(c) crown copyright
Catalogue Reference:CAB/23/11
Image Reference:0012
Printed
for the War Cabinet.
July
1919.
SECRET.
WAR
Minutes
CABINET 5 9 8 .
of a Meeting of the War Cabinet held at 10, Downing
Wednesday, July 2 3 , 1919, at 12 noon.
Street, S.W., on
Present :
T h e P R I M E M I N I S T E R (in the
H o n . t h e E a r l C U R Z O N OE
KEDLESTON, K . G . , G . C . S . I . , G . C . I . E .
The Right
Chair).
The R i g h t Hon. A. CHAMBERLAIN, M.P.
The R i g h t Hon. G. N . BARNES,' M.P.
T h e R i g h t H o n . A. B O N A R L A W , M . P .
T h e following were also p r e s e n t :
T h e R i g h t H o n . t h e Viscount M I L N E R ,
G . C . B . , G.C.M.G., Secretary of S t a t e for
t h e Colonies.
T h e R i g h t H o n . W . S. C H U R C H I L L , M . P . ,
S e c r e t a r y of S t a t e for W a r .
T h e R i g h t H o n . A . C. G E D D E S , K.C.B.,
M.P., P r e s i d e n t of t h e Board of Trade.
The R i g h t H o n . H . A . L. F I S H E R , L L . D . ,
M.P., P r e s i d e n t of t h e Board of E d u c a ­
tion (for M i n u t e 5).
T h e R i g h t H o n . C. A D D I S O N , M . D . , M . P . ,
Minister of H e a l t h .
T h e R i g h t H o n . Sir L. W O R T H I N G T O N
E V A N S , B a r t . , M.P., Minister of Pensions
(for M i u u t e 7 ) .
T h e R i g h t H o n . Sir R . S. H O R N E , K . B . E . ,
K.C., M.P., Minister of Labour.
Major-General t h e R i g h t H o n . J . E . B .
S E E C Y , 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 for A i r (for
Minute 7 ) .
Sir
HAMAR
GREENWOOD,
Bart.,
The R i g h t H o n . W . LONG, M . P . , F i r s t
Lord of t h e A d m i r a l t y .
T h e R i g h t H o n . t h e Viscount C A V E , K . C .
(for M i n u t e 6).
The R i g h t H o n . Sir J . MACLAY, Bart.,
Shipping Controller (for Minutes 1 - 5 ) .
The Right
H o n . G. H . R O B E R T S , M . P . ,
Food Controller (for Minutes 1 - 5 ) .
General
the
Hon.
Sir
J.
H.
Major-General
Sir
C.
H.
HARINGTON,
T h e V i s c o u n t P E E L , C.B.E., Under-Secre­
t a r y of S t a t e for W a r (for Minute 7 ) .
The Right
H o n . H . W . FORSTER, M . P . ,
Financial Secretary,
Minute 7 ) .
W a r Office
(for
Sir J O H N P E D D E R , K . B . E . , C.B., A s s i s t a n t -
S e c r e t a r y , H o m e Office (for Minute 5 ) .
M.P.,
7).
Lieutenant-Colonel Sir M. P . A. H A N K E Y , K . C . B . ,
Secretary.
Secretary.
Lieutenant-Colonel L . STORR, C . B . , Assistant
Captain L. F . B U R G I S , Assistant
BYNG,
K.C.B., D.S.O., D e p u t y Chief of t h e
Imperial General Staff (for M i n u t e 7 ) .
Director of Overseas T r a d e (for M i n u t e
Mr. T H O M A S J O N E S , Assistant
G.
G . C . B . , K . C . M . G . , M.V.O. (for Minute 7 ) .
Secretary.
Secretary.
2
The Coal Strike.
1 . W i t h reference to W a r Cabinet 5 9 7 , M i n u t e 1, t h e W a r
C a b i n e t h a d before them four reports on the situation in Yorkshire
b y Sir Eric Geddes (Papers U . C . - 9 , 10, 1 1 , a n d 1 2 ) .
. T h e Minister of Labour said t h a t his information was to t h e
effect t h a t Mr. H e r b e r t Smith, t h e P r e s i d e n t of t h e Yorkshire.
M i n e r s ' Association, had made a pacific speech a t a meeting of t h e
Yorkshire District Council. The feeling of t h e younger miners in
Yorkshire was t h a t t h e a b a n d o n m e n t of t h e p u m p s was t h e only
m e t h o d of bringing t h e situation to a head, a l t h o u g h t h e older men
were a g a i n s t this course. There was a general feeling now t h a t t h e
p u m p s should be worked, and it was hoped t h e pumpmen would
r e t u r n shortly. The Yorkshire dispute was receiving n o ' support
from t h e other coalfields. I n S o u t h W a l e s t h e m e n were still a t
work, and in Lancashire t h e y were about to r e t u r n . The strikes in
N o t t i n g h a m s h i r e and Derbyshire were on issues not connected with
piece-rate awards.
W i t h regard to t h e situation of t h e pits in
Yorkshire, six had been entirely flooded, and t h e owners were quite
content t h a t this should be so, as t h e s e were unprofitable pits to
work. Seventeen were g e t t i n g into a dangerous condition, and it
was t h o u g h t t h a t t h e assistance of t h e naval r a t i n g s was being
obtained to keep t h e pumps going. Mr. H e r b e r t S m i t h had told his
men n o t to interfere with t h e naval r a t i n g s . Sir R o b e r t H o m e
added t h a t t h e coalowners were very anxious t h a t Sir Eric Geddes
should see Mr. H e r b e r t S m i t h w i t h regard to t h e 1 4 ' 3 per cent., as
some of t h e owners were in favour of this increase being given
in full.
