Lords Sitting of 16 November 1939

Preamble
The House met at half-past three of the clock, The LORD CHANCELLOR on the Woolsack.

BUSINESS OF THE HOUSE.
THE LORD PRESIDENT OF THE COUNCIL (EARL STANHOPE): My Lords, I beg to move that Standing Order No. XXXIX be considered in order to its being suspended for this day's sitting.
Moved, That Standing Order No. XXXIX be considered in order to its being suspended for this day's sitting.—(Earl Stanhope.)
On Question, Motion agreed to, and ordered accordingly.

RESTRICTION OF ADVERTISEMENT (WAR RISKS INSURANCE) BILL.
Brought from the Commons; read 1a; and to be printed.

CHARTERED AND OTHER BODIES (TEMPORARY PROVISIONS) BILL. [H.L.]
Returned from the Commons, agreed to, with Amendments.
THE LORD CHANCELLOR (VISCOUNT CALDECOTE): My Lords, I beg to move that the Commons Amendments be now considered.
Moved, That the Commons Amendments be now considered.—(The Lord Chancellor.)
LORD STRABOLGI: My Lords, perhaps I may be allowed to make a mild protest against our having to consider the Amendments to this Bill—which I agree are not of very great substance—and, in addition to that, having to take the most important Bill of which I believe the noble Lord, Lord Templemore, is going to move the Second Reading, the National Loans Bill, before the statement which the House expects to hear from His Majesty's Government. It means either that we keep noble Lords
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who come up to hear the statement waiting—and, after all, the statement on the war is the most important business of the week—or we have to cut short our discussion of a Bill which may be very important. The last occasion when we had a statement, a fortnight ago, the Prices of Goods Bill came in front of it, and the statement, on which my noble friend had some important observations to make, was not made until about half-past four. I do not know what the remedy is, but I suggest to the Leader of the House that it might be better if we could find some more convenient procedure so that the statement would come on about four o'clock, and at the same time noble Lords would be able to consider most important matters that are put down in front of it.
EARL STANHOPE: I appreciate the remarks made by the noble Lord opposite, but, as he knows, it is rather difficult to arrange these matters, because it is not within the power of this House to arrange the business for both Houses of Parliament. We have to consider what occurs in another place, and therefore I am afraid that sometimes it does happen that the statement has to be made on a day for which already other business of importance is on the Order Paper. I do not think that on this occasion there will be very much cause of complaint, because, although the Bill we are now to consider is an important one, I doubt if discussion on it is likely to be very prolonged, because I understand that there is general agreement with the principle of the measure at any rate. Therefore I do not think the statement is likely to be deferred to a late hour of the evening. I hope your Lordships will find that you are not put to any very serious inconvenience.
LORD STRABOLGI: Would it not be possible, when there is an important Bill on a day when a statement is to be made, to put it down later on the Order Paper?
THE MARQUESS OF SALISBURY: My Lords, I do not want to intervene between the noble Lord and the Government as to the National Loans Bill, but as regards this Order which is now before your Lordships, that is, for the consideration of the Commons Amendments, I think with a Lords Bill it is the practice of your Lordships' House always to take

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that first, the moment it arrives in the House. It would be a great change of procedure if it had to be postponed until after the other Orders of the day.
On Question, Motion agreed to.

COMMONS AMENDMENT.
[The references are to Bill No. 285.]
Clause 2, page 2, line 3, leave out ("make, with respect to") and insert ("on an application made on behalf of").
THE LORD CHANCELLOR: My Lords, I beg to move that this House doth agree with the Commons in their Amendment.
Moved, That this House doth agree with the Commons in the said Amendment.—(The Lord Chancellor.)
On Question, Motion agreed to.

COMMONS AMENDMENT.
Clause 2, page 2, line 7, after ("Act") insert ("make").
THE LORD CHANCELLOR: My Lords, I beg to move that this House doth agree with the Commons in their Amendment.
Moved, That this House doth agree with the Commons in the said Amendment.—(The Lord Chancellor.)
On Question, Motion agreed to.

COMMONS AMENDMENT.
Page 4, line 8, after Clause 5 insert the following new clause:
Orders in Council to be laid before Parliament.
(".—(1) Every Order in Council made under this Act shall be laid before Parliament as soon as may be after it is made, and if either House of Parliament, within the next twenty-eight days on which that House has sat after such an Order in Council as aforesaid is laid before it, resolves that the Order be annulled, the Order shall thereupon cease to have effect except as respects things previously done or omitted to be done, without prejudice, however, to the making of a new Order.
(2) Section one of the Rules Publication Act, 1893, shall not apply to any Order in Council made under this Act.")
THE LORD CHANCELLOR: My Lords, the purpose of this Amendment will be evident to your Lordships. It is to ensure that any Orders in Council shall come before Parliament, so that there may be an opportunity of a Resolution being passed to annul them, otherwise they will be valid and effective. I beg to move that this House doth agree with the Commons in their Amendment.
Moved, That this House doth agree with the Commons in the said Amendment.—(The Lord Chancellor.)
On Question, Motion agreed to.

