(c) crown copyright
Catalogue Reference:CAB/23/9
Image Reference:0021
uolonei Jones',
[This Document is the Property of His Britannic Majesty's Government.]
Printed
for the Wor Cabinet.
March
15)19.
SECRET.
WAR
Minutes
of a Meeting
of the War
House of Commons,
CABINET,
Cabinet
534.
held in the Leader
on Wednesday,
February
of the Housed
Room,
1 9 , 1 9 1 9 , at 5 "30 P.M.
Present :
T H E P R I M E MINISTER (in the
T h e R i g h t Hon. A . CHAMBERLAIN, M.P.
Chair).
The R i g h t Hon.
G.C.B., M.P.
S I R E . GEDOES, G . B . E . ,
T h e following w e r e a l s o p r e s e n t :
T h e R i g h t Hon. W . LONG, M . P . , F i r s t
L o r d of the A d m i r a l t y .
The
Right
T h e R i g h t Hon. W . S. CHURCHILL, M . P . ,
S e c r e t a r y of S t a t e for W a r (for M i n u t e s
2 and 3).
Hon. E . S . MONTAGU, M . P . ,
S e c r e t a r y of S t a t e for I n d i a .
M a j o r - G e n e r a l J . E. B . SEELY, C . B . , C . M . G . ,
D.S.O., M . P . , U n d e r - S e c r e t a r y of S t a t e
T h e R i g h t Hon. E . SHORTT, K . C . . M . P . , j
for
t h e A i r F o r c e (for M i n u t e s 1 a n d 2 ) .
S e c r e t a r y of S t a t e for Home Affairs.
The Right
President
Board.
Hon. C. ADDISON, M . D . , M . P . , T h e
of
the
Local
Right Hon. R. MUNRO, K . C . , M . P . ,
S e c r e t a r y e i "Stale"for S c o t l a n d .
Government j
T h e R i g h t Hon. J . I. MACPHERSON, M . P . ,
T h e R i g h t Hon. S I R A . C. GEDDES, K . C . B . , i
Chief S e c r e t a r y for I r e l a n d .
M . P . , M i n i s t e r of R e c o n s t r u c t i o n a n d j
N a t i o n a l Service.
T h e R i g h t Hon. LORD ERNLE, M.V.O.,
P r e s i d e n t of the B o a r d of A g r i c u l t u r e
T h e R i g h t Hon. S I R A . MOND, B a r t . , M . P . ,
a
nd Fisheries.
F i r s t C o m m i s s i o n e r of W o r k s .
S I R H . LLEWELLYN SMITH, K . C . B . , B o a r d
of T r a d e (for M i n u t e 2 ) .
Mr. JOHN ANDERSON, C . B . , S e c r e t a r y , ,
M i n i s t r y of S h i p p i n g (for M i n u t e 2 ) .
Mr. THOMAS JONES, Acting
Secretary.
L i e u t e n a n t - C o l o n e l L. STORK, C . B . , Assistant
Mr. PEMBROKE W I C K S , Assistant
C a p t a i n L. F . BURGIS, Assistant
[826]-193
Secretary.
Secretary.
Secretary.
B
72
Payment for Goods
supplied to
Germany.
1. The W a r Cabinet had under consideration a memorandum
h e Chancellor of t h e Exchequer (Paper G . T . - 6 8 2 9 ) , in which
t t e d t h a t a divergence of aims had appeared among the
British delegates in Paris in regard to payment for food supplied t o
Germany.
The approval of the W a r Cabinet was requested for a draft
telegram to Mr. Balfour (Appendix), pointing o u t the divergence of
views of Mr. Hughes, as expressed a t t h e Inter-Allied Commission
on Reparation and the views of Mr. Bonar Law, as expressed a t the
Supreme W a r Council (Paper I . C . - 1 0 5 , Minute 5), in regard to the
relative priority of claims for reparation for acts of damage and
claims for indemnity.
The Prime Minister said t h a t he was informed t h a t the French
Government were restricting their claims to claims for w a r damage,
and would not press for indemnity, inasmuch as their bill for direct
w a r damage could be made up to 4 , 0 0 0 , 0 0 0 , 0 0 0 Z . , or a n y figure they
cared to name, and it would be v e r y difficult to dispute the claim.
The Belgians were taking t h e same line. The British claims for
reparation, apart from indemnity, were exceedingly small. If the
claims for reparation were given an absolute priority, they would
probably absorb the whole of the amount it was possible to obtain
Mr. Hughes had unfortunately admitted in the
from Germany.
Commission t h a t claims for reparation would come first. The
important thing was to secure payment before Germany again
became powerful. It was the first payments which mattered. No
one would go to war to recover an indemnity, and it was possible,
and indeed likely, that if Germany became powerful again, the time
would come when, in order to recover an indemnity, our only remedy
would be to declare war or to go without. He had sent a note to
Mr. Hughes, urging t h a t reparation must include indemnity, and
had added that, in his judgment, reparation should not come first ;
if it did, Great Britain would recover nothing at all.
Mr. Chamberlain said t h a t he had heard t h a t the Americans
were sending surveyors into the damaged districts in France to
appraise the damage for themselves. If the Government stood by
Mr. Bonar Law's declaration, the British claims will be paid in full.
Reparation might be 1 0 s . or 2 0 s . in the pound, according to the
character of the claims, but in a n y case the British claims for repara­
tion for direct damage were v e r y small. Lord Sumner bad written
to him t h a t the British claims had been made out on a theoretical
basis of so much per ton for t h e hull, and so much per ton for the
cargo. Lord Sumner thought t h a t claims of that kind were untenable,
and he wanted claims made out for each ship in each case. He had
communicated with the Board of Trade, and t h e y were preparing a
statement in accordance with Lord Sumner's view.
The Prime Minister pointed out that the British were standing
alone in this m a t t e r ; the Italians had no interest, as there was no
Austria left and no chance of getting indemnity ; while the French
had based their claims solely on reparation.
