything short of abject surrender—and indeed that would not do it—you are going to conciliate Japan. Looked at merely from the point of view of the oldest form of British, or of any other, diplomatic desirability, it does seem a very strange form of diplomacy that, having inevitably quarrelled with Japan, we should now proceed to quarrel with China also.
I have put this matter, I hope, with moderation; I have certainly tried to do so. I think it is a matter which is worthy of your Lordships' very careful consideration. I confess that when I look at the proceedings of these two parties—Japan with an arrogant indifference to all international obligations and to all the principles of justice, and China who has, as far as I know, carried out every single one of her obligations, who has done her best to co-operate with the Western Powers, particularly this country, no doubt partly because that is her interest, who has behaved throughout, and long before this, with absolute propriety, and who has been making prodigious efforts to restore her country, improve her communications and increase her education, all leading in the path of what we regard as progress (and just because these things were succeeding I believe Japan hastened the attack she made upon her)—I confess when I look at the two countries, I hope without prejudice, I feel it is incredibly humiliating that we should be taking action which is regarded by both of them as favourable to Japan and unfavourable to China and that we should once again have, at any rate, the appearance
822
of abandoning that country which has done most to deserve our help.
4.32 p.m.
LORD DAVIES LORD DAVIES had the following Notice on the Paper: To ask the Foreign Secretary what steps are being taken to implement the statements on foreign policy recently made by representatives of His Majesty's Government; and to move for Papers. The noble Lord said: My Lords, I find myself in the position of my noble friend who has just sat down because when I put this Motion on the Paper it seemed to me it would provide the only opportunity for discussion of these important matters before your Lordships adjourned for the Recess. Since then the Motion of my noble friend has also appeared on the Paper, and consequently I transferred my Motion for discussion to-day. My object was to take advantage of this opportunity to protest against the decision announced by the Prime Minister in another place to adjourn Parliament until the month of October. Surely in these critical days through which we are passing, and having regard to what happened during the Recess twelve months ago, it is not unreasonable to suggest that Parliament should meet in the interval between now and October to take stock of the situation and to give the Government its moral support if any crisis suddenly supervened. I believe there is a feeling very widely shared, not only by the Opposition Parties but also by those who support the Government, that before October the Government may be called upon to make far-reaching decisions, and that in these circumstances they should take Parliament into their confidence before, not after, a final decision has been reached. Therefore I would ask the noble Viscount opposite to give us some assurance, if he can, upon this point, and also whether he can assure us that without previous consultation with your Lordships' House there will be no departure from the policy he announced in his speech of June 29, which I believe was endorsed by all shades of opinion throughout the country.
We have already discussed three subjects. First, I should like to say a few words in regard to the negotiations with the Russian Government. I trust the Foreign Secretary will be able to give us some further information upon this matter. As your Lordships will remember,

823
these negotiations commenced on March 18, when the Foreign Office inquired whether the Government of Russia would support Rumania in the event of an attack. Since that date, over a period of four months, these negotiations have dragged on interminably, causing a great deal of anxiety and also, I am afraid, in some quarters a considerable amount of suspicion as to the real intentions of His Majesty's Government. The noble Lord who moved the Motion deplored these unfortunate delays, which in one instance amounted to more than three weeks and in another to thirteen or fourteen days. They have been due, I fear, to no procrastination on the part of the Soviet Government, but to the dilatory tactics of our Foreign Office. At a time of extreme emergency it is difficult to understand why there should have been all these delays. In these days of rapid communication it is really impossible to comprehend why so much time should have been needed to frame our replies on the points submitted by the representatives of the U.S.S.R., although we have to remember that on each occasion our Government had to consult with the authorities in France. That, of course, made some difference.
Another point I should like to make is this, that it is surely of the utmost importance, when the issues at stake are so vital, that these proceedings should be conducted not in an atmosphere of haggling, but in one of cordiality and friendship. After all that has happened, it is surely essential to create a feeling of mutual confidence, otherwise no pact or bargain, however carefully drafted, is likely to produce the results we all desire. In consequence of that I would suggest once more to the noble Viscount opposite, as I did some time ago, that he or some other prominent member of the Cabinet should undertake a visit to Moscow at the earliest opportunity so as to establish personal contacts with the responsible Ministers there. After all, the noble Viscount went to Berlin and to Rome in pursuit of the policy of appeasement. Why, therefore, may I ask him, with all respect, should he not display at least an equal solicitude for his new policy of building up a Peace Front in order to resist aggression? May I also remind him that in 1917 Lord Milner, who was a member of the Cabinet,
824
accompanied a Military Mission to Russia?
I should like if I may to congratulate the Government upon their decision to despatch a Military Mission now. All I venture to plead for is that the noble Viscount, or one of his colleagues, should accompany it in order that further delays may be avoided and the protracted negotiations may be brought to a successful issue. There is one other question I should like to ask before leaving this subject. We have now, apparently, agreed on all the points in the Russian proposals except the definition of what constitutes indirect aggression. I wonder if the Foreign Secretary can tell us whether there is a clause in the Polish Pact which deals with this question of indirect aggression, and if so, is there any reason why a similar clause should not be inserted in the proposed pact with Russia?
Now I come to another subject, the position of Danzig. Your Lordships must have been disturbed by the numerous statements which have appeared recently describing the fortifications which are being erected in and around the free city, the smuggling of arms, and other activities, all of which are a direct breach of the Danzig Statute. From the standpoint of International Law we all know that Danzig is a free city under the protection of the League, and under the terms of the Statute fortifications are forbidden, no munitions can be manufactured, and the harbour cannot be used as a naval base. I do not want to embarrass the Foreign Secretary, but I am wondering whether he can tell us what steps are being taken to prevent the infringement of those Articles. Several years ago I ventured to suggest that an International Police Force should be installed in Danzig to ensure that the terms of this Statute were respected. Whether this is practicable now I do not feel that I am in a position to offer any opinion, but if, as in the case of the Saar, it was possible, then that probably might be one way of endeavouring to solve the problem. In any ca se I think your Lordships will all agree that if Danzig is to retain its present status as a free city under the League we cannot allow matters to drift indefinitely, and in conjunction with the signatories of that Statute is it not possible to take some steps to uphold the sanctity of International Law?
Lastly, as my noble friend Lord Cecil has reminded your Lordships, there is the menacing situation in the Far East. Here, again, unfortunately there has been a failure on the part of the Government to observe any coherent policy. I agree with every word which has fallen from the noble Viscount, Lord Cecil, and from the Leader of the Opposition. It seems to me that the trouble with the Government is that collectively, at any rate, they refuse to recognise as such the most flagrant acts of aggression in whatever quarter of the world they may be perpetrated. Your Lordships will recollect that as far back as the Manchurian crisis the Chancellor of the Exchequer closed his eyes to it when, as Foreign Secretary, he placed an embargo upon the supply of munitions not only to Japan, who then was the aggressor, but also to China, the victim of aggression. I notice from his speech in another place that the Prime Minister takes very much the same attitude of neutrality, which I believe is hopelessly impracticable. On the other hand, the Foreign Secretary, in his speeches both here and at Geneva, has shown conclusively that he regards the attack of Japan upon China as immoral and indefensible. I believe he is right, but how is it possible, may I ask, to run with the hare and to hunt with the hounds?
If we have any regard for treaty obligations, the Nine-Power Treaty for instance, or for our signature of the Covenant, or for the reputation of the British. Empire in the Far East, or even for our commercial and trading interests in China, surely it is imperative to make up our minds to support the Chinese Government. I ask your Lordships how can we expect to be successful in our negotiations with Russia, or to inspire the confidence of General Chiang Kai-Shek if we condone the brutal campaign which Japan has been carrying on in China, and if we are prepared also to carry on negotiations with the aggressor which are bound, sooner or later, to bring us into antagonism with the Chinese Government? Clearly I think we shall inevitably run the risk of falling between two stools. If we regard it from the standpoint of British interests alone is it not better, is it not more statesmanlike, to assist China in her battle for freedom than to capitulate to Japan? If Japan wins this war she will treat this vast country and its teeming population as a
826
Japanese preserve from which all European trade and commerce will undoubtedly be excluded.
I would therefore join with my noble friends in appealing to the Foreign Secretary to collaborate with the President of the United States and his Government, and, if necessary, to withdraw our nationals from the Treaty Ports where, apparently, we are unable to reinforce or to protect them, to base our defences upon Hong Kong or Singapore, to succour and support the Chinese Government in every possible way, to repatriate if necessary Japanese citizens from all parts of the British Empire, and to sever all economic relations with Japan. I would suggest very humbly that if a bold constructive policy on these lines was approved by the Government, especially in co-operation with the United States, then in a relatively short period the strangle-hold of the Japanese military on China would be relaxed, and 500,000,000 Chinese would be rescued from the appalling slavery which otherwise may be their lot.
4.50 p.m.
VISCOUNT SAMUEL: My Lords, it is nearly two months since, in this House, we had a general survey of the foreign situation, and in these days two months is a very long time. Various developments have taken place during that interval. Among the chief has been the rapid development of British defensive armaments, on which the whole of our policy must necessarily depend, for policy must always depend upon strength. There was an old English writer—I do not know whether the noble Viscount's attention has ever been drawn to this quotation—who said: "Let not thy will roar when thy power can but whisper." That adage is one which has permanent validity. Secondly, during these recent months, we have watched with great satisfaction one development, to which no reference has been made here this afternoon so far as I am aware, and that is the economic and political recovery of France. That unquestionably is exercising a great influence on the course of events, first in the Mediterranean and also in Europe and throughout the world. Thirdly, our ties have happily been drawn closer with Turkey, Rumania, Greece, Portugal and Poland. That is a fact which again is of great international moment.

