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Title: British speeches of the day
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Title: British speeches of the day
Physical Description: 5 v. : ; 23 cm.
Language: English
Creator: British Information Services
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Place of Publication: New York
Publication Date: March 1946
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Subject: World War, 1939-1945 -- Periodicals   ( lcsh )
Politics and government -- Periodicals -- Great Britain -- 1945-   ( lcsh )
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Dates or Sequential Designation: Began with Mar. 1943.
Dates or Sequential Designation: -v. 5, no. 5 (June 1947).
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General Note: Description based on: Vol. 4, no. 1 (Feb. 1946); title from cover.
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WORLD FOOD CRISIS
HOUSE OF COMMONS, February 5, 1946
The Minister of Food (Sir Benjamin Smith): As the House will know,
the world position in regard to cereals supplies has been giving us con-
siderable anxiety for some time past, and I am taking the earliest oppor-
tunity of making a statement on this important matter.
Last summer it was clear that only the maximum efforts on the part
of the overseas producing countries could meet world requirements. Since
then, the position has deteriorated. It was not until shortly before Christ-
mas that we had an exact measure of the position. By then, the importing
countries knew how long their harvests would last, and the exporting coun-
tries the quantities they could ship.
The position was made worse by a series of droughts. During 1944-5
these reduced the harvests of Australia and Argentina. North Africa has
suffered a similar disaster. The 1945-6 harvest in South Africa has been
seriously reduced by drought and reports from India within the last few
weeks of failure of the rains, and other disasters, make it clear that that
country will be faced with the prospect of famine.
Full information regarding the position in South Africa and India had
not arrived when I left for Washington, shortly after Christmas, to discuss
the whole question of cereal supplies, mainly wheat and rice, with the
United States Government. At that time, the situation was sufficiently seri-
ous to compel us to review the requirements of all importing countries, and
examine what measures could be taken to increase supplies from the ex-
porting countries.
WHEAT: REQUIREMENTS AND SUPPLIES
We estimated, when I was in Washington, that the wheat requirements
of the importing countries during the first six months of this year would
amount to a little over 17 million tons, against which there were available
exportable supplies of only 12 million tons. Since then, developments in
India, South Africa and elsewhere have increased requirements, while sup-
plies are now expected to fall short of 12 million tons.
We recognize that all importing countries will have to make heavy
sacrifices. His Majesty's Government have taken the lead in accepting a
reduction of nearly 250,000 tons in the United Kingdom wheat imports for
the first half of 1946. This reduction cannot be met out of the stocks held
in this country, which have been progressively reduced since D-Day to the
lowest point consistent with the maintenance of distribution. The stocks
now held in this country are nothing more than a working stock and con-
tain no reserve element.
Since it cannot be met out of the United Kingdom stocks, the reduction
in imports decided upon by His Majesty's Government will have to be met
by making greater use for direct human consumption of our wheat supplies,
and this will necessitate an early increase in the flour extraction rate to
85 per cent. [HON. MEMBERS: "Hear, hear."] Hon. Members had better
wait until they hear the effect of it. This may not, however, be the last
step we shall have to take.






British Speeches of the Day [Sir B. Smith]
The change will be effected gradually and, while it will mean a return
to the darker wartime loaf, there will certainly be no deterioration in the
nutritive value of our bread. It will, however, materially reduce the vol-
ume of animal feeding stuffs, as my right hon. Friend the Minister of Agri-
culture will explain, and in consequence will result in a diminutiorr of
livestock production in this country. This will mean less bacon, poultry and
eggs than we had hoped to enjoy later on this year.
His Majesty's Government are in close touch with the U.S.A., Canada
and Australia, with the object of increasing exports from those countries
to the importing countries. Much will depend upon their success, as well
as that of Argentina, in their effort to maximize the collection, movement
and exports of wheat during the next few months. We are confident that
they will spare no effort, but the needs of the importing countries of the
world are appalling. The United States have already started a publicity
campaign to avoid the waste of bread and to increase shipments to Europe,
where starvation, disease and death are threatening thousands.
RICE
The world position in regard to rice supplies is no less serious, and is
indeed a contributory factor to the wheat shortage, since countries which
cannot secure rice for consumption turn to wheat or flour as a substitute.
In Washington, we were faced with the same gap between requirements
and available supplies as we were for wheat. For the first six months of
1946, we found ourselves with 2,000,000 tons less rice than were required to
meet the demands of all claimants.
The collapse of Japan seriously aggravated the rice position because
the rice-consuming countries of the East were liberated before rice produc-
tion could be got into full swing. The United Kingdom has been unable
to make any major contribution to this problem because its normal import
requirements are very small, but in our desire to make our fullest con-
tribution we have ceased entirely the importation of rice into this country.
We propose to continue this policy of not issuing rice for the civil popu-
lation, until world supplies again become adequate to meet essential needs.
THE EFFECT ON FATS
This acute shortage of wheat and rice has had a serious effect also on
our supplies of fats. Owing to the shortage of cereals in India, the Indian
Government have announced that they must retain substantial quantities of
groundnuts [peanuts] for their own consumption, with the consequence that
we shall obtain less thin half the quantity of groundnuts which we had ex-
pected to obtain from that source. This deficiency in our supplies of vege-
table oils has been made more serious by the fact that the whaling fleets
which were dispatched to the Antarctic last autumn to secure more whale
oil have so far achieved very poor results, owing to the exceptionally un-
favorable weather. Our stocks of oils and fats were substantially reduced
last year in conformity with the Tripartite Agreement with U.S.A. and
Canada. I cannot, therefore, make good from stocks these deficiencies. It is
therefore with much regret that I have found it necessary to reduce the
784






World Food Crisis
butter, margarine and cooking fat ration from eight ounces to seven ounces
per week, by reducing the cooking fat ration by one ounce from 3rd March.
In the circumstances which I have described, I am sure that the nation
will regard any avoidable wastage of bread as an anti-social act, and I in-
tend to spare no effort to bring this fact home to our people. This applies
equally to private houses, canteens and restaurants. No bread is to be
served in any catering establishment with a main meal except on request.
I expect the trade to co-operate with me, but if this appeal is not effective
I shall consider what further steps can be taken. Wherever food is served,
there are opportunities for economy and avoidance of waste which will
help to see us through our present difficulties. His Majesty's Government
are confident that when the facts are explained to them, the public will
respond with full co-operation and support.
I had hoped that it would have been possible to give the British public
some gradual improvement in their diet. I still confidently cherish that
hope, but I must postpone its fulfillment. Unfortunately, world harvests
of many commodities were very bad last year, and mankind cannot have a
world war without experiencing shortages for some time to come. We have
faced worse situations than this in the past. This period of shortage, diffi-
cult as it may be, will pass, and there are fuller times ahead-perhaps sooner
than we dare to hope. But, in the meantime, this country must join with
the other countries of the world in making its contribution to the global
war against hunger.

The Minister of Agriculture and Fisheries (Mr. Thomas Williams):
My right hon. Friend the Minister of Food has dealt with the world food
situation and has explained how it affects food consumers\ in this country.
It is my task, speaking also for the Secretary of State for Scotland, to deal
with its significance for home farmers. For them it means briefly a serious
cut in feedingstuffs supplies and an urgent need to sow all the grain they
can this spring.
CUTS IN LIVESTOCK RATIONING
The cut in feedingstuffs supplies arises from two factors. First, be-
cause of the world wheat shortage much of the coarse grain which
would have been available for feeding livestock here and elsewhere
has to be diverted for milling into bread. Secondly, we are raising
the rate of extraction of wheat and that means a loss of milling offals
at the rate of something like 300,000 tons per year. I have had to
decide what is the best use I can make of the reduced supplies of feeding-
stuffs. There will be no change in rationing arrangements for the present
winter period and ration coupons issued for the period up to the end of
April will be honored. It is in the period from May to September that the
cut will be felt. In the interests of national health the priority given to
milk production must continue, although rations for dairy cows during the
summer are not in fact substantial. The only large issues in this period
are' the basic rations for pigs and poultry, which at present rates would
absorb about half the summer supplies of rationed cereals. Commercial pig






British Speeches of the Day [Mr. T. Williams]
and poultry keepers are at present receiving rations sufficient for one-
quarter of the numbers of stock kept before the war. In April, 1945, it was
announced that rations sufficient for one-third of these numbers would be
issued from May, 1946. The cut in cereals is so great that not only is this
undertaking now impossible of fulfillment, but a reduction is inevitable
and on present calculations, as from 1st May, pig and poultry rations will
be based on one-sixth of the pre-war numbers. No change will be made in
the rations, for domestic pig and poultry keepers. These classes did not
benefit from the increases to commercial producers last year.

A BLOW TO REVIVAL OF LIVESTOCK INDUSTRY
I need not tell the House with what grave concern I view this grievous
blow to our reviving livestock industry, involving as it does the abandon-
ment of an undertaking given by my predecessor before the disastrous series
of droughts occurred. I can only promise that as soon as more feedingstuffs
are obtainable commercial pig and poultry keepers will have strong claims
for a much better share. In the meantime, there is an urgent task before
our home farmers. It is imperative that they, in common with farmers all
over the world, shall put forth their maximum efforts to restore the situ-
ation after the next harvest by sowing as much grain as they can this spring.
They must continue a high level of tillage so as. to make the maximum
contribution to the nation's granary, while at the same time redoubling
their efforts at self-sufficiency. All this means sowing more spring wheat,
for the more wheat there is in the world, the more speedily can coarse
grains return to their use as feedingstuffs, but where that is not practicable
we want more barley and more oats. That is the task for our farmers, but
everyone with a garden or allotment can also help to meet this food short-
age. The Government hope that all classes of the community will grow as
much as they can this year and that local authorities and others will con-
tinue to foster this "Dig for Victory over Want" campaign. The need for
self-help is just as great as in the dark days of the war.


HoUSE OF COMMONS, February' 14, 1946 [Extracts]
The Acting Leader of the Opposition (Rt. Hon. Anthony Eden): I want
to put to the Government a number of questions which are, I think, judg-
ing from my letter bag, the kind of questions which the country is asking
itself now. I also want to make certain suggestions of a constructive nature,
which I hope the Government may be able to take to meet a situation which
is gravely troubling us all. We must, none of us, underrate the serious-
ness of this position for the British people, especially for the women of
this country. Our people have endured six long years of rationing-and
in that, let me add, they differ from the people of some countries in Europe,
notably Germany, which, so far as my information goes, until the very hour'
of victory, lived very well on the spoils of the conquered territories. Now,
at the end of this long time, our people have been called upon to make
further sacrifices.






World Food Crisis


The first question I ask the right hon. Gentleman is whether, in fact,
the Government have paid the close and constant attention to the develop-
ing world food situation which that situation clearly demanded. Have
Ministers, individually and collectively, made the decisions and taken all
the steps that were necessary, and above all, did they take those steps soon
enough? Are they now doing all that is humanly possible to alleviate the
situation? Of course, we do not blame the Government for crop failures
in far-distant lands, we do not blame them for the bad weather that affects
the whaling fleet, but we do say that it was the duty of the Government,
as those disasters and difficulties became known, to take urgent steps to meet
them, and to apprise this House and the general public of their implica-
tions upon the rations available for the British people.

DROUGHTS AND CROP FAILURES
The Minister of Food told the House last week, quite rightly, about
crop failures in Australia, in the Argentine, and in North Africa. I would
like him to tell us today how long he has known about those failures.
Was it not months ago? He knew of them in fact before Christmas, by his
own admission in this House in his statement last Tuesday. He then added
the further news of crop failures in India and South Africa, which he said
did not arrive until he got back from Washington. He said it was not
until a few weeks ago that it was possible to assess fully the effect of all
those disasters on the world food position. All right, we accept that, but
was it really necessary to wait for precise knowledge of the full facts of
all those calamities before any action could be put in train, or any in-
formation or warning issued to the country as a whole? Was it not ap-
parent long since to the Government, with their information-so much
greater than ours-that something of this nature was going to arise, even if
they could not give the exact figure?
Let us take the position of India-the right hon. Gentleman will correct
me if I am wrong. As I understand it, the failure of the south west mon-
soon in India in the late summer and autumn was followed in October by1
a disastrous cyclone in the province of Madras; and then on top of that
came a failure of the Christmas rains in northern India. But long before
that, it must have been apparent that serious shortages were inevitably
going to arise in India. The major part of that damage was done by last
autumn, and by November I am told, though I do not know whether it is
right or not, it was known in India, in the grain trade, that disaster had
overtaken the crops for this year-a disaster, it is quite true, whose magni-
tude could not finally be ascertained until the failure of the Christmas
rains, but it must have been visible many weeks before that. Now I come
to why we have, if you like, misunderstood the situation. On 10th Decem-
ber last a Question was asked about the position in India-I was in the
House at the time-by the hon. Member for Maidstone (Mr. Bossonm), who
referred to the failure of these very rains about which we now hear so
much. He asked about them, and was told by the Under-Secretary of
State for India that the Government of this country:






British Speeches of the Day [Mr. Eden]

"sees no cause for apprehension of famine, whether in Bengal or else-
where in India."
I simply cannot understand that answer, in relation to what has happened since.
Now about South Africa. South Africa is a grain-importing country,
but I doubt whether her requirements today are large enough to make a
difference to the total world demand. But I should like to know what
those Southl African requirements are. For instance, there has been a wide-
spread drought in that country, following the failure of the rains last year,
and I should like to ask the Minister if he can tell us when it was that the
Union Government's appreciation of the crop position foreshadowed a
shortage. Again, I do not ask for exact figures, but for a reasonable estimate
of the likely size of the deficit now impending there. We must see the
over-all position.
I turn to the various items of food that are affected. First, and most
important, of course, are food grains. On this subject I should like to ask
the Government two questions. First, what steps have they taken to in-
crease production at home; and, secondly, what steps have they taken to
increase imports from overseas producing countries? About the position at
home, surely it must have been evident to the Government from what they
have now told us, that these failures of grain crops throughout the world
were piling up. That must have been evident to them months ago from
what they now tell us, and even if full details of the position were not
known until the beginning of the year, at any rate, it was apparent to the
Government before Christmas, I think, that there must be a substantial
deficit on the world's wheat account. There is no dispute on that. If that
was so, surely it was then the duty of the Government to take all possible
steps to increase at that time the production of food grains in this country.
Did they do it? On Tuesday-I ask the House to note this-on Tuesday
of last week the Minister of Agriculture said that he had that day dis-
patched a letter to the county committees. Why on that day? Why not
weeks before? We are now told that the storm had been gathering for
months. . .
THE PROBLEM AT HOME
I go back to the domestic food position, and what we are doing here.
Why was action left so late? It is quite true that the Coalition Government
decided early last year that compulsory directions would not be issued to
farmers to sow wheat this season. I remember very well that decision being
taken. That was at a time when, by general admission, the present world
wheat shortage was not foreseen. I do not think there is any dispute on
that. That was early last year. Yet, on December 5th-I ask the House
to note that date, and how near it is to the present time, when we are now
told the storm clouds were gathering and that we ought to have seen them-
on that date, the Minister of Agriculture told the farmers that it was not
the intention of the Government to issue such compulsory directions. It
is only now, at the last moment, now when it can only be done at great
inconvenience, with considerable loss of efficiency, that he appeals to farmers
to sow the maximum acreage of Spring wheat this year. And even now






World Food Crisis


he has not issued directions, neither has he restored the acreage payment.
We are entitled to ask the Government for some explanation of this strange
state of affairs. If it was known by Christmas that the wheat shortage
would be so serious this year, why did not the Minister of Agriculture then
make his appeal to the farmers, and tell the country at the same time what
the position was?
I come to the question of labor. It is only too well known that agri-
cultural labor is sadly short. In answer to a Question of mine on Wednes-
day last week, the Prime Minister said that the Government had decided to
defer the call-up-mark you, Mr. Speaker, it had been announced only in
January after this cloud was gathering-of 8,000 agricultural workers until
after the 1946 harvest. Why was that decision not taken weeks ago? I am
bound to point out to the Government that on the very day before the
Prime Minister made his statement announcing this deferment of the call-
up, the Minister of Labour had given an entirely contradictory answer in
this House. A few hours after the announcement of the position in this
House, and after the public reaction, the Government's policy was changed.
Surely, this shows not only a lack of foresight, hlut also a lack of co-ordina-
tion between Government Departments, and a lack of timely action.

THE QUESTION OF IMPORTS
I pass now to the question of imports. Are the Government satisfied
that they have now explored every possible source of food grain imports?
We all know that the most serious effect of the raising of the extraction
rate, which the Government now, as I think, rightly propose in the cir-
cumstances-it might have been proposed long ago when this situation was
arising; I am coming to that in a minute-is loss of feedingstuffs for pigs
and poultry. What action are the Government taking to find alternatives?
May I here make a suggestion which may or may not be of value? What
are they doing about maize which, I understand, will shortly be available
in considerable quantities in South America, particularly in the Argentine.
I know from previous discussions which we have had on this matter, that
the difficulty in the past of obtaining that maize has been, in part, shortage
of shipping for the long run to the Plate, and, in part, because the United
States were unwilling to supply the Argentine with the fuel oil for the rail-
ways to enable the maize to be moved. I understand, however, that that
problem was resolved some time ago, and my impression is that the par-
ticular problem of fuel was resolved as long ago as last May. There are,
I understand, to be supplies available in about two months' time. Are
the Government taking any steps to secure some portion of that valuable
crop for this country, as a most useful substitute, and if they are not, will
they tell us the reasons why that cannot be done?
Finally, on the question of wheat, I would say a word about consumption.
Here, I would ask the Government why the steps which they are now tak-
ing were not taken long before. Many right hon. and hon. Gentlemen on
the benches opposite remember very well that, during the war and during
the height of the U-boat menace, Lord Woolton and his successor raised







British Speeches of the Day [Mr. Eden]

the rate of extraction always to safeguard against a dangerous fall in the
levels of our stocks. In other words, that step was taken well in advance,
and Lord Woolton always kept his picture a certain period ahead. I think
that it is true to say that never, even at the worst period of the U-boat
menace, did we allow our reserves of wheat and flour to fall below some-
thing in excess of three months' supply. That was because my Noble Friend,
who is a real master of this subject, always budgeted three months in ad-
vance . .
I am not saying that the right hon. Gentleman has not done that. I do
not know. I am not a Member of the Government, but I say that the im-
pression given to the public is that he has not done so. Not until we have
come up against a crisis apparently has he taken the steps that Lord Wool-
ton was careful to take in advance of the event. Of course, if the right hon.
Gentleman has an explanation of that he will, no doubt, give it to us. The
right hon. Gentleman's predecessors at the Ministry of Food always made it
part of-their policy to keep the public fully informed on the food situation
and to ask for their co-operation at the earliest moment. Yet, it is only
now, at this late date, that,the public are given the facts about the wheat
situation, and an appeal is made to them to save bread. Why could not
they have been told before and that. appeal made before? There have, it
is true, been references-I want to be fair about this-to world shortages,
but in statements which responsible Ministers made up to the last moment
there was nothing whatever to warn the public of the imminence of this
grave situation.
THE CUT IN FATS
I want to say a word on the question of fats. The cut in the fat ration,
from eight to seven ounces, I regard as one of the most serious features of
this whole unhappy situation. It is a grave threat to our standard of liv-
ing, and to the health of our already overstrained population. ...
. perhaps I may say that my colleagues of the late Government will
remember the number of occasions on which we were advised of the capital
importance of maintaining the level of this fat ration. I ask the Govern-
ment what alternative they have in mind and what alternative sources they
have examined.
May I tell the right hon. Gentleman-he will correct me if I am wrong-
my impression of what the position was recently. When Lord Llewellin
examined the oils and fats position in conjunction with the United States
last Spring in Washington, it was apparent then that there would not be
sufficient edible oils and fats available to us in this country to maintain
the eight-ounce ration rate through the Winter, and the following Summer
until June, 1946. That became evident last Spring. I was in Washington at
the time and my Noble Friend told me about the position. What did we do?
Lord Llewellin decided, with the approval of the Coalition Cabinet, that
a cut had to be made, and that it would be made during the warm summer
months; and so, in May, 1945-not a very happy date for us, the "Care-
taker" Government, just before the General Election-Lord Llewellin cut
the ration from eight ounces to seven. . .






World Food Crisis


S. the reason for it I would remind the House was to reduce the
rations during the summer months in order that the ration might be re-
stored to eight ounces in the winter days and to maintain the eight ounces
until the end of June, 1946. The ration was restored and rightly restored,
but now it is cut again to seven'ounces, and we have still some of the worst,
and maybe some of the coldest and wettest months of the year ahead of us.
The main reason that the Minister of Food gave for the cut in fat ration
is the retention by the Government of India of a substantial quantity of
groundnuts consequent on the failure of the crop in India. I want to ask
the right hon. Gentleman this. My impression was that at that time, to
get over the later restoration, Lord Llewellin made a bargain with the
Government of India to exchange a substantial tonnage of wheat for the
groundnuts which India was to supply to us to maintain our fat ration.
I want to know, if there was such an arrangement, what happened to it?
Was the wheat not delivered, and if it was not delivered why not? I do not
ask the right hon. Gentleman for an immediate reply, but I think if he
makes an investigation in his Department, he will find that that is the
position. I do ask the Government most earnestly, to give the utmost
thought to this problem of restorating the fat ration. No one can blame the
Government, and no one seeks to blame them for a natural disaster, but it
is our duty to demand from them the fullest possible account of the meas-
ures they have taken to find an alternative.

DRmD EGGS
I wish to deal briefly now with the question of dried egg. The Minister
of Food has explained that the reason for stopping the supply of dried egg
was the shortage of dollars. It was a decision which, as he told us, was
taken immediately after the ending of the Lend-Lease; taken, in fact, in the
Autumn of last year. Although this decision was taken many months ago,
and although the Minister and the Cabinet presumably have known for
some time that the supply of dried egg would cease in the first months of
1946, the right hon. Gentleman did nothing whatever to tell the public.
Why did he conceal this information? Why was the public not told? Why
were the housewives not given an opportunity of expressing their opinion
to the Government before they were presented with a fait accompli. We
are told that the problem was shortage of dollars, and yet, at that time, we
continued to spend dollars on American films and tobacco and are still
doing so. The Government may tell us that the reason for the cut in dried
egg is that fresh eggs are to be given-or perhaps I ought to say shell eggs.
If that is so, should they not have explained that to the people long before
this decision was taken? I shall be glad to hear, of course, the explanation,
but I would say to the Government that this is a very small additional
supply of shell egg. After all, if my arithmetic is correct, it is only 14 eggs
extra per person per four months. If that is right, I must say it would
never replace dried egg, and for those purposes for which dried egg is used
it is quite inadequate. Moreover, are the Government still absolutely cer-
tain that they will be able to maintain the supply even of this small addi-
85






British Speeches of the Day [Mr. Eden]
tional quantity of shell eggs? We would like to be reassured on this point,
because, if the right hon. Gentleman will forgive me for saying so, we have
had one or two disappointments in the past.
A PLEA FOR MOBE PUBsCrIT
I have put to the Government a number of questions. I want to make
to them another appeal, to end all this secrecy.
Mr. Stokes (Labour): Hear, hear.
Mr. Eden: I see I get support from the hon. Gentleman. I know how
natural it is for all Government Departments to keep as much information
as they possibly can to themselves. They think, "The more we tell, the
more Questions our Minister is going to be asked in the House, and the
more trouble we shall have. We are already overworked so let us keep it
to ourselves as much as we can." It is a perfectly natural temptation, but
it is also, especially in a subject of this kind, a very grave error, because
the more you conceal, the more angry eventually the people are when they
find out their position. I must remind the Government in that connection,
to give one example, that the details of our stocks were last given by my
right hon. Friend the Member for Woodford (Mr. Churchill) in March
while we were still at war with Germany and Japan. Since then, the figures
were not given until the other day, when they were accompanied by the
double shock presented to the House by the two Ministers, I know appeals
were made by several Members in this House for more information, and
surely it is clear that it would have been wise to give that information.
We all admit there may be good reason or what seems to us good reason
for secrecy sometimes in wartime, but there is absolutely no reason for
secrecy here as far as I can see. May I tell the right hon. Gentleman that
I am not at all impressed by his argument that he could not reveal the
position of our stocks because he was trying to buy in a sellers' market. I
think it is pretty dear that the sellers knew all about it. The only people
who did not know were the people in this House and in this country. They
were placed at a disadvantage, but I should like very much to see any
evidence of any advantage the right hon. Gentleman obtained by that.
In conclusion I say this to the Government. I am afraid we are by no
means at the end of our troubles in these'matters. What I would urge the
Government to do, is to tell the people the truth, and keep on telling them
the truth. Above all I say do please try to warn them well in advance of
what is coming. Our people have had many hardships to bear. The an-
nouncement last week of these further hardships reveals that unhappily
far from our troubles being at an end, they are going to be increased. The
least the Government can do, and the least the Government must do is to
take our people into their confidence so long as the responsibility rests with
them. If they do so and eep the House informed-for they have not kept
the House informed-I c n tell them with all sincerity we will do all we
can, in a joint effort, to n eet what we know is a desperate and very serious
national need. We believe in and wish for nothing else but such an effort.