Mr. Long agreed that, if t h e French were allowed to have priority
for their claims in the w a y suggested, we should be left in the lurch.
He thought t h a t Mr. Hughes had only made the admission he had
with a desire to moderate the case which he had put too strongly.
Mr. Montagu suggested t h a t it was necessary t o provide a formula
t h a t would secure the division of t h e money equally, according to
war effort.
Mr. Churchill drew attention to the great importance of the
British indebtedness to the United States, 8,000,000£. ; the sale
of British securities in the United States, 1,200,000,0001. ; and
export of bullion to the United States 400,0OO,00OL A f t e r the
absolute destruction of property in France and Belgium he con­
sidered this claim should be the next, involving, as it did, a complete
alteration of our financial position in relation to America. W e had
been harder hit than any other country, in that we had paid these
f
r o m
t
w
g
a
s
a
enormous s u m s for other people. H e desired to m a k e t h e G e r m a n s
responsible for t h e d i s c h a r g e o f our overseas debt, a n d he h a d
t h o u g h t t h a t t h e U n i t e d S t a t e s s h o u l d be confronted w i t h t h a t point
of v i e w .
The W a r C a b i n e t d e c i d e d —
To confirm t h e view s t a t e d b y M r . B o n a r L a w a t the S u p r e m e
W a r Council ( P a p e r I . C . - 1 0 5 ) ,
and requested —
The A c t i n g S e c r e t a r y to i n v i t e Lord S u m n e r , L o r d Cunliffe, a n d
Mr. H u g h e s to r e t u r n to London i m m e d i a t e l y t o discuss
the matter.*
Ministry of W a y s
and Comniuni­
cations.
Merchant Shipping:
Clause 2 (1) (g).
2. T h e W a r C a b i n e t considered t h e draft Bill for t h e M i n i s t r y
of W a y s and C o m m u n i c a t i o n s ( P a p e r G . T . - 6 S 1 2 ) , t o g e t h e r w i t h
m e m o r a n d a thereon b y t h e P r e s i d e n t of t h e Board of T r a d e , t h e
A i r M i n i s t r y , a n d t h e Chancellor of t h e E x c h e q u e r ( P a p e r s G . T . ­
6 8 0 1 , 6 8 0 9 , and 6832).
S i r H u b e r t L l e w e l l y n S m i t h s t a t e d t h a t t h e Board of T r a d e
took exception to clause 2 ( l ) (g), which provided for t h e transfer
to t h e n e w M i n i s t r y of t h e powers a n d d u t i e s of t h e B o a r d of
T r a d e in relation to m e r c h a n t shipping, including pilotage.
S i r E r i c G e d d e s said he a s s u m e d t h a t the M i n i s t e r of W a y s
a n d C o m m u n i c a t i o n s should lie responsible for t h e c o n v e y a n c e of
goods in t h e k i n g d o m a n d into t h e kingdom. H e s t a t e d t h a t
S i r A l b e r t S t a n l e y , on the other hand, considered it w a s w r o n g to
put into one D e p a r t m e n t competing services of this description.
S i r A l b e r t S t a n l e y a g r e e d t h a t , if t h e r e w a s to be a M i n i s t r y of
W a y s a n d Communications, t h e n e w M i n i s t r y should h a v e control
over m e r c h a n t snipping, b u t w a s of opinion t h a t the new D e p a r t ­
ment should be a M i n i s t r y of K a i l w a v s a n d not a M i n i s t r y of W a v s
a n d Communications, in which case it would be logical to e x c l u d e
shipping altogether.
S i r H u b e r t L l e w e l l y n S m i t h said t h a t he t h o u g h t S i r A l b e r t
S t a n l e v w o u l d s u g g e s t t h a t the new M i n i s t r y should be responsible
for all forms of transport over which t h e S t a t e for t h e time being
a s s u m e d control. A D e p a r t m e n t which w a s a d m i n i s t r a t i v e l y a n d
financially
responsible for one form of transport service w o u l d not
be r e g a r d e d as an i m p a r t i a l r e g u l a t o r of a competing p r i v a t e service.
The inclusion of m e r c h a n t s h i p p i n g u u d e r clause 2 ( 1 ) (g) w a s a n
excrescence on t h e Bill : in all other respects t h e B i l l d e a l t w i t h
i n l a n d t r a n s p o r t . I t m i g h t be n e c e s s a r y a t some time or a n o t h e r to
go to P a r l i a m e n t a n d s e e k - c o n t r o l over s h i p p i n g . A t present no
real p o w e r s would be o b t a i n e d u n d e r t h e Bill in respect of
n a t i o n a l i s a t i o n of s h i p p i n g , b u t suspicion would be aroused a n d t h e
s h i p p i n g i n t e r e s t would be a l a r m e d . Tbe s h i p p i n g i n t e r e s t w a s
v e r y powerful, a n d t h e r e w a s no doubt it would a d d g r e a t l y t o
the difficulties of g e t t i n g t h e B i l l t h r o u g h if t h i s clause w e r e
retained.
S i r E r i c G e d d e s s a i d t h e r e w a s no provision for t a k i n g over
a n y t h i n g b u t t h e e x i s t i n g powers of t h e Board of T r a d e . T h e
s h i p p i n g i n t e r e s t h a d no reason for t a k i n g exception t o t h a t .
He
a t t a c h e d g r e a t i m p o r t a n c e to t h i s clause.
T h e F i r s t L o r d of t h e A d m i r a l t y a g r e e d t h a t t h e chances of t h e
B i l l w o u l d be g r e a t l y imperilled b y t h e inclusion of t h e clause.
T h e r e w a s no v e s t e d i n t e r e s t in t h e H o u s e of Commons so powerful
H e w a s informed t h a t t h e s h i p p i n g
as t h e shipping interest.
i n d u s t r y h a d a s t u p e n d o u s t a s k before t h e m in r e s t o r i n g o v e r s e a s
t r a d e , a n d w e r e v e r y suspicious of a n y G o v e r n m e n t action b e i n g
On t h e other h a n d , t h e y w e r e in close
proposed i n P a r l i a m e n t .