NATIONAL LOANS BILL.
Order of the Day for the Second Reading read.
3.38 p.m.
LORD TEMPLEMORE: My Lords, the main purpose of this Bill, which I ask your Lordships to put through all its stages to-day, is to give the Treasury extended powers of raising money for the prosecution of the present war. There may be some of your Lordships who remember the South African war of nearly forty years ago. A great many of your Lordships remember the last Great War, and will call to mind that similar Bills were passed in both those wars to enable the Treasury to obtain like powers. This Bill, like those that were passed between row and 1902 and between 1915 and 1919, is strictly limited in point of time. If the present war unfortunately goes on for any length of time similar Bills will be produced from time to time in order to enable the financing of the war to go on.
The borrowing powers at present possessed by the Treasury under which new money can be raised do not meet the requirements of a great war. Apart from powers to borrow for the specific purposes of certain Statutes—for instance, in order to finance the Local Loans Fund—there is the short-term power conferred annually by the Consolidated Fund Acts to borrow by way of Treasury Bills repayable in the same financial year, and power to borrow by way of savings certificates provided that the proceeds are devoted to reduction of debt. In addition to this network of limited and, broadly speaking, essentially peace-time powers, the Treasury has under the War Loan Act, 1919, a power to borrow in any form it desires in order to provide for the repayment of Treasury Bills and of Ways and Means advances. By the cumbrous process of piecing together these powers deriving from a series of Acts designed in times of peace or to finance the last war, it might be possible, at any rate for a while, to avoid fresh legislation. But my right honourable

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friend the Chancellor of the Exchequer has decided that it is preferable, and indeed necessary, to obtain from Parliament a direct and general authority for the new borrowing, including long-term borrowing, which will be necessary.
The National Loans Bill has accordingly been devised to give that authority in an up-to-date, withal traditional form. Your Lordships will see that under Clause 1 subsection (1), of the Bill the Treasury may borrow in such manner as they think Et up to the limit of the Supply in the present financial year, 1939–40, plus an additional sum not exceeding £250,000,000. The inclusion of this additional sum of £250,000,000 corresponds to the surplus amount authorised by the War Loan Acts of 1915–19, but it should not be interpreted as a signal that the Treasury necessarily intend this year to borrow up to that colossal upper limit. I should like to take the opportunity of saying that this Bill is merely concerned with the conferring of powers and with providing the Treasury with the necessary machinery for the exercise of these powers. How and when these powers will be exercised, which is unquestionably a matter of great national importance, must be reserved for determination by the Treasury. My right honourable friend, in the Third Reading debate on this Bill in another place, refused to go into details on this matter, and I cannot go further than that to-day. To resume: the object of subsection (1) of Clause 1 is to provide, in a manner which has proved serviceable in the past, against the contingency that the Treasury might wish to borrow between the end of the current financial year and the date in the next financial year at which a new Act was passed, and some borrowing is therefore required that is not tied to the Supply of the current year.
In general, the form of the Bill follows the form of the War Loans Acts. I would specially invite your Lordships' attention to subsection (4) of Clause 1 which enables money raised by the issue of National Savings Certificates to be "applied for any purpose for which money may be raised" under the Act. Under the existing law, which was passed in time of peace, the proceeds of the sales of savings certificates have to be used for the redemption of debt. My right honourable friend the Chancellor of the Exchequer
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considers that such a restriction has no useful application to the present state of affairs, and he has decided to remove it. As he stated in another place, he thought it was right that the citizen of small means—a very important part of the community—who makes his contribution through the medium of National Savings Certificates, should feel that by doing so he, no less than his richer fellow citizens, is securing that the contribution is going directly for the purpose of fighting and winning the war. The psychological effect on people's minds is considered very important, and my right honourable friend has inserted this subsection in order to meet that.
Clause 2 deals with the exchange of securities. The Government have at present unrestricted powers to convert any security issued under a War Loan Act, including that of 1919. Under Clause 2, subsection (1), a wider power is given, extending to the conversion of any Government securities whatever into any other Government security. The clause contains a number of other provisions such as the power given by the latter part of subsection (3) to make payments with the object of encouraging early application for a loan on the lines of the cash bonus offered in connection with the conversion of the 5 per cent. War Loan. Clause 3 is technical in character, explains itself, and contains no new principle. Clause 4 is an important clause. It relates to the powers of trustees, repeating certain provisions made during the last war in this connection. By these provisions, briefly stated, trustees were indemnified from loss arising from their subscribing to, or investing in, any Government loan raised for the purpose of the war, and were enabled to exercise their powers of subscription, investment, sale, or conversion, notwithstanding anything to the contrary in the instrument of trust and irrespective of any obligation to obtain the consent of any other person. Subsection (1) of Clause 4 provides a like indemnity in respect of any securities issued under this Bill.
Although there may not be very many cases in which investment in Government securities is forbidden by the terms of the trust, there may be a certain number of trustees who find it difficult to decide whether their duty to the beneficiaries and their duty to help the State are mutually