86






World Food Crisis


A SELLERS' MARKET
Tlae Minister of Food (Sii" Benjamin Smith): From the remarks of the
right hon. Gentleman it is obvious that a good deal of the information
which he has addressed to the House today has been culled from speeches
I have made in this House. I welcome the opportunity which this Debate
affords me of giving the House a detailed exposition of the serious food
problems in this country and of the world .... I particularly welcome
this Debate, as it affords me an opportunity to rebut the statement which
the right hon. Gentleman the acting Leader of the Opposition has just
made, namely, that this House has been left in the dark. If that were true,
the House would have good cause for complaint, but, as I hope to show,
that statement was not only untrue, but was unfair.
The right hon. Gentleman rightly said that my predecessor was always
careful to keep the public in his confidence on food matters. But I would
remind the House that both the right hon. Gentleman and Lord Woolton
frequently found it necessary to maintain a discreet silence, not only from
the point of view of denying information to the enemy, but also of avoid-
ing discussion when delicate negotiations regarding food supplies were in
progress. The first of these causes, fortunately, no longer exists, and so far
as this Government is concerned the second applies with even greater force
than it did to my predecessor. For all varieties of food-and I repeat it to
the right hon. Gentleman opposite-for all varieties of food, we are now on
a sellers' market, and'he knows, and any business man knows, that were I
to reveal stocks, as I have been requested to do, it would afford a great
opportunity to gentlemen to raise prices against this House. It is a sad
commentary that such a thing could happen, in a world in which many
countries are suffering from semi-starvation, a sad commentary on what has
to be done on the altar of profit.
The difficulty during the terms of office of my predecessors was to find
ships to carry the food. Moreover-and this is important-we were getting a
substantial part of our food on Lend-Lease, and the dollar question did not
arise. If it was found necessary in the past to be discrete, how much more
nmust I be discreet now? I cannot undertake to conduct delicate negotiations,
which are necessary to procure our national food supplies, in the full glare
of publicity.
INTERNATIONAL PLANNING
Here I think I might remind the House that this country has not the
last word in the disposal of world food supplies. We are only one of many
claimants. There is an international machine for planning the allocation
of all the main foods among the nations of the world, namely, the Com-
bined Food Board, which was set up in 1942 by the Governments of this
country, the United States of America and Canada. That Board has since
been extended to include on its commodity committees most of the main
producing and consuming countries. It is the duty of this organization to
take stock of the total supply and requirement position for the foods with
which it deals, and to recommend to the Governments concerned the allo-
cation between the various claimant countries. This country, as a party






British Speeches of the Day [Sir B. Smith}


to the Combined Food Board, has to present its demands and make out its
case in support of those demands. But the final recommendation as to
each country's share is made by the Board, and we as parties to it must
abide by its decision. It is either this system of planned distribution or a
wild scramble for supplies, with prices soaring and no security of supply
for every one.
THE GOVERNMENT'S PAST WARNINGS
I would like to draw the attention of the House to a number of occa-
sions during recent months in which I, or other Members of the Govern-
ment, have called the attention of the House to the food situation that was
developing, particularly as regards wheat. I would like to refer to the
Debate which took place in the House on 26th October last on the Motion
for the Adjournment, when attention was called to conditions in Europe.
If Members read the OFFICIAL REPORT of that Debate they will see that
enough was said on that occasion by my right hon. Friend the Foreign
Secretary and myself to impress upon everyone the seriousness of the world
situation. The Foreign Secretary spoke, as ever, frankly of the serious
conditions in Europe, and drew attention to the grave situation that would
arise, unless action was taken by the great wheat producing countries to
maximize their contribution for export. Among other things, my right hon.
Friend said:
"Additional supplies, on a scale sufficient to bring any widespread relief, must be'
organized on an international basis, with the co-operation, in particular, of the
exporting countries. We must look to them to make a much bigger contribution.
For instance, I should like to see much less wheat being fed to livestock in North
America, and more maize and other foodstuffs shipped from South America."
That was said for those who were here to hear, and can be read by those
who have eyes to see. It is in the OFFICIAL REPORT, and it was a warning.
During that Debate the right hon. Gentleman the Member for Oxford
University (Sir A. Salter) said he thought there was plenty of wheat in the
world which could be used for relief to Europe.,
Sir Arthur Salter (Independent): In the context, it is quite clear that
what I said was that on the information I had while I was in office, up to
August, there seemed to be enough wheat for the essential needs of the
world, if there was proper organization of distribution. The right lion.
Gentleman himself summed up by saying that if steps were taken to avoid
waste, he hoped and believed that there was enough wheat to meet, in full,
the essential needs of the world. I have been without access to official in-
formation since August, and that Debate was in October last. Can the
right hon. Gentleman complain if, at the end of October, with his full
official information, he confirmed precisely the opinion I had formed sev-
eral months earlier?
Sir B. Smith: We are at no variance on this point, as I shall prove. I say,
quite truthfully, that when the right hon. Gentleman spoke in that Debate
it was on the basis that there was-and he now agrees-plenty of wheat in
the world to meet the requirements. [HON. MEMBERS: "Does the Minister
agree?"] If you wait a little you will see whether I agreed. Of course I

88






World Food Crisis


agreed at that date. I replied that I only wished I could have endorsed
what the right hon. Gentleman the Member for Oxford Uniiersity had
said, and I went on:
"I am at this moment particularly concerned with the world wheat position.
The only hope of avoiding further serious hardship and famine conditions in certain
parts of Europe this winter and next spring is by maintaining an adequate flow of
wheat imports, and we must clearly devote all our efforts to securing this objective."
I went on to point out that until recently wheat was one of the few
foods of which there was no shortage-and this is where I say there is no
variance between the right hon. Gentleman the Member for Oxford Uni-
versity and myself-and that . the situation had been completely
changed by the exceptionally heavy demand arising from the liberation of
Europe, coinciding with poor crops resulting from adverse weather con-
ditions in many areas. I said:
"It is not yet possible to make a final assessment of the position, but it is clear
that it will call for very careful and prudent management of world wheat supplies
during the next nine months, and the utilization of all stocks in excess of minimum
requirements which must be carried over into the next season."
I drew attention to the necessity for the maximum utilization of home-
grown bread grain, for direct human consumption, and stressed the im-
portance of giving human consumption full priority over the feeding of
animals. In the course of the same Debate I was pressed by hon. Members
to make further reductions in our stocks or to reduce our own consump-
tion in order to make more food available for other countries. I resisted
that pressure. In so doing, I incurred the displeasure of a considerable
number of hon. Members on both sides of the House. I pointed out that
we had already gone as far as we could safely go in reducing our stocks, and
firmly refused to make any further cuts in our rations.
What has happened since has, I think, fully confirmed the view I then
expressed, that we could not risk any further reduction in our stocks.
Moreover, the reactions of the public to my announcement on 5th Febru-
ary fully bears out the view which I expressed last October, that the people
of this country should not be asked to bear any further cuts in consump-
tion, if it were possible to avoid it. Unfortunately, this has not been pos-
sible. The situation in Central Europe was again debated on 5th. Decem-
ber last, on the Motion of the Archbishop of Canterbury,"in another place.'
The Under-Secretary of Stafe for War, referring to a statement made by the
Bishop of Chichester to the effect that, whilst there were shortages of many
commodities, there was no world shortage of wheat, said . he could not
allow that statement to pass without correction, because the plain fact
was that the situation as to wheat was one of the most serious preoccupa-
tions of those who have to deal with food problems. On 7th December I
again referred to the difficult wheat situation in replying to the hon. Mem-
ber for Ipswich (Mr. Stokes) on the Motion for the Adjournment when he
pressed for the depletion of our stocks in order that food might go to the
relief of Europe. I said quite plainly that there was a world shortage of
wheat.. On 17th January, my riglit hon. Friend the Foreign Secretary, in
a speech at the General Assembly of U.N.O., said:






British Speeches of the Day [Sir B. Smith]
"There is one problem which is not confined to countries needing UNRRA's
help but is common to nearly the whole world, namely, that of food. A common
effort by all peoples is necessary to deal with this pending the return of good harvests."
Finally, when I arrived at Southampton on 23rd January, I warned the
Press that the situation regarding the world shortage of wheat and rice
was not promising, though I said as little as I could to them. Surely this
in itself is a sufficient refutation of the statement by the Acting Leader of
the Opposition. [HoN. MEMBERS: "No."] Are hon. Members opposite so
ill-informed that they are ignorant of what has been well known to any-
one who cared to inquire? The general facts of the position have been
well known for a long time. This is recognized, at least, by two weeklies
That are not noted for their Labour sympathies, The Economist and The
Spectator. Both of these papers in their current issues emphasize that
many warnings have been given.
THE WHEAT SITUATION
What are the circumstances which led to the present position? [An HON.
MEMBER: "Lack of planning."] If the House will bear with me, I will first
deal with wheat. There are other problems such as rice, fats, etc., but all
'of them are accentuated by the fact that the great stand-by of the world, an
abundant supply of wheat, is no longer available. I do not intend to re-
peat what I said to the House on 5th February, I will only remind the
House of the outstanding fact that against world import requirements of
more than 17,000,000 tons in the first six months of 1946, less, and I am
afraid much less, than 12,000,000 tons will be available in the world. Many
millions of people in Europe and the Far East will face hunger and star-
vation, and 125,000,000 people in Europe will have to subsist on less than
2,000 calories a day and, in some areas, large numbers will receive as little
as 1,000 calories per day.
I have never been under any illusion about the difficulties which were
inevitable after the end of the war. My predecessors constantly warned the
House and the public that food shortage would not only continue long
after the war came to an end, but would be accentuated by the enormous
demand which would arise from liberated countries. In 1943 the British
Delegation to the Hot Springs Conference was responsible for getting on
record resolutions recording the view that supplies of essential foodstuffs
would be inadequate to meet the basic requirements for several years after
the cessation of hostilities. They urged all countries to utilize their agri-
cultural resources to the full to bring about a rapid improvement in food
production by increasing their acreage under crops for direct human con-
sumption.
But it was not until the results of the harvests of 1945 were known that
it was possible to measure the deterioration in wheat supplies. In July,
1943, stocks in the four main exporting countries amounted to over 46,-
000,000 tons. From that time stocks fell rapidly because of the greatly in-
creased demand for-livestock products. This led to a heavy usage of wheat
for feeding livestock in exporting countries. I remember, while in Wash-
ington, that, in one bite, 174,000,000 bushels of Canadian wheat were
90






World Food Crisis
shipped to America for the purpose of feeding livestock. Even so, there
were still more than 30,000,000 tons of wheat in the four main exporting
countries on D-Day.
In the Spring.of 1945 the wheat situation was still thought to be satis-
factory. The former Minister of Production and my predecessor in office
went to Washington to discuss with the-American and Canadian Govern-
ments the action to be taken to meet the great world shortage of many
foods. As a result, drastic cuts had to be made in our rations, as the right
hon. Gentleman said. Even then, however, the conclusion reached by the
Canadian and United States Governments was that wheat supplies were
assured. The only problem then was whether transport and port facilities
would be available to handle the wheat. So secure did the supply position
seem to the Coalition Government that they considered they would be
justified in gradually changing over British agriculture from maximum
production of human food crops to increased animal production.
They felt that we could afford some reduction in our,wheat acreage.
Therefore, the Coalition Government decided to reduce the acreage sub-
sidy on wheat for the 1946 crop by 2 an acre. This decision was made in
February, 1945, because farmers have to make plans in advance. There has
been a great deal of criticism of this action, but, in my view, it was a rea-
sonable decision having regard to the wheat situation as it then appeared.
Hon. Members opposite may suggest that this Government should have
reversed that decision, but as I hope to show, the full gravity of the position
was not revealed until late in the Autumn. It was too late then to affect
the acreage of Autumn sown wheat. As a further illustration of the opti-
mistic estimate of cereal supplies, I would remind the House tlnat last
Spring the former Minister of Agriculture, the right hon. Member for
Southport (Mr. R. S. Hudson), announced an ascending scale of rations
for pigs and poultry. Again, I find no fault with the announcement, but
I doubt whether it was a wise decision in the light of events. The right
hon. Gentleman took a chance, and it did not materialize. As a result, my
right hon. Friend the Minister of Agriculture announced on 5th February
that we should find it impossible to fulfill the program of rations increases
which was then decided upon. It was not until the results of the 1945
world wheat harvest were known that a full measure of the deterioration
of the world wheat situation could be taken.

A WoauL FooD SuRvEY
One of the first things I did when I. became Minister of Food was to
make a survey of the world food position. It was a pretty gloomy picture.
For the first time there was considerable danger of an actual shortage of
wheat. It was clear that it was no longer a transport problem. The total
stocks in the four main exporting countries had fallen from 46,000,000
tons in July, 1943, to 22,000,000 tons. Serious droughts had affected Aus-
tralia, the Argentine, French North Africa and other countries. The Euro-
pean harvest, which before the war yielded 45,000,000 tons, fell to 23,000,-
000 tons. It was clear that the wheat budget could not bemade to balance






British Speeches of the Day [Sir B. Smith]
unless every effort was made in producing countries to see that as much
wheat as possible was conserved for human consumption. As a result of
that report, the Cabinet decided to press upon the Governments of the
four main exporting countries the necessity of restricting the use of wheat
for animal feeding stuffs and to allow their stocks-that is the minimum
end of season stocks under the International Wheat Agreement-to be re-
duced to provide sufficient wheat for export to meet. all the needs of the
world. At the same time, through the Emergency Economic Committee
for Europe, European Governments were warned of the expected wheat
shortage and urged to take all practicable steps to make the fullest use of
their own cereal crops for human rather than for animal feeding. It was
felt that, if action were taken on those lines, we should probably get
through, although it was realized that our own stocks would have to be
reduced to the minimum level consistent with safety. But the full serious-
ness of the position did not finally emerge until the middle of December.
Mr. Eden: Will the right hon. Gentleman tell us what was the date of the
action to which he referred a moment ago?
Sir B. Smith: I am sorry I have not the date, but it was at the Emergency
Economic Committee for Europe, I think in October or November. In the
middle of December, I received the latest estimates from the Combined
Food Board, which is the international body to which I have referred, as to
the world supplies and requirements in wheat. Throughout the autumn
and early winter months the demands of importing countries had been con-
tinually increasing. A new factor in the situation was the increasing de-
mands of the Far Eastern countries for wheat because of the acute shortage
of rice. There were immense demands from India, as a result of the failure
of the rice crop in many areas through drought, and also the loss of a large
quantity of cereals due to damage by tidal wave in Madras. I think the
figure was 740,000 tons, a terrific figure, to which I will refer again. The
figures which I received from the Combined Food Board showed a de-
ficiency between supplies and requirements of anything between 5 million
and 7 million tons.
THE MINISTER'S VISIT TO WASHINGTON
It was at this point the Government decided that I should go to Wash-
ington to discuss the whole position with the American Government and
see what' measures could be taken to meet the world demands. It was clear
that substantial sacrifices would have to be made by this country, but for
-obvious reasons it was not desirable to make an official statement on the
position until the conclusion of my negotiations. In dealing with wheat,
care had to be taken to avoid undermining the confidence of holders of
wheat and other cereals. I refer to those holding it for a rise in price be-
cause of famine conditions. In dealing with wheat, we had to take care
that we did not undermine confidence. In most countries cereals are
grown by a multitude of comparatively small growers. Fears of a world-
wide scarcity would have encouraged those peasant farmers to hold their
grain. This would have made matters worse. From the point of view of






World Food Crisis


the consumers in this country, any announcement in advance of an im-
pending shortage would dearly have invited a run upon our flour stocks.
As a result of the examination which the United States Secretary of Agri-
culture and I made in Washington, it was clear that the world was short
of a minimum 5,500,000 tons of wheat, or approximately one-third of the
total requirements. Cuts had to be made in allocations all round. Having
received the agreement of my colleagues, I accepted a cut in our allocation
of about a quarter of a million tons. This necessitated an increase in the
extraction rate, and a consequential reduction in the supply of animal feed-
ing stuffs.
SOUTH AFRICA'S PLIGHT
Since my return from Washington, the position has still further
worsened. Even while discussions were in progress, information reached
me of a serious state of affairs in India and South Africa. May I say, with
regard to South Africa, that I have had to meet two Ministers from the
South African Government. A very distressing experience it was. They
assured me that, by the end of March, not one bushel of wheat would be
in store in South Africa. Whether I did right or wrong, I diverted a ship
at once to try to assist them in that situation. Their original demand on
the Combined Food Board was about 50,000 tons. In the allocations made
in Washington, they received 44,000 tons. It is since that date, owing to the
drought, that their demand now upon the world for wheat is 323,000 tons
for the full calendar year 1946, of which 225,000 tons is wanted up to the
end of June, 1946. As I said, we had allocated 52,000 tons. I had sent this
ship for some easement of the present situation. May I say, on maize, that
the demand, which was about 220,000 tons to the end of May, 1946, owing
to the drought is now 700,000 tons to October, 1946. . The tragedy of
it, as Mr. Waterston told me, is that their next harvest looks, like going also,
because the drought is still with them and the ground is still too hard.
"We cannot prepare for the next harvest," he said.

THE INDIAN PosmON
That is the sort of problem that is brought to me. A delegation arrived
from India yesterday. I shall be seeing them shortly. A demand that Lord
Wayell.put to me, supported on the following day by Mr. Casey, was for
1,000,000 tons of wheat or rice this year for India and Bengal. Today, that
demand is 2,250,000 tons, and is rising. I cannot see where we can find
wheat or other grains in substitution for rice which will even approxi-
mately meet those claims.
At the very moment when I was discussing this matter with my col-
leagues in the Cabinet, a telegram was brought to me from Washington
stating that the United States Government had over-estimated their stocks
of wheat by 61 million bushels, or 1,750,000 tons, by which they were short
on the estimated stocks. It was arising out of that that the President de-
termined, at the request of myself and Mr. Clinton Anderson, that he
would increase their extraction rate from 72 per cent to 80 per cent. Let
us not be under any illusion. That fact will not give back the 1,750,000
93.






British Speeches of the Day [Sir B. Smith]
tons. If all the economies are effective, the total saving we will get will be
1,200,000 tons.
Perhaps I might now revert to India. .. I repeat in the case of India,
that it was from the middle of December onwards that we began to receive
reports from various parts of that country of the partial failure, as the right
hon. Gentleman opposite has said, of the monsoon. On 3rd January, while
I was still at Washington, I received a cable about the partial failure of
the monsoon in Bengal, which is the principal rice-exporting area.
Mr. Nicholson (Conservative): Rice producing area.
Sir B. Smith: Producing, yes, and exporting, too. On 17th January, a
further cable referred to a serious deterioration of the food supply position
because of the cyclone in Madras, Bombay, Mysore and other areas in
Southern and Western India. On 25th January, we were informed that a
conference had been called on 22nd January, of representatives of the
main surplus and deficit Provinces, at which it had been revealed that in
Madras, owing to the continued drought-the rainfall in December being
83 per cent below normal-the loss of rice and millet was estimated at more
than 1,500,000 tons, while in Mysore, for similar reasons, the loss was esti-
mated at more than 300,000 tons. Thus, an additional deterioration in the
position of more than 1,000,000 tons was indicated, compared with esti-
mates received in December for those two Provinces alone.

PROMPT ACTION BY THE U. S., CANADA AND AUSTRALIA
Immediately after I had reported to my colleagues on my return from
Washington in the middle of January, the Prime Minister sent an urgent
message to the President of the United States and to the Prime Miiisters
of Canada and Australia, appealing to them to take all possible steps to
increase the quantity of food they could'make available for export. There
has been an immediate response. It must be borne in mind that the
Dominions were already doing their very utmost to make food available, so
that we had no right to expect any substantial additional supplies to be
put at our disposal. Nevertheless, Canada has already decided to reduce
her butter ration in order to divert milk to the production of cheese and
milk powder for export, while the Government of Australia has promised
to divert 125,000 tons of wheat from feeding livestock so that it may be
exported, and they are looking to the possibility of making coarse grains
also available. That is a proud record. On a mere call from the Mother
Country they are willing to extend themselves, even at this moment, to the
cutting of many of their own rations.
Since I spoke to the House on 5th February, we have had news that the
Government of the United States have taken prompt action to meet the
situation. President Truman has announced a nine-point program. 'The
flour extraction rate is to be increased to 80 per cent; the use of wheat for
the production of alcohol is to be discontinued; the use of other grains for
that purpose is to be reduced; steps are to be taken to reduce the feeding
of grain to livestock-which will probably mean the premature slaughter






World Food Crisis


of large numbers of livestock and poultry. Remember that every time we
move in this matter, something goes down, and there is a shortage to be
faced later on. A vigorous economy campaign is to be instituted, and vari-
ous measures are to be taken to facilitate the rail movement and shipment
of wheat and flour. Only the great exporting countries are in a position
to make any substantial contribution to the solution of the wheat supply
problem.
This action of the President will be of inestimable value. I am quite
sure it is a fine reply to the Prime Minister, who was the first to initiate
these telegrams in his' effort to get the world alive to the seriousness of the
situation. We must not try to deceive ourselves into thinking that this will
solve all our difficulties. It is estimated that the measures taken by the
United States will save 45,000,000 bushels, or 1,200,000 tons. But it must
not be thought that this quantity will reduce the gap between supplies
and requirements to which I have referred. These measures are necessary
to enable the United States to make their contribution to the supplies re-
quired for export. If these measures were'not taken, the situation would
be just that much more serious. There are still doubtful factors, in the
situation, and many possibilities of further deterioration. It is only right
to warn the House that, before we are through, we in this country may
have to make still further sacrifices. We might have to raise our extraction
rate still higher, or use coarse grains as diluents in our bread; I hope, how-
ever, that I shall be able to avoid that.

RICE
I now come to rice. .. It was always foreseen that a problem of the
utmost gravity would arise if the rice consuming countries-of the East
were liberated before production in the rice exporting countries was re-
stored. That is exactly the position which has arisen, because of the sud-
den collapse of Japan. During the Japanese occupation the great rice-
producing areas of Burma, Siam, and French Indo-China tended to limit
production to their own requirements. They had no means of disposing of
any surplus. Production therefore fell and liberation did not take place
soon enough to increase the production from the 1945 crops. In other'
SEastern countries, such as China, Java, and the Philippines, production has
fallen off as a result of war devastation. I have already referred to the mis-
fortunes which have overtaken India through the failure of the monsoon.
The magnitude of the problem will be appreciated when it is realized that
in 1946 exports of less than 1,500,000 tons are expected from Burma, Siam
and Indo-China, compared with an average pre-war export of about 6,000,-
000 tons. In Siam, where I understand there is 1,500,000 tons of rice, the
problem is that of getting it out. The quantity available for export during
1946 for all sources, therefore, is, at most 3,000,000 tons, whereas the world
requirements are 6,000,000 tons, leaving a deficit of 3,000,000 tons.
We are doing what we can in countries to which we have access, such
as Burma and Siam, to get maximum supplies exported. The main hope
lies in Siam. After the cessation of hostilities I immediately dispatched to






British Speeches of the Day [Sir B. Smith]
Siam a special rice unit, composed of persons with an intimate knowledge
of the pre-war rice trade. Unfortunately, the leader was killed Pshortly
after, his arrival in an aeroplane accident. Their task was to take all pos-
sible steps to facilitate the procurement of rice, transport it to port, and
arrange shipment to other countries. The main difficulty in Siam, how-
ever, is that the Siamese growers are loath to part with their rice, owing
to the lack of confidence in their currency. They are holding on to it as a
tangible asset. Another problem is to give them sufficient incentive to sell
their goods; they are not very willing to sell unless there is something to
buy with their money. We are therefore giving Siam high priority in the
supply of consumer goods such as agricultural tools, textiles and so forth.
I now come to oils and fats--

THE ALLOCATION OF SIAM'S RICE
Mr. Nicholson: Before the right hon. Gentleman leaves the question of
rice, will he be good enough to give us the figures as to the allocation of
the Siamese rice between various countries?
Sir B. Smith. We have not yet obtained the Siamese rice to allocate. I
cannot make any promises at the moment, because it is an operation of
the Combined Food Board. It has to go from the exporting countries to
the Combined Food Board who make their allocations in the light of world
demands, of which I am ultimately notified.
Mr. Nicholson: Is it a fact or not, that 60,000 tons have been allocated
to Cuba, which refuses to ration rice?
Sir B. Smith: I am not sure, but there is an allocation to Cuba. I do
not want to be brought into a discussion which criticizes another country,
and I would beg the hon. Member not to press that point further.

OILS AND FATS
I now turn.to oils and fats. The grave food situation in India and the
difficulty of importing sufficient cereals to-meet their needs, naturally makes
the Indian Government reluctant to part with groundnuts. During the past
two years they have permitted the export of 500,000 tons, and last summer
the prospects were such that we had every reason to suppose that we would
get more this summer. In fact, on 15th December, we were informed by
the Government of India that the quantity would probably be 554,000
tons. This was subject to review during this month, February. On 31st
January we heard from our agent in India that, owing to crop damage in
Madras, the Madras Province were threatening to reduce the export quota;
a week later the Government of India informed me of the serious damage
to millet and rice to which I have already referred. In view of this, it
would seem that we shall not get more than 300,000 tons of groundnuts,
instead of 554,000 tons which had been provisionally promised and& the
600,000 tons allocated by the Combined Food Board. This represents 130,-
000 tons less oil than the Combined Food Board expected,
It is a sad story which I have to tell the House, but we had a further
misfortune. One of the first steps which the Government took at the end






World Food Crisis
of the war in Europe was to send a whaling expedition to the Antarctic.
As this was the first expedition since before the war, it was expected that,
in the interval, the whales would have remained unmolested and that there
would have been an exceptionally large catch. Unfortunately, the achieve-
ment falls short of expectations. In the first place, owing to the inevitable
delay in fitting out the expedition, many of the vessels arrived late on the
fishing grounds. We are taking all possible steps to extend the whaling
season, but this is regulated by an international convention. In practice
the approach of winter darkness, and the freezing of the seas, will limit
the possibility of any profitable extension. It is unfortunate, that this ex-
pedition has met with the most atrocious weather. Finally, and contrary
to all expectations, the yield of oil per whale has been far below average.
I estimate that we are unlikely to get more than 100,000 tons of whale oil,
as against our expectation of 155,000 tons.
As a result of all these circumstances, in 1946 we shall be short of our
total oil supply by well over 100,000 tons. The cut of one ounce in the
cooking fat ration will go some way to meet this position but not all the
way. I shall endeavor to find means of replacing some of this deficiency
this Winter. I shall aim at getting more from American hogs, for example,
for if hogs are to be killed in America owing to shortage of foodstuffs, there
should be more lard. But I warn the House that it is another dollar propo-
sition. There is a very real risk that we may have to make further cuts
later in the year. I will do my best to avoid this also.

DRIED Ecos
A friend of mine with prophetic foresight, when I left New York to
come home, handed me a book and said, "Ben, I think this will amuse you
on the way home." The title of the book was "The Egg and I." He was
certainly prophetic. .I promised the House that I would deal more fully
in the course of this Debate with the question of dried eggs. Housewives
rightly attach great importance to this commodity and the provision of
these supplies, I think it will be agreed, has been one of the most welcome
steps taken by my Department under food control. I suppose my Depart-
ment has done more to popularize dried egg than any other body that
exists in the country. It is perhaps not generally realized, however, that in
the past by no means all have taken up their full entitlement. In last
August when the entitlement was one packet for every four weeks, the
offtake was only half of the entitlement.
In the early Summer of last year it became doubtful whether the United
States would be able to maintain exports of dried egg to this country on
the then existing levels. By the time the present Government took office,
the stocks position and supplies in sight were such that I had to reduce the
issue of one packet to every eight weeks. Immediately afterwards Lend-Lease
came to an end-it is important to remember that-and, apart from the
small quantity in the pipeline, shipments of dried egg ceased. Moreover,
it was made clear that unless we gave firm orders for the whole of our 1946
requirements, many of the plants would be converted to other purposes,






British Speeches of the Day [Sir B. Smith]
and indeed Some of them were. We had to make up our minds how much
of our limited dollar resources we could afford to spend on this commodity.
It was not an easy matter to settle. We did not know how much of the
reduced ration would be taken up; we had good reason to expect a con-
siderable increase in shell egg supplies in the Spring; we had to spend our
limited supplies of dollars to the best advantage, and dried egg is a very
expensive food. The House will not expect me to quote the actual price
per ton, but I would refer hon. Members to the reply of my right hon.
Friend the Chancellor of the Exchequer to a Question in this House on
7th February, when he pointed out that the quantity of dried egg which
was imported in the last financial year, if it had to be paid for at the-cur-
rent American price, would cost 35,000,000. There are a good many foods
which give us better value for our money. For example, at the price at
which we used to buy American meat, we could obtain five tons of meat
for every ton of dried egg.
Dried egg is also expensive to the Exchequer. It is being sold at present
at the retail price of Is. 3d. per packet. The actual retail value, if it were
to be sold without loss, is 2s. 7d. a packet. The total cost of the subsidy in-
volved, if we were to continue importing at a rate sufficient to maintain
the recent rate of distribution, is 16,000,000. Weighing up these factors
I could not contemplate spending dollars to enable supplies to come here
in anything like the quantities under Lease-Lend. Then too, the egg posi-
tion was such that I cold not get any dried egg to arrive during the first
four months of 1946, so I had to face a reduced issue or a gap in the issue.
Taking all these considerations into account, I decided to buy enough to
continue issuing one packet every eight weeks when shell eggs were scarce,
to have the gap when supplies of shell eggs were greatest in the Spring,
and then to resume issues of dried egg. Under the plan I had in mind
there would have been about the same number of eggs in one form or
another as in 1945, but more of them would have been shell eggs. I regret
the necessity for a, temporary break in 1hese allocations of dried egg, but I
expect to be able to issue 40 shell eggs per ration book in the period
February to May inclusive. During the same months last year the figure
was 26. I think that answers my right hon. Friend's point. The dried egg
taken up during that period last year represented 18 eggs per head, making
44 altogether, so that there is very little change in quantity. It is four
eggs, and not the figure of the right hon. Gentleman, and this year the
whole of this quantity is in its natural condition.
It was never my intention to discontinue thd issue of dried egg perma-
nently. The Press notice which I issued made that clear. Let me read
the last paragraph-I do not wish to weary the House with the body of
the note:
"It is hoped, however that satisfactory arrangements will be made later in the year
which will enable the shell egg distribution to be supplemented once again with sup-
plies of domestic pack dried eggs."
That was not telling people that they were not likely to get it back. Un-
fortunately, I regret to say, many of the Press omitted to put in that para-
graph; many of them omitted the last sentence. The question has been






World Food Crisis
asked whether we could not use for ordinary civilian consumption some
of the bulk supplies of dried egg which we hold for allocation to the bakery
trade and caterers. The total quantity taken up by those caterers repre-
sents less than four allocations for domestic consumption. Of this, 75 per
cent is allocated to the bakery trade, and I should be very loath to reduce
the issues to that trade. I do not think it would be good policy from the
consumer's point of view. It would reduce substantially the quantity and
quality of cakes and flour confectionery. So far as the small quantity
issued to caterers is concerned, it amounts to less than one domestic allo-
cation. Its withdrawal would have an adverse effect on the quality of
meals provided in catering establishments including the many industrial
canteens throughout the country.

