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(THIS
DOCUMENT IS T H E PROPERTY OF H I S BRITANNIC I-IAJESTY S GOVERNMENT) . S E C
I
T
Copy No, R E T .
C A B I N E T
41 (27), Meeting of the Cabinet to be held at No. 10, Downing Street, S.W.I., on WEDNESDAY, ­
20th July, 1927, at 11.30 a.m. A G E N D A . 1,
REDUCTION AND LIMITATION OF ARMAMENTS -
THE NAVAL CONFERENCE. ' (If required). (Reference Cabinet 40 (27) Conclusion 3 ) . ' Extract from iviinutes of 229th Meeting of the Committee of Imperial Defence. ( C P . 204 (27) - circulated herewith). -
2.
See also Telegram to the First Lord of the Admiralty from the Prime Minister, No. 125 of 15th July, 1927. EGYPT.
(Question to be raised by the Secretary of State for Foreign Affairs). 3.
MILITARY CONTRIBUTIONS BY COLONIAL AND OTHER GOVERNMENTS.
'
Memorandum by the Secretary of State for War. ( C P , 197 (27) * already circulated). 4. . THE POLITICAL SITUATION IN CYPRUS. Memorandum by the Secretary of State for Dominion Affairs. ( C P . 198 (27) - already circulated). REPRESENTATION IN THE DOMINIONS OF HIS MAJESTY'S GOVERNMENT IN GREAT BRITAIN. (Reference Cabinet 31 (27) Conclusion 3 ) . Report of Cabinet Committee. (CP%. 202 "(27) - circulated herewith). 6.
T H E EMPIRE MARKETING BOARD. (Question to be raised by the Chancellor of the Exchequer). 15 0 7 8
THE POSITION OP THE IRON AND STEEL INDUSTRY. f Memorandum "by the President of the Board of Trade. ( C P , 201 (27) - already circulated). 8
"
THE ISLE OF MAN CUSTOMS BILL. Memorandum by the Financial Secretary to the Treasury covering draft Bill. ( C P . 199 (27 ) - already circulated). 9 o
ROAD CONVEYANCE O F PASSENGERS AND GOODS BY R"A I Eg AT""C"QMPANIES . Memorandum by the Minister of Transport. ( C P . 200 (27) - already circulated). 10.
WASHINGTON HOURS CONVENTION. .Memorandum by the Minister of Labour. ( C P . 206 (27) circulated herewith). TO TAKE NOTE OF :­
11.
AIR RAIDS PRECAUTIONS. Extract from
Committee of
with interim
( C P . 205
the 229th Minutes of the Imperial Defence together Report of Sub-Committee. (27) circulated herewith). . (Signed)
M.P.A. HANKEY, Secretary, Cabinet. Whitehall Gardens, S.W.1. 18th July, 1927. . (THIS DOCUMENT IS THE PROPERTY OF HIS BRITANNIC MAJESTY'S GOVERNi-aENT) Copy No. S E C R E T.
C A B I N E T
41 (27). Meeting of the Cabinet to be held at 10, Downing Street, S.W.I., on "WEDNESDAY, July 20th, 1927, at 11.30 a,m. ADDENDUM TO THE AGENDA. PREPARATION OF THE ARMY FOR WAR. Memorandum by the Secretary of State for War ( C P . 207 (27) - circulated herewith). (Signed)
M.P.A. HANKEY, Secretary, Cabinet,. 2, Whitehall Gardens, S.W.I. 19th July, 1927. T H I S DOCUMENT I S
T H E P R O P E R T Y OF H I S B R I T A N N I J M A J E S T Y b
f
GOVERNMENT).
CopyNo, RET,
C A B I HJ
T
41 ( 2 7 ) .
CONCLUSIONS of a Meeting of the Cabinet held at 1 0 , Downing Street, ..-.S.W.1., on WEDNESDAY, 20th July, 1927, at 11.30 a.m. PRESENT;-
The Right Hon. -Stanley Baldwin, M.P., Prime Minister.
(in.the Chair). he Right Hon.
Sir Austen Chamberlain, K.G.,
M.P., Secretary of State for
Foreign Affairs. The Right Hon. Viscount Cave, G-.C.M.G.., Lord Chancellor. he Most Hon.
The Marquess of Salisbury,
K. G .., G . C. V . Q .., C . B f
Lord Privy Seal. The Right Hon. W.S. Churchill, C .H.,, M. P . . , Chancellor of the Exchequer. c
Ihe
Right Hon.
Sir William Joynson-Hicks,
Bt.,M.P., Secretary of State
for Home Affairs.
