(c) crown copyright
Catalogue Reference:CAB/128/10
Image Reference:0021
HIS
DOCUMENT
IS
T H E PROPERTY
Printed
OF
H I S
BRITANNIC
for the Cabinet.
August
MAJESTY*S
GOVERNMENT
1947
S E C R E T
Copy N o .
q
CM. (47)
70th Conclusions
CABINET
CONCLUSIONS
70(47)
of a Meeting of the Cabinet
on Thursday,
7th August.
held at 10 Downing
1947. at 10 a.m.
Street,
S.W. 1,
Present:
T h e R i g h t H o n . C . R . A T T L E E , M P . , P r i m e M i n i s t e r (in the
Chair).
The R i g h t H o n . H E R B E R T M O R R I S O N , T h e R i g h t H o n . E R N E S T B E V I N , M . P . ,
S e c r e t a r y of S t a t e f o r F o r e i g n
M . P . L o r d P r e s i d e n t of t h e Council.
Affairs. '
The R i g h t H o n . A R T H U R G R E E N W O O D , T h e R i g h t H o n . H U G H D A L T O N , M . P . ,
Chancellor of t h e E x c h e q u e r .
M.P., M i n i s t e r w i t h o u t P o r t f o l i o .
The R i g h t H o n . S i r S T A F F O R D C R I P P S , T h e R i g h t H o n . A . V . A L E X A N D E R ,
M . P . , M i n i s t e r of Defence.
K.C., M . P . , P r e s i d e n t of t h e B o a r d
of T r a d e (Items 1 - 3 ) .
The R i g h t H o n . V I S C O U N T J O W I T T , T h e R i g h t H o n J . C H U T E R E D E , M . P . ,
S e c r e t a r y of S t a t e f o r t h e H o m e
Lord Chancellor.
Home Department.
The R i g h t H o n . V I S C O U N T A D D I S O N , T h e R i g h t H o n . A . C R E E C H J O N E S ,
Secretary of S t a t e f o r Commonwealth
M . P . , S e c r e t a r y of S t a t e f o r t h e
Relations.
Colonies.
T h e R i g h t H o n . G. A I S A A C S , M . P . ,
The
Right
H o n . T H E E A R L OF
L I S T O W E L , S e c r e t a r y of S t a t e for
M i n i s t e r of L a b o u r a n d N a t i o n a l
I n d i a a n d S e c r e t a r y of S t a t e for
Service.
Burma.
The R i g h t H o n . E . S H I N W E L L , M . P . ,
The R i g h t Hon. A N E U R I N BEVAN, M . P . ,
M i n i s t e r of H e a l t h .
Minister of F u e l a n d P o w e r .
The R i g h t H o n . GEORGE TOMLINSON,
The R i g h t H o n . T. W I L L I A M S , M . P . ,
Minister
of
Agriculture
and
M . P . , M i n i s t e r of E d u c a t i o n .
Fisheries.
T h e following w e r e also p r e s e n t :
The R i g h t H o n . V I S C O U N T H A L L , FirstL o r d of t h e A d m i r a l t y (Items 1 - 2 ) .
The R i g h t H o n . P . J . N O E L - B A K E R ,
M . P . , S e c r e t a r y of S t a t e f o r A i r
(Item 2 ) . The R i g h t H o n . A L F R E D B A R N E S , M . P . ,
Minister of T r a n s p o r t (Item 6 ) .
The R i g h t H o n . S i r H A R T L E Y S H A W CROSS, K . C . , M . P . , A t t o r n e y - G e n e r a l
(Item 5 ) .
The Rirfit Hon. F . J . BELLENGER, M . P . S e c r e t a r y of S t a t e f o r W a r (Item 2 ) . The R i g h t Hon. J O H N W I L M O T , M.P., M i n i s t e r of S u p p l y (Item 6 ) . T h e R i g h t H o n . J O H N STRACHEY, M . P . , M i n i s t e r of Food. The R i g h t Hon. W I L L I A M WHITELEY, M.P.,
Parliamentary
Secretary,
T r e a s u r y (Items 1 - 2 ) . Mr. HAROLD WILSON, M.P.,
Secretary
for Overseas T r a d e (Items 1 - 5 ) .
Secretariat
:
M r . W . S. M U R R I E .
M r . S. E . V . L U K E .
[34134-3]
C A B I N E T
70
(47)
CONTENTS.
Minute
No.
Subject
1
Parliament
....
Page
....
213
B u s i n e s s i n t h e H o u s e of C o m m o n s .
2
B a l a n c e of P a y m e n t s
3
....
....
....
....
....
213
Anglo-Soviet T r a d e N e g o t i a t i o n s
....
....
....
....
214
4
T r a d e N e g o t i a t i o n s a t Geneva
....
....
....
....
215
5
C r i m i n a l J u s t i c e Bill....
....
....
....
....
216
....
P r o p o s e d A b o l i t i o n of C a p i t a l
Punishment.
6
I r o n a n d S t e e l I n d u s t r y Bill
....
....
....
....
217
7
Indian Sterling Balances
....
....
....
....
220
....