SUGAR
I have dealt now with those foods which have been most in the public
eye during the past few days. I do not want to leave the impression that
all is well. [Laughter.] I will come to that if hon. Members will wait a
minute. It is not as bad as hon. Members opposite think. The world sugar
position is precarious. It does not need me to tell the House why. There
are greater demands coming from ex-enemy and liberated countries; de-
mands are increasing almost every day. The beet sugar production in
Europe in the season which has just finished is estimated to be 4,000,000
tons less than pre-war. The production in the Philippines, which used to
export 1,000,000 tons a year, is only a few thousand tons this year. There
were reports of a stock of 1,000,000 tons of sugar in Java, but such stocks
as there are are inaccessible under present conditions. The war is still
going on there-or rather, there is trouble in that country. There have
been disappointing crops in most of the Empire sugar producing countries.
Meanwhile world requirements are constantly increasing. I was planning
to increase the bacon ration as soon as possible but, owing to a fall in the
expected supplies from Canada and Denmark-each of them, 40,000 tons
for next year-and the United Kingdom, this is not possible. I will do all
I can to maintain the ration as at present. Cheese and starch are causing
me anxiety. Much depends on whether we get the Loan from the Inited
States. That is by no means certain, but I must warn the House, especially
hon. Members who were so vociferous in their opposition to its acceptance,
that failure to get it will cause further difficulties. They should have little
to grumble about.
A FEW BRIGHT SPOTS
So much for the bad side of the balance sheet. I would not like to leave
the impression that there are no bright spots. Attention has already been
drawn to some statements made recently by members of the Government-
the right hon. Gentleman the hon. Member for Warwick and Leamington
(Mr. Eden) has called attention today to them-which may have encour-
aged the public to expect some improvement in the variety of their diet.
The Prime Minister, for example, on January 25th, in reply to the sponsors
of the "Save Europe Now" campaign, said:
99






British Speeches of the Day [Sir B. Smith]
"It may be shown to be necessary to provide some variation in the present monoto-
nous and unexciting diet in order to secure increased production at home and thereby
build up our export trade."
SThis is not inconsistent with the picture I painted, although it might
appear so at first sight. We must distinguish between.the staple foods
which form the basis of our diet-wheat, sugar and fats, about which warn-
ings have been repeatedly given-and what I call extras, which provide
variety. So far as these foods are concerned, there are favorable prospects.
Improvements have been promised and delivered. Bananas have begun to
come back, citrus fruit, oranges, lemons, and grapefruit have been made
available in increasing quantities. I intend to take every opportunity to
augment our supplies of vegetables and fruit by imports as far as this is
consistent with undertakings to home producers, although the tight posi-
tion of refrigerated tonnage is very difficult. If I could have another 10
refrigerator ships, I could make a good deal of change very quickly in this
country, but, unfortunately, I have not got them. Table jellies are to be
restored, supplies of canned fruits are to be put on points, there have been
improvements too in one or two of the basic foods. Milk supplies are de-
cidedly better this winter than last. We have raised the entitlement to two
and a half pints a week, a month earlier than last year. Fish supplies in
1946 will be back to, and even in excess of pre-war. Even the diminished fat
ration includes three ounces of butter instead of two, which was the amount
when I took office. There are more shell eggs and the potato position this
year, I am glad to say, is quite satisfactory. ....
I think I have said enough to the House on the general position in
regard to food in this country and the world in general. I would like to
thank the House and particularly the Opposition for the tolerance with
which they have listened to me. It has been a long, gloomy story and no
doubt was very wearisome to many hon. Members, but the facts are what
they are. This is not a time for developing a partisan spirit when the
world is more or less hungry. This is a time when we should' do, 'as we
have done so often before in. the country's interest, the best we can for our
people, not forgetting our responsibilities to the world at large.
[House of Commons Debates]



FOREIGN AFFAIRS
HOUSE OF COMMONS, February 20 and 21, J946. [Extracts]
Rt. Hon. Harold Macmillan (Conservative): The whole nation has fol-
lowed with deep interest and rather mixed emotions the dramatic debates
of the Security Council. It is clear that the developing situation has brought
With it both gains and losses. The United Nations Organization, with its
manifold activities, has been launched. That is a gain. The young plant,
which some thought too tender to be exposed prematurely to the storms
of controversy, has survived. That is a gain. Frank-sometimes brutally






Foreign Affairs
frank-discussion has taken place in the open, in the full glare of publicity
with all the modern technique. Yet the personal relations of the protag-
onists have remained friendly. We are so accustomed to this tradition in
our Parliamentary life that we do not perhaps altogether realize its im-
portance in the international life. That is a gain. Finally, in the impor-
tant issues on which the conduct of the British Government has been
challenged-Indonesia, Greece, and the Levant States-the honor and good
faith of Great Britain,. has been.broadly justified by the verdict of this
world assembly. All these are clear gains.
Nevertheless, we cannot disguise from ourselves the other side of the
picture. The relations between the great Powers are greatly, even alarm-
ingly, strained. New groupings of minor satellites round one or other of
the Big Three have taken shape. Soviet diplomacy, for whatever reason,
seems to be concentrating. upon outward pressure in the Mediterranean
and the Middle East against well-recognized and established British in-
terests. In the Security Council the technique of attack, direct and indirect,
has been developed upon all the weak links in the chain of world security
and peace. New rivalries, based upon strategical fears and supported by
ideological weapons, have been sedulously promoted. It would be folly not
to recognize that the Anglo-American-Russian Alliance that held so firmly,
in spite of so many difficulties, throughout the years of war, is virtually, if
not formally, in abeyance. All these are losses and grave losses and dis-
appointments. They are dangerous, but not fatal. It would, however, be
folly not to admit them and to discuss the disease and the remedies at
least as freely in this House of Co mons as they have been discussed by
the representatives of the United- Nations.
Meanwhile, in the meetings of the Security Council four main issues
have been raised-Persia, Indonesia, the Levant States and Greece. New
questions, with the intensity of an artillery barrage, have also been pro-
pelled against us day after day, but those are the main four. It goes with-
out saying that on all four my right hon. and hon. Friends approve and
commend the stand taken by the Foreign Secretary. The barrage-or
counter-barrage perhaps I should call it-has certainly been partly success-
ful in its main object. It has diverted attention from Persia. The posi-
tion of His Majesty's Government is dear and above-board, British troops
in Teheran, as we have been told categorically, have not been reinforced.
They will be withdrawn as agreed by 2nd March. I wish the position in
Northern Persia were as plain and unequivocal. In Indonesia, His Maj-
esty's Government have inherited, by the decision of the Combined British
and American Chiefs of Staff, a difficult and arduous task. They are using.
the familiar and proper combination of force and reconciliation in order
to discharge it. They have been subject to ignorant and irresponsible
criticism. Let them disregard it. They will be sustained by the broad
commonsense of the nation as a whole.
In the Levant States after many painful incidents and stresses, in which
I myself was involved in 1943, a solution seems now possible and is equally
agreeable to our French Allies and our Lebanon and Syrian friends. ....






British Speeches of the Day [Mr. H. Macmillan]


GREECE
My first connection with Greek affairs was at the end of August, 1944,
when the command was changed from the Middle East to Allied Force
Headquarters in Naples, and the Greek Government migrated from Cairo
to Salerno. From that time, until conditions made possible their return to
Greece, opr sole pre-occupation was to avoid, by any means that we could,
the dangers which we knew awaited them. The formation of the coalition
government under M. Papandreou, including representatives of E.A.M.,
seemed a happy augury. That was largely due to the efforts of the British
Ambassador, Mr. Leeper, the "infamous Leeper," as the organ of the Min-
ister of Health calls him. Mr., now Sir Reginald, Leeper is a great public
servant who deserves well of his country. He is a man of wide culture,
liberal outlook, and deep sincerity. . .
The Caserta Agreement, which followed those efforts, was signed on 26th
September, and it gave us great hopes. The Government representatives,
including E.A.M. members, together with General Zervas and General
Sarafis, the rival guerilla leaders, sat in conference with us, under General
Wilson as chairman, and in two days we reached agreement and signed a
compact. I shall never forget the sailing of that armada of 120 ships
bringing much-needed stores and equipment, under Admiral Mansfield's
direction. We embarked at Naples on Friday, 13th October, but we waited
until one minute past midnight, until the 14th, so that was not the reason
for any disaster. After some exciting experiences we were acclaimed with
universal joy and enthusiasm on our official entry into Athens on the
18th. Of course, we noted the undercurrent of political clash and rivalries
between the supporters of E.L.A.S. and E.D.E.S., but we felt confidence
in a peaceful restoration of Greek life. Indeed, so confident was I person-
ally that the Greek Government would succeed-as it certainly would have
done if the dark counsels of the extreme revolutionary Communists had not
prevailed over their more moderate associates-that I felt more concerned
at that time about the economic rather than the political problem.
At my request, the foreign Secretary, with the agreement of the Chan-
cellor of the Exchequer, made available to us the services of Sir David
Waley and with his help the drachma was stabilized on l1th November.
On 22nd November I left London to discuss with my colleagues the terms
of the so-called new deal for Italy, with the intention of leaving immedi-
ately for Washington to discuss them with the President. That was not
to be. The storm broke on the day I was to leave for America, and I
turned'eastwards, instead of westwards, and flew with Field-Marshal Alex-
ander to Athens, he having succeeded that very week to the Mediterranean
Command. The rest of the story is known in general terms to all-the
siege, the visit of the Prime Minister and the Foreign Secretary to Athens
on Christmas Day, the Regency, the truce, and, finally, the signing of the
Varkiza Agreement on 12th February, 1945.
All through these events His Majesty's Government have had one
policy and one only-to restore order, to find a political as well as a mili-
tary solution, to preach moderation and reconciliation. Field-Marshal






Foreign Affairs
Alexander, the best and most generous of colleagues, worked with his
usual calm efficiency at both military and political tasks. He found a
worthy adjutant in General Scobie. But it is easy to advise toleration. In
the stress of intense emotion it is hard to persuade others, more intimately
affected, to lay aside their animosities. Greece, long distracted by internal
disputes, was brutally lacerated and maimed by the German occupation.
In the course of the civil war cruel passions were aroused, and dreadful
crimes committed. It is not so easy to heal wounds as to inflict them. I
shalLnever forget the final session at Varkiza. A conference that had many
obstacles to overcome before it could,even start, had reached a final impasse.
On the invitation of both sides-for I do not believe personal intervention
is effective if it is unwelcome-the Ambassador and I consented to attend.
From 8 p.m. until five o'clock next morning the terms of the peace were
debated.
I still regard that Agreement as a great tribute, in all the bitter cir-
cumstances, to the patriotism and good sense of the Greek negotiators.
SMost credit of all is due, through that stirring time, to the noble person-
ality of the Regent. Since that date much has happened, some good, some
bad. I left the Mediterranean in May of last year. Much has happened
since, but all I wish to affirm, with all the sincerity in my power, is the
singleness of purpose which has animated successive British Governments.
Greece is our loyal Ally. She did not desert our cause when it stood low
in the world. Our determination, our duty is not to desert her in the
painful path of recovery and reconstruction.
Apart from those main issues-Persia, Indonesia, the Levant States and
Greece-many other perplexing difficulties present themselves, or are pre-
sented to us in the course of what seems to me a planned diplomatic of-
fensive. I must ask some questions of the Government concerning them.
What of Poland? Are conditions there worsening or improving? What
of- the Polish Army? The Foreign Secretary has firmly rebutted the wild
accusations made against us as to its use, but may we take it that no man
in that Force will be sent back to Poland against his will? If men be un-
willing, are we prepared to carry out the suggestion, made by the last
Prime Minister, that we should offer citizenship of the British Common-'
wealth to those whose sufferings and exploits have been almost without
parallel in history? What of the Greek territorial claims? Will we abide
by our plan-as the Turkish Government readily agree-for the Greek
Dodecanese Islands to be returned to Greece? Are we ready to .resist
any claim against the integrity of the Greek mainland?

THE ITALIAN PEACE TREAT
What are the prospects of Italian peace? The situation is obscure. I am
absolutely convinced that in spite of all that has happened in the sad
years between the wars the recovery of Italy as a stable and democratic
power in the Mediterranean is a British interest, and a world interest. It
is nearly two and a half years since-the Armistice was signed, They have
been a long way to work their passage home. The Americans and our-






British Speeches of the Day [Mr. I. Macmillan]
selves have made great efforts for Italy, but it is now essential that a formal
peace shall be made and made quickly. Hitherto the Soviet support of
the Yugoslavian claims to Trieste has been the stumbling block. Now,
if rumor is to be believed, we are to expect a sudden and dramatic turn
in Soviet policy, but I greatly fear that Italy may become a pawn in a
great diplomatic game, to her detriment and to ours. All these uncer-
tainties have created an atmosphere of suspicion. We are irresistibly re-
minded of Metternich's reception of the news of the death of the Russian
Ambassador at the Congress of Vienna. "Ah," he said, "is that true?
What can have been his motive?" It is true that the more realistic public
opinion of today, compared with the facile optimism that followed the
last war, is a healthy symptom, but realism must not be allowed to de-
generate into cynicism, or disillusionment into despair. We do not want
this to be the age of open diplomacy and secret fear.

RUSSIA'S AIMS
What does Russia want? What is the motive behind these manoeuvres?
Are they a manifestation of the expansionist policy which inspired Tsarist
Russia-greatly to the alarm of the European Powers-during the 'latter
part of the 19th century? Has this urge, temporarily suspended during
the revolutionary period, once more taken control, or has Russia, yield-
ing to those secular forces which seized nations in turn-Spain, France, and
Germany-made up its mind to dominate the world? Is this a manifesta-
tion of a new imperialist drive, or do these developments mean the return
to the proselytizing fervor of international Communism? Does it meafi
that the militant theorists are back in control? All these are possible ex-
planations. If any one of them is correct we. shall know where we are,
and we shall frame our policy accordingly. So long as there is breath in
British bodies, we shall defend ourselves and our heritage against aggres-
sion. Nor shall we accept any political or economic doctrine except as
the result of our free and democratic choice. It may be that none of these
is the real motive governing Soviet foreign policy, but it is absolutely vital
for ourselves, and for the future of the world, that we should try to learn
the truth. These matters are too grave to be dealt with on party or pre-
conceived lines.. We cannot be pro-Russian or anti-Russian; we must be
pro-mankind. This is the situation. If it drifts on, it is full of danger
threatening ultimate disaster. Is there anything that can be done to make
a new start, is there any new approach to the problem?
There is another possible explanation. Do we, for instance, make
sufficient allowance for Russian experience and the Russian psychological
background? All through her history, in early, medieval and modern
times, Russia has been invaded, both from the East and from the West, by
a succession of enemies. It is no accident that her recent propaganda-by
film, by the written and spoken word, and by orders of chivalry and the
like-has all been concentrated upon the heroic figures of Russian resistance
in preceding conflicts. Whether it be Demetrius Donskoi or Kutuzov or
Suvarov, it is significant that all these great names are now brought back
104






Foreign Affairs
to the public mind. Each of these successive invasions of Russian territory-
and in the last 130 years there have been four, the Napoleonic, the Crimean
and the two German onslaughts-has caused immense suffering and loss of
Russian life and property. The last has been the most devastating, to a
degree that we perhaps hardly realize. What is the reaction to continued
invasion? The search for security. The French followed this policy after
the last war. They sought the Rhine frontier; when that was denied them
they sought the American guarantee, and when that failed they set in
train a whole diplomatic and political structure, the Little Entente, in-
tended to isolate Germany. These security measures, in their turn, gave
rise to new pressures, social, political, and economic, which, if not the
cause, were at least the excuse for the rise of Nazi Germany.
May it not be that the apparent Chauvinism of Soviet policy is a form
of insurance, not of expansion, that security, not imperialism, is their in-
stinctive goal, and that for this a new cordon sanitaire is being created of
States made satellite and dependent, both by power and doctrine, partly
dominated, partly converted? These are to form a kind of defensive glacis
of small nations looking to the Kremlin for political and economic theory,
and to the local Russian commander for material support, and using their
arms and police forces, rather than the ballot box, as the instrument of
power. It may well be, therefore, that the ultimate cause of these recent
manifestations of Soviet policy are,.at bottom, isolationist and not expan-
sionist, that their purpose is not to dominate the world either as Russian -
imperialists, or as militant international Communists, but to secure the
soil of Holy Russia herself against new outrages. If this, in their view,
requires new strategic frontiers or the invasion of neighboring rights, or
the grave disturbance of the balance of the world, well, the risk, from
their view, must nevertheless be taken. Now, when the world is exhausted,
may seem to them an opportunity to seize and fortify bastions against
foreign aggression.

A PLEA FOR PERSONAL, DIcCT NEGOTIATION
All this is very wrong and very dangerous, but if this interpretation of
Russian motives should be right, it need not be fatal if it is dealt with in
time. Drift and delay will lead us to the abyss. Whether we like it or
not the world is in fact being divided into different spheres of economic,
political and military influence. It is futile to deny the great differences
in political conceptions and economic practices of the dominant Powers
within these spheres. The task of statesmanship is surely to reconcile
them at the points where they meet and in the matters upon which all are
interested and involved. With Russia, I believe that this can only now
be done by personal and direct negotiation. Could not Marshal Stalin
himself take the initiative? Could not something like the old Stalin-.
Roosevelt-Churchill combination be re-established? The Security Council
has become, for the moment, the forum for public and often acrimonious
debate. It is being used as the instrument of power politics with new
rules but the old motives. At this stage the tangle can be restored only






British Speeches of the Day [Mr. H. Macmillan]
if dealt with by meetings of those men themselves, in whom are vested
both the power to frame policy and the power to carry it into effect. Let
the Government consider and, in their consideration, let them take note
of the anxiety which is now beginning to darken-even more than domestic
troubles and disputes-the whole spirit of the nation.
If these matters are not resolved, what then? There is another nation
with a great population, great agricultural and mineral resources, great
industrial capacity, great intellectual and organizing power, great past
achievement. This nation is wrapped for the moment in mystery and dark-
ness. We are given practically no information on what is happening there.
There is a complete statistical and informational blackout. Yet she lies at
the center of Europe. She lies at the center of the European problem.
In the long run, though we seem to have no policy about her future, she
cannot be neglected. Her name is Germany.

GERMANY
What is our policy towards Germany? Unless an accommodation can
be found, and a formula established between the Eastern and Western
Hemispheres, you can have no sound policy regarding Germany. If that
accommodation is reached Germany so often the scourge of Europe, can
in due course be transformed into a healthy and valuable member of the
European family. Only so can the soul of the German people be saved.
But if not, if there is dispute and acrimony and intense feeling between
the East and the West, she will once more become a menace to peace.
Nothing can prevent the inevitable and logical development of this situ-
ation. Germany, now cast down, despised, shunned like an unclean thing,
will once more be courted by each of the two groups, and from a starving
outcast she will become the pampered courtesan of Europe, selling her
favors to the highest bidder. She will once more have lost the war and
won the peace, and Hitler's dream and mad prophecies will have come
true. Therefore, before it is too late let us act.
The seeds of war are not sown in the years immediately preceding, a
conflict; it is the first years after war that are the critical years. In this
period, for good or ill, the future is begotten in the womb of time; after it,
events move forward with the grim inevitability of Greek tragedy. The tra-
ditions of Western humanism and Christian civilization have with difficulty
survived two wars in a single generation. They cannot outlast a third.
Novel and terrible weapons of destructive power hover like vultures await-
ing their human prey. In these grave times, in this hour, perhaps an hour
of destiny, only Ministers can know the methods and modalities of con-
ciliation. But let them act, not drift. We say to them: Take comfort and
inspiration from the good will and willing co-operation of all your fellow
countrymen, but be strong and of good courage.


Mr. M. P. Price (Labour): The task of statesmanship then, as I see it, is
to bring about such conditions as will enable the three great Powers of the






Foreign Afairs

United Nations to work together because, without that, no matter what
machinery there is, it will not work. The main difficulty is, of course,
Anglo'Russian relations, which have been going steadily from bad to worse
since the end of the war. . .
The right hon. Gentleman the Foreign Secretary has had an easy task
in dealing with Mr. Vyshinsky; he has had a chance to speak his own mind
and to stand no nonsense, but when all the applause for this has died
down, one is left with the uncomfortable feeling that this by itself does
not constitute a foreign policy which will lead us anywhere. . .

WHAT DOES RUSSI WANT?
What is the motive of Russian policy? Where can we find the key to
Russia's intentions today? I have just spent two months in the Soviet
Union, where I went not as a Member of this House, but as a humble
journalist and a member of the public, anxious to meet not high people,
but people in the market places and villages. I talked to them and was
able to get about because I approached the whole thing with an open
mind and a desire to be friendly. What struck me most was that the Rus-
sians are just as fearful of us as we are of them. All the time they were
asking "What are you up to, are you preparing a western bloc against us,
you and the Americans?" I could see they were determined to prevent
their country ever again being a scene of war and devastation to which
they have been subjected for the third time in 30 years. I found a nervous
suspicion of us. They cannot forget the wars of intervention. While talk-
ing to them, I was all the time trying to tell them that 1945 is not 1918
again, and that it is different here and elsewhere in Europe: The Russians
are a sensitive and suspicious people, who will require handling with the
utmost care. Moreover, I had certain very awkward facts thrown up against
me. I was asked about General Anders' Polish Army in Italy and I could
not answer it adequately. I hope the right hon. Gentleman the Foreign
Secretary will take this matter in hand as soon as possible. . .
In general, I feel that the Russians are determined to prevent govern-
ments growing up on their borders which are going to be used as a hostile
source of intrigue against them. They are not trying to impose Com-
munism on these countries, nor are they trying to impose collectivization
of the land in Poland or Rumania. Indeed, they are actually going to the
other extreme and I heard a Hungarian statesman the other day com-
plaining that the Russians are backing a "Kulak" regime in Budapest of
well-to-do peasants. Unfortunately, we have aroused suspicions in Russia
by our dilatory method of recognizing these Baltic and Danubian Govern-
ments. We ought not to have been too squeamish about it. It is no use
expecting to export our particular form of democracy into Eastern Europe.
These people have never known anything like it. Russia and the Baltic
and Danubian States have had to listen to long lectures from America
about democracy in God's own country and I suppose they have to put up
with this as the price of America's abandonment of isolationism and watch
the painful process of Americans trying to understand Eastern Europe.






British Speeches of the Day [Mr. Price]


THE MIDDLE EAST
There is another matter about which I would say a word, the Middle
East. I went to Russia and then to the Middle East in order to get a little
of the line-up there, knowing how important it was. I was in!Persia at the
time that the Azerbaijan trouble was at its height. I regret to say that
the atmosphere I found among the British colony in Teheran was such
that among the less responsible element there was talk in terms of the
next war against Russia and among the more responsible elements no
great desire to find a way of co-operation with Russia. They were taking
a purely legalistic line: "Russia has broken the Treaty and that is that."
Russia's case in Persia remains weak, I admit, as long as she refuses to
permit journalists and responsible persons from going into Persian Azer-
baijan and reporting fairly.
But she has three aims there. The first is to prevent the U.S.A. and
Britain from having oil concessions in the north where she feels she has a
perfectly reasonable right to get in first. The second point is that she
wishes to raise the whole question of the Russian participation in a settle-
ment in the Eastern Mediterranean, and particularly to reopen the whole
question of the Montreux Convention in regard to the Dardanelles and
the Straits. Russian diplomacy is indirect. It is a question of making
trouble in Azerbaijan in order to gain a point somewhere else. After all,
let us not forget that in 1915 we signed a secret treaty with Czarist Russia
to give Russia, lock, stock and barrel, the whole sovereignty over the
Dardanelles and a large part of Asiatic Turkey. I happen to know about
that because I was the first person to get the secret treaty, which was handed
to me by Mr. Trotsky's secretary. I got it to England to the Manchester
Guardian, which printed it first. I do not advocate that we should go
anywhere near as far as we went in that treaty. I am simply pointing out
that years ago we were prepared to give Russia far more than she will
reasonably ask today. Russia certainly would have a very strong case in
asking for the internationalization of that great international waterway of
the Dardanelles, and I think we have an equal right to ask from Egypt,
and other Powers of the Eastern Mediterranean, for a similar state of affairs
in the Suez Canal.
Thirdly-and this is rather a subsidiary point-the Russian aim is to
bring about a reform and a progressive regime in Persia. Our traditional
policy in Persia is not of a kind which will, I think, commend itself to the
House. Traditionally we have been fond of keeping in power in Persia,
by our diplomacy and influence, a Government of the Persian nobility
which is anything but in keeping with the spirit of modern times. The
Persian Government and Medjliss consist of charming Persian gentlemen
who have been to Eton and Balliol, to Harrow and Trinity, Cambridge,
who know the Persian classics from Hafiz to Jelal-udin-Rumi, and who in
every way are very charming people, as I have found on meeting several
of them; but I am satisfied they are quite incapable of handling the affairs
of their country in such a way as to lead it towards the things that are
urgently needed-land reform, social reform, and war against poverty.






Foreign Afair.
Until, we and Russia can act together over Persia to get governments of
that sort, we shall have trouble in that part of the world. The Russians
are exploiting the old regime in Prsia and our attitude towards it as a
means of raising the disaffected elements of the Middle East against us,
including some of the mountain tribes, such as the Kurds. This is danger-
ous from many points of view. They are on the borders of Iraq, that very
important oilfield, which is so vital to us at a time when we are dependent,
as we are now, on a sterling economy.