The Right Hon.
L.S. Apery, M.P.., Secretary
of State for Dominion Affairs
and Secretary of State for
the Colonies. fhe Right Hon.
Sir Laming Worthington-Evans,
Bt.,G.B.E.,M.P., Secretary
of State for War.
The Right Hon. The Earl of Birkenhead, Secretary of State for India. phe Right Hon.
Sir Samuel Hoare, Bt.,C.M.G.,
M o P o , Secretary of State
for Air.
The Right Hon.
Sir" John Gilmour, Bt.,D.S. 0.,,
i f t . P . , Secretary of State
for Scotland.
[The Right,Hon.
Sir Philip Cunliffe-Lister,
K.B.E. , M . C . , M . P . , President
of the Bo a:--d of Trade. The Right Hon. Neville Chamberlain, M.P., Minister of Health. [The Right Hon.
W.E. Guinness, D.S.0 ,M.P.,
Minister of Agriculture and
Fisheries.
The Right Hon. Lord Eustace Percy, M . P . , President of the Board of Education. pie
The Right Hon,
Viscount Peel, G.B.E.,
First Commissioner of Works.
Right ,Hon.
Sir Arthur Steel-Maitland,
B t . , M . P . , Minister of Labour.
The Right Hon.. Sir Douglas Hogg, K.C.. ,M.P., Attorney-General. m *
Sir M . P . A .
Hankey,
G.C.B
.*
w
Secretary.
1. The Cabinet had before them the following documents on the subject of Reduction and Limitation of Naval Armaments:-
An Extract from the Minutes of the 229th Meeting of the Committee of Imperial Defence (Paper C.P.-204 (27)): The Prime Minister informed his colleagues that the Cabinet Committee had held a number of anxious deliberations in regard to the proceedings at Geneva, and had on the previous day come to the conclusion that it w a s desirable to bring the British Delegates home for consultation. Ke thought it would b e necessary to hold a Special Meeting of the Cabinet on FRIDAY afternoon. The Secretary of State for War asked that he might be excused from attendance at this Meeting of the Cabinet, as he w a s due that day at Tidworth i n connection with the Mechanised Brigade. The Secretary of State for Dominion Affairs said he also would b e unable to be present, as his ship was due to sail from Southampton at 4 p.m- for his visit to the Dominions. The Cabinet agreed
—
)
That a Special Meeting should be held for the consideration of the question of REDUCTION AND LIMITA-
TION OF NAVAL ARMAMENTS on FRIDAY, July 22nd, 1 9 2 7 , at 2-30 p.nu at THE HOUSE OP COMMONS. 2. The Cabinet had before them a
Memorandum
b y the Minister of Labour on the subject of the Y/ashington Hours Convention (Paper C P . - 2 0 6
(27)). In his Memorandum the Minister of Labour explained that on May 4th, 1927 (Cabinet 30 ( 2 7 ) , Conclusion 3 ) , the Cabinet had authorised him to consult the Employers
1
representatives privately in order to ascertain their views upon the way in which the Government proposed to deal with the Hours question.
He had accordingly been in communication with the President of the Employers
1
Confederation, and had received lengthy documents stating their grounds for opposition to ratifica­
tion.
The main reasons wh.v the Confederation concentrated upon opposition to the Washington Convention appeared to be ­
(i) They fear that although a "sensible" Hours Act might be passed now, the Washington Convention would still be i n existence and might be used later o n as a reason for mod if ications in the law; and (ii) They do not regard the Washington Convention as a suitable basis for an attempt at securing international uniformity of Hours. The Minister of Labour therefore proposed tcr the Cabinet that he should see the Employers and tell them.that the view of the Cabinet was that, having; regard to the. history of the.matter since 1919, s
the Hours question must be dealt with and that the Government
invite the Employers to co-operate in the framing of proposals which w i l l be governed by two main considerations:­
'
-Cl) That, while embodying the principle of the 48-hour w e e k , they should follow in the main the existing industrial conditions in this country and should be calculated to interfere as little as possible with those conditions: C2) That the
suitable
designed
national
proposals should form a basis for a Convention to secure greater inter­
uniformity of hours. The Minister of Labour made"a statement to the Cabinet in amplification of his Memorandum.. The Cabinet agreed
—
(a) That the Minister of Labour should continue his negotiations with the Employers on the lines proposed in his Memorandum: (b) That he should keep in close touch with the Home Secretary on the subject, since the Factories Bill, to be introduced next February, would be affected by the result of his negotiations: (c) To take' note that the negotiations in their present stage were entirely confidential and that no statement could be made in Parliament. 3. The Secretary of State for Foreign Affairs reminded the Cabinet that at the previous Meeting he had informed them of a preliminary conversa­
tion he had had with Sarwat Pasha with a view to exploring the possibilities of an Agreement with Egypt, and had told them that it was too early as yet to say whether anything would result. He had since circulated a full account of the conversation (F.O., Egypt and Sudan. Oonfiden­
tial. J.1934/8/16, of July 13th). Subsequently Sarwat Pasha had lunched with Sir Austen Chamberlain" s Private Secretary (Mr Selby) to meet Sir William Tyrrell.