* At a later stage the Prime Minister decided that he himself would go to Paris,
and that therefore Lord Sumner, Lord. Ounliffe, and Mr. Hughes need not be invited
to return to London. 'fbis decision again was subsequently rescinded, and Mr.
Hughes, Lord Sumner, and Lord Cunliffe attended a Meeting of the War Cabinet,
held on the 25th February, 1919.
touch with the Board of T r a d e , a n d w o u l d not welcome a s s o c i a t i o n
w i t h a n e w D e p a r t m e n t of whose i n t e n t i o n s t h e y k n e w n o t h i n g .
Mr. John Anderson said t h a t Sir Joseph Maclay, who was unable
to be p r e s e n t o w i n g to illness, w a s of opinion t h a t the f u n c t i o n s of
t h e G o v e r n m e n t in relation to s h i p p i n g s h o u l d remain w i t h B o a r d of
T r a d e , in w h i c h w a s v e s t e d t h e d u t y of s a f e - g u a r d i n g t h e t r a d e of
the country. H e would deprecate very strongly a n y attempt to t a k e
t h e s e functions from t h e B o a r d of T r a d e a n d g i v e t h e m to a n e w
D e p a r t m e n t m a i n l y concerned w i t h l a n d t r a n s p o r t . A n y a t t e m p t to
do so would a r o u s e t h e v e r y s t r o n g e s t p r o t e s t a n d c r e a t e a p p r e ­
hension in t h e m i n d s of t h e shipping c o m m u n i t y .
S i r E r i c G e d d e s s t a t e d t h a t if t h e M i n i s t r y of S h i p p i n g w e r e to
continue as such, h e a g r e e d t h a t t h e r e w a s no case to be m a d e out
for t h e proposals contained in t h e B i l l .
Sir H u b e r t Llewellyn Smith pointed out that there w a s a
proposal in t h e B i l l to g i v e e x p r e s s p o w e r to t a k e over t h e c o a s t i n g
t r a d e by a g r e e m e n t .
T r a d e r s would object to t h a t , a s s o m e t h i n g
b e t w e e n one-third a n d one-half of t h e r a i l w a y r a t e s w e r e more or less
affected by the coasting t r a d e , a n d i n t h a t w a y t h e c o a s t i n g t r a d e
w a s a g r e a t r e g u l a t o r of r a t e s .
The W a r C a b i n e t d e c i d e d t h a t —
C l a u s e 2 ( l ) (g) should be e x c l u d e d .
Harbours, Docks,
and Piers :
Clause 2 (1) (/).
3. Some discussion w a s raised w i t h r e g a r d to t h e proposed
transfer of h a r b o u r s , docks, a n d p i e r s , u n d e r clause 2 ( 1 ) (/), a n d i t
w a s pointed out t h a t difficulty m i g h t be e x p e r i e n c e d in t h e H o u s e of
Commons from t h e l e a d i n g dock a u t h o r i t i e s , especially those of
Liverpool, London, a n d Glasgow.
S i r E r i c G e d d e s said t h a t if power to control docks w e r e
r e m o v e d from t h e B i l l it w o u l d e m a s c u l a t e t h e Bill. T h e control of
ports influenced the whole s y s t e m of t r a n s p o r t , a n d lie r e g a r d e d it
a s a vital m a t t e r to be able to r e g u l a t e traffic in t h e ports.
The W a r C a b i n e t d e c i d e d t h a t —
C l a u s e 2 ( 1 ) (/) should s t a n d .
Supply of
Electricity:
Clause 2 (1) (A).
4. S i r H u b e r t L l e w e l l y n S m i t h drew a t t e n t i o n to t h e v i e w s
e x p r e s s e d b y t h e P r e s i d e n t of t h e B o a r d of T r a d e in his m e m o r a n d u m
( P a p e r G . T . - 6 8 0 1 ) , a n d r e m a r k e d t h a t t h e s u p p l y of e l e c t r i c a l
p o w e r w a s o v e r w h e l m i n g l y an i n d u s t r i a l problem, t h a t t h e n e t
electrical d e m a n d for r a i l w a y s w o u l d p r o b a b l y not be more t h a n
1 0 per cent, of t h e i n d u s t r i a l d e m a n d .
S i r E r i c G e d d e s observed t h a t , w i t h t h e best e s t i m a t e i t w a s
possible to m a k e of t h e d e v e l o p m e n t of power for h e a v y t r a c t i o n , t h e
a m o u n t of power r e q u i r e d for t r a c t i o n w o u l d c e r t a i n l y be more t h a n
20 p e r cent, for r a i l w a y s alone. L i g h t i n g w a s o n l y 4 per cent., a n d
a l a r g e portion of t h e r e m a i n d e r consisted of t r a m w a y t r a c t i o n .
S i r H u b e r t L l e w e l l y n S m i t h s a i d t h e B o a r d of T r a d e w e r e of
opinion t h a t the provision of electrical power s h o u l d be in t h e h a n d s
of e l e c t r i c i t y commissioners responsible to a D e p a r t m e n t t h a t w a s con­
cernecl with t h e g e n e r a l i n t e r e s t s of electrical u s e r s a s a wdiole, r a t h e r
t h a n in the h a n d s of a l a r g e consumer, such a s t h e Minister-of W a y s
and Communications.