THE ARAB LEAGUE
Unless we use our influence on the side of progress and reform in the
Arab countries in the Middle East, Russia will gain prestige among those
disaffected elements. I was constantly asked by Arab politicians and states-
men in the Arab countries I passed throtigh,"Is Russia going to be a danger
to us?" I replied, "Yes, until you put your houses in order, and if you
do that, I do not think she will be a danger to you." Of course, at the
present time the Arab League is a force. I have always favored giving our
moral support to it. About two years ago, I put a Question to the right
hon. Gentleman the Member for-Warwick and Leamington (Mr. Eden),
who was then Foreign Secretary, to try to find out what would be the
attitude of the Coalition Government towards the Arab League if it was
formed, and I thought the right hon. Gentleman's answer at that time very
sensible. But Russia unfortunately suspects the Arab League as being an
Eastern cordon sanitaire. They may be wrong, but whatever happens the
Arab League must not have our support if it is allowed to become that.
Moreover, the influence that we seek to assert in the Arab countries, as in
Persia, should be on the side of social reform, raising the level of the fella-
heen and lifting him out of the poverty and disease from which he suffers.
I am certain we could get Russian support for that. Here, then, is ground
for co-operation between Russia and ourselves. Our position today, tied
as we are to the chariot wheels of Wall Street, and dependent upon the
whims of a reactionary Congress, is not so easy, but we might try to see
what a little co-operation with Russia might bring about.
The right hon. Gentleman the Foreign Secretary must not allow his
dislike of Communist activities in the trade unions to color his attitude
to the Russian State. The Communist nuisance must not be allowed to
menace Anglo-Russian relations. That is a test of the right hon. Gentle-
man's foreign policy. I do not believe that Russia has territorial and im-
perialist intentions either in Eastern Europe or in Asia. The Trotsky purge
nearly ten years ago brought about a change. The idea of world revolu-
tion was dropped. Just before I left Moscow, to go to the Caucasus, it
was Constitution Day in Soviet Russia. The newspapers were full of in-
teresting articles about the Soviet constitution and, tied up with that, for-
eign policy. The general tone of these articles was that the foreign policy
of the Union is the defense of the Union, because the Union must be an
example to the world. That is my interpretation of what I saw in the
Press and the talks I had with Russian folk, both high and low. I admit






British Speeches of the Day [Mr. Prices
also noticing a desire to compete with His Majesty's Government in moral
support of the working-class parties on the' Continent and they rather
resent competition with the Communist parties they are setting up there.
They are jealous of any other influence. Even that, however, ought not to
cause us to lose our tempers with them. We ought to put up with the
policy of pinpricks, even though it is most annoying. On Saturday last, the
Manchester Guardian said in a leading article:
"If we want our ideas to triumph in the battle of the spirit, we shall have to
assert ourselves on that plane with the same force and persistence as on the lower
plane of diplomacy."
BRITAIN'S NAVAL PRESTIGE
We have great moral prestige in Europe, as I saw wherever I traveled.
We alone stood against the Fascist beast during the most critical years
when other nations--Russia and America-were neutral. That is moral
capital which I am convinced we can still use, but it will not last indefi-
nitely. This, alas, is still a cynical world. Power politics and material
interests play a very big role in world affairs. I found, in the Arab coun-
tries particularly, loose talk about another world war and what a chance
they would have to play us off against the Americans, and both of us off
against Russia. That is the kind of thing we find among these newly de-
veloping national countries. My right hon. Friend can deal with this
cynicism by acting on a higher plane. He must also seek to find a way to
co-operate with Russia, that key to the peace of the East. Russian sus-
picions are not altogether groundless, having regard to what happened in
the past. They must be removed, and the Foreign Secretary will be judged
before the tribunal of history by his capacity for removing them. If he
succeeds, he will go down to posterity as one of the great Foreign Ministers
along with Castlereagh, Canning, Salisbury, Gladstone, Disraeli and Grey.


The Acting Leader of the Opposition (Rt. Hon. Anthony Eden): As
to the work of the various United Nations organizations, it is very difficult
for those of us who have not been at the meetings to form a just assess-
ment of what happened. The best which could be said about it is that I
believe few organizations could have supported so severe a strain as the
United 'Nations organization has sustained from the outset, and the fact
that it has survived is an encouraging start. . .
Though I am afraid I have inflicted far too many speeches on foreign
policy in my time, I do not think I have ever known one where it was
more difficult to offer some constructive suggestion in a situation which is,
none the less, I am certain, troubling every hon. Member in this House.

THE CAUSES OF UNEASE
If I may, I want to try to look at the causes of this unease and make
one or two suggestions which might help to remove them. Let me start
first with what I think troubles us all most-the present state of Anglo-
Soviet relations. It has been said many times in this Debate-and I think






Foreign Afairs

with truth-that it is difficult for us to understand the profound impres-
sion that has been made upon the minds of the Soviet Government and
the Soviet people by the wide and deep invasion of their land by the
German armies and by the distress and suffering that accompanied that
event. That is perfectly true, and it is perhaps difficult for an island
people entirely to understand it because, despite the fact that modern
inventions have resulted in our being militarily no longer an island, it is,
none the less, true that our mental approach to this question is still the
mental approach of an island people. Physically, perhaps, if I may, I
could give one illustration. I happened to be in Moscow in the winter
of 1941, about Christmas time, when conditions were about at their worst
for Russia, and pretty bad for us at that particular phase of the war. Dur-
ing an interval in our discussions, Marshal Stalin arranged that General
Nye and myself should go up to what our Russian Allies called the front-
which was as near as they thought it reasonable for any foreigner to go,
because they were always anxious we should not get into trouble-so that
we could see the prevailing conditions in that area. I wish I could give
to the House the sense I got-and several hon. Members in this House
have seen many battles-of what the Russians were feeling about this
German tidal wave which had not, perhaps, up to then, so far as they
knew, reached the high-water mark, though it was only 50 miles from
Moscow.
I am convinced that it is the scourge of that invasion-and not the only
one in this country-which is the dominant motive in Soviet foreign policy.
It does not excuse some things which I shall talk about in a moment, but
it is there. Coupled with it is the memory that it was only 80,000,000
Germans who nearly dealt a mortal thrust to 180,000,000 Russians, and a
determination that, so far as lies in the power of the Union, Germany
shall not be in a position to do that again. That, I think, is the second
dominant note of Soviet foreign policy. I say those things, not to excuse,
but so that we may try, in fairness, to set out the position as it seems to be.
This determination not to allow Germany to be in a position ever to do
this again and this alarm-I think that that is the right word-which the
near approach of the Germans to Moscow created, have resulted in Soviet
determination to have as friendly neighbors as they can. And there,
almost at once, their policy results in difficulties and complications for the
Soviet Government's Allies.
It often happens that those whom the Soviet Government think they
can trust among their neighbors are not those whom the majority in those
countries wish to govern them. That is undoubtedly true. Inevitable
friction results, and it is really too over-simplifying the issue to speak like
the hon. Gentleman the Member for the Forest of Dean (Mr. Price) spoke
in the Debate yesterday. He complained of American reluctance to recog-
nize the Government set up in Rumania and Bulgaria. Russia, no doubt,
regarded it as legitimate to set up those governments in those particular
countries, but it is pardonable that other countries should have their
doubts as to whether those Governments are truly representative of those






British Speeches of the Day [Mr. Eden]

countries. If they have those doubts, it is inevitable they should hesitate to
recognize them.
THE BIG THEE
Now a word about the relation of the Soviet Union with the other two
Powers-ourselves and the United States. I believe that the Soviet Union
is sincere when they say to us that they want to collaborate with ourselves
and the United States, their two great partners in the mortal conflict from
which they and we have only just emerged. I think, also, that the Soviet
Union are sincere in wishing that the United Nations Organization should
function. It can only function if there is a measure of understanding be-
tween the three great Powers. That far, I think, we are agreed. But here
comes the rub. While Russia wants this collaboration-as I say, I am
convinced sincerely-with the other two great Powers, she appears only to
want it on her own terms. That will not work. Sooner or later, that must
land us all into difficulties. It cannot be acceptable to the Allies of the
Soviet Union that the Soviet Government should just repeat that formula
of the need for unity as a sort of abracadabra and then, having said it,
pursue any policy she likes, quite regardless of the feelings or interests of
those who have been her Allies. That is the heart of the problem, and
it is only right that we should fairly state it to our Allies. There can be
no true understanding between Governments which permanently stand
a strain of that kind.
I hope I may be allowed, without conceit, to introduce for a moment
a personal note. It is nearly eleven years since I first went to Russia and
had my first conversations with Marshal Stalin, M. Molotov and M. Lit-
vinov. We had very long, exhaustive conversations about the relations
between our two countries, but I will not weary the House with an ac-
count of them. We afterwards issued a document which I would rather
like hon. Members to look at again, because it is of interest in our present
state of relations. I am not going to quote it except for one short passage
which shows where we ought to be in our relations with the Soviet Union
and where we are not at the moment. It says:
"The representatives of the Government were happy to note that there is at
present no conflict of interest between the two Governments on any of the main
issues of international policy and that this fact provided a firm foundation for the
development of fruitful collaboration between them in the cause of peace. They
are confident that both countries, recognizing that the integrity and prosperity of
each is of advantage to the other, will govern their mutual relations in that spirit of
collaboration and loyalty to obligations assumed by them which is inherent in their
common membership of the League of Nations."
I say, substitute the word "charter" for "League of Nations," and that is
the basis upon which our policy with our Russian Ally ought to rest, but
I cannot truly say that it is the basis on which it rests now. I am bound
also to say-and I say it as one who has long been anxious for collaboration
with the Soviet Union-that the fault, in the main, is that of our Soviet
Ally. I am now going to give one or two reasons. I wish to take up the
remarks made by the hon. Gentleman the Member for the Forest of Dean
(Mr. Price) about the situation in the Middle East. He complained that






Foreign Affairs

our policy in Persia, for example, was to keep in power what he called
the nobility-I will quote his words-those
"who have been to Eton and Balliol, to Harrow and Trinity, Cambridge, who know
the Persian dassics."
That is all right, but let me tell him, incidentally, that knowledge of the
Persian classics is not confined to what he is pleased to call the Persian
ndbles, any more than, so far as I know, a knowledge of the classics is very
widespread among the same kind of people in this country. However, he is
quite wrong in his definition of our policy. We have never sought to back
one particular government in Persia, or, indeed, any particular govern-
ment in Persia.
THE PROBLEM IN PERSIA
Here, I think, is the fundamental problem which the House has to face
about these countries. We did not elect the Medjliss. The system under
which the Medjliss is elected may not be a good one, but I am not re-
sponsible for that, and neither is the right hon. Gentleman the Secretary
of State for Foreign Affairs. The hon. Member for the Forest of Dean
asked: "How can you expect to have our conception of democracy in the
Balkans and in the countries of Eastern Europe?" If he does not expect to
have our conception of democracy there, why does he expect to have it in
the Middle East? It suited his argument with regard to the policy of Russia
in the Balkans, but he used an argument exactly to the contrary with regard
to Persia. I will tell the hon Gentleman what we have to face. Ir none of
those Middle Eastern countries is there a democratic government in the
sense that we understand it-a parliamentary one-nor is there likely to be
one. The hon. Gentleman spoke of our attitude to the League of Arab
States. I think that was a perfectly correct attitude-one of encouragement,
but not of interference in their arrangements. We have tried from time to
time to encourage these Middle Eastern lands to broaden the basis of their
prosperity, to increase the wealth of those who have far too little substance
on which to live. I know-and so does the right hon. Gentleman-that
many times ambassadors-or some of us, at least-have given that advice on
instructions, when we have had actual contacts with these people, but that
is as far as we have gone, and the House ought to consider whether we would
be justified in going further.
Mr. Price: Would not the right hon. Gentleman admit that, if we and
Russia took action together in Teheran, we would get a somewhat different
government there than there is now?
Mr. Eden: I am not sure about that. Let us look at this carefully. I
think this is important and fundamental to our Persian policy. Supposing
we and the Russians did agree that one party was better than another, is it
really our business to impose that party on Persia, and ought we to? The
hon. Gentleman will remember, for instance, that in the time of Edward
Grey, in 1906, we tried to do that sort of thing. It was a terrible failure
and we got ourselves absolutely detested by every section of the Persian
people. If we ourselves, or in conjunction with Russia, said to any of these
other countries, "This and that is what you should do"-in fact, in other
113






British Speeches of the Day tMr. Eden]

words, if we tried to govern them-we would be opening ourselves to the
very charges which were hurled at us yesterday by the hon. Member for West
Fife (Mr. Gallacher). I think the Russian attitude is wrong. I think their
interference in the internal affairs of Persia is contrary to the treaty they
signed, and if we did it we would be acting contrary to the treaty which we
signed. Persia should work out these things for herself, with any encourage-
ment and assistance we can give, but without ourselves or our Ally saying,
"This, that, or the other party is the one which should be put into
power." . .
SOME QUESTIONS TO THE FOREIGN SECRETARY
I would like, if I may, to make one or two suggestions to the right hon.
Gentleman. . We would be glad to hear, if he can tell us, any
information, first of all, about the general Far Eastern situation. I myself
am not going into that; it has been touched upon by so many other speakers.
But, coming nearer home, I would like to ask him whether he can tell us
anything about the prospects of some form of closer understanding between
the countries of Western Europe. I know what the earlier difficulties were.
Until those countries were liberated, and until, in some cases, they had had
their elections, they did not want to enter into commitments-I think rightly
so-but now that period is passed, and, while nobody cares more than I do
for good relations with the Soviet Union, I cannot now or at any time admit
that they have the right to complain if wQ choose to make arrangements with
our near neighbors in Western Europe.
It is only fair that I should add, so far as I can remember, that no states-
man of the Soviet Union has ever raised to me any objection to such a
course. I have seen plenty of it in the newspapers, but I do not think any
such objection was raised by any statesman of the Soviet Union. On the
contrary, I can remember one particular occasion when the Soviet Union
took exactly the opposite line and made it clear that they did not take any
objection to our making such an arrangement. However, whether they do
or not, we are obviously entitled to make such an arrangement, and it is
cear to us all that it is in the interests of the peace of Europe that we should
do so. Therefore, any information the right hon. Gentleman can give us-
not forgetting that all these arrangements are allowed for and arranged for
in the Charter itself-would be very welcome. There is no question of
replacing the authority of the Charter.
Can the right hon. Gentleman tell us anything about the other subject
which he touched upon-with regard to Germany and our policy towards
Germany? I feel that perhaps one ought not to raise that question without
trying to make at least one constructive contribution on the subject. I will
try to make one. I believe it would be to the long-term advantage of
Europe if the Ruhr were internationalized. I can see no disadvantage-
although I do not know what the position is in respect of our Allies-in our
making that arrangement. Of course, that by itself would not be a guar-
antee of security in the West, but it would be a step which would assist to
create a sense of security, and I can conceive of it being so worked out as to
be to the economic advantage, not only of Germany's neighbors, but also of
Germany herself.





Foreign Afairs
There is one other matter to which I wish to refer before I close. There
were occasions during the war, as the right hon. Gentleman will remember,
when we had the opportunity of full discussions on foreign policy with the
Prime Ministers of the great Dominions. Those discussions were of immense
benefit to us. The position is quite unique in the world now. The Prime
Ministers of the Dominions, and, of course, the Ministers of external affairs,
have access to all the information to which we have access.
They know exactly as much as we do on every subject. Yet they bring
to our problems a fresh mind and a different angle of approach. For my
part, I was never so heartened by any experience.during the whole of the
war as by the meetings-which the Prime Minister and the right hon. Gentle.
man will remember, because they sat through them all-of the Dominion
Prime Ministers held in London in 1944. If it were possible-I do not know
whether it be so or not-to create the opportunity for another such meeting
in the course of the next few months when developments and foreign policy
are certain to be so important, and when the right hon. Gentleman's task is
so complex and difficult, I believe he would find it of inestimable benefit.
THE RULE OF LAW
Let me conclude as I began. We are at an anxious moment in the state
of relations between the great Powers. Any hon. Member could feel the
sense of that weighing on us while listening to this Debate. We have all
pledged ourselves to observe the Charter which we drew up at San Fran-
cisco. If we carry out that pledge, not only in the letter, which is always so
capable of argument and interpretation this way and that, but in the spirit,
then the nations can move forward to an era of prosperity greater than has
ever been known. . Unless there is an observance of the rule of law
none of our plans however well conceived, and none of our Charters how-
ever well drawn up are going to be worth very much. If we can work in
that spirit our problems can be solved. But if we do not, there is a real
danger that suspicion will grow until it hardens into lasting misunderstand-
ing. That is the anxiety which I feel today, which might be an immeas-
urable calamity for the human race. What steps the Government think it
right to take to meet the situation is for them so say. I am not suggesting
who shall see whom or when anybody shall meet anybody. That is for their
initiative. There is the problem. With all our hearts and minds we seek
to help the Government in their task. Any endeavors which the right hon.
Gentleman makes to this end will have the support of the House and the
people. From the bottom of our hearts we wish him Godspeed in his harsh
task.

The Secretary of State for Foreign Affairs (Mr. Ernest Bevin): ... I
would like to say this to some of my hon. Friends on this side of the House. I
have been told that when the Opposition cheer me I am wrong. But you
know, you cannot carry out a foreign policy on a very narrow and limited
basis. Neither can you alter history by a slogan. I said to Mr. Vyshinsky in a
talk the other day that I did not think we could set down our difficulties on a
piece of paper and solve every one of them. I felt that if we could get confi-
115






British Speechds of the'Day [Mr. Bevin]
dence in one another we could grow together. I repeat that: We could grow
together. It is the task of growing together that is the purpose of my policy.
Let me assume for a moment that the imperialisms of the past have caused
friction and difficulty either for strategic or any other purpose in any part
of the world. I remember saying to the Generalissimo in Moscow, "Do not
let us throw in any sand. Let us keep the ball-bearings well oiled. Let us
try to make the machine run smoothly, and in the end we will solve these
difficulties in the course of time." This war ended only nine months ago,
and I am not apologetic for the progress we have made. It has taken a
different line from that which everybody thought it would take. There
has not been any, and I venture to suggest there will not be any of the
general Peace Conferences we understood at Versailles. I am not sure that"
that is too bad. Versailles set down a very rigid treaty and the right hon.
Gentlemnan the Member for Warwick and Leamington, who has been in the
Foreign Office for many years, knew that the rigidity of that treaty meant
that revision was very difficult. The circumstances of modern life and the
modern world will mean that rigidity will be the enemy of a long-term
peace. I am not too sure that the controversy and the fluidity of the situa-
tion will not in the end produce better results.

THE WESTERN Bloc
If I may deal first with the last questions put by the right hon. Gentle-
man, I will take the question of a Western union. Nothing has percolated
through with greater acrimony than the question of a Western bloc. I delib-
erately raised this question in Moscow. I said, "You want friendly neigh-
bors. Well, in my street I want friendly neighbors too. I am entitled to
have them, but I will do nothing that injures you. His Majesty's Govern-
ment will do nothing about which they do not inform you. We will tell
you everything. We have a treaty of friendship, and I mean friendship, I
mean it in the terms stated in that treaty." For the first time, I will reveal
to the House and to the world that I said, "If you want to change that from
20 years to 50 years I will advise my Government to do it. I do not think
I could do better than that. If it is to be amended in order to make it
more acceptable, or to be changed in order to give confidence, I am willing,
also, to look at that. But I cannot be accused of not wanting friendship
for the Soviet Union-for all time if I can get it.

THE VEXED PROBLEM OF GERMANY
Now with regard to Germany. Germany is a very vexed, difficult prob-
lem to solve. We acceded to the Oder and the Western Neisse at Potsdam;
and so all you can do for Russia, Poland, and the satellite States you have
done. You have done it in the war and immediately at the end of the war.
But the heart of aggression in Germany is the Ruhr. That is the peak. I
frankly confess that we have not made up our minds about the Western
frontier, for that is what it means; but I have had a very strong committee
working-two committees: one on the political solution. I have studied
very closely the proposals of France. I have not rejected them; I have not
accepted them. I do not know at the moment whether they are quite work-
116





Foreign Afairs

able. But I am convinced that you have got to settle the ownership of the
Ruhr, that is to say the ownership of the industries of the Ruhr. The heart.
of the general staff in Germany was the industrial lords of the Ruhr; and
the Ruhr must not go back to their possession and it must not be controlled
for that type of mentality.
The second thing about the Ruhr which attracts me is this. The Ruhr
is a great productive area, potentially. A lot of people of our Allies say,
"Deprive it of all its productive capacity for security's sake." I have to ask
myself, Will that succeed? If we go on the basis of the reparations payments
now being discussed, I am afraid that you will create a recrudescence in
Germany that will be disastrous for peace. The trouble with the Ruhr was
that its full potentiality might not be realized unless 65 per cent of it went
into munitions-and I have known it for a good many years. On the other
hand, the standard of life in Europe is lower. Ought I, then, to aim for a
policy by which the Ruhr should be a productive unit for Europe as a
whole, including Russia, including everyone, so that its products go east
and west, in order to develop the standard of life in Europe? Or ought
I to restrict it? I confess that at the moment, if I may say to my right hon.
Friend the Member for Warwick and Leamington, I have not yet from the
purely security angle, arrived at a conclusion. My industrial instinct-which
probably is not a security instinct; and I want to draw the distinction-tells
me that, the right thing to do with the Ruhr is to own it publicly under
international control, with each Government owning a share in the concern
and sitting on the governing body; not private individuals, for the sheer
sake of security; and then to consider whether the Ruhr products could not
be limited . to what I call the partially manufactured states, leaving
no unfinished ends, which are convertible into munitions very quickly in
the Ruhr; but allowing all its potential manufactured ends to pour into
Italy, Yugoslavia, and anywhere else, in order to develop them, letting them
spread over the whole of Europe.
That is a point I have to consider, and on which I have to arrive at a
conclusion. But I can assure the House I am giving the utmost study to the
problem. I am in the closest consultation with France, Belgium too, Hol-
land, and all those affected. When I am ready and they are ready, then we
must consult the United States and we must consult Soviet Russia. If I
may say so publicly to all of them, "Please do accept our good intentions
in this matter. For after all, France has bled three times. We have bled
twice. Do not, please, accuse us, who have shed so much blood in the last
ten years, of wanting to create the very weapons that have bled us so bitterly
during this period." Unless good intentions are accepted and they are put
on the anvil of discussion the situation is hopeless.

AusTIA
I have been asked about Austria. I am one of those who believe that the
Austro-Hungarian Empireswas economically right but politically wrong. It
was an economic unit, and the cut-up that took place, from the point of
view of the standard of life of the country, was impossible. I do not know,
it is too early yet, but I can say both we and the United States of America






British Speeches of the Day [Mr. Bevin]

-although Austria was incorporated in the Reich and, therefore, is not
quite in the position of Italy and the Balkan States with which we were at
war-are ready to re-create the position by a new peace treaty, as the only
means by which we can get a legal clarification of the position of Austria
in the new creation. All I can hope is that all these States, although they
are politically separated from the point of view of government, will not go
on creating tariffs and all the other restrictions against one another. Let
trade flow freely between them so that the standard of life may be raised.

ITALY
I was asked about Italy, which I regard as very important. I think Italy
has gone a long way-to use the words of the late Prime Minister-to work
her passage. I want to try to do justice in the settlement of the Italian
treaty, if we can, and to settle it on a basis that will not produce the antago-
nism and difficulties that may lead to conflict between her and her neighbors
again.
I think that the nationalisms around her are being pushed a little too
far. We have to exercise a good deal of common sense. But when you get
to these frontiers, you are faced with very great complications and the con-
flict between what is called the ethnic frontier and the economic necessities
of the case. You have great electrical power in the Tyrol, but the territory
is ethnically Austrian. Is it beyond our wit and our power, in the end, to
see that great economic power, which the Italians themselves have created,
is made to serve both Austria and Italy-and still solve the ethnic problem?
I cannot answer that at the moment; I can only postulate it. When you
get down to Trieste, you find the mines and the bauxite. The ethnic line
may be in Yugoslavia or it may be in Italy-I do not know-but why cannot
there be, wherever the ethnic line goes, joint companies, or some arrange-
ment under which both can have the benefits of these raw materials that
exist in territories of that kind? Why is it necessary to set people to fight
one another when, in the normal arrangements that can be made between
countries, these great raw materials for the benefit of everyone can flow
through these territories.
I do not pretend to give an answer, but these are the problems. I find
myself in constant conflict over the economic facts. After all, what do the
people want? They want homes, food, light, markets, and they want to
enjoy the decencies of life. The mere drawing of an ethnic boundary ought
not to mean poverty to them, and the raw materials ought to flow, whichever
way it is. Therefore, I appeal to all these countries not to allow their
nationalistic feelings to override their common sense in dealing with the eco-
nomic difficulties. The same thing applies-to transport. The transport of
Middle Europe and Southern Europe and Northern Italy must have an
outlet to Trieste. If the industries are to be maintained, then why deny the
ordinary transport facilities, simply because it runs across the frontier?
These are the kind of problems which agitate my mind more than anything
else. While I want, and His Majesty's Government want, to give nationalis-
tic aspirations the greatest possible chance of expression, I do not like to
do so at the expense of a low standard of life for the people concerned.