The latter had told Sarwat that the Secretary of State had in mind more particularly three questions on which a settlement was desired:­
(l) The Army. (2) The British advisers. ( 3 ) The responsibility of Great Britain to see that foreigners and their property were safe­
guarded. Sarwat Pasha had promised to think the matter over and to tr,y and produce the heads of an Agreement which might be acceptable to His Majesty's Government.
If he could achieve this result he would return to Egypt for consultation and would subsequently join King Fuad on His M a j e s t y s visit to Rome, whence 1
he would come back to London.
Two days ago Sarwat had called on Mr Selby and had handed him the heads of a possible Treaty of Alliance. Before doing so he had stated that he had , communicated the draft to King Fuad, who had approved the general idea. Sir Austen Chamberlain said that he had had Sarwat Pasha's draft translated, and the original, together * ith the translation, w a s 1
now in the printer s hands and would be circu­
lated at once.
It w a s not a document which, in its present form, w e could accept, but it marked a great advance on the attitude of any previous Egyptian Government since 1922.
It
seemed to show that Sarwat Pasha had been attracted b:-/ Sir Austen's idea, and that he hoped to do business.
He himself had appointed a Committee in the Foreign Office, with which he had associated Lord Lloyd, w i t h a view to the examination of Sarwat's draft and the - preparation of alternative clauses where necessary. The Secretary of State for Foreign Affairs then gave the Cabinet the substance of the 12 Articles of Sarwat's draft.
(As these are to be circulated the;/ are not reproduced in ­
these Minutes.)
Summing u p , he emphasized the signs which this draft gave of an intention,to make a very serious overture, and laid stress on the immense advance it was on the attitude of any previous Egyptian Government.
Sir Austen also made clear that Sarwat Pasha was not in a position to put it forward as an offer, as he did not yet know whether he could carry it in Egypt, but if he could reach some kind of basis of agreement here he would go back to Egypt and try to obtain its acceptance. It, was most important that w e should , go forward and discuss the heads of the Agreement, since either its rejection or refusal to discuss it would, when it became known, create a very strong The Foreign adverse feeling in this country.
Secretary asked that, before he resumed negotia­
tions with Sarwat Pasha, the Cabinet
should either themselves consider the proposal or, i f they preferred,, appoint a Cabinet Committee to report to them in the first instance-
In the course of a short discussion the Secretary of State for Foreign Affairs w a s asked to bear in mind the importance of securing an expert Adviser in the Ministry of the Interior in Egypt;
of doing anything he could to safeguard the position of British officials engaged by the Egyptian Government;
and of our interest in Egypt from the point of view of communications, including air communications and civil aviation. The Secretary of State for Foreign Affairs, informed the Cabinet that, in reply to a Question in Parliament, he w a s going to state that he had naturally taken advantage of Sarwat Pasha's preseno in this c o u n t r y to discuss-Anglo-Egyptian relation with him, but that it was not Sarwat's intention, or his own, to conclude any Agreement during his visit. The Cabinet agreed
—
(a) To approve the policy of an Alliance with Egypt, provided that suitable terms could be agreed, while reserving absolute freedom in regard to the details of Sarwat Pasha s scheme, which they had not yet seen in full: 1
(b) That the Draft Agreement, with the comments of the Foreign Office thereon, should- be considered in the first instance by the following Cabinet Committee:­
The Secretary of State for Foreign Affairs (In the C h a i r ) , The Lord Privy Seal, The Chancellor of the Exchequer, The Home Secretary, The Secretary of State for War, The Secretary of State for India, The Secretary of State for Air, The First Lord of the Admiralty, The Attorney-General, Sir Maurice Hankey, G.C.B. (Secretary). -7­
4. The Cabinet had before them a Memorandum by the Secretary of State for War on the subject of Military Contributions by Colonial and other Governments (Paper C P . - 1 9 7
The Cabinet agreed
—
(27)). That a Committee, composed as follows — The First Commissioner of Works (In the Chair) , The Chancellor of the Exchequer (or Financial Secretary to the Treasury), The Secretary of State for Scotland, The Parliamentary Under-Secretary, Colonial
Office, The Financial Secretary,War Office. M r R. B.Howorth, C B . (Secretary)
should examine and report on the proposals of the Secretary of State for war, on the understanding that the present moment was not favourable for raising the question of a contri­
bution from Egypt. 5.