827
Although an agreement with Russia has not yet been completed neither on the other hand have negotiations broken down, and there is every reason to hope that they will be carried to a successful conclusion. I think there would have been less disappointment with regard to the slow progress of the negotiations with the Soviet if on two or three occasions at an earlier stage there had not been evidently inspired declarations from the Government that a pact was on the point of signature. That proved on each occasion to be a premature hope. It is a sound axiom never to prophesy unless you know, and it was certainly an error for the Government to allow the impression to go abroad that an agreement with Russia was immediately at hand. However, now military action is being concerted, and perhaps that is of even greater importance than the signature of a detailed pact. If the noble Viscount the Foreign Secretary is able to make any statement—I do not know whether he can or whether it may be inconvenient to do so—if he can with advantage make a statement on the course of negotiations, I am sure the information would be very gratefully received.
There are two points of special interest at the present time—Danzig and the Far East—and I would venture to address to your Lordships some brief observations on both these and then conclude. The situation in Danzig, as all the world knows, arises from the fact that both of the contending parties have some degree of right on their side—the Germans from the point of view of nationality, and the Poles from the standpoint of economic and strategical conditions. There is, therefore, every reason for advocating a compromise between them, but that compromise has already been carried into effect. The compromise that was desirable was arrived at after the War and has been the basis of the régime which has been in force in Danzig for the last twenty years. That this compromise was not wholly offensive to Germany was clear from the fact that Herr Hitler himself, of his own free will, made a treaty recognising it for the period of ten years, of which only five years has so far elapsed. Therefore, those who advocate a compromise between Germany and Poland can also say that the compromise has
828
been already reached and is now in fact in operation.
The parallel between the present situation in Danzig and that in what was Sudetenland is somewhat close. Sudetenland was to Czecho-Slovakia as Danzig is to Poland. But there are certain differences. In the first place, the Germans in Danzig have full freedom to manage their own affairs, of which they are taking every possible advantage, while in Sudetenland that was not so. Secondly, if the Reich absorbs Danzig completely, the geographical positions are such that the threat will be far greater to Poland than the absorption of Sudetenland by the Reich need have been to Czecho-Slovakia. Thirdly, the experience in the one case is a guide in the other, for what has happened to Czecho-Slovakia after the Reich had absorbed Sudetenland is a very good indication of what may happen, though no doubt perhaps in a somewhat different form, to Poland if the Reich also absorbs Danzig. The present situation is of a most exceptional character, as the action taken by the Reich is not in the nature of a direct military aggression, but of infiltration, and the question arises at what point does infiltration become aggression. It is somewhat the same problem as how many stones make a heap. When is it that action such as has been going on in the last few months becomes so formidable to Poland that it has to be regarded, taken in the total, as aggression? British policy in this matter has now been clearly defined, and we are not likely to go back on it, but if it should happen that it should be convenient for the noble Viscount the Foreign Secretary to make any observations on this point, I am sure they also will be gratefully welcomed.
With regard to the situation in China, and especially in relation to the events in Tientsin, I think the Government will agree that the Oppositions, both Labour and Liberal, have been very restrained in this matter. It would have been very easy for opponents of the Government to taunt them on their failure to protect British rights, but it has been quite apparent from the beginning what the limitations on British action at Tientsin have been. The Government have declared that the formula reached at Tokyo does not involve any change of policy, and I would join with my noble friends

829
Lord Snell and Lord Cecil in urging the Government to make it quite plain that that applies in the fullest measure to the question of support for the Chinese currency which is, at this moment, the vital point in the struggle between China and Japan. The difficulties in that part of the world have largely arisen from the duality in the Government of Japan. The Constitution of Japan gives equal status to the Army as to the Civil Government—and also to the Navy, though in these days the Navy is more in the background. It is not only the statesmen who decide the policy of Japan but also the General Staff and both have equal access to the Throne and equal status under the Emperor.
The General Staff themselves are again and again being committed, possibly against their will, by the intransigence of the junior officers in the Army and the extent to which that intransigence may go was seen in the terrible assassinations in 1936. A few years ago, I had the privilege and advantage of being the Chairman of a delegation of the Royal Institute of International Affairs that went to Banff in Canada for one of the periodical conferences of the Institute of Pacific Relations. My noble friend Lord Snell, I am happy to remember, was one of my colleagues on that occasion. That conference, like the other conferences of the Institute of Pacific Relations—the word "Pacific" there referring to the ocean—was attended by representatives of similar institutes in Japan, China, the United States, Canada, France, and indeed all the countries concerned with the Pacific, except Russia. The impression that was left upon my mind was that if the policy of Japan were controlled by the statesmen it might be possible to arrive at agreement and at a renewal of the old traditional friendship between Britain and Japan in which we all took so much pride and satisfaction in earlier years. But unhappily, as I say, the statesmen are frequently overruled by the Generals, and the Generals committed by their junior officers.
If the Japanese are content to accept that state of affairs, that is their concern, but there is no reason why the British Empire should allow its policy to be swayed by the vehemence and violence of the colonels and majors of the Japanese Army. That Army, as my
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noble friend Lord Cecil mentioned, was largely trained under the influence of Germany. Many of the higher ranks have received their education either in Germany or from German Staff officers, and unquestionably they are in close touch with the authorities in Berlin. It is very easy to see the hand that has been behind the events at Tientsin. At the present time there is every reason to believe that the Japanese army are bitterly disappointed at the failure of their military efforts to secure a decision in China after a period of two years. There is a feeling among them, so it is said, of anger, of resentment and almost of fear, as of a man who finds himself sinking slowly in a quicksand. They vent these feelings upon some scapegoat, and we in the British Empire have been made the scapegoat. After all, the British are not the only Power with concessions in China. Many nations have interests there, but there is a reason why this country is specially singled out for attack.
The United States have taken two very significant actions, animated not only by their own great economic interests in the Far East but also by what they conceive to be their duty to the world at large. The United States have made their position very clear in two ways. First—it has now been almost forgotten by many people—President Roosevelt moved the whole of the American Fleet from the Atlantic into the Pacific, a most significant action taken some months ago; and secondly, in the last few days they have given notice to terminate, at the end of the six months' period required by the Treaty, the Commercial Treaty between the United States and Japan. There is no reason to suppose that that action has been taken for any purely commercial reason; unquestionably it is intended to have a political significance. In those circumstances I think that His Majesty's Government may be encouraged to refuse to adopt any policy of mere surrender to pressure. A policy of surrender does not win either the respect of your opponents or the good will of your friends.
I do not think it has been mentioned to-day, but one consideration that must be prominent in the minds of the Government is the fact that one of our great Dominions, Australia, has a very large interest in all Pacific questions and particularly