Parliament.
Business in
the H o u s e
of
Commons.
Balance
of
Payments.
(Previous
Eef erenee:
C M . (47) 6 9 t h
Conclusions,
Minute
2.)
1. T h e C a b i n e t were i n f o r m e d of the business to be t a k e n i n
t h e H o u s e of Commons before t h e A d j o u r n m e n t for the S u m m e r
Recess.
On 7 t h A u g u s t the P r i m e M i n i s t e r would propose a M o t i o n of
T h a n k s to t h e Civil a n d M i l i t a r y Services of t h e C r o w n i n I n d i a ;
t h e debate on t h e S t a t e of the N a t i o n would be continued, a n d t h e
proceedings on t h e Consolidated
Fund (Appropriation)
Bill would
be completed. T h e P r o c e d u r e M o t i o n on the Supplies and
Services
(Transitional
Powers) Bill w o u l d also be t a k e n .
On 8 t h A u g u s t the Second R e a d i n g of the Supplies and Services
(Transitional
Powers) Bill w o u l d be t a k e n .
O n 11th A u g u s t i t w a s proposed to t a k e the Committee a n d
r e m a i n i n g S t a g e s of the Su/pplies
and Services
(Transitional
Powers) Bill, a n d a n y L o r d s ' a m e n d m e n t s to Bills t h a t m i g h t be
received.
O n 12th A u g u s t the H o u s e would consider w h a t action should
be t a k e n on t h e findings of the Committee of P r i v i l e g e s in r e g a r d to
t h e editor a n d the political c o r r e s p o n d e n t of t h e Evening News, w h o
h a d refused to divulge t h e n a m e of the Member to w h o m t h a t p a p e r
h a d m a d e a weekly p a y m e n t i n r e t u r n for p o l i t i c a l a n d i n d u s t r i a l
i n f o r m a t i o n . T h e r e would also be a debate o n P a l e s t i n e ; a n d any
o u t s t a n d i n g L o r d s ' a m e n d m e n t s to Bills would be t a k e n .
O n 13th A u g u s t Questions would be t a k e n at 11 a.m.; airy o u t ­
s t a n d i n g L o r d s ' a m e n d m e n t s to Bills would be considered; a n d the
H o u s e would a d j o u r n for the S u m m e r Recess u n t i l 20th October.
2. The Chancellor of the Exchequer s a i d t h a t in h i s speech in
the P a r l i a m e n t a r y debate l a t e r in the day he would have to deal w i t h
the question of the size of the A r m e d Forces. T h e s t a t e m e n t m a d e
by the P r i m e M i n i s t e r on the previous day t h a t the n u m b e r s in the
A r m e d Forces would be r e d u c e d to 1,007,000 by 31st M a r c h , 1948,
h a d given rise to some d i s s a t i s f a c t i o n , a n d h e t h o u g h t it would be
desirable to s u p p l e m e n t it by i n d i c a t i n g t h a t , t h o u g h releases could
n o t be f u r t h e r accelerated in t h e period u p t o 31st M a r c h . 1948, it
m i g h t be possible to r e d u c e t h e t o t a l size of the Forces by some
m e a s u r e of d e f e r m e n t of call-up.
I n discussion i t w a s p o i n t e d out t h a t the e n q u i r i e s so f a r m a d e
suggested t h a t a n y acceptable scheme of deferment was not likely
to yield a r e d u c t i o n in the t o t a l size of the A r m e d Forces-of m u c h
m o r e t h a n 10,000 by 31st M a r c h , 1948, wdiereas those who h a d
criticised the P r i m e M i n i s t e r s a n n o u n c e m e n t were looking for a
r e d u c t i o n of the order of 100,000. Moreover, any suggestion t h a t the
G o v e r n m e n t were c o n s i d e r i n g the deferment on a n extensive scale of
men due for call-up would have a bad effect o n men a l r e a d y serving
i n t h e Forces a n d u n d e r m i n e the whole scheme of compulsory
n a t i o n a l service. F o r these reasons, i t would be better to say n o t h i n g
about t h e possibilities of a scheme of d e f e r m e n t ; nor should any
reference be m a d e to releases u n d e r the age and length of service
p l a n . T h e Chancellor of t h e E x c h e q u e r m i g h t , however, give separ­
ately the n u m b e r s in each of t h e t h r e e Services a t 31st M a r c h , 1948,
i n o r d e r to dispel the belief t h a t t h e g r e a t m a j o r i t y were in the
A r m y . H e should also m a k e it p l a i n t h a t t h e problem of securing
a r e d u c t i o n in the size of t h e A r m e d Forces h a d been faced long
before t h e p r e s e n t critical s i t u a t i o n h a d developed ; t h a t t h e G o v e r m
m e n t s efforts to secure r e d u c t i o n s in the c u r r e n t financial year were
by n o means ended, a n d t h a t w h a t e v e r f u r t h e r economies could be
achieved would a t once be p u t into effect. N o estimates of the size
of t h e Forces a t t h e e n d of 1948 should be given, since these were
bound to be affected by the c u r r e n t e n q u i r y into t h e peacetime s h a p e
a n d size of the A r m e d Forces.