The Cabinet had under consideration a
Memorandum by the Secretary of State for the Colonies on the subject of the Political Situation in Cyprus (Paper C.P.-198(27)). After some discussion the Cabinet agreed That the Secretary of State for the Colonies should be placed in a position to negotiate with the Cyprus Government on the basis that (i) The British Government will relieve Cyprus of the Tribute (92,800 per annum) applied to the service of the Turkish Guaranteed Loan of 1855-, so long as it continues, by means of a grant-in-aid of an equivalent amount, Vyprus renouncing any claim on the invested surplus of the Tribute account: and (ii) Cyprus will contribute £10,000 per annum as a contribution towards the cost of defence: so that the net additional charge on British funds shall not exceed £32,800 per annum as a maximum over and above the present grant-In­
aid of £50,000. The above agreement was reached on the understanding that the Secretary of State for the colonies would do his best to maske reductions in the Colonial Services Estimates to compensate for the expenditure on Cyprus? 6.. The Oahinet had before them the Report of a Cabinet Coranittee on the Representation in the Dominions of His Majesty's Government in Great Britain (Paper C*P. -202 (27)).
In their Report the Committee stated that they were generally in favour of proposals of the character put forward by the Secretary of State for Foreign Affairs, and submitted the following recommendations to the Cabinet, bearing in mind that the Chancellor of the Exchequer had asked that it should be recorded that his assent thereto was subject to the condi­
tion that the total cost of a soheme of British Representation in the Dominions as a w h o l e , inclu­
sive of establishments and other expenses, should not exceed £10,000 per annum in the aggregate:­
(a) That the Secretary of State for Dominion Affairs should be authorised to send forthwith an official reply to the Governor-General of New Zealand's telegram of June 2 , 1927, to the effect that the British Government concur in the proposals contained therein and will accordingly arrange for the appointment of a junior member of the staff of the Foreign Office to the Prime Minister's Department in few-
Zealand in a consultative or informa­
tive capacity but with no executive or administrative functions , and in no way representative of the British Govern­
ment in a diplomatic sense; and that the British Government are prepared to pa7/ his emoluments. (b) -That the Prime Minister should be invited to take the opportunity of his forthcoming visit to Canada to confer informally with the Governor-
General and the Priie Minister of Canada on the specific proposals respecting British Representation in that Dominion outlined in paragraph 6 of the Report of the Committee (Paper C.P.-202 (27)), v i z : - That an Officer be appointed at Ottawa representing the British Government. The kind of arrangement discussed w a s . (i)-An Officer with status and emolu­
ments equivalent to those of a Minister or Senior Counsellor in the Diplomatic Service ? and (ii) a junior with status and emoluments equivalent to those of a Second Secretary In the Diplomatic Service; the British Government hope that the Canadian Government will be willing- to provide office accommodation for the British Representative in one of their Departments at Ottawa. " (c) That the financial bearing of the proposals (a) and (b) above should be further examined by the Treasury, the Dominions Office and the Foreign Office, in consultation. (d) That as regards the Union of South Africa, the best arrangement would be for the Imperial Secretary to act as the Representative of the Eritish Government in South Africa, the details to be left for discussion between the Secretary of State for Dominion Affairs and the South African authorities. (e) That, for the present, no further action should be taken regarding British representation in the Commonwealth of Australia, the Union of South Africa (subject to (d) above) or the Irish Free State, but that the Secretary of State for Dominion Affairs should be at liberty to examine the question of British representation with the Australian and South African authorities respectively should be find it necessary or desirable to do' so during his forthcoming visits to those Doininions, and report to the Cabinet. In giving their approval to the above proposals the Cabinet were in general agreement that the British representative in Canada should not be regarded as being there to balance the representative of the United States of America, and inclined to the view that the
representative should be placed on the Vote of the Cabinet Office which, they were reminded, is a sub-head of the Vote for the'Treasury and Sub Departments. 7. The Chancellor of the Exchequer informed the Cabinet that the Cabinet Committee on Experdi­
ture had been considering reductions in Depart­
mental expenditure in order to cover the excess of expenditure over Estimates involved b y the Shanghai Defence Force.