Consumers would never believe that t h e
p o w e r s of t h e M i n i s t r y w e r e e x e r c i s e d i m p a r t i a l l y . The B i l l took no
p o w e r s in r e g a r d to e l e c t r i c i t y , it o n l y t r a n s f e r r e d wdratever p o w e r s
e x i s t e d i n r e g a r d to e l e c t r i c i t y , a n d a new B i l l w o u l d be r e q u i r e d
to e n a b l e it to s u p p l y e l e c t r i c i t y . T h e B o a r d of T r a d e h a d a n e w
B i l l in draft, w h i c h o u g h t to be pressed forward in t h e H o u s e of
C o m m o n s a t t h e e a r l i e s t possible moment. T h e r e w a s n o t h i n g in
- t h e new B i l l to p r e v e n t t h e new r a i l w a y a u t h o r i t y d e v e l o p i n g i t s
own electric power s u p p l y in t h e most economical w a y . I f t h e
B o a r d of T r a d e B i l l w e r e held over t i l l t h e n e w M i n i s t r y of W a y s
and C o m m u n i c a t i o n s w a s established, t h e Session w o u l d p r o b a b l y be
lost a n d t h e Bill would h a v e to be postponed u n t i l n e x t y e a r , w h i c h
would be d i s a s t r o u s . T h e B o a r d of T r a d e w e r e also afraid t h a t t h e
m u n i c i p a l i n s t i t u t i o n s w e r e s t r o n g enough to w r e c k a n y proposal to
p u t e l e c t r i c i t y u n d e r the D e p a r t m e n t w h i c h r e p r e s e n t e d t h e r a i l w a y s .
The m u n i c i p a l a u t h o r i t i e s w e r e a l r e a d y m o v i n g in t h e m a t t e r . I f a
t r a n s f e r w e r e desired in t h e f u t u r e it could e a s i l y be done b y a s h o r t
Bill. T h e A r c h i b a l d W i l l i a m s o n C o m m i t t e e , r e p r e s e n t i n g all t h e
i n t e r e s t s , had come to an a g r e e m e n t w h i c h , w i t h v e r y s l i g h t
modifications, w a s embodied in t h e B o a r d of I r a d e Bill.
If the
municipal, a u t h o r i t i e s took a l a r m , t h e a g r e e m e n t so a r r i v e d at. w o u l d
be t h e r e b y dissolved, and t h e position would r e v e r t to t h e state, of
chaos a n d confusion w h i c h had h i t h e r t o e x i s t e d .
T h e S e c r e t a r y of S t a t e for W a r r e m a r k e d t h a t t h e M i n i s t r y of
M u n i t i o n s in three y e a r s bad m u l t i p l i e d enormously t h e e l e c t r i c a l
power s u p p l y of t h e country as compared with t h i r t y y e a r s u n d e r
t h e Board of T r a d e .
No doubt t h e y had wider and a l t o g e t h e r
different powers, b u t on t h e m e r i t s he would h a v e t h o u g h t t h a t it
would be b e t t e r to place e l e c t r i c i t y u n d e r the- n e w a u t h o r i t y proposed
by t h e Bill. H e s u g g e s t e d t h a t the Board of T r a d e should proceed
w i t h t h e E l e c t r i c a l S u p p l y Bill, which should be followed u p by the
W a y s and C o m m u n i c a t i o n s Bill.
T h e "Prime M i n i s t e r concurred t h a t t h e B o a r d of T r a d e should
proceed with t h e i r E l e c t r i c i t y S u p p l y Bill, and s u g g e s t e d t h a t S i r
E r i c Geddes should come to a n a r r a n g e m e n t w i t h t h e Board of T r a d e
to transfer their electrical powers to t h e new M i n i s t r y by Order in
Council.
S i r Eric Geddes said t h a t t h e Board of T r a d e Bill stopped s h o r t
a t compulsory transmission, which, in his view, was q u i t e i n a d e q u a t e .
T h e y could only g e n e r a t e , a n d h a d no compulsory power to t r a n s m i t .
T h e y could t a k e over transmission lines by a g r e e m e n t only. B u t , in
order to deal successfully w i t h e l e c t r i c i t y a t high tension, y o u m u s t
t a k e it up to the point w h e r e you reduce t h e pressure a n d g i v e it to
t h e distribution m a i n s . S i r A l b e r t S t a n l e y took t h e view t h a t
a n t a g o n i s m e x i s t e d b e t w e e n t h e r a i l w a y s a n d the t r a d i n g c o m m u n i t y :
t h e c o n t r a r y w a s t h e c a s e — t h e r a i l w a y was t h e life-blood of i n d u s t r y ,
a n d it w a s along t h e r a i l w a y t r a c k t h a t the pioneer t r a n s m i s s i o n
cables o u g h t to go. To g e t t h e most economical w o r k i n g power of
electrical p l a n t on a r a i l w a y , e l e c t r i c i t y m u s t be d i s t r i b u t e d to all
i n d u s t r i e s in the s u r r o u n d i n g district, so a s to g e t a s t e a d y load.
T h e i d e a t h a t the r a i l w a y i n t e r e s t in e l e c t r i c i t y w o u l d squeeze out­
i n d u s t r y w a s not t e n a b l e for a moment, l i e w a r n e d to push t h e
e l e c t r i c a l power s u p p l y tor all it w a s w o r t h , both in t h e i n t e r e s t s of
railways and industry.
T h e P r e s i d e n t of t h e Local Government B o a r d s u g g e s t e d t h a t
t h e provision of power w a s t h e function of t h e M i n i s t r y of S u p p l y .
I t w a s for S i r E r i c Geddes to provide t h e power s t a t i o n s , and he
should m a k e a r r a n g e m e n t s with t h e M i n i s t r y of S u p p l y to s u p p l y
e l e c t r i c i t y in t h e s a m e w a y t h a t i t w o u l d s u p p l y o t h e r commodities.
The proper o r g a n i s a t i o n , so far as t h e S t a t e w a s concerned, w a s t h e
M i n i s t r y of S u p p l y , upon w h o m S i r E r i c G e d d e s would i n d e n t in t h e
s a m e w a y a s other D e p a r t m e n t s i n d e n t for t h e i r r e q u i r e m e n t s .
He
w a s not in favour of t h e B o a r d of T r a d e proposal.
S i r H u b e r t L l e w e l l y n S m i t h said t h a t if t h e t w o B i l l s w e r e to
proceed: side by side t h e B o a r d of T r a d e m i g h t be p u t in a difficult
position in piloting t h e i r Bill. H e would, however, a t once consult
S i r A l b e r t S t a n l e y on the s u b j e c t .