The C a b i n e t ­
(1) A g r e e d t h a t i n t h e P a r l i a m e n t a r y debate l a t e r in the day
the Chancellor of the E x c h e q u e r should deal w i t h the
question of t h e size of t h e A r m e d Forces on the lines
i n d i c a t e d i n discussion.
[34134-3]
2
B
The Chancellor
of the Exchequer
s a i d t h a t it h a d been SUD-­
gested by c e r t a i n G o v e r n m e n t s u p p o r t e r s t h a t a n a u t u m n Budget
would be desirable.
I n his view, i t w a s f a r too early t o take a
decision on t h i s m a t t e r a n d h e would like t o have the authority of
t h e C a b i n e t t o say so i n t h e
The Cabinet—
(2) A g r e e d t h a t in the P a r l i a m e n t a r y debate later in the day
t h e Chancellor of t h e E x c h e q u e r should n e i t h e r promise
t h a t t h e r e would be a n a u t u m n B u d g e t n o r rule out the
possibility of such a B u d g e t .
Anglo-Soviet
Trade
Negotiations,
(Previous
Reference:
C.M.(47)62nd
Conclusions,
M i n u t e 4.)
3
The President
of the Board of Trade recalled t h a t it had
k
necessary to b r e a k off t h e n e g o t i a t i o n s for an Anglo-Soviet
t r a d e agreement because agreement could not be reached on the
revision of t h e r e p a y m e n t terms of the Civil S u p p l i e s Agreement of
1941. I t h a d been m a d e clear t o t h e Soviet Government at t h a t stage
t h a t the financial concessions w h i c h H i s M a j e s t y ' s Government had
been p r e p a r e d to offer w e r e w i t h d r a w n , a n d t h a t the o r i g i n a l terms
f t h e 1941 A g r e e m e n t , i n c l u d i n g t h e obligation of the Soviet
Government to m a k e r e g u l a r q u a r t e r l y repayments of advances
m a d e on t h e i r behalf, r e m a i n e d in force.
I n the course of the
negotiations, however, i t h a d been s u g g e s t e d by M. Mikoyan that
this obligation m i g h t cease t o be honoured if agreement was not
reached on t h e concessions desired by t h e Soviet Government, and
a t the last m e e t i n g t h i s statement h a d been repeated i n terms which
came very n e a r to a d e c l a r a t i o n of an i n t e n t i o n to default. H e had,
therefore, on 2 9 t h J u l y , h a n d e d to the Soviet A m b a s s a d o r in London
an aide-memoire a s k i n g for a definite assurance t h a t there was no
such i n t e n t i o n o n the p a r t of t h e Soviet Government. A t the same
t i m e he h a d i n t i m a t e d t o M. Z a r u b i n t h a t an agreement on financial
concessions, if signed before 1st November, would be made retro­
spective to a d a t e p r i o r to 1st A u g u s t .
H . M . Ambassador at
Moscow h a d now r e p o r t e d (Moscow T e l e g r a m No. 1757 of 3rd
A u g u s t ) t h a t he h a d received a letter from M. Vyshinski saying
t h a t , in view of the l a t t e r assurance,' h e for his p a r t hoped that
n e g o t i a t i o n s could be recommenced. M e a n w h i l e , the Soviet Govern­
m e n t h a d m a d e a p a y m e n t of £ 1 million on account of the full sum
of £ 2 - 4 millions due on 1st A u g u s t u n d e r t h e 1941 Agreement.
The P r e s i d e n t of the B o a r d of T r a d e said t h a t n o further pro­
gress could be m a d e unless the Soviet Government p a i d in full the
i n s t a l m e n t due on 1st A u g u s t . If, however, t h a t p a y m e n t was
m a d e , he suggested t h a t we should reopen negotiations on the basis
t h a t , p r o v i d e d t h a t the Soviet G o v e r n m e n t would agree to increase
s u b s t a n t i a l l y t h e i r offer of barley a n d course g r a i n s for the present
crop-year, w e should be ready t o m a k e f u r t h e r concessions in regard
to t h e r e p a y m e n t t e r m s of the 1941 A g r e e m e n t . H e accordingly
proposed t h a t the Soviet A m b a s s a d o r in L o n d o n should be informed
a t once t h a t H i s M a j e s t y ' s Government would be p r e p a r e d to reopen
discussions once t h e i n s t a l m e n t due o n 1st A u g u s t u n d e r the 1941
A g r e e m e n t h a d been p a i d in full. A n e a r l y decision w a s desirable
since an offer of 300,000 tons of coarse g r a i n s h a d been received from
t h e A r g e n t i n e . T h e p r i c e quoted w a s £ 2 5 10s. a ton, which was
£ 2 10s. in excess of t h e R u s s i a n price. Moreover, freight costs for
A r g e n t i n e w h e a t w e r e £ 2 a ton h i g h e r t h a n for R u s s i a n wheat.
e e n
G
The Minister
of Food strongly s u p p o r t e d the proposal that
n e g o t i a t i o n s should be resumed, p r o v i d e d t h a t the Soviet Govern­
m e n t p a i d in full the o u t s t a n d i n g a m o u n t due u n d e r the 1941 Agree­
ment. The proposed expansion of a g r i c u l t u r a l production in this
c o u n t r y w a s d e p e n d e n t upon a n a d e q u a t e supply of feeding-stuffs,
a n d the A r g e n t i n e a n d R u s s i a w e r e t h e only countries to which we
could at p r e s e n t look for a d d i t i o n a l supplies.