There had already been . a considerable response to their recommendations from the Minister of Health, the Secretary of State for Air and the Secretary of State for War. One recommendation had been that a saving of £600,000 should be effected b y reducing the grant to the Empire Marketing Board for 1927-28 from "£1,000,000 to £400,000.
The Secretary of State for Dominion Affairs, however, had demurred to this proposal.
The Chancellor of the Exchequer asked the Cabinet to approve the proposal and to authorise the despatch of a telegram from the Prime Minister of Or eat Britain to the Prime Ministers of the Dominions in some such terms as the following: ­
"We have been considering with some anxiet,y the financial position during the current year.. The Budget made provision for a balance of £1,400,000, but included nothing for the cost of the Shanghai Defence Force. The measures which we have felt bound to take in t h e interests not merely of Great Britain but of the Empire as a whole in order to safeguaxd our position in China are likely to cost not less than £6,000,000 in'all in extra expenditure, of which about £4,000,000 will fall in the current y e a r , and the whole cost has to be met b y the British taxpayer. We have been considering what economies on other Estimates can b e made in order to meet the Shanghai expenditure without involving a deficit for the third successive y e a r , which w e feel would be damaging to the country's interests. Among possible economies is a suggestion in regard to the funds of the Empire Marketing Board. A million pounds is voted as a grant in aid to the Board this year, and this sum in addition to £350,000 carried forward unspent from last year would make the avail­
able funds of the Board £1,350,000. The Board do not however, w e are informed, expect to spend this year more than three quarters of a million. If the actual issue from the vote for this year were abated by £600,000 it would give us a most sensible relief on our Budget, and at the same time would not restrict the execution of the Board's programme this year in any way. To call upon the taxpayer to provide money before it can in fact be used to advantage is an obvious extravagance. Having regard to the nature of the emergency which gives rise to this request, we trust"you will raise no objection to the p r o ­
posal. (Next year the full sum of one million pounds would be voted and would be ample to meet any probable expenditure b y the Board.) We feel the less hesitation in asking your concurrence in this request because of the growing extension and effectiveness of our preferential system. Prom 4.7 million in 1925-6, the loss to Revenue which Preference has involved has amounted to no less t h a n 6.2 million last year and is estimated to reach 6.5 million this year". In the course of the discussion it was explained that the Empire Marketing Board had only expended £150,000 out of the £500,000 voted in 1926.
£350,000 therefore had been carried over to the present y e a r , and the Board would nominally have £1,350,000 to spend in 1927.
The Board did not expeot to spend more than £750,000 this year, so that the effect of M r Churchill's proposal would b e that the Board would not carry forward a balance of £600,000 to the financial year 1928-29. The Chancellor of the Exchequer explained that he only made this proposal as applicable to the present year and without prejudice.to the general policy of carrying forward sums unexpended by the Empire marketing Board in any year to the next financial year. The Secretary of State for Dominion Affairs, while quite willing that the Exchequer should secure the relief Involved in withdrawing £600,000 from the carry forward account this year, providing that the Dominions could be informed that this money would ultimately be available, said that he could not agree to the proposal in a form which was in fact making a request,which could not well be refused whatever might be thought, for release from our explicit pledge.
Such a step, he felt, would to a great extent stultify the work already accomplished by the Empii e Marketing Board; would create great Ill-feeling in the Dominions; and would achieve no economy in the present year or in the near future as compared with his alternative. The subject was adjourned until the same afternoon. BASIS OP ARMY
ESTIMATES. 8. The Cabinet had before them a Memorandum by the Se ore tar;/ of State for War in regard to (Previous
Reference: War Cab ins t
616A (1919).) *
r
the basis of the preparation of the Army for war, (Paper C P . -207 (27)) in which he asked for an early renewal of the decision taken by the War Cabinet in 1919, which was as follows:­
"It should be assumed, for framing revised Estimates, that the British Empire will not be engaged in any great war during the next ten years, and that no Expeditionary Porce is required for this purpose". The Secretary of State foruWar said he would like to leave out the words after "ten years". The Secretary of State for Foreign Affairs said that he had had little warning of this question, and would like more tine to consider the precise wording of any basis which w a s given. The Cabinet agreed
-
That the Secretary of State for Foreign Affairs and the Secretary of State for War should concert the precise wording to be given to a renewal of the decision of 1919, and that the. question should then be referred to the Committee of Imperial Defence.
If the formula was approved by the Committee of Imperial Defence the Secretary of State for War should be authorised to adopt it as the basis .of the Army Estimates. 2 , Whitehall Gardens, S.W.I, July 2 0 , 1927, ,