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cons stent. Hence the Chancellor of the Exchequer has had this provision inserted which enables the trustee to obey his patriotic instinct, if he chooses, without fear of personal risk. Subsection (3) of this clause also has its precedent in the legislation of the last war, although it goes further in that there is no restriction of time, and it will be possible for a company to purchase securities issued under the Bill at any time. Clause 5 is merely the short title, construction, and repeals, and there are three Schedules to the Bill.
There is a very important question which was touched on a good deal in another place both on the Second Reading and the Third Reading, and that is as to the rate of interest to be offered on these loans. I say, in anticipation of anything that may be raised here, that, as my right honourable friend said in another place, the policy of His Majesty's Government is to borrow at the lowest rate they possibly can when the time comes to issue these loans, and they consider that an essential part of their war effort. I have explained as well as I can the principal features of the Bill, which I am bound to say I, personally, find extremely complicated and difficult to understand. I shall do my best to answer any questions which your Lordships may have to ask. In conclusion, I have to apologise to your Lordships for rather rushing such an important Bill. In normal times we should have desired more time for the Bill in order that it might be fully considered in all its implications, but my right honourable friend considers that the powers conferred by the Bill should be at his disposal at the earliest possible date, and this must be my excuse for the very rapid procedure in your Lordships' House. I beg to move that the Bill be now read a second time.
Moved, That the Bill be now read 2a.—(Lord Templemore.)
3.49 p.m.
LORD STRABOLGI: My Lords, my noble friends have asked me to make a few remarks on this Bill explaining our attitude. Your Lordships who have studied the debate in another place and recent controversies will probably have noticed that this deals with a subject which may well be the first real cause of quarrel during this war between the Opposition and the Government. There
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is a clean cleavage of opinion as to the means of financing the war, and I only hope the Chancellor of the Exchequer will have been impressed by what was said in another place and will follow our proposals. The noble Lord, Lord Temple-more, said it was the Government's intention to raise money at as low a rate of interest as possible. Of course it is. Naturally they would not do otherwise. But we say it is the duty of the citizens to subscribe to these loans and they must not ask a high rate of interest. The people have never been so united in any war as they are united at the present time. The response to the calling up of the drafts of militiamen is just one example of how united they are. Surely the men and women who are too old to serve will be only too glad to lend their money at a very low rate of interest indeed.
The quarrel may be between us, however, not on the raising of loans from genuine savings of the people and reserves of companies, but the raising of loans by means of artificial creation of bank credits on which the citizens will have to pay interest in perpetuity. That was the fault made in the last war, and that is why we were saddled with the immense debt, which we have not yet paid off. It is on this proposal that the Labour Party take a very strong stand indeed. We are opposed to inflation, though it is obvious that there has already been some controlled inflation—I make a distinction between controlled and uncontrolled inflation—by means of short-term borrowing. That is unavoidable in war, but it must be kept controlled, and the inflation should be as little as possible. The Labour Party feel that it is always the wage-earners who suffer most in a period of this kind by inflation, except possibly those living on small fixed incomes. In Germany, on the other hand, they are already in the full flood of inflation, and the German public is only just beginning to suspect it. Indeed this inflation was in progress in Germany before the war began, and, as is made clear in the report of our Ambassador in Berlin, was probably one of the causes for the onslaught on Poland.
If loans cannot be raised in toto from genuine savings of the people, plus taxation—and obviously you cannot pay the whole cost of the war by taxation—then, if artificial credit has to be created, that is a form of inflation, but it can

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be controlled inflation if it balances your increase in production. But this artificial credit should not be created by banks, as was done in the years from 1915 to 1918, for the benefit of their shareholders, but should be created by the Government themselves. That is the Labour Party's policy. It means that, if we pay interest on it, in a way we are paying it back to ourselves. We see no reason why the banks, in this case acting only as bookkeeper, should be able to claim during a following period of years a comparatively high rate of interest on money which represents the genuine savings of their depositors. I do not want to go into details. I think mistakes were made in the means of financing the last war, and we are afraid a similar mistake is going to be repeated, and, if so, we shall have to offer our most strenuous opposition.
There have been various proposals before the country already. We may know we are really at war when Mr. Keynes gets busy. Your Lordships, I am sure, will have noticed his latest proposal—his idea of compulsory savings. My friends in another place and my noble friends here have not, I think, considered those proposals, but, speaking quite personally, I would say they would not be acceptable to the Labour Party. I do not believe that this idea of compulsory saving will be at all popular. It would be much better to tax and borrow by appealing to the citizens to do their duty to the State by lending from genuine savings from genuine economies. We do not think compulsion is necessary at the present time. And we have another objection to Mr. Keynes's proposals. Accompanying the idea of compulsory savings to be blocked in the Treasury is a plan that these savings shall be hypothecated, blocked, and then, after the war, at some unspecified time, de-frozen or unblocked and paid back to the citizens: this is to be a means of mitigating or preventing a post-war slump. We do not think that will work at all; at least I do not think so, and I do not believe my friends would think so. We think you can ward off a post-war slump—and this has a great bearing on the matter, as the noble Lord, Lord Templemore, is aware—by a great programme of public works, which you should have ready beforehand, plus what are known as open market operations. I
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would like to ask if there is any plan in contemplation by the Government, and if it is proposed to set up some Ministry of Construction or something of that kind to prevent a slump after the war.
I have done my best to explain what is our feared difference with the Government. I say "feared," because we do not want this difference to arise, but it may be very acute and very serious if the Government propose to use the powers under this Bill to do what they did in the last war. If so, we shall be very hostile. With regard to what I said just now about controlled inflation, which is not harmful if balanced by increased production, we are nowhere near the need for any form of inflation at the present time. That is obvious if we consider the fact that there are over 1,400,000 people unemployed, and a great many efficient plants up and down the country and manufacturing resources idle and unused. We have not nearly mobilised industry for this war, and we have, therefore, immense untouched reserves that have not yet been really drawn upon. Therefore, I think the Government should employ these men and plants before they consider any reckless financial expedient. On the other hand, to revert for a moment to Germany, Germany's whole uneconomic system was, even before the war, stretched almost to breaking point. Therefore, our position is much sounder and stronger, and with wise finance—I venture to stress that, and I speak with great diffidence in the presence of so many financial experts in your Lordships' House—we and the French can outpace and outlast our enemy; but we must not try to finance this war by the same methods as were adopted in the last war. My noble friends realise that this Bill is necessary at the present time and that it is also urgent. We will therefore facilitate its further passage into law.
On Question, Bill read 2a: Committee negatived.
Then, Standing Order No. XXXIX having been suspended, Bill read 3a.
EARL STANHOPE: My Lords, I have it in command from His Majesty to signify to the House that His Majesty, having been informed of the purport of the National Loans Bill, gives his consent as far as His Majesty's interest is concerned, on behalf of the Crown, the Duchy of

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Lancaster and the Duchy of Cornwall, that the House may do therein as they shall think fit.
Bill passed.

