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Arrangement with Russia Necessary.

Genoa Conference. – in the House of Commons on 25th May 1922.

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The British Empire Delegation met together to consult upon the whole of these facts, and I must say one word about that. You had the representatives of Canada, Australia, Africa, New 'Zealand, and India. They came into our consultations. There was not a step of any kind taken without previous consultation. The action we took had their unanimous support, and was arrived at after the guidance which they gave us. They came to the same conclusion as we did—that it was necessary, in the interests of the peace of the world, whatever we thought about the Soviet Government—and let me say at once we had no difference of opinion about that. But it is not my business to tell the House of Commons what was that view. It is the Government of another country. Had it been the Government of this country, I know what would have been said. But they came to the same conclusion as we did—that, in the interest of the peace of the world, some arrangement with Russia was necessary in order to save the misery in Russia itself, necessary in order to enable Russia to make her contribution to the needs of the world, necessary to enable Russia to help in the swelling of that volume of trade upon which so many millions of people depend for their daily bread, necessary in order to give a sense of stability, necessary, above all, in order to avert those evils which lurk in die future if nothing be done to unravel this tangle of misunderstanding. For that reason the British Empire Delegation—all of us—gave the whole of our strength and our minds, day after day, to fight the battle of the peace of the world.

Now I come to the practical difficulty we experienced in dealing with the Russian problem. Russia needed goods and customers for her produce in the future. We needed produce and customers for the goods that Russia needed for her development. It seemed very simple. There was her need, here was our supply. [Interruption.] I do not think I am Concealing a single fact, whichever way it goes, in the House of Commons. Therefore it seemed perfectly simple. There was a seller, and here was a buyer. And yet, when you came to deal with it, you found a chasm, deep, wide, impassable, between the man who needed this and the man who could supply it, and the man on the other hand who needed this and the man on the other side who could supply it—a chasm rent by the revolution between the old and the new. The first question was, "Could that chasm be filled up?' We said, "No, for a generation." The next question is, "Can it be bridged? "That was our problem, and a great engineering problem, because you had to find foundations for the piers of your bridge in a shallow and shifting channel of mud and quicksands. Without that bridge, there is no intercourse between those 120,000,000 of brave, gallant, hardworking people, who are in misery, and Europe, which needs them, and is ready to help them.

How did this difficulty arise, or, rather, what concrete form did it take? Revolutions on a great scale always carry in their train confiscation of property, and, I am sorry to say, confiscation without compensation. It was our experience in England. We had a religious revolution, which was a source of so many calamities. There was the French Revolution, which was accompanied by a wholesale confiscation of the land of France, without compensation. In fact the conservatism of France to-day is rooted in confiscation. [HON. MEMBERS: "And of this country."] I want to state the whole problem. In addition to that, there is another feature of revolution, and that is the repudiation of pre-revolutionary obligations. That was the position, but there is this difference: France created a system of peasant proprietorship without compensation, but she was not seeking credits from the world. Russia, with her repudiation, Russia with her confiscation, is coming to the very people whose claims she refuses to pay, and whose property she has confiscated, and she says: "Lend me more" They are practically asking for credits from these same people, and they can only get it on the conditions which have been laid down—the restoration of the confidence upon which credit is based. The Russian leaders quite realise this. Whatever they may be, they are men of exceptional ability, and they are men with a knowledge of the outside world. However much they communicate that knowledge to their followers, they certainly know it for themselves. In spite of what some people have said, they know that they are not going to get credit in the West upon the basis of confiscation and repudiation of debt. They also know that Russia can never be restored until she gets credit. That is the position they took.

We had at the beginning of the Conference a close examination of the problem, in a two-days' conversation. Representatives of France, Belgium, Italy, with my right hon. Friend the Secretary of State for War and myself, had frank and very searching conversations with the leaders of Soviet Russia. I will state to the House the position which they took up, and the proposals which were put before them in those conversations. They said: "The revolution is a break with the past, a break with the methods of the past, with the traditions of the past, with the obligations of the past. But we quite realise that Russia cannot be restored economically without the help of systems which are different from our own, and systems with which we are at war "—as they put it, "the capitalistic system. "They said: "We also know that we cannot get the help of the capitalistic system except upon conditions, and, although we do not abandon any of our principles, we realise that we cannot get the assistance required unless we make terms with the capitalists."

That, roughly, is the, position they took up. With regard to debts, with regard to money which had been advanced to Russia before the Revolution, they were prepared to acknowledge those debts. I will come to the question of property, which presented the greatest difficulty of all, later on. They were prepared to make arrangements for repayment. What they said was this: "To ask us now to pay "—I forget what the amount is, but it is a very considerable sum—" or even to pay the interest upon it, is to ask us for something that it would be quite impossible either for us or for anybody to pay. We should be entering into an obligation which we could not discharge, and until Russia is restored economically we can pay nothing. "That is quite true. Therefore they said: "The obligations which we enter into will depend upon the assistance which you give us."

This country has been in the habit of dealing in the past with defaulting States, but it has always been a condition, whenever a defaulting State comes for further credits, that they should acknowledge their old debts. There has always been a wiping out of past interest, a postponement of interest in the future, and sometimes a writing down of the capital amount as a condition of further assistance. That was the proposition they made there. They said: "Before we can tell you what moratorium we should require, and how we can repay, we must know first of all what you are prepared to do, in order to put Russia on a sound economic basis by helping her with credits. "There was a basis for a business discussion. There was no challenge of principle at all. It was purely a business discussion.