831
in our relations with Japan, both commercial and strategic. When the matter of Manchukuo was prominently before the world in 1931 and 1932, there is no doubt that the interests of Australia played an important part in influencing the mind of the Government at home during that period. I trust that the Government and people of Australia will recognise that a policy of constant retreat is neither likely to succeed in the long run nor be consistent either with the dignity or the interests of the British Empire; that it results merely in loss of honour without buying safety. I hope, therefore, that the intransigence of the Japanese Army, the violent anti-British agitation which is now going on in China, and the insults directed against our citizens there, will not cause a weakening but rather a stiffening in the attitude of His Majesty's Government.
We cannot but admire, I think, the courage, the endurance and the self-sacrifice of the Chinese people in the presence of overwhelming disaster; and I confess I could not read without emotion the appeal of General Chiang Kai-shek, which was published in a British newspaper a few days ago and in which he says:
"I firmly believe the British Government and people will not treat an aggrieved nation in the same light and same manner as an aggressor nation; will remain faithful to their promise to respect International Law and treaties; and will not help an aggressor nation against China, who is fighting in self-defence to uphold justice."
Those are very cogent and feeling words. I am glad that His Majesty's Government have taken steps lately to reinforce Singapore, and if the Tokyo Conference should not succeed and Japanese pressure should increase, I trust that the Government will consider more definitely taking the same action as the United States have taken. I believe that if the Government came to the conclusion, with the full knowledge that is in their possession, that it was desirable to give twelve months' notice—for that Treaty requires that longer term, unfortunately—of termination of our Commercial Treaty with Japan, that would be approved by our people at large. There we have a means, in conjunction with the United States, of bringing most effective economic pressure to bear upon Japan. We should be able to stop those supplies without which it would be impossible for her to carry on her warfare.
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One particular point in regard to the Far East on which I should like to address a question to the noble Viscount relates to the position of Colonel Spear, our Military Attaché, who although he should enjoy diplomatic privileges has been for a long time under arrest and apparently is about to be placed under trial by the Japanese. A question was asked of the noble Viscount in this House in a former debate, and he replied:
"In regard to his case [Colonel Spear's] I cannot speak fully until I have an account from himself."
But, the noble Viscount continued:
"I have no reason to anticipate that matters in regard to Colonel Spear will not be satisfactorily settled."
The date of that debate was June 12. We are now at the beginning of August, and I trust that the noble Viscount will be able to make reference to that case and to give us some satisfactory information.
The House is now about to go into Recess, which I am glad is for two months and not for three, though the reasons that would make us satisfied with that Recess are not personal but purely political. But there is a sense of uneasiness in a large section of the nation lest during this Recess some circumstances may occur which many of us would regard as regrettable. Some action may be taken, or more probably some inaction may take place where action was necessary. The past record in many respects of the present Government is such as to make many uncertain that where vigour and energy are required they will necessarily be shown, and I trust that when we meet again in October it may not be said that those fears have been realised. As to the general policy of the Government, as stated by the noble Viscount himself in his great speech on June 29, I believe that that is supported by the whole nation. That speech was received with a unanimity and warmth of approval which few statesmen at any time have been able to elicit. The nation is solid behind that policy if the Government will pursue it with vigour and energy, and I trust the noble Viscount, under the burden of his daily anxieties—a burden so heavy and anxieties so grave; the burden which he carries on behalf of us all with so fine a sense of duty—may feel fortified by the fact of that support.
5.11 p.m.
VISCOUNT ELIBANK: My Lords, I do not propose to take part in the general debate on foreign affairs to-day. My intention is to speak to the Motion on the Paper in the name of my noble friend Lord Cecil, referring to the Far East. I do not know that I can follow my noble friend in some of the paths which he has pursued, or the deductions which be has drawn, but I do wish to support the statements that have been made by two or three noble Lords who have spoken, with regard to the strong feeling in this country, and in the Far East, to my knowledge, in regard to the treatment by the Japanese of our nationals in China and in regard to the anti-British propaganda, and in fact the general manner in which the Japanese are conducting affairs there so far as we are concerned.
This Conference in Tokyo seems to me to be upon very vague lines, and I should like to ask my noble friend Lord Halifax whether he can state quite clearly that the statement which was made by Baron Hiranuma to the Japanese Press almost directly after the Craigie-Arita formula had been arrived at, is not correct. Baron Hiranuma claimed that it would bind us to satisfy Japanese requirements, and would be a bad shock to the Chinese Government. That is the sort of propaganda that is being put about in Japan, and it is very deleterious not only to our prestige in the East but to the very questions which are being dealt with or are supposed to be dealt with at that Conference. We all know—it has been referred to this afternoon—that there are two very vital matters which are now being discussed at the Tokyo Conference, and which are perhaps the most critical issues at the moment.
I refer first of all to the proposed recognition of the Japanese Federated Reserve Bank currency in North China, and to the $50,000,000 in silver lying in British and French banks in Tientsin. So far as that silver is concerned, from a cable received by The Times from their Tokyo correspondent we understand that the Japanese argue that this silver belongs not to the Central Chinese Government but to the old local Peking Government, and that the silver naturally passes to the Japanese puppet Government, which has replaced the former
834
Government. If we accept this argument it means that we are recognising the Japanese puppet Government in Peking, whereas the old Peking Government was a branch of the Central Government and not an independent Government at all. Consequently, to recognise that would be to recognise that the Peking Government was not a branch of the Central Government, which it actually was. Not only did this silver belong to the Chinese who lodged it with us for security, but it is not in Chinese banks but in British and French banks, and the silver is not ours to give up. We really are in the position of a banker with a gangster holding a pistol at his head and demanding that the jewellery stored with him by clients for safe keeping should be handed over. We have no more right to hand over that silver than the banker would have, if he could resist the demand, the right to hand over his clients' jewellery.
As to the Federated Reserve Bank currency, I should like to give a few details why it is important that this currency be not recognised. We see in the Press from time to time a general statement saying that it would be disastrous if it were recognised. I should like to give, very shortly, a few details why we should refuse to recognise it. For instance, if we were to recognise that currency in North China we should have to recognise it everywhere else. We would enable the Japanese to establish an economic bloc between China, Japan and Manchukuo, which is their great aim. Then it is a blocked currency, and the Japs will never sell foreign exchange for it. This is actually happening in Manchukuo, where one can only buy for 1,000 yuan about £50 of foreign currency. Then, if we were to recognise that currency we should implicitly recognise that the Chinese national dollar is not good currency, though this is the only money which our banks in China hold, and in which our people do all their business.
I think Lord Cecil did say that we would commit a violation of neutrality if we recognised this Japanese currency. It would really be an act of treachery towards the Chinese and an act which I am sure they would never forgive. I want to urge the noble Viscount, who will reply to this debate, that he will tell us to-day, emphatically, that there is no intention of handing over that silver or of recognising that currency. Statements

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have been made in another place by the Prime Minister which are certainly not very definite in regard to those two matters, and I am going to ask the noble Viscount to-day to give an emphatic denial of the suggestion that that silver may be handed over, altogether or in part, and that there will be any question of recognising the Japanese currency.
I should like to pass just for a few moments to the question of the position of Japan itself. Japan has had two years of war and her Budget for those two years reached nearly £1,500,000,000. She has an adverse balance with countries from which she has to buy raw materials, which is steadily increasing, and her gold reserves are estimated to have sunk from over £100,000,000 to £29,000,000. Owing to the guerrillas' activities in China she can get none of the iron, coal and cotton from China which she expected to secure. She herself only knows how many men and what munitions she has lost in China. Since the capture of Hankow, she has had no military success. On the contrary, in Central and Northern China she has suffered considerable reverses. Then the pressure of Russia is reported on good authority to have forced her recently to withdraw men to Manchuria. In the light of those facts, any suggestion that Japan should declare war on us if we take a firm stand seems to be surely wiped out of consideration altogether. We must also take into consideration the important fact that on July 27 the United States denounced her trade treaty with Japan. It is said that the effect of the American denunciation of that Treaty will not take place for six months, but that is not actually the case, because it is obvious that merchants who know that six months hence that Treaty will be abrogated are not going to enter into forward contracts. Consequently the effects of that denunciation must already be felt to-day.
I take the view that the Tokyo Conference must go on. But in view of the fact that there are moderate-minded people in Japan as well as the warmongers, and that it is only through those moderate-minded people that ultimately the warmongers will be controlled, I think we should at least say that we intend to take some action in co-operation with America in order to further our case, as America is furthering hers. Whether
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that should be by the denunciation of the Anglo-Japanese Treaty of 1911, or whether it should be by the closing of certain ports to Japanese shipping, I cannot say—that is for the Government to decide. But that we should now take stronger action than we have taken in the past, in the light of the circumstances which I have related as to Japan's position, I think is perfectly obvious.
Speaking about the position of Japan in China, my noble friend Lord Cecil suggested that the Japanese might be cleared out of China, or rather that we should never stop until the Japanese were cleared out of China. I do not take that view. I believe a situation has been reached in which the Japanese are likely to remain in parts of China, for the simple reason that the Chinese, with the arms and equipment at their disposal, will never be able to drive them out. In fact, with the economic situation in Japan, and the position of the Japanese as well as the Chinese in China, I believe that in a very short time there will be a stalemate. Then will come the time for mediation. My noble friend Lord Cecil may not like that word, because I think he would like the Japanese driven out of China altogether. But actually I do not see that at all. The war between Japan and China is one with which certainly we do not agree, but if we are to act as police for all the world, there can be no end to our troubles. If, on the other hand, we could act as mediators, and could do anything to help to bring this war to a close in conditions in which the Japanese and the Chinese would find themselves living in amity in the future, then we ourselves could remain in that part of the world, preserving our interests and position there, and preserving in fact the position of the European world in that area. I again ask the noble Viscount to give an emphatic assurance, in his reply, with regard to the two points I mentioned earlier in my speech—namely, the silver at Tientsin, and the Japanese currency; and I urge him in the light of the matters I have mentioned to stand firm—firmer than the Government have stood hitherto.
5.28 p.m.
LORD RENNELL: My Lords, no direct criticism of the Government is foreshadowed in the terms of the Resolution brought forward by the noble Lord, Lord

