Sitting of 11 May 1934

Preamble
The House met at Eleven of the Clock Mr. SPEAKER in the Chair.

PRIVATE BUSINESS.
Weston-super-Mare Urban District Council Bill (by Order),
Read the Third time, and passed.
Marriages Provisional Orders Bill,
Read the Third time, and passed.
Clydebank and District Water Order Confirmation Bill,
Read the Third time, and passed.

OFFENCES RELATING TO MOTOR VEHICLES.
Address for :
"Return showing the number of Offences relating to Motor Vehicles in England and Wales, together with the results of the proceedings in courts of summary jurisdiction, and the number of persons cautioned or prosecuted for such offences, during the year ended the 31st day of December, 1933 (in continuation of Parliamentary Paper, No. 118, of Session 1932–33).—[Captain A. Hudson.]

ORDERS OF THE DAY.

  PALESTINE LOAN [GUARANTEE].
  Considered in Committee, under Standing Order No. 69.
  [Captain BOURNE in the Chair.]
  Motion made, and Question proposed,
  "That it is expedient to authorise the Treasury to guarantee the payment of the principal of, and the interest on, a loan to be raised by the government of Palestine not exceeding an amount sufficient to raise two million pounds, and to charge on the Consolidated Fund any moneys required to fulfil any such guarantee."—[King's lie-commendation signified.]
  11.7 a.m.
  The SECRETARY of STATE for the COLONIES (Sir Philip Cunliffe-Lister): The Resolution and the Bill which will be founded upon it, if the House approve of the Resolution, implement the undertaking and carry out the policy which I explained fully when we debated this question in July last. It proposes that His Majesty's Government should have authority to guarantee the principal of and interest on a loan not exceeding £2,000,000. It follows precisely the precedent that was followed in 1926, when my right hon. Friend the Member for Epping (Mr. Churchill) was Chancellor of the Exchequer and when the House guaranteed a loan of £4,500,000. It follows that precedent, but in somewhat altered circumstances. The financial position in Palestine, and therefore the security for this loan, is incomparably better than in 1926 when, quite rightly, the House guaranteed the previous loan. I explained in July that we proposed to give the guarantee, but we did not propose to make that unconditional Grant-in-Aid which had been foreshadowed by the Government in 1930. At that time when the financial position of Palestine was certainly very different, the Government foreshadowed that they thought it might be necessary not only to guarantee the loan but to make a free grant-in-aid.
  The financial position is so entirely different to-day that it is clearly unnecessary that any direct grant should be made other than those grants which are made throughout the Colonial Empire out of the Colonial Development Fund for prospective capital work of one
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  kind or another which produce much employment in this country, and, therefore, if the Committee accept this Resolution, we are merely guaranteeing the principal and interest, and we do not propose to make the direct grant which was suggested in 1930. The Government guarantee itself is of considerable value. It enables the loan to be raised at a much lower rate of interest which Palestine can well afford and, therefore, it is a very valuable concession to Palestine, without any serious risks to ourselves.
  Mr. ISAAC FOOT: What will the rate be?
  Sir P. CUNLIFFE-LISTER: I should certainly hesitate to say what would be the rate of interest if there were no guarantee. There is £4,500,000 of this Government guaranteed stock now existing, and this will rank pari passu. If an independent loan were made to the Government of Palestine, it would have to be subject to that first charge and I hesitate to say what the market difference would be but no doubt the Committee will appreciate that, in view of the existence of that first charge, the guarantee is likely to make a considerable difference in the rate at which the loan could be raised. I think the Committee would wish to be satisfied not only that we are following the 1926 precedent, and, with the modifications that I have shown, the policy which Dr. Drummond Shiels announced on behalf of the late Government, but that the financial position in Palestine is sound and, therefore, that the security for this loan is good and the objects for which it will be devoted are themselves desirable and necessary. Let me deal with all those points. First of all the financial position has improved enormously in recent years. In 1930 there was a deficit of £146,000. In 1932–3 that deficit had been converted into a surplus on the year of £500,000. In the year 1933–34 it is estimated that the surplus will be in the region of £1,000,000.
  Mr. LAMBERT: Then why is it necessary to borrow?
  Sir P. CUNLIFFE-LISTER: Because it is a very sound principle to borrow for capital development and to build up a large reserve. I am glad the right hon. Gentleman has taken that point. He has been connected with some great financial undertakings. He will probably agree

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  with me that it is not good business necessarily, when you can raise money very cheaply, to do the whole of your development entirely out of your earnings, but that it may be very sound policy to borrow on good terms for capital development and to build up a large and solid reserve. Indeed it is a policy which every sound undertaking is pursuing at present, and which a number of economists are telling us we are not pursuing half enough.
  Colonel WEDGWOOD: Do I understand the right hon. Gentleman to say that the realised surplus for 1933–34 is £1,000,000?
  Sir P. CUNLIFFE-LISTER: No. There are two different things. There is the annual surplus on the Budget for the year, but in Colonial administration we do not do what is done in this country, put the surplus for the year into the redemption of debt. It is carried forward and can be used for creating a reserve fund. It has always been a very good principle that surpluses are carried forward and go into a large liquid reserve fund, and it is the surplus for the year which I estimate is going to be £1,000,000. I estimate that, when the year is closed in May, 1934, the gross surplus of that and previous years will be over £2,000,000 and, after making a generous allowance for the working capital that any administration requires, the net surplus will be well over £1,500,000. It is argued that we should go on building up a large and formidable reserve in this country. I think that I have said sufficient to show that, compared with 1926, and indeed on its merits alone, the financial position is such that we are very well justified in lending the aid of our guarantee in such circumstances.
  Let me turn to another consideration on which, I think, the Committee will require to be satisfied. The criticism which I have seen of the Palestine position is that the balance of trade is uneven. It is true that there is a large excess of imports over exports at the present time, but from what does that excess come? It comes largely because people are putting money into Palestine, It is not by any means only the large amount of money that comes in from the Zionist organisations, but very large amounts of money are being sunk by individual investors and companies. It is natural, therefore,
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  that there should be this large importation, and as this development proceeds and the irrigated areas produce, undoubtedly the exports will tend to grow largely in future years. In addition to that, there is the value of the internal markets, and in the general security and prosperity of the country there is a most interesting development going on in building up many different kinds of industries in Palestine which will add to its internal wealth and prosperity. Therefore, one may sum up the situation by saying that the security may rightly be regarded as a satisfactory one, that the future prospects are sound and that we are fully justified in giving this guarantee.
  I come to the objects of the loan itself. The Committee will wish to be satisfied that those objects have been carefully selected and are sound objects of development. They have been selected by the Government of Palestine (and I think that the whole Committee will appreciate in what able hands the Government of Palestine is at the moment) as the objects which are most necessary and valuable at the present time for the development of the country. They will be in large measure revenue-producing. Take, for instance, the additional expenditure which is to be made on the port of Haifa where an oil dock is being built and a land area reclaimed. The total expenditure on that is put down at £210,000. The oil dock alone will bring in, under contract with the oil company, a minimum rent of £30,000—not a bad return on an expenditure of £200,000. In addition to that there are the reclaimed areas, and there will be certain rents obtainable from those reclaimed areas. The development of that port is of enormous value on many grounds. Everybody realises the importance of that great pipe line having, at any rate, one of its exits at that port. In addition to that, there is a very interesting development of transit trade in progress, and it seems likely that there will be a large trade from Iraq, and possibly from Persia, in future, which many of us hope to see come through that port—and which many of us thought in the years before the War would go by another route.
  Take the Jerusalem Post Office and Telephone Exchange. Those, at any rate, will earn their cost and and their keep. There are water and drainage schemes

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  in Jerusalem and Haifa, and anyone who knows those places realises how urgent they are. Anybody who has been told that he could have one bath in three days in three inches of water in an hotel where other amenities are considerable and the charges not out of proportion will appreciate this. Anyone who knows how serious both the water and drainage conditions are in Jerusalem and Haifa will realise that it is indeed a wise expenditure. Those works, except during construction will pay their own way, and I think that the Development Fund is helping during the construction period of both. As regards school buildings, even here there is some saving, because these will take the place of unsuitable buildings which are now being leased at very high rates. Therefore, that is not all what I may call dead expenditure.
  Arab re-settlement will be on terms on which there will be a rental payment for the farms on which they are settled. Agricultural credits should, I hope—and I will not put it higher—more or less pay their way. Indeed, what we are doing on the agricultural credit side is to give some assistance to most competent financial authorities in this country and over there in order to increase agricultural credits. Anybody who knows the part the moneylender has played, and still plays, in so many countries in the East, will realise the importance of this in Palestine.
  Colonel WEDGWOOD: The Arabs have heaps of friends.
  Sir P. CUNLIFFE-LISTER: Really, it is quite extraordinary what a lot the right hon. and gallant Gentleman can see, and yet how little he can see at the same time. Does he really think that the problem of the moneylender does not exist in Palestine? Do let him turn his eyes to the hills.
  Colonel WEDGWOOD: Landlords and moneylenders!
  Sir P. CUNLIFFE-LISTER: The Committee must listen to the facts, and the right hon. and gallant Gentleman must listen to them, even though he will not accept them. Largely through the operation of English banks, co-operative credit has been extended, but it is nonsense to say that it is not a tremendous thing to
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  give agricultural credit in that country and that that will not help to save many from the hands of the moneylender. I need say nothing about Arab settlement at the moment. I have explained fully to the House on previous occasions the conditions on which settlement will take place and how the claims have been adjudicated upon, and I think that it is generally accepted that the Government have discharged their obligation in that regard.
  Money is to be spent on water boring and water surveys, and on the improvement of village supplies. Really, I do not think that the right hon. and gallant Gentleman can cavil at the need of water in a thirsty land. The prospects are, I think, that we can probably get that water. One finds in travelling about that country traces of old Roman water supplies right into the plains of Beersheba. There must have been water, as there were large populations and large cities. I do not believe that we could engage in a more hopeful operation than in trying to find more water and in trying to improve the water supplies. The son of my hon. Friend who is sitting below the Gangway opposite (and I would like to say in his presence what admirable work he is doing in Palestine) can tell him all about that.
  These objects have been selected on their merits. It may be said that they favour unduly one section of the population against the other, that the Arab gets more out of it than the Jew, or vice versa. I would deprecate any effort in this country to try to emphasise sectional disputes in Palestine. It should be our common object not to stress that point of view. As a matter of fact, I have taken steps to have an arithmetical calculation made on the basis of population in the urban and rural areas to discover which benefit under the scheme, and I am informed that, working out that interesting if somewhat irrelevant mathematical formula, the expenditure will be as to two-thirds for the benefit of the Arabs and one-third for the benefit of the Jews. Looking at the matter from that sectional standpoint—which I would rather not do—the provision is not altogether unreasonable.
  What is the value to this country of the proposed scheme? We consider that it is reasonable, seeing that we are giving our credit to back this loan, that the orders

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  shall be placed in this country. That is a very right and proper provision. I have had an estimate made to within a few thousand pounds of the monetary value to us of contracts placed and to be placed and as near as can be estimated the orders which will directly flow from the scheme and which will be placed in this country, will be somewhere in the region of £600,000. That is not a small benefit. [Interruption]. I should have thought that when you have boring operations, for instance, the people out there benefit because wages are paid to those engaged in the boring operations.
  Colonel WEDGWOOD: If you lend £2,000,000, how can it leave this country except as gold or as goods?
  Sir P. CUNLIFFE-LISTER: I do not think it is necessary for me to enter into an economic argument with the right hon. and gallant Gentleman. I am only making a calculation when I say that the benefit directly flowing to this country from the orders which have been or will be placed here will be something in the region of £600,000. I have dealt at some length with the matter, because I realised that the House would want a comprehensive review of it and to know exactly how we intend to proceed. I submit that in accordance with precedent, in accordance with our obligations under the Mandate, in accordance with the dictates of sound and prudent finance, and in accordance with the industrial interests of this country, we should pass the Resolution and authorise the Treasury to guarantee the loan.
  11.30 a.m.
  Mr. ISAAC FOOT: I shall not occupy the time of the House for more than a few minutes in making comments on the proposal put before the House by the Colonial Secretary. I am a man of some sentiment, and I think it is a very wonderful thing that we should be spending part of our morning on the 11th May, in the year of Grace 1934, in discussing conditions relating to places whose names are as familiar to us as those of the towns and villages in the counties in which we were born. I think the case has been made out for the loan. We have the experience of the previous lending. A loan in a case such as this is a sign of progress. I observed an inter-
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  vention by my right hon. Friend the Member for South Molton (Mr. Lambert), who asked why we should borrow at "time when the Secretary of State was pointing out the happy financial conditions in Palestine.
  Mr. LAMBERT: Hear, hear.
  Mr. FOOT: I think there are some circumstances where a loan is not a sign of distress, but a sign of prosperity.
  Mr. LAMBERT: Then why have this Government guarantee?
  Mr. FOOT: The question of the guarantee is one thing and the question of the loan is another. The previous loan was very well carried. It enabled Palestine to repay something like £1,000,000 in respect of advances made by this country for War efforts, and I think it is quite right that there should be built up a reserve fund, especially in the present conditions. I want to make a comment upon the objects which the Secretary of State said were desirable. Those objects come mainly under three heads. There is agriculture. It is in the highest degree fitting that this encouragement in respect of agriculture, in so far as we can give it by a guarantee of this loan, should be made while we have the High Commissioner carrying out his special work. I think that the High Commissioner in Palestine must have written above the mantelpiece in his study that well-known passage of Jonathan Swift in which he gave it as his opinion that—
  "Whoever could make two ears of corn or two blades of grass grow upon a spot of ground where only one grew before, would deserve better of mankind and do more essential service to his country than the whole race of politicians put together."
  I am speaking specially about the conditions in Palestine. When one sees the Arab cultivator working his primitive plough, drawn, it may be, by an ox and an ass, yoked together, and one sees the efforts made in out-of-the-way places to wrest a scanty livelihood from a somewhat forbidding soil, one realises how important is the work of the High Commissioner. He has devoted himself to this work with something of the spirit of an Ignatius Loyola or a St. Francis of Assisi. He has made this work his special interest, and one is glad to know that this particular loan will deal with that matter.