THE WAR: MEDIATION OFFER.
3.58 p.m.
LORD SNELL: My Lords, I beg to ask His Majesty's Government if they have any statement to make on the international situation.
EARL STANHOPE: My Lords, you will be glad to hear that the Prime Minister's gout is much improved and his general health continues excellent. During the fortnight that has passed since the last statement was made to your Lordships' House the most notable development in international affairs has been the communication addressed by Their Majesties the Queen of Holland and the King of the Belgians on November 7 to His Majesty The King, the President of the French Republic, and the German Chancellor. In this communication the two Sovereigns offered their good offices in the hope of avoiding a further extension of the war. In the speech which my right honourable friend the Chancellor of the Exchequer delivered on behalf of the Prime Minister at the Mansion House on November 9, it was announced that His Majesty's Government were in consultation with the Dominions and with our Allies with a view to tendering to His Majesty our advice on the nature of his reply to this bold intervention in the cause of peace. The Chancellor of the Exchequer was obliged to add, however, that past experience did not enable us to be very hopeful of a satisfactory response from the German Chancellor.
Your Lordships will now have seen the reply which the King sent to the Queen of Holland and the King of the Belgians on November 12. In his reply His Majesty expressed appreciation of the spirit of Their Majesties' initiative and the readiness of His Majesty's Governments in this country and in the Dominions to examine any reasonable and assured basis for an equitable peace. His Majesty further stated that his Governments were prepared to give their most earnest consideration to any proposals from Germany of such a character as to afford a real prospect of achieving the
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purposes for which they had been compelled to enter the war. These purposes had been made clear in the numerous statements of policy which have been made publicly by the Prime Minister and by my noble friend the Secretary of State for Foreign Affairs. A reply on similar lines, which illustrated the unity of purpose between ourselves and our French Allies, was sent on the same day by the President of the French Republic.
The misleading references to British policy in the German Chancellor's address at Munich on November 9 coupled with the misrepresentation by German propaganda of the British and French replies as a refusal of the Dutch and Belgian peace initiative, did not indicate that the German reply was likely to open the door to a peaceful and satisfactory settlement. The official German News Agency has now published a statement that Herr von Ribbentrop yesterday informed the Belgian Ambassador and the Netherlands Minister in Berlin, in the name of the Führer, that after the blunt rejection of the peace move by Britain and France the German Government considered the matter closed. Your Lordships will have noticed the reports in the Press to the effect that no formal reply to Their Majesties is to be made by the German Government.
The past week has also been marked by the recurrence of rumours of German aggressive intentions against the Netherlands or Belgium. The presence of large concentrations of German troops on the Dutch and Belgian frontiers and the opening of a threatening campaign in the German Press presented a pattern all too familiar to a world which has grown accustomed to seeing in such signs the immediate forerunners of German invasion. There could therefore be no surprise at the general reluctance shown throughout the world to accept at their face value the pacifying statements of a purely general nature put out from Germany. On the other hand, there could be no desire anywhere—and least of all in this country—to exaggerate the significance of these reports. On November 13, the official German News Agency broadcast a statement that Germany intended to continue to respect the neutrality of the Netherlands and Belgium as long as Great Britain and France did so, and as long as Belgium and the Netherlands showed themselves capable of strictly preserving that

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neutrality. On the same day the Netherlands Prime Minister broadcast a statement to the effect that his Government had no immediate reason to fear a breach of its neutrality, and that the precautionary measures recently taken by them had been necessary to keep pace with the increased tension in Western Europe. The relaxation in tension which has followed upon these statements is a satisfaction to His Majesty's Government who, I need hardly say, have every intention, in accordance with the consistent policy of this country, of continuing to respect the neutrality of the Netherlands and of Belgium.
Other developments during the past fortnight have strengthened the position of the Allies. In particular, the United States have by their recent legislation restored to us the right to purchase the abundant supplies which they are able to offer us. A less satisfactory incident has been the virtual breakdown in the negotiations which have been proceeding for over a month between the Soviet Government and the Finnish Government. On November 13 the Finnish delegates were recalled from Moscow, as it had not been possible to reach agreement between the two Governments. It has, however, been emphasized in official circles in Finland that this does not represent a final rupture between the two countries, and that the negotiations may be resumed at a later stage.
Fresh evidence of the close and friendly collaboration between ourselves and our Allies is afforded by the official visit, which the Polish Prime Minister and Minister of Foreign Affairs are now paving to this country. We have been very happy to welcome General Sikorski and to renew our contacts with M. Zaleski, and to discuss with them the measures which are being undertaken to enable detachments of all the Polish armed forces to join in the Allied war effort against Germany. A detachment of the Polish Navy is already giving valuable service in co-operation with the Royal Navy, and we hope that it will be possible to take early steps in consultation with the French Government to organise self-contained Polish military forces for service in France. Such forces will, in addition to their intrinsic military value, be symbolic of the right to independent national existence which it is the purpose of our
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struggle to vindicate on behalf of the gallant Polish people.
My right honourable friend the Chancellor of the Exchequer has also had the pleasure of discussing Allied financial problems with his French colleague, M. Reynaud, during his recent visit to London. As was stated in the communiqué issued at the close of his visit, both recognised the necessity for close and continuous co-operation in the financial and economic spheres. They reviewed the arrangements for such co-operation which already exist and decided to maintain and do everything in their power still further to develop them. A number of questions both of general financial and economic policy and of a more technical character were discussed and on all these questions the existence of a common point of view was established. On the conclusion of the meetings M. Paul Reynaud proposed that there should be further meetings of a similar kind so as to establish continuous contact between the two Treasuries. My right honourable friend expressed his complete agreement with this proposal.
The last statement on November 2 recorded our pleasure in welcoming to this country Cabinet Ministers from Canada, the Commonwealth of Australia, New Zealand and the Union of South Africa and a representative from India. Since their arrival the representatives from the Dominions and India have been engaged with Ministers in discussions on all aspects of the war. These talks have covered questions of defence and foreign policy, problems of supply and matters relating to economic warfare and shipping. A number of meetings have also been held with representatives of individual Dominions on various special problems. Discussions are still proceeding, but the progress already made has been most encouraging and has shown the great value of direct and personal contact. In addition to their discussions with Ministers here, the overseas representatives have been able to see for themselves various aspects of the defence preparations in this country: they have also recently returned from a visit to France where they had an opportunity not only of conversations with M. Daladier and General Gamelin and of meeting the British and French General Staffs, but also of seeing the British Expeditionary