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Snell, which has been supplemented since by two further Motions to which no doubt His Majesty's Government will reply in due course. I do not propose myself to touch upon the Far East, which has already consumed a good deal of the time available to the House this afternoon. I would offer only a very few general observations arising out of the first Motion, which rather suggested to me that in drawing attention to the present position of foreign affairs the noble Lord who submitted it must have in his mind some clearly defined appreciation of what that position is. If so, he certainly has the advantage of me. Although I have devoted the greater part of a lifetime to the observation of foreign affairs with some attention, I have to admit that they have seldom, if ever, seemed to me so perplexing as at the present time—and that perhaps largely owing to the contrast which I perceive between the desire of the peoples of most countries for peace and the provocative utterances of those who direct their policies.
What is the position so far as it can be ascertained by the average man? He would, I presume, consider from the sources of information which are open to him that of recent years there has been a steady drift towards a division of the more powerful States into two antagonistic groups—one aggressive in character, the other defensive—while many smaller States are chiefly concerned to maintain their neutrality and to offer no pretext for provoking intervention from other quarters by seeking safeguards against a menace to their own security. The common basis of association between what he regards as the aggressive States is the alleged injustice of Peace Treaties in having taken too much from one and having given too little to the other.
My forty years' residence in foreign countries has led me to be very sceptical about friendships between States. Their association has very little to do with friendship, which appears to me to be a misnomer as applied to States. Their mutual attraction at any given time is derived solely from their believed interests. On the other hand, there may be friendships between peoples, the result of tradition or appreciation on the part of one of qualities or characteristics in the other which inspire regard or sympathy. Such friendships as these we should be
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studious to cultivate and to maintain, bearing in mind that while administrators and methods of government are liable to change popular sentiment inclines to permanence.
A spirit of friendly good will between ourselves and the Italian people has been traditional for a century. It is still evident there to-day to those who know that country well, in spite of the imputations of a rigorously managed Press which might lead a superficial observer to assume that it had been replaced by irreconcilable antagonism. In the inspired organs also you will find a continual reaffirmation of the indissoluble bond of friendship which unites the Powers of the Axis, so persistent as almost to suggest misgivings as to the conviction it carries. Meanwhile all the British who visit Italy—of late, perhaps, less numerous than they used to be—find only a very cordial welcome and the assurance that war with us is unthinkable. It is now some two years or more since I was last in Germany, but at that time at any rate I found it difficult to detect in the popular feeling expressed to me much to justify the venomous outbursts against this country which characterise the speeches of certain politicians and articles in the controlled Press. It must, however, be admitted that to-day there are some very disquieting symptoms in an apparent mobilisation on the frontiers of Germany and a readiness to attract and conciliate Italy by consenting to the removal of large numbers of a population of ancient Germanic stock from their old homes in Tyrol.
We know how profoundly our own people and those of our neighbour and ally, France, desire peace. Now if, as my experience on the Continent has led me to believe, the mass of the people nowhere desires war, it does seem to me that one more effort might be made to bring together those whose guidance they have accepted or tolerated, to discuss in the light of reason and a spirit of good will what can be done to avert from the present generation such a catastrophe as we have witnessed in our lifetime. If no such settlement can be found, our only alternative is to be strong enough to face all eventualities, and a first condition of that is for us to be united. Therefore, when I studied a recent debate in another place, I could not help feeling a certain relief that the Session is now drawing to

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a close in spite of all the arguments which were advanced there for its prolongation, and that there will be for the present no more occasion for those attacks on the Government which are so eagerly misinterpreted abroad and which offer renewed opportunities to the vicious pens of the publicists of propaganda. To me, who for so long watched political developments at home from outside the country, it often appeared regrettable that criticism from the Opposition was apt to be most accentuated during anxious phases in foreign affairs, whereas valuable opportunities were missed of drawing attention to the designs of foreign Governments while to do so might have served a useful purpose.
Neither Governments nor Oppositions can, I think, escape responsibility for having over a long period ignored the premonitions of contemplated activities in other countries. In the reaction after the Great War we allowed ourselves to be directed by sentiment—the most dangerous of guides in international affairs—a sentiment which revealed itself in an initiative to give the world a lead in disarmament and culminated in a futile plebiscite, most welcomed abroad by those who anticipated that it might scare a democratic Government into quiescence. The result of our naive confidence in the compelling virtue of moral and ethical values, which are not elsewhere regarded as necessarily imposing restrictions on political ambitions, was not only to reduce the defensive potentiality of a vulnerable Empire, but also to weaken our influence in the councils of Europe. Now, however, after a long period of anxiety and even some dread, to which I may confess, of humiliation through prolonged inaction, which, by the way, those who contributed to make it inevitable were the first to denounce, I rejoice to feel that this people has realised that its voice must remain ineffectual if it is not backed by the certitude of strength.
The splendid spirit manifested in response to the call of duty has already, so far as I am able to diagnose feeling on the Continent, somewhat eased the situation. I would wish therefore to say here, in this last debate on foreign affairs, that I cannot sufficiently applaud the pronouncement made on June 29 by the Secretary of State for Foreign Affairs and
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the policy of the Prime Minister who, having tried all that conciliation and patience could hope to achieve, has at a grave moment taken a firm and courageous stand. I trust and believe that he will have the unhesitating support of the whole nation in leading Great Britain to resume her tradition of upholding individual liberties and defending weaker peoples who have a legitimate right to exist and to develop on their own lines. Conscious of strength and ready to make every sacrifice to increase it, we may reaffirm the faith which I think has been so well expressed in two memorable lines of a famous English poetess:
"Happy are all free peoples, too strong to be dispossessed,
But blessed are those among nations who dare to be strong for the rest."
5.42 p.m.
VISCOUNT STONEHAVEN: My Lords, I wish to ask my noble friend the Foreign Secretary a point on machinery rather than on policy, but before doing so may I refer to a reference to some failure of Australia made by the noble Viscount opposite? I did not quite get the implication, but it seemed to me that the noble Viscount thought we had taken a certain line for the benefit of Australia that possibly was not advantageous to ourselves. I am not familiar with the particular incident to which the noble Viscount referred, but I think it ought to be remembered in that connection that Australia, for the benefit of British trade, did jeopardise her very important trade with Japan when Australia handicapped the Japanese from the point of view of importing into Australia their cotton and silk goods in order to benefit our manufacturers in this country.
VISCOUNT SAMUEL: May I interrupt the noble Viscount? I did not for a moment intend to suggest that Australia had induced us to take a certain course for her benefit which was disadvantageous to ourselves. What I had in mind was that any British Foreign Minister has to take into account the interests of the British Empire as a whole in which Australia is one of the most important units, and that Australia has great commercial and strategic interests which are concerned in any relations between this Government and Japan. We have been obliged quite properly and necessarily to

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take that into account. I expressed the hope that Australia would realise that in the long run, even at some sacrifice of immediate interest, it may be necessary to take a stronger line than mere ease and economic advantage may require.
VISCOUNT STONEHAVEN: I am much obliged to my noble friend for enlightening me. I am sorry I did not quite get the gist of what he said at the time. I do not think he need have any fear on that subject for the reason I have given, that Australia has already shown an appreciation of the part she plays as a member of the Empire by running grave risks of losing one of her best customers—Japan is a very large buyer of Australia wool—by handicapping the Japanese in Australia for the benefit of the manufacturers of this country. I think, therefore, my noble friend may be quite sure on that point.
The point I wish to submit to my noble friend the Foreign Secretary is in connection with the overseas trade guarantee. I have already written and asked him and he is prepared to give the answer, I know. The point is this. I hoped that the Overseas Trade Guarantee Bill would supply a very important omission in the equipment of our Ministers and Ambassadors overseas as a result of which they have been handicapped in relation to other foreign Powers. As I read the Bill, it gives power to the Government to give guarantees in connection with any matter in connection with which it appears to them—that is to say, the Board of Trade and the Treasury—to be expedient in the national interests that guarantees should be given. What was not clear to me either from the debates in your Lordships' House or in another place, or from the Bill, is to what extent Ambassadors who see opportunities for advancing British interests in foreign countries can take advantage of these provisions, and what machinery there is for dealing with them. The importance of being able to meet our foreign rivals on equal ground is considerable, and we have always been handicapped because it has been the deliberate policy of other countries to back up and push their exporters and financiers with a view to getting concessions and so forth. That has not been our policy in the past. We have relied upon the efficiency and
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ingenuity of our manufacturers and financiers to obtain the necessary concessions.
In normal times I think that was a pity and a mistake, but these are anything but normal times, and we are handicapped certainly in two directions in dealing, for example, with the Axis Powers. You find the manufacturer, the financier, the exporter and the retailer all the same individual in the case of the Axis Powers—namely, the Government. You find also that they are manifestly short of cash, and their financial situation is one which we would not envy. But they are invariably able, because of that combination, to offer terms to foreign nations either for export or for work to be done with which the contractor or the manufacturer in this country cannot possibly compete, and the normal banker still less so, because, after all, he is trustee for his depositors and therefore is quite unable to give terms to the manufacturer which would enable him to compete satisfactorily with his foreign rivals. It is not merely from the point of view of the material benefit of providing work in this country, though that is obviously of first-class importance, but it is from the political point of view that it is important, it seems to me, that our diplomatic representatives abroad should have far greater facilities of getting the support of our national credit for enterprises in foreign countries than they have had hitherto. I have not been able to discover from the Bill that that is the case.
There is another reason, and I think a very important one, why that is desirable to-day. A great many of the countries abroad have frozen credits in the Axis countries, and it is quite conceivable that the only possibility of getting anything for those frozen credits is in the shape of exports or in work done. We have seen that ourselves with our ship-owners who, in order to recover some value for their credits from Germany, have had to take German ships. But it is very important, it seems to me, from the purely political standpoint, not merely at the moment when we want to strengthen the hands of our representatives as far as we possibly can, but from the point of view of establishing a position which will be favourable to us when the present difficulties have been overcome, as we hope they will be overcome. The Bill does appear to give the widest possible