Foreign Affairs

RESULTS OF THE FOREIGN MINISTERS' MEETING
I am asked whether we arrived at terms of reference at the Foreign Min-
isters' meeting in London. Yes. At the Foreign Ministers' meeting we did
arrive at terms of reference for the Italian treaty, and the Council of Depu-
ties, now working on the job, are doing so on the basis which we then
devised. I would again say what I said in an earlier Debate. There is so
much talk about Fascism and Communism and everything else. The prin-
ciple which His Majesty's Government must apply to Italy is this, we
cannot treat Italy in this settlement as if Mussolini were still alive. We
made a mistakewith Germany at the end of the last war, in my view. We
did not hang the Kaiser, but we went on as if he were still there, and we
treated the Weimar republic as if it had been the Kaiser's republic. I think
that was a great mistake which we made, instead of nursing it into strength.
I do not want His Majesty's Government to make that mistake. I realize
that, like Greece and Italy and all the other countries that have been under
dictatorship-I think I used this illustration before-they have lost their
political legs. They are like a man who has been in bed for many years
and begins to recover, but-is unsteady politically. What is the use of ignor-
ing him? The question is, shall we impose another dictatorship from out-
side or inside, or shall we help him to get his muscles back in order that he
may stand on his own feet and walk erect? In Italy they are making a very
great recovery. They will have very great difficulties. I do not underesti-
mate them, but anything His Majesty's Government can do in order to
restore Italy to her old position, not as an imperialistic country which
Mussolini made the mistake of trying to create, but as a cultural and use-
ful member of the comity of nations, we shall try to do, and we shall try to
do it without detriment to the neighbors of Italy, which are also affected in
the discussion. Italy's problems are not merely political, they are economic
as well. I can assure her, as I would any other country, that in her attempt
to restore her economy we will co-operate, with any others who can help,
just as we are doing in Greece at the present moment, to restore her eco-
nomic life and put her on her feet again.
GREECE: THE DODECANESE AND THE MAINLAND
Another question was raised about Greece. Greece comes up in every
Debate with amazing regularity. I was asked about the Dodecanese. As I
understand it, neither the Russians nor anyone else object to the Dodecanese
going to Greece. I did, however, agree in Moscow-because I might as well
tell the House I was considering handing over the administration of these
islands, in order to bring our troops away, to the Greek government; 'I do
not want to keep British troops in all these places when I would rather have
them here at home-that it was better to leave it till the peace treaty in
May.. But on principle I understand that there is no disagreement. As
regards the claims against the integrity of the Greek mainland, I have never
heard a claim made, and I cannot imagine that there will be one. The
Greeks had claims against Albania, and they have raised questions with
regard to Bulgaria, on the frontiers, but these they must argue when the
time comes. They must present their objective and have it discussed. With






British Speeches .of the Day [Mr. Bevin]


regard to Greece generally, one has seen in the newspapers-and I pay great
attention to the advice given to me in the News Chronicle by the hon. Mem-
ber for Bridgwater (Mr. Vernon Bartlett)-that I ought to postpone the
elections. It is not for me to postpone them or anything else. The line I
have taken is this. Everybody is agreed that these elections should be on
31st March and I take this view rightly or wrongly that the thing for Greece
is for once to be consistent. Once a thing has been decided let it be carried
through as the best contribution to the stability of that country.
Mr. Vernon Bartlett (Independent): I am sorry to interrupt the right
hon. Gentleman, but may I assure him that I perhaps did not express myself
very clearly, because actually what I wrote entirely agrees with his policy.
THE GREEK ELECTIONS
Mr. Bevin: Then the sub-editors must have altered it. My hon. Friend
and I know the dangers of sub-editors. I saw in that paper which always
supports the Government, The Times-it supports all Governments-that
they take the same line, but I do emphasize this. We have been through
discussions on this business in perfect good faith, and on the advice of that
Government I have said these elections will take place. It is not my deci-
sion; it is their decision. If you want to stop this bickering between great
Allies about a particular country, in my view it is better to be consistent
and go through with it and get it done. That is the only point there is in it,
and I think in the interest of Greece it should be done, because what we
are anxious to see is the elections over and a stable government established.
It has been suggested to me that we ought to reform the Government before
the elections. I am only grateful it was not tried before the Election in
England. I think it is much better to do it afterwards. There have been
so many governments in Greece that I had a feeling it was far better to get
the elections over and see what the opinion of the people is. Then when
you know that, form a government, let it be a Coalition or whatever form
it takes. I think that is the commonsense line of approach to the problem.
THE DARDANELLES
May I say a word about Turkey? This is another question which looms
large in this controversy about the Middle East. I raised this question in
Moscow, and I frankly confess to the House that His Majesty's Government
was troubled about what looked to us like a war of nerves, going on with
Press polemics on both sides. I would say this to this House and to the
world-one of the greatest dangers to international peace is Press polemics,
very-often on wrong premises, producing misunderstandings and keeping
people on the jump. I think that is very bad. There are two points in this
controversy; one is the two provinces and the other is the Dardanelles. In
the case of the two provinces, as I understand it from what I have read, the
frontier between Turkey and Russia was fixed, not by conqueror and van-
quished, but by defeated Turkey and an unfortunate Russia which had not
come too well out of the last war through no fault of her own. Therefore,
this cannot be said to be an imposed frontier. There is the point of view of
the people living in those provinces, but as far as I can study it, there






Foreign Afairs
has been such movement of population that there is no nationality problem
at all. Therefore, as the frontier was drawn I believe by the Generalissimo
himself, it is a matter of regret that it is now the subject of controversy
and a war of nerves.
The Dardanelles presents a different problem. Somebody yesterday raised
the question of whether we offered Constantinople to the Tsar in 1914-18.
We seem in that war to have done an awful lot of things of one kind and
another which I do not doubt have harassed every Foreign Secretary since,
but the idea behind Russia's mind is that we are prepared to. treat her in
an inferior way to that in which we treated the Tsars. I do not want to
do that, but what we offered the Tsars is, I think, unnecessary in the
modern world with the United Nations. That is the difference. We are
ready to consider either with Turkey and Russia as Allies or allow them
themselves to consider without us a revision of the Montreux Convention,
but in that revision we are anxious to keep the international aspect of these
waterways in view.' I am not too sure that it contributes to world peace
that, one particular Power as against another should have bases in a
particular spot.
The question of the Great Belt and the Skagerak was raised, and I agree
that as long as Germany is defeated there is no need to do anything as far
as the Skagerak is concerned. It is an open, free waterway to all nations
entering or leaving the Baltic. In that case that is the policy of the British
Government. Therefore I say my answer is, "I would like to see your pro-
posal." When I am accused of being antagonistic to Russia or any other
country my policy is to examine proposals, not accusations. There is a
great distinction between hurling accusations and putting proposals before
us, and I do plead with all countries in the world which have anything to
discuss with us, to put proposals before us and let us see whether we can
agree.
THE U. K., THE U.S.S.R., AND THE U.S.A.
It is said we are drifting into war with Russia. I cannot conceive any
circumstances in which Britain and the Soviet Union should go to war.
The Soviet Union has a territory right from the Kuriles into the satellite
States. It is the greatest in the world-one solid great land Power. I cannot
see about what we have to fight. And certainly it never enters my mind,
and I am certain it does not any of my colleagues in the Government. I
approach America in the same spirit. I would never think of, and I never
could see-and I am sure no party in this House ever sees-the possibility of
war between us and America. I do not think of it in the other case either.
I say this very emphatically that in considering in our minds all organiza-
tion for States there can be no policy or anything else which will lead to a
conflict with either of these great Allies.
If I may return to Turkey for a moment, I want to say we have a treaty
with Turkey. I really must be frank and say I do not want Turkey con-
verted into a satellite State. What I want her to be is really independent.
I should like to see the treaty of friendship renewed between Soviet Russia
and Turkey. I cannot see that that conflicts with the treaty of friendship






British Speeches of the Day [Mr. Bevin]

with us and I must say that if anything could contribute to confidence
between us it is the right attitude of mind of both of us towards that par-
ticular case.
I said I would do my best to bring that about and I repeated this to
Mr. Vyshinsky in London. He referred to the fact that the Generalissimo
had said he had no intention of war, that he wanted to settle these things
amicably; and I believe that. Why should I doubt it? When I had dis-
cussed the Western bloc with him, or, rather, not the Western bloc, but
the Western arrangement for friendly neighbors. Mr. Vyshinsky's answer
to me was, "I believe you." If two of us believe each other that is half the
battle.
PERSI
May I turn now to Persia? I was asked in this House whether I would
safeguard British interests, and I replied that I would safeguard them any-
where. But I do not regard this Persian affair as a question of competition
between Russia and ourselves; that is what I tried to prevent. I confess
that I was concerned by the character of the Azerbaijan movement. I know
that this movement began-if I may say so with respect-in 1914 in a very
similar set of circumstances, and while I was not suspicious I wondered what
really was going on, particularly as the Press and everyone else were ex-
cluded. I think that when a thing is not open to the light of day that
contributes to suspicion, and that is exactly what has happened. I also
had a vivid recollection of the difficulties of Sir Edward Grey in 1907,
and naturally I wondered whether a policy was being followed which
might lead to a controversy which I thought would be quite unnecessary
if there were talks. Therefore, when I went to Moscow I had a discussion
about this matter, and I think the right hon. Gentleman is quite correct
when he says that from the point of view of democracy, free elections and
so on, we would not hold up Persia as a paragon of virtue.
The 1921 constitution of Persia itself has never been operated. Had
it been, Persia would have been a federal State. The language question,
the minority question, I felt, would have been dealt with, and, therefore,
I wondered whether, out of all the agitation of the Tudeh party and many
other good people in Persia, a tripartite commission of the three Allies
could go to Persia and-taking the 1921 constitution as a basis-deal with
such problems as the language problem, which is very vital. While we
accept Persian as the national language, the minority languages are very
important from the point of view of unrest in these countries. There was
also the problem of Turkestan and, in addition, it is no use disguising the
fact that amidst all these troubles there were the very vital interests of the
United States, ourselves, and Soviet Russia in regard to oil, with which
so much of our defense was concerned. I therefore proposed terms of
reference-which I did not draft until I got to Moscow-for this Commis-
sion to consider, and I really thought they would be adopted. I made it
clear in the document-I was quite honest about it-that I had not got the
concurrence of the Persian Government because I had had no opportunity
to consult them. But subject to the concurrence of the Persian Govern-






Foreign Affairs
ment, I was prepared to agree to this tripartite Commission. When I
raised the question of the concurrence of the Persian Government there
were objections, and as a result my suggestion did not go through. On
my return I renewed my efforts, but on that occasion I could not get the
Persian Government to agree.

THE U.N.O. AGENDA
It has been suggested in many places-and by inference in this House-
that the trouble over Greece and Indonesia arose from the fact that I was
responsible for putting Persia on the U.N.O. agenda. As a matter of his-
toric fact-rather outside my province because it is an independent coun-
try-I gave advice to the contrary. I felt that U.N.O. was such a new
organization that to introduce disputes at its first meeting might endanger
its success, and I still had faith that if they would agree to the tripartite
Commission I might still make a contribution towards settling the Persian
affair once and for all, both for Persia and for the great Allies affected.
One thing that must be done when a small country happens to possess a
vital raw material is for the Allies so to arrange their business as not to
make the small country the victim of controversy between the big Allies.
I think that a sound policy; I tried to do it, and failed. I can but apologize
for failure. At least, I tried.
Accordingly, it was put on the U.N.O. agenda and I have no doubt that
probably our Soviet friends were suspicious of me-I have an honest face
but it does not impress them somehow. So they dumped in Indonesia and
Greece, but I did not mind that at all. It is said that because this oc-
curred we had endangered the relations between the Soviet Union and
ourselves. I do not agree.
After all, those who make up the Soviet Union are members of the
proletariat, and so am I. We are used to hard hitting, but our friendship
remains. I do not think an exchange of views of this kind does any more
harm than the exchanges of views at a Labour Party Conference. Over
and over again, I have seen it prophesied that our party would be split
over such events. . I think the knock-about method is not too bad,
after all. At least, let me say that I am sure the friendship between Mr.
Vyshinsky and myself is just as close as it was when he came, and even
closer. The newspapers said that he taught me to play chess and that I
taught him to play darts. As I have said, I do not think any harm has
been done at all.
Objection has been taken by one Member to what my right hon. Friend
the Minister of State said yesterday, that no small nation, in the future,
Ieed fear to put their grievance before the Security Council. I think we
have removed fear, and that the Security Council did very well. How
could it do otherwise when I was one of the principal members? The
discussion was frank and open, and I think the solutions have been good.
The case of Persia remains on the agenda, I know, but if they are not
satisfied the Persians will come back. In the case of the Levant we are
getting out of there. I was rather glad that they brought their case be-





British Speeches of the Day [Mr. Bevin]
fore the Council because my predecessor would agree that the commit-
ments and counter-commitments in that territory were very embarrassing..
As a result of the discussion of the Security Council a lot of the troubles
which were left behind by Sir Edward Spears, who sat for Carlisle in the
last Parliament, have been removed from me. I am glad they have gone.
There has been a real opportunity to start with a clean sheet, and deal
with this problem in a thorough and proper manner.

FOOD AND THE FAR EAST
I have been asked for a statement about the Far East. . Food is the
immediate problem of the Far East. Is it right, on either side of the
House, or in another place, to talk about this matter as if it referred only
to Great Britain? Are the 500 million people of India and the East Brit-
ish subjects or not? I put that challenge to everybody who intends to
refer to this problem in future. If we claim to be an Empire, and to be
responsible, then the talk cannot only be about these Islands; it must be
about the people in the British Empire, who are subjects of the King.
As I have said, the first and greatest problem we have to face is the food
problem. For five or six months, as Foreign Secretary, I have been study-
ing this question, the difficulties of which have been added to now by the
failure of the monsoon. In addition I think my predecessor will agree
that there was really no guaranteed method of dealing with the Far East
as a whole. The Foreign Office dealt with one aspect, the Colonial Office
another, and the India Office another. I felt it was essential-and I am
sure my right hon. Friend the Member for Warwick and Leamington will
agree with me-that in the light of the rise of the independent movement
all over this territory, which must be faced, and which we do not intend to
frustrate, there had to be a guaranteed policy.
I would therefore like to announce to the House that we have agreed
on what seems to me to be a first-class organization to grapple with the
problem. The organization will be stationed at Singapore. Lord Killearn
will be the Chief Commissioner, and around him will be every Governor,
representatives of India, and representatives of all other countries in the
area, who will be consulted, and who will sit in a purely consultative
capacity. The more I study this question the more I feel convinced that
this famine can be fought. It can be fought if the available resources of
the world are distributed properly, month by month and territory by ter-
ritory, as production comes in, if we carry on propaganda which will teach
cultivation to enlightened people, and if Great Britain makes a really first-
class effort to assist these people to get over this great difficulty.
That will lead to the next phase. There is Indonesia, India Malaya,
Ceylon, and a new China emerging. There is all that new development,
and I think the policy we have to follow so far as the dependent territories
are concerned which are emerging into independence, is to nurse them,
guide them, help them to change over as a going concern, to keep their
administration intact, to provide them with experts. I am not too sure
that from the point of view of our own interests in this country we should
124






Foreign Affairs
not do far better by helping' these countries and assisting them from a
purely trade point of view in trade and commerce than we did under the
old-fashioned Colonial system of the past. That is our policy for the
Far East.
THE POLISH ARMY
There is one point I missed, if the House will forgive me for returning
to it, the question of Poland. At Potsdam I had long discussions with the
Polish Provisional Government, as I reported to the House before. The
question of elections was agreed, and the method by which they should be
held under the 1921 constitution. They should be free and unfettered
and, in addition, I on my part would endeavor when the time came to
settle up this military problem and the question of the Polish Army. It
must be recognized that if the Polish Army is to be settled, the soldiers
must receive assurances that, when they return, they will be treated as to
rights and privileges equally with everybody else in the country. To that
end I have been in negotiation with the Polish Provisional Government,
and have now a statement which I have undertaken to broadcast to the
troops and, on that footing, to endeavor to get as many as I can to return
to Poland. In fact, I think these magnificent troops will be an asset to
Poland if they return, but we must be sure that they will be treated fairly
when they return.
I wanted in my discussions with the Polish Vice-Premier to remove
this from the Press controversy altogether. I thought this hurling of
charges at one another did not solve the problem. What advantage is it
to put a clever question to me, and for me to give a cleverer answer, when
I do not secure one Polish soldier a bit of land back in his own country;
or what good is it writing articles when I do not solve the problem in
consequence? Let this be said: His Majesty's Government take this view,
and this is very dear to us however much anybody in this House agrees or
disagrees, that when men have fought with you, or stood by you, it is
against our religion to let them down. [HoN. MEMBERS: "Hear, hear."]
These cheers from the other side-
Mr. Warbey (Labour): Does my right hon. Friend apply the same prin-
ciples to E.L.A.S.?
Mr. Bevin: E.L.A.S. turned against us when we entered Greece. I ex-
plained last week that if E.L.A.S. had gone through, as they originally
promised to go through, it would have been all right, but when we were
marching after the Germans, they were marching back to Athens for civil
war. That is not quite friendly. But I say this: these Polish soldiers were
given certain promises. We have to try to solve the problem and I ask
the House to help me solve it. All I want to do is to help these very
ordinary men because they are not all General Anders; most of them are
ordinary people, many of them are from the East of the Curzon Line, many
of them are from the territory which has now gone to Russia. I have a
most complex problem. Have they to be returned to Poland? Have they
to be returned to the East of the Curzon Line? It is not merely writing






British Speeches of the Day tMr. Bevin]
an article which settles this problem, it is a question of dealing with every
individual man. I am not antagonistic to winding this up. I must wind
it up, but I must wind it up on a basis of justice and equity. I cannot
throw these people to the wolves-
Mr. Barstow (Labour): Who are the wolves?
Mr. Bevin: If I threw them into unemployment; if I gave them a bit of
money; if I just dismissed them; if I said, "You have finished your job;
that's an end to it." I have never let a victimized man down in my life
and I will not be a party to it in this case. I say, let me wind up this busi-
ness on a perfectly rational sound basis, and do not make these men, the
bulk of whom, thousands of them, are just ordinary soldiers, the mere
tools of political propaganda.
In addition I have a great admiration for Poland itself. What country
has gone through more than Poland has gone through? Subjected to the
tortures of great Powers, divided. If you say that the Poles can never
agree-who can agree when they have lived the life that the Polish nation
has gone through? Not merely an underground army for this war, but an
underground army for nearly two centuries; an underground army that
has had to fight for liberty. You may as well accuse an Irishman, who was
an expert-he is growing out of it now-at it for many years. No, I under-
stand the man who has been at the bottom and who has had to work by
the underground method. You cannot change that character in a moment,
and if these antagonisms exist, let us have patience and toleration in order
to get the thing cleared up. I will do my best, and I hope to be able to
face this House with an honorable solution of the problem which will be
satisfactory to Poland and, I hope, satisfactory to the conscience of this
nation, which has at least used these men to defend our skins when the
enemy was nearly into Cairo.
One word about the Dominions. I was asked about a meeting of the
Prime Ministers. I want to assure this House that all through this business
I have been in the closest consultation with the Dominions, and I venture
to suggest there never was such unanimity among the Dominions as in
the difficulties we are facing now. The Prime Minister has invited the
Dominion Prime Ministers to this country, and we hope we shall meet
them before the Peace Conference in May.
AGREEMENTS WITH THE UNITED STATES
May I say one word about America? As I said earlier, it is sometimes
suggested that we "gang up" against Russia. The difference in the posi-
tion is that America and ourselves lay our cards on the table, and discuss
our proposals, and they range over a tremendously wide field. It is not
merely a question of foreign policy when we are dealing with America,
it is everything. During the last few months, we have dealt with the loan,
we have dealt with Bretton Woods, we have arrived at an agreement on
telecommunication, on civil aviation, oil, and a whole host of settlements.
I would be quite willing if the Soviet would join us in the oil agreement
as an international agreement, because that would solve the conflict over

S 126






Foreign Afairs
oil as between the great Allies forever. We have agreed to call an inter-
national conference on trade in addition to the agreement on telecom-
munications, civil aviation and a host of other matters. The U.S.A. joined
us in dealing with a matter which we will be debating in a few minutes,
a great act of co-operation to find a solution of the Jewish problem in
Europe and Palestine.*

THE FOUn POWERS IN KOREA
In order to grapple with the vexed problem of the Far East, in Korea
we are developing the four-power trusteeship and we have worked out
agreement in regard to Japan. In all these fields the State Department
and other Departments of the United States administration have been in
discussion with us. I invite the Soviet to do the same. I am more concerned
with the economic rehabilitation of Europe than I am about geography.
When I see millions of people suffering in the world, I would like to be
sitting down considering how, and in what limited space of time, I could
conquer hunger and misery. I would rather do that than be arguing about
nineteenth century imperialism. I invite the House to join with me in this
effort. That is my attitude. I am more concerned with seeing the standard
of life for the common people raised, than with grandiose development of
any other grade of society. I really want this, and if I can be accepted as
being truthful, I hope that is the basis on which we shall work. Indeed,
nothing would give me greater joy at this moment if it were possible, not
to have one plan for one country, but, with all the devastation in the world
-in all the great cities of Russia and the East and of our own country and
all the Allies-and the waste of substance and wealth that this war has
meant, to see an international pool of resources and effort for the rehabili-
tation of the world. The happiness of the human soul is better than vic-
tories in any other field.
THE BRITISH EMPIRE
I hope the House will appreciate that in this great era the world has
too many things on its plate and the whole world is in difficulty. You
cannot deal with one problem and solve it. The whole difficulty arises
out of the greatest catastrophe that has fallen upon humanity. But I can
say I am not pessimistic; the greater the difficulty, the greater the oppor-
tunity. When I say I am not prepared to sacrifice the British Empire,
what do I mean? I know that if the British Empire fell, the greatest col-
lection of free nations would go into the limbo of the past, and it would
be a disaster. I know, further, it would mean that the standard of life
of our constituents would fall considerably. Therefore, I say, give us a
chance to carry this evolution of free nations and the growth of inde-
pendence still further, at the same time maintaining our standard of life.
In conjunction, with our Allies and small countries let us prepare the soil
in which these great plants of democracy may grow together for the benefit
of humanity.
[House of Commons Debates]

127








NATIONAL INSURANCE BILL
HOUSE OF COMMONS, February 6, 1946
The Minister of National Insurance (Rt. Hon. James Griffith): A little
over a year ago, in November, 1944, an Act was passed by Parliament setting
up the Ministry of National Insurance. Somewhat less than a year ago-in
March of 1945-the various powers until then vested in other Ministries
were transferred to the Ministry of National Insurance and we got under
way. Less than three months after that, the first of the series of co-ordinated
Acts designed to improve the standard of life of our people was placed upon
the Statute Book-the Family Allowances Act, 1945, which we shall bring
into operation in August of this year. The second of the series, the National
*Insurance (Industrial Injuries) Bill, is now before the House. This Bill is
the third of the series and, later on, we shall bring the fourth before this
House-a Bill designed to deal with assistance and allied questions on a
national scale. I think that I can claim that that is not a bad year's work
for a young Ministry and, if I may express a hope, it is that when we come
to be classified under our own Bill, we shall have been found to have been
"gainfully occupied."

A REVIEW OF PREVIOUS LEGISLATION
This Bill is the culmination of half a century's development of our Brit-
ish Social Services. Fifty-one years ago, the House of Commons was startled
by the presence in its midst of Keir Hardie. It was even more startled a
few months afterwards when he stood up in his place and demanded the
acceptance by the State of the principle of work or maintenance. He was
a lone figure in that Parliament and found little support, but 10 years later
-when.the General Election took place-the Party opposite was swept out
of power, and a Liberal Government was returned. As we now appreciate,
even more important and significant was the emergence, for the first time in
our history, of an Independent Labour Party, with 30 Members of Parlia-
ment. Two years after that Election, the first of the Measures which I think
can be regarded as the beginning of our Social Service system, came before
the House. On 10th May, 1908, Mr. Asquith introduced the Old Age Pen-
sions Bill. Shortly afterwards, Mr. Asquith became Prime Minister and the
task of piloting that Bill through the House fell upon Mr. Lloyd George.
Even to this day, the "over 70" pensions in my country are familiarly re-
ferred to as "Lloyd George pensions." Sir-I hope the House will permit
me to say how privileged I feel to be associated in a task with which the
name of my famous compatriot will be forever linked.
The Act of 1908 was a modest beginning. The pension was not payable
before the age of 70, and it varied in amount between 5s. and Is. a week.
Its cost was estimated at 21/ millions in the first year, rising to an annual
cost of 6 million later. But even that first, modest step was bitterly
opposed in this House, and bitterly opposed in another place. I read the
ofher day the Debates on the 1908 Act and the language sounds strange.
One Noble Lord thought that:






National Insurance Bill
"A scheine so prodigal of expenditure might be dealing a mortal blow at the
Empire."
Another Noble Lord feared that pensions of 5s. at 70:
"would weaken the moral fiber of the nation . and diminish the self-respect of
our people."
In spite of the fact that the 5s. was increased to 10s. and that the expendi-
ture on pensions has increased from 6 millions to nearly 200 millions, the
Empire has survived-indeed it appeared that it is growing. If proof were
needed that Social Services do not weaken the fiber of the nation, I would
cite the fact that we have just emerged from six years of war and the, British
people have proved that their moral fiber is still unbroken. . .
The 30 years that followed 1908, witnessed a gradual extension of these
schemes. It has all been done in what we are pleased at times to call the
British fashion. Parliament after Parliament passed a series of Measures,
and so the system has grown up in a haphazard, piecemeal way much like
a patchwork quilt. How patchy the quilt is, can be gleaned from the fact
that the mere enumeration of the Acts of Parliament which are superseded
by this Bill takes three pages of print in the Schedules, and the Acts which
we amend take another nine pages. For a long time past it has been appar-
ent that what was needed was a co-ordinated plan for weaving all these
together in a unified, comprehensive scheme covering the whole Nation,
and the first step to that end, and to this Bill, was taken in 1941 by my right
hon. Friend the Lord Privy Seal. It has been my good fortune to have had
his guidance and help in the preparation of this Bill, and I am grateful to
him. The Committee which he then set up was presided over by Sir
William Beveridge. The Beveridge Report has taken its place as one of the
great documents of British history. I am sorry that Sir William is not with
us in the House to take part in the translation of his Report into legislation.
I hope I have not wearied the House with this recital from past history.
I thought that it would be interesting to place the new Bill in the setting
of the background of the last 50 years.
THE FORM OF THE BILL
Now let me come to the Bill itself. First, a word about its form, about
which there have been some comment and some criticism. Hon. Members
will realize that to a large extent this is a Bill consolidating existing Meas-
ures and in so far as it is doing this, we shall be dealing with matters which
have already been before Parliament, fully debated, and which have stood
the practical test of many years of administrative application. Many of the
regulation-making powers taken in this Bill will enable us to continue, as
we intend to do, much that is well tried by long experience in existing
machinery and procedure. Let me give an instance. In Clause 43 of this
Bill we provide that the machinery and procedure for settlement of claims
and questions in disputes shall be established under regulations. What we
intend to do here is very simple. We have come to the conclusion that the
machinery at present used for settling claims and disputes under the Unem-
ployment Insurance Act, the Court of Referees method, is the best that has
been designed in the last 30 years. We propose therefore to use that type of
machinery over the wider field of insurance covered by this Bill. In addi-






British Speeches of the Day [Mr. J. Griffiths]
tion to that, many of the other powers to act by regulations relate to the
transition from the old to the new schemes. It is desirable, in order that
that transition may be made as quickly and smoothly as possible, that we
should have the power we need to have flexibility and speed of action to
bring the Bill into operation as speedily as possible. For these reasons we
have taken wide and elastic powers in order that the transition can be car-
ried through smoothly.
AN ADVISORY COMMITTEE
While it has been thought desirable and necessary to take very wide
powers for a number of very special matters, the regulations will only come
into force after they have received express approval in both Houses by
affirmative Resolutions. The power to vary contributions for the purpose
of maintaining a stable level of employment, the terms of compensation of
displaced employees of approved societies, and supplementary schemes of
benefit are instances of matters which will require this special approval. All
these, and others, will only come into operation after both Houses have
expressed their approval by affirmative Resolutions.
Finally, on this question of the form of the Bill and regulation-making
power, I would refer to the proposal under Clause 41 to set up a National
Insurance Advisory Committee, somewhat after the pattern of the Statutory
Committee under the present Unemployment Insurance Scheme. I gave
a good deal of thought and time to this problem. I could have set up-some
urged me to set up-a very large committee, which would seek to be repre-
sentative of the new varied field of insured contributors which the Bill
covers. I tried to calculate this, and found that, to be representative, it
could not be done by less than a committee 50 strong. Having had some
experience of committees, I believe that when a committee reaches 50, it
becomes a mass meeting, and not a committee. I thought I should set up a
small committee of men and women carefully selected because of their
knowledge, and a committee with a good deal of power though obviously,
in this scheme, shorn of the mandatory financial powers which they had
under the existing Unemployment Insurance Act.
The Committee will give all interested parties an opportunity of making
representations about any regulations affecting them. They will report to
me upon the regulations and I must take their views into account. Their
reports will be published and presented to Parliament. I think this piece
of machinery, which has worked very satisfactorily in the narrower field
of unemployment insurance, should provide all those likely to be affected
by regulations to be made under this Bill with adequate opportunity of
expressing their views and should provide Parliament and, in particular,
the Minister, with most useful and necessary help in the administration of
what is a vast scheme. I appreciate that in the main the whole mass of
the people of the country are included, and they will have their opportunity
under this procedure. So much for the form of the Bill.
CLAUSE I: UNIVERSAL INSURANCE
Now I come to its contents. The Bill consolidates into one scheme the
existing schemes of insurance against sickness, unemployment, and old age.