T h e P r e s i d e n t of t h e Board of Trade said t h a t t h e Miners'
F e d e r a t i o n had h a d a long discussion on piece r a t e s a t Keswick, a n d
h e understood (through Mr. H a r t s h o r n ) t h a t t h e y h a d decided t h a t
a 10 per cent, increase for all pits was all t h e y could ask for, w i t h
t h e exception of Lancashire a n d Cheshire, which t h e y considered
should have 1 2 ' 2 per cent., and Yorkshire something like 1 2 ' 1 per
cent. I n South W a l e s only did t h e y consider the rise should be as
much as 1 4 3 per cent. Mr. H a r t s h o r n h a d informed him t h a t
Mr. Smillie had compelled t h e Lancashire delegates to r e t u r n to
Lancashire and inform t h e men t h a t t h e y h a d got to t a k e 12"2 per
cent. There was another feature in t h e situation, r e g a r d i n g t h e
p u m p m e n who were not members of t h e Miners' Federation, as
distinct from those pumpmen w h o were members. These m e n were
being intimidated, and h a d decided t h a t t h e y would not return to
t h e mines until t h e y had been paid their wages for t h e days on which
t h e y h a d been compelled n o t to work b y t h e Yorkshire Association.
I f t h i s claim was not met, and t h e men came out on strike after t h e
miners h a d r e t u r n e d , it would result in a more difficult situation
t h a n t h e present one. These p u m p m e n were of t h e opinion t h a t t h e
miners should be made t o ' p a y t h e i r wages, b u t so long as t h e y were
paid, w h e t h e r by t h e owners or b y t h e Government, he did not t h i n k
t h e y would mind.
T h e Minister of Labour said t h a t these m e n had m a n y
grievances against t h e Miners' Federation, one of which was t h a t
t h e F e d e r a t i o n h a d refused to sit on t h e S a n k e y Commission
with t h e m .
T h e Chancellor of t h e Exchequer said t h a t he understood from
t h e Minister of Labour t h a t t h e two Yorkshire Owners' Associations
wished, to give way to t h e men a n d a w a r d t h e m t h e 1 4 ' 3 per cent, for
piece r a t e s . This looked like an invitation to t h e Government t o
g o back on its decision. Such a course would condemn t h e Govern­
m e n t u t t e r l y and destroy its power to deal with further troubles.
T h e Prime Minister said t h a t it would create a serious position
if t h e owners advised t h e Government to g r a n t t h e 1 4 ' 3 per cent., as
t h e fact t h a t such advice h a d been given was bound, sooner or later,
- t o be made public.
The Chancellor of t h e E x c h e q u e r observed t h a t such advice was
on a subject in which t h e owners had ceased to have any pecuniary
interest.
-
r
3
WC5
The Minister of Labour said t h a t t h e Scottish and S o u t h W a l e s
miners were against t h e 1 4 3 per cent., and he believed only a few
miners in Lancashire, Yorkshire, and W a r w i c k s h i r e supported t h e
demand.
The P r i m e Minister said t h a t such an advance would mean 6d.
or I s . e x t r a on to t h e price of coal, which t h e country could not
possibly afford. A s t h e Chancellor of t h e E x c h e q u e r h a d observed,
ix, was all very well for t h e masters t o advise t h e giving of t h i s
concession, b u t t h e money would not come out of their pockets.
The Secretary of S t a t e for W a r said t h a t , with r e g a r d to t h e
general situation, he h a d received a private l e t t e r from t h e General
Officer Commanding, N o r t h e r n Command, in which he s t a t e d t h a t
t h e liaison with Sir Eric Geddes was working very well. Troops
h a d been sent from Clipstone to Wakefield, Pontefract, a n d Leeds.
H e proposed to reinforce Clipstone Camp by one of t h e brigades frOrn
t h e fihine A r m y .
The Food Controller said t h a t , w i t h regard to t h e strike of t h e
Co-operative Societies' employees, he was able t o report t h a t t h e y
were r e t u r n i n g to work pending negotiations.
-
Nationalisation of
Mines,
2. The Cabinet had some discussion on t h e desirability of
making a s t a t e m e n t regarding t h e nationalisation of. mines.
The P r i m e Minister said t h a t Mr. Smillie was coming to see him
on the following day, and he would probably ask if the Government
was able to give him a n y information regarding nationalisation.
The P r i m e Minister said t h a t he was inclined to t h i n k t h a t t h e r e was
n o t h i n g to be gained b y p u t t i n g off a decision. The previous evening
he h a d dined w i t h seventeen or eighteen Members of P a r l i a m e n t ,
mostly Coalition Liberals, and he h a d asked t h e m their views on
nationalisation, a n d with one exception t h e y h a d all been against it,
t h o u g h t h e y were in favour of t h e nationalisation of t h e railways.
These gentlemen were, however, agreed t h a t t h e miners should have
a voice in t h e management of t h e mines, and t h e y were in favour of
t h e nationalisation of royalties and minerals. H e t h o u g h t it would
be wise to m a k e a s t a t e m e n t on t h e subject before t h e recess, b u t if
these strikes continued it gave t h e G o v e r n m e n t very little time to
consider such a weighty question.. Should there be a strike on t h e
subject of nationalisation, he t h o u g h t it would be b e t t e r t o have it
in A u g u s t t h a n t h r e e months later. H e was interviewing some of
t h e mine-owners shortly, with a view to an interchange of opinions
on this subject, and he would like t h e a u t h o r i t y of t h e Cabinet to
press these owners to give representation to t h e men in t h e manage­
m e n t of t h e mines. The Prime Minister said t h a t there w a s one
other subject on which he would like to m a k e a s t a t e m e n t t o t h e
H o u s e before t h e recess, which was, the trade,policy of t h e country.
The Members of P a r l i a m e n t with whom he had dined on t h e previous ­
night h a d also pressed him t o m a k e a s t a t e m e n t on t h e action t h e
Government proposed to t a k e regarding profiteering.
These
gentlemen favoured drastic and dramatic measures.
The Minister of H e a l t h observed t h a t , while t h e Government
did not possess t h e confidence of t h e miners, unless a s t a t e m e n t on
nationalisation was made, t h e y would lose t h e confidence of t h e
general public also.
I t was generally agreed t h a t a s t a t e m e n t on t h e subject of
nationalisation was desirable before t h e recess, in view of t h e fact
t h a t , if a strike was to come, t h e best month in which to h a v e it was
August.
The W a r C a b i n e t decided t h a t —
(a.) T h e P r i m e Minister, in his interview with Mr. Smillie on
t h e following day, should inform him t h a t t h e Govern­
m e n t would m a k e a s t a t e m e n t of their policy on
nationalisation before t h e recess ;
The P r i m e Minister, when interviewing t h e coal-owners,
should u r g e t h e m to concede representation for t h e men
in t h e m a n a g e m e n t of t h e mines.