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powers of guarantee for work to be done such as I have indicated, but I cannot see from the Bill or from the debates what is likely to happen when an Ambassador or a Minister sends to the Foreign Office a Despatch advocating the undertaking of certain work which, if we do not get it, will go to our rivals and will give them an advantage far beyond the material advantage of the contract. I think it is important, and I hope that my noble friend will be able to say that when proposals reach him from overseas, he will be able to deal expansively and generously with them, not primarily, or entirely by any means, from the intrinsic financial or economic point of view, but from the point of view of political advantage.
I cannot help feeling that the case is strengthened by the speech of my noble friend Viscount Cecil. He gave a list of some of the resolutions of the Council of the League of Nations which have had absolutely no effect at all. He might have extended the list. The noble Viscount expressed surprise that these resolutions have had no effect. It occurred to me that the short answer to the noble Viscount—although it is not one which I think my noble friend below me will give—is that "fine words butter no parsnips." If all that a British Ambassador has to support his policy is a resolution of the League of Nations it is not surprising that that policy is not received with enthusiasm and does not carry any weight at all. On the other hand there is another saying that "money talks." We happen to have more money than anybody else in Europe. We are getting rid of it as quickly as we can, it is true, but for the time being we are better off than other people. I hope my noble friend will be able to say that this Overseas Trade Guarantees Act—if it does what I hope it will do, it strikes me as one of the best things the Government have done—does in fact enable him to take advantage of openings and opportunities which will greatly advance our present and future fortunes of which, owing to the lack of some such measure in the past, he has been unable to take advantage.
5.53 p.m.
LORD PONSONBY OF SHULBREDE: My Lords, I have found myself in less
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disagreement with the speeches made today than I thought I should, but I noticed that those speakers who seemed to lay emphasis on the desire for force, action and boldness never reached that point in which they explained to us how, when and where that action is to be applied. Therefore they really resemble their predecessors in anxious times in the past who with a certain irresponsibility condemned the Governments of this country for not acting at any certain moment. I am glad to say that the contest is still in the diplomatic field, and long may it remain there. It is unfortunate that we are not strong in diplomacy. I am not talking of individuals, I mean nationally speaking. Perhaps your Lordships will allow me just in parenthesis to say how sorry I am—as I am sure the House is—at the death of a very distinguished diplomatist of ours, Lord Howard of Penrith, who was a notable example of very accomplished diplomacy and brought conciliation wherever he went. I mean that nationally speaking we are not strong.
When I read—and I am glad to say did not hear to-day—attacks on the Government because negotiations with Russia are going so slowly I must say I think that is most unfair. If we get an agreement with Russia within the next year or two that will be rapid. The Russians are extremely acute diplomatists. You have to get up very early to deal with them, and that is not our habit.
LORD STRABOLGI: You did not take long to get an agreement with them.
LORD PONSONBY OF SHULBREDE: I had not only to get up early but I had to refuse to go to bed while I was negotiating the Russian Treaty of 1924. This quest for a formula which is going on both in the Far East and in Moscow is a most difficult business. I remember very well on one occasion being kept up all night with an objection to certain words that had been put in a certain clause. Two or three nights afterwards one of my colleagues discovered the word "notwithstanding," and we sailed on after that for several weeks. We are not very good at finding formulas. We are not very good at negotiation, and it is because of that that I have deplored all along the entanglements that we have let ourselves in for. I have been frightened lest some minor incident, some outbreak

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on a frontier, might lead us into the carrying out of certain obligations which necessitate force. I do not know if the noble Viscount, the Foreign Secretary, can say anything with regard to the frontier incident between Hungary and Rumania. We are bound to defend Rumania, but it is not necessary that Rumania should be in the right in a controversy with Hungary. That is the sort of entanglement in which it is inadvisable that we should be caught up, in what I have referred to as this diplomatic contest which is going on in so many parts of the world.
But if I want to stress one point it is a point which has not been dealt with by any previous speaker. It is the one I feel most about, and one that I think is after all perhaps the most important. That is the condition here at home of our own people and their prospects. How long is this terrible tension to last? It is no good the Government saying that it does not rest with them, that it rests with people abroad. That will not satisfy us. How long is this tension going to last? How long is this apprehension of a coming calamity going to spread over the people? We are told by people who have been travelling abroad in Italy and Germany, Switzerland and France that the peaceful countryside is really peaceful. Aeroplanes are not always passing overhead, people are not always talking of precautions against air raids, and there is a genuinely peaceful atmosphere. I do not think there is a peaceful corner in this country at the present time. Every village is being roused by bogus majors and middle-aged women until people are storing things. I believe the chief things they are storing are coal and beans. These people are genuinely anxious. All over the country aerodromes are destroying agricultural land, and everyone's conversation is of this, just as in London and the big cities the posters of the newspapers rouse people, even if they have had a decent night, to the prospects of a very bad evening.
How long are we going to be kept like this, and how long is our energy to be dissipated from the real objects we want to achieve? I came across this passage in a letter of Sir Walter Scott at the time that he and the country were preparing to defend these islands against the great dictator Bonaparte. It was in
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1804; he himself had joined the Edinburgh Light Infantry and he writes:
"The truth is that this country has for once experienced that the pressure of external danger may possibly produce internal unanimity; and so great is the present military zeal that I really wish our rulers would devise some way of calling it into action, were it not only on the economical principle of saving so much good courage from idle evaporation."
That is all I would ask the Government. I do not want them to obtrude a plan, but I want them to realise that this organisation that they have brought into being in so many directions ought to be utilised and not allowed to evaporate and be dissipated. Why not use this organisation, when better times come—as we all trust and hope they will—for national reconstruction, for real work that needs doing, for expenditure of money which is fruitful and not destructive as it is now? I think it is an urgent need. The organisation should be arranged; and the women should be in this thing. Give a young woman a uniform and she will do anything.
You have the organisation at hand; you have built huge barracks; you are spending a vast amount of money. You have your campaign of fitness, which apparently began when it was anticipated that most of us would shortly be corpses. But it is in peace-time, it is in ordinary times, that the population ought to be made fit. It is now that we ought to be building houses and destroying slums. There is plenty of work there for all the explosives, and we ought to be building up the nation's life. It would give a hopeful feeling if the Government would declare to the country: "Yes; for the time being we have to be sure that our country and our Empire are safe, and we believe that this is the best method of doing it; but, having enlisted the whole population for this work, we are not going to switch it off; we are going to ask the same people to help us in a far greater and more terrible war: the war against poverty, misery, crime and disease." I feel that we, in our position of strength to-day, ought to be able to give an example to the world instead of always waiting for someone else to start, or insisting that all nations must agree before disarmament can come.
I only make these suggestions because I believe that we have a leading position,

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and that if we could make our voices heard we could set an example. The voice of the Foreign Secretary and the voice of our Prime Minister are heard at the present time, not indulging in attack or diplomatic entanglement, but—I do not say that they overstress it, but too often the note is that other people ought to take an example from us. I want us to be busy setting the example that other people are to take. Being the largest country, the richest country and the biggest Empire that has been known is not an example that we can ask other people to take, because it is merely a challenge which rouses their jealously. No, it is in the heart of the Empire that we can make our real contribution to civilisation and ask nations to follow our example.
6.5 p.m.
LORD ADDINGTON: My Lords, the Far East has been mentioned in this debate by Lord Cecil and others, so I should just like to read to the House two messages that have been sent to an assembly that is now being held on the West Coast of the United States of America. One is from Generalissimo and Madame Chiang Kai-shek, and is as follows:
"We respond whole-heartedly to your stirring call. Accept this expression of our unqualified support. Moral rearmament may, we believe, eventually override the influence of power politics by harnessing the innate goodness and good will of every nation and thinking individual."
The other is from Baron Hiranuma, the Premier of Japan, and runs:
"The hope of civilisation lies in the moral and spiritual forces of mankind. I pray for the success of your second World Congress, and hope that the moral rearmament of the nations will bring international peace at this important period of world history."
At that assembly leading Chinese and Japanese spoke as friends from the same platform, and have broadcast to their own countries advocating these same fundamental principles of morality and faith. I have felt that these are facts that should be known as showing that there is a common ground on which these two nations can meet, and that this does give a hope for the just and equitable settlement to which Lord Cecil has referred.
6.7 p.m.
THE EARL OF DARNLEY: My Lords, the foreign policy of this country in
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Europe, as I have gathered from the remarks of most of the noble speakers preceding me, and as I may perhaps have permission to anticipate from the speech of the noble Viscount the Foreign Secretary, to whom I apologise for delaying him for yet another three minutes, is still firmly fixed as a counter-threat to which millions of lives are pledged as a support. This is not a very cheerful holiday story, and perhaps it is useless to deplore it to-day in your Lordships' House against such a unanimous agreement as is going to be voiced after the noble Viscount's coming speech. But, like my noble friend Lord Ponsonby, I should like to ask him, now that the country is going away on holiday, what hope he can give to it that this impasse is not going to be permanent, and what the Government are expecting to happen to make their policy an ultimate peace policy. According to the excitement shown in another place at Parliament's length of holiday, it would not appear that any great peace of mind, which is so necessary to holidays, is expected to last very long. I think your Lordships, like everyone else, would like to know more particularly how the policy's name of "Peace Front" is likely to be justified in fact.
I presume it is not thought that Herr Hitler is likely to express a desire to turn over a new leaf; because I believe, and most people believe, that his policy is as firmly fixed as this country's is and he is no more likely to yield to threats, propaganda and other such armaments than we are. I am very grateful in this connection to the noble Viscount, Lord Cecil, for his story about the savage dog. He said, quite rightly, that if you show any fear of a savage dog it will turn and bite you, but if you go up to it boldly it will not do so. But he and all the rest of your Lordships know full well the effect of putting a dog on a chain, or, if you will not accept that, of making the dog think he has been put on a chain. If this is the case, how is this Government's policy going to be a method of producing a settlement which can be lasting and likely to lead to the good feeling which is essential to real peace? I should like to ask the noble Viscount that question. He already knows that every soul in this country and in Europe is praying that the day may soon come when the method of settling international questions by negotiation may be supported by all the