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Force and French troops at their war stations. The representatives from the Dominions and India have thus had an opportunity of judging for themselves the magnitude of our own war effort. It has also been possible to gain a fuller knowledge of how the assistance of the Empire overseas, offered in such generous measure, may best be utilised for the furtherance of the common cause.
In the various theatres of war there have been no major operations during the past fortnight. At sea our watch and ward continue. The Minister of Shipping informed the House of Commons two days ago that discussions had already taken place between him and the First Lord of the Admiralty with a view to speeding up the system of convoy. Faster convoys will be instituted, and, as more escorting vessels become available, the number of convoys will be increased. Since war began our destroyers have steamed hundreds of thousands of miles. As already announced, we have now to record the loss of one of these vessels due to a mine. That is part of the price we pay for command of the seas. The merchant ships of Germany remain for the most part in their own or neutral ports. Of those which leave harbour a great proportion are either captured or scuttled by their crews to avoid capture. Four enemy ships have been sunk since the beginning of the month, and two large vessels were scuttled on November 12 and 13. Our own merchant ships continue to move in great numbers across the seas, notwithstanding that their crew snow have to brave, in addition to the perils of the sea, the torpedo, the gun and the mine of the enemy. We are doing all that is possible to protect our Mercantile Marine in accordance with the provisions of International Law. Many of our ships have been armed, and recent experience has shown that, if attacked, they will acquit themselves with the skill and courage necessary for effective and successful defence.
On land, operations have been curtailed by bad weather. On the French front minor German attacks have been repulsed. The British forces in France have continued to improve the defences of their section of the line. As your Lordships already know, four enemy aeroplanes dropped bombs in the Shetlands on November 13. They were
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heavily engaged by our anti-aircraft forces, and the bombs, twelve of which fell on land and eight in the sea, caused no casualties and negligible damage. Elsewhere there has been considerable activity in the air, although it has been of a desultory character and there have been no major engagements. Nevertheless, as your Lordships will be aware from the particulars which have been published, a number of successes have been won which have given us further vivid illustrations of the dash and gallantry of the Royal Air Force.
This summary brings the information in the possession of the House up to date, and while there has been no outstanding event in active operations during the last fortnight, the efficiency of our forces and the determination of our people are demonstrated with every week that passes.
4.14 p.m.
LORD SNELL: My Lords, since last the international situation was discussed in your Lordships' House, several important things have occurred, some of which have been referred to in the statement to which you have just listened. I propose to make a brief comment upon those events, but before I do so I should like to make a few reflections upon things that have not taken place. First of all, England has not yet been invaded. The Donner and Blitzkrieg has taken the shape of a prolonged indecision. Most of the noise so far has come from Dr. Goebbels—a noise which, as the whole world knows, can be offensive without necessarily be enlightening or helpful. We do not complain of this attitude towards things. If it suits the German authorities it suits ourselves. Meanwhile we hold ourselves ready to meet with fortitude whatever may come to us, and at any time, I hope, to consider any proposals of peace which will enable ourselves and other nations henceforth and for ever to live in untroubled peace.
The statement to which we have just listened began with a reference to the health of the Prime Minister, and I am sure that he has the sympathy and good wishes of us all for a speedy restoration to health.
NOBLE LORDS: Hear, hear.
LORD SNELL: We hope that the physical rest that he has been compelled

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to take may help him in his anxious labours. The second reference, which I was glad to hear, was to our merchant shipping. These courageous and faithful men upon the high seas may also rest assured that in their most essential work they have our complete confidence and appreciation. The third reference was to the presence in this country of representatives from the Dominions and from India, and I am gratified to know that their visit has been a complete success.
The chief matter, in my judgment, in the statement we have just heard was its reference to the appeal which has been made to His Majesty the King, the President of the French Republic and the German Chancellor by the Queen of Holland and the King of the Belgians. I think the whole nation should be grateful to them for the step that they took, and at least we on these Benches are grateful. There is something almost pathetic in the fact that these two menaced and comparatively weak nations, one of which even in our own time has experienced the horrors of invasion and destruction, are trying to prevent the horrors of war for the three larger nations of Europe. For their proposals I believe that they have our whole-hearted gratitude. The small nations have always made a notable contribution to international well-being; and I cannot help remembering, in passing, that the time when Germany was greatest in the spiritual sense and most commanded the admiration of mankind was when she was not the great Power she is to-day, but represented rather a group of small peoples. If, by the kindly offices of the rulers of Belgium and Holland, this war could be shortened or ended, once more the small nations would have given to humanity a very great service.
The high status and the personal virtues of these two illustrious monarchs merit that their proposals should receive the most serious consideration. The reply of His Majesty the King is well known to us, and it was perhaps as far as he could go in a formal communication of that kind. The principles were stated upon which, in his judgment, a peace might be arranged. I do not propose to-day 10 enter into any criticism of what was then said. In substance and in principle they were so obviously right and essential. They invited Germany to make her
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contribution to peace, first of all by implying some kind of restoration of the independent political life of the Czech and Polish peoples; secondly, by an adequate guarantee that whatever peace was arranged, a peace which would be honourably negotiated, should not be at the mercy of ambitious leaders with possibly afflicted minds. If Germany could have accepted those principles, the pathway towards peace would have been opened.
I do not propose, as I said, to discuss in detail the terms upon which we should express ourselves as being willing to accept, but I think perhaps I ought to indicate to your Lordships that when the new Session begins and His Majesty's Address is before your Lordships' House will perhaps be an occasion when such a discussion should take place, or, if not on that occasion, shortly after, as the result of some specific Motion on the Paper of your Lordships' House. Meanwhile I desire to say that I think we also have a contribution to make. We ought to be able to assure the German people that their territory will be respected, that as soon as possible the blockade will be removed, and that, just as soon as she accepts the way of peace rather than the way of war, our full co-operation will be given in trying to restore and rebuild her shattered life. I personally believe that, if this could be made clear to the German people now, the response would be astonishing and immediate. In addition to the statement made by His Majesty, there have been, as your Lordships know, several unofficial proposals, and all these I personally regard as being helpful. The Labour Party has, as your Lordships know, issued its own indication as to what is required, and I think that that is not seriously out of line with what His Majesty's Government are after.
Out of these sectional proposals for peace it is possible that a national view may emerge, but I hold it to be due first of all to the German people, as soon as it may be possible, to indicate what we are feeling, because their minds have been warped by a poisoned propaganda and they ought not to act in ignorance if we can give them enlightenment. Secondly, I hold it to be due to the sons of our own land, the splendid living shield of our liberties, and even more to the men who from the far Dominions have come to fight for civilisation and the defence of the herd. All of these, I think, would