Xtis 6X-K3.is6r.
3. The Cabinet h a d a short discussion regarding t h e venue of
t h e trial of t h e ex-Kaiser. The P r i m e Minister agreed t h a t London was n o t a very suitable
place, and it h a d been his intention, in his speech on t h e subject, to
say t h a t i t would t a k e place in England.
The relative a d v a n t a g e s of H a m p t o n Court a n d Dover were
discussed.
The A c t i n g Secretary of S t a t e for^ Foreign Affairs m a d e t h e
suggestion of the Channel Islands.
Visit of H.E.H. the
Prince of Wales to
the United States.
4. W i t h reference t o W a r Cabinet 589, M i n u t e 1, t h e A c t i n g
Secretary of S t a t e for Foreign Affairs reported t h a t t h e U n i t e d
S t a t e s Ambassador entirely approved of t h e proposal t h a t t h e Prince
of W a l e s should be lodged on his own b a t t l e s h i p during his visit to
N e w York. This would relieve t h e U n i t e d S t a t e s of t h e difficulty
of finding a suitable residence, a n d would h a v e t h e additional
a d v a n t a g e of enabling H i s R o y a l H i g h n e s s to r e t u r n hospitality.
The W a r C a b i n e t approved t h i s proposal, a n d agreed t h a t an
immediate announcement should be made r e g a r d i n g t h e
Prince of W a l e s ' visit to t h e U n i t e d S t a t e s .
T h e A c t i n g Secretary of S t a t e for Foreign Affairs
undertook t o set in motion t h e a r r a n g e m e n t s he h a d agreed
on with L o r d Stamfordham for t h i s purpose.
Situation in North
Eussia.
j
p
Minister said he wished t o d r a w the a t t e n t i o n of
t h e W a r Cabinet t o t h e most recent developments in N o r t h Russia, as
revealed b y t w o telegrams from General Ironside, which h a d j u s t
been received. The first s t a t e d t h a t Onega h a d been handed over
t o t h e Bolsheviks, after a m u t i n y . T h e railway position was t h e
same, Russian troops being disarmed in parties as t h e British arrive.
The s t a t e of t h e Russian troops was such t h a t his efforts t o consoli­
d a t e t h e Russian national a r m y m u s t now be regarded definitely as
a failure. U n l e s s t h e British force a t A r c h a n g e l was to be increased,
i t was essential t h a t evacuation be carried out w i t h t h e least possible
delay. T h e t e l e g r a m expressed t h e hope t h a t t h e naval contingent
in N o r t h Russia m i g h t a t once be increased b y t w o large warships,
t o admit of l a n d i n g parties in t h e t o w n so as t o release soldiers for
fighting.
I n conclusion, General Ironside asked w h e t h e r h e was to
commence t h e e v a c u a t i n g of any civilian population, as, if it was
decided t h a t t h i s m u s t be done, a s t a r t should be made as early as
possible.
I n t h e second telegram General Ironside said t h a t h e h a d
discussed t h e situation with G e n e r a l Miller, who agreed w i t h him
t h a t it would not be possible for t h e Russians t o hold on to Archangel
d u r i n g t h e w i n t e r if t h e British troops were withdrawn.
The
situation was difficult, as he h a d to stabilise each front w i t h British
troops, and, w i t h t h e river in its present s t a t e , movement was slow.
Monitors were s t a n d i n g by a n d bombarding t h e enemy, who was not
in great s t r e n g t h . T h e tactical situation m i g h t demand a w i t h d r a w a l
on t h e Dwina a n d Vaga. All preparations were being m a d e for an
evacuation slowly down t h e river, if t h e situation required it. As
r e g a r d s holding on d u r i n g t h e winter, and t h e number of British
troops required t o do it, t h e safety of Archangel depended so much
on t h e situation in t h e rest of Russia t h a t General Ironside could not
estimate exactly w h a t t h e requirements would be. H e t h o u g h t he
could hold practically w h a t he h a d now w i t h o u t danger, w i t h t h e :
5
T
i e
r
i
m
e
WC 598
troops he h a d a t present, provided t h a t the odds against him were
no g r e a t e r t h a n t h e y h a d been t h e previous - year. The position,
however, would always be one of active defensive only.
The P r i m e Minister said t h a t t h e telegrams left upon him t h e
impression of a strong man, who was not afraid to face facts. T h e y
u n d o u b t e d l y revealed a very serious position. I t was clear t h a t
General Ironside contemplated t h e possibility of remaining on into
t h e winter. The first t h i n g to be done was t o eradicate this idea a t
once. The Cabinet h a d some t i m e ago definitely decided t h a t our
troops must be w i t h d r a w n before t h e winter set in.
The Secretary of S t a t e for W a r said t h a t t h e W a r Office had no
intention of l e t t i n g General Ironside remain on, and t h e y would t a k e
steps t o remove his misapprehensions a t once.
The P i r s t Lord of t h e A d m i r a l t y said t h a t t h e best men t h a t
could be sent to General Ironside's assistance would be a fine
battalion of Marines, which it had been proposed to send to SchleswigHolstein, b u t had been retained in E n g l a n d for t h e present on
account of t h e Labour situation.
T h e Acting-Secretary of S t a t e for Foreign Affairs pointed o u t
t h a t t h e situation in N o r t h Russia had changed since t h e Cabinet
h a d reached t h e decision referred to by t h e P r i m e Minister. A t t h a t
time t h e y h a d contemplated t h a t when our troops w i t h d r e w t h e y
would leave behind t h e m a local Russian Government. I t was clear
now, however, t h a t directly we evacuated Archangel, t h e Tchaikovski
G o v e r n m e n t would fall, a n d t h e Bolsheviks t a k e its place.