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  With regard to the question of water, we have had, lately, anxiety in our own country. I remember the Parliamentary Secretary to the Ministry of Health saying that every morning the Ministry of Health prayed for rain. If that has been our anxiety here we can understand a little of the constant preoccupation of the people of Palestine. I was out there in the early part of last year and I know that the constant thought of everyone, high or low, in town or village, was as to the possibility of the coming of rain. It is a matter there of life and death. I was told that when the water failed, as it was threatening to fail, it is not merely that there is mortality among the children, but very often even if the lives of the people can be spared by the scanty supplies of water, there is the tragedy of the mortality among their beasts. There is the trouble of prospecting. It is impossible, in the conditions which prevail in Palestine, for the poor population in out-of-the-way villages on hillsides, miles away from any roads, to take on the burden of prospecting for water, and it is a most beneficent thing that the Government have been doing this work.
  Colonel WEDGWOOD: Beneficent for whom—the landlords or the peasants?
  Mr. FOOT: My concern is mainly for the peasants. We are concerned here with the immediate needs of these people, for whom, I am sure, my right hon. and gallant Friend is as much concerned as we are. Under what conditions this prospecting should be done, whether there should be safeguards to secure what he has in mind, is something different from the point I was putting before the Committee. If water is found, I understand that some contribution is expected in the way of taxation from those who will receive an advantage, and if it is not, then the loss will fall on the Government. That is the only way in which prospecting can be done in Palestine. Unless the Government do it, water will remain undiscovered, and the people and beasts who depend upon a supply of water will still remain in jeopardy. In Jerusalem the water supply last year was a cause of grave concern. The supplies at the wells fell far below the normal. You have there a growing city with special claims, I suppose in some respects the most famous city in the world if not
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  large in population and area. But there is a growing population in Jerusalem and an increasing demand for the amenities of modern life. If there happen to be additional water supplies, they should be secured. If they can be found in a land where water is scanty, if resources can be found upon which that great city can depend, surely it is very advantageous.
  Another part of the scheme deals with education. I should like to see the time when the village school is regarded in Palestine as being as indispensable as the village well. Under the administration of my right hon. Friend the Member for Darwen (Sir H. Samuel), who was anxious that there should be a school established in every village, schools were established in 200 villages. That beneficient work was stopped by financial stringency. Education in the Arab villages is carried on in difficult conditions. I remember going into what is now an out-of-the-way village, but which was once one of the greatest cities of history, where there was once amplitude, great architecture, great beauty and great education, but which is now what Plutarch would call a pelting village—Samaria—where I saw the contrast between the splendour of past years and the poverty and wretchedness of to-day, and where the school accommodation was so limited that the boys had to take an hour in and an hour out because of the restriction of space.
  Mr. MAGNAY: May I ask whether the conditions in Samaria are worse than they are at Escomb in the County of Durham?
  Mr. FOOT: I am not in a position to say; I have not visited the County of Durham. I was speaking of something which comes within my own knowledge, and I am talking of children, who, I suppose, the hon. Member will admit, have a claim on our consideration. The limitations and disabilities to which they are subjected, in my opinion, call for reform, and I am glad that it is contemplated in this scheme. I expect that the hon. Member is also glad. What astonished me was the avidity and eagerness of these Arab children. It was distressful to see their eagerness to get education, and that the conditions were shutting them out. I know that this applies mainly to the Arab children, and that the criticism will be

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  made that this contribution will give them an advantage. That is one of the results of an historical tradition. We have a legacy which was not created by us, and it is no good imagining what we have to do in ideal circumstances. We have to face the facts. The first concern of the Jews, historically and traditionally, to their great honour, is for the child and the family. I went into out-of-the-way settlements which are springing up in the plain of Esdraelon and under the shadow of the hills of Gilboa, where the first interest and charge are the nursery and the school. It may be argued that under this scheme more money may be going in that direction than to Jewish children, but that is the result of circumstances with which we have to deal. The Arab children are stragglers there, and it will be an advantage and help to lessen the gulf between the two peoples when there is something approaching a measure of educational equality.
  These are the three main concerns dealt with in the proposals. I know that the scheme will be subjected to criticism. I gather that from the comments and interruptions which have been made. The impression on my mind, when I had the chance of going over the country, was that it you take that little piece of land, you have more problems to the square mile than in any similar territory in the world.
  Colonel WEDGWOOD: And more officials.
  Mr. FOOT: It would be a tragedy if this loan should tend to widen rather than narrow the breach between the two peoples. It is a country where there is no general Press, where opinions cannot generally be expressed through the Press, and where fears and apprehensions create suspicion which causes largely the trouble. I hope that no discouragement will be given to those who have been taking part in what is called the Zionist Movement, one of the most remarkable movements in the history of the world. No one can go there and see the agricultural settlements in different parts of the country without being impressed with the splendour of the idea. A man has lost his historical sense if he cannot appreciate the change that is taking place, where you see developments carried on largely by those who only a few months or years ago were in the
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  slums of London or the ghettos of East Europe. Those who are working on the spot are right up against this problem, and what the Government propose to do in the measure of relief which comes from this guarantee should be a gesture of encouragement to those who are working in Palestine. It will take a long time to solve problems which have grown up in the course of centuries. They are not going to be solved in a single generation, but they will be solved by patience and wise statesmanship, and if this ultimately happens, it will stand as one of the noblest achievements in which this country has ever been concerned.
  11.45 a.m.
  Colonel WEDGWOOD: I have taken the unusual step of putting down on the Paper a direct negative to this Resolution and I have already, I may say, lost my temper. I cannot endure listening to the Secretary of State for the Colonies taking false economics, and when it comes to the Protestant champion making a sloppy sentimental speech like that to which we have just listened, any decent man would lose his temper. I will not say anything more about the Secretary of State, but he knows as well as I do that if we lend £2,000,000 to Kamschatka, ultimately that £2,000,000 must leave this country either in gold or in goods. We want to get rid of the gold and of the goods; therefore, all these arguments as to whether British orders will amount to £600,000 are all right for the gallery, but not suitable for this House. It is perfectly true that this development, particularly as regards water schemes and pumping, will involve the purchase of pumping machinery, and I am glad, therefore, that I have shares in Crossleys.
  As I say, I do not make any further reference to the speech of the Secretary of State, because I know that every Minister bas to make appeals to the gallery, but I would bring the Committee to the consideration of a far more serious thing and it is this absolutely new theory which seems to be advanced, that when you have a lot of money in the bank you ought to borrow more. The idea, apparently, is that it is much better to pay 4 per cent. on borrowed money than to get 1½ per cent. on money on deposit. I warn the right hon. Gentleman that if many more of the Colonies go upon

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  those lines, he will have bankruptcies all round. I gather that there is in this case £1,500,000 of an accumulated surplus. That money is in the bank and is, I suppose, drawing 1½ per cent., and the proposal is to go to the banks and to borrow at, I suppose, 3½ or 4 per cent.—though I do not know at what rate this loan will be.
  Sir P. CUNLIFFE-LISTER: I hope the Committee will not assume from the right hon. and gallant Gentleman's speech that the Crown Agents in investing balances and Sinking Funds of the great Colonial loans deposit the money with the banks at 1 per cent.
  Colonel WEDGWOOD: I presume then that there must be a profit, and that the surplus of the Palestine Government is productively employed and is bringing in a larger rate of interest than the interest on the prospective loan. If so, there can be no further criticism of the admirable finance of the Crown Agents. But, in any case, it is a bad thing to give any Government too much money. The way in which officials of every sort, directly there is a surplus in the Treasury, get their fingers into it is perfectly marvellous. I do not believe in thrusting money upon any Colony or Protectorate or Government which does not want it. The mandated territory of Palestine does not want this money.
  A year ago I supported this scheme when it was before the House, but many new points have arisen since then. There is one point in regard to which I entirely support it. I agree that it ought to have the British Government's guarantee. That will mean, at any rate, that we shall be able to borrow the money at a lower rate of interest. After our experience in Newfoundland we know that, even if they borrow the money without our guarantee, sooner or later we shall have to pay all the same. To get the guarantee of the British Government first is a good step forward. It has this other merit. As long as money lent to Palestine is lent on the British Government's guarantee, I trust and hope we shall retain our control over that territory. A new idea which seems to have developed since a year ago is that the first act of every self-respecting government, when it gets real control and no longer wants to borrow, should be to refuse to pay the
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  interest on what has been already borrowed. In those circumstances, I think we may safely say that the right hon. Gentleman opposite and the Treasury, and, above all, Mr. Montagu Norman, will desire to keep complete control over Palestine. But in that case, what happens to the Governor's proposals about setting up representative institutions there? Believe, me, he had better keep off. The repudiation of liability for what has been borrowed under the autocratic government of the past would be the first slogan of the future democratic government of Palestine. Therefore, I am satisfied with the Government guarantee.
  There are, however, several other points. In the first place, you have this new feature in Palestine in the last year, that there is no unemployment in that country. Here we have Durham, Staffordshire and other areas clamouring for development. In North Staffordshire all we want is a government aeroplane factory. But in the places where we have any amount of unemployment nothing is done. Where there is no unemployment, however, we shove capital upon them, we tell them that we will find the machines if they will find the labour, and we urge them to get on with the job. I would certainly have the problem of unemployment in this country met by long-term loans and by wise or even semi-wise expenditure such as we find proposed here, but I cannot see why we should provide it in a mandated territory where there is no unemployment and where, there being no unemployment, you take every possible step to prevent anybody coming in there for the jobs that are available. The position is almost ridiculous.
  There is another new factor in the situation on which I would like to comment, although I shall possible get into hot water for doing so. The Government of Palestine is no longer a Government which is seeking to develop that country. It is no longer a Government such as it was under Lord Plumer anxious to extend the population and to develop the idea of a Jewish national home. Instead of that, you have now in Palestine the most pronouncedly anti-Semitic. Government in the British Empire.
  Sir P. CUNLIFFE-LISTER: Rubbish!
  Colonel WEDGWOOD: I had better state a few evidences of that. We know that the Brown Book of the Nazi terror has been prohibited, but the country is flooded with the vilest documents from Germany. They have out there the ordinary Nazi agents of whom we have seen something in this country. The attitude of the Government towards immigration of the Jews from Germany can only be explained on the grounds that the Government, the hierarchy, in Palestine does not like the German Jew. Really, according to the officials in Palestine, the Jews themselves do not want these Jews from Germany, the helpless refugees, and therefore they are perfectly justified in keeping them out.
  Earl WINTERTON: How does the right hon. and gallant Gentleman reconcile the very remarkable statement he has just made with the immigration, which has been going on for months past, of Jews from Germany and the arrangements made in Germany for that immigration?
  Colonel WEDGWOOD: I did not say they were made in Germany. During the last year they had 9,000 Jews from Germany into Palestine, the best immigration that country has ever had, and now, under this new schedule, the immigration for the next six months of all Jews over the whole world is limited to 5,600. They are calling out for immigration, calling out for labour, and they pass, not legislation, but a mere fiat of the Government, saying that only 5,600 Jews shall go into Palestine.
  Sir P. CUNLIFFE-LISTER: I hope the right hon. and gallant Gentleman will remember that such complete misstatements made in this House, when repeated in Palestine, give rise to trouble. He is surely perfectly well aware that the labour figure is only part of the immigration into that country. If I may take last year's figures alone, the labour schedule included only 19,000 out of a total Jewish immigration into Palestine of over 30,000.
  Colonel WEDGWOOD: I am very glad to have the correction. I understand that there were 11,000 not on the labour schedule, but the capitalists of Germany, who got in last year. It is better than I thought it was, but the House will observe that last year, when unemployment was not so bad, they had 19,000 imported under the labour schedule, and this year
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  it is to be only 11,000, being 5,600 for six months. The whole point is missed when you consider it in that way, because the German refugee I speak of has not got any capital. All those must come in under the labour schedule. The most wanted in Palestine to-day are the working Jews, not the Jews who go in with £1,000 capital.
  I will go past that to one or two other evidences of the partial character of this Government. The hon. Member for Bodmin (Mr. Isaac Foot) has been over to Palestine recently and has observed, no doubt, the admirable main roads there are in that country. Going off from those main roads everywhere are admirable byroads, made with Government money, to all the Arab villages, but let anyone try to go to a Jewish village. I have been dragged out by tractors, by horses and by teams of mules. Emphatically, roads are not made for the Jewish villages; they are to the Arab villages.
  Mr. ISAAC FOOT: My experience was that I went to several of the Arab villages, and I was astonished at the difficulties in the way of access. I admit that roads have been made, but the difficulties in the way of access in some of the out-of-the-way villages astonished me. The villages have been there for a long time, but the settlements that I saw have not been there so long, I admit.
  Colonel WEDGWOOD: I do not say that every Arab village has had a road made to it, but what roads have been made have been made to Arab villages, and none have been made to Jewish villages. Let any hon. Member give me an illustration of any Jewish village which has had a road made to it by Government funds. The hon. Member for Bodmin has been all over that country. Can he give me an illustration of a single Jewish village which has had a road made to it? You cannot help seeing these things when you go there, if you keep your eyes open. Take the question of money spent on schools. It seems to be that because the Jews find the money for their schools, the Government are completely absolved from finding any money for education except through casual grants. Why should they spend all the money for Arab schools and none on the Jewish schools, simply on the ground that the Jews of America will look after their own?
  Dr. MCLEAN: The right hon. and gallant Gentleman is not quite correct in this matter. The total sum spent on education is about £150,000, of which £25,000 is given as a block grant to Jewish schools. This would be found to be in proportion to the Arab and Jewish population in tile country.
  Colonel WEDGWOOD: The Jews have not any more money in Palestine than the Arabs.
  Dr. MCLEAN: In 1932, £25,000.
  Colonel WEDGWOOD: I am very glad to hear it. I am glad to hear that £25,000 is going to Jewish schools. The real difficulty with the Arab education, as well as with the Jewish education, is that it is such bad education. It is all very well for the right hon. Gentleman to put up beautiful schools, but go into those schools and listen to the stuff that is being taught there. There is not one teacher in 10 who can speak English, and as to the Jewish education, they are taught an unknown language. All the children in the country are terrifically anxious to learn English. They want English in order to get elsewhere in life, even to go to America, but they are not given English. What they are given is the Koran or the Talmud. Really, it would be an enormous advantage if you got a complete overhaul of the educational system in Palestine at the same time as you are finding this additional money for their schools.
  Let me pass from that to an illustration that seems to me most apposite to any contention that the Government is anti-Semitic. Some years ago a Baghdadi Jew died and left all his money for education in Palestine—a considerable sum, over £100,000. After a long struggle the Jews, who naturally thought it was meant for their education, managed to secure the promise of half the money of the Baghdadi Jew for Jewish education in Palestine, but they have not got that money yet. On the other hand, an Arab school built with the rest of that Jew's money has been built and opened, and at the opening ceremony—it is almost impossible to conceive it—not one word was said about the money having come from a Jew at all. There you have the sort of attitude there is towards the Jew in Palestine. The idea that you must not be indebted
  1368
  to a Jew, that a Jew must not participate in any of the benefits of Government, and that he must be made a thing apart, as he is in other countries, in the ghetto or whatever concentration camps in Germany are called, has spread to Palestine itself. The feeling against Jews does not get better by reason of the persecution in Germany. The feeling against Jews among that sort of people has got worse; it is almost respectable to treat them with injustice.
  Let me illustrate it again from the really serious question of taxation, because it is taxation which is going to pay the interest on this loan. In the Palestine Budget by far the largest contribution to taxation is indirect taxation—taxes on imports into the country. The taxation on imports is paid as to at least three-quarters, possibly nine-tenths, by the immigrant population. It is on their capital which they are bringing into the country and on the civilised goods they consume—on British goods as much as on foreign. That mainstay of the revenue of Palestine comes almost entirely from the immigrant population, which means the Jews. At the same time, the other tax, the tithe, which used to be the largest tax in Palestine and which is paid by those who own the land according to the old idea of the value of the land, but actually on the produce of the land, has now been reduced and diminished. Therefore, the taxation comes more and more from the immigrant population on the import duties, and less and less from the landlords of Palestine. About half the land in Palestine is owned by landlords, and the other half by the peasants, Arab and Jew. In so far as the peasants paid the tax they have benefited as landlords, for now they are able, if they want to sell any of their land, to get much higher prices for it in consequence of the remission of that taxation.
  Yet I think the worst illustration of all is in the question of immigration. You have these frightfully heavy restrictions upon Jews who go into the so-called Jewish National Home, and at the same time you have Arabs immigrating into that country without any check or restriction and without any possibility of knowing how many are going in except when the census is taken. The census figures have shown a far larger numerical increase of Arabs than of Jews, and that