National Insurance Bill
It has long been apparent, and desirable, that this consolidation should
take place. It will involve not merely consolidation of existing provisions
but also a considerable economy in working and, I think, considerable con-
venience to all concerned. Until recently, to take one or two examples,
sickness benefit was a matter' for the Ministry of Health, unemployment
insurance for the Ministry of Labour, and workmen's compensation for the
Home Office. I think it is much more sensible that these closely linked
schemes should be under the control of a single Minister responsible to
Parliament working through a single Department, and that all the schemes
should be based upon the use of a single stamp upon a single card. ..
The next point of general importance to which I would refer is the
scope of the scheme. I believe that Clause 1 of the Bill is an epoch-making
document. I hope all Members will read it.
"Every person who on or after the appointed day, being over school-leaving age
and under pensionable age ... shall become insured under this Act and thereafter
continue throughout his life to be so insured."
As I said, that marks an epoch, the bringing of all the people in this
country within this all-embracing scheme. The sickness scheme started with
a fairly wide, but by no means nation-wide, scope and was extended as the
years went on, but it is still not universal today. Unemployment insurance
began in a much humbler way. Indeed, at first it only covered a group of
seven trades; it was extended slightly during the First World War, extended
very much at the end of the First World War, and in 1936 still further
extended when agriculture was brought in. Not until 1936 was agriculture
inside the Act., The scheme for sickness, unemployment and pensions as
they stand today are far from covering everybody. A third of the letters
which I and my Parliamentary Secretary receive every day at our Ministry
from Members of Parliament are pathetic letters in which they call our
attention to the case of some man who has grown old, who was for years in
insurance, and then took a little shop and fell out of insurance, and now
cannot have a pension. There are even more tragic cases such as that of a
man who was insured for half of his lifetime and then took up some job
outside the scheme, and then in two or three years dies and leaves a widow
who has no claim at all.
I believe this bringing of everybody into the scheme is one of the
greatest things we are doing in this great Bill. This is laying it down, in
one Clause or another, that everyone shall continue to be insured through-
out their life. The step is, I think, a long overdue logical development of
the existing scheme. In the White Paper of the Coalition Government
three reasons were given for this universality, this bringing of everybody
inside, and I think they are reasons I should repeat. It was said first:
"In a matter so fundamental, it is right for all citizens to stand in together
without exclusion based upon difference of status, function or wealth."
Secondly, it said:
"There are many people at present outside the scope of national insurance, whose
need of its benefits is at least as great as that of many of the insured population."
Finally:
"Without universality, it is not possible adequately to maintain the cover needed
during various normal changes from insurance class to class."
131






British Speeches of the'Day [Mr. J. Griffiths]
For all those reasons, we have decided to'accept in the Bill the principle
of universality. The result of that will be that sections of the community
who have been hitherto excluded from insurance will now be brought
inside. There are several sections. For instance, those above the income
limit who were excluded for that reason, and only for that reason. There
are also those who have been able to claim exemption because they were
substantially free from the risks which the insurance covers. However free
they may be, it is right they should come inside and share the general risk
of everybody else. Thirdly, there are those who are exposed to risks, and
who are outside. Now all will come into the scheme.
Further, all special arrangements, such as those in unemployment insur-
ance for agriculture, banking and insurance, will go. I am sure that, on
reflection, not only the Members of this House, but the whole nation will
welcome this principle by which sectional privileges are abolished in order
to serve the general interests. During the last week or two, particularly
since the publication of the Bill, many hon. Members have told me that
they get anxious, indeed worried letters from constituents about one conse-
quence of bringing everybody into this scheme. There are in the country,
and there have been for quite a long time, a fairly large number of special
schemes, particularly schemes providing for superannuation. Questions have
been put to me on what is to happen to these schemes and what adjust-
ments, if any, are to be made. Let me begin by saying there will be no
adjustments in our Bill; it is one Bill for everybody in the country. It may
be that some adjustment of existing schemes will be required, but this, I
would say, can only be made after the most careful consideration and after
the fullest opportunity has been given to the persons affected by the schemes
and those parties who will be responsible for them. I understand there has
been concern in some quarters that as a result of this scheme there would be
automatic one-sided adjustment. I cannot concede that.

RATES OF BENEFIT
I now come to the benefits provided in the Bill, and I begin, if I may,
by asking for the indulgence of the House, for I shall have to deal with a
lot of details, and the details are important to Members of this House and
important to the people outside. In the first six days after the publication
of the Bill our Ministry was overwhelmed with letters. We received 325
letters in the first six days from Members of Parliament alone, each of them
raising a point of detail. The details are, therefore, of very great impor-
tance, and I would like to ask the indulgence of the House in explaining
them. I hope hon. Members will bear with me if I have to refer to my
notes more often than my Celtic temperament normally allows me to do.
Before I deal with the individual benefits, however, I would touch upon
the general question of the leading rates provided in the Bill. I would
answer the question put to me why the figure of 26s. was chosen and where
we got it from. In the discussion on the Beveridge Report, in which I was
privileged to take part, and in the discussion on the White Paper in
November, 1944, there was a good deal of argument and controversy about
the practicability of adopting what is called the subsistence basis for bene-






National Insurance Bill'


fits. The controversy ranged round three questions. First, is it practicable,
and, if so, is it desirable, to peg the benefits to a definite cost of living, with
automatic adjustments up and down; secondly, is it possible to fix a general
level of benefit that will adequately cover the variations in personal needs;,
and, thirdly, is it possible to cover the variations in rent in a scheme based
upon flat rate contributions and benefits?
We have given the most careful consideration to this question, which
is vital and fundamental to the scheme. We are definitely of the view that
it is undesirable, as well as impracticable, to have automatic adjustment.
This method of pegging benefits to a specific cost of living and adjusting
them automatically was tried at the end of the last war in war pensions,
and broke down the first time it came to be applied. We are convinced,
after examination, that it will break down again. It is equally clear that
no general level of benefit can possibly cover all the varied individual needs
of every person who would come within the scheme. If I may say a word
on the problem of rent, we have now a good deal of information, since the
basic old age pension has been supplemented, and we have discovered that,
in the case of pensioners who get supplementation, rents vary from 2s. 6d.
to 20s. a week. We therefore came to the conclusion that it is, in our view,
impossible to have a general level that excludes some kind of supplementa-
tion to meet those three points.
Having said that, let me add, the Government feel very strongly indeed
that, in order that the benefit and pension rates may be soundly based,
they must satisfy two essential requirements. In the first place, the leading
rates must be fixed initially at figures which can be justified broadly in
relation to the present cost of living. Secondly, we believe that definite
arrangements should be made for a review of the rates from this point of
view at periodic intervals. It will be remembered that Sir William
Beveridge, in order to arrive at the rates of benefit which he proposed, first
estimated the cost of the requirements of various classes of persons in terms
of 1938 prices. To these basic figures he added amounts sufficient toallow
for a rise of rather more than 25 per cent in the cost of necessaries, includ-
ing rent, and it was in this way that he arrived at the provisional rates of
benefit and pension of 24s. single and 40s. joint. These were, I think,
generally accepted in all quarters of the House, and, indeed, outside the
House, at the time of the presentation of the Beveridge Report.
The House will be aware that the Chancellor of the Exchequer has
expressed the Government's intention to hold the cost of living at about
31 per cent over the September, 1939, level. We decided, therefore, to review
the leading rates proposed in the White Paper and in the Beveridge Report
on the basis of an over-all addition of 31 per cent instead of 25 per cent.
The result was to establish a basic rate of 42s. for a couple living together,
with 26s. for a single adult, for unemployment, sickness, widows' pensions
and retirement pensions, 16s. for an adult dependent and 7s. 6d. as the child's
allowance for the first child in any family, the others to be covered by
family allowances. I believe that we have in this way endeavored to give
a broad subsistence basis to the leading rates, within the framework of a
contributory insurance scheme. Further, the Bill, in Clause 40, places a






British Speeches of the Day [Mr. J. Griffiths]

statutory duty upon the Minister to review every five years the rates of
benefit payable under the scheme. I think these words are important,
having regard to the expenditure which is necessary for the preservation of
health and working capacity and to any changes of circumstances which
may have taken place. At the end of five years, the Minister is required
to report to Parliament on the result of each such review, and bring any
proposal that he has before the House. This provision imparts a new
and valuable criterion into our scheme of national insurance. It is the
beginning of the establishment of the principle of a National Minimum
Standard.
SICKNESS BENEFIT
I come now to specific benefits, and I will take them in the order in
which they are provided in the Bill, and deal first with sickness benefit.
Here, we have made a number of very important changes, quite apart from
machinery. We have raised the leading rate to 26s., as compared with the
24s. suggested in the White Paper and compared with the present rate of 18s.
for six months and 10s. 6d. afterwards. We have effected a reform long
overdue in sickness benefits in the shape of grants in respect of dependents.
Unemployment insurance has had this ever since 1921, but it has hitherto
been absent from sickness benefit. We are giving in sickness benefit 16s.
for a wife or adult dependent, and 7s. 6d., as against 5s. in the White
Paper, for a child. It will be remembered that the White Paper suggested
that, after the lapse of a certain period-three years-the sickness benefit
should drop from 24s. to 20s. We have decided that, subject to three years'
qualification, there shall be no drop in any benefit and that benefit shall
continue at the same rate as long as incapacity continues. These provisions
will lift the sick and their dependents out of the pauperism in which they
have been left too long. We intend, in addition to giving cash benefits,
to set up a comprehensive National Health Service, and to ensure, by
proper administrative machinery, that there shall be the closest possible
link between the payment of cash benefits and the provision of appropriate
and suitable treatment.
In addition to the pain and suffering caused to those who are sick, and in
addition to the poverty of those who depend upon them, the loss to the
nation caused by preventable sickness is appalling. It has been estimated
by Political and Economic Planning that the loss to the nation from pre-
ventable illness is 300 millions a year, equal to three-fifths of the total
cost of this scheme in the initial year. I would advise the few in this House
and the few outside who are afraid of the cost of this scheme to ask them-
selves whether we can afford to go on without it, when we look at the cost
of preventable illness.
UNEMPLOYMENT BENEFIT
Next I come to unemployment benefit. The rates of benefit here are
the same as the rates for sickness-26s., 16s. and 7s. 6d. per child. We have
tried, as far as we can, to assimilate the rates of benefit for both. I would
call attention to one important point common to both. We have changed
the age at which we begin to call a boy or a girl an adult for the purposes






National Insurance Bill


of insurance. We have taken the age of 18, as we have for industrial injury,
and, at 18 years of age, boys and girls become adults for this purpose, and
I am quite sure it is the right thing to do for the country.
I pass to the important provisions for the duration of unemployment.
There are, first, permanent provisions in Clauses 11 to 13 of the Bill, and
in Clause 61 there will be found the temporary provisions which are to
operate for the first five years of the scheme. Before I come to describe
these two provisions in detail, I would like, first, to state the reasons that
have impelled us to make these separate provisions. Sir William Beveridge,
in his Report, said that his plan was based upon three assumptions-three
essential prerequisites for the success of his scheme. One of these was the
maintenance of full employment. If we were-God forbid that we should-
to allow ourselves to drift back to the mass unemployment of the inter-war
years, this scheme would be sunk-indeed, the nation would be sunk. The
Government are resolutely determined to secure full employment. And we
are confident that with the full implementation of our economic policy we
shall succeed. Let me quote the Beveridge Report again on this problem,
because it is important and significant:
"Assumption means not the abolition of unemployment-but the abolition of
mass unemployment-and of unemployment prolonged year after year for the same
individual. It should be possible"-
said Sir William Beveridge, and we share his views-
"to make unemployment of any individual for more than 26 weeks continuously
a rare thing in normal times."
I should hope so, indeed. We provide for more than 26 weeks. I think
Sir William Beveridge is right in his contention. The Government have
given serious consideration to this unemployment benefit and its relation-
ship to the Fund. They have come to the view that only short-term unem-
ployment ought to be borne by the Insurance Fund. We believe that the
responsibility for long-term unemployment should be undertaken by the
State as a direct responsibility. If by some disaster mass unemployment,
lasting for a long time, should come to us, I would ask hon. Members to
look upon it in the context that it would break this Fund. At the end of
the last war, mass unemployment broke the Unemployment Fund within
six months of its coming into operation in 1920. I would ask hon. Members
to realize that that would happen again if all unemployment were borne
by the Fund and if a terrible disaster took place. We have here not a
separate unemployment fund, but a single fund from which the sick, the
aged and the widows benefit. We believe, therefore, this principle is right
and sound. Those are the reasons which have impelled us to make this
decision and embody these provisions in the Bill....

DURATION OF UNEMPLOYMENT BENEFIT
I want to describe these detailed provisions very briefly. The dura-
tion of benefit payable from the Fund is limited to 30 weeks, with added
days of benefit for contributors with good records of employment over the
preceding five years. We have decided to adopt a rule on the pattern of
that now existing for the purpose of calculating the added days. I will






British Speeches of the Day [Mr. J. Griffiths]
not repeat this formula to the House because hon. Members are familiar
with it. It is very complicated, but it has the merit that, on the whole, it
has worked reasonably satisfactorily. I thought, therefore, we could not
do better than adopt, that same rule for calculating the added days. Dur-
ing the last five years, of course, most people in this country have had a
reasonably good record, and it will be appreciated that all men and women
who have served in the Forces, have had their cards stamped by the State
for every week they have served. That period counts for benefit now when
they come out. When a person is about to exhaust, or has exhausted his
standard benefit, he can apply for the extended benefit in accordance with
the provisions of Clause 61. The application will go before the Local Tri-
bunal-Courts of Referees-who will recommend to the Minister what fur-
ther period of benefit shall be paid. The Tribunal will have regard to
the circumstances of the applicant's claim and to the conditions of the
locality. Let me make it abundantly clear that by circumstances we do
not mean means test. The criterion upon which decisions will be made
will be entirely industrial.
One further point upon this-It will be noted that there is no provision
for an appeal, either by the Insurance Officer or by the claimant, against
the decision of the Local Tribunal. I thought that was the right thing
to do, and I will tell the House why. If an appeal is made, it goes before
the Umpire and he makes a decision. That decision becomes case law.
The result, therefore, of allowing appeals in these cases would be, in a
short time, to crystallize them into a definite case formula to be applied
all over the country. I thought it better to have a flexible rule in these
cases. Of course, that may be an arguable point.

MATER= TY
The next category of benefits in the Bill is that described as maternity
benefits. The proposed benefits fall under three heads-maternity grant,
attendance allowance and maternity allowance. The first, maternity grant,
continues the existing allowance paid on confinement, but it has been
increased from 2 to 4. This will be paid to all mothers who are wives
of insured persons, or are insured in their own right. The second is an
attendance allowance of 1 a week for four weeks, which is payable to the
mother not engaged in gainful occupation-the mother who stays at home.
It is intended to pay for domestic help immediately after childbirth. This
is a new and, I am sure, a welcome provision for the mothers of the nation.
Finally, there is another new benefit payable to the mothers who are engaged
in gainful occupation. It will be an allowance of 36s. a week for 13 weeks,
six weeks before and seven weeks after the birth. It is to enable the
mother to stay away from work during the period of confinement, and
will only be paid if she stays away from work. This provision fills a long-
felt want. It will also enable us to do something else which should have
been done a long time ago, namely, to ratify one of the International
Labor Office Conventions. These benefits will help the mothers of the
nation-and what helps the mothers helps the nation, too.
136






S National Insurance Bill


WIDOWS' BENEFITS
Next we come to the benefit provided for widows. The House will
remember that the principles adopted in the White Paper-more. generous
in some ways than those proposed by Sir William Beveridge-were, first, to
provide payments at a relatively high rate for a limited period of adjust-
ment; secondly, to make special provision if there were dependent chil-
dren and, thirdly, to give a pension, equal to the retirement pension, to
the widow who at the time of her husband's death, or when the youngest
child ceases to be dependent, has reached an age when she finds it difficult
to take up employment. We have followed these principles with two im-
portant improvements. Three kinds of benefit will be provided for widows
in the permanent scheme. First, an allowance of 36s. for 13 weeks to tide
them over the first days of widowhood. Secondly, if there is a child, the
widow will receive a widowed mothers' allowance of 33s. 6d. weekly, an
increase from 29s. as suggested in the White Paper. If she is over 40 years
of age when the allowance for the child ceases, she will then become en-
titled to a widow's allowance. In the White Paper the age fixed was 50.
I reduced it to 40, because I believe it is important-and I believe the ex-
perience of the war has proved its importance-that mothers should be
enabled, without undue anxiety, to stay at home and look after the family
during the period -of adolescence. The second improvement that we make
is the provision for widows who are. incapable of self-support at the hus-
band's death or when the last child ceases to be dependent. Finally, there
will be a widow's pension of 26s. instead of 20s. as proposed in the White
Paper. I should point out, because this principle runs through the scheme,
that the widowed mother's allowance and the widow's pension will be
reduced if the widow earns more than 20s. weekly. These benefits will
ultimately replace the existing provision of 10s. pensions for widows.
Now I come to the transitional provisions. When I speak about tran-
sitional provisions-we shall discuss them again-let me say that they have
been one of our most difficult problems. Let hon. Members appreciate
what we do, in a vast scheme of this kind. By these transitional provisions
we bring into benefit under the scheme persons who hitherto have not
contributed towards the scheme. That is right. I shall refer to that later,
in relation to retirement pensions. All the time, however, we have had to
use very great care, for when we bring these transitional classes-if I may
call them that-into full benefit under the new scheme, it will have a very
considerable impact upon the scheme as a whole. However, we have done
our best.
WIDOWS' PENSIONS
I come next to the pension for widows. When the new scheme starts,
the widow who is drawing a pension under the. existing scheme will re-
ceive a widowed mother's allowance of 33s. 6d. under the new scheme if she
has a child covered by her present pension; or a retirement pension at
the new rate of 26s. if she is over 60 and has retired; or she will keep her
present pension if she is under 60 and has no child, or if she has not re-
tired. The under-60 widow without children, while retaining the 10s.






British Speeches of the Day [Mr. J. Griffiths]
pension, will become insurable in the appropriate class under the Bill, and
will be eligible for retirement pension at the age of 60. It is provided, too,
that under special transitional powers we shall provide that any woman,
married before the new scheme starts to a man insured under the existing
scheme, shall either receive the benefits of the new scheme if qualified
or, failing that, retain her rights to a 10s. pension. That is the provision
for widowhood in the Bill. I do not think I need say more than very
little about the next provision, the guardian's allowance, beyond explain-
ing that it covers orphans. The payment of 12s. is as proposed in the
White Paper and compares with the present payment of 7s. 6d. for an
orphaned child. We have increased it by 5s. a week.

RETIREMENT PENSIONS
Let me now refer to retirement pensions. As I have already indicated,
the basic rate for a single pensioner is to be 26s. and for a coupleS42s.
These rates compare with 20s. and 35s. as proposed in the White Paper,
and compare with 10s. each at present. They will replace the existing
contributory pensions at ages 65 for men and 60 for women, but will be
paid in future only on retirement from regular Work. The Government in
this respect have followed the recommendation of the Beveridge Report
and the White Paper. We shall have discussions in this Second Reading
Debate and, I have no doubt, too, in the course of the Committee stage, on
the retirement age. Proposals have been submitted to me and I have been
urged to reduce the retiring age. I have been very loath to do that and to
fix a general retiring age for the whole of the country. Here I want to
make two points which I have always had in mind from experience of
industrial life about retirement pensions. As a matter of fact, it was my
own party which proposed the age of 60. Fiom the point of view of the
old people, retirement is not always an unmixed blessing. I should hesi-
tate to compel them to go into retirement. I have seen colleagues, with
whom I have worked, retire under a superannuation scheme, full of life
and vigor, and within two years of retirement they have died because the
transition from a busy life to a life with nothing to do has killed them. It
is to be remembered that at this time there are 750,000 old-age pensioners
at work. I think we ought to pay them a tribute, and the best tribute is
this new Bill. During the war, nearly 300,000 old people came again into,
the labor market after they had left it. From the standpoint of the old
people, therefore, we have thought it desirable not, at the moment, to lower
the age from 65 for men and 60 for women.
Now, I come to the standpoint of the nation. From the present and
prospective age structure of our population, it is indeed imperative, in the
national interest, to encourage the aged to stay at work where that is pos-
sible and desirable. We have accordingly thought it right to encourage
people to remain at work as long as possible, by making their pensions
increasingly valuable according to the period for which they defer retire-
ment from work. With this end in view, we have doubled the increment
for postponement which was suggested in the White Paper and the Bev-
138






National Insurance Bill


eridge Report, making Is. a week for every 25 contributions he pays in the
five years beyond pension age; that is, 2s. for a year's deferment, so that
the maximum increment for a single person will be 10s.
Another new provision enables the pensioner with a wife under 60 liv-
ing with him to get a .dependent's allowance of 16s. for her if she is not
gainfully employed. After all, old men, if they do remarry, do not always
remarry old women. We thought that if a man has a wife under 60 who
is dependent and not gainfully employed, he should get 16s. for her; the
wife's pension will be 16s. at the age of 60 and it will be increased in the
same way. It will be appreciated, therefore, that the maximum increment
that can be gained by a couple by postponing retirement for five years, will
be 20s. a week. We have thought it right and desirable that, at the age of
70 for men and 65 for women, the retirement conditions for pensions should
be waived. That was urged upon me particularly from the point of view
of the small independent traders-the little men. Therefore, once they have
reached the age of 70 there will be no question about, retirement. If a
man has worked until he is 70, and a woman until she is 65, they have
earned their pension, and they will receive it for the remainder of their
lives. I will come later to -the adjustments that will be made in the non-
contributory pensions scheme-the old Lloyd George pensions. Appro-
priately enough, the last benefit to which I have to refer is the death grant.
This is an entirely new provision, but no one who knows anything at all
about this matter doubts the wisdom of the State in making this provision.
For a long time it has been a need, and I am glad that it is provided for in
the Bill.
CONTrrBUTIONS
So much for the benefits. I now come to the contributions. I think
the House will agree the benefits which I have described present a very
considerable advance on existing schemes, and indeed on the proposals of
the White Paper, and, in some important respects, an improvement on the
proposals of the Beveridge Report. They are, of course, subject to a variety
of contribution conditions which are set out in the Third Schedule to the
Bill. I will not now weary the House with reading those contribution con-
ditions. Hon. Members will, I am sure, have read them, or will read them.
The contributions-are substantial: 4s. 7d. for an employed man, with 3s. 10d.
from his employer; 5s. 9d. for a self-employed man, and 4s. 8d. for a non-
employed man-in addition to very substantial contributions from the
SExchequer.
I have said these contributions are substantial. They are substantial,
but it is a substantial scheme with substantial benefits. I am not unaware
of the burden that I am imposing, 4s. lld. on the employed person-when
we'add the 4d. for industrial injuries benefits-and 5s. 9d. on the self-em-
ployed. These contributions look high because they are expressed in one
figure, Let me ask hon. Members, What do the workers pay now? What
does the little man pay now? Have a look at the pay docket of a worker
and count up the stoppages, not only the stoppages from the pay before he
gets it but what he pays afterwards in "bobs" and "tanners." Count it all






British Speeches of the Day [Mr. J. Grifliths]

up in a week. It is far more than 4s. 7d. in millions of working class homes
in this country. Let the little man jot down all he pays and add it all up.
Then, having put it all down and counted it all up, contrast the benefits
he gets for what he pays now with the benefits he will get under this scheme.
I believe this has not been brought out as clearly as it ought to have'
been. The 4s. 7d. for the employed contributor and 5s. 9d. for the self-
employed contributor covers not only all the benefits under this Bill-and
they are substantial. Remember what other benefits it covers. Of the
5s. 9d. and of the 4s. 7d., 10d. is the contribution, and the only contribution,
that he will make towards the complete National Health Service: a doctor,
a consultant, hospital treatment for himself, for his wife, and for his chil-
dren-all for 10d. a week. Why, he pays more than 4s. 7d: for that alone
now in thousands of homes in this country. Therefore I have no hesitation
.in saying-I have said it before outside and I will say it now in the House
-this scheme is the best and cheapest insurance policy ever offered to the
British people, or to any people anywhere.

FINANCIAL PROVISIONS
Now I come to the financial provisions of the Bill. They are dealt witi"
in detail in the Memorandum by the Government Actuary, which has been
published with the Bill. I think hon. Members would probably prefer to
examine the figures in black and white rather than be wearied by listening
to me trying to recapitulate them. I would, however, like to mention one
or two of the main features in the financial structure. As under the -exist-
ing schemes, the funds required come from the contributions of insured
persons-now described as employed, self-employed and non-employed per-
sons-from employers, and from the Exchequer. The Exchequer contributes
to the Fund out of taxation in two ways. First, it pays a supplementary
weekly contribution in each class. Secondly, it pays annually a sum, cal-
culated on a rising scale, to meet the estimated cost of accepting at the outset
entrants of all ages on the same terms as entrants at the age of 16. Exclud-
ing payments towards the cost of the National Health Service, it is estimated
that the cost of the scheme will be 452 millions in 1948, rising to 545
millions in 1958, to 678 millions in 1968, and 749 millions in 1978. The
share of the Exchequer, excluding contributions toward family allowances,
industrial injuries insurance, the new National Health Service, and national
assistance, is estimated at 118 millions-26 per cent-in 1948, 190 millions
-35 per cent-in 1958, 322 millions-47 per cent-in 1968, and 416 mil-
lions-56 per cent-in 1978.
It will be noted that the Bill provides that the initial rates of contribu-
tion are to be increased after five years by 4d., 2d. each for the employer and
worker. The addition is required to relieve the Exchequer of some part
of the heavy increase in expenditure, which is due almost entirely to the
growth in the cost of retirement pensions. The total expenditure on retire-
ment pensions is expected to reach 501 millions in 1978, as compared with
238 millions in 1948. That means that at the latter year the retirement
pensions alone will take 67 per cent of the total insurance expenditure pro-
vided in this Bill. It will be noted, too, as one final word on finance, that






National Insurance. Bill
provision is made for quinquennial reports by the Government Actuary
on the financial condition of the National Insurance Fund.,

THE OPERATION OF THE SCHEME
So far, I have been dealing mainly with the permanent provisions of the
scheme. People will naturally ask, "Where do I. come in, and when are
the new rates to begin?" I cannot answer all these questions at the moment.
A scheme of this magnitude must, obviously, be brought into operation by
stages, on a series of appointed days. While we hope to see most, if not all,
parts of the scheme in full effect during 1948, the detailed operation of the
various parts is dependent on so many factors that I cannot at the moment
name precise dates. This much I can say now. We have undertaken to
bring the new rates of retirement pension into operation before next winter,
and this undertaking will be honored in full. We intend, in pursuance of
this undertaking, to convert existing contributory 10s. pensions, provided
the pensioner has retired, into retirement pensions at the new rates. If they
have earnings, these will not reduce their pensions below IOs. a week. This
will apply to all existing 10s. pensioners, including widows over 60 insured
under the standard conditions of the general scheme, provided they have
retired.
It will also apply to non-contributory pensioners over 70 who are draw-
ing these pensions. The means scale, under the Old Age Pensions Act, will
be suitably adapted to the increased rates of pension. We do not propose
at this stage otherwise to modify the non-contributory schemes. There-
fore, what we can now say is this. Those who are now getting 10s. under
the Lloyd George scheme will get the full rate before next Winter. Others
will get appropriately adjusted rates. Thereafter, persons who are insured
under the existing scheme will qualify for retirement pensions subject to
the new conditions as to retirement, but to modified contribution condi-
tions on the lines of the existing scheme. The new rates of contribution
will come into operation by stages as each installment of the Bill is brought
into operation. Let me make it perfectly clear now that when, in the
Autumn, we bring the new pension rates into operation for the existing
insured people, the rates of contribution will begin to go up. For the rest,
we shall press on as hard as we can with measures to apply the new benefits
to existing classes of insured persons, and we shall work as hard as we can
to admit new classes of persons to this scheme at the earliest possible date.
Here let me correct a misapprehension which seems to have ariien in
some quarters. I have received many letters about it from hon. Members
during the last week. The impression has apparently been created that these
scales mean the end of supplementation. Nothing in this Bill interferes
in any way with the duties of the Assistance Board, or of the Public Assist-
ance Authorities to supplement benefits in cases of individual need, at their
discretion, according to the circumstances of the case. The benefits pro-
vided under this Bill may reduce the need for supplementation, but the
power to make supplementary awards remains untouched. I would also
remind the House that, particularly during the last few years, assistance







British Speeches of the Day [Mr. J. Griffiths]
does not stop at cash payments. A welfare service, particularly for the
aged, has developed and has played a very important part.