The Chancellor of t h e E x c h e q u e r said t h a t he a n d some of his
colleagues, w h e n t h e Cabinet h a d approved of General Ironside's
plans for an offensive, h a d viewed t h e whole proposal with grave
misgivings, a n d t h e possible political a d v a n t a g e s to be derived from
this action h a d not convinced them. They had yielded to s t r o n g
pressure on t h e p a r t of t h e military authorities, who h a d represented
(a) t h a t a s t r o n g forward movement was necessary to render t h e
evacuation a safe operation ; and (b) t h a t , if we could hold on until t h e
river froze, t h e Tchaikovski Government could m a i n t a i n itself d u r i n g
t h e winter. I n both cases t h e g r o u n d had now been cut a w a y from
under our feet, and t h e r e was no reason for our troops remaining a
a day longer t h a n was necessary. W e had, however, t o consider t h e
question of evacuating t h e local population, a n d he wished to know
exactly w h a t our obligations were in this respect.
T h e Secretary of S t a t e for W a r said t h a t t h e British troops h a d
been in Archangel before he took over his present a p p o i n t m e n t .
He
desired, however, t h a t t h e position of t h e W a r Office in regard t o
t h i s situation should be clearly understood.
T h e y h a d never
diverged from their plan, which was t o evacuate those troops as
soon as possible. W e only maintained in N o r t h Russia a force j u s t
sufficiently large to ensure a safe withdrawal.
That withdrawal
m i g h t now h a v e been completed h a d it not been decided t o accept
General Ironside's plan, for reasons s t a t e d by t h e Chancellor.
W h e n t h i s plan h a d been before t h e Cabinet, Admiral Koltchak's
position had been so good t h a t "the W a r Office felt bound t o seize
w h a t appeared t o be a most favourable o p p o r t u n i t y to establish a
j u n c t i o n w i t h him a n d set u p a secure local
Government.
U n f o r t u n a t e l y , these hopes had not been realised, so we had now t o
revert t o our original intention of e v a c u a t i n g as soon as possible.
The last chance of saving t h e Archangel Government had gone. H e
did n o t t h i n k , however, t h a t t h e general s t r a t e g i c situation in
Russia h a d undergone a n y g r e a t change. I t was quite clear now
t h a t General Ironside's plan to strike t h e Bolsheviks a heavy blow
was sound, a n d it was to be r e g r e t t e d t h a t he h a d been.unable t o
bring i t off. The R u s s i a n s a t Archangel k n e w perfectly well t h a t
we i n t e n d e d t o w i t h d r a w , a n d t h e y ' m u s t now realise t h a t , when we
went, t h e y m u s t endeavour to m a k e t h e best t e r m s t h e y could w i t h
t h e Bolsheviks. T h e Government, he t h o u g h t , h a d t a k e n a wise
course in announcing t o P a r l i a m e n t their intention of evacuating.
I n a n y case, concealment would h a v e been impossible, as we had t o
promise t h e troops already t h e r e t h a t t h e y would be b r o u g h t back,
and, further, we h a d to give a pledge to other troops, volunteering
to go o u t and relieve t h e m , t h a t t h e y would be w i t h d r a w n before t h e
winter. I n his opinion, it was quite evident t h a t we must be
prepared to evacuate a certain n u m b e r of t h e local population.
We
could not, of course, allow R u s s i a n s who bad fought for us t o be
murdered, a n d he suggested that, w e should offer to r e p a t r i a t e t h e m
t o S o u t h Russia, where t h e y could join General Denikin. H e h a d
on t h e previous d a y seen a British officer who had j u s t retmmed
from Archangel^ who strongly urged t h a t t h e idea of m a i n t a i n i n g a
British Military Mission there during t h e w i n t e r should be abandoned,
as their t h r o a t s would certainly all be cut.
The P r i m e Minister reminded t h e W a r Cabinet t h a t our policy,
w h e n we first decided to land troops a t Archangel, was to assist our
R u s s i a n friends against t h e Germans. W e h a d t h e n had to remain
on in order t o protect Russian troops, and others who were still
loyal to t h e Entente,
against t h e Bolsheviks.
I t was most
unfortunate t h a t Admiral K o l t c h a k ' s recent, operations had definitely
failed.
I t was clear to him t h a t Koltchak's present advisers
a t t a c h e d no importance to t h e A r c h a n g e l Government.
Archangel
possessed no population, no railways, no resources. For this reason
it was unlikely t h a t t h e Bolsheviks would pay very much a t t e n t i o n
to it, as South Russia—where minerals, oil, & c , were found in
profusion—would prove a more powerful magnet. H e t h o u g h t t h a t
t h e W a r Office, in replying to General Ironside's telegrams, should
remove a n y apprehension he might have about t h e possibility of his
s t a y i n g on into t h e winter, and should also inform him t h a t our
honour was involved in saving as m a n y of our Russian friends as we
could. For t h e rest, he t h o u g h t we h a d no reason a t all t o reproach
ourselves.
W e had given Koltchak, Denikin, Archangel, and t h e
Russians generally, every possible chance of saving themselves from
t h e Bolsheviks, a n d this we h a d been compelled to u n d e r t a k e single­
handed. W e alone had supplied troops, munitions, a n d money,
while t h e F r e n c h had only contributed promises.
The Chancellor of t h e E x c h e q u e r t h o u g h t t h a t t h e situation in
Siberia, to j u d g e from General K n o x ' s telegrams, was j u s t as serious
as, or even more serious t h a n , t h a t in Archangel.
As regards
the evacuation of the civil population, he t h o u g h t t h e t i m e h a d
come when we should tell them t h a t we could n o t u n d e r t a k e to
continue to feed a n d finance t h e m after t h e y have been w i t h d r a w n
from N o r t h Russia. As t h e P r i m e Minister had s t a t e d , t h e whole
burden of assisting t h e Russian people to escape from Bolshevist
t y r a n n y h a d been borne by ourselves. I t was an u n f o r t u n a t e t h i n g
t h a t none of those we were assisting h a d ever t a k e n our advice in
military or political matters.