  1369
  in the last year when the cry for labour has been so great. It has led to a large immigration of Arab labour. That labour is unskilled and is gradually driving Jewish labour out of all the unskilled trades and the heavy manual trades in the country. When I was in Haifa last I saw Jews, driven from Salonica, six feet high and broad-shouldered men, doing the stevedore work in the port, and their complaint was that they were offered precisely the same wage as the Arabs who came in. There again, you have the same discrimination against Jewish labour. Unless you can get the working class in Palestine Jewish it will never be a Jewish country. If you are to go on allowing the capitalist to go in—the merchant and the middleman—you will have repeated in Palestine what has happened in the rest of the world. One hope of making Palestine a Jewish country is to allow the workers to go in and to see that they are not driven out by inferior labour and paid a sweated wage on which the Jew cannot live free.
  I should like to look at the question of water supply and drainage scheme, the construction of the oil berth, and the reclamation scheme. Those items are taking more than half the loan. Is there any chance of getting wages paid upon which the Jewish worker can live when employed on those works? When we passed the original Loan Bill some years ago, we made a desperate effort to get a fair wages Clause in the Bill. I do not know whether we shall have such a chance on this occasion. I fear not. I am certain that it will make a world of difference to the willingness of the Jews in Palestine to accept this loan if some of the work, at any rate, were earmarked definitely for Jews and paid for at wages on which they could live. All over the country you have the Arabs advancing as it were in seven-league boots from the 15th century to the 20th century. They are getting education in spite of the Government; they are getting fair wages and civilised ideas, and they like to drop into the town for the cinema on Saturday nights. They are becoming more and more the ordinary working-men of Southern Europe. I think it is an advantage. They are using the roads that have been provided, and are acquiring motor cars and rebuilding their houses. The reconstruction that is going
  1370
  on in that country is mostly Arab and not Jewish. They are coming along admirably, their wages must rise with their wants, but if you are going on every occasion to allow a discrimination between Jewish and Arab labour you will prevent the Arabs from rising further and prevent the Jews from becoming working-class in Palestine, and perpetuate for all time an Arab proletariat in that country.
  Let me deal with some of the other questions. There is the resettlement of displaced Arabs, for which £250,000 is required. We were told last year that there were 800 of them. I wonder whether they can now be found. I wonder what they are doing now and what they will do with the land. For 800 of them this loan will mean £300 a head. If you offered them one-tenth of that amount cash down, they would bless you. When Palestine gets this money they will go into the market and buy land. They will buy land from their friends at a friendly price, and it will be served out to Arabs who are probably working at Haifa or the Dead Sea or somewhere else. They will be presented with plots of land, 10 acres or so, but, at any rate, they will get a bit of land of their own. No government could persuade them to live on that land. They will remain elsewhere—
  Sir P. CUNLIFFE-LISTER: No one in their senses proposes to hand out this money to Arabs in order that they can buy land. What is intended is that the able Director of Land should buy land, and the Arabs will be given an opportunity of getting on the land as the Jews have of getting on the land.
  Colonel WEDGWOOD: Exactly. The land will be bought by Government officials. That will make it even worse. Suppose they do not want to settle on the land? I think the end of that settlement will be very much as I sketched it. They will have got the land, and I hope the Government will hold the titles and that in due course the Government will sell that land. £250,000 will have gone west in the meantime.
  Really, is it impossible for us to do the right thing by these Arabs, that is in some other way than giving bonuses to selected cases? We shall be putting the Arabs to do a job they do not want to do. They are mostly nomads—Bedouin

  1371
  who want to wander over a large area. And this £250,000 is an effort by Mr. French and his Commission to show the villainous character of the Jewish land settlement policy in Palestine. It is said that the Jews have turned these people out; there were thousands of them till they were counted. As a matter of fact, a search has been made for them and not more than 800 could be found in the whole country. £250,000—I am confident that the Government in Palestine will find it very difficult to spend that money.
  A few words about the water supply for Jerusalem. I think we ought to know how much has been spent on the Jerusalem water supply already. I heard that they did spend a great deal of money on a scheme which did not work. I do not think it is of much use having another expensive scheme if it will not work. This proposal for boring miles from Jerusalem and then pumping the water up to Jerusalem, 2,600 feet above sea level, will be very expensive. I am not certain that they are dealing with the problem quite on the right lines. There is this scheme for pumping from the Plain of Sharon up to Jerusalem. I think they had better bring Jerusalem down to the Plain of Sharon.
  Let me touch on the question of agricultural credits. There is no lack of agricultural credit money in Palestine now, whatever there was three or four years ago. To-day the banks have got sufficient reserves and credit is easy to come by. The real difficulty is that the moneylenders in Palestine, unlike those in other Moslem countries, are the landlords. They lend the capital for the seed, for the manures, for the instruments. They work the land of Palestine on that abominable system under which the cultivator takes one-third or one-half of the crop, and the landlord, who has provided the instruments, the seed and the manure, takes the rest. So you have there a system of moneylending under which the tenant, working for the landlord on the land, is not a person with any economic or financial rights at all; he is in fact the serf of these landlords, a survival of the old fuedalism. The peasants are perpetually in debt to their own landlords. Until now, when the Government has been helping the peasant, it has provided the money not for the peasant but for the landlord, who doles it out as if it was his
  1372
  capital; and in a sense it is. The peasant is absolutely on the margin of subsistence, and anything that he produces more than is necessary for his subsistence goes to the landlord. That is the dangerous system, not the Indian system, that you have in Palestine. So far as the independent cultivator is concerned there are ample credit facilities already; and it is almost astonishing that we have not developed in Palestine, owing to landlordism there, just that particular type of moneylending which is so much the curse of Mohammedan countries.
  Take the question of agricultural credits and water supplies from a different point of view. Who is going to benefit if they find water or if they advance money to a landlord to drain his land? If these things are done for the landlord it is not the peasant who is going to profit in the least, but the landlord. The chief difficulty in Palestine to-day is the enormous price of land and the difficulty of buying land. Every sort of obstruction has been put in the way. All land is subject to any claims by anyone who may say that he has squatted at any previous time. The mortgage banks are finding it extremely difficult to lend any money on the security of land because the title of that land has been made completely insecure by the Lands Ordinance, one of the Government's recent attempts to prevent tenants being turned off when the land is bought for Jewish settlers. A difficulty is the high price of land everywhere. The Plain of Sharon has been the discovery of the last 10 years. It runs 100 miles south from Haifa. There you have a wonderful development. They are providing the oranges for the world. They are providing an example of how a country can develop under security and civilisation. And they are also providing a first-rate example of a rise in land values. Every 20 acres or so has a Crossley pump now, pumping the water on to the land, which is worth anything from £40 to £60 an acre. An acre planted with oranges, I understand, produces an income up to £40 a year.
  Pari passu with the development of this industry you have had the rise in land values. solely due to the discovery that pumped water can turn a desert into a fertile country. Now we hope to do exactly the same thing with this loan.

  1373
  I gather that they are going to investigate the possibilities of water at Hebron. Suppose it is found that artesian boring there is a success. The immediate result will be a gigantic rise in land values all around there, and all of it going, as all past rises in value have gone, into the pockets of the Arab landlord. A development which otherwise would follow the discovery of water will be checked by the high price of land, and the money spent on boring, although it has found water, will be wasted because you have not taken the elementary precaution of seeing that the value of the land derived from the development goes into the public pockets. It will be the unfortunate taxpayers in Palestine who will suffer. They will have to find the interest on the loan for all time, and when they have seen that the money is gone and that someone else has reaped the benefit, they will say with some justification that the loan has been forced upon them by an alien Government in which they have no faith and that it should have found the money itself.
  12.25 p.m.
  Earl WINTERTON: The right hon. and gallant Gentleman the Member for New-castle-under-Lyme (Colonel Wedgwood) has devoted a considerable period of time—something like 35 minutes—of which I do not complain—
  Colonel WEDGWOOD: I could have gone on.
  Earl WINTERTON: —to what was a very elaborate jeremiad which he thought was going to strike terror into the hearts of the Government, have an echo in the hearts of patriotic Jews in Palestine and have an immense effect everywhere. Personally, I should apply neither epithet to the right hon. and gallant Gentleman's speech; but I will come to the details later. It is a speech which obviously requires answering, and answering at once, because in the address which he delivered to the Committee—one might almost say it was a lecture—he has made statements about the Government of Palestine which are of the most serious character. I shall hope to show in my reply that they are statements which arise from a complete misconception of the position and a complete misunderstanding of the situation. Before I come to the speech I would like to say something
  1374
  about the situation generally. Far too many people in this country fail to realise that the Government of Palestine, which we administer, and the authority which we exercise in Palestine, are both conditioned, and one might almost say fully controlled, by the pledges and commitments into which we entered from 1917 to 1920. It may well be that the promises made in those years to the Arabs and Jews respectively are very difficult to reconcile. It may well be that when the late Lord Balfour made his famous declaration, it was a statement or a declaration of a statesman who had passed the zenith of his power, and who based his declaration upon information conveyed to him by over-enthusiastic young men who had been better occupied fighting in the War than in preparing for what was to happen afterwards.
  All those statements may be true—they are constantly made outside this Committee—but what we here have to realise is that if ever a nation was bound in honour to attempt to carry out its pledges and undertakings, however difficult they may be, it is this country. What is the use of any responsible man—and I have always looked upon the right hon. and gallant Gentleman as a most responsible man—coming here and delivering the kind of attack which he has delivered on the Government when he knows as well as anybody that the Government's hands are completely tied—the present Government's hands and their predecessors, including the Government of which he was a member—by the pledges and the undertakings we gave from 1917 onwards? When people make these accusations against the Palestinian Administration, whether they are made by extreme Zionists or extreme Jews, or by the Press, talking about this miserable little country of a few hundred acres surrounded by desert and occupied by two races which hate each other and us, they forget these commitments. After the right hon. and gallant Gentleman's speech the Committee ought to be brought back to a realisation of the extreme difficulties with which this Government is faced. I should like to pay a tribute to every Government which has held office, including the two Labour Governments, of one of which the right hon. and gallant Gentleman was a Member, for their handling of the situation. No other country or Government

  1375
  in the world would have carried out so admirably this difficult task as have these successive British Governments. Does the right hon. and gallant Gentleman deny that?
  Colonel WEDGWOOD: Yes.
  Earl WINTERTON: I do not think the right hon. and gallant Gentleman will find many Members here to support him. The compliment I am paying is not to this Government alone but to all the Governments. We have had raised to-day one matter of principle in connection with this loan and it is a point which ought to be answered. The suggestion contained in the speech of the right hon. and gallant Gentleman and in an interruption—a perfectly fair one—by an hon. Friend of mine below the Gangway, was to the effect that it is wrong to guarantee money for the purpose of development in a country like Palestine when there is so much need for money to be spent on developments in this country. That raises the old "little England" doctrine. My mind goes back to the days of the Uganda railway, one of the most successful undertakings ever carried out. There was a debate in this House in which a large number of Liberals and Nationalists took part, and the argument was always the same—why spend money on a railway in Africa when there are unemployed here? The simple answer is that ours is a great trading and exporting country, and unless we do whatever we can to encourage development, not only in the Dominions and in the Colonial Empire, but in the Protectorates where we have a mandate, we shall be doing nothing to give much-needed succour—
  Colonel WEDGWOOD: Would not the Noble Lord attach any importance to the question of whether the investment pays?
  Earl WINTERTON: I certainly should attach importance to whether the investment paid, but I understood that it was the argument of the right hon. and gallant Gentleman that this was one of the most prosperous countries in the world. I understood him to say that it was one of the few countries where there was a surplus; and if I did understand him to say that, it was the only thing which I did understand him to say with which I was in agreement or which
  1376
  seemed to be in accordance with the facts. That is my answer to the right hon. and gallant Gentleman. I think it will pay. The right hon. and gallant Gentleman spoke of Crossleys. He said he was a shareholder. In view of the policy which he seems to advocate for Crossleys and other great British firms, I hope that he is not a director, because if so I should hasten to request my broker on no occasion to purchase Cross-leys' shares. How have business firms like Crossleys and other exporters built up their connection throughout the world? By Ignoring development everywhere? By using the sort of argument used by the hon. Member below the Gangway that we ought to use this money to build schools in Durham?
  Mr. MAGNAY: I am sorry if I led the House to believe that I said that. I did not talk of schools. Education is well attended to in the County of Durham. I was referring to the means of training boys and girls who have left school. On account of the expert knowledge and skill of the Noble Lord may I ask him, for purposes of elucidation, to tell the Committee this : Suppose the credits that are given for export trade are not honoured, or the credit is given in gold, does not that inevitably tend to the disadvantage of the home producer?
  Earl WINTERTON: The hon. Gentleman wishes to obtain employment for the people who live in the depressed areas. I do not want to get off my subject, and I should not be in order in going into that question, but the one way of helping the depressed areas is for us to be able to sell more of our goods abroad. Everybody knows that, yet whenever a proposal to that end is put forward, somebody from one of the depressed areas says "I should like to see the money spent in my constituency on this or that undertaking." Money spent to encourage British export trade will be the greatest help to the hon. Gentleman's constituents. That is my answer to him. The right hon. and gallant Gentleman wanted an aeroplane factory put up in his constituency. I suppose he wants to make aeroplanes for the purpose of selling them to foreign countries.
  Colonel WEDGWOOD: No, certainly not.
  Earl WINTERTON: Perhaps is was to produce commercial aeroplanes for Germany?
  Colonel WEDGWOOD: I want a State factory.
  Earl WINTERTON: Even if the right hon. and gallant Gentleman does want that, there is nothing in this proposal which prevents that being built. To say that the money ought to be devoted to constituencies here in contradistinction to the development of countries like Palestine is to adopt an entirely false antithesis. There is no conflict between the two things.
  I was very glad that in his statement the right hon. and gallant Gentleman made it clear that it was still going to be the policy of this Government, as it has always been of this and of previous Governments that the loan must be bilateral in its application; in other words, our guarantee must ensure that it is spent for the benefit of Jews and Arabs, and as far as possible equally. I heard nothing in the speech to indicate that that principle is being lost sight of. If on this particular occasion a shade more is being spent for the benefit of the Jews than of the Arabs, we must remember what has been done for the Arab community.
  Far too many people, sometimes in this House, fail to realise that in Palestine there is as acute a communal problem as exists anywhere in the world. That must be remembered in connection with every feature of administration, including this loan. I am neither pro-Zionist nor anti-Zionist; I accept the Balfour Declaration, as any responsible person is bound to do. I fought on the side of the Hedjaz Arabs during the War—I think I am the only Member of the House who was in that position—but they are very different from the Palestinian Arabs. I have a natural sympathy with the Arab peoples, but I do not sympathise with the point of view of the Arab extremists in Palestine who include most of the Arabs in public life in that country. Apart from those, there are in the administration some most admirable representatives of the Arab race. One substantial grievance the whole Arab community would have, and that is if there were many speeches like that which the right hon. and gallant Gentleman the Member for Newcastle-under-Lyme has just made. If at any time the vast
  1378
  mass of the law-abiding, respectable Arabs in Palestine, who are very much in the majority, as everyone knows, got it into their heads that this House of Commons, or any considerable body of Members, permitted themselves to support the claims of the Zionists and to ignore those of the Arabs, Palestine would be ungovernable. Therefore, I want to say to my right hon. and gallant Friend—and I am sorry to have to say it, because he is my right honourable friend personally, if not merely in the political sense—that I deplore such speeches. It is the kind of speech which, if any Member of this House got up and made it vis-à-vis the Moslem-Hindu struggle in India, and supported the claims of Moslems or Hindus, as the case may be, against the others, as the right hon. Gentleman supports the claims of the Jews against the Arabs—
  Colonel WEDGWOOD: I have always done so.
  Earl WINTERTON: But never before with such violence, or such lack of essential sense of responsibility—if that were done, it would produce a riot in Bombay to-morrow. I have had a long experience in administration of the communal differences in India, and I can testify to the Committee that there is one thing from which India is free, and from which Palestine is unfortunately not free; we do not have Members of this House supporting one or the other of the protagonists or contestants, as we do in the case of the Jew-Arab communal problem in Palestine, and as was done in the speech which the right hon. and gallant Gentleman has made this afternoon.
  We are discussing administration only to a limited extent, but I will say, by way of parenthesis, that the claims which are made by the extremist supporters of Jews and Arabs in this country and in Palestine are ethnologically and historically completely unsound. Neither the Jews nor the Arabs have as clear a case as they urge to regard Palestine as their exclusive national home. It is quite true that many hundreds of years ago the Jewish people—or peoples, because there were always two kings as we know from the study of the Bible, the King of Israel and the King of the Jews—occupied Palestine, and that is a fact which the Arabs constantly ignore. The Jews