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feel themselves sustained by an assurance that we are seeking to lay the foundations of a better world in which the German people as well as ourselves would benefit. Therefore I hope that we shall not for long deprive our cause of the inspiration that this perhaps intangible, but also possibly decisive, weapon would give us. It would reassure the world and it would bring comfort to millions as well as add strength to our strength.
Another matter upon which I will delay your Lordships for a moment or two is Finland, which was mentioned in the statement that has just been made. I speak on that matter with great hesitation, because I am anxious not to be harmful even if I cannot be helpful. The difficulties between Finland and Soviet Russia are not settled, but the door seems still to be left open. I will not try to assess any blame to-day, but Finland is a small and gallant nation, and I feel sure that her desire to retain unimpaired her territorial integrity must command the respect, if not the admiration, of the great Power with whom she is negotiating. In any case I express my own admiration and sympathy.
The last thing I will mention is the satisfaction with which we welcomed the Prime Minister and Foreign Secretary of Poland, which the statement also mentioned. I hope that the cordiality with which they have been welcomed here and the conversations they have had will be some consolation to a people who have been called upon to bear so heavy and bitter a part in this most tragic conflict. The British people note with keen sympathy that their spirit has not been broken and that the new Army which they are creating may be regarded as a prelude to the reconstituted Poland which is yet to come. I beg to move for Papers.
4.30 p.m.
VISCOUNT SAMUEL: My Lords, in the absence of my noble friend Lord Crewe, I would ask leave to address to your Lordships a few observations on the Ministerial statement. First, I am sure noble Lords on these Benches would wish me to join on their behalf in the message of sympathy which has just been expressed by the Leader of the Opposition to the Prime Minister on account of his illness, and our great satisfaction that it
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is happily proving a brief one. The statement gave first place to the intervention of Their Majesties, the Sovereigns of Belgium and Holland. We all remember how before the outbreak of war those Sovereigns took an initiative with a view to obviating so grave a calamity, and that this country and France warmly welcomed that initiative and gladly accepted their offer of mediation. At that time no response came from Germany. So now this intervention has been welcomed here and in France, provided its results would be consistent with the objects that we have publicly and repeatedly proclaimed. But again no reply has been vouchsafed by Germany.
The Governments of Great Britain and France have given the only possible answer that could be given to the suggestion of an early peace. If peace could now be obtained consistently with securing those great purposes which we have set our hands to pursue, then to continue the war would be a crime. But to abandon those purposes rather than to continue the war would also be a crime, and a crime not only against the world of to-day but against posterity. I believe that those purposes have been stated by His Majesty's Government with as much definiteness as can be expressed in the present circumstances. Let public opinion express itself and form its views as to our desirable war aims, but I doubt whether Britain and France and the Dominions could yet formulate them with any detailed precision. The Foreign Secretary ten days ago stated in general terms what our peace aims are in a broadcast which I am sure your Lordships regarded as very admirable, an address which I believe none could have listened to without emotion and few without full agreement. Soon after came a speech from Herr Hitler, full of bombast and braggadocio, and with cynical distortions of established historic facts. I could not wish for anything better than that those two speeches should go down side by side to history as expressing on the one hand the spirit of the Allies and on the other the spirit of their antagonists.
The course of events described in to-day's statement on land, sea and air—the course either of events or lack of events—is not unsatisfactory. That is endorsed by the shifts to which the German Government are put to furnish successes for the delectation of their own