T h e Acting-Secretary of S t a t e for Foreign Affairs said t h a t in
March last t h e number of people, o t h e r t h a n British, whom we
m i g h t have to evacuate from Russia amounted t o some 1 8 , 0 0 0 ;
t h a t is to say^ 9,000 of t h e local population, 4 , 0 0 0 Poles, L e t t s ,
Lithuanians, & c , and 5,000 locally enlisted Russian troops. H e
proposed to telegraph to our r e p r e s e n t a t i v e a t Archangel to enquire
w h a t his most recent estimate was of t h e numbers to whom we were
under an obligation in this respect. I t would not be difficult to
r e p a t r i a t e t h e Poles, L i t h u a n i a n s a n d others,, as their countries were
contiguous t o Russia. The repatriation of t h e Russians was mainly
a m a t t e r of shipping. There were t w o classes of Russians to be
considered ; those who h a d fought w i t h us, b u t m a n y of whom h a d
since mutinied, a n d t h e ordinary population.
The S e c r e t a r y of S t a t e for W a r t h o u g h t it w a s q u i t e probable
t h a t in t h e course of t h e n e x t t w o m o n t h s t h e whole K o l t c h a k
movement would crumple to pieces, unless t h e J a p a n e s e a n d t h e
U n i t e d S t a t e s w e n t to his rescue, a n d t h e Bolsheviks would t h e n
be able to concentrate t o w a r d s t h e south. The repercussion of a
succession of misfortunes was bound to have an effect on, a n d m i g h t
even overwhelm, Denikin. H e wished our policy in r e g a r d t o Russia
had been more clearly defined. Mr. Churchill said t h a t he r e g r e t t e d
t h a t t h e Chief of t h e Imperial General Staff w a s unable to be
present t h a t day, b u t he hoped to bring him with him to-morrow or
t h e following day to t h e W a r Cabinet, when t h e y would submit
considered proposals to meet t h e present situation.
The Shipping Controller said t h a t he understood t h a t a l t o g e t h e r
he would be required to find shipping for not less t h a n 5 0 , 0 0 0 men
to be w i t h d r a w n from Archangel. This number included British
troops a n d t h e local population. The shipping situation was already
very serious, and it would be g r e a t l y accentuated if he had to provide
for t h e repatriation of a n y considerable numbers of Russians to t h e
Crimea. All shipping was not suitable for this purpose, a n d it
would probably be necessary to w i t h d r a w vessels from t h e A t l a n t i c
services. I t would mean t h a t t h e repatriation of Canadians a n d
Australians would be interrupted. His D e p a r t m e n t could, h e
t h o u g h t , furnish t h e necessary shipping, provided t h e y were told a t
once exactly thfi numbers for whom accommodation would be
necessary, and w h e r e t h e y must be sent. The position was rendered
t h e more serious b y t h e t h r e a t of a possible strike in Liverpool.
The W a r Cabinet d e c i d e d Co.) T h a t t h e Acting-Secretary of S t a t e for Foreign Affairs
should ascertain from our representative at Archangel
the e x a c t n u m b e r s of friendly troops and i n h a b i t a n t s
whom we were under an obligation t o evacuate, w i t h
special reference to t h e minimum number of Russians t o
be r e p a t r i a t e d to t h e Black Sea.
. (b.) T h a t t h e W a r Office, in reply to General Ironside's
telegrams, should m a k e it absolutely clear t o him t h a t
there was no intention whatsoever of t h e British Govern­
ment d e p a r t i n g from its decision to evacuate Archangel
before t h e winter set in.
A t a later s t a g e in t h e m e e t i n g t h e First, Lord of t h e A d m i r a l t y
informed t h e W a r Cabinet t h a t his N a v a l Advisers were being
pressed by t h e W a r Office to send a battalion of Marines t o A r c h a n g e l
w i t h o u t delay. A r r a n g e m e n t s would be m a d e for these m e n to s t a r t
within forty-eight hours, if t h e Government authorised their despatch.
H i s D e p a r t m e n t were assured t h a t t h e Liverpool men who h a d s t r u c k
would resume work a t once if t h e y could be told t h a t by loading t h e
ships t h e y would be helping to bring our men back from Russia.
If
t h e W a r Cabinet authorised t h e despatch of t h e Marines, t h e
necessary shipping would have to be provided.
This question was reserved u n t i l t h e further discussion w h e n
t h e Chief of t h e Imperial General Staff would be present.
Government
Machinery for
Trade and
Commerce.
6. The W a r Cabinet h a d under consideration t h e R e p o r t of t h e
Committee, established by W a r Cabinet 5 5 3 , M i n u t e 4 , to examine
t h e question of G o v e r n m e n t machinery for dealing w i t h t r a d e a n d
commerce ( P a p e r G . - 2 5 3 ) .
Lord Cave, t h e C h a i r m a n of t h e Committee, s t a t e d t h a t t h e
enquiry of t h e C o m m i t t e e h a d been devoted to t h e machinery for t h e
development of British t r a d e abroad. The Committee h a d investi­
g a t e d t h e m a t t e r thoroughly, their principal object being t o further
t h e development of British t r a d e in foreign countries. H e h a d
s t a r t e d t h e investigation with a bias in favour of t h e - p o i n t of view
p u t forward b y t h e P r e s i d e n t of t h e Board of Trade, but t h e Com­
m i t t e e found, from t h e evidence before t h e m , t h a t t h e r e was a v e r y
s t r o n g feeling amongst commercial m e n against t h e proposal t h a t t h e
D e p a r t m e n t of Overseas Trade should be abolished or absorbed into
t h e Board of Trade. I t was a d m i t t e d t h a t t h e Consular Service
m u s t remain under t h e Foreign Office, a n d it would be impossible,
w i t h o u t t h e existence of t h e D e p a r t m e n t of Overseas Trade as a
link between t h e Foreign Office a n d t h e Board of Trade, to keep u p
a proper connection between t h e representatives of the British
G o v e r n m e n t abroad and the D e p a r t m e n t s a t home concerned
w i t h t r a d e questions.
The Committee were of opinion t h a t
t h e D e p a r t m e n t of Overseas T r a d e should be continued a n d
s t r e n g t h e n e d . . The fact t h a t it h a d a t its head an U n d e r S e c r e t a r y able to devote his whole time to foreign commerce would
enable it to do a great deal for British trade abroad. There was
no dotibt t h a t t h e accommodation occupied by t h e D e p a r t m e n t
h a d been disgraceful. I t h a d been scattered t h r o u g h half-a-dozen
buildings in different p a r t s of London, and h a d not had a fair chance.