T h e W a r C a b i n e t decided t h a t —
T h e B o a r d of T r a d e should proceed w i t h t h e i r E l e c t r i c i t y S u p p l y
Bill, a n d t h a t t h e Bill c r e a t i n g t h e M i n i s t r y of W a y s a n d
C o m m u n i c a t i o n s s h o u l d include p o w e r to t r a n s f e r t o it a l l
or a n y p o w e r s of a n y G o v e r n m e n t D e p a r t m e n t r e l a t i n g to
s u p p l y of e l e c t r i c i t y , b u t in order to a v o i d t h e d e l a y t h a t
[826]-193
C
w o u l d o t h e r w i s e r e s u l t t h e C a b i n e t w i s h t h e B o a r d o,
T r a d e to proceed a t once w i t h t h e S u p p l y of E l e c t r i c i t y Bill
after m e e t i n g a n y criticisms t h a t S i r Eric G e d d e s m a y w i s h
to m a k e on the Bill a s d r a f t e d . T h e above decision t o be
s u b j e c t to t h e concurrence of t h e P r e s i d e n t of t h e B o a r d of
Trade (who was unable to attend the Meeting).*
Conveyance by air:
Clause 2 (1) (*).
Power to take
Possession of
Eailways.
5. T h e W a r C a b i n e t d e c i d e d - S i r E r i c Geddes c o n c u r r i n g —
thatThe power to convey p a s s e n g e r s a n d goods b y a i r should be
d e l e t e d from t h e Bill.
6. T h e S e c r e t a r y of S t a t e for I n d i a a s k e d w h e t h e r clause 3 (b)
m e a n t t h a t t h e G o v e r n m e n t were g o i n g to n a t i o n a l i s e the r a i l w a y s .
S i r Eric G e d d e s s a i d t h a t t h e power to t a k e possession of r a i l ­
w a y s u n d e r t h i s c l a u s e w a s t a k e n for two y e a r s only. U n d e r t h e
Defence of t h e R e a l m A c t t h e B o a r d of Trade h a d power to t a k e
possession of t h e r a i l w a y s . T h i s m e r e l y enabled t h e n e w M i n i s t e r
to continue t h e powers for t w o years'- which h a d been e x e r c i s e d
d u r i n g t h e w a r . O t h e r w i s e so soon a s the Defence of t h e R e a l m
A c t l a p s e d t h e r e would be no p o w e r a t all to control r a i l w a y s .
There w e r e t w o m a i n facts to be c o n s i d e r e d - ­
The R u n c i m a n l e t t e r , which w a s a b i n d i n g l e t t e r , g a v e t h e
r a i l w a y s t w o y e a r s more, d u r i n g which t h e G o v e r n m e n t
g u a r a n t e e d t h e s a m e profits a s t h e r a i l w a y s h a d e a r n e d
i n t h e pre-war period.
(6.) A S e l e c t C o m m i t t e e of t h e H o u s e of Commons, w h i c h h a d
been a p p o i n t e d to e x a m i n e t h e question of t h e n a t i o n a l i s a ­
tion of r a i l w a y s , h a d not y e t reported.
(a.)
C l a u s e 3 w a s a g r e e d to.
Power to acquire
Eailways.
Bail way
Nationalisation.
Clause 4.
7. T h e C h a n c e l l o r of t h e E x c h e q u e r s u g g e s t e d t h a t if it w e r e
decided t o r e t a i n t h e s u b s t a n c e of t h e clause it w o u l d be n e c e s s a r y
for him to confer w i t h Sir E r i c Geddes in r e g a r d to the m e t h o d of
p a y m e n t . H e d e s i r e d to r a i s e t h e big question w h e t h e r i t w a s r i g h t
to a t t e m p t to d e a l in this Bill w i t h t h e p u r c h a s e of r a i l w a y s b y t h e
State.
T h e W a r C a b i n e t a t t h e moment h a d no policy in t h e
m a t t e r ; some k i n d of control m u s t continue, a n d it w a s possible t h a t
n a t i o n a l i s a t i o n w a s t h e righl; policy ; b u t t h e S e l e c t C o m m i t t e e h a d
not y e t r e p o r t e d a n d t h e G o v e r n m e n t b a d never considered it.
He
t h o u g h t it a m i s t a k e t o insert t h e s e powers before t h e G o v e r n m e n t
h a d m a d e up t h e i r m i n d . T h e proper course, if n a t i o n a l i s a t i o n w e r e
decided on, w a s t o i n t r o d u c e a special B i l l in P a r l i a m e n t for t h a t
e x p r e s s purpose.
S i r E r i c G e d d e s r e g a r d e d t h e p o w e r s as i m p o r t a n t in order to
p u t h i m in a position to n e g o t i a t e w i t h t h e r a i l w a y companies
d u r i n g t h e n e x t t w o y e a r s . T h e y w e r e not a t p r e s e n t i n a v e r y
conciliatorv mood.
The C h a n c e l l o r of t h e E x c h e q u e r a s k e d w h e t h e r it w o u l d n o t
d o . s i m p l y to h a v e power to p u r c h a s e w i t h o u t specifying how t h e
p u r c h a s e should be a r r a n g e d .
The P r i m e M i n i s t e r s a i d he t h o u g h t it would b e desirable, t o
h a v e powers w h i c h w o u l d enable t h e Government to e n t e r i n t o
n e g o t i a t i o n s w h e n t h e y had considered t h e m a t t e r . T h e r e w e r e
a l r e a d y powers to p u r c h a s e u n d e r a n A c t p a s s e d in 1 8 4 4 , a n d w h e n
h e w a s P r e s i d e n t of t h e B o a r d of T r a d e t h e r a i l w a y m a n a g e r s h a d
b e e n not u n w i l l i n g to h a n d over t h e r a i l w a y s to a body l i k e t h e
P o r t of London A u t h o r i t y , b u t i t w a s found to be u n d e s i r a b l e u n d e r
t h a t A c t . T h e r a i l w a y s w e r e now w o r k i n g a t a deficiency of
9O,000,O00L, a n d t h e r a i l w a y companies w o u l d not t a k e t h e m over
i n two y e a r s ' t i m e u n l e s s t h e G o v e r n m e n t w e r e p r e p a r e d to m a k e u p
t h a t deficiency, or else allow t h e m to r a i s e t h e i r c h a r g e s .