1853
people. They have issued a series of false announcements of sinkings and successful raids. They are relying upon Dr. Goebbels for the successes of their armed force and finding in his case that the pen is far mightier than the sword. But deception always brings its own penalties, and there is a great disillusionment in store for the German people in no very distant future.
Looking further afield, we may observe with satisfaction that the process of pacification in the Balkans continues, and particularly the tension between Turkey and Bulgaria seems to be lessening. The German propagandists are continually saying that this country wishes to extend the area of war to different parts of the world. Nothing is further from the truth. So far as the Balkans are concerned we have no other aims than to help, if we can, in ending the old antagonisms between the Balkan States, in order that they may live in greater peace and happiness for the benefit of their own peoples and for the tranquillity of Europe. I could only wish that we saw signs of pacification also in the Far East. I am glad to think that His Majesty's Government show no intention to change their policy with regard to China. Should there be any such disposition it would be their clear duty first to consult Parliament. This question of the Far East is one of those, however, which it is difficult to discuss in open Session, and this is one more example of the kind of subject which in my view could advantageously be discussed in this House or in the other House in Private Sessions.
I regret greatly that the Government yesterday gave a negative answer to the appeal that was made to them in this matter from all quarters of the House, and by many of its most authoritative and distinguished members. Clearly a Private Session is desired by this House. It may do good; I cannot see that it could possibly do any harm. The suggestion that was made yesterday by the Leader of the House that Dr. Goebbels would seize upon the fact of a Private Session as indicating that opinion in this country is profoundly divided is, I think, of no great substance. He could equally seize upon the fact that the Government have refused to agree to a Private Session as being evidence that they were afraid to meet the outspoken declarations
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of members of either House. I trust that before long the Government will give way on this matter, as they gave way after long and lamentable delay on the question of the establishment of a Ministry of Supply, which had been repeatedly and for months pressed upon them in this House and in the other House; and again have now given way on the proposal for a Select Committee on national expenditure, which was again first rejected by the Government but has now been acceded to.
Finally, I should like to say a few words on the question of India, not to deal with the matter in general, since it was discussed in this House only a fortnight ago, and since then the situation has not greatly changed; but in order to have an opportunity of giving a reply on one particular point to the noble Marquess opposite, Lord Salisbury, since I had the misfortune to find myself the object of his criticism, and indeed denunciation, on that occasion. On one particular point the noble Marquess, through misunderstanding no doubt, did very seriously misrepresent the tenor of my observations, and on a subject which is of itself of serious importance. I will quote a sentence from his speech. Referring to me, the noble Marquess said:
"Then the noble Viscount said 'You must not pay too much attention to the Moslems—they are only one-quarter part of the Indian population.'"
Well, I will venture to read two or three sentences of what I actually did say. With regard to the Moslems, I said this:
"All of us, I think, in this House understand the Moslem position and sympathise with it. Undoubtedly Great Britain has duties towards the Moslems of India. We cannot wash our hands of that question and say their future is no concern of ours."
And again I said:
"I cannot suppose that Mr. Gandhi and his colleagues would suggest that in those preliminary discussions"—
that is, future discussions on the modification of the Government of India Act—
"the representatives of Great Britain should take no part. It appears to me essential that we should take part; first, because we have those obligations to the Moslems and to the Princes from which we cannot in honour withdraw.…"
Then I proceeded to say that the future defence of India must rest in great degree with the British Commonwealth.
It is plain that the noble Marquess did not do me justice in representing that I

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brushed aside the whole Moslem situation. What I did say was that I thought the Government were pursuing the wrong policy in announcing that there should be no Dominion status until agreement between the Moslems and the Hindus had been reached, because it is obvious that the Moslems have only to refuse agreement in order to postpone Dominion status. A veto in this matter is therefore vested in the hands of a quarter part of the population. While minority rights are valid, majority rights are also valid. It is plain that both should be respected and the object should be to reconcile them. You cannot reconcile two communities which are engaged in a negotiation if you say to one of the communities, "We give into your hands the right to speak the last word, and you have merely to give a negative to the person with whom you are negotiating in order to stop altogether the fulfilment of his aspirations." No negotiations can be carried to a successful conclusion on these terms, and the present attitude of the Government in India is, as I say, to give the final word to the Moslems by saying that, unless the Hindus will agree with them, the Hindus shall have no Dominion status. To that argument neither the noble Marquess nor the representative of His Majesty's Government gave any reply.
I do not resent the noble Marquess's criticism of my speech. On the contrary, if on the subject of India the noble Marquess agreed with my speech I should have felt there must be something wrong with it, for while we all of us deeply respect the noble Marquess for his long public services and that splendid sense of duty which has been the characteristic of his house for generations, when it is a question of the freedom of a people we cannot look to him for guidance. He himself stated that on the Government of India Bill he was an opponent from first to last. It was his action, and the action of the group which agreed with him on the Select Committee, that was largely responsible for that measure being incomplete, and prevented it from becoming that great and generous measure of reconciliation which might have obviated the troubles with which we are now faced.
In that the noble Marquess, as in all things, is perfectly consistent. All
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through his career, on the question of Ireland, he pursued exactly the same course. When the Parliament Bill was fought to the "last ditch" in this House, he was one of those who manned that ditch. And prior to that, when the great issue was raised of this House challenging the control of the other House in matters of finance, on the Finance Bill of 1909, he, of course, was there. I very much suspect that in some previous incarnation the noble Marquess would have been in the House of Lords to oppose the grant of self-government to Canada, when proposed by Lord Durham, and that he would have fought to the end against the rebels in America under General Washington. When he rises to speak I seem to see this House thronged with the ghosts of the eighteenth century silently applauding a kindred spirit.
The present situation in India is, I am sure, deeply to be deplored by all of us, no matter what our views may be on the Constitution of India, and worst of all is the fact that the Hindu-Moslem differences have now been brought into the very forefront. They dominate the political scene, and on that account may further embitter the relations between the two communities. I would express the very earnest hope that the leaders both of the Hindus and the Moslems will recognise the danger arising from this situation, and will use their influence to prevent any violence breaking out between these communities, any repetition of those tragic conflicts which have so often stained the soil of India with the blood of her own children.
4.46 p.m.
THE MARQUESS OF SALISBURY: My Lords, I certainly was not prepared when I came down to your Lordships' House this afternoon to face a general attack upon what I, perhaps, may be allowed to call my political life. I was aware, by the courtesy of the noble Viscount, that he intended to say a word or two about India, but I was not aware that he would go back into a very large number of legislative events in your Lordships' House and elsewhere, and even go back to the Confederation of Canada, in order to find material with which to throw stones at me. I have not thought, the noble Viscount will be surprised to hear, what I should have done at that period of British history; but as regards