The D e p a r t m e n t necessarily had in its register m i n u t e s and docu­
ments which both of t h e p a r e n t D e p a r t m e n t s desired t o see, and i t
was essential t h a t it should be in close proximity to the Board of
Trade and the Foreign Office, and, if possible, t h a t all three
D e p a r t m e n t s should be u n d e r t h e same roof.
The P r e s i d e n t of t h e Board of Trade said t h a t he did not t h i n k
t h e solution proposed by t h e Committee would be satisfactory.
The
work of r e g u l a t i n g public services was in process of being taken a w a y
from t h e Board of Trade, a n d t h e functions remaining t o it would all
be of a/commercial n a t u r e , of which b y far t h e most important would
be those relating to overseas trade, which were inseparably linked
u p w i t h questions of export. I t was impossible to separate export
questions from questions of internal t r a d e . W h i l e he would not s a y
t h a t with good-will t h e scheme proposed by t h e Committee could
not be made to work, he was of opinion t h a t it was bad in principle,
a n d wasteful.
H e agreed t h a t t h e main difficulty was t h e geo­
graphical separation of t h e D e p a r t m e n t of Overseas T r a d e from t h e
Board of Trade! On t h e other hand, he believed t h a t t h e real
solution was not to set up t h e D e p a r t m e n t of Overseas Trade as a
link u n d e r t h e same roof as t h e Foreign Office and t h e Board of
Trade, b u t simply to house the Foreign Office and t h e Board of
Trade t o g e t h e r . ' T h e dual allegiance owed by t h e P a r l i a m e n t a r y
U n d e r - S e c r e t a r y a t t h e h e a d of the" D e p a r t m e n t of Overseas Trade
would necessarily be very difficult to achieve in practice. I n any
event, he agreed w i t h t h e recommendation of t h e Committee t h a t
machinery should be set u p for close consultation between t h e Foreign
Office a n d t h e Board of Trade. The, proposed S t a n d i n g Council he
r e g a r d e d as absolutely essential, w h e t h e r t h e D e p a r t m e n t of Overseas
Trade were continued or not. T h e principal need, however, was to
g e t proper accommodation. If t h e D e p a r t m e n t of Overseas Trade
were to continue in a different building, t h e Board of Trade would
be artificially split u p . The staff concerned with its most i m p o r t a n t
functions would be housed in a different building and would not be
known u n d e r t h e n a m e of t h e Board of Trade a t all. The staff of
t h e D e p a r t m e n t of Overseas Trade would be larger t h a n t h a t of t h e
Board of Trade, a n d t h e l a t t e r , being robbed of its principal functions,
would be placed in an invidious position.
. T h e P r i m e Minister pointed out t h a t , u n d e r t h e recommenda­
tions of t h e Committee, questions of commercial policy would still be
in t h e h a n d s of t h e Board of Trade.
T h e Acting-Secretary of S t a t e for Foreign Affairs observed t h a t
it was r e m a r k a b l e t h a t t h e Committee h a d expressed a broad general
opinion in favour of t h e D e p a r t m e n t of Overseas T r a d e . H e was
astonished a t t h e almost complete consensus of commercial opinion
in favour of t h e control of foreign commercial policy being under­
t a k e n b y t h e F o r e i g n Office. Three m e m b e r s of t h e Committee­
were in favour of continuing t h e D e p a r t m e n t of Overseas Trade,
while t h e only dissentient member w e n t even further and desired
t h e transfer of t h e supervision of foreign commerce to t h e Foreign
Office.
I n view of t h e opinion of t h e majority of t h e Committee
h e did n o t propose to a r g u e t h e case in favour of t h e suggestions, p u t
forward in t h e Minority R e p o r t , for t h e transfer of t h e D e p a r t m e n t
of Overseas Trade to t h e F o r e i g n Office. H e was of opinion,
however, "that t h e G o v e r n m e n t , h a v i n g referred t h e m a t t e r t o a
Committee upon which t h e commercial community were so largely
represented, would have g r e a t difficulty in refusing to adopt their
report. H e g a t h e r e d from t h e concluding remarks of 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 a t t h e l a t t e r was prepared t o accept t h e
solution proposed b y the Committee.
The P r e s i d e n t of t h e Board of Trade interposed t h a t t h a t was
so, provided t h e question of accommodation could be satisfactorily
settled.
Mr. Bonar L a w said t h a t he also h a d s t a r t e d w i t h a s t r o n g
prejudice in favour of t h e Board of Trade case, which he retained,
b u t . as t h e Cabinet h a d submitted t h e matter to t h e Committee,
which had sent in a strong r e p o r t , he t h o u g h t t h a t t h e y w e r e bound
to give t h e new scheme a trial.
The Minister of H e a l t h said t h a t he was entirely in agreement
with t h e President of the Board of Trade. I n his opinion t h e Com­
mittee had been influenced, in coming to their conclusion, by a
wrong idea of t h e functions of t h e Board of Trade as a purely
regulating and controlling D e p a r t m e n t .
The F i r s t Lord of the A d m i r a l t y said t h a t he was in a g r e e m e n t
with t h e P r e s i d e n t of t h e Board of Trade.
The Chancellor of t h e E x c h e q u e r said t h a t , in his opinion, t h e
scheme proposed b y t h e C o m m i t t e e was unsound, b u t he felt t h a t h e
could not advise t h e G o v e r n m e n t to reject t h e report of so s t r o n g a
Committee with so powerful a backing of commercial opinion behind
it. H e regarded it as of importance t h a t commercial policy should be
controlled by t h e Board of T r a d e , and in his experience t h e late
Director of Overseas Trade h a d n o t always expressed t h e mind of
t h e P r e s i d e n t of t h e Board of Trade on questions of policy. H e h a d
particularly in mind t h e case of a scheme for developing t r a d e w i t h
Roumania.
Lord Cave pointed out t h a t t h e scheme in question h a d been
d r a w n up by a high official in t h e Board of Trade, and t h a t t h e
D e p a r t m e n t of Overseas Trade could not be held responsible if i t
had n o t received t h e sanction of t h e President.