  1379
  ignore the truth that during all that period many of the ancestors of the present Arab inhabitants of Palestine were also in that country, although, it may be, as wandering Bedouins, as they are to-day. To make the sort of claim that we have heard : "Palestine is the national home of the Jews; nobody else "hall live there," or on the other hand : "Palestine is the national home of the Arabs; nobody else shall live there," is ethnologically, historically and politically, from the point of view of both Jews and Arabs, the most disastrous claim that could be taken up. I would take this opportunity of reminding both Arabs and Jews that there is only one thing that stands between them and the most frightful bloodshed that has ever been seen in that country, and that is the British Government with the British Forces. Let them remember, before they proceed to criticism, as has been done this afternoon, of the point of view of the British administration—
  Colonel WEDGWOOD: I have never criticised the British police force.
  Earl WINTERTON: I said "British administration." The right hon. Gentleman has merely made the task of the police force more difficult. The right hon. and gallant Gentleman had a lot to say about immigration, and incidentally he made a very interesting observation. He said that German Jews were the best Jews in the world. That may be so; I confess I should not have thought so. It is a delicate question to discuss. I should have thought that the British Jews were the best—if we are to make these invidious comparisons. The right hon. and gallant Gentleman has a great belief in German Jews, and in a burst of enthusiasm he asserts that they have been denied access to Palestine. The answer to the right hon. and gallant Gentleman is that the wrong figures have been given to him, because as much immigration has been permitted to Jews from Germany since the Nazi Revolution as the country can absorb, or, to put it another way, as equals its absorptive capacity.
  Colonel WEDGWOOD: Who decides what is its absorptive capacity?
  Earl WINTERTON: I will tell the right hon. and gallant Gentleman who are the
  1380
  people who should say what is its absorptive capacity and that is the people who are responsible for the administration; they are the only people who can say. I suppose that the right hon. and gallant Gentleman would like some German Jews expelled from Berlin to say what it should be. I would not. I am very sorry for those people; we are all sorry for them, but their case is not helped by extravagant statements on their behalf such as those made by the right hon. and gallant Gentleman. He seemed to regard it as a most tremendous hardship that, when Jews and Arabs work alongside each other, the Arabs are able, as he suggested, to undersell Jewish labour. The Jews have undersold other labour in many parts of the world for a good many thousands of years, and will continue to do so for reasons that are wholly creditable to the Jews. They are a most self-denying people, they look after their family, they work very hard, and they are a temperate and moral race. That is why they can undersell other people, and that is why Arab labour is underselling Jewish labour.
  The right hon. and gallant Gentleman went on to talk about that portion of the loan which relates to the land and to agricultural credits and research, and to the resettlement of displaced Arabs. I do not want to go into all the figures that he gave, but the fact remains that it is necessary to spend this money if there is to be in Palestine a prosperous agriculture in which both races are to have a fair share. I want to pay a tribute to what has been done in Palestine by the Zionist movement and by Jewish immigrants in the establishment of the Jewish colonies which have been created. I saw some of them during the War, and even then they were a credit to any people. They have since been greatly improved. I should like to call attention to a point which the right hon. Gentleman has entirely ignored, namely, that these Colonies were only made possible by the contributions of benevolent Jews all over the world. The Arabs have no—
  Mr. JANNER: Why not?
  Colonel WEDGWOOD: It has only been made possible by buying the land.
  Earl WINTERTON: I cannot deal with two interruptions at once; I hope that

  1381
  any interruptions will be confined to the right hon. Gentleman with whose remarks I am dealing. The interruption of the hon. Member for Whitechapel (Mr. Janner) was most inappropriate. It ill becomes any supporter of Zionism to object to this money being spent in order to raise the level of the Arab part of the population as well as that of the Jews. Moreover, it is not true to say that the money which is being spent on agricultural credits is being spent purely in the interests of the Arabs. The question is, is it or is it not the fact that, in a country like Palestine, there is a real risk, unless there is a good land' system and a good system of agricultural credits, that the Arabs may get into the hands of moneylenders, it may be of their own race or it may be of the Jewish race.
  I have been paying a tribute to the Jews, and shall continue to do so, but I must point out to the Committee that one of the principal economic difficulties in Europe to-day is the fact that, in many countries where land has been purchased or expropriated from large landowners and sold to peasants, it has, after a period of years, got into the hands of Jewish moneylenders. For example, the whole of the land in Czecholovakia belongs to Jewish moneylenders, and not to the peasants who are occupying it. While, therefore, one takes into consideration the good side of the Jewish character, one must remember that the Jews naturally—and I do not say it is in the least wrong—are inclined to lend money on land, and, unless the agricultural system in Palestine is strengthened by giving the Government power to finance agriculture and agricultural credit, the sole result will be that the whole of the land of Palestine will be owned by Jewish moneylenders. Everybody knows that that is true. A prominent Zionist, whose name I will not mention, but for whom I have the greatest admiration and who has done an immense deal to develop Palestine, admitted to me that that is the danger. He said, "In saying that, you must not think the Jews are the only offenders; the Arabs are often just as bad." I replied that I quite agreed. After all, they are two branches of the same race, and there has always been a great deal of lending
  1382
  in the Near East, although one Prophet of a great religion tried to prevent it by forbidding it.
  The right hon. Gentleman made an astonishing and very serious statement. He prefaced it by saying that the Government was Anti-Semitic. I deny that absolutely, and I challenge him or any subsequent speaker to produce any real evidence of it. It is a very serious charge to make. It is as though he had said that the Government of India were pro-Hindu or pro-Moslem. He talked in a most wounding and injurious manner of the local administration, but let me remind him that he himself at one time had the honour to be an administrator, and a very successful administrator he was, under the Crown in South Africa. I am told that even to-day the people of the district speak with respect, but with a certain amount of awe, of the right hon. Gentleman. Why did he attack people who are doing their very best in difficult circumstances in Palestine in the way that he did? Having made that preface to his observations, he went on to give as evidence the fact that, as he claimed, money was constantly being spent on roads for Arab villages and none on roads for Jewish villages. I do not want to go into details, but I can show that that is not the case, and it was effectively answered by the hon. Member for Bodmin (Mr. Isaac Foot), who knows the country, and one of whose sons is occupying a position of responsibility there, and, incidentally, is one of the most brilliant administrators out there; and it is contradicted by everybody who knows the country. Equally it does not apply to education, although the right hon. Gentleman tried to insinuate, though he did not make the direct statement, that there was a bias against the Jews so far as the Government was concerned in the matter of education. The simple answer is that it is not the fact.
  As regards the whole situation, in the long run, in my opinion, for the next quarter of a century or so, the continued development and prosperity of Palestine cannot go on on the basis which exists to-day without far more good feeling and co-operation between both races than has existed in the past. What is there to stop it, apart from foolish speeches exacerbating the situation in this

  1383
  country? I am not now referring to the speeches of the right hon. Gentleman, but to speeches made outside, both by extreme Zionists and by extreme advocates of the Arab point of view. Of course, the circumstances are difficult but, on the other hand, racially the Jews and the Arabs are not so far apart. They belong to two great deistic religions. They have a common respect for many of the great prophets of both religions, like Moses and Abraham. They are not, like the Moslems and the Hindus, divided by frightful differences of opinion as to the whole conception of the deity. The best of both races have high moral standards and a quick and sensitive intelligence; and, as the right hon. Gentleman the Member for Darwen (Sir H. Samuel) can testify, in Palestine and the neighbouring countries many of the best of the leaders of both races are working together to-day. Let them work in amity for the peace and prosperity of the land which they inhabit, and, in guaranteeing this loan, as I hope we shall agree to do, let us remember that we ought to be, and are, contributing to that result, and are thereby carrying out our undertaking and commitments as we ought to carry them out.
  12.53 p.m.
  Mr. GEORGE HALL: It is not my intention in any way to take sides in the contest which we have heard between the two right hon. Gentlemen, but I feel sure I am expressing the opinion of every Member of the Committee when I say that we endorse the sentence at the close of the Noble Lord's speech, to the effect that both sections in Palestine should work in peace and amity with a view to building up the country. I think the Committee will have been very pleased to hear the statement of the Secretary of State with regard to the financial condition of Palestine at the present time. Indeed, he almost convinced the Committee that there was no need for the Government to guarantee this loan. With regard to the speech of the right hon. and gallant Gentleman the Member for Newcastle-under-Lyme (Colonel Wedgwood), while we agree with him on many of the matters that he raised, there we're also many points in his speech on which we disagree with him, and I think it ought to be made
  1384
  clear that he was, of course, speaking as an independent, and was not in any way speaking on behalf of the Members who occupy the Front Opposition Bench on this side of the House.
  I regret that my hon. Friend the Member for Caerphilly (Mr. Morgan Jones), who was asked to take part in this debate, is prevented by indisposition from being present this morning, and therefore I am speaking in his stead. The Noble Lord the Member for Horsham (Earl Winterton) referred to the fact that, whenever the question of guarantees is brought forward in the House, the question is always asked, why should not money be guaranteed for the development of our own country, or of certain districts of our own country? It is all very well for the Noble Lord to say that it is as well that there should be development of the British Protectorates and Dominions, and that money should be found for this purpose. I do not know that we altogether disagree with him. But, at the same time, we would remind him that there are in this country many districts which are regarded by the Government as being almost derelict.
  Earl WINTERTON: I hope that the hon. Member will allow me to interrupt to assure him that I have travelled very far in the distressed areas myself, and feel very strongly upon this point.
  Mr. HALL: That was the point that I was making. I quite realise that the Noble Lord represents his Division very well from this point of view, but he must keep the facts in mind. In the county of Glamorgan, with a population as large as the total population of Palestine, we have not a shortage of labour but something like 40 per cent. of the male insured persons unemployed. Every interest—residents, municipalities and the various industrial concerns—would willingly agree to certain developments provided that a loan could be guaranteed on terms similar to the loan to which the Government are asking the Committee to agree this afternoon. Let us take the point raised by the right hon. Gentleman in introducing this Motion. He said that during the last four or five years we have seen what may be regarded as unbounded prosperity in Palestine. In the Budget of that country we have seen a change from a deficit of £140,000 three or

  1385
  four years ago to an expected surplus for the last financial year of something like £1,000,000. I hope that I am not misquoting the right hon. Gentleman; I think he said that there was an anticipated surplus in the Budget for the last financial year of something like £1,000,000.
  Sir P. CUNLIFFE-LISTER indicated assent.
  Mr. HALL: In addition to that, he emphasised the fact that there was good security for this loan by saying that there was a reserve of something between £1,500,000 and £2,000,000, and that he was hoping that the Government of Palestine would build up a large, formidable reserve, so that the financial security and stability of the country could be safeguarded. I do not know how large a reserve the right hon. Gentleman would regard as being sufficient to meet the requirements for the development of that country.
  Sir P. CUNLIFFE-LISTER: The aim is to have a reserve fund not less than the annual expenditure of the country. The annual expenditure is between £3,000,000 and £3,500,000.
  Mr. HALL: I do not wish to labour that point. The right hon. Gentleman rightly, of course, mentioned this fact to prove that there was some security for the guarantee which he is proposing. He actually went so far as to say that the only reason why the guarantee was required was that he was of the opinion that the interest charged upon the loan would be very much lower as a result of the Government guarantee.
  Sir P. CUNLIFFE-LISTER: Surely the hon. Gentleman will appreciate that I am an inheritor of the undertaking given by his Government quite clearly in 1930, that the British Government would guarantee the loan. [An HON. MEMBER : "The whole loan?"] The whole loan. The hon. Gentleman was in the House when I spoke, and I explained that the guarantee then given was not only to guarantee the loan then to be made, of £2,500,000, but that we should also make a grant of interest.
  Mr. HALL: The right hon. Gentleman said that, but he also dealt with the
  1386
  changes in the financial position of the country as compared with 1930, when the guarantee was given that there would be either this loan or a grant for the purpose of development.
  Sir P. CUNLIFFE-LISTER: That there should be both. I do not think that we ought to get this wrong. What the hon. Gentleman promised—or rather said that be would do—was (a) to guarantee the principal and interest of £2,500,000; and not as an alternative but in addition—(b) to give a free grant of interest. I have maintained in the House before to-day, and it has been generally accepted as reasonable, that in the altered financial circumstances we ought not to give that free grant of interest which the Government of the hon. Gentleman proposed, but that it was quite reasonable that we should guarantee the loan.
  Mr. G. HALL: For those reasons we might say, as far as I am concerned, that we do not propose to oppose the Motion which is before the Committee. It may be possible, when the Bill is being debated in the House, for us to ask that certain amendments should be made. We shall, of course, have to wait until the Bill is presented, and then the matter will be considered.
  There was one point to which reference was made by the right hon. Gentleman, and that concerned the question of wages and labour conditions. He made the point, which was also referred to by the Noble Lord who preceded me, that something should be done to safeguard the wages of the persons who will be actually engaged in the works for which the loan is made. I see that the right hon. Gentleman deals on page 4 of the Memorandum with the question of fair conditions of labour :
  "It is proposed to provide that plant and machinery and material imported into Palestine and used in the execution of any of the works chargeable to the loan shall be, as far as possible, goods manufactured or produced in the United Kingdom; and the Bill will contain a clause providing for fair conditions of labour."
  Perhaps the right hon. Gentleman will inform the Committee whether that paragraph deals with exactly that labour which will be employed in the production of the necessary materials in this country for carrying out the work, and whether or not that condition can be imposed upon the actual carrying-out of the work

  1387
  in Palestine? That is a matter with which we on this side of the Committee are concerned.
  Sir P. CUNLIFFE-LISTER: I think the question has come up before, and that in Debate on a similar Bill the Minister one one occasion said that fair conditions of labour should be observed in the execution of the works. That was meant to ensure fair conditions of labour on the works that are being carried out in Palestine, and there will be a clause providing for fair conditions of labour.
  Mr. HALL: There was just that point that I was very anxious to have met. We want to see everything possible done for the development of the country. We are very pleased with the progress that has been made. We hope that the concluding words of the noble Lord will be reiterated throughout the whole of Palestine, and there is no reason as far as we are concerned why the Jews and the Arabs cannot work together. We on this side will do all we can with a view not only of assisting the development of that country, but to try to get a happy and prosperous country in Palestine.
  1.6 p.m.
  Mr. LAMBERT: We have had a couple of hours of very interesting disquisition on the Government of Palestine. I do not propose to take part, because I am quite ignorant of it. We have had rival discussions as to whether the government is a good government or a less good government. I am interested in the British taxpayer, and I am rather amazed at the indifference which this House exhibits towards the interests of the taxpayer. The taxpayer is asked to guarantee this loan; otherwise there would be no necessity to come to the House. I observe that during the whole of this discussion there has not been a representative of the Treasury present. I presume the Treasury have agreed to it.
  Sir P. CUNLIFFE-LISTER: Every item and every detail has been discussed with the Treasury, and on every single point it has their full concurrence.
  Mr. LAMBERT: I am glad to have that assurance, and to know that there is not another agreement to differ on the Government side. The right hon. Gentleman
  1388
  is a very persuasive speaker and he has come here with an admirably persuasive speech, but he has missed his vocation. He should have gone into the City with this loan. If it is so attractive and there is such a surplus behind it, why ask the British taxpayer to guarantee a loan so attractive? There is ample surplus money on the City ready to be invested, I notice that the Chairman of Lloyds Bank said that the banks have great difficulty in loaning money. Instead of asking the taxpayers to guarantee the loan why not go to the banks, to the City, to Jewish financiers, if you like, and ask them for this advance? I am a good deal apprehensive about these constant guarantees on the part of the Treasury to Dominions and foreign countries. We have had this year, Bechuanaland £140,000; Newfoundland, £400,000; and I have here the financial accounts of the United Kingdom. The League of Nations loans in default are something stupendous. Now we have £2,000,000 more for Palestine. We govern Palestine and, from the disquisition that has gone on, apparently we are to take responsibility. We have had charges made to and fro which few of us can check because we have no personal knowledge, but we govern Palestine under the Mandate of the League of Nations. How long is that Mandate to last? What sort of position to-day is the League of Nations in? We know that great Powers have left the League of Nations. Is the Mandate under which this Government governs Palestine to be continued under the League of Nations? It is rather an important matter.
  Colonel WEDGWOOD: Would you make it a Crown Colony?
  Mr. LAMBERT: The right hon. and gallant Gentleman is an expert in this question. I am not. I simply say I am a representative of the taxpayer and I have more than enough to do to help in the Government of my own country, and I cannot interfere in others. I do not know the constitution of the Government of Palestine. We are told that it is to become a democratic Government. If so, all I have to say is that they might spend their own money. I would not trust them to spend ours. They would spend it all right but would they repay

