8.99
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[Mr. Stanley.]
country profitable. I should hesitate to do so, because within the next few weeks I hope to pass through this House a Bill dealing with share-pushing, and I might feel some reluctance in recommending certain of its Clauses. But I think it is a pity to let the idea get about that rearmament is a way to prosperity. I do not believe it. I believe that re- armament does not call for rejoicing. It calls for sacrifice, and when I see some probability of armament expenditure being relaxed, as the Prime Minister hopes may sometime result from his efforts, I shall not look upon that as the closing of the road to a prosperous future. I shall look upon it as a relief from a sacrifice which is becoming almost in- tolerable. If we are to look upon it in a light-hearted way as a new method of attaining prosperity, I am afraid we shall overlook a consideration which I believe all of us however strongly we hold views as to rearmament, should bear always in mind and that is that the financial and commercial strength of this country is one of our greatest assets in war.
In the whole course of our history, when we have been fighting European Powers, I cannot recollect a time when we have ever won a short war, but I can hardly recollect a time in history when we have ever lost a long one. That is because the deployment of these great financial and commercial resources has enabled us to outlast our enemies and to get the decisive position at the end of a
Therefore, long war.
we must put finance and commerce among our military assets when we are discussing the question of future rearmament.
Mr. Boothby: In order that I may not be misinterpreted may I say that I would very much prefer to see an expansion of public works of a useful character, rather than an expansion of works of a destruc- tive character, if I had my choice?
Mr. Stanley: Even so, the hon. Gentle- man still maintained that this expendi- ture on armaments per se was a way to the rehabilitation of the economy of this country and that, I am afraid, is a doctrine with which I do not agree. There is one other point with which I wish to deal and that is the point raised by the hon. Member for South Shields (Mr. Ede). He was dealing with the question
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of evacuation and in particular the arrangements for the billeting of civilians, and he read out an article from a paper the name of which I forget-
Mr. Ede: The
Ci
Eastbourne Herald."
Mr. Stanley: That is an article, the tone of which I, myself, find distasteful in the extreme, and I do not believe that it represents the feelings of a traction of the people of this country. I was in my constituency last week-end and had some talk about the arrangements in my area. It is an area to which civilians from the North of England are to be evacuated. I had some talk with those responsible for the arrangements, and certainly that was not the kind of spirit which was repre- sented to me as being the spirit in which these arrangements were being received. It is, of course, a difficult problem. It needs great common sense and tact. But I believe that if a crisis were to come, it is a burden which the people generally of this country would realise to be essential, and that they would shoulder it willingly as part of the common effort to get over the crisis successfully. I think the hon. Member has done a service by allowing hon. Gentlemen in all parts of the House to express their disapproval of the sort of spirit contained in that article.
I pass now to some of the remarks which were made with regard to trade and the effect of Munich upon trade conditions in this country. The effect seems to me to fall into two parts. There is first of all the actual effect of the cession of the particular territory on trade between Czechoslovakia and ourselves and on trade between ourselves and the districts which will now be transferred to Germany. It is clearly very difficult so soon after the event to get anything more than a rough estimate of what the effect of this change-over will be. There are many things that we do not know yet. We do not know what are likely to be the Cus- toms arrangements between Germany and the new Czechoslovakia, and between Poland and the new Czechoslovakia. As there has been no census of production it is difficult to get any exact estimate of what was the production in the Sudeten areas as compared with the total produc- tion of Czechoslovakia. But I must say, with all allowance for the difficulties of making any definite estimate, I do not believe that the Munich Agreement and
177
International Situation I NOVEMBER 1938 the cession of the territory are going to have any great effect upon trade.
Last year our exports to Czechoslovakia were about £2,500,000 while our imports were over £7,000,000. In so far as the goods imported from Czechoslovakia came from the Sudeten area and will now come from Germany instead of from Czechoslovakia, that is all catered for in the Anglo-German Payments Agreement, and those imports into this country will have to be paid for by Germany by an express ratio of our exports to them which is considerably higher than the ratio of about two to seven which was the ratio of our trade with the old Czechoslovakia. On the other hand, of course it may well be that, in so far as our exports went to the part of Czechoslovakia which remains in the new State, the greater economic difficulties will leave them with less to be exchanged, and that we may to some ex- tent lose part of our exports there. On the whole the probability is that we shall gain by the amount of the imports to this country which are transferred to the Sudeten area and we shall lose to some extent on that part which remains within the boundary of the new Czechoslovakia.
With regard to coal, one of the most important items, it is difficult to assess the direct effect. The greater part of the Czechoslovakian coal-I am not sure I should not be right in saying all of it— has been used either internally or in supplying the markets directly alongside -Austria, Hungary and the co-terminous States. Those are markets which we do not reach with our coal owing to their geographical situation, and it is not likely to have very much effect on our coal trade because it seems to me that the probability is that it will still go to the same markets that it was going to before.
Mr. Shinwell: The right hon. Gentle- man has missed my point. The point that I was making was not the effect of the Munich Agreement on Czech-United Kingdom trade. I agree that trade generally in Central and South-Eastern Europe with Great Britain was compara- tively small, but if Germany is now in a position, because of the acquisition of new territory, to liberate exports, will they not percolate into our existing mar- kets outside Central and South-Eastern Europe and injuriously affect our trade?
Mr. Stanley: I was going to deal with that, but there are really three points.
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There is the direct effect on our trade, there is the penetration in South-East Europe, and there is the third and major problem of the general relationship be-
tween our trade and the trade of the totalitarian States. Let me pass to the question of penetration in South-Eastern Europe. I agree with the Prime Minister when he says he does not think we need look for sinister and ulterior motives in the recent visits of Herr Funk to the capitals of South-East Europe, but I think it right, when considering this problem of German penetration of South- East Europe, to make up our minds definitely what it is that is complained of and what it is that you want. I do not think that we are entitled to, and I do not think we do, object that Germany should be the chief trader in those areas. They are her natural markets and she has the advantage in many cases of lan- guage similarity. I do not think anybody either could or wants to enter into an economic war to prevent her natural de- velopment in those areas. Indeed, a policy of that kind would be extravagant, impracticable, and, I think, unjustified; it would be a real dog-in-the-manger policy.
But there is another thing. It is different to say that Germany is entitled to the major share in those markets and to say that she is to have exclusive con- trol of them. I see no reason why we should be completely disinterested in the potential trade of an area of this kind, and I believe it is quite possible that even while Germany increases her trade in those areas, we should maintain and in- crease our trade as well. If you com- pare the figures for the Danubian coun- tries in 1936-37, you will find that although Germany, according to her own figures, largely increased her exports, so at the same time did we. We intend to give every assistance to the industries of this country to maintain, as the hon. Gentleman suggests, a footing in those countries and to take advantage of what, after all, in the long run must react to the credit of this country.
It may be that we cannot purchase goods from those countries either to the quantity or at the price the Germans can. Many of these goods are competitive with goods which come to us from our own Empire. Also the Germans, through their particular methods, to which the hon. Gentleman referred, are enabled to