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more recent events during my own life, which is all I need be responsible for, I have no doubt made as many mistakes as other people—perhaps I should say as many mistakes as the noble Viscount.
In the instances he has given, I cannot say my conscience is at all uneasy. I cannot think the experience of the last few years has done anything but vindicate the opposition which some of us made to the passage of the Parliament Act, and when I come down to more recent history still, are we really to say that the India Act has been such a colossal success that those of us who called its provisions in question when it was a Bill before your Lordships' House have any reason to be ashamed? I do not desire to go into, and I shall not go into, the question of the controversy regarding the India Bill. In the first place it would be asking your Lordships to give an opportunity which really would be a waste of time, if the noble Viscount will forgive my saying so, but also I cannot think there is anything in the world which would do more harm in India at this moment than to raise again all the issues we discussed on the India Bill.
The India Bill became an Act of Parliament. The noble Viscount and his friends had every opportunity to criticise it at the time and to vindicate their position. They, I suppose, are satisfied. They think they passed a magnificent Act of Parliament which is going to work admirably. The noble Viscount said that those who agreed with me belonged to the atmosphere of the eighteenth century. I do not go back so far as that, but I gather the noble Viscount belongs to the atmosphere of the nineteenth century, belongs to that particular brand of Liberal opinion which believes you can do everything by constitutional change. He believes that if you go for "one man, one vote," and the supremacy of the odd man, you can achieve the millennium. That was the view in the nineteenth century. The Liberal Party of that day thought that by extending the basis of the Constitution they would produce a new heaven and a new earth. That is what in my earliest political life we had to contend with. Of course the subsequent history of this country has proved that that was an entire delusion. No doubt you may improve matters, but as to curing the fundamental ills of human nature by changes in the Constitution,
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whether it be in England or in India, that is a pure delusion. You can improve them, you can also do a great deal of harm, but the one thing you cannot do by the clumsy method of constitutional change is to make a fundamental alteration in human nature.
I wonder, when the noble Viscount is in such a great hurry that the Government should go further in the process of constitutional change in India, whether he has ever reflected upon the wisdom of others—others not altogether strangers to him—in the matter of Indian Reform. I came across a passage in a speech quite recently which I will quote:
"In the meantime there are those, some members of the Congress for instance, who seem to think that the constitutional problem is a comparatively simple one, and that by using words such as self-determination or independence it can be regarded as approaching a conclusion."
I myself might have added there the words "Dominion status."
"I should like to remind them that in the whole creation and growth not merely of the British Empire but of all other combinations of races and countries, so far as I know, there has been no helpful precedent anywhere for conferring responsible government on India. Both its size and what Lord Snell described as the vast differences of races and religions make the whole case totally different from that of any other which history records. Therefore I think it is fair to hope that all Parties, however eager and keen they may be to see something done, will be prepared to admit that time must inevitably be given to examine these intensely difficult problems."
That was cautious advice, and advice which the noble Viscount might well lay to heart. I need not tell your Lordships, for all your Lordships heard those words, that they were uttered by the noble Viscount's leader, the noble Marquess, Lord Crewe, in a recent debate in your Lordships' House. He was not a free lance like the noble Viscount. He had been in the course of his great and most distinguished career Secretary of State for India, and he recognised that these matters must be approached with the greatest caution and could only be solved by the greatest lapse of time. Let the noble Viscount himself lose all his old nineteenth century prejudices. Let him realise that you cannot make a Constitution for India, or for anyone else, of a revolutionary character, for that is what it is, without the greatest caution, and that the difficulties can only be removed by experience and time.
LORD SNELL: My Lords, I beg to thank the noble Earl for the statement he made to the House, and with your Lordships' permission I withdraw the Motion for Papers.
Motion for Papers, by leave, withdrawn

BUSINESS OF THE HOUSE.
4.55 p.m.
EARL STANHOPE: My Lords, perhaps before the House adjourns for a short period before the Royal Commission, it might be of advantage if I told your Lordships the course of business for next week. I propose that the House should meet at 3.30 p.m. on Tuesday, when the Restriction of Advertisement (War Risks Insurance) Bill, will be read a second time. I was in considerable difficulty with regard to Wednesday, and thought the noble Lord, Lord Strabolgi, would have cause for finding fault with the business before the House for that day, because that is the day on which the next Government statement is to be made next week and, as your Lordships know, there is a very important Motion on the Paper by the noble Lord, Lord Addison, on which there is likely to be considerable debate. I understand that he has been good enough to agree to postpone that Motion till the following Wednesday—the first Wednesday in the new Session. Therefore on Wednesday we shall have two introductions of right reverend Prelates, one of whom is the new Bishop
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of London. That will be followed at once, I think, by the statement. I propose that the House should meet at 3.30 p.m. on Wednesday. On Thursday it is proposed that the House should meet at 12 noon for the transaction of business already on the paper—two questions by the noble Lord, Lord Newton—after which there will be a Royal Commission. It is expected that Parliament will be prorogued on Thursday next, and the new Session will be opened on the following Tuesday, November 28.
LORD STRABOLGI: What is the time for the new Session?
EARL STANHOPE: I cannot say yet, as I do not quite know what the procedure is to be. All I can say at present is that the times for next week are half-past three on Tuesday and Wednesday, and 12 noon on Thursday.
House adjourned during pleasure.
House resumed.

ROYAL COMMISSION.
The Royal Assent was given to the following Bills:

National Loans,

Prices of Goods,

Chartered and Other Bodies (Temporary Provisions).

House adjourned at ten minutes past five o'clock.