The
* Sir Albert Stanley later wrote to the Prime Minister signifying his concurrence.
t r a d i n g c o m m u n i t y m i g h t be p r e p a r e d t o s u b m i t to increased c h a r g e s
in t h e form of g e n e r a l t a x a t i o n , b u t t h e y w o u l d not a g r e e t o it if
i t w e r e for t h e purpose of i n c r e a s i n g t h e d i v i d e n d s of r a i l w a y s h a r e ­
h o l d e r s , and t h e r e w o u l d be a combined t r a d e a n d labour opposition
to a n y proposal to i n c r e a s e t h e r a t e s . H e w a s also of opinion
t h a t if the G o v e r n m e n t could s a y t h a t t h e y h a d in mind a proposal
t o m a k e t h e r a i l w a y s S t a t e property it would be much easier t o d e a l
w i t h the. m e n a c i n g i n d u s t r i a l trouble. T h e y w o u l d be in a position
t o s a y to t h e m e n t h a t t h e y were imposing a b u r d e n on t h e com­
m u n i t y if t h e y persisted i n t h e i r d e m a n d s , w h i c h w o u l d have to be
m e t e i t h e r b y i n c r e a s e d t a x a t i o n or an increase in t h e price of com­
modities. T h e powers m u s t be e x e r c i s e d by O r d e r in Council w h i c h
w o u l d lie on t h e t a b l e of t h e House, and could not be made effective
w i t h o u t t h e sanction of t h e House of Commons. On t h e other b a n d ,
t o introduce a B i l l m i g h t e n a b l e a d e t e r m i n e d m i n o r i t y to hold u p t h e
m a t t e r for months.
T h e F i r s t L o r d of t h e A d m i r a l t y p o i n t e d out t h a t t h e r e w a s
n o t h i n g so u n p o p u l a r in t h e House of Commons a s legislation b y
Order in Council, a n d in h i s v i e w it would be absolutely n e c e s s a r y
for t h e P r i m e M i n i s t e r h i m s e l f to m a k e a strong" personal a p p e a l t o
t h e House.
T h e Secretary" of S t a t e for I n d i a a s k e d whether it w a s
impossible to decide t h e question of n a t i o n a l i s a t i o n i m m e d i a t e l y .
T h e P r i m e M i n i s t e r a s k e d t h e S e c r e t a r y of S t a t e for I n d i a not
to press the point a n d s a i d t h a t he would l i k e S i r E r i c Geddes to
be in office first, in order to be able to a d v i s e t h e Government in t h e
l i g h t of his e x p e r i e n c e in office w h e t h e r it w e r e desirable or not.
H e believed o w i n g to t h e fierce competition a m o n g r a i l w a y s t h e
m a j o r i t y of r a i l w a y m a n a g e r s held n a t i o n a l i s a t i o n to be inevitable.
The S e c r e t a r y of S t a t e for W a r r e m a r k e d t h a t the r a i l w a y
shareholders d e s e r v e d consideration, in view of t h e d a m a g e to t h e
r a i l w a y s d u r i n g the w a r .
S i r Eric G e d d e s did not agi-ee t h a t t h e G o v e r n m e n t had r u i n e d
r a i l w a y p r o p e r t y . H e held t h a t w a g e s and g e n e r a l costs w o u l d
h a v e risen a n y h o w .
T h e P r e s i d e n t of t h e Boat d of A g r i c u l t u r e pointed out t h a t a
Commission on N a t i o n a l i s a t i o n w a s s i t t i n g before t h e war a n d h a d
been suspended e i g h t e e n m o n t h s after the w a r broke out.
The
g e n e r a l idea of t h e Commission h a d been t h a t n a t i o n a l i s a t i o n should
not be a t t e m p t e d u n t i l some idea h a d been g a i n e d a s to how i t
would work.
Power to acquire
Tramways.
Clause 4 (1) (a).
8. A t t e n t i o n w a s c a l l e d to t h e power to a c q u i r e t r a m w a y s ,
w h i c h it w a s s u g g e s t e d w o u l d raise v e r y s t r o n g opposition a m o n g
municipal authorities.
S i r Eric G e d d e s r e m a r k e d t h a t i n t e r - u r b a n a n d s u b u r b a n
communication were so l i n k e d up t h a t it would be v e r y difficult t o
solve t h e traffic problem without, a c q u i r i n g t h e r i g h t to p u r c h a s e
t r a m w a y s . T h e r e g u l a t i o n of i n t e r - u r b a n t r a m w a y s w a s an i n t e g r a l
p a r t of t h e solution of t b e h o u s i n g problem.
T h e S e c r e t a r y for S c o t l a n d s a i d t h a t G l a s g o w , for e x a m p l e ,
w o u l d raise t h e s t r o n g e s t possible objection.
T h e P r i m e M i n i s t e r pointed out t h a t t h e London C o u n t y
Council a n d t h e m u n i c i p a l a u t h o r i t i e s of B i r m i n g h a m , M a n c h e s t e r ,
a n d other g r e a t t o w n s w o u l d also object.
T h e Chancellor of t h e E x c h e q u e r s u g g e s t e d t h a t p o w e r s of
control a n d compulsion w h e r e t w o a u t h o r i t i e s w e r e not a g r e e d w o u l d
provide all t h a t w a s n e c e s s a r y in t h e m e a n t i m e .