  1389
  it? That is the real point. I, speaking in all my ignorance, have a profound distrust of this policy of a national home for the Jews in Palestine, where you have an Arab population of something like 90 per cent. I look at the matter, I hope, from a commonsense point of view. The right hon. Gentleman has told us that there was a loan in 1926. I believe he was a Member of the Government and in this matter he agrees with the right hon. Gentleman the Member for Epping (Mr. Churchill). They are carrying out the same policy. I was not a Member of the House then. It was a short lapse that I had. Those were the days of acrobatic adventurous finance. I hope it is not going to be continued. I have here the Act of Parliament guaranteeing the Palestine loan of £4,500,000, and with it there was a guarantee of £10,000,000 for East Africa. Millions flowed out. This adventurous policy, of the right hon. Gentleman the Member for Epping was only topped by the Socialist Government that followed, and we know what happended in August, 1931. I have here, not the right hon. Gentleman's very rosy description of the finances of Palestine but this cold, steely document, the finance accounts of the United Kingdom for the financial year 1932–33. I find that a loan was issued to Palestine under that Act of Parliament in 1926 for £4,475,000. Then I observe in another paragraph that the nominal amount of securities held on account of sinking fund on 31st March, 1933, amounted only to £134,628 14s. 1d. I congratulate the accountant on the penny.
  Sir P. CUNLIFFE-LISTER: Does the right hon. Gentleman suggest that there has been any default in payment of interest and maintenance of sinking fund? Is it not a fact that every penny which, under the Statutory Sinking Fund, was to be paid has been paid?
  Mr. LAMBERT: I am quite unable to give the right hon. Gentleman an answer. All I say is, here are the finance accounts of the United Kingdom and this is the entry—nominal amount of securities held on account of Sinking Fund on 31st March, 1933, £134,000 odd, and the annual net liability of the State is £4,340,371 5s. 11d. [lnterruption.] I have been told so many times that loans to foreign countries are perfectly well secured.
  Earl WINTERTON: May I remind the right. hon. Gentleman that the British Empire is not a foreign country and that mandated territories conducted by the British Government are not foreign countries? We place a higher value on the carrying out of our obligations than foreign countries.
  Mr. LAMBERT: My right hon. Friend must really remember that our colonial Empire is inhabited by white English people, and that Palestine is a totally different proposition. I do not want to make any special point, but I protest against this constant coming to the House of Commons with proposals for the British taxpayer to guarantee these loans. If they are good loans, why not apply to the public? That is a thing which I have never been able to understand. My right hon. Friend has given us the details of the Palestine Loan, I have a copy of the White Paper here and I see that it says:
  "Water supply and drainage schemes for Jerusalem and Haifa, £933,000."
  Why not go to the Jews of the world and ask them to finance the water supply of Jerusalem?
  Mr. JANNER: Really, this is too bad. Has the right hon. Member ever studied a single thing about Palestine, and, if he has not, what earthly right has he—I ask him in all fairness and honesty—to make criticisms of people who are doing their utmost to make that land the very best in the world. I hope that he will respect the feelings of those people.
  Mr. LAMBERT: The hon. Gentleman must realise that I did not bring this Loan before the House; the Government brought it before the House. I represent the South Molton Division of Devonshire, and I am going to have something to say when the taxpayers in my constituency are asked to guarantee a loan. I do not understand the House of Commons. It seems to take no interest in finance at all. Look at the. Benches now. Look at them all day. Look at the Treasury Bench. There is not a representative of the Treasury there, and yet £2,000,000 is to be guaranteed. Who can say that it will be repaid? Is there a Member here who can say so? The hon. Gentleman does not seem to understand the purpose of the House of Commons. I am not

  1391
  going into Palestine. I do not want to interfere with the Government of Palestine, but I do not want the Government of Palestine to come over here and ask my constituents to guarantee them a loan. That is all I ask. I am not interfering. I do not want to interfere, and I do not want you to interfere with the pockets of my constituents—
  Notice taken that 40 members were not present; House counted, and 40 Members being present—
  Mr. LAMBERT: I do not wish to attack the administration either of Jews or Arabs in Palestine, but I want my hon. Friend opposite to realise that some of us have the old Liberal tradition of House of Commons responsibility for finance. That is the one thing I inherited when I came to the House of Commons from Mr. Gladstone, and I have it today. When you ask the House of Commons to guarantee a loan of £2,000,000, I do not apologise for drawing attention to these matters. I say to my right hon. Friend that surely, if Palestine is in such a flourishing condition, he should have applied to the Jewish financiers of the world to supply Jerusalem with her water supply. That is a perfectly reasonable proposition. My right hon. and gallant Friend the Member for New-castle-under-Lyme (Colonel Wedgwood) said that they were to pump it up from some plain and take it to Jerusalem. It is much better that that should be done under private enterprise. I am a great believer in private enterprise. I do not believe in Government enterprise at all. In fact, the one thing that I am convinced of more than another is that directly the Government interfere in any matter of expenditure there is extravagance and waste. As to the water supply and drainage schemes for Jerusalem, why the Jews of the world do not drain Jerusalem I do not understand. There is the re-settlement of the Arabs, but that, I understand, is to carry out a pledge of Lord Passfield in 1930.
  I want to give the Government this warning. The less they carry out the pledges of the late Socialist Government the better it will be for them. I was not returned here to carry out the pledges of the late Socialist Government; I was returned here to upset most of their legislation. [An HON. MEMBER : "And
  1392
  support Free Trade."] Whatever my hon. Friends think of me, that is my view. I am sure they will give me the credit for having views of my own.
  Mr. TINKER: The right hon. Gentleman is a supporter of the Government, but, judging by his speech this morning, he is not supporting them on this matter.
  Mr. LAMBERT: I am trying to get the Government into the right way, and to help them. When they carry out pledges of the Socialist party, I can assure my hon. Friends opposite and the House that the Government are not pleasing their own supporters in the country. There is a sum of £250,000 for the re-settlement of displaced Arabs. What are they going to do about the re-settlement of Arabs?
  Sir P. CUNLIFFE-LISTER: The right hon. Gentleman has talked about carrying out a pledge given by the Socialist Government; he will remember, however, that we all agreed to the appointment of the Shaw Inquiry in 1929, though we ourselves were not in office, and he will realise that this obligation towards the Arabs who were found to be displaced is just as much binding on us as on the Socialists.
  Mr. LAMBERT: I am not going in the slightest degree to attempt to talk about the Government of Palestine. I am only saying that here are a few items which I am entitled to comment upon because we are asked to guarantee a loan. If the right hon. Gentleman had gone into the City and had got private people to guarantee a loan, I would not have said a word. I see that it says :
  "Provision would be made for the resettlement of those Arabs who might be found, after inquiry, to have been displaced from the lands which they occupied in consequence of the lands passing into Jewish hands."
  I do not understand it, but if the land has passed into Jewish hands, surely the Jews ought to have compensated the Arabs?
  Mr. JANNER: They have done so.
  Mr. LAMBERT: Then why do you want to compensate them twice over? That is a matter I really want to know something about. Water supplies to Jerusalem, construction of an oil-berth at

  1393
  Haifa, public buildings, including a new post office at Jerusalem :
  "the majority of these works will be revenue-producing."
  Again, I say, why not go to the public and ask for a loan to Palestine? It is a very flourishing mandated territory. I speak, as I say, as the representative of the taxpayer. Then we have it here :
  "It is also proposed that the Bill should contain.… provisions.… to the effect that the Treasury guarantee shall not be given until the Palestine Government has provided, to the satisfaction of the Treasury and the Secretary of State—"
  I should much prefer to see the House of Commons look into this matter. When the taxpayers' credit is being given in respect of a loan, I like the House of Commons to come in all the time. It is no use atempting to oppose a proposal of this sort, because financial criticism in the House of Commons to-day is of the most meagre description. I have merely risen to make a protest. If I could I would willingly divide against the Resolution, because I do not believe in these constant applications by Governments of all kinds asking for guarantees from the British taxpayer for all sorts of projects overseas, however good they may be.
  1.26 p.m.
  Dr. McLEAN: In spite of the very complete description of the economic foundation for this loan given by the Secretary of State there still seems to be a good deal of misunderstanding, judging by some of the speeches. The test to be applied is, I think, whether the expenditure under the loan for the construction of works and contingent matters will result in such economic development as to justify the expenditure. I submit that an examination will show that that test is quite fulfilled. I should like to call attention to the trade situation. The Secretary of State told us that the imports of Palestine exceeded the exports. I find from the Blue Book that the imports in 1932 amounted to £8,000,000, whereas the exports only amounted to £4,000,000. The imports consist principally of foodstuffs wheat, rice, sugar and meat, and manufactured articles such as cotton, machinery and motor-ears. Attempts are being made to reduce the imports of goods or commodities which might be produced or made locally. That is a proper thing to do.
  1394
  As regards the exports, the principal commodities exported are oranges and also certain minerals, for which we find there is an expanding world market. With regard to oranges, there is more than double the area now under orange cultivation available and suitable for such cultivation. The figures are, roughly, about 35,000 acres under orange cultivation and about 80,000 acres available. It is, therefore, only a question of market expansion for these products, and one is glad to know that steps are being taken, by advertising and other means, to effect this necessary expansion. Increased production and export is necessary in order to have a more balanced trade, and an increase in production is seen to be possible. I submit, therefore, that the economic situation is a suitable one for capital expenditure in the form of the loan proposed.
  Turning to the schedule of the loan itself, one finds that it is intended to be spent on economic development which will help to produce a better trade balance. Item No. 1 provides for the resettlement of displaced Arabs and item No. 3 for the granting of agricultural credits, which will obviously be helpful in agricultural development. Items 2, 4, and 5, which together form three-fourths of the loan, are for public works, which I think examination will show are economic developments. I should like to consider these three items in detail item No. 2 deals with town water supply and drainage and also makes provision for a survey of water resources, largely for agricultural purposes. My own experience in the construction and the running of town water supplies in the neighbouring country of Egypt show that such supplies are economic and profitable undertakings in almost all cases. The explanatory note to the loan indicates this, and it is, in my opinion, correct.
  The estimated costs appear to me to be reasonable so far as one can make a rough check of them. In Jerusalem, where the works are obviously the largest part of Item No. 2, the population is about 95,000. Roughly the cost of town water supply in Egypt I found came to £2 a head and drainage £3 a head, making a total of £5, which would work out at £500,000 approximately for Jerusalem, a reasonable sum. An enormous increase in population has taken place in recent years in Jerusalem.

  1395
  In 1919 I had the honour of being invited to plan for the development of the city, when the population was very much smaller than 95,000 souls which it contains to-day. The city has now spread almost to the limits then planned. At the back of my mind when I made the plan I expected that the city would expand to the full limit of the plan in 30 years, but in 15 years it has extended to those limits. Those planned limits of Jerusalem were wide because the main object was to establish zones around the old city and the Holy Places, to protect them from modern encroachments. We were criticised in the Press of this country at the time for being much too optimistic about the development of Palestine, but one is glad to see that we were justified.
  Item No. 4 is a necessary development of Haifa to deal with the large entrepot trade in oil. It is essential to have proper facilities for dealing with this export trade at the Haifa end of the great oil pipe line from the Monsul oilfields. The other part of the item is for the reclamation of land behind the quays, a necessary economic work. Item No. 5, Public buildings, includes a new post office and telephone exchange, which is a commercial necessity because the present building in Jerusalem is very old and quite unsuitable for modern requirements. Part of this item is for school buildings, and I understand that some of the money will be spent on vocational and technical schools. As a member of the Secretary of of State's advisory committee on education, and having had some practical experience of teaching engineering in the Sudan, I venture to express the opinion that technical education is of extreme value, and hope the committee will agree as to the necessity for it and for encouraging it in Palestine. In my opinion, it is the best economic investment any country can make.
  The materials, machinery and plant required will be ordered in this country, and, in the case of waterworks, as I know from experience they are a very large proportion of the whole cost, somewhere about 50 per cent. May I remark with some pleasure that Scotland makes practically all the special waterworks appliances for the whole world. I submit that the items included in the proposed loan are essential for the economic development of Palestine, a country which to
  1396
  many of us is certainly the most interesting in the world. In conclusion may I reply to one remark made by the right hon. and gallant Member for Newcastle-under-Lyme (Colonel Wedgwood) who asked why we should develop Palestine and not parts of this country? The reply is simply that there are markets available for the products of Palestine, but there are no markets available for the manufactures of parts of this country. In regard to the block grant given to Jewish schools in Palestine, I mentioned a figure of £25,000. This is the figure to-day, and not the figure for 1932 which was, I believe, about £21,000.
  1.37 p.m.
  Mr. JANNER: I am happy to have an opportunity of intervening in the Debate, because some of the speeches which have been made will probably lead to considerable misunderstanding, and I hope that the apparently acrimonious interchange of words from one side of the Committee to another will not be taken as implying in the slightest sense that anyone connected or interested in the advancement of Palestine desires to see friction between one section of the community and another in that country. It is high time that we realised that we should deal very carefully with the interests of both sections, and I say quite bluntly and frankly that the fault certainly does not lie, as I hope I shall be able to show, upon those who are connected with the development of the Jewish National Home, who are most anxious that nothing of that nature shall interfere with the advancement of Palestine as a whole.
  The first important question to consider in regard to the loan is whether Palestine is in a position to secure the repayment of a loan of this description without calling on the British Exchequer to implement its guarantee. In this regard I agree with the proposition put forward by the hon. Member opposite, but not with the manner in which it was put forward. In spite of the misleading statements made from time to time, statements which are still being made, the truth of the matter is that there is no doubt that the country is in a position to meet every penny of its obligations. This state of affairs has not arisen of its own volition. On the contrary, it is undoubtedly due to the tremendous efforts

  1397
  which have been expended by men and women working under trying conditions but inspired by deals of such a strength that they have been able to overcome almost insurmountable difficulties. Chalutzim pioneers of both sexes, have for years given of their best to the cultivation of the land which they hold so dear and the land has responded nobly to their activities. To-day the assets of Palestine are able to meet its liabilities many times over. There is an accumulated surplus not of £2,000,000 as stated by the Secretary of State, but I believe of a sum much nearer £2,500,000 in the coffers of Palestine or elsewhere, where it is amply secured. Last year a Budget of only £3,000,000 showed the huge surplus of £1,000,000.
  Since the mandate was granted to this country roads have been built, some of which are among the finest in the world, cities have grown up, some entirely built since that date, while others have grown in strength, and in particular the city of Tel-Aviv, which has now a population of 100,000, is an illustrious testimony to the enterprise and foresight of Jewish settlers there. To-day the Levant fair is being held in this town. At this great trade exhibition most countries of the world are displaying their wares, and British exhibits are prominent. The construction of permanent buildings alone for the Fair cost over £150,000. This is something new in respect of a town which has arisen within a few years on the site of sand dunes, which is peopled by Jews, with Jewish policemen and Jewish scavengers, a Jewish town almost from the first of its inhabitants to the last, and which in no circumstances holds out any antagonism towards any other section of the community. Important industries have been established throughout the country. Land, much of it at one time malaria-infested marshes which have been reclaimed, is now being scientifically cultivated, with the result that products have increased in a striking manner in quantity and in quality. The area of orange plantations in Palestine in 1922 was about 41,000 dunams, a dunam is a quarter of an acre. In 1932 it was about 177,000 dunams. It is interesting to note, in view of the allegations which are made from time to time that the enterprise of Jewish settlers antagonise or disturb the Arabs who are their neighbours, that the area cultivated by the Arabs rose from 30,000
  1398
  dunams to 75,000 dunams in the same period. From 1932 to 1933 there were 4,500,000 cases of oranges exported from Palestine and it is estimated that for 1933–1934, 5,500,000 cases will be exported.
  There has also been an advance of productivity in poultry and dairy farming. Fluid milk, milk products, eggs and poultry figure prominently in this increase. As many as 621 new industrial enterprises have been established in Palestine in 1933 alone. Many millions of pounds have been sunk in the buildings, in the public works, in gardens and in industries. Mud hovels in many old Arab villages have been replaced by modern dwellings. All these assets, however, are as nothing compared with the potentialities which lie in the further development of the country owing to the ideology of men and women who have immigrated there, and particularly of the hundreds of thousands who are looking forward to the day when they will be admitted to give a hand to their fellow-men in this great work.
  Immigration is the very life blood of Palestine. From £40,000,000 to £50,000,000 of Jewish capital, much of it contributed by poor struggling people throughout the world, some of them only able to afford to put a penny a day into a box for this object has already been used towards the creation of this security not by capitalists as we have been led to believe but by hundreds of thousands of men and women who regard the Holy Land as something worth developing. Millions of that capital have already been used towards the creation of this security, and there are millions lying idle in the banks ready to be put to practical use.
  The danger of destroying the security lies mainly in one direction only. Immigration into Palestine must be sufficient to cope with the necessities of multifarious activities in progress there. Already, building is being held up with the result that wages in this industry have risen to such an extent that the capital which has to be expended on buildings is beyond that originally calculated for and an uneconomic expenditure is being incurred. Naturally, many who were working on farms and plantations have been lured into building work by these high wages. I wish to point out in a spirit of friendliness and in no offensive sense at all, to my right hon. friend the Colonial Secretary that, if he