F a i l u r e to obtain
coarse g r a i n s from R u s s i a would g r a v e l y jeopardise the building
u p of our livestock. On the other h a n d , if the R u s s i a n negotiations
were successful, t h e result m i g h t be to force dowri t h e A r g e n t i n e
price a n d t h u s to f a c i l i t a t e f u r t h e r p u r c h a s e s from t h a t source also.
The Chancellor
of the Exchequer
p o i n t e d out t h a t we h a d
a l r e a d y m a d e n u m e r o u s financial concessions u n d e r the 1941 A g r e e ­
m e n t in a n effort t o secure agreement. H e doubted w h e t h e r f u r t h e r
concessions could be justified. I t h a d also to be remembered t h a t
p u r c h a s e s in R u s s i a were now, in fact, h a r d currency t r a n s a c t i o n s .
A g a i n , account m u s t be t a k e n of t h e effect which r e n e w e d negqtia­
tions m i g h t have on 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 u n d e r p r e s e n t
conditions.
The Foreign Secretary
u r g e d t h a t a h a s t y decision should be
avoided.
T h e r e should, in any event, be no question of reopening
discussions u n t i l t h e Soviet Government h a d p a i d in full the out­
s t a n d i n g i n s t a l m e n t d u e u n d e r the 1941 A g r e e m e n t .
I n f u r t h e r discussion t h e r e w a s g e n e r a l a g r e e m e n t t h a t there
could be no question of r e s u m i n g n e g o t i a t i o n s u n t i l the Soviet
G o v e r n m e n t h a d p a i d in full the i n s t a l m e n t d u e on 1st A u g u s t
u n d e r t h e 1941 A g r e e m e n t .
I n view, however, of o u r need for
cereals a n d coarse g r a i n s , it w a s t h o u g h t t h a t we should be p r e p a r e d
t o resume n e g o t i a t i o n s , if p a y m e n t w a s made, a n d t h a t some f u r t h e r
r e l a x a t i o n of t h e r e p a y m e n t t e r m s of the 1941 A g r e e m e n t should n o t
be r u l e d o u t if t h e Soviet G o v e r n m e n t w e r e for t h e i r p a r t p r e p a r e d
to make some c o r r e s p o n d i n g concession.
The C a b i n e t ­
(1) I n v i t e d t h e P r e s i d e n t of the B o a r d of T r a d e to i n f o r m the
Soviet A m b a s s a d o r in L o n d o n t h a t H i s M a j e s t y ' s
G o v e r n m e n t would be p r e p a r e d to reopen the n e g o t i a t i o n s
for a t r a d e agreement once t h e Soviet G o v e r n m e n t h a d
p a i d in full the i n s t a l m e n t due on 1st A u g u s t u n d e r the
Civil S u p p l i e s A g r e e m e n t of 1941.
(2) I n v i t e d t h e P r e s i d e n t of the B o a r d of T r a d e , i n consulta­
tion w i t h t h e Chancellor of t h e E x c h e q u e r , the F o r e i g n
S e c r e t a r y a n d the M i n i s t e r of Food, to consider the terms
on w h i c h n e g o t i a t i o n s m i g h t be reopened.
ations
ie?a.
4. T h e C a b i n e t h a d before t h e m m e m o r a n d a by 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 ( O . E . P . (47) 29 a n d 30) s e e k i n g g u i d a n c e o n
c e r t a i n questions w h i c h h a d a r i s e n i n t h e discussions a t Geneva o n
the t e r m s of t h e d r a f t C h a r t e r for t h e establishment of a n I n t e r ­
n a t i o n a l T r a d e O r g a n i s a t i o n , a n d i n the p a r a l l e l n e g o t i a t i o n s on
tariffs a n d preferences.
I n the course of discussion, the following p o i n t s w e r e r a i s e d :—
(a) The Secretary for Overseas Trade said t h a t it w a s proposed
in O . E . P . (47) 29 t h a t acceptance by H i s M a j e s t y ' s G o v e r n m e n t of
the d r a f t C h a r t e r should be d e p e n d e n t on the a d o p t i o n of a t e x t
which would, so f a r as the C h a r t e r w a s concerned, give t h e U n i t e d
K i n g d o m no less freedom to use d i s c r i m i n a t o r y i m p o r t r e s t r i c t i o n s
in o r d e r to o b t a i n a d d i t i o n a l i m p o r t s t h a n w o u l d be given t o any
o t h e r c o u n t r y in balance of p a y m e n t s difficulties; a n d t h a t w e should
be p r e p a r e d only in t h e last resort to modify our view t h a t t h e use
of such r e s t r i c t i o n s ought not t o be subject to the p r i o r a p p r o v a l of
the O r g a n i s a t i o n . H e suggested t h a t even if we h a d to concede t h i s
p o i n t w e should keep our h a n d s completely free for a t least two
years. I n order to meet our difficulties about t h e n o n - d i s c r i m i n a ­
tion provisions of the C h a r t e r , the U n i t e d S t a t e s G o v e r n m e n t h a d
proposed t h a t , in the General A g r e e m e n t on Tariffs a n d T r a d e
embodying the result of the tariff n e g o t i a t i o n s a n d some of the
provisions of t h e d r a f t C h a r t e r , i t should be l a i d d o w n t h a t these
provisions should not take effect u n t i l 1951.