The Director of Overseas T r a d e observed t h a t t h e ideal con­
ception would be t h a t t h e offices of t h e P r e s i d e n t of t h e Board of
Trade and t h e Secretary of S t a t e for Foreign Affairs should b e
u n i t e d in t h e same person, b u t t h a t was manifestly impossible.
U n d e r t h e n e w scheme t h e P r e s i d e n t of t h e Board of Trade would
lay down t h e lines of t r a d e policy. I t would be impossible, however,
to dispense with t h e D e p a r t m e n t of Overseas Trade as a bridge
between t h e Foreign Office a n d t h e Board of Trade unless t h e
Consuls were t a k e n away from t h e F o r e i g n Office.
Mr. Bonar L a w t h o u g h t t h a t it was not possible to reject t h e
scheme. I t was n o t enough t o say t h a t t h e D e p a r t m e n t of Overseas
Trade should be absorbed by t h e Board of Trade. Some provision
m u s t be m a d e for t h e supervision of t h e w o r k of t h e Consuls.
He
believed t h a t t h e proposal would work satisfactorily, provided t h e
Director of Overseas Trade realised t h a t h e was an U n d e r - S e c r e t a r y
responsible to both D e p a r t m e n t s , a n d did not ally himself especially
to one or other of t h e D e p a r t m e n t s .
T h e President'' of t h e B o a r d of T r a d e agreed t h a t it was
obviously impossible to reject t h e scheme without proposing
a n y t h i n g in its place. If t h e Cabinet decided t o accept t h e R e p o r t ,
he pressed v e r y strongly t h a t t h e separate establishment of t h e
D e p a r t m e n t of Overseas T r a d e should be done away with, a n d t h a t
t h e members of t h e staff should be carried on one or other of t h e
votes of t h e two parent D e p a r t m e n t s . T h a t he believed to be
absolutely necessary. A s e p a r a t e establishment tended t o provoke
a suspicion of aggression a n d to create ill-feeling in m a t t e r s of
promotion. There would be n o difficulty in conceding to t h e
D
Director of Overseas Trade t h e full control of any members of his
staff seconded from t h e Board of. Trade. If t h e D e p a r t m e n t h a d
a separate vote, t h e President would have no say in t h e appointment
of t h e staff. H e w a s not inclined- to be responsible for t r a d e policy
unless h e h a d a say in the appointment of t h e higher officials of t h e
D e p a r t m e n t . H e had not been consulted in such m a t t e r s in t h e
past. H e regarded this as vital to t h e effective co-ordination of
policy in t r a d e and industry. H e was . prepared to accept t h e
recommendations of t h e Committee so long as t h e s e p a r a t e vote
was n o t maintained. Otherwise, there was no c e r t a i n t y t h a t h e
would know w h a t was being done in the D e p a r t m e n t of" Overseas
Trade.
Lord Cave t h o u g h t t h a t it would be dangerous to prevent t h e
staff of t h e D e p a r t m e n t of Overseas Trade from developing a n
independent existence, with t h e r e s u l t a n t esprit de corps.
H e hoped
t h a t t h e P r e s i d e n t of t h e Board of Trade would not insist upon t h i s .
The D e p a r t m e n t had done exceedingly good w o r k , a n d was covering
ground not h i t h e r t o covered by anybody. I t h a d t h e s u p p o r t of t h e
commercial world, and he suggested t h a t if t h e P r e s i d e n t of t h e
Board of Trade would give t h e scheme a fair chance for two or t h r e e
years, h e would find t h a t it would tend t o g r a v i t a t e in commercial
m a t t e r s towards t h e Board of Trade.
*.
T h e P e r m a m e n t Secretary to t h e Board of Trade said t h a t he
a t t a c h e d more importance, from t h e point of view of administration,
to t h e abolition of t h e separate establishment of t h e D e p a r t m e n t
t h a n t o any other m a t t e r . A body of civil servants w a s growing u p ,
who were neither on the s t r e n g t h of t h e Foreign Office nor of t h e
Board of Trade, although t h e D e p a r t m e n t t o which t h e y belonged
was not, in fact, an independent department. T h a t could only lead
eventually to t h e growth of a spirit of separation.
Mr. Bonar L a w observed t h a t , if t h e members of t h e staff of t h e
D e p a r t m e n t of Overseas Trade were in fact Board of Trade officials,
a n d . t r e a t e d as such, t h e mere fact of t h e r e being a formal vote for
t h e D e p a r t m e n t would appear to m a k e no difference. I n his opinion,
t h e H o u s e of Commons would w a n t a separate E s t i m a t e , a n d would
x-esent t h e splitting up of t h e vote for t h e D e p a r t m e n t between t h e
Foreign Office and t h e Board of Trade.
T h e P r i m e Minister said t h a t , as one who h a d ' considered its
establishment as a doubtful experiment, h e was v e r y gratified t o
hear t h a t the D e p a r t m e n t of Overseas Trade was giving satisfaction
in commercial circles, a n d suggested t h a t t h e scheme should b e
adopted as an experiment for a few m o n t h s . W i t h r e g a r d to t h e
question of accommodation, t h e F i r s t Commissioner of W o r k s m u s t
be consulted. The seventh recommendation of the Committee, t h a t
t h e Board of Trade should remain responsible for the general com­
mercial policy, was very important, a n d should g r e a t l y s t r e n g t h e n
the position of t h a t D e p a r t m e n t .
. T h e President of t h e Board of Trade said t h a t t h e question of
accommodation was a vital m a t t e r .
T h e Director of Overseas T r a d e said t h a t all t h e senior officials
at present belonged either to t h e Foreign Office or t h e Board of
Trade, a n d he would not t h i n k of appointing anybody of his own
selection.
T h e W a r Cabinet decided—
(a.) To approve t h e R e p o r t of t h e Committee as a provisional
scheme subject, to reconsideration if it should not be
found to work satisfactorily after some m o n t h s '
experience;
(b.) T h a t t h e separate establishment of t h e D e p a r t m e n t of
Overseas Trade should continue for t h e present, b u t
should be b r o u g h t u p for further consideration in t h r e e
months' time.