  1399
  realised the ideals which animate those who want to go to Palestine, if he realised their point of view, which is not a biased Jewish point of view at all, but the point of view of people anxious to bring prosperity to the whole population, he would do his utmost to see that immigration certificates were issued to labouring people in a much more reasonable and extensive manner than at present. The result already has been that the vital work of the country in such matters as agricultural development, the tending of new plantations and the furthering of industry is being neglected and this state of affairs will grow worse unless the true absorptive capacity of the country is taken into consideration in connection with the issue of these immigration certificates.
  I appeal to the right hon. Gentleman to keep that aspect of the position well in mind It is ludicrous to offer to a growing country 5,500 immigration certificates for six months. I am not dealing with the capitalist at all. The more capital goes into the country the more labour will it require. In each of three successive half-years the same number of certificates have been issued, although the country is progressing so rapidly. Here I submit lies the danger of causing a fall in the value of the security on this or any other loan. It is a danger to Jew and Arab alike for just as Jewish immigration has brought prosperity to the country and to its inhabitants, irrespective of race so will undue checking of immigration bring about disaster.
  That the Arab has not suffered by the advent of the Jew is abundantly clear. Time after time the Zionist Organisation has declared that its policy is to promote and maintain amicable relations with the Arabs. Those Arabs who live nearest to the Jewish settlements are those who have benefited most, and they have benefited in proportion to the number of Jews in the vicinity. From the 1922 census to 30th June, 1932, the mere increase of the Arab population was approximately equal to the total Jewish population at the later date, and was more than double the increase in the Jewish population for the same period. We want to bring the two sections of the community together. We do not want irritating regulations and irritating misunderstandings created by people who do not understand the position and who
  1400
  ought not to be allowed to interfere with the amicable relations which now exist and always have existed between the men who are actually working on the soil. We do not want the interference of political intriguers who are anxious, not only to take the penny but also to have the bun. There are those landowners who have sold their land and left the country but who see to-day that they might be able to make something out of it. They are prepared to intrigue and they are intriguing day by day. But the Arab who is actually working on the land knows very well that he has not been deprived of anything. He knows that compensation was given on all occasions when land was acquired, that the prosperity of his Jewish neighbour means the prosperity of himself and that the methods introduced by his neighbour have resulted in prosperity all round.
  Before the War there was, each year, a considerable Arab emigration from Palestine. I would point out to the Committee and particularly to those hon. Members who are interested in the Arab movement that to-day there is hardly any Arab emigration from Palestine at all. The non-Jewish population of three of the chief centres of Jewish settlement, namely, Haifa, Jaffa, and Jerusalem increased by 85 per cent., 61 per cent. and 43 per cent. respectively, whereas in Nablus and Hebron districts, which are unaffected by Jewish development, the increase was 9 per cent. and 8 per cent. respectively, while in Gaza there was actually a decrease.
  So much for the first question. I hope to deal later with a few of the points raised by the Noble Lord the Member for Horsham (Earl Winterton) and by the right hon. Gentleman the Member for South Molton (Mr. Lambert). Though I regret very much that I should have to say this is so in their absence, I suggest that the throwing of the words "Jew" and "Arab" from one side of the Committee to the other conveys an insidious impression which neither Jews nor anybody else with the interests of civilised people at heart, wish to see introduced not that hon. Members intended this. I suggest that in that way we are damaging not only the cause of Arab and Jew alike, but damaging the cause of all people interested in Palestine. I would appeal to all of those who are considering this position to approach it

  1401
  with a knowledge of the facts. I do not say that hon. Gentlemen intended to convey any wrong impression, but certainly the impression left by some of the statements which have been made may have effects which they would not desire.
  Then comes the question of the allotment of the loan. Someone has said that it is a question of the Jew claiming more than the Arab or the Arab claiming more than the Jew, but nothing is further from the truth. The question is whether the loan when granted will be equitably allotted. I wish to disabuse the minds of any who may still be under the impression or idea that the Jewish agency or the Jewish settlement is in any way intended to damage a single Arab. As I have already said, they have tried time after time to make it clear that they want to help the whole community. Any criticism of the proposed allotment as far as I am concerned is not based on antagonism to the legitimate interests of any section of the community. The trouble is that it has not yet been realised that the establishment of the Jewish National Home is not in any sense a charitable undertaking on the part of the Jewish people. Some people ask "Why do not the Jews provide this or that facility in Palestine?" But this great venture is not a charity; it is something which Jews place high above anything in the nature of eleemosynary operations.
  I ask hon. Members to take into consideration the feelings of the men who have gone to Palestine and who are labouring in the fields and at industries there and doing their level best for the country. They do not want to depend on charity. They only ask the ordinary human rights which every administration is entitled to give them. They only ask to be treated equally with their neighbours, no better and no worse. Is it any wonder that men and women working in field, factory and workshop who have spent the best years of their lives in the advancement of this country should be resentful if they are regarded as people requiring the charity from their co-religionists or others for the necessities of life and ordinary social amenities? They have denied themselves all luxuries, "they are clothed in plain garments," they have for their meals only
  1402
  the barest necessities and they have denied themselves the amusements offered by cities and by life outside Palestine.
  These words apply to a large section of the Jewish community in Palestine. Surely it is not fair that the welfare of those men and women and of their families, the ordinary educational requirements of their children, healthy villages and cities, amenities of postal services—should be denied them. Is it fair that they should have to look to the already overburdened Jewish community of the world when that community has had the care, owing to the shockingly, immoral and uncivilised action which is taking place at present in Germany, of large numbers of people to support? Is it fair that those people in Palestine, who have the advantage of saying that at least they have given of their energy and all that they hold dear in order to build up that land, should have to look to the coffers of their richer fellow Jews throughout the world in order to receive that which the administration ought to give them?
  Sir P. CUNLIFFE-LISTER: I do not quite see how the hon. Gentleman's criticisms apply to the present discussion. He does not suggest, does he, that this loan is not for objects most urgently needed by both communities in Palestine?
  Mr. JANNER: I do not think I have yet made myself sufficiently clear to the right hon. Gentleman. I do not complain of what is in this loan; I complain of what is not in the loan. I am not saying that we do not need works in Jerusalem and that works are not needed in Haifa. Heaven knows that the introduction of those works will mean a big advance as far as the country is concerned, but take Tel-Aviv. Here is a city which is absolutely Jewish. Does it not need a drainage and water system?
  Sir P. CUNLIFFE-LISTER: Does the hon. Member not know that the Palestine Treasury and the British Government succeeded in obtaining a loan from an insurance company on very good terms for Tel-Aviv? I hope that will be acknowledged.
  Mr. JANNER: I acknowledge all that the Government have done, and when I am making criticisms I hope they will

  1403
  be accepted as constructive and not destructive criticisms. Far be it from me to criticise anything in this connection in a destructive sense. I quite agree with the right hon. Gentleman, but will Tel Aviv receive the loan at the same rate of interest as this loan which is being guaranteed by the Government? Will not the Tel Aviv citizens themselves have to pay the whole of this money? Who will pay the interest, and who will repay the capital? The Jews in Tel Aviv. Let us have it plainly and openly stated. That they will be assisted, I agree, but that is only going half-way, and I say that if the other cities are entitled to be assisted by this loan, as they are, why should not Tel Aviv be likewise assisted?
  No one wants to displace the Arabs. We were told there were 800 odd displaced Arabs, but there were not. I should like the right hon. Gentleman to let us know in this House how many actually were displaced. Investigators spoke about thousands of displaced Arabs and would have had us believe that the world was seething with displaced Arabs. It is not true. What is the case? The question was raised in the Permanent Mandates Commission of the League of Nations on the 27th June, 1933, and a statement was made giving remarkable figures as to landless Arabs. There were 3,188 claims, 2,441 of which were rejected, 542 acceptances, and 205 were then still under examination. I do not say that they should not be given land, although in other countries, including England itself, when a person buys a place and pays the full amount, he does not give compensation to the tenant as well. In the main the Jews who purchased land in Palestine not only paid the owners well for the land, but compensated the tenant as well. The Jewish population of Palestine would not see a single Arab harmed, when his claim was just, but what the Jew does complain about is this, that when these matters are being considered they should be considered on an equitable basis.
  I would ask the right hon. Gentleman, How has the mandate itself been implemented? How many Jewish people, if any, of these workers, for whom the Jewish national home is supposed to have provided, have been given a single acre of land in Palestine? We were told that
  1404
  that opportunity would be given for settlement to Arab and Jew. I do not complain about the Arabs getting it. Both sections should get it, but the Jew appeals that the mandate should be implemented properly. When it comes to education, I am anxious to see that every individual in Palestine, whether he be Jew, Arab, or other person, should have an equal opportunity for education, but why say to the Jewish community, "You have got to pay for almost the whole of your education you have £1,000,000 excess in your Budget. Why not allow a part of this £1,000,000 to be utilised for the ordinary social services, so that the education of the child shall not depend upon the good will of someone who is putting a penny in a fund here in Europe or in America?" The Administration should do it, and everyone would be content. It is only this last year that anything approaching a reasonable proportion was paid. But this loan does not deal with the question of the proportion to be paid for education. It is a sum set aside to erect and support educational establishments, in the main. Is that same consideration not to be shown to those who are opening their arms at the present time to their oppressed brethren throughout the world? No one wants a concession by way of loan, but if we were assured that there would be an equitable arrangement of this kind I should be more happy about this loan that is now before us.
  As to the post office, I know my right hon. Friend will say again that in Tel Aviv the money is going to come from the loan to be raised by Tel Aviv, but it will be obtained at a higher rate of interest, and it will be paid by the Tel Aviv ratepayers, not by the general taxes. It has been admitted that over 30 per cent. of the taxation of that country, or more, some years ago, was being contributed by the Jewish people, and to-day, I suppose, it would be nearer 50 or 60 per cent. No one says that the needs of the people should be attended to in proportion to the amounts that they contribute towards the Exchequer, but one does say that the contributions give an opportunity for the land to build itself up, that the Exchequer may have the opportunity of giving to all sections of the community those amenities which they properly need. A post office is needed

  1405
  in Tel Aviv; very much more is it necessary there than in the other cities of Palestine. I have not yet visited Tel-Aviv. I have postponed my visit there and stayed back here specially to give my views to-day, but I hope to have an opportunity of seeing things there for myself. I am given to understand, however—and I believe it is true—that the post office at Tel-Aviv is crushed out with business. Why does not the Exchequer of Palestine, instead of waiting for Tel Aviv to raise its loan, do the same for Tel-Aviv as this loan is intended to do for other cities?
  I hope I have never done anything which may in the slightest way create differences between the two peoples in Palestine. We as a people have been given the task of upholding this important place in the world, which, after all, is a place that is held dear by every race, with perhaps one exception to-day. It is a place on which all eyes are centred. No one wants to do it any damage. I am sure that those who have gone there, including those who have been torn from their homes in one country to another today, do not want this acrimony. No one wants to draw a distinction between the German Jew and the Arab or with any other Jew. The German Jew has gone to Palestine. Is there anywhere else in the world where he is likely to be received as well than by his brethen out there? Is there anywhere else in the world where he would more desire to be received than in Palestine itself?
  It is a tremendous problem. But I feel very heavily the responsibility on my shoulders when I speak in this House on this subject, particularly at this time. I would like the right hon. Gentleman to know the differences that have been created between the two peoples in Palestine are not differences that should have been created or for which any reasonable person is asking. I would like him to know that it is not only necessary, as far as the communities of Palestine are concerned to do justice, but it is necessary to appear to be doing justice the same as everywhere else in the world. It is necessary for him to know that there are forces at work. I hope that my hon. Friends who have had agitators coming to them from the other side will take to heart what I am about to say. I would like to quote what a German said when
  1406
  writing in the most vicious public journal of Germany to-day—Der Stürmer. Only a week or two ago he wrote an article "Two years among the Jews in Palestine," and he stated that he participated in the Arab National Demonstration in Jaffa against the Jewish immigration which resulted in 20 deaths and some 300 being injured. He boasts :
  "On the night following the demonstration I was arrested by the British police for causing a disturbance. On the 13th December I was released and ordered to leave the country the same day."
  I wonder how many of these Nazi agitators, those people who have no regard for the truth, have been enbittering the minds of the Jews and the Arabs in Palestine and others for many years. I wonder how many people, like the person who wrote in that vicious journal, which is to-day perpetuating the ritual blood libel in a form that is nauseating and disgusting to any decent person, have been responsible for the difficulties that have been created in that land. I ask the Government again, in all honesty and sincerity, not to take the side of only one party, but, when they are considering these matters, to take the proper opinions of both sides. I ask the Government to see that when the Jewish agency which has been entrusted with the duty of making suggestions with regard to emigration give reasons why there should be 20,000 there should not be a miserable 5,000 slung across; that the Government should not thus allow the possibility of the land to go to decay; and that they should give an opportunity for the security of Palestine being as strong for this loan as it was for the previous one.
  Persons who have complained about the other loan should know very well that their complaints are unfounded. The amount of that loan to Palestine was £4,500,000. The first £1,000,000 was used for the purpose of taking over the railways which had been erected for military purposes. Is there any other country in the world whose loans or whose assets have been utilised for the purpose of repaying such a large sum in order to take over what had been necessary during military occupation? The truth of the matter is that Palestine can afford to repay the loans if properly treated, if immigration is allowed according to its true absorptive capacity. The country is prospering and the money is there. If

  1407
  the country is allowed to develop, this loan will be secured, and loans a hundredfold as big will be secured, not for a year but for centuries. It is in that spirit that I ask the right hon. Gentleman to accept my contentions and that of many others who feel like myself and who hold Palestine in high regard.
  2.10 p.m.
  Mr. ANNESLEY SOMERVILLE: The Noble Lord the Member for Horsham (Earl Winterton) made an eloquent plea for the harmonious co-operation of the two races in Palestine. That plea was repeated by the hon. Member for White-chapel (Mr. Janner), and it must be endorsed by every well-wisher of Palestine and every one who hopes for the progress of humanity. As far as this loan will ensure that object, we must all approve of it. There is one point of modified criticism which I would like to make with regard to the loan. It is one of a series of such loans and guarantees. There was the original loan of £4,500,000 to Palestine. We have had a loan to Austria, and we have had to give £400,000 to Newfoundland. The latter has the merit of having been given within the Empire. We have commitments at Geneva, and now we have this loan. My right hon. Friend the Secretary of State has told us that this guarantee is perfectly safe. Why is it safe? Because at the present time Palestine is one of the few prosperous countries in the world. Why is it prosperous? Because of a combination of good administration and private enterprise. Capital has been brought into the country by Jews throughout the world, and successful settlement has been effected on a well-planned and well-ordered system.
  Recently there was an interesting article by Mr. Sieff in the "Morning Post," in which he spoke of the settlement in Palestine and drew the moral—why not apply the same principle to our own British Empire. The most important problem before the Empire is the settlement and re-distribution of our white population. At the present time we have a credit of £3,000,000 a year for that purpose lying dormant. If the country can afford to give loans and to make presents of capital in all directions, why should we not utilise that credit
  1408
  in a planned and ordered manner for the settlement of our own Empire? We have a mandate for Palestine. We do not know how long it will last, but I should like this loan to be a mandate to the Government to undertake in a well-thought-out manner the re-distribution of the white population of the Empire.
  2.13 p.m.
  Mr. TINKER: The Debate has gone on three hours and I heard it said when it started that it would be over by one o'clock. Evidently that is not the feeling of hon. Members. The Debate has been highly interesting, and has shown that from all sides of the Committee keen attention is being paid to the affairs of Palestine. Many of the speakers have spoken of their personal experience there. The Secretary of State told about his visit, the hon. Member for Bodmin (Mr. Isaac Foot) spoke about his recent visit; the right hon. and gallant Member for Neweastle-under-Lyme (Colonel Wedgwood) has also been there, as have other speakers. I cannot speak of recent experience, but I can speak of what I saw there at an earlier period. It was my fortunate or unfortunate experience to be there during the War, and I saw much of what has been referred to to-day. I was present when the railway was begun for military purposes, and I saw part of it working. I could see then that the building of that railway would be for the use of Palestine. It was put down on a permanent basis, and one could recognise that later on it would be an asset to that country. I was not aware until to-day that the Palestine people had paid for it.
  Mr. JANNER: £1,000,000.
  Mr. TINKER: Naturally it would be to the advantage of the people of Palestine to take over the railway and to have control of the communications from Egypt to Jerusalem.
  Mr. JANNER: It is not a question of payment of debt. The money was used in that way. It was a case of something being done for military purposes and it was gradually paid for out of a loan.
  Mr. TINKER: I am not complaining of that. I noticed also that the time of which I have spoken that the one great thing Palestine would have to deal with was the water supply. The provision of