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different churches, different countries and Governments, and in the international Press, as being not only the right way but the most sensible and successful way of defending the people whose lives are in their charge. Is it not possible to hasten its arrival, and would not the heartfelt joy and approval with which it would be greeted put into complete shade any gratification which may be felt in such times as these?
6.11 p.m.
THE SECRETARY OF STATE FOR FOREIGN AFFAIRS (VISCOUNT HALIFAX): My Lords, the noble Lord who introduced this debate began by an observation which I think was an extremely fitting observation to make, and on which I also have something to say. Before doing that, however, I would like to associate myself with what fell from Lord Ponsonby in regard to what he said about Lord Howard of Penrith. I had it also in my mind to give expression to what, it was evident from the reception given to Lord Ponsonby's words, was the general feeling of all those in your Lordships' House at the death of Lord Howard, who was so well known to so many of us and who in so many fields had given such notable service to this country.
The noble Lord, Lord Snell, began on the text of his Motion which is one to "call the attention of His Majesty's Government to the present position of foreign affairs," and the comment that I made to myself when I first read that Motion on the Paper was one of subdued gratitude to the noble Lord for being so good as to remind me and His Majesty's Government that foreign affairs existed. I can assure him that they are very seldom out of our thoughts, and indeed I think there are very few people out of whose thoughts they ever are; but whatever the label of words under which we initiate discussions, I do most emphatically agree with the noble Lord, and this was the observation I had in mind, when he emphasized the great responsibility that attaches not only to Governments but also to Parliament on matters which, as Lord Ponsonby reminded us, so much affect the fortunes of every single citizen in the country. Therefore, although, if I had not been in this House, I might well have employed my time elsewhere, I make no complaint of the singularly sparing opportunities
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which are taken to elicit the opinion of your Lordships on these grave affairs.
I do, however, take some exception to the suggestion of the noble Lord who moved, that all he gets from this Bench was, I think in his own very carefully chosen language, "a dribble of somewhat reluctant information." I would ask the noble Lord to believe that we are always ready from this Bench, and I certainly do my best, to give to him and to the House all the information at my disposal that I think can usefully, without prejudice to the public interest, be given. That, I know, the noble Lord recognises very well. It is not without significance that both in this House and in the other place there have been during recent months strikingly fewer debates upon foreign affairs than was the case some months ago, and I think perhaps one may read in that a not insignificant expression of a very substantially broader national unity behind the policy of the Government, and also of confidence that the Government intend to abide by the several declarations that they have given, whatever their critics may suggest. It may be that a different suggestion may be made in other quarters, but it certainly is not a suggestion of which it is possible to find a serious echo in this House, or even outside.
A good many things have been said this afternoon that would tempt me into the field of controversy, but were I to yield to that temptation I am afraid I might very well say many things which would be no more helpful than some of the things which fell from my noble friend Lord Cecil, and, if I may put him alongside Lord Cecil, the noble Lord, Lord Davies. I was very much impressed by that proverb or quotation quoted by Lord Samuel, and as I heard it I made the reflection that it would be an admirable proverb for the noble Viscount, Lord Cecil, and the noble Lord, Lord Davies, to commit to memory and recite daily to one another.
I begin with the Far East, on which the principal part of the attention in this debate has been concentrated, and it has, been suggested in several speeches in various parts of the House that the formula recently signed with the Government

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of Japan commits this country to a fundamental change of policy; that we have by signing that formula recognised a state of belligerency in China; that it is in spirit contrary to our obligations under the League resolutions; that it is in danger of violating the Nine-Power Treaty; and generally, that it condones action which we have previously condemned. I think that is a fair summary of the kind of charges that have been floating about with regard to that formula this afternoon. I wish to state quite plainly that in my judgment those who take that sort of line ignore both the plain terms of the formula and the interpretation of the formula that His Majesty's Government have themselves placed upon it.
I know, of course, from such experience as I have had in India, how extremely difficult it is for people sitting in London to appreciate on one side or another the precise implications in the East of any of those carefully phrased formulas. I also know that, that being the case, there can hardly be any ground more fertile in which the enemy can sow tares among the wheat; and those who make that kind of loose accusation arising out of the formula lose sight, I think, of one fact that is of great importance, and it is this. The impression that the kind of accusation that I have listened to this afternoon produces is exactly the impression that those wish to see produced who are most anxious to exacerbate any difficulty by which we may be confronted at the present time, and accordingly, in my view, we should be very careful indeed not to play their game.
I would ask that we might all bear in mind certain governing considerations which have, I think, all of them, been already quite explicitly stated by those who have spoken for His Majesty's Government. I do not think that any useful purpose is served by proceeding on the lines of creating the maximum measure of doubt, if I may put it so, upon the minimum basis of fact. Only suspicion and mistrust are sown by that method, and, as I have sought to say, that merely serves the ends of those who are least friendly to this country. The general considerations that I would therefore plead might be kept in mind are these. The Japanese Government have
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never asked His Majesty's Government to reverse their general policy, nor, let me add, could His Majesty's Government do so if they were asked. I can assure my noble friend Lord Cecil, who reminded me of the many obligations under which this country lay, that I am not unmindful of any of them, whether the Nine-Power Treaty or the League resolutions, and that there is no intention in the mind of His Majesty's Government either of disregarding British interests in China or of disregarding our obligations to third Powers. All that we have done by this formula is to state the facts, as they seem to us to exist, and to attempt in practical fashion to deal with the background against which the situation in Tientsin has actually arisen. It will be difficult enough to reach agreement on the Tientsin issues without placing misconstruction on the formula, and we must, I suggest, be on our guard that we do not unnecessarily complicate the task of our Ambassador at Tokyo, who is handling a very delicate situation with both firmness and understanding, in the efforts that he is making to reach a solution.
Therefore, while nothing that we have done, and I hope nothing that we shall do, can on any reasonable construction be taken as condoning action bearing the character of aggression, and though our policy is most certainly, as my noble friend Lord Cecil I think asked, designed to promote peace and international order, it none the less does seem to me that the purpose towards which we have to bend our efforts in the Far East, from the widest point of view, is to endeavour to do two things: first of all, if we can, to assist in the finding of a settlement that will be fair as between all the interests concerned; and, secondly, from the more narrow point of view of the interests of this country, to work for such an issue of the present difficulties as will not impair our relations with China or with Japan if that can be avoided. I am perfectly well aware that many of your Lordships will think that that is much too optimistic a hope, that we are dealing with irreconcilables, and that any such effort is from the beginning either unjustifiable or foredoomed to failure. I certainly do not conceal from myself that the question of whether or not we can succeed in attaining any such object as

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that is not one that depends only on ourselves. It depends, firstly, on the attitude and on the purpose of the Japanese Government, and on how far the Japanese authorities in China are prepared to regard themselves as bound by the distinction between local and general issues recognised by their Government, and how far they are prepared to refrain from attempts to represent general as local issues and vice versa.
The noble Viscount, Lord Cecil, and my noble friend Lord Elibank referred to an interview reported in the Press as having been given by the Japanese Prime Minister a day or two after the formula was announced. In regard to that I have only to say this. I was informed by the Ambassador that that interview was incorrectly reported, but I would also add that if it was correctly reported His Majesty's Government certainly could not accept its implications. More particularly, His Majesty's Government are bound to take a very grave view of the blockade at Tientsin and the increasing agitation against British interests in those parts of occupied China and in Japan. I think the Japanese Government and people must recognise that if this agitation continues no negotiations or discussions could prevent relations between our two countries from growing steadily more difficult, with all the consequences that that deterioration must inevitably bring. Moreover, it is worth remembering that the Japanese Government, under the terms of the formula, have made themselves responsible for the maintenance of public order in the Japanese controlled areas of China, and His Majesty's Government accordingly will expect them, in implementation of the formula, to put down agitation and check anti-British propaganda in these areas. So much for the degree to which the hope I expressed depends on the co-operation of Japan.
In the second place we obviously have to remember that some of the issues raised, although they may be local in origin, also have a significance much more wide and have a direct interest for other Governments besides ourselves. Reference has already been made in this debate to the common interest we share in several of these matters with the United States and, though I am not sure it has been mentioned, with France. I would only
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like in that regard to say this. The general aims and objects of our three Governments are closely similar, and His Majesty's Government, I can assure the noble Lord who introduced the Motion and my noble friend behind me who also referred to it, are acutely alive to the importance of collaboration with these Governments wherever collaboration is possible. I can assure your Lordships that we have never failed to keep these Governments closely informed both of our intentions and of our actions. But the noble Lord will recognise that that is not to say that we must all necessarily do the same thing in the same way at the same time. The recent denunciation of the Commercial Treaty by the United States Government, to which reference has been made, is a case in point. The noble Viscount, Lord Samuel, addressed sonic of his remarks rather precisely to this point. I can very well conceive circumstances in which His Majesty's Government also might wish to give notice of their intention to denounce their Commercial Treaty but, as my right honourable friend the Prime Minister said on Monday in another place, that is a matter which would require most careful consideration, and in regard to which close exchange of view with His Majesty's Dominions would anyhow be necessary. I would not wish at this stage to say more in regard to that subject than I have already said.
The noble Lord, Lord Davies, mentioned—I was called out of the House for a moment so I am not sure he mentioned, but he told me he was going to mention—the question of the degree to which His Majesty's Government have been actuated by a desire to cling to ancient privileges which he was disposed to feel were now out of date. He will not have overlooked, I am sure, the passage in the Note we addressed to the Japanese Government earlier in the year in which we reminded them that, as long ago as 1931, we had nearly completed negotiations with the Chinese Government upon the subject of extra-territoriality. These negotiations, as he knows, were suspended following the seizure of Manchuria by the Japanese, but the Note went on to say:
"His Majesty's Government have always been ready to resume negotiations at a suitable time and are prepared to discuss this