Disposal of Canteen
t P r o f i
(.,'
;
(
s
7. T h e W a r Cabinet h a d before t h e m a Memorandum by t h e
Secretary of S t a t e for W a r ( P a p e r G . T . - 7 5 9 5 ) on t h e subject of t h e
disposal of canteen profits, in which it was s t a t e d t h a t t h e A r m y
Council h a d had under consideration t h e question of t h e u l t i m a t e
disposal of t h e large funds which h a d accumulated as a result of
canteen t r a d i n g d u r i n g t h e war. Tt was estimated t h a t these funds,
which arose from various sources, a m o u n t e d to over 10,500,OOOZ., of
which, after d e d u c t i n g t h a t proportion which represented t h e profits
from purchases by Dominion, Colonial, a n d I n d i a n troops, t h e r e
remained approximately 8,000,00OZ. as t h e a m o u n t available in
respect of Imperial troops. The policy of t h e A r m y Council had been t o
conserve canteen and similar funds, with a view t o t h e i r utilisation
after t h e war in t h e best interests of those who were.serving,
or h a d served, a n d their d e p e n d a n t s , a n d in view of t h e fact t h a t t h e
large majority of men who contributed as soldiers and sailors to t h e
profits of t h e canteens were now civilians, and t h a t widows and
children were to share in the benefit from canteen profits, it was felt
t h a t t h e administration of such funds should n o t r e s t with t h e W a r
Office, so far as t h e y were concerned, b u t should be transferred to a
central a u t h o r i t y representative of all interests concerned. A draft
scheme for administering t h e fund, giving t h e proposed constitution
of a central Council and a Board of M a n a g e m e n t representative of all
interests, was appended to t h e Memorandum.
T h e W a r Cabinet also h a d u n d e r consideration a M e m o r a n d u m
on t h e same subject by t h e Chancellor of t h e E x c h e q u e r ( P a p e r
G . T . - 7 7 6 4 ) , in which a t t e n t i o n was d r a w n to t h e
following
p a r a g r a p h s from t h e Fifth R e p o r t of t h e Select Committee on
N a t i o n a l E x p e n d i t u r e :—
1
" 1 0 . The N a v y a n d A r m y Canteens Board conducts A r m y
C a n t e e n s on behalf of t h e A r m y Council.
I t is a t r a d i n g
organisation w i t h a gross annual, turnover of some 2 0 , 0 0 0 , 0 0 0 1 .
I t is financed by a Treasury g u a r a n t e e of 3,000,000Z;, b u t t h e
Board occupies a quasi-independent position; its accounts are
a u d i t e d b y its own auditors, and not b y t h e Controller a n d
Auditor-General.
I t s receipts are derived, first, from t h e
e x p e n d i t u r e in canteens of t h e 6^d. cash allowance g r a n t e d to - ­
troops for messing over and above t h e ration issued in k i n d ;
secondly, from t h e soldiers' individual e x p e n d i t u r e in canteens.
%
Ten per cent, of these receipts is given u p b y t h e Board,
four-fifths of t h e 10 per cent, to t h e units, one-fifth to t h e
Central Regimental Institutes Fund.
The question w h e t h e r
t h e profits derived from t h e e x p e n d i t u r e of t h e 6^d. cash
allowance belong to t h e public purse or not was reopened after only
40,000Z. h a d been paid in respect of one q u a r t e r , a n d has n o t
y e t been decided. This is a m a t t e r proper for t h e consideration
of t h e P u b l i c Accounts C o m m i t t e e , and pending t h e i r report
upon it we h a v e suspended our enquiry into t h e operations of
t h e Board.
" 1 1 . A second question t h a t arises in t h i s connection
relates t o t h e Central R e g i m e n t a l I n s t i t u t e s F u n d .
I t is a
t r u s t fund, vested in t h e A r m y Council, to be used for t h e
benefit of t h e soldier. A t t h e end of t h e W a r it is likely to
a m o u n t to several millions. M e a n t i m e , however, it forms p a r t
of t h e w o r k i n g capital of t h e N a v y and Army Canteens
Board. T h e situation w i t h respect to t h i s fund needs further
investigation on t h e p a r t b o t h of t h e W a r Office a n d of t h e
Treasury. A m o n g other considerations t h a t should be borne in
mind is t h e fact t h a t before t h e W a r we h a d a small
professional A r m y ; after t h e W a r our forces will be reduced t o
w h a t e v e r peace establishment it m a y be found necessary to
maintain ; d u r i n g the years of war t h e Army has been e x p a n d e d
t o include a g r e a t part of t h e a d u l t manhood of t h e nation. It'
is from t h i s vastly larger body t h a t t h i s fund h a s been d r a w n ,
a n d t h e disposal of it should t a k e these differences into account.
W e consider t h a t , in a n y event, t h e H o u s e of Commons should
have cognizance of t h e g r a n t s m a d e from time- to t i m e from t h e
Central R e g i m e n t a l I n s t i t u t e s F u n d , a n d of a n y proposals of
dealing w i t h t h e accumulated balances a t t h e end of t h e war.",
. The M e m o r a n d u m further s t a t e d t h a t , while t h e Chancellor of t h e
E x c h e q u e r did n o t support t h e suggested claim of t h e public p u r s e
t o a n y share in t h e profits of t h e canteens, h e felt t h a t t h e following
points required consideration :—
(1.) The claim of t h e ex-soldier t o share.
(2.) The claim of t h e House of Commons to be consulted.
(3.) R e p r e s e n t a t i o n of t h e Pensions Ministry on t h e C e n t r a l
Council.
The F i r s t Lord of t h e A d m i r a l t y s t a t e d t h a t t h e A d m i r a l t y
were t a k i n g steps to ascertain w h e t h e r t h e men of t h e F l e e t wished
t h e N a v y to join in t h e scheme.
The W a r Cabinet decided—
To
approve in principle t h e scheme p u t forward in t h e
Memorandum of t h e Secretary of S t a t e for W a r ( P a p e r
G . T . - 7 5 9 5 ) ; t h e details t o be a r r a n g e d in consultation
between t h e Secretary of S t a t e for W a r a n d Air, t h e
Minister of L a b o u r a n d t h e Minister of Pensions.
2, Whitehall
July
Gardens,
23, 1919.
&W.1,
CJ