T h e P r i m e M i n i s t e r s a i d , in r e p l y to S i r E r i c Geddes, who a s k e d
if he m u s t drop c o n s t r u c t i o n a s well a s t h e p u r c h a s e of t r a m w a y s ,
t h a t t h a t w a s a different m a t t e r a n d not open t o t h e s a m e objection.
The W a r Cabinet decided—
To d e l e t e t r a m w a y s from clause 4 ( l ) ( a ) .
Power to acquire
by Agreement
Shipping Lines
running in
competition with
the Railway.
Clause 4 ( 1 ) (a).
9. S i r E r i c G e d d e s said t h a t he a s k e d for t h i s power in order t o
be able to b u y a c o m p e t i t i v e s h i p p i n g line w h e r e t h e s h i p p i n g
c o m p a n y complained of r a i l w a y competition.
T h e P r i m e M i n i s t e r s u g g e s t e d t h a t t h i s clause should not b e
p u t in t h e B i l l , b u t should be offered a s a concession if n e c e s s a r y .
Determination of
Purchase Price :
Clause 4 (2)
and (3).
1 0 . T h e Chancellor of t h e E x c h e q u e r s a i d t h a t h e w a s u n c e r t a i n
a b o u t t h e provision in clause 4 (2) a n d ( 3 ) for t h e d e t e r m i n a t i o n of a
price to be paid for a n u n d e r t a k i n g in default of a g r e e m e n t b y a
C o u r t of A r b i t r a t i o n ,
l i e would l i k e to l e a v e it open for discussion
w i t h S i r E r i c Geddes, w i t h power to come t o t h e C a b i n e t a g a i n i f
necessary.
I f t h e G o v e r n m e n t c o n t e m p l a t e d t h e p u r c h a s e of r a i l ­
w a y s t h e y o u g h t to be r u n to p a y t h e i r w a y a s a commercial concern
on a proper basis, a n d a c c o u n t s o u g h t to be k e p t so t h a t e v e r y t h i n g
for which t h e y w e r e responsible should be c h a r g e d a g a i n s t t h e m —
t h a t w a s to s a y , special r a i l w a y stock o u g h t to be i s s u e d a g a i n s t t h e
r a i l w a y r e v e n u e w i t h t h e g u a r a n t e e of t h e Consolidation F u n d
b e h i n d it.
This w a s a g r e e d to.
The W a r Cabinet decided—
(a.) To a p p r o v e t h e Bill, s u b j e c t to t h e conclusions a b o v e
recorded a n d to v e r b a l d r a f t i n g a m e n d m e n t s .
(6.) To a p p o i n t a d r a f t i n g c o m m i t t e e to consider t h e clauses of
t h e Bill, consisting of—
Sir Eric Geddes,
T h e P r e s i d e n t of t h e B o a r d of T r a d e ,
The Home Secretary,
t o g e t h e r w i t h r e p r e s e n t a t i v e s of—The Local G o v e r n m e n t Board,
The S c o t t i s h Office,
T h e Irish Office.
Control of Building
for Land
Settlement.
1 1 . The W a x Cabinet had before them a Memorandum by
Lord Ernie (Paper G . T . - 6 7 9 7 ) regarding the control of building for
l
a n c
i settlement.
The President of the Board of Agriculture and Fisheries said
that, in accordance with a decision of the W a r Cabinet ( W a r Cabinet
4 9 6 , Minute 1 2 ) , the First Commissioner of W o r k s claimed t h a t the
functions of his Department covered the whole of the building work,
advisory and actual, that might be entaded in the scheme of buildings
for small holdings for the County Councils. Lord Ernie said that, in
his view, this work, together with that of adaptation and housing on
the small-holdings colonies, should be carried out by the Board of
Agriculture. He had already appointed an architectural staff, who
were about to issue a series of type plans to t h e County Councils as
a basis for the work of their architects.
The First Commissioner of W o r k s stated t h a t the W a r Cabinet
had laid down ( W a r Cabinet 496, Minute 1 2 ) that the only Govern­
ment Departments which should be empowered to undertake building
or constructional work should be the Admiralty, the W a r Office, the
Ministry of Munitions, and the A i r Ministry, and t h a t the duty of
carrvine' out work for other Government works should be entrusted
to the Office of Works. His Department had a n efficient district
organisation and maintenance contractors all over the country, who
could carry out the work of t h e Board of Agriculture.
The Chancellor of the Exchequer said that the Haldane
Committee recommended t h a t services should be grouped under one
p a r t i c u l a r M i n i s t e r , a n d if different services w e r e a l l o w e d to g r o w
up u n d e r t h e v a r i o u s D e p a r t m e n t s it w o u l d m e a n a g r e a t m u l t i p l i ­
cation of staff. U n d e r t h e n e w H o u s i n g B i l l t h e P r e s i d e n t of t h e
Local G o v e r n m e n t B o a r d r e s e r v e d t o himself t h e r i g h t to build
houses i f t h e local a u t h o r i t i e s proved- t h e m s e l v e s incapable. This "
m i g h t m e a n t h a t t h e L o c a l G o v e r n m e n t B o a r d would a s k t h e
T r e a s u r y to sanction a staff of a r c h i t e c t s ; t h e Board, of A g r i c u l t u r e ,
if L o r d E r n l e ' s p r e s e n t proposal w a s a d o p t e d , w o u l d w a n t a n o t h e r
staff of a r c h i t e c t s , w h e n all the t i m e t h e F i r s t Commissioner of
W o r k s h a d a t r a i n e d staff r e a d y to c a r r y out t h e work.
The
Chancellor of t h e E x c h e q u e r s t r o n g l y u r g e d t h a t t h e B o a r d of
A g r i c u l t u r e s h o u l d specify t h e i r n e e d s a n d allow t h e Office of W o r k s
to c a r r y t h e m out.
The P r e s i d e n t of t h e Local G o v e r n m e n t B o a r d said t h a t i t w a s
t r u e he h a d a s k e d for powers u n d e r t h e n e w H o u s i n g B i l l to build
in d e f a u l t of action b y t h e local a u t h o r i t i e s , b u t h i s i n t e n t i o n w a s
t h a t t h e work should be c a r r i e d out b y t h e Office of W o r k s .