  1409
  water as one of the greatest difficulties with our troops. When it was proposed to get from one point to another the question always asked was whether we could get to a water well before it was destroyed. When Beersheba fell the only problem was whether we should be able to get to the water wells before they were destroyed. To do so meant all the difference between success and failure. Every man in the Army had to have an extra water bottle and the question always before us was "Can we manage to save this water until we get to the wells?"
  Earl WINTERTON: The hon. Member will remember how bad the water was just after the fall of Beersheba.
  Mr. TINKER: We were told that Palestine was a land of milk and honey, but it did not look like it, though we could see the possibilities for the future. Near Tel-Aviv we saw development taking place, the orange groves, and we realised what might happen in the future. I thought of the great possibilities if the development could be taken over by Great Britain. So this morning I am very glad indeed to give my assent to what is proposed. I know that when we hand out money we have to watch it and not allow sentiment to govern our actions. Palestine is a country to which we owe something. Partly for sentimental reasons, but partly for practical purposes, I would not like to sit here and allow this discussion to end without saying something in favour of this loan. On the practical side we know that Palestine needs developing. Palestine needs a loan. Suppose we say that we do not guarantee it. There would then be grave doubts on the part of the people who lent the money. If there were no backing by His Majesty's Government Palestine might have to pay a greater rate of interest. When money is lent the amount of interest depends on the security. If this loan has to be risked without the guarantee of Britain behind it, instead of about 3½ per cent. interest having to be paid the rate might be 5 or 6 per cent. That would put the people of Palestine into the hands of the moneylenders and in greater difficulties than would otherwise be the case.
  I have not the slightest fear that this money will not be repaid. I do not think we shall ever be chilled upon to
  1410
  provide anything. It is merely a question of a strong and powerful Government being behind the loan, so that if anything should arise in Palestine between the two sections, or should any attempt be made to overrun Palestine as in the past, this Government will be there to decide as to the rights or wrongs of that particular question. The Government will see that the money is not thrown away altogether. Looking upon the matter from the practical point of view I feel that this country is not going to squander any money; it is merely giving its word. It will be doing a great service to a lot of people who have a right to expect it from her. I was very glad, when the question was put from this side with regard to the possibilities of the waterworks, the school buildings and other kinds of work, to hear that we might have a voice with regard to the labour arrangements. I would not like to think that this country was behind any guarantee that would allow the exploitation of Arab labour. My right hon. and gallant Friend the' Member for Newcastle-under-Lyme feared that Arab labour might be employed at low rates of pay. I would not agree to any loan that would lead to that possibility, and I was therefore pleased to get an assurance from the Scretary of State that so far as labour could be protected it would be protected. When the Bill comes before us I hope it will contain something on that point.
  Sir P. CUNLIFFE-LISTER: I propose to put a provision of that character into the Bill. I mentioned the matter in the White Paper because I wished to give the House as much information as possible. There will be reproduced in the Bill a provision bearing out what I have included in the White Paper.
  Mr. TINKER: I thank the right hon. Gentleman. That statement helps me in supporting the Government. It is not often that one can support the Government when one has such bitter feeling against them on other things, but matters do come before this House when all Members have to support the Government. It is not necessary for anyone to say always that he is in opposition. With the assurance that labour will be protected, I am very pleased to give my support to this proposal.
  2.23 p.m.
  Major-General Sir ALFRED KNOX: I want to say only a few words. At one time the Debate seemed to degenerate into a communal squabble. My right hon. and gallant Friend the Member for Newcastle-under-Lyme (Colonel Wedgwood) evidently advocated the policy of allowing all the Jews expelled from Germany to settle in Palestine. He would like more money spent on education in order that better English, might be taught, because all the children were only anxious to get away to America as soon as possible. I asked myself where the British Empire came into it. From an opposite point of view my Noble Friend the Member for Horsham (Earl Winter-ton) alluded to his experience with the Arabs of the country, and demanded justice for the Arabs, with which I thoroughly agree. But I do not want to enter into this communal question. I do not want to say anything about the oppressed on either side in Palestine, but to say a word for the most depressed person in the world, the British taxpayer.
  We are told that this loan will cost us nothing. But is everyone quite sure? When some years ago the British Government guaranteed a loan to cover the land annuities in Ireland were we not told that that would cost us nothing? It is costing us a good deal to-day. Perhaps the taxpayer does not actually have to pay, but it has led to a trade war between the Irish Free State and this country, which is not for the good of either. The Minister, in his interesting and charming speech, pointed out the very strong financial position of Palestine at the present day. If their position is so strong, why should not they raise this loan themselves? Why should the unfortunate British Government have to do it again? The Noble Lord the Member for Horsham will no doubt call me "a Little Englander," but I did not vote against that railway in Uganda. Surely, however, there is a difference between Empire development and this continual guaranteeing of loans for mandated territories which are not part of the Empire.
  Earl WINTERTON: As the hon. and gallant Gentleman has referred to me, perhaps he will allow me to remind him that at the time of the Uganda Railway
  1412
  loan there was no undertaking that all the materials to be used should be purchased in this country. There is such an undertaking in the case of this loan, and therefore, from the point of view of the British producer and exporter, this loan is just as favourable as the Uganda loan.
  Sir A. KNOX: I quite agree that as regards employment in this country the immediate effect of both projects would be the same; but if the Minister looked round some of the various territories in Africa and elsewhere for which he is responsible, surely he could find projects there which might with advantage be undertaken with guaranteed loans. Some of this money is to be devoted to the very useful purpose of providing a water supply. There are lots of places in this country which are urgently in need of a water supply. No doubt the thirst of the people in Palestine is greater than here, owing to their climate, but I could show places in my constituency which are sorely in need of water but get no guaranteed loan. Why should the Minister not go to the Minister of Health with a guarantee of a loan to supply those villages at home with water, rather than supply excellent people like the Jews and Arabs in Palestine with water? Then some of the money is to be spent on telephones. Could he not ask the Postmaster-General whether our telephone system in this country could not do with a loan for its improvement? Some of the money is to be devoted, also, to agricultural credit. I shall go down to my constituency in a few hours to face farmers and I shall have to say "I have come hot from Westminster where we have proposed to give agricultural credits to the Arabs in Palestine."
  Sir P. CUNLIFFE-LISTER: May I remind the hon. and gallant Member of a very large operation a year or two ago by which the Government undertook to guarantee credits to farmers in this country?
  Sir A. KNOX: Yes, but the unfortunate farmers want a little more. The position of agriculture has deteriorated since then, and the industry is in a very parlous condition. We hear also about moneylenders. Surely there are other parts of the Empire where the moneylender has just as tight a hold as in Palestine? I think our fellow subjects

  1413
  in India might have something to say about that if they were articulate. I have put forward these few reasons as a protest against this proposal in the interests of the British taxpayer and the urgent needs of the Empire for guaranteed loans.
  2.29 p.m.
  Mr. HALES: It is with great pleasure that I intervene in this Debate, because I have just returned from a trip to the Far East and on both the journey out and on the journey home I spent a week in Palestine, not as a tourist but as a British business man trying to open up trade in a country which is fast developing. It would be difficult to go against this loan as a financial proposition, for with millions of Jewish capital flowing into that country we shall be pretty safe in following the Jewish lead—providing we are not too far behind. The developments of Palestine to-day resembles very much the development of which we used to hear in the Far West of America, where towns sprang up, so to speak, like mushrooms in a night. On visiting Jerusalem one cannot help being struck by the fact that an entirely new city is being built outside the walls of the ancient city; it is difficult to realise that one is visiting the Holy City of the Bible until one penetrates the fastnesses and labyrinths of the inner city. Building is proceeding on every side, and owing to the rocky nature of the ground the foundations can only be got out by blasting with dynamite. One has to be a little careful, when walking about the streets, to watch for the man with the red flag who comes running along to see that no pieces of flying rock catch passers by. Tel-el-Aviv, on the coast, 40 miles from Jerusalem, and practically a suburb of Jaffa, is growing almost hour by hour. A great stream of camels carrying sand from the desert can be seen trooping along to the brickworks, where they are making bricks which will be used in the erection of buildings on the sea-shore.
  There is no doubt that Palestine is one of the few countries which can be termed really prosperous. There are no unemployed, in fact restrictions have had to be placed upon immigration, because the country could not assimilate quickly enough the extra population streaming to its borders. It must not be looked upon as a hardship that restriction of immigration has had to be exercised, to
  1414
  prevent an undue growth of the population at too early a date. One could wish that these mandated territories were of more use to the countries in whose charge they are placed. I have felt this keenly as a business man, on my visits both to Palestine and to Iraq. I suppose that we have spent somewhere about £200,000,000 in Iraq, and we have not even a preferential tariff, we who alone are responsible for the prosperity of that country. We seem to be the milch cow—we find the money and then have to stand aside and do not even get the credit to which we are entitled. We Britishers are very slow in taking advantage; of which any other nation would take care to get a benefit for itself.
  I suppose I am one of the few commercial travellers ever elected as a member of this august assembly, and I still follow my commercial life outside during the Recess. I wish other Members took advantage of the recesses to get outside and sell goods for Britain, and then they would obtain a very much more correct estimate of what is happening in the world. One imagines, on returning from a journey, such as I have just made, of some 20,000 miles, that some interest will be taken by others in what is happening in those far countries, but I should almost have a heart attack if a Member of the Cabinet were to say : "Just tell me what you found going on out there." Commerce is a war, and commercial war is far more deadly than actual warfare, because it goes on for ever, whereas an ordinary war does come to an end at some time. Commercial travellers are like scouts. Here I may say that my wife always criticises me for saying that I am a commercial traveller. She says that I am a merchant and a shipper, but I am proud to be a commercial traveller selling British goods abroad. When a scout has been in the enemy's country one would think that on his return—if he returns alive—he would be asked on all hands, "Tell us what is happening."
  A general wants to know what his scouts have seen, but our generals of industry seem to take very little interest in the scouts on his return, or in the information he can give them. I sometimes sit here hour after hour, day after day, and week after week, waiting for the magic word, my name, to be called from the Table, and sometimes when I go

  1415
  home I feel very cross about it. I do know something of what we are talking about perhaps more than any Member of the House on some matters at least and I am possibly the only one who is not called upon.
  I do not intend to go outside the scope of this Debate but I would like to say, in passing, that I feel very great disappointment that in the transport measures which are being brought about I, as a pioneer in the motor trade in this country for 37 years, have never even been asked to join the Committee. I am always of a shy and retiring disposition, and I do not wish to push myself where I am not wanted, although I did push myself in the House of Commons when I was not wanted. One feels that, at any rate, when one has a claim such as that which I put before the Minister of Transport only—[Interruption]—I am sitting down in a moment, and I am trying to say the right thing but to say the wrong thing sometimes is a very great temptation and so much more interesting. I only had 10 minutes when I got permission to speak.
  If in some business I were going to invest say, £5,000—which I have not got to spare—I should certainly want a voice in the running of that business so as to know that the financial support that I was giving would result in some benefit in the conduct of that business. There may be reasons which I do not know because I am speaking without knowledge, why, when a mandated territory is concerned, we should not be allowed to have some preference in trade, but I certainly think that we might put our money out to better advantage and into a direction from which we should see a better return.
  2.38 p.m.
  Mr. MAGNAY: Nothing was lacking in fulness in the exposition of the Resolution which the right hon. Gentleman gave, and no one could complain of not understanding what the right hon. Gentleman meant. I agree with the hon. Member for Bodmin (Mr. Isaac Foot) that, to use his own words, we must face things as they are. I suggest that we should face all the facts the wide world over. I admit that we are bound by mandate, agreement, understanding, undertaking or whatever you like to call it, since the War.
  1416
  I am not concerned about the racial animosities between Jew and Arab, and I would deprecate, as we all would that one word should be said that would make those thousand-year-old animosities more pronounced. Every one of us wants to see those age-long breaches healed, but I am concerned with the timeliness of the financial policy of the government in this instance.
  The hon. Member for Leigh (Mr. Tinker) said that we have a concern in the affairs of Palestine; I suppose we have, but I am more concerned with the affairs of England, and particularly of the distressed areas. I have this morning been called a "Little Englander" by the noble Lord the Member for Horsham (Earl Winterton). I do not mind that; certainly I am in very good company, both in the past and in the present, by being put into that category. I suggest that this Resolution is not required because, compared with the condition of England, Palestine is really flowing with milk and honey, and is well-to-do, in comparison with the United Kingdom. I suppose there is a sentimental reason for helping Palestine because we all wish that that land, and that sacred spot, should be remembered with the gravest honour, if not with reverence, but even in the old days a collection was taken, according to the Acts of the Apostles, for the poor saints in Jerusalem. That was after the communist settlement established by the early Church had broken up.
  We have been told that Palestine has a surplus of £2,500,000. I was amazed to hear that the policy of the Government is, in such a case as Palestine and any territory where authority runs under a mandate or in a Crown Colony, that the reserve has to be equal to the annual expenditure. What a blessed state would be that of England if we could have a reserve equal in amount to our annual expenditure. If the Resolution is carried, I suggest that it is a good omen for the distressed areas. I will not use the rather plain and lurid language that will be used by the people in my part of the country when they read of this Debate and when they ask me afterwards whether it is a. fact that we have been guaranteeing £2,000,000 for the Arabs and the Jews. I shall explain that the money is for the resettlement of distressed Arabs to the extent of £250,000, for water supply nearly £100,000, and for agricultural