The Foreign Secretary
a n d The Secretary
of State for Com­
monwealih Relations u r g e d t h a t w e should not e n t e r i n t o a n y fresh
commitments w i t h r e g a r d to n o n - d i s c r i m i n a t i o n , even t h o u g h t h e
[ 3 4 1 3 4 - 3 ]
3
B
U n i t e d S t a t e s Government were w i l l i n g t h a t they should not take,
effect for some time t o come; a n d t h e r e w a s g e n e r a l s u p p o r t for this
view.
( 6 ) The Secretary for Overseas Trade said t h a t agreement had
now been r e a c h e d in Geneva on the inclusion in the d r a f t Charter of
a new provision s a f e g u a r d i n g the position of any country which had
complete control of its external t r a d e .
H e understood t h a t this
provision w a s satisfactory to the N e w Z e a l a n d M i n i s t e r of Finance.
The Secretary of State for Commonwealth
Relations said that
i t w a s most i m p o r t a n t t h a t t h e New Z e a l a n d Government should not
be d r i v e n to refuse t o p a r t i c i p a t e in the O r g a n i s a t i o n . H e would,
therefore, w i s h t o see the t e r m s of the new provision a n d to be
a s s u r e d t b a t i t w a s acceptable to M r . N a s h .
(c) The Minister
of Fuel and Power p o i n t e d o u t t h a t it was
proposed to a g r e e to some modifications of the I m p e r i a l Preference
system in r e t u r n for c e r t a i n reductions in the U n i t e d S t a t e s tariff.
I n h i s view t h e r e w a s very little prospect of a n y s u b s t a n t i a l increase
i n the q u a n t i t y of m a n u f a c t u r e d goods w h i c h we m i g h t hope to
e x p o r t to the "United States, and it w a s t h e r e f o r e essential t h a t we
should make s u r e of securing s u b s t a n t i a l a d v a n t a g e s in r e t u r n for
a n y concessions t h a t we m i g h t make.
The Foreign Secretary s u p p o r t e d the recommendation made in
O . E . P . (47) 29 t h a t preferences which we enjoyed should not be
r e d u c e d in a n y case w h e r e serious d a m a g e to a n i m p o r t a n t export
w o u l d result.
I t w a s also necessary to t a k e special care t h a t the
a d v a n t a g e s o b t a i n e d in r e t u r n for a n y concessions t h a t we might
m a k e were of corresponding value. I t w a s not enough to accept
p e r c e n t a g e r e d u c t i o n s of tariffs which afforded only illusory benefits.
The Secretary of State for Commonwealth
Relations said that,
w h e r e the U n i t e d S t a t e s G o v e r n m e n t asked for some modification
of an e x i s t i n g preference, it w a s essential t h a t the Dominion Govern­
m e n t affected should also receive a compensatory concession of real
value.
(d) The C a b i n e t disagreed w i t h the recommendation made in
O . E . P . (47) 29 t h a t H i s M a j e s t y ' s G o v e r n m e n t should concede free
e n t r y for fresh apples, provided t h a t t h e C a n a d i a n Government
consented. S u c h a concession would for some time be incompatible
w i t h t h e m e a s u r e s announced in P a r l i a m e n t on the previous day,
a n d it w a s u n d e s i r a b l e to enter i n t o a n y long-term commitment on
t h i s subject a t the p r e s e n t time.
(e) The Secretary
of State for the Colonies d r e w attention to
t h e recommendation m a d e in O . E . P . (47) 29 t h a t a n a t t e m p t should
be m a d e to settle the question of boycotts a t t h i s stage r a t h e r than
a t the forthcoming W o r l d Conference. H e suggested t h a t a further
a t t e m p t m i g h t be m a d e to reach agreement by negotiation w i t h the
A r a b L e a g u e countries. T h i s was a g r e e d .
The C a b i n e t Subject to the p o i n t s r a i s e d i n discussion, endorsed the
recommendations m a d e in O . E . P . (47) 29.
Criminal
Justice Bill.
Proposed
Abolition
of
Capital
Punishment.
(Previous
Reference:
C M . (47) 61st
Conclusions,
Minute
2.)