ADMINISTRATION
I now come to one of the most controversial matters in this scheme, the
question of administration. I appreciate the importance of administration.
I have been in administration all my life, and I know that the way it is
handled is as important as what is actually in the Bill. I realize that this
scheme will be made or marred by the spirit in which it is administered.
It is my intention that my Department shall do its work through a network
of Regional and Local Offices to be set up throughout the country, working
in the closest association with the Employment Exchanges of the Ministry
of Labour, through which unemployment benefit will continue to be paid.
It will be my aim to provide a flexible, personal service to insured persons
wherever they may be, and I have no doubt that we can do so. To illustrate
what I have in mind by reference to sickness benefit, I would contemplate
that the principal method of claiming and paying this benefit would be
through the post, as many Approved Societies do today. At the same time
we shall make it flexible enough to provide a home service for those who
need it.
Do not believe that every working-class family likes to be called on at
home in matters like this. It is a matter of the greatest delicacy, and there
is a lot of tosh talked about what is called "home service"; how it is done
is a matter of supreme importance. I shall seek to make the system elastic
enough to meet individual needs, including, as I have said, payment of
benefit in the home where circumstances render this desirable and neces-
sary. I want to see the offices which we shall open become centers where
people will not be afraid to go, where they will be welcomed, and where
they will not only get benefits but advice. I want to see them become not
only security offices but citizens' advice bureaus where everyone can go as of
right, to speak to someone who is there not to rob them but to help them.
To help me in this I have made provision in the Bill for the establishment
of local advisory committees to advise me on questions connected with local
administration. There will also be, at the center, the National Insurance
Advisory Committee, to whose important functions in this respect I have
already referred.
APPROVED SOCIESIE
This brings me to the important and controversial question of the Ap-
proved Societies. When the Approved Societies system was established in
1911, sickness benefit was a separate service, provided by a separate Act,
with a separate contribution and a separate Fund. Under this Bill it be-
comes not a separate benefit but one of a series of co-ordinated benefits
with one contributionpaid by one stamp on a single card. Under the old
system, separate as it was, delegation of administration was easy, and in
1911 the State asked the Approved Societies to work the scheme and had
nothing more to do with it. I would like hon. Members to realize that
this Bill cannot be delegated to anybody. We have to do the job ourselves,
142






National Insurance Bill


for we cover the whole of the nation. In the Press the other day, I saw a
suggestion that I had not thought about this at all, but that I had been
over-ridden by the bureaucrats. I would remind the House that I took
the same view when I was not in the Government. I do not think that this
can be delegated. Sickness benefit under this scheme is linked up with in-
dustrial injury benefit, and we must think of this question of whether or
not to 'have Friendly Societies, in terms of this Bill, and not of the old
Act. Last November I made a statement to the House in answer to a
Question. I should like to repeat what I then said. I was asked whether
I had considered representations made to me in favor of the use of the Ap-
proved Societies in the proposed National Insurance Scheme, anti whether
I was in a position to make a statement on the matter. My answer was
as follows:
"Yes, Sir. The Government have given most careful and sympathetic considera-
tion to the possibility of using the Approved Societies under the new arrangements.
While they fully recognize the great services which Approved Societies have rendered
in the administration of the Health Insurance scheme, they have, however, reluc-
tantly .felt bound to come to the same conclusion as their predecessors, that it
would be impracticable to use the Societies as organized bodies in the administration
of the comprehensive scheme of social provision now contemplated."
I added that it was the Government's intention that, in the administra-
tion of the new scheme, the fullest possible use should be made of the skilled
and experienced staffs who have been engaged in the work of Approved
Societies, and that arrangements would be made for providing compen-
sation for those who would be displaced from their employment as a result
of the new Measure. Since that time, I am happy to say that the Approved
Societies have responded to the invitation which I sent to them to appoint
committees which would consider with my Department, under the chair-
manship of the Parliamentary Secretary, the arrangements to be made for
the transition from the old to the. new scheme. They will also discuss ar-
rangements to be made for selecting staffs from the Approved Societies of
persons who wish to join the Ministry, and will decide the terms of com-
pensation for those who will be displaced as a result of the new scheme.
Two Committees have been set up and one of them has already started its
work. The House will observe that we have taken powers in the Bill to
make regulations which will embody the terms of compensation worked
out for displaced employees of Approved Societies, and such regulations
will, of course, be subject to the affirmative Resolution of this House.
On the general question of the future of the Approved Societies, I
have, since the matter was raised in this House, received further represen-
tations from the Friendly Societies urging that a place should be found for
them in the administration of the scheme. We have given the most careful
thought to this matter. I know it is a most important matter, and I have
explored with the greatest good will every possibility and every scheme
suggested for giving these Societies a place in the new scheme. The Gov-
ernment's decision remains unchanged. I acknowledge the great services
of the Societies to the community, but we must move with the times. The
sickness insurance system is now a general part of the social provision. If
all the parts of the scheme are to be, as I think they ought to be, properly






British Speeches of the Day [Mr. J. Griffiths]
knit together, the Department responsible for administration cannot divorce
its work from day-to-day contacts with insured persons in an important
part of the field by delegating responsibility to others. It is, I am con-
vinced, the duty of the Government, once they have embarked on a com-
prehensive scheme of this character, to provide the necessary comprehen-
sive and unified machinery. The scheme is unified at the center-a single
Minister, a single Fund, and a single contribution. All this calls for a
unified administration in the localities. No scheme has been put before
me, and indeed I do not know of any scheme that could be put before me
or devised, for harnessing the Friendly Societies to the administration, which
did not carry with it a great deal of overlapping machinery. I therefore
came to the conclusion that the State, having put its hand to the plough,
must complete the job. We want the help of large numbers of the expe-
rienced staff of Approved Societies to build up a service for the whole of
this scheme which will be sensitive, humane and discriminating, and I feel
confident that we shall secure this help. With it, I have no doubt as to our
capacity to complete the job and administer this scheme.

SECURITY
I shall not occupy the time of the House much longer. There are many
matters of importance I have not touched upon, such as the power to make
supplementary schemes. I would also have liked to talk about reciprocal
arrangements. A few weeks ago the National Health Insurance Minister of
the Labour Government of Australia called upon me and asked if I could
possibly find time to go out to Australia and complete reciprocal arrange-
ments with that Dominion. I would have liked also to go to Australia to pay
a tribute to that Labour Government and to say that the old country is
trying to catch up with it.
I have kept the House much longer than I intended, but I am grateful
for the forbearance that-has been shown to me. One last word. I have
devoted most of my time today to details, contributions, benefits and
machinery. For the last six months now I have worked, and if I may say
so have worked fairly hard, at these thousand and one details. I have had
the loyal help of the staff. I have had the co-operation of my colleague, the
Parliamentary Secretary, and if I may be allowed to use colliers' language,
the daily, constant help of my "butty," the hon. Member for Mansfield
(Mr. B. Taylor). All the time while I have been working out these details,
I have tried to remember that behind the contributions, the benefits, the
rates, behind them all are human beings, men and wdmen with their hopes
and dreams, their fears and their disappointments. As I have worked, I often
recall, and I believe the recollection has helped me in working out this
scheme, an experience in the grim days of 1940. I went down to speak at
my native village after the Party Conference at Bournemouth. We had
decided there to enter the Government and see the war through. I went
down to explain why to my old collier "butties." After my speech an old
collier came to me and said, "Yes, you are right. We have to see this thing
through to the bitter end. But," he added, "let me ask you-after this,
what?" And behind that "But" and that question were ntemories, .bitter






National Insurance Bill
memories of the insecurity and poverty and the frustration of the inter-war
Years. Behind that question was a grim resolve never to go back to the
bad old days nor to return to the futile old ways. It is that "what" that
won the General Election last July.
For a generation I have lived with the consequences of insecurity, but
to those who profess to fear that security will weaken the moral fiber and
destroy self-respect, let me say this. It is not security that destroys, it is
insecurity. It is the fear of tomorrow that paralyzes the will; it is the frus-
tration of human hopes that corrodes the soul. Security in adversity will,
I believe, release our people from the haunting fears of yesterday, and will
make tomorrow not a day of dread but a day to welcome. I believe that
security will release their gifts and energies for the services of the nation:
"Security cannot be forced on a democracy; it must be won by it."
So said Sir William Beveridge in his Report, and he was right. We shall
pass this Bill, we shall inaugurate this scheme. Its success will depend,
not only on my Ministry and its officers, but on the full co-operation of all
who come within the scheme. It will have to be nurtured, it will have
to be safeguarded from abuse, and it will have to be paid for. I know
full well that Social Security can only be established on a sound economic
foundation. This Bill and this scheme represents an act of faith, of trust
in the British people. I ask the House to accept it, in the sure confidence
that our people are worthy of our trust.

Rt. Hon. R. A. Butler (Conservative): . My right hon. and hon. Friends
on this side of the House have contributed our share to the making of this
plan, and we wish to see it through; but in the course of debate, the right
hon. Gentleman and his friends must remember that it is the duty of the
Opposition to criticize, and we shall do our best in the course of the Second
Reading Debate and in the course of the long and protracted Committee
stage to put forward constructive suggestions for helping, not only the
contributors, but also the best interests of the country. . .
[House of Commons Debates]


INVESTMENT (CONTROL AND GUARANTEES) BILL
HOUSE OF COMMONS, February 5, 1946. [Extracts]
The Chancellor of the Exchequer (Mr. Dalton): I present to the House
today a simple, short, modest but, as I shall argue, necessary Measure. This
Bill will help His Majesty's Government to control the flow and the direc-
tion of new investment, and also to stimulate that flow when necessary.
It will give the Government two small but useful additions to their set of
tools for economic planning. With the Bill goes Command Paper 6726,
which contains a Memorandum and a draft of the Order I shall propose to
make when the Bill has become law. The House will, no doubt; have
studied these papers with attention.
145






British Speeches of the Day [Mr. Daltonj
The Bill follows our latest streamlined legislative model. It contains
only two operative Clauses. Clause I gives power to the Treasury to control
all new access to the capital market. It provides, substantially, for the
continuation of the present power of controlling new capital issues-the"
present power, which has been available during the war under Regulation 6
of the Defence (Finance) Regulations. The purpose of this. control is
simple. It is to ensure that the order of priority of schemes for raising new
capital shall be determined by one criterion only, namely, by their relative
importance in the general national interest; whereas in the absence of such
control, they would be determined by other criteria, namely, their relative/
appeal to profit-seekers and the relative plausibility of their presentation
to a credulous public by company promoters and others. Therefore, we
propose to substitute the national interest as the test, rather than follow
the old-world practice. In a second sense, the control will be valuable in
ensuring good timing in the raising of capital for approved purposes.
Given that a number of purposes have been approved, it is desirable that
we should have good timing of successive releases of new securities, and that
we should have orderly marketing-a phrase often used in regard to produce,
but equally applicable to securities-without any unnecessary disturbance
or congestion in the money market.
I would like to say a word at this stage about the Capital Issues Com-
mittee. It is intended to retain the Capital Issues Committee as an execu-
tive instrument of the Treasury in relation to Clause 1 of the Bill. This
body is a non-statutory body, which was instituted in 1939 and has done
excellent work during the war ....
The function of this Committee is to act as a licensing authority for new
issues, and to advise the Treasury on the suitability of particular applica-
tions in'the light of the policy laid down by the Government from time
to time. . .
SALE OF DOMESTIC SECURITIES
When this Bill is passed into law, and when the draft order mentioned
in the Command Paper has been brought into force, Regulation 6 of the
Defence (Finance) Regulations will be revoked. One of the consequences
will be that the present requirement of Treasury consent to public offers
for sale of existing domestic securities will lapse. There has been some
misunderstanding in the past about that; so, to make it quite clear, I will
repeat that when the draft Order is made and the existing Regulation is
revoked, the present requirement for Treasury consent to the sale'of exist-
ing domestic securities will lapse, and this will put an end, as far as Treas-
ury control is concerned, to the recent controversy on the relative merits of
placings on the one hand, and offers for sale on the other .hand. For the
rest, the draft Order follows, in the main, the lines of the existing
Regulations.
BONUS IssUES
That does not mean that it is unchangeable for all time; and while,
in the main, it follows the existing Regulations, there is a number of mat-
ters on which I propose to consult the National Investment Council we are






Investment (Control and Guarantees) Bill
setting up, and to collect their views as to whether, and if so in what direc-
tion, and to what extent any of these arrangements should be modified.
Initially, the restrictions on bonus issues will be continued in their present
form; but I shall discuss this matter, together with others, with the National
Investment Council. It will be one of the first matters which I propose
to discuss, because there will be much debate about it. I should, however,
add, lest there be any misunderstanding of my own view or that of the
Government, that bonus issues in the past have often led to abuse. I think
that cannot be denied. They have often led to concealment, both from the
public and from the workers in a particular industry, of the true rate of
profit on invested capital. Bonus share issues have often been a racket-
not always, but often. We are entitled, therefore, to look at them with a
certain suspicion, although I am not here committing myself to the existing
arrangements exactly in their present form ....
I confine myself to saying that bonus issues should be viewed with a
certain suspicion, although it may well be that sometimes there are good
reasons for them. However, we will look into all this at an early date on
the National Investment Council.

THE NATIONAL INVESTMENT COUNCIL
May I say a word about this Council? It is proposed, as will be seen
from the Memorandum, to set up this body to
"advise and assist the Governmerit in so organizing and, when necessary, stimulating
investment as to promote full employment."
I shall myself be Chairman of this Council. Some of the other Members will
be appointed ex-officio, while others will be chosen for their individual
capacities. They will include the Governor of the Bank of England, the
Chairmen of the Capital Issues Committee and of the Public Works Loan
Board-which, as the House knows, looks after loans for local authorities-
the Chairmen of the two Finance Corporations for industry, and the Chair-
man of the London Stock Exchange. The Council will also contain a promi-
nent trade union leader, whose name I hope to be able to announce shortly;
Mr. C. E. Prater, who is Chairman of the Finance Committee of the Co-
operative Wholesale Society. [Interruption.] Well, why not? The Co-
operative Wholesale Society manages much larger funds than many other
concerns. We shall have a lot of common sense from that quarter to blow
the cobwebs away.
I have also invited Sir Clarence Sadd, Vice-Chairman of the Midland
Bank; Sir Clive Baillieu, whom I have selected not because he happens, at
the moment, to be President of the Federation of British Industries, but
because I think highly of him, anyhow-there is no disqualification in being
President of the Federation-and Mr. Nicholas Davenport, who is a stock-
broker, but is also well known as a lively writer on financial subjects. That
is a fine body of high-powered, collective wisdom. I have not put any Mem-
bers of Parliament on the Council. I do not think it right that Members
of Parliament should be asked to do the hard brain work that will be
required for the advice on which the Government relies; but I do say, quite
seriously, that I think that, from the collective wisdom of this body, the






British Speeches of the Day [Mr. Dalton]
Government will be able to derive much advantage. I hope and believe
it will be a very valuable new organ in our discussions on these matters.
FINANCIAL AND "PHYSICAL" CONTROLS
I will now say a word about the relationship of the financial controls
which we are debating in this Bill to the so-called physical controls. The
financial controls contained in this Bill, and in certain other Bills including
the Bank of England Bill, will supplement the physical controls over the
allocation of labor and materials, and the control of new building operations
through building permits and the like. I do not know whether it will be
denied-it will be interesting to see whether it is denied in the Debate
Which follows-but in my view it is very difficult to deny the statement that
at the present moment the demand for capital is greatly in excess of the
supply. This will continue to be the case for some considerable time to
Scome,.the length of the period being difficult to estimate at present. That
position exists both in terms of money and also in terms of real resources-
Sthe labor, materials, equipment, and so forth, on which we are dependent.
Hence, it appears to me there is a most obvious need for control in the
determination of priorities according to the national interest. The demand
being so much greater than the supply, the demand must somehow be cut
down to the level of the supply, until the supply can be increased; -and this
does demand control in the determination of priorities.
THE EFFECT OF UNCONTROLLED COMPETITION
If we were to return to a "free for all" scramble, such as we had after
the last war, it is clear that it would lead us to great chaos; it would lead
to inflation; and it would be no exaggeration to say we should soon
be landed in a first-class national disaster. There is no doubt about that
at all. To take one particular point relating to the money market, if we re-
turned to unregulated competition in the money market, the result would
be to drive up the rates of interest. This would have the effect of increasing
needlessly the cost of borrowing both to the Government and to productive
industry. Both the Government and industry would have to pay more for
their loans, if we allowed unregulated competition. This, in turn, would
mean a reversal of our cheap money policy, which we are steadily pursuing,
with some visible results in terms of stock exchange movements; and it
would also mean a depreciation of the value both of Government and of
industrial securities. Now, we are against this. It would mean, on the one
hand, a depreciation of the value of war savings; and we are strongly against
that. We desire to maintain the value of war savings. On the other hand,
it would also increase the cost of industrial reconversion; and that would
be a most disadvantageous state of affairs. Nothing of this kind can be
allowed to happen. We must take steps to stop it. This Bill is an
instrument for preventing it, for maintaining capital values, for ensuring
a proper rationing of new capital, and for putting first things first.
UNDISTRIByTED PROFITS; LIQUID RESOURCES
One word about undistributed profits. Clause 1 of the Bill does not
deal, and is not intended to deal, with undistributed profits. In my Budget






Investment (Control and Guarantees) Bill
speech, I urged industrialists to put new development before higher divi-
dends; and there was no dissent from any part of the House. I made the
payment of the Excess Profits Tax refunds conditional, as my predecessor
had indicated must be the case, upon this money's being used for develop-
ment, in the broad sense of the word, and not merely being handed out
to shareholders. Though we are anxious, and though we have taken steps
to promote this attitude in relation to undistributed profits, it is inevitable
that, over the use of such profits, there should be, in these times, some
measure of control. But this financial Measure is not the most convenient
Measure of exercising the control I have in mind. On the contrary, it is
the view of the Government that such control as may be necessary over the
use, by firms, of their undistributed profits, should be effected by the physi-
cal controls operated by the President of the Board of Trade. That is the
practical way to approach the matter, rather than by seeking to impose
financial controls, such as are provided in this Bill upon this particular
element in our economic setup.
On the other hand, I would like to say that firms who desire to make
new issues of capital, or to borrow from either of the two Finance Corpora-
tions, will be expected, as a condition of the permission to raise new issues
or to secure a loan, to make a suitable contribution from their liquid
resources to the cost of the new development assisted by those means. I
would take the tin-plate development in South Wales as an example. It
is clear that some of the firms who will be concerned and might desire to
raise new capital would be quite prepared, and would regard it as reason-
able, to meet a considerable part of the cost of the new plant out of their
own liquid resources. In this sense, the use of liquid resources and undis-
tributed profits will be parS of the same scheme of things as the licensing
of new issues.
Clause 2 provides that the Treasury may guarantee loans up to a limit
of 50 millions in any one financial year-
Mr. Jennings (Conservative): Would the right hon. Gentleman allow me?
He has referred to liquid resources and undistributed profits. They are
two entirely different things. A firm may be hard up and have no liquid
resources, and yet have undistributed reserves.
Mr. Dalton: In many cases they are the same; in others they may be
different.
Mr. Jennings: I feel that the matter is one requiring some explanation--
Mr. Dalton: I do not want to spend too long on. that point. I do not
think there is really any dispute.
Mr. Jennings: I am only speaking as a chartered accountant, and I was
hoping that the House might understand- .
Mr. Dalton: No doubt, the hon. Gentleman will make it very clear and
wipl help the House to understand, if he catches Mr. Speaker's eye later on.
I should not venture to compete with a chartered accountant in such a
matter; but I really do not think we should gain much by pursuing the
question. I think the point is very dear; but I will endeavor, very briefly,






British Speeches of the Day [(Mr. Dalton] ,
to make it clear again. This Bill does not deal with the question of undis-
tributed profits. There is no provision for control over those profits. Con-
trdl over them, where it needs to be exercised, can be exercised through
the physical controls by the Board of Trade, such as building permits, allo-
cations of materials and so on, rather than through financial controls. That,
I think, is agreed. I ventured to refer, when I was talking primarily about
undistributed profits, to liquid resources, and I am bearing in mind certain
discussions which I have had with industrialists. There are many of these
who, not having distributed profits in the past, have temporarily invested
them in Government securities; and such investments are commonly re-
ferred to as liquid resources, because they can quickly be realized.

POWER TO GUARANTEE LOANS
Under Clause 2, the Treasury may guarantee loans up to 50 millions
in any one year
"for the purpose of facilitating the reconstruction or development of an industry
or part of an industry in Great Britain."
This power is not new. A similar power was contained in the Trade
Facilities Acts, 1921 and 1926, the Development (Loans, Guarantees and
Grants) Act, 1929, and in a number of special Acts passed from time to
time, such as the London Passenger Transport Act, 1935. But under all
these Acts, the powers of guarantee were limited both in time and amount.
The Government have now decided that this power of guarantee should.
be made permanent, and also that it should be upon a larger scale. There
are some who think that even 50 millions may not be enough. We shall
see how we shall go. If it should be necessary to ask for more, nothing is
easier than to introduce a one-clause Bill substituting some other figure.
This power of guarantee has a two-fold purpose. First, it is intended
as an anti-slump weapon. If there should be danger of trade depression
hereafter, and if private enterprise and finance were somewhat hesitant
in embarking upon new ventures which were desirable in the national
interest, these guarantees could be used to stimulate industry and produc-
tion, and to promote employment. This is the first purpose-an anti-slump
measure. In the second place, quite apart from a trade depression, this
power can be used for the reconditioning of private industries, which, in
this Parliament, the Government would not propose to transfer to public
ownership. It may well be that some of the reports of the working parties,
which my right hon. Friend the President of the Board of Trade has set up,
may suggest that such a guarantee would be a useful aid in procuring
finance to modernize a backward industry and make it more efficient.
These are the possibilities that we have.in mind. I will not name the
industries, but many will spring to mind at once-industries which are in a
bad way, and are greatly in need of modernization and new plant, but may
have considerable difficulty in raising the necessary money on their own
credit in the capital market. It is in these cases that such a guarantee
could be very helpful. Clause 2 (2) provides:
"(2) Any guarantee given under this Section may be given in such form and
manner and on such terms and subject to such conditions as the Treasury think fit."






Investment (Control and Guarantees) Bill
It will be open to us to consider all these cases on their merits. More-
over, so far as information to Parliament and the public is concerned, it is
laid down, in Clause 2 (4), that the Treasury shall lay before Parliament
a statement of "any guarantee given under this Section," and
(b) Within one month after the end of any financial year in which any guar-
antees given under this Section are in force, an account of the total sums, if any,
which during that year have been either issued out of the Consolidated Fund under
this Section or paid in or towards repayment of any money so issued."
We have made provision that the House and the public shall be informed
of what is going on under this Section.
It has been asked whether these guarantees do not overlap, and even
conflict, with the operations of the two new Finance Corporations. The
answer is that there is no overlapping; the one provision may usefully sup-
plement the other. The Finance Corporations have their share capital,
which is provided, in the case of the Finance Corporation for Industry, by
the Investment Trusts, the Insurance Companies and the Bank of England,
and, in the case of the Industrial and Commercial Finance Corporation, by
the banks, including the Scottish banks. In addition, of course, they have
borrowing powers. But-and this is the point I should emphasize-there
is no Treasury guarantee behind any of the advances which the Corpora-
tions may make to industry. They make these advances in the exercise
of their own good judgment, but without any Treasury guarantee behind
them.
S Cases therefore may yell arise in which part of the requirements of an
industry, or of a section of an industry, may be met by a loan from one or
other of the Corporations, and the rest by a loan guaranteed by the Treas-
ury. In this way industrial risks might be spread and diminished by a
sharing of the responsibility between the Treasury and the Corporations.
I would emphasize that the guarantees under 'this Clause are not required
for the development of any nationalized industry. New capital for national-
ized industries will be provided by direct Government borrowing. The
guarantees under this Clause, therefore, are all for private enterprise. I
hope that is appreciated by hon. Gentlemen opposite.

THE NATIONAL INVESTMENT BOARD
I wish to say a word about the National Investment Board, for which
no provision is made in the Bill or the Memorandum. This Board was a
device mentioned by the Macmillan Committee-if I remember rightly; I
think a minority report of that Committee proposed the setting up of what
they called a "National Investment Board.". Lord Keynes advocated it in
what was then the Liberal Yellow Book; and some members of the Labour
Party have advocated it from time to time. But this Government, after
close aud careful consideration of the best way of achieving our purpose,
have now Vnoved beyond that conception. The Cabinet, subject always
to the approval of the House of Commons, must be responsible, and is pre-
pared to be held responsible, for economic and financial planning in this
country. The, Cabinet cannot delegate its ministerial responsibilities in
these matters to any independent or semi-independent Board. The Capital
Issues Committee-to take the first of the two bodies we are envisaging






British Speeches of the Day [Mr. Dalton]
here-is, in practice, an executive instrument subject to Treasury direction.
On the other hand, the National Investment Council will be an advisory
body. It is the Government itself which, in our considered view, must take
the responsibility for planning, including the planning of investment ....
Ministers are now giving a good deal of attention to working out the best
machinery for economic planning. We are collecting and collating essen-
tial information of many kinds, much of which we hope to publish. The
House, the public and the Press will have a considerably greater volume
of statistical information than it has been possible to make available in the
war years, when security considerations and shortage of staff limited our
output very severely. We shall correct that and increase the flow of infor-
mation. Each year we must have a manpower budget, as well as a money
budget. We must know the facts regarding not only the surpluses or deficits
in finance, but also the surpluses or deficits in labor, both in the country as
a whole and in particular areas and industries. All that must be studied.
We must be able to estimate the prospects for the future. On that basis,
we must make our plans, aiming at full employment, a fair distribution of
wealth among the different sections of the community, and the best use in
the national interest of all our resources, whether physical or financial.
These plans must not be mere essays; they must be consistent with practical
possibilities. They must not be too rigid or hidebound. They must be
capable of continuous adjustment in the light of changing conditions. We
shall never be able to sit back, as some planners imagine, and dose our
eyes, and let the plan take charge, like one of the automatic pilots in an
aeroplane. It was said, long ago, that eternal vigilance is the price of
liberty. Eternal vigilance is equally the price of successful planning. And
without successful planning, there is no liberty for the people.

CONTROL BY THE HOUSE OF COMMONS
Hon. Members opposite, or some of them, are opposed to this Bill. Later
in the Debate they will develop the reasons why they are opposed to it.
But there is one point with regard to their Amendment on the Order Paper
on which I would like to comment. They declare in their Amendment
that this Bill gives permanent and uncontrolled power to the Government.
Permament power, yes, unless some later Parliament proposes-though I
hope it will not-to repeal the Bill. But uncontrolled power, no. Control
rests, and must rest, with this House of Commons, with its eager, expectant
and resolute majority. It is they who exercise control, in the last resort,
over anything done or proposed to be done by this Government. The con-
trol remains democratic in character, and what we do and what we propose
will be published to the world. The Press . will be able to comment
on it.
Looking back, we remember what happened at the end of tfe last war,
when the party opposite had power, and when they were able to put their
theories into disastrous effect. We were at that time deluged with decontrol.
It has been said, not untruly, that there was a paradise for profiteers and-
security for speculators-but insecurity and unemployment, as we well know,
for the great majority of the citizens of the land. We remember, in par-





Investment (Control and Guarantees) Bill
ticular, how the Lancashire cotton industry was sold down the river to
shady financiers. We remember what happened to the shipping industry.
There, too, there was the most wicked speculation. In one month only, in
1919-I give this as one illustration out of many-30 new companies were
floated.
There was no capital control and no investment control. Those 30 new
companies were floated on a total capital running into millions of pounds,
not in order to produce anything or to build ships, but to buy up existing
ships for the purpose of making speculative profits. One company at that
time raised its capital for this purpose from 42,000 to 3,500,000-simply to
buy up existing ships. Yet a little later, in 1921, these ships were sold for
barely a quarter of what they had fetched during the boom; and the ship-
yards on the Wear and the Clyde and the Tyne closed down, many of them
forever. I recall these things in order that we may see the present discus-
sion in its right perspective. This Bill is a small but necessary part of a
big plan to stop all that sort of thing from happening again.