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and other similar questions with a fully independent Chinese Government when peace has been restored."
It is not therefore with a view to preserving unchanged the entire structure of what one might call the old treaty days that His Majesty's Government have shaped their policy and, as we have also more than once made clear to the Japanese Government, while we have never concealed our view about Japanese action in China, and while we are bound to have regard to all the interests involved, particularly those of China, we have also been fully prepared to recognise the special interests and position that Japan, in virtue of geography and economic needs, is entitled to claim and to exercise.
My noble friend Lord Elibank put to me a number of questions regarding the Chinese currency and the disposal of the silver stocks at Tientsin and Peking. All I can usefully say on that subject to-day is that various solutions of these problems have been suggested, but none of them, as far as I have been able to form an opinion, appears to be satisfactory. His Majesty's Government are naturally continuing to examine all the possibilities, but I can assure your Lordships that in considering these matters we shall certainly not lose sight of our obligations either towards the Chinese Government or towards the other signatories of the Nine-Power Treaty. As regards the extension of further support by this country to the Chinese currency, your Lordships will, I have no doubt, recognise that any such proposal, whatever it might or might not be held desirable to do from the point of view of China, would fall also to be considered in the light of very many other financial considerations and obligations incumbent on this country at the present time. I cannot therefore say more on that subject at the present time.
LORD STRABOLGI: Will the noble Viscount allow me? Did not the noble Viscount put that the wrong way round? The Foreign Secretary said it was a question of further supporting the currency. Should he not have said the question of not further supporting?
VISCOUNT HALIFAX: It is always open to state every proposition either positively or negatively, and the sense is not greatly different whichever way it is
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stated. My proposition is incapable of challenge. I thought it was indeed such a platitude that I hesitated to lay it before the House. All I ventured to say was that in any suggestion of giving financial help to Chinese currency there were also important financial considerations from the point of view of this country to be borne in mind. I am quite sure the noble Lord, on reflection, would feel that that is an observation hardly capable of contradiction.
The noble Viscount, Lord Samuel, asked me a question in regard to Colonel Spear. I must admit that the position in regard to Colonel Spear is most unsatisfactory and emphasizes—although it was not in this connection that the noble Viscount uttered his opinion—the wisdom of his counsel when he seeks to discourage any of your Lordships from adopting the cloak of prophet. The position in regard to Colonel Spear is this. His Majesty's Ambassador at Tokyo has made repeated representations to the Japanese Government on that matter, and these have been met with the reply that the investigation of Colonel Spear's case is almost complete. Within the last few days the Japanese Government have held out the hope to the Ambassador that a settlement of Colonel Spear's case might be expected in the very near future. No explanation has been given of Colonel Spear's long detention, but the Japanese Government, I need hardly say, have been left in no doubt as to the feelings of His Majesty's Government in regard to it. There is one small point that is perhaps worth mentioning incidentally, and it is this. There is, in fact, no question of Colonel Spear being covered by diplomatic immunity except in relation to Chinese Courts.
I pass from that and I conclude what I have sought to say by this observation, that I cannot myself resist the conclusion that on the widest view and the longest view of our present difficulties in the Far East His Majesty's Government would feel that it was the duty of responsible persons everywhere to look ahead and to try to keep clearly in front of them the real goal in the Far East. I suggest that that goal must not be, as I think Lord Cecil's argument seemed to suggest, the adoption of a course which would be likely to have consequences very much wider and a good deal more dangerous than he appreciates, but, as the Prime

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Minister said the other day and as my noble friend Lord Addington again reminded us to-day, to try and bring about a just and equitable settlement of the present dispute. The noble Viscount, Lord Elibank, I think, said that it was impossible for this country to act as policeman in the Far East, but the time might come when they should go perhaps as mediators, and I certainly hope that His Majesty's Government may, as they will certainly be ready some day to do, offer their good offices, if and when those good offices can usefully be employed. I do not believe that it is beyond the power of men of good will to find the solution which will both do justice to China and take due account of the interests of other Powers that are concerned in the Far East.
Now I must just say something about Russia. His Majesty's Government have, I suppose, taken the lead in endeavouring to organise a combination of resistance against aggression, and the fact that the principal portion of blame for every difficulty or delay falls on them shows indeed that their leading role is generally acknowledged. If the world were just, His Majesty's Government would receive, of course, the lion's share of credit for whatever has been achieved, but as the world, or the people in it, is or are not always just, His Majesty's Government make no complaint at all of shouldering the greater part of the blame for real or imaginary failures. The basis of British policy has been, as your Lordships are aware, close co-operation with France in defence of interests that are common, as was explicitly laid down in the declaration made so long ago as the beginning of February by my right honourable friend the Prime Minister in another place. It was starting from that point that His Majesty's Government offered their guarantee to Poland and Rumania, and undoubtedly by doing that they made a substantial contribution to the security of Russia and it was in view of the fact that they felt obliged at that time to act promptly, with, I think I can say, the approval of the overwhelming mass of opinion in this country—not in the presence of Lord Ponsonby clearly unanimous, but I think the overwhelming mass of opinion—that they did not make their action dependent on receiving any counterpart then and there from the Soviet Government.
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The present negotiations with Russia have, as we all know, as their object the strengthening of the forces against possible aggression, and noble Lords will no doubt realise that to provide an instrument which will cover every possible contingency is a very complicated task which must inevitably give rise to certain divergencies of view. Moreover, as we also know very well, the problem is further complicated by the necessity of trying to provide for the new technique of indirect aggression. His Majesty's Government and the French Government and the Soviet Government are in full agreement on the necessity of trying to make such provision, but the differences which have arisen relate to the precise form in which this elusive shadow of indirect aggression can be brought to definition. Our common object is to find a formula which may cover what may rightly be regarded as indirect aggression without in any way encroaching on the independence and the neutrality of other States, and it is no secret that the proposals that the British and French Governments have made have appeared to the Soviet Government insufficiently comprehensive, whilst the formula favoured by the Soviet Government has seemed to His Majesty's Government and the French Government to go too far in the other direction. The delays—and I confess, although I am naturally restrained in judgment, I am not so pessimistic as Lord Ponsonby who talks in terms of years—which have occurred have not only risen from the complexity of the problem in hand which affects the rights and interests of a very large number of States.
I rather doubt whether even noble Lords, and I am quite sure still more of the general public outside, fully realise all that is involved in negotiations of this character. It is quite true that an interim agreement such as those made with Poland and with Turkey can be concluded relatively quickly; in the case of both these countries, the formal agreements are still under discussion. The noble Lord, Lord Davies, asked me whether our agreement with Poland included a definition of indirect aggression and, if it did, why it was not possible to transplant that definition into the Russian Agreement. Well, the answer is that the formal agreement with Poland is still being agreed, it is still not concluded, and