5. At t h e i r m e e t i n g on 15th J u l y t h e C a b i n e t h a d invited the
H o m e Secretary to a s c e r t a i n w h e t h e r t h e t i t l e of the Criminal
J u s t i c e Bill m i g h t be d r a f t e d in such a w a y as to exclude any
a m e n d m e n t for the abolition of c a p i t a l p u n i s h m e n t a n d to circulate
a m e m o r a n d u m on the suggestion t h a t it m i g h t be possible to distin­
g u i s h between c e r t a i n types of m u r d e r for w h i c h c a p i t a l punish­
m e n t would be r e t a i n e d a n d other types for w h i c h it would be
abolished.
T h e C a b i n e t now h a d before t h e m a m e m o r a n d u m by the Home
S e c r e t a r y ( C P . (47) 217) d e a l i n g w i t h these p o i n t s .
The Home Secretary
said t h a t he w a s satisfied t h a t i t w o u l d
not be possible to a r g u e t h a t a n a m e n d m e n t to abolish c a p i t a l p u n i s h ­
m e n t would be o u t s i d e t h e scope of the C r i m i n a l J u s t i c e Bill, a n d
accordingly, even if t h e long title could be d r a f t e d in such a w a y
as to exclude the subject of c a p i t a l p u n i s h m e n t , such a n a m e n d m e n t
would, nevertheless, be in order. H e h a d also reached the conclusion
t h a t , for the reasons set c u t in C P . (47) 217, a n y system of g r a d i n g
m u r d e r s would be u n d e s i r a b l e . I n these circumstances, he felt t h a t
t h e r i g h t course w a s for t h e G o v e r n m e n t to declare, w h e n t h e B i l l
w a s introduced, t h a t they would resist a n y amendment to p r o v i d e
for the a b o l i t i o n of c a p i t a l p u n i s h m e n t .
The Lord Chancellor said t h a t he a g r e e d w i t h the conclusion
reached by the H o m e Secretary t h a t a scheme for the g r a d i n g of
m u r d e r s would be u n w o r k a b l e .
The Attorney-General
said t h a t he still r e m a i n e d in favour of
p r o v i d i n g for the abolition of c a p i t a l p u n i s h m e n t in the Bill a n d
he w a s satisfied t h a t t h e m a j o r i t y of Government s u p p o r t e r s w o u l d
t a k e this view.
The C a b i n e t ­
(1) Took note t h a t a n a m e n d m e n t p r o v i d i n g for the abolition
of c a p i t a l p u n i s h m e n t could n o t be ruled out of order on
the g r o u n d t h a t it did n o t come w i t h i n the scope of t h e
C r i m i n a l J u s t i c e Bill.
(2) A g r e e d t h a t it would be impossible to g r a d e m u r d e r s i n t o
those for w h i c h capital p u n i s h m e n t would be r e t a i n e d
a n d those for which it would be abolished.
Iron and Steel
Industry Bill.
(Previous
Reference:
C M . (47) 6 6 t h
Conclusions,
Minute
4.)
6. The C a b i n e t resumed t h e i r discussion of the j o i n t memo­
r a n d u m by t h e L o r d P r e s i d e n t a n d t h e M i n i s t e r of S u p p l y ( C P . (47)
215) on t h e r e o r g a n i s a t i o n of the i r o n a n d steel i n d u s t r y .
The Lord President
recalled t h a t a t t h e i r meeting on 31st J uly
t h e Cabinet h a d i n v i t e d t h e M i n i s t e r of S u p p l y a n d himself to
a s c e r t a i n the views of the t r a d e unions concerned. I t h a d u n f o r t u n ­
ately been impossible to a r r a n g e a m e e t i n g w i t h t h e I r o n a n d Steel
Committee of t h e T r a d e s U n i o n Congress, but a t a m e e t i n g d u r i n g
t h e previous week t h e a l t e r n a t i v e courses which the C a b i n e t h a d
considered h a d been p u t before a_ fairly r e p r e s e n t a t i v e g r o u p of
members of t h e G e n e r a l Council. H e h a d since received a message
s t a t i n g t h a t the conclusion of the G e n e r a l Council w a s t h a t they
were not yet in a p o s i t i o n to say t h a t the policy of the T r a d e s U n i o n
Congress on t h e n a t i o n a l i s a t i o n of steel h a d changed from w h a t had.
been agreed a t the m e e t i n g between the M i n i s t e r a n d the d e p u t a t i o n
from the T r a d e s U n i o n Congress a t w h i c h the scheme o u t l i n e d in
C P . (47) 123 h a d been approved. T h e m a t t e r h a d , moreover, h a d
to be considered by t h e Council at very s h o r t notice, and t h e Council
h a d i n d i c a t e d t h a t t h e i r r e p r e s e n t a t i v e s would be available for a
f u r t h e r discussion w i t h t h e M i n i s t e r of Supply if necessary.