  1417
  credits £200,000. In very plain, terse and lurid English they will tell me what they think of the Government. They will say that our job is to put the distressed areas upon a proper footing. Some of us had to get a petition signed in which supporters of the Government threatened to vote against the Government before we could get £500,000 to reduce the rates of the distressed areas, and yet we come here on a Friday morning and just throw off quite easily £2,000,000, as though we said : "What is that to talk about?" It is nothing when you say it quickly.
  With all respect to the Jews and to the ancient land, I say that our first job is to see that our people are provided for. The question that those people will ask is : "If £2,000,000 can be guaranteed for Palestine, which is not hard up and where there are no unemployed, how much more should be guaranteed for the setting up and developing of the industries of the distressed areas?" That is a question which the Government have only two years in which to answer. If they do not answer it I, for one, shall be no more in this House and hundreds of the Government's supporters will not be here. That is the pertinent question which has to be answered by the Government, and that is the test. The test for this country is not Palestine or any other Colony, but what are we going to do in this country in the tremendous fight against poverty and unemployment?
  We have here a provision for the resettlement of Arabs, but I would ask again, what about the settlement of our people, and the credits necessary for agricultural holdings, and so on, in this country? The Resolution says : "it is expedient." We say that it is expedient and timely to do something like this in England—that it is our plain duty now to build Jerusalem in England's green and pleasant land. That is not merely a moral and a spiritual thing which we all desire; the first thing that we have to do is to be natural. The Epistles to the Corinthians indicate quite plainly that that is a very sensible and reasonable thing to do. Let us talk about the things that matter first, and then we shall have time to talk about the others. I suggest that we put first things first. If I am told that we ought to love our neighbours as ourselves, I agree, but we must first of all start at the Jerusalem
  1418
  at home. When we have done our plain duty there, then, and then only, can we cross the border to help others. I feel certain that I am right when I say that our people in the distressed areas are sick of the dole. They want our industries restarted, and it is no comfort to them to see that we are guaranteeing loans for far-off Palestine when we have to send investigators to the distressed areas to find out what we have known for 10 years and more, namely, the distressed condition in which those districts are. It is no comfort to us in those areas to know that this can be done abroad and so little can be done at home.
  2.48 p.m.
  Captain FULLER: The hon. Member for Gateshead (Mr. Magnay) has certainly directed to the Government an argument which needs an answer. I agree with much that he has said, but, at the same time, I do not think we can shift the responsibility on to the doorstep of the Colonial Secretary when we are discussing this loan to Palestine. To me, in these days of world-wide depression, loans are like a red rag to a bull, and, if I thought that the granting of a guarantee for this loan would prevent the Government from undertaking schemes such as we hope they will undertake in the distressed areas, I should vote against it. Obviously, however, that cannot be the case to-day- I would like to ask one or two specific questions with regard to the loan, and to make one or two general observations.
  In the first place, I would like to ask how many Arabs, really, are going to be resettled on the land? The hon. Member for Whitechapel (Mr. Janner) mentioned a figure, but there is another figure, which does not quite agree with his, published by the Department of Development of the Palestine Government in 1933, which indicated that the number of claims accepted was 570, and that of those there were only 83 outstanding. The truth obviously lies between the two, and a figure of about 600 seems to be indicated, which, taking the amount of money provided in the Resolution, would be roughly some £400 per settler. I would like to ask whether the Government are satisfied that that is a reasonably figure? I think that in this country £1,000 is considered necessary for settling a man on the land, and, taking into consideration

  1419
  the differences in living and so on, I should like to know whether the figure I have suggested would be regarded as reasonable.
  With regard to the item for public works, I trust that these will be revenue-producing, in accordance with the hope that is expressed. This has not been the happy result in the case of the railway which was bought under the previous loan. In spite of all the hopes which were expressed in regard to it, it has been one more example of the failure of the Government to run what is essentially an affair for private enterprise. I notice that, although some years ago there was an excess of gross revenue of some £140,000, when the debt charges were met this surplus was turned into a deficit, which in 1930, 1931 and 1932 amounted to £2,000, £50,000 and £48,000 respectively. Therefore, so far from being revenue-producing, it is imposing a burden on the taxpayer in Palestine. I think that, if concerns of this nature are not revenue-producing, Palestine would be well advised to take a warning from the many debt-ridden States, importers of goods on credit, which exist throughout the world to-day, and of the fact that their burdens, which they cannot bear, have been built up almost entirely in this way. With regard to the oil berth, I should like to ask to whom this will belong when it is finished. The right hon. Gentleman may have mentioned that in his speech. I was a little late, a fact for which I apologise, and, if the right hon. Gentleman has given the answer to that question, I will not expect him to do so again.
  Sir P. CUNLIFFE-LISTER: It belongs to the Haifa Harbour Board, which belongs to the Government.
  Captain FULLER: Could ray right hon. Friend tell us what is the nature of the agreement with the company?
  Sir P. CUNLIFFE-LISTER: I dealt with the whole of that matter in may opening speech.
  Captain FULLER: I do not know if the aspirations of the Jews are being realised in Palestine, but, from the figures I have seen, they are certainly not developing on the lines that were hoped for in the first instance. It has been stated, and I think it has been accepted everywhere, that, if
  1420
  Palestine is to develop and become a national home for the Jews, there must be a large Jewish population on the land, but the figures do not suggest that that hope is being realised. Of course, the Jews have put in an enormous amount of labour themselves, and they have themselves collected vast sums of money all over the world. In their Foundation Fund, established in 1921, they amassed, I think, no less than £5,000,000 towards the development of Palestine. That brings me to a question which has been puzzling me for some time, and on which I hope during the discussion, perhaps not to-day but on the later stages of the Bill, the right hon. Gentleman will be able to give us a little information. That is in regard to the trade balance of Palestine itself.
  Sir P. CUNLIFFE-LISTER: I am very sorry, but again I dealt with that fully in my opening speech.
  Captain FULLER: I am glad to hear that, but, when I asked my right hon. Friend a question on the subject last year, he told me that the information was not available, and that he did not think the labour involved in obtaining it would be justified by the result.
  Sir P. CUNLIFFE-LISTER: I have laboured ever since to satisfy my hon. and gallant Friend.
  Captain FULLER: This is a point which I should like to emphasise, because the figures that are available indicate that there is an adverse visible balance of trade, over the last five years, of some £23,000,000. Although I am quite prepared to admit that there must be a considerable sum from invisible exports, I cannot imagine that it will be sufficient to make up the very large difference. The only thing I want to say in regard to that is that if that is the true situation, it is a serious matter and must be taken into consideration by anyone who is guaranteeing a loan to Palestine. I wish to ask how Palestine is paying her way, and how, if this is the case, she is to obtain the exchange wherewith to meet the charges on this new loan. I have no objection to the loan itself; I am only asking these questions in an inquiring way. I am very glad to know that we are living up to the expectations of our Mandate, but I should like to be reassured as to the general position of Palestine.

  1421
  One good thing is that capital goods are to be made in this country. I would congratulate the right hon. Gentleman on that provision, and would only say that I think it is an arrangement, which is long overdue, and I only hope that it may form a precedent for future lendings.
  Mr. MORGAN JONES: Looking at page 4 of the White Paper, I see at the top of the first paragraph the words :
  "The item 'Public buildings' includes £156,000 for the construction of a new Post Office and Telephone Exchange at Jerusalem and £106,000 for the provision of school accommodation for Arab children, the deficiency of which is serious."
  Obviously, on the face of it the contrast is somewhat striking. Could the right hon. Gentleman tell me whether that is an initial, a first expenditure in that direction, and for how many children the £106,000 is expected to cater?
  2.57 p.m.
  Sir P. CUNLIFFE-LISTER: In the first place, I should like to express my gratitude for the reception which this proposal has met. It has been received with practical unanimity, and the reason is that we are carrying on in a sound businesslike way the policy which has been followed in Palestine ever since we accepted the Mandate. I do not think that the Committee would desire me to go back upon the rather full speech I made in opening, in which I dealt as clearly as I could, not only with the budgetary position of Palestine, present and prospective, but also with the whole question of balance of trade; with the nature of the imports which have been coming in; with the large capital in-vestments which have been made and which will inevitably result in future years in much larger exports; and with the internal development. With all of these matters I dealt in my opening speech. I should like to thank the whole Committee, and particularly the hon. Member for Bodmin (Mr. Isaac Foot) and my Noble Friend the Member for Horsham and Hastings (Earl Winter-ton), for two speeches showing a real understanding of and sympathy with Palestine and its problems. Those two speeches will be as welcome in Palestine as they were in this Committee when they were made. They present a clear contrast with a speech made from the Front Opposition
  1422
  Bench by the right hon. and gallant Member for Newcastle-under-Lyme (Colonel Wedgwood) which the official spokesman of his Party hastened to disavow.
  There has only been one criticism of the proposal, that of the right hon. Member for South Molton (Mr. Lambert), who has now left. He said that if Palestine has as large a surplus on its Budget as I said, and if the economic position is as satisfactory as I represented it to be, it could have borrowed this money in the open market without a Government guarantee. I have never denied that for a moment. It is quite possible for Palestine to borrow the money without a guarantee—at a price. The value of the British guarantee, however, particularly in view of the fact that there is also a £4,500,000 loan outstanding, makes all the difference to the rate of interest which Palestine would have to pay and the price at which the loan would have to be raised. I thought that the right hon. Member was a little unfair when he said, speaking of the £4,500,000 loan, "But look at this; there is only £138,000 in the Sinking Fund." It is true that there is only £138,000 in the Sinking Fund, because the statutory contractual requirements of the Sinking Fund, as of every Sinking Fund of every loan in the world, is that so much should be put into it each year. It would have been a little fairer had he said that Palestine has meticulously, year by year, met every requirement of interest and Sinking Fund without any suggestion of recourse to this country. Of course it is not the Sinking Fund which is the security for the loan. The right hon. Member might as well say that because there is a Sinking Fund attached to some of the British loans, the only security for the man who buys 3 per cent. or 3½ per cent. British Government stock, is the Statutory Sinking Fund. What he buys it on is the general credit of the country. I hope, however, that I have satisfied the Committee that there was good solid security, both in the budgetary and in the economic position of Palestine, which fully justified us, on merits, in being sure that in giving this guarantee we should not be called upon to implement it.
  There were two or three small points of detail raised, to which I should reply. The hon. and gallant Member for the

  1423
  Ardwick Division of Manchester (Captain Fuller) asked me how many Arabs are to be resettled. I think the exact number is 890 families. A very careful calculation has been made by the extremely able Director of Agriculture in Palestine, and we may safely rely on that calculation—a certain amount of land has already been bought—as to what will be the cost of the resettlement. The hon. and gallant Member said he hoped that the water schemes and drainage schemes will be revenue-producing, and he contrasted them with railway receipts. Of course, there is all the difference in the world between the certainty of getting revenue out of waterworks and out of a railway. You can always send stuff along the road; that is the thing that knocks the railway out; but people have no alternative to water to wash with or even, in some cases, to drink. If you supply a peculiarly thirsty city with water, where people have to have the water and cannot get it from anywhere else, you may be reasonably certain that, though the water rate which it is proposed to levy is not outrageous, if anything is revenue-producing it will be the water supply.
  Captain FULLER: Is there an effective alternative to the railway?
  Sir P. CUNLIFFE-LISTER: There is an effective and competitive alternative to the railway, but not to the water.
  May I deal with the point raised by the hon. Member for Caerphilly (Mr. Morgan Jones)? This £106,000, which it is proposed to spend on education buildings, is an exception to the general rule that the education expenditure comes out of revenue. It does not at all represent the total on education expenditure year by year. What has happened is that there are certain buildings which are now taken at a fairly high rent and are thoroughly unsatisfactory. The High Commissioner of Palestine completely agrees with me that we should be justified in taking some part of this loan in order to substitute permanent buildings belonging to the State for buildings which have been let. It is not because education is less important than telephones. It is a capital expenditure for a very pressing need which is very present to our mind. It is extraordinarily true, as I know from firsthand knowledge, what several speakers have said of the keenness for education
  1424
  in both communities. It is well known that the Jews have established their own schools, and in the Arab villages, where many people have come back with a little money that they have earned outside, in the poorest villages they have set up schools, establishing the buildings themselves, which are among the best houses in the village. It is very remarkable.
  Now I come to the extraordinary speech of the right hon. and gallant Gentleman the Member for Newcastle-under-Lyme. It contained an attack on the administration in Palestine which was repudiated in every other quarter of the Committee. It charged the Government of Palestine with having a prejudice against German Jews. It entirely ignored the fact that the distribution of labour certificates as between Jews from one part of the world and another rests, under the present arrangement, with the Jewish Agency. A number of certificates are given and they apportion them out. He asked, "Why do we not let in anything like the number of people who came in under Lord Plumer? He knew how to run it." Indeed he did. I took the trouble to send for the number of Jewish immigrants coming in during the four years of Lord Plumer's administration. In 1925 there were 34,000; in 1926, 13,000; in 1927, 2,700; and in 1928, 2,158. Last year our total of Jewish immigrants was 30,000 all told. In the first two months of this year the immigration is 5,200. Therefore, if you compare the last year with the peak year of the Plumer administration, you find that there is no great difference. But you find a thing that Lord Plumer himself and everyone realised, that what had been done when that peak year of immigration took place was that, a very large number of immigrants having been attracted in that year, that kind of rate could not be kept up under the economic conditions of the country, and I think it was a matter of real regret to Lord Plumer and to the Palestine administration generally that the policy had not been more carefully adjusted to allowing a steady flow over a period of years. It would give rise to enormous dissatisfaction if you said, "I can take in a very large number now, but next year or the year after you will have none at all."
  I do not think that that is sound. The decision as to the number of immigrants

  1425
  that can be taken, the Committee will agree, must depend upon the absorptive capacity of the country. That does not mean the absorptive capacity at one moment. You might have a building boom. I am not saying that you could not employ more builders to-day in Palestine than are going in. In fairness, let me say that the High Commissioner has frequently made an offer, and said that if there is a shortage of skilled labour, if the skilled labour is available he will give special entry for that skilled labour. It is not an answer to a claim for skilled labour in a particular occupation to say that there is a chance for them and then to bring in unskilled people who cannot do that job. By "absorptive capacity," we do not mean that at a particular moment a certain number of people can find a job. You have to take into account the general future of that country. Every Jew who goes to settle in Palestine means to stay there and found a family and make it his permanent home. The Arab population is, of course, increasing very largely and the only people who can form a fair judgment of what is the proper absorptive capacity of the country are those who are on the spot, working in the administration day in and day out, and who have only one interest, which is to serve the best economic advantage and general welfare of that country. I will never, as long as I am Secretary of State, try to overrule those people who are on the spot and who must be responsible, and can alone judge how many people of one kind or another shall be allowed to come in at a particular time.
  I must join issue with the hon. Member in one thing that he said. I understood that he said that you must deal with this matter fairly and impartially. Impartiality and fairness all round is the keystone of our policy. It is true that the Jews have put forward a claim for a larger number of immigrants to enter than the High Commissioner has conceded. The Arabs, on the other hand, have contended that it is not possible for that country to admit more immigrants. The High Commissioner has taken the middle course. I expected that in advocating impartiality the hon. Member would say that the man on the spot, having heard both sides, was the responsible man to decide the number,
  1426
  but what I understood him to claim was that if the Jewish Agency asked for so many labour immigrants that figure should be accepted. I do not call that impartiality. We could not go on in that country on any such basis.
  I have gone rather outside the particular items included in this Resolution. I am very glad that permission was given for the Debate to range over rather a wide field. It afforded some hon. Members the opportunity of delivering speeches which might have been delivered on entirely different occasions, but for all that the Debate has been none the less pleasant. I think that we can say that in this case we are going to give help where help will be very welcome. We are giving the help of the financial credit of this country to enable Palestine to raise an essential loan at a very low rate of interest, and we can give that help without any risk to ourselves or our own finances; indeed with considerable benefit to our own industries. I appreciated what the hon. Member for Gateshead (Mr. Magnay) said. He expressed anxiety for his own distressed area. My noble Friend the Member for Horsham gave the answer to that. Under this scheme there will be at least £600,000 worth of orders coming to this country. That will be a great benefit to industry, and I hope that some of it will find its way into the hon. Member's constituency. We are discharging an obligation, we are carrying on the established policy of successive British Governments in the past, and in doing that I believe we shall be doing good business for our own people in this country. Again, I thank the Committee for the way in which they have received the Resolution.
  Question put, and agreed to.
  Resolution to be reported upon Monday next.
  The remaining Orders were read, and postponed.

  PALESTINE LOAN [GUARANTEE].

    ADJOURNMENT.
    Resolved, "That this House do now adjourn. "—[Commander Southby.]
    Adjourned accordingly at Nineteen Minutes after Three of the Clock.

AVIATION.
  AERODROMBS.
  AERODROMBS.
  PILOTS' LICENCES.
  PILOTS' LICENCES.
  ACCIDENTS.
  ACCIDENTS.
  PALESTINE (EDUCATION).
  PALESTINE (EDUCATION).
  ROYAL AIR FORCE (ACCIDENTS).
  ROYAL AIR FORCE (ACCIDENTS).
  WATER SUPPLY (COLLIERIES).
  WATER SUPPLY (COLLIERIES).
  COAL INDUSTRY, YORKSHIRE.
  COAL INDUSTRY, YORKSHIRE.
  DWELLING-HOUSES (VALUATION).
  DWELLING-HOUSES (VALUATION).