The P r e s i d e n t of t h e B o a r d of A g r i c u l t u r e a s k e d t h a t h e should
be a l l o w e d in a n y case to complete t h e half-built c o t t a g e s on w h i c h
work h a d been stopped vdien the W a r C a b i n e t i n s t r u c t e d t h a t no
b u i l d i n g should be done e x c e p t t h a t d i r e c t l y r e q u i r e d for w a r
purposes.
T h e W a r C a b i n e t decided t h a t —
T h e a d a p t a t i o n a n d housing r e q u i r e m e n t s of t h e B o a r d of
A g r i c u l t u r e should be c a r r i e d out by H i s Majesty 's Office
of W o r k s , but t h a t t h e B o a r d of A g r i c u l t u r e should complete
a n y b u i l d i n g operations i n i t i a t e d b y t h e m which h a d been
i n t e r r u p t e d owing to war conditions.
r
Cabinet h a d before t h e m correspondence b e t w e e n
the C o m m o n w e a l t h of A u s t r a l i a a n d t h e Colonial Office, in which
t h e H i g h Commissioner a s k e d t h a t lie m i g h t be s u p p l i e d w i t h full
p a r t i c u l a r s r e g a r d i n g a n y a r r a n g e m e n t s which w e r e being m a d e in
this c o u n t r y in connection w i t h the celebration of peace.
(Paper
G.T.-6784.)
The W a r Cabinet decided—
Peace Celebrations.
i 2 -
T
h
e
W
a
r
To appoint t h e following C o m m i t t e e to e x a m i n e t h e question of
peace celebrations in t h i s c o u n t r y , a n d to m a k e recom­
m e n d a t i o n s to t h e W a r C a b i n e t : —
Lord Curzon
(Chairman),
The Home Secretary,
T h e F i r s t Commissioner of W o r k s ,
A r e p r e s e n t a t i v e of t h e A d m i r a l t y ,
A r e p r e s e n t a t i v e of the W a r Office,
A r e p r e s e n t a t i v e of t h e Colonial Office.
Soldiers'and
Sailors' Pay
Committee.
1 3 . W i t h reference to W a r C a b i n e t 5 3 3 , M i n u t e 4, t h e W a r
C a b i n e t took note of t h e following decision a r r i v e d a t b y t h e S o l d i e r s '
­
C o m m i t t e e : - *"
g ji ' p
a
n
d
a
o r s
a
y
T h a t pensioners in the non-commissioned r a n k s should r e c e i v e
t h e full m o n t h l y i n c r e m e n t , b u t t h a t , in so far a s t h e corn­
missioned r a n k s a r e concerned, it is not d e s i r a b l e to m a k e
a n y c h a n g e a s t h e r e s u l t of t h i s decision.
826-193]
D
American
Relations: Rates
for Transportation
of American
Troops in British
Ships.
1 4 . W i t h reference to W a r C a b i n e t 4 8 3 , M i n u t e 1 3 , t h e W a r
C a b i n e t took note of a m e m o r a n d u m b y Lord P l e a d i n g ( P a p e r G . T . ­
6 7 9 5 ) r e g a r d i n g t h e a g r e e m e n t he h a d a r r i v e d a t w i t h t h e U n i t e d
S t a t e s G o v e r n m e n t a s to t h e r a t e s to be c h a r g e d for t h e t r a n s p o r t a tion of A m e r i c a n troops in B r i t i s h ships.
Joint Conference *
of Government
Departments and
Trade Unions.
1 5 . W i t h reference to t h e J o i n t Conference of G o v e r n m e n t
D e p a r t m e n t s and T r a d e U n i o n s concerned, before w h i c h t h e I n t e r i m
R e p o r t No. 1 on t h e A p p l i c a t i o n of t h e W h i t l e y R e p o r t t o Govern­
m e n t I n d u s t r i a l E s t a b l i s h m e n t s is to be b r o u g h t on the 2 0 t h
F e b r u a r y a t t h e C e n t r a l Plall, W e s t m i n s t e r —
The W a r C a b i n e t took note t h a t t h e P r i m e M i n i s t e r h a d a p ­
pointed S i r R o b e r t H o m e , M i n i s t e r of L a b o u r , to be C h a i r ­
m a n of t h e I n t e r - D e p a r t m e n t a l C o m m i t t e e to consider t h e
A p p l i c a t i o n of t h e W h i t l e y R e p o r t t o G o v e r n m e n t E s t a b ­
l i s h m e n t s vice M r . R o b e r t s ( W a r C a b i n e t 438, M i n u t e 1 2 ) .
2, Whitehall
Gardens,
S.W.
February
20, 1 9 1 9 .
1,
APPENDIX.
Earl
(No. 1 8 9 .
Curzon
to " Astoria
"
(Paris).
Very Urgent.)
(Telegraphic.)
Foreign
Office, February
19, 1 9 1 9 , 7TO P.M.
P A Y M E N T f o r food s u p p l i e d to G e r m a n y .
A t t e n t i o n of W a r C a b i n e t h a s been called t o divergence b e t w e e n v i e w e x p r e s s e d
b y Mr. H u g h e s a t R e p a r a t i o n C o m m i t t e e on 1 0 t h F e b r u a r y a n d t h a t u r g e d u p o n
S u p r e m e W a r Council b y Mr. B o n a r L a w on 1 3 t h J a n u a r y , a n d t h e n a c c e p t e d b y t h e
Council.
H i s M a j e s t y ' s G o v e r n m e n t m u s t a d h e r e to a t t i t u d e t a k e n by M r . Bonar L a w .
T h e y a r e u n w i l l i n g t o become responsible for a n y s h a r e of cost on a n y o t h e r t e r m s .
P l e a s e so inform a l l B r i t i s h d e l e g a t e s on R e p a r a t i o n C o m m i t t e e a n d on a n y o t h e r
bodies conceimed.