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£120 million). This is the precedent of the Treaty of Versailles and of the peace treaties with the satellite States after this war. We owe special consideration to many of the debtors: nearly all arise from pre-1933 contracts and a large part arise from obligations entered into because of the direct encouragement of the Government of the day.

5. I favour making these assets available to the pre-war creditors. The cost to the Exchequer will be less than the sums paid out, since much will come back as tax. I should propose to lay down only the broad lines of the scheme in the Bill; the details would be filled in by Order in Council after consultation between a representative Advisory Committee and the Administrator appointed by the Board of Trade, with whom the final responsibility would lie. The cost of the operation should be met from the assets.

6. The matter is now of considerable urgency and I still hope that it can be taken this Session. The question was first raised in the House in January last; I have been pressed for a statement; and on 18th October, in answer to a question, I promised one soon. I shall be embarrassed if I have to temporise any further on this matter, which has been outstanding for so long, and I am anxious to get it settled during the life of the present Parliament. If I cannot take this oppor- tunity I shall have to give up all chance of carrying it through, unless I am to overburden the Foreign Secretary's Bill, which is quite long enough for a session of uncertain length. I am therefore asking the Legislation Committee to agree that a place should be reserved in this Session's programme for a Bill on the German assets and claims alone.

7. Subject to this proving possible and to the Foreign Secretary's agreeing to be responsible for a separate Bill to dispose of the Yugoslav and Czechoslovak compensation and the Russian and Baltic assets, I ask-

(a) that my proposals for the disposal of the pre-war German assets, as set

out in paragraphs 4-6 above, should be approved; and

(b) that I should be authorised to introduce a Bill as soon as possible in this

Session to cover this subject alone.

Treasury Chambers, S. W. 1,

21st October, 1949.

R. S. C.

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