Government s u p p o r t e r s i n P a r l i a m e n t were now p r e s s i n g for
i n f o r m a t i o n about t h e G o v e r n m e n t s a t t i t u d e , a n d i n h i s view i t
would be difficult to t a k e the line t h a t t h e G o v e r n m e n t were n o t yet
able to s t a t e their i n t e n t i o n s . H e still believed t h a t t h e r i g h t course
w a s to i n t r o d u c e legislation in the 1947-48 Session on the lines p r o ­
posed in C P . (47) 212. T o a t t e m p t to control t h e i n d u s t r y t h r o u g h
the exercise of the powers which w e r e being t a k e n u n d e r t h e S u p p l i e s
a n d Services ( T r a n s i t i o n a l Powers) Bill would expose t h e Govern­
m e n t to d a m a g i n g criticism, a n d to proceed w i t h the o r i g i n a l scheme
set out in C P . (47) 123 would lead t o a loss of steel o u t p u t a t a
c r i t i c a l t i m e . If, however, i t w a s the g e n e r a l view of t h e C a b i n e t
t h a t the G o v e r n m e n t could not commit themselves as to t h e i r inten­
tions d u r i n g the 1947-48 Session in a n t i c i p a t i o n of T h e K i n g ' s
Speech, he felt t h a t i t would be w r o n g for t h e m to announce at t h i s
stage t h a t they would introduce legislation t o implement the scheme
in C P . (47) 123 d u r i n g t h e lifetime of t h e p r e s e n t P a r l i a m e n t .
The Chancellor
of the Exchequer
said t h a t he remained in
f a v o u r of t h e policy of full n a t i o n a l i s a t i o n . H e felt, however, that
it would be most unwise for the Cabinet to a t t e m p t to decide at the
p r e s e n t t i m e w h a t , if a n y , legislation on the subject of the iron and
steel i n d u s t r y should be included in t h e 1947-48 Legislative Pro­
gramme.
T h e Government should, therefore, inform their sup­
p o r t e r s t h a t it w a s very d o u b t f u l w h e t h e r it would be possible to
legislate on the subject i n t h e 1947-48 Session. A t the same time,
it should be m a d e clear t h a t a measure to n a t i o n a l i s e the iron and
steel i n d u s t r y would r e m a i n p a r t of the G o v e r n m e n t s programme
of legislation for the p r e s e n t P a r l i a m e n t ; a n d he believed there was
a good chance of the G o v e r n m e n t s being able to deal w i t h the matter
i n t h e 1 9 4 8 ^ 9 Session. Meanwhile, any necessary control over the
i n d u s t r y could be exercised u n d e r the S u p p l i e s a n d Services (Tran­
sitional Powers) Bill.
The Minister
of Fuel and Power said t h a t in principle he
favoured t h e complete n a t i o n a l i s a t i o n of the iron a n d steel industry.
H e recognised, however, t h a t n a t i o n a l i s a t i o n would not produce any
beneficial result in increased steel o u t p u t for some considerable time
a n d t h a t t h e i n t r o d u c t i o n of legislation to c a r r y out the scheme in
C P . (47) 123 would have a d i s t u r b i n g effect. On the other hand,
t h e r e p l y w h i c h b a d been received from the T r a d e s Union Congress
m a d e it difficult to a b a n d o n any proposal for legislation in the
1947-48 Session, a n d he accordingly suggested t h a t the r i g h t course
would be to introduce a Bill to c a r r y o u t the scheme of control out­
lined in C P . (47) 212, a t the same time m a k i n g it clear t h a t this was
only a step t o w a r d s the n a t i o n a l i s a t i o n scheme outlined in C P . (47)
123.
L o o k i n g to the circumstances in w h i c h the Supplies and
Services ( T r a n s i t i o n a l P o w e r s ) Bill h a d been introduced, he thought
i t would be most unwise for the Government to expose themselves to
the c h a r g e t h a t they were u s i n g powers g r a n t e d by t h a t Bill to carry
o u t a m e a s u r e of n a t i o n a l i s a t i o n .
The Foreign Secretary
said that, a f t e r f u r t h e r consideration,
he r e m a i n e d opposed to the scheme of control outlined ill C P . (47)
212. On the other h a n d , he did n o t t h i n k t h a t the Government
should commit themselves to legislation to n a t i o n a l i s e the industry
in t h e 1947-48 Session. H e d i d not see w h y the Government should
be forced t o s t a t e their i n t e n t i o n s at t h i s stage, a n d h e would prefer
to leave the position open for a t least a few weeks. The Cabinet
m i g h t then consider the m a t t e r afresh, possibly a f t e r t a k i n g further
s o u n d i n g s among their s u p p o r t e r s .
The Minister
of Health u r g e d t h a t t h e Government should
f o r t h w i t h s t a t e t h a t they intended to i n t r o d u c e legislation to carry
o u t the scheme outlined i n C P . (47) 123 in t h e 1947-48 Session. In
previous discussions it h a d been r i g h t l y assumed t h a t , if the neces­
s a r y legislation w a s not introduced in this Session, there would be
no hope of c a r r y i n g out the n a t i o n a l i s a t i o n of the industry in the
l i f e t i m e of the present P a r l i a m e n t . I t w o u l d be difficult, if not
impossible, for the Government to avoid m a k i n g some statement of
t h e i r i n t e n t i o n s in view of the Conservative amendment to the
S u p p l i e s a n d Services ( T r a n s i t i o n a l P o w e r s ) Bill providing that no
r e g u l a t i o n m i g h t be m a d e u n d e r the Bill for t h e purpose of bringing
t h e iron a n d steel i n d u s t r y u n d e r public o w n e r s h i p . To announce
t h a t legislation would be introduced in a l a t e r Session would merely
leave the i n d u s t r y in a s t a t e of prolonged u n c e r t a i n t y . No satis­
factory evidence h a d been produced to show t h a t , if the Government
proceeded w i t h the full scheme of n a t i o n a l i s a t i o n , o u t p u t would be
adversely affected.