Rt. Hon. Ralph Assheton (Conservative): The right hon. Gentleman the
Chancellor of the Exchequer has delivered a speech of a pattern with which
we are now becoming familiar. There is one great advantage about the
Chancellor of the Exchequer, and that is that he knows what he wants, he
goes out to get it and he does not make any bones about it. This Bill, the
Second Reading of which he has moved in a most able speech, and to which
some of my hon. Friends will move an Amendment later, is the second
of three Measures designed to give to the Government complete control
over the financial system of this country. The Chancellor himself said that it
was not a breath-taking Bill. I do not know what takes his breath, but,
at any rate, he admitted that it was a streamlined Bill. It is a Bill of
modern design, which leaves in the hands of the Minister concerned all
the power, and removes it as far away as possible from the House of Com-
mons. The first of these Bills was the Bank of England Bill; this is the
second, and I understand there is to be a third Bill dealing with exchange
control. When we have in power a Government whose policy it is to have
a complete and comprehensive planning of the economic life of the nation,
it is not to be wondered at that they should bring in such proposals, but
they are proposals which, none the less, we on this side of the House will
strongly oppose. We want to get these issues between us clarified.
Before I go on to criticize the Clauses of the Bill, I would like to make
clear three points. The first is that we on this side of the House do not
dispute the need for some temporary continuation, during the transitional
period, of the financial controls which were found necessary during the war.
But we do object very strongly indeed to making them permanent, and that
is just what this Measure does and is designed deliberately to do. There is
no question about that.
Secondly, I want to make it clear that the policy laid down by the
Coalition Government and reinforced by my right hon. Friend the Member
for Woodford (Mr. Churchill) in his declaration of policy to the electors,






British Speeches of the Day [Mr. Asaheton]
which accepts as one of the primary responsibilities and aims of the Gov-
ernment the maintenance of a high and stable level of employment, is some-
thing by which we stand now as firmly as we stood when we were members
of the Coalition Government. Unlike the right hon. Gentleman, however,
we believe that to find plenty of work, with individual liberty to choose
one's own job, free enterprise must be given a chance and encouragement
to plan ahead. Under this Measure it cannot do so. We believe in close
co-operation between industry, finance and the State, as explained in the
White Paper on Employment which was issued by the Government of which
the right hon. Gentleman the Chancellor of the Exchequer and I were both
members. But we do not believe that measures of compulsion, such as are
envisaged in this Bill, should form any permanent part of our economic
structure. We admit them as a temporary necessity, but we do not admit
that they should form any permanent part of the economic structure.
Thirdly, we on this side of the House would welcome any sensible meas-
ures for protecting the interest of the saving and investing community
from fraud, share-pushers and financial trickery of any sort. I am a little
disappointed that the Chancellor should have given priority to this Measure
over a Bill which, no doubt, will be coming forward in due course to imple-
ment many of the proposals of the Cohen Committee. These proposals,
which will be coming forward no doubt in due course in the form of a Bill,
combined with the present-day control of the Stock Exchange Council,
which is now extremely strict, should be fully effective to deal with this
aspect of the problem. There is nothing in this Bill which goes any
further to help us in that direction.

CLAUSE 1 DISCUSSED
May I now come to the Clauses of the Bill? . it is Clause 1 to
which we mainly object; and it is the chief reason for our opposition to
this Bill.
What does Clause I do? It makes permanent the powers by which the
capital market was controlled during time of war. It shows clearly that
the Government intends its policy of controls and restrictions to be a perma-
nent feature of our national economy, and not merely a temporary expedi-
ent to meet the time of shortage caused by the war. . In other directions
the Government have given the country the impression that their systems
of rationing and restriction were merely temporary measures, but here they
have laid bare for all to see the plan which they have of permanently con-
trolling and restricting the economy under which we have to live ...

THE CAPITAL ISSUES COMMITTEE
I will say here a word about the Capital Issues Committee, with whose
work I was constantly in touch when I was Financial Secretary to the Treas-
ury. . .
During the war, although innumerable difficulties cropped up in the
administration, the main function of the Committee was quite clear. It
was restrictive. Its purpose was to prevent any issues of capital other than
those directly necessary for the war effort. That was the Committee's
154






Investment. (Control and Guaranteed) Bill


objective, and they succeeded. They wanted to reduce to the barest mini-
mum any possible competition with Government issues. That was a
cear-cut object, and the sense of it was apparent to everybody. As long as
the war was going on, we were all agreed that to win the war was the great
objective. Therefore, it was not so difficult for the Treasury to give guid-
ance to the Capital Issues Committee, or for the Capital Issues Committee
to follow that guidance. Nevertheless, it was difficult enough. ...
My own feeling is that, as time goes on and as the war recedes, the posi-
tion will become very much more difficult. We all admit that during the
transitional period some continuance of capital issues control is necessary,
and my right hon. Friend the former Chancellor of the Exchequer, in his
memorandum of guidance to the Capital Issues Committee, which was
brought out after the end of the European War, talked of the order of
priority of capital issues being determined according to their relative im-
Sportance in the general national interest, having regard particularly to
current Government policy in respect of physical investment .. It will
become increasingly difficult to carry out these instructions, because there
will be an increasingly wide divergence of opinion on what constitutes the
national interest. ...
Once the transitional period has passed and markets are again free,
how on earth will the Capital Issues Committee be able to carry out their
duties? I do not know. In a period when plenty succeeds scarcity and
when there are no longer any physical controls, who is to be the judge of
what capital issues are to be permitted. ....
No system of Gallop polls will ever tell the Government what the con-
sumer wants as accurately as a free market and price system. . .
True, the people will not always want what the Government think
they ought to have. Different Governments have different ideas. . The
Chancellor of the Exchequer must bear in mind that we shall not always
have a Labour Government, and he may not at all like the fads of suc-
ceeding Governments. We in this country still believe in freedom. ...
The right hon. Gentleman ... may say he is not interfering in any
way with the use by existing companies and firms of their cash and re-
serves. If this is the argument, it brings me on to another criticism which
I think is very pertinent to this Measure, and that is the criticism that this
Bill will handicap new entrants into industry. It will protect the rich
firms, the well-established individuals with large capital resources....
It is a really remarkable thing that the Chancellor believes that he can
control investment when he proposes to leave free the investment of re-
serves by existing businesses and merely confine his attention to the very
sector of the field of investment which the Treasury is least likely to be
able wisely to guide, namely, the sector which predominantly caters for
new enterprises. . .
What would have happened in England in the nineteenth century if
there had been a Capital Issues Committee? Would this have been the
country in which railways were developed? Would this have been the
country which led the world in one manufacture after another? . .





British Speeches of the Day [Mr. Assheton)
Never before was there a time when it was so important as it is today
that the trade of the world should be expanded, and yet the Government
come forward with a Bill to restrict it. This Bill has got restrictionism
and Government control written all over it, and it is not a temporary
Measure dealing with an awkward year or two, but a permanent Measure
to cabin and confine the traders and business men, the merchants and
financiers, of our country forever. . .
In the employment White Paper which was presented by the Coalition
Government, various methods were proposed for dealing with the prob-
lem of booms and slumps, and for avoiding the difficulties which have
arisen in the past. We all realize that there is much room for experiment
in this field. It was admitted that the Government could seek to even out
capital expenditure over the years by the proper use of the great power
they have got in their responsibility for public projects, whether,promoted
by the Government, by public boards or by local authorities. It was recog-
nized also that there is great scope for co-operation in the field of private
investment between government and business. But we must not forget
that, whereas it is quite easy by law to prevent private enterprise making
an issue of capital, you cannot force a man to borrow money for a project
which he does not think will be successful.
Therefore, it is impossible to have planned investment over the whole
field unless the whole field is in the charge of the Government. . If
the Government own everything, they can in theory plan everything, but
if private business is to be allowed to continue, how can business men plan
their work many years ahead, if they are uncertain whether or not they
will be able to get capital for extension when the time comes for them
to need it? . .
We shall seek to amend this Bill in various ways. In the White Paper
which accompanies the Bill there is, for example, an Order which exempts
the borrowing of sums less than 50,000. Perhaps the Chancellor will
consider putting this exemption in the Bill, and not merely in an Order.
S. I hope he will put it in the Bill, and indeed I should be glad if he
would put in 100,000. . .
We shall also seek to amend the Schedule to the Bill. . Paragraph 2
as it stands gives the Treasury power to give directions to any person, and
not merely to a person suspected of wrong doing. I should have thought
that this goes far beyond anything which should be allowed. . .
I have not said anything about the National Investment Council. . .
I do not criticize the Chancellor for changing his mind, because I thought
the proposal for a National Investment Board was a very foolish one.
I am very glad he has changed his mind. It seems to me, on the face of it,
that the National Investment Council-composed of such busy men as the
Chancellor of the Exchequer, the Governor of the Bank, and the others
whose names he read out to us-will not have time to carry out the func-
tions which the White Paper assigns to this advisory body.... A Na-
tional Investment Council which really did the work which the Chancellor
envisages, would have to have on it not only men who gave their whole






Investment (Control and Guarantees) Bill
time to it, but a very considerable permanent staff. I suggest that it is
unlikely to prove a reality at all . .
I would like, in summing up, to add two or three more comments.
This Bill seeks to make permanent the existing wartime method of con-
trol, and that is the principal reason why we object to it. It is more in-
terested in established businesses than it is in new ones. It gives a certain
monopoly to the Bank. It does nothing for the protection of the invest-
ing public. It leads the investor to suppose that because the imprint of
the Committee is on the prospectus it will give him security; though, in
fact, it will frequently involve him in loss. . .
We on this side do not object to continuing control though we should
like it to be exercised in a more flexible way than in the past. But we
cannot agree to its becoming a permanent part of the economic life of this
country. That is a policy of restriction and not of expansion. This Bill
is not a step towards a high and stable level of employment. That can only
be achieved in an ordered society by encouraging enterprise-and allowing
a fair reward-by those who earn it by their industry, their foresight, and
their skill. [House of Commons Debates]


CABINET MISSION TO INDIA
HousE OF LORDS, February 19, 1946

The Secretary of State for India (Lord Pethick-Lawrence): Your Lord-
ships will recall that on the 19th September, 1945, on his return to India
after discussions with His Majesty's Government, the Viceroy made a
statement of policy, in the course of which he outlined the positive steps
to be taken, immediately after the central and provincial elections to
promote, in conjunction with the leaders of Indian opinion, the early real-
ization of full self-government in India. Those steps include:
(1) Preparatory discussions with the elected representatives of British
India, and with the Indian States, in order to secure the widest measure
of agreement as to the method of framing a constitution;
(2) The setting up of a constitution-making body; and
(3) The bringing into being of an Executive Council having the sup-
port of the main Indian parties.
The elections at the center were held at the end of last year, and in some
of the provinces they are also over and responsible governments are in
process of formation. In the other provinces polling dates are spread over
the next few weeks. With the approach of the end of the electoral cam-
paign His Majesty's Government have been considering the most fruitful
method of giving effect to the program to which I have referred.
In view of the paramount importance not only to India and to the
British Commonwealth, but to the peace of the world, of a successful
outcome of the discussions with the leaders of Indian opinion, His Majesty's
Government have decided, with the approval of His Majesty the King,
.to send out to India a special mission of Cabinet Ministers consisting of






British Speeches of the Day [Lord Pethick.Lawrencel
the Secretary of State for India, the President of the Board of Trade, and
the First Lord of the Admiralty, to act in association with the Viceroy in
this matter. This decision has the full concurrence of Lord Wavell.
I feel sure that your Lordships will give your support and goodwill
to the Ministers and to the Viceroy in carrying out a task in which the
future of 400 million people and crucial issiies both for India and the world
will be at stake.
[House of Lords Debates]


THE 214th ANNIVERSARY OF
GEORGE WASHINGTON'S BIRTHDAY
RT. HON. CLEMENT ATTLEE, Prime Minister [Broadcast]
Sulgrave Manor, (B.B.C.), February 22, 1946. I am speaking to you
today from Sulgrave Manor in Northamptonshire, the ancestral home of
the Washington family, on the 214th anniversary of the birthday of George
Washington. I am sitting in the Great Hall of the Manor immediately
beneath a portrait of the great patriot, general and statesman, painted by
the American artist, Gilbert Stuart.
As I motored down this afternoon from London through the quiet
English countryside, I was reminded of a visit I paid last Spring to a very
different but also very beautiful scene, Mount Vernon on the banks of the
Potomac. As I looked at that stately home of George Washington, I was
struck by its resemblance to the classical architecture of eighteenth-century
England, from which indeed it derives.
Sulgrave Manor is, of course, very different in style. It is a gabled,
stone building over four hundred years old, standing almost in the very
center of England, equidistant-twenty-eight miles-from Oxford and Strat-
ford-on-Avon; not a grand house, a "nobleman's seat," but a very worthy
home of the solid stock of squires and wool merchants to which the Wash-
ingtons belonged. Most English people cannot visit Mount Vernon; but
many, particularly in the summer months, make a pilgrimage to Sulgrave
in honor of George Washington, whose name is respected and honored in
this country as in yours.
That the man who led successfully the American Revolution should be
so honored in Great Britain will, I think, be readily understood by those
who study the history of Anglo-American relations. The reasons for it
indeed are simple. Even during the War of Independence, the American
cause had many sympathizers among the people of Britain; and perhaps
the most eloquent voice raised in defense of the revolutionaries was that
of a British Member of Parliament, Edmund Burke. I recall that the
elder Pitt, one of our greatest Prime Ministers, said, in 1777, "If I were an
American, as I am an Englishman, while a foreign troop was landed in my
country I never would lay down my arms-neverl never never"
Then George Washington stands out in history as a defender and cham-
pion of liberty; and a passion for liberty is still the strongest bond that
unites the English-speaking peoples.






Washington's Birthday
I feel, therefore, that it is specially appropriate that I should pay this
tribute to George Washington at the end of a great war, in which your
people and ours have fought side by side against the greatest enemies of
liberty the world has ever known.
The virtues of George Washington, single-mindedness and tenacity of
purpose, complete integrity of character and devotion to the good of his
fellow men, are ones of which the world stands in great need today.
Although he was a great patriot, he believed no less strongly in friendship
between the nations. Today, at the close of the first United Nations'
Conference, we stand at the threshold of a new era, not in a mood of
easy optimism, but of resolve to conquer difficulties admittedly great.
There is a legacy of fear and misunderstanding to be removed-war has
ravaged and exhausted vast areas of the world; and Nature has added to
the grimness of the prospect, so that millions are threatened by famine
and disease unless speedy succor comes. We need men like Washington,
who do not rest after their victories, but realize that the service of humanity
is never ending.
You may be interested to know that Sulgrave Manor was purchased and
endowed as a result of proposals to celebrate the centenary of the Treaty
of Peace signed between England and America at Ghent in 1814. The
endowment was a generous gift from the National Society of The Colonial
Dames of America.
Since 1814, we have known nearly a century and a half of friendship,
and the bonds that unite us are closer now than at any period in the history
of the two nations. On our friendship much for the future of peace and
civilization depends; and I do not think I can end this message better than
by quoting words used by the late Marquess of Cambridge when Sulgrave
Manor was formally opened on the 21st June, 1921:
"We want this house to be a shrine for all Americans and a center from which
sentiments of friendship and good will between the British and American peoples
will forever radiate; and these sentiments we believe to be the greatest security for
the world's peace." [Oficial Release]


QUESTION TIME IN THE HOUSE OF COMMONS
The first hour of every sitting day in the House of Commons is
devoted to answering questions which Members of Parliament put
to Ministers. A selection of some of the questions asked during
FEBRUARY, 1946, is included below, together with the Ministers'
answers.
PURCHASE OF U. S. AIRCRAFT
Wing-Commander Cooper (Labour) asked the Parliamentary Secretary
to the Ministry of Civil Aviation what is the price fixed for each of the
five Constellations it is proposed to purchase from the U.S.A. for the use
of B.OA.C. on the North Atlantic service; the price paid for each of the
56 Dakotas already purchased under Lend-Lease terms; and the price to
be paid for each of the further 16 Dakotas about to be purchased.






British Speeches of the Day
Parliamentary Secretary to the Ministry of Civil Aviation (Mr. Ivor
Thomas): The basic price of the Constellation aircraft will be $700,000
each subject to certain adjustments which are being examined. The ac-
quisition of the 72 Dakotas formed part of the comprehensive settlement
of Lease-Lend and Reciprocal Aid concluded on the 6th December last.
For the purpose of calculation their purchase price was taken as the stand-
ard United States surplus disposal price of $20,000 each.
Mr. Lennox-Boyd (Conservative): Can the hon. Gentleman say whether
these prices are the same or more expensive than the prices being charged
by the United States to China and South America for comparable aircraft?
Mr. Thomas: I should require notice of that question. They are the cata-
logue prices of the aircraft.
Wing-Commander Cooper: Can the hon. Gentleman say, in view of the
great importance of dollar exchange at the present time to this country
for obtaining essential supplies such as foodstuffs, if he can justify this
purchase of aircraft from America?
Mr. Thomas: The question of dollars was very carefully considered be-
fore this decision was taken, and on balance it is thought that this trans-
action is likely to lead to our retention of more dollars than would other-
wise be the case.
[February 6, 1946]


MALAYA (Rubber Prices)
Mr. Janner (Labour) asked the Secretary of State for the Colonies whether
he has now reviewed the circumstances under which only lOd. per pound
is being paid for Malayan rubber bought by the British Government;
whether he is satisfied that this price will enable the Malayan rubber in-
dustry to pay adequate salaries to managerial staff and Asiatic labor as well
as to restore and rehabilitate their industry in the most efficient manner
possible; or whether he will arrange for an increase in the price forthwith.
Mr. Gammans (Conservative) asked the Secretary of State for the Colo-
nies if he is aware of the loss in dollar exchange by paying a lower price for
Malayan rubber as compared with Ceylon rubber; and if his attention has
been called to the dissatisfaction in Malaya at this differentiation in price;
and what action he proposes to take to mitigate this dissatisfaction.
The Secretary of State for the Colonies (Mr. George Hall): The price
paid for Ceylon rubber was fixed during the war having regard to condi-
tions not now relevant. The amount of dollar exchange which can be
obtained from the sale of rubber to America depends on the price which
the American Government are willing to pay and the quantity they will
buy at that price, which are matters not under the control of His Majesty's
Government. I am aware that some dissatisfaction has been expressed re-
garding the price now fixed in Malaya, and the circumstances governing
the price to be paid are kept under review with the adequacy of a return
to those engaged in the industry very much in mind. I have not yet com-






Question Time in the House of Commons
plete information regarding the proper costs of production, but an eco-
nomic adviser recently appointed by His Majesty's Government is expected
shortly in Malaya and we shall expect to receive his advice on this matter
as early as possible. [February 6,1
[February 6, 1946]

DRIED EGGS
The Minister of Food (Sir B. Smith): In view of the number of Ques-
tions on the Paper today about dried egg, I ask your permission, Mr.
Speaker, to make a brief statement on the subject. .
When Lend-Lease terminated we had to consider at once what arrange-
ments we should make to continue supplies of dried egg, the great bulk of
which had been coming to us from the United States under the Lend-Lease
arrangements. It was evident that if the consumer's entitlement was to be
maintained at its existing level we should have to spend in 1946 a very
large sum in dollars on dried egg. In fact for domestic dried egg alone it
would have involved an expenditure of over 100 million dollars or 25
million to provide the same quantity as in 1945. Obviously the allocation
of foreign currencies as between the import of non-food commodities and
the import of food is not a matter in which I alone am concerned.
As it is expected that during the Spring of 1946 there will be a very
much larger supply of shell eggs than in 1945, we deliberately decided that
we should not be justified in bringing in so much dried egg as in 1945.
That is why there will be a gap in the allocation of dried egg. I thought
it right that that gap should fall during the period when supplies of shell
eggs would be at their maximum. Between now and the end of May I am
expecting to be able to allocate not less than 40 shell eggs per ration book
as compared with about 26 in the corresponding period last year. This
will not, I know, fully make -up for the loss of dried egg but it will go
some considerable way in that direction.
When the supply of shell eggs begins to fall off as the season advances
we shall start issuing dried eggs again. This will now be all the more im-
portant, as the deterioration in the feeding stuffs position will reduce the
number of fresh eggs to less than what we had previously expected. At
the moment I am not able to say upon what scale I shall be able to resume
the issue of dried eggs. To take supplies of dried egg away from catering
establishments and manufacturers to whom it is issued in bulk would not
add appreciably to the available supplies of the domestic pack. I under-
stand that an early Debate is being arranged through the usual channels
when I will deal with this matter more fully.
[February 6, 1946]

AMERICAN FILMS (Imports and Royalties)
Mr. Hogg (Conservative) asked the Chancellor of the Exchequer the
monthly value of American films imported into this country during the 12
months of 1945 and January, 1946, respectively.
The Chancellor of the Exchequer (Mr. Dalton): Recorded imports of
161






British Speeches of the Day
exposed cinematograph film (mainly from the U.S.A.) were valued as fol-
lows in each month of 1945. (Figures for January, 1946, are not yet avail-
able.)
January ................................ 9,634
February ............................. 9,418
M arch ................................. 13,190
A pril ................ ................. 12,872
M ay ................. ................. 8,623
June .................................. 11,409
July ..........'.......................... 23,060
August ................................. 9,640
Septem ber ............................. 26,128
O ctober ................................ 12,472
November .............................. 13,416
December .............................. 19,785
It will be noted that the total imports in 1945 amounted to only some
170,000. As I informed the hon. Member for Twickenham (Mr. Keeling)
on 7th February, total remittances of royalties by film companies to the
United States in 1945 amounted to 16,800,000.
Lieut.-Colonel Byers (Liberal) asked the Chancellor of the Exchequer
what are the reasons for the Government decision to continue the expendi-
ture of dollars on films and tobacco while refusing to spend dollars on the
purchase of dried eggs.
Mr. Dalton: I would ask the hon. and gallant Member to await the forth-
coming Debate.
[February 11, 1946]

EX-MINISTERS' AUTHORSHIP EARNINGS
Mr. McKinlay (Labour) asked the Prime Minister if it is the intention
of the Government to introduce legislation giving authority to the State
to claim 50 per cent of all earnings of former Ministers of the Crown de-
rived from the publication of books or newspaper articles based on official
documents collected during their term of office.
The Lord President of the Council (Mr. H. Morrison): No, Sir. Such
earnings are already subject to Income Tax and, in appropriate cases, to
Surtax also.
Mr. McKinlay: Is my right hon. Friend aware that it is grossly offensive
to a great section of the community that documents which are documents
of State should be converted into biographies and used in newspaper arti-
cles for personal gain by former Ministers? Is it not a fact, in view of what
has taken place recently, that it is quite obvious they are being sold to
the highest bidder, whether they are publishers in this country or not?
Mr. Speaker: There is an imputation there against an hon. Member,
which I think the hon. Member should withdraw.
Hon. Members: Withdraw.






Question Time in the House of Commons
Mr. McKinlay: I want to give hon. Members an opportunity to recover.
If there is anything I have said that conveys the impression which appar-
ently it has conveyed, I unreservedly withdraw, but I should like to ask
my right hon. Friend whether it is not the height of vulgarity that these
things should be bandied about in the Press for gain?
Mr. Morrison: Of course, I am not quite sure what is being referred to
though I could have a good and intelligent guess, but if it is the publica-
tion of certain speeches of the right hon. Member for Woodford (Mr.
Churchill), they were not State documents.
Mr. McKinlay: On a point of Order. I think I have tried to make the
point clear. I was not referring to any particular person. I submit through
you, Mr. Speaker, that I am raising a question of vital principle affecting
State documents in this country.
Mr. Morrison: The hon. Gentleman will see that is the difficulty we get
into. If there is a particular document or a particular person concerned,
and if my hon. Friend will put a Question down, I will do my best to
answer it but, unless there is, we are arguing in the dark as to whether a
document is a State document or not.
[February 14, 1946]

EMPIRE FOOD SUPPLIES
Mr. Driberg (Labour) asked the Prime Minister what steps are being
taken by the India Office, Burma Office, Colonial Office and other Depart-
ments concerned, to prevent famine among the many millions of citizens
of the British Commonwealth and Empire in the East whose staple diet is
rice, whose food supplies have already been diminished seriously, and
whose welfare is the concern of this House; and what substitute foods are
to be provided for them instead of their normal diet.
The Lord President of the Council (Mr. H. Morrison): Along with
other responsible authorities in the East, His Majesty's Government are
taking all possible steps to overcome the difficulties arising from the world
shortage of rice. So far as practicable- within the rice-growing areas, efforts
are being made to increase production and improve methods of collection.
For example, teams of experts have been sent to Burma, Siam, Egypt and
Brazil, and for Burma and Siam special supplies of consumption goods are
being organized. But where crops have failed owing to prolonged drought,
as in parts of India, little can be done along these lines, and elsewhere im-
mediate results cannot be expected. In the areas where the staple diet is
rice, local food production is being stimulated, and rationing and other
arrangements extended to ensure effective distribution of available supplies.
As regards Europe, the Combined Food Board has agreed at the in-
stance of His Majesty's Government that, except in special cases, no rice
shall be provided during 1946.
Despite these and other measures, the rice available is certain to be far
'below needs. On behalf' of the London Food Council, representations






British Speeches of the Day
have been made to the Combined Food Board as to the need for additional
supplies for the East. Up to the present, allocations have been made only
for the first quarter of 1946 and further decisions await more precise in-
formation as to the quantities of rice available. Since supplies of rice are
woefully inadequate, some additional wheat has been secured to help to
make up the deficiency and efforts are being made to obtain further sup-
plies of cereals. In view of the present wheat situation, however, the quan-
tities available are bound to be insufficient to meet needs.
Major Wyatt (Labour): Can my right hon. Friend say what active steps
are being taken to procure rice for India from Siam, where there is re-
ported to be a surplus, and what the results of those efforts have been?
Mr. Morrison: All possible steps are being taken to get rice from Siam
and one of the purposes of this team of experts is to follow that matter up.
We are very conscious of the needs of India and I can assure the hon. and
gallant Gentleman we are doing our best to meet the position.
[February 14, 1946]

ADMISSION OF DISTRESSED PERSONS TO GREAT BRITAIN
Mr. Piratin (Communist) asked the Secretary of State for the Home De-
partment the number of applications for permits to enter the United King-
dom made under each of the categories announced in November last, re-
ceived by the appropriate office in Germany or Austria, up to 13th Febru-
ary, 1946; the number of permits granted under each category; the number
of persons who have arrived in the United Kingdom under each category
up to 13th February; the number of applications refused; and the average
time taken between the receipt of the original application and arrival in
the United Kingdom.
The Secretary of State for the Home Department (Mr. Ede): As re-
gards persons in Germany and Austria, I would refer to the reply given on
14th February to my hon. and gallant Friend the Member for Colchester
(Captain C. Smith). I am not in a position to give information as to the
number of applications made to passport control officers on the Continent.
The numbers of aliens admitted to the United Kingdom up to 13th Febru-
ary who have been identified as having visas granted under the scheme
which I announced on 13th November is 250. Classification according to
the different categories has not yet been completed.
Mr. Piratin: Is the Minister aware that there is a further section to the
Question which I asked, namely, the number of applications which have
been refused? Can he give that information, if not now, at a later con-
venient date?
Mr. Ede: These applications are made to the officers who grant the visas
on the Continent. I am exceedingly anxious not to impede their work by
asking for a number of statistical returns. I will see if, without doing that,
I can get some information which will be helpful to my hon. Friend.
[February 28, 1946]




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