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the arrangement on which we have been working and are working with Poland does not, I think, refer to indirect aggression in the form that he has in his mind, and for the simple reason that will be at once apparent to the noble Lord if he casts his mind back, that our guarantee to Poland rested upon a perfectly simple, precise, but rather different basis. Our guarantee to Poland, he will remember, was made operative in the event of Polish independence being clearly threatened and the Polish Government feeling it necessary to resist and so on. However, that is rather by way of parenthesis.
The Soviet Government, in contradistinction from what we were able to do with Turkey and Poland, preferred to proceed without any intermediate stage to the conclusion of a formal agreement, and the terms of that formal agreement naturally have required careful consideration. It was inevitable that there was a great deal of discussion to be done on the drafting and so on. I was very glad to hear the noble Lord, Lord Davies, acknowledge, as he very fairly did, that the fact that we had to agree any modifications and alterations with the French Government necessarily and inevitably involved a certain measure of additional time expenditure. It has been assumed in some quarters, and I rather think that Lord Davies assumed it to-day—attributing, indeed, I think, to me a certain role that seemed to him appropriate—that had His Majesty's Government been represented by a Cabinet Minister instead of an Ambassador a quick agreement would have been secured. Well, I do not really know what warrant he can certainly feel to have for any such surmise, and I do not think experience supports him. He will remember, as I remember, the Washington Naval Conference, for example, in 1921, when His Majesty's Government was represented by a most distinguished Minister, the late Lord Balfour. Although the ground for that Conference had been prepared with the utmost diligence through diplomatic channels it took no less than three months there to secure agreement. In the present case I understand M. Molotov is obliged at every stage to consult his Government, and the same would have applied to any British representative, whether in the Cabinet or
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out of the Cabinet, who had been on our behalf conducting the negotiations for His Majesty's Government in Moscow.
LORD DAVIES: I apologise for interrupting the noble Viscount, but may I point out that at Washington several nations were represented by delegations, whilst the present discussions in Moscow are bilateral, only two countries being involved?
VISCOUNT HALIFAX: Yes I appreciate the noble Lord's point, but he perhaps will not overlook the fact that if you have the interests of several nations to consider, it may be easier if you have in one place the representatives of all these nations, than if the representatives of two or three nations have to consider the interests of many countries not represented, which has been our case in these negotiations. Leaving that aside, the fact that His Majesty's Government and the French Government have decided to despatch Military Missions to Moscow—I think they leave, if I am rightly informed, the day after to-morrow—before full agreement has been reached on the political issues may be held, I hope, to be the best evidence of the bona fides and determination of His Majesty's Government, and concrete evidence not only of our interest to bring these negotiations to an early and successful conclusion but of our belief that that step will facilitate outstanding discussions on political issues which will proceed simultaneously with the military discussions.
I had on my notes something to say in regard to the Turkish negotiations, but I do not think that I need detain your Lordships beyond saying, as your Lordships would indeed anticipate, that they are, I think, proceeding satisfactorily and smoothly and that the understanding between our two Governments is very cordial and complete. The noble Lord, Lord Ponsonby, asked me if I had anything to say about the frontier incident reported in the Press yesterday between Hungary and Rumania. I have not had any direct official information in regard to it, but I had the opportunity this morning of seeing the Rumanian Minister, who told me that he hoped and thought that no particular significance was to be attached to it, especially having regard to the fact that the Hungarian Government had themselves immediately suggested that it should be referred to a

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Joint Commission of Inquiry representing these two countries.
Now I must just say a word or two in regard to another subject on which the noble Lord, Lord Davies, the noble Viscount, Lord Samuel, and I think others have asked me a question. That is Danzig. But I do not know, with your Lordships' permission, that I want to say very much. Your Lordships will recollect that the Prime Minister in another place on July 10 last set out the attitude of His Majesty's Government in a statement which, in some quarters there may be surprise to learn, I had some hand in drafting. I do not want to quote parts of that statement because it was a balanced whole, and still less would I wish to quote it all to your Lordships, but I would only say this in regard to it. Its terms were I think clear, they were precise, and they were certainly carefully weighed, and I do not wish to say to-day anything in any way to weaken whatever may be held to be their effect or their value. But I would say one word in reply to a particular point raised by the noble Lord, Lord Davies. He spoke about the possibilities of an international force in Danzig. Those of us who are familiar with the contributions that the noble Lord from time to time makes in your Lordships' House were not surprised to find that he had adjusted his remedy of universal application to that which is for the moment of particular interest in all our minds. The fact that I do not think, as I do not think, that the installation of an international force in Danzig at this moment would be a practical and useful step in all the circumstances, does not mean that His Majesty's Government are not watching the situation most closely or that they are not fully alive to the possible repercussions or developments in that quarter upon the future of European peace.
May I say before I leave that part of the world a few words in regard to Poland and more particularly the Anglo-Polish financial negotiations to which reference has been made? As your Lordships know, discussions with the Polish delegation have covered two separate matters. The first relates to export credits, and I am glad to say, as your Lordships may have noticed in the Press, that an agreement was signed yesterday for the guarantee of export credits to Poland up to an amount of rather over £8,000,000
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in order to facilitate the purchase in this country by the Polish Government of material necessary for their defence. Discussions have also been taking place on the possibility of a cash loan to Poland by His Majesty's Government and the French Government acting jointly, and along with all members of your Lordships' House I greatly regret that it was not found possible to reach agreement as to the conditions on which such a loan might be made available in time for Parliament to be asked to pass the necessary legislation before we rise. The difficulties that were in the way were, as has been stated in another place, technical difficulties, and it would not I think be in the public interest to discuss them, but I may add just this, that the difficulties that arose were not difficulties in connection with the purchase of arms by Poland in countries other than the United Kingdom. There has been some misconception on that point, and I think it is worth making that plain. I would also add that these difficulties have in no degree—I think I can safely say this—impaired the relations of complete confidence that exist between the Governments of the two countries.
My noble friend Viscount Stonehaven raised the question of the Overseas Trade Guarantees Act. Perhaps your Lordships will allow me to say a few words about that, because, although it is rather different in character to the questions that are in our minds, it is a question of great importance. Your Lordships are aware that the granting of credits for the furtherance of export trade and with the object of guaranteeing traders and bankers against loss due to insolvency has been the practice of His Majesty's Government since, I think, very soon after the War, and in 1926 the Export Credits Guarantee Department came into being. Until quite recently that Department was only concerned with granting credits which were held to be justified on purely economic grounds. The Department itself is run on commercial lines and its transactions are approved by an Advisory Committee of business men, industrialists and so on. So far as purely commercial credits are concerned there is no question, therefore, of the Department being out of touch with the interests of United Kingdom trade.

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The new Overseas Trade Guarantees Act, however, moves on rather different lines and constitutes an extension of the principle which underlay the previous activities of the Export Credits Guarantee Department. Under the new arrangement we are enabled to grant credits as a result of which our friends or our allies can purchase armaments, and it authorises the grant of credits which, if purely commercial considerations were taken into account, would not in view of the risks involved be entirely justified. It is therefore clear that the facilities which are available to be granted under the new Act are not of a sort which require the control of business men, and that those countries which desire to profit by them have, as His Majesty's Government indeed have every cause to know, no difficulty either in making their requests known or in taking advantage of the opportunities open to them.
Perhaps I might conclude what I have to say with a very few general observations. As I reflected during the most thoughtful and helpful speech of my noble friend Lord Rennell, the task of statesmen to-day is made doubly difficult very often by those official propagandists and unofficial journalists and writers who deliberately invent, exaggerate or distort events and their implications. I do not believe that one can attach too great an importance to the damage that is in that way day after day being done. I have recently noticed, if I may take a single example that perhaps comes home to a good many of us in a rather particular way, most offensive aspersions made in the German and Italian press against the conduct of British troops in Palestine. All those who fought in the Great War—anyhow those on the British side, I think—look back with feelings of respect for the courage displayed in that War, whether by their then German foes or their then Italian allies. I am equally sure that similar feelings are felt for British troops by those who fought with them or against them during those same days. I am quite sure that it must be repulsive to the feelings of the best elements in every country when attempts are made to obliterate those mutual feelings of respect by insinuations that are quite unworthy of those honourable memories. That is only an example, but the observation which I
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made is, I think, one deserving of general application.
As we rise for our Recess, much as I should like to do so I cannot encourage anyone to feel complacent about the situation in which the world finds itself. With all respect to the noble Lord, Lord Ponsonby, I do not think that anxiety is only confined to the people of this country. It is felt by the people, I think, in all countries. Therefore we cannot be complacent, for that would not be, as I see it, in accordance with the facts and the possibilities as we believe them to exist to-day. Indeed, it may well be that the next weeks or months may prove critical. The policy of His Majesty's Government is, I hope, sufficiently clear and so generally accepted that I need not recapitulate it. I myself tried to define it in the speech to which the noble Lord opposite was kind enough to refer, which I made something over a month ago. To that speech I have nothing to add, and from that speech I have certainly nothing to withdraw. Only those for whom, as for the Bellman in The Hunting of the Snark, the degree of truth is directly dependent upon verbal repetition, would think any useful purpose was served by my saying it again. I venture to think that misunderstandings are more often the child of speech than of silence. Accordingly, while saying that, I would add this. We have tried to make the position of this country crystal-clear. We have no aggressive designs; our alliances and understandings have not been framed with any aggressive intent. We have, however, sought to define the double purpose of British policy as regards, on the one hand, our attitude towards aggression by others, and on the other our willingness, if force and threat of force were abandoned, to join, as the noble Earl, Lord Darnley, suggested at the end of our debate, in the constructive establishment of a peaceful order.
There can, I think, be no mistake now as to where this country stands. We have taken our own precautions, and we have done everything possible, by organising the forces of peace, to strengthen the deterrents to war. It only remains for us—and this would be my special request as this House approaches the time of its rising—to keep calm and, so far as we may, to keep united, to avoid exaggerated attention to rumour and to be neither

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over-confident nor over-pessimistic. For I suggest that a united nation which both knows exactly where it stands and knows itself to be strong can meet the future, whatever it may hold, with confidence.
7.9 p.m.
LORD SNELL: My Lords, I desire to thank the noble Viscount for the great courtesy of his reply and for such information as he has been able to give to us. As I listened to his speech, the noble Viscount did not seem to be quite so firm on the matter of Chinese currency as the Chancellor was in another place recently. That may be a misapprehension, but in any case we thank him for his courtesy, and I beg leave to withdraw the Motion which stands in my name.
Motion for Papers, by leave, withdrawn.
VISCOUNT CECIL OF CHELWOOD: My Lords, I only desire to make this one observation on what has just fallen from the Foreign Secretary. I do not see why aggression in the Far East is different from aggression in Europe. I beg leave to withdraw.
Motion for Papers, by leave, withdrawn.
LORD DAVIES: My Lords, I ask leave to withdraw my Motion.
Motion for Papers, by leave, withdrawn.