The Secretary of State for Commonwealth
Relations said that
to proceed w i t h the scheme in C P . (47) 123 would lead to reduced
o u t p u t of steel, which would be d i s a s t r o u s i n the present critical
economic s i t u a t i o n . Accordingly, if i t w a s felt to be impossible to
proceed w i t h t h e scheme set o u t in C P . (47) 212, the r i g h t course
seemed to him to be to introduce no legislation on this subject in
the 1947-48 Session.
The Minister
of Food suggested t h a t the l i o v e r n m e n t should
u s e t h e i r powers u n d e r t h e S u p p l i e s a n d Services ( T r a n s i t i o n a l
P o w e r s ) Bill to g a i n the effective control over the i n d u s t r y w h i c h
would h a v e been secured by the legislation proposed i n C P . (47) 212.
T h e y should then follow t h i s u p by i n t r o d u c i n g i n the 1 9 4 7 - 4 8
Session legislation to c a r r y out the scheme set out in C P . (47) 123.
T h i s course would avoid a n y risk of loss of o u t p u t a n d , a t t h e same
time, m a k e it clear t h a t the Government were n o t to be t u r n e d aside
from t h e i r i n t e n t i o n t o n a t i o n a l i s e the i n d u s t r y .
The Lord Chancellor s a i d t h a t , in view of the advice w h i c h t h e
C a b i n e t h a d been given by the M i n i s t e r of S u p p l y t h a t to proceed
w i t h t h e scheme i n C P . (47) 123 would j e o p a r d i s e steel o u t p u t
d u r i n g the next y e a r or eighteen months, he w a s strongly o p p o s e d
t o proceeding w i t h legislation in the 1947-48 Session. H e t h o u g h t
t h a t t h e G o v e r n m e n t should f o r t h w i t h decide t h a t t h e r e should be
no legislation to deal w i t h the iron a n d steel i n d u s t r y in t h a t Session
a n d t h a t t h i s decision should be announced. N o t h i n g need be s a i d
about the G o v e r n m e n t s i n t e n t i o n s w i t h r e g a r d to t h e i n t r o d u c t i o n
of legislation in a l a t e r Session.
The Minister
of Defence s a i d t h a t , t h o u g h he w a s personally
committed to a policy of full n a t i o n a l i s a t i o n for the iron a n d steel
i n d u s t r y , he believed t h a t n o t h i n g would be g a i n e d by saying t h a t the
m e a s u r e to n a t i o n a l i s e the iron a n d steel i n d u s t r y would be b r o u g h t
f o r w a r d in a later Session.
H e accordingly s u p p o r t e d the L o r d
P r e s i d e n t s suggestion t h a t legislation on the lines proposed i n
C P . (47) 212 should be i n t r o d u c e d in the 1947-48 Session.
The Minister
of Education
said t h a t ' t h e Cabinet should t a k e
account of the effect t h a t their decision m i g h t have on the w o r k e r s
in the iron a n d steel i n d u s t r y . H e s u p p o r t e d a solution on the lines
proposed by the Chancellor of the Exchequer.
The Home Secretary said t h a t d u r i n g the next six m o n t h s t h e
Government would be faced w i t h tremendous a d m i n i s t r a t i v e t a s k s .
Tor t h i s reason he w a s opposed to the i n t r o d u c t i o n of a Bill to
n a t i o n a l i s e the i n d u s t r y in the 1947-48 Session.
The Minister
without
Portfolio
said t h a t he feared t h a t t h e
proposals p u t f o r w a r d in C P . (47) 212 would create b i t t e r dis­
a p p o i n t m e n t . A c c o r d i n g l y , if the Cabinet could be assured t h a t
o u t p u t would not be adversely affected, he would favour t h e i n t r o ­
d u c t i o n i n the 1947-48 Session of legislation to implement the
scheme outlined in C P . (47) 123.
The Minister of Supply said t h a t it w a s impossible to say cate­
goricaliy t h a t t h e i n t r o d u c t i o n of legislation to n a t i o n a l i s e t h e
i n d u s t r y would inevitably have an adverse effect on o u t p u t .
It
would, however, u n d o u b t e d l y increase the r i s k t h a t the t a r g e t of
14 million tons o u t p u t of steel in 1948 would n o t be reached.. On the
whole, he was inclined to suggest t h a t the proposal for full
n a t i o n a l i s a t i o n should be r e t a i n e d as p a r t of the p r o g r a m m e for the
p r e s e n t P a r l i a m e n t , b u t t h a t n o decision should be t a k e n as to
whether it should be i n t r o d u c e d in the 1947-48 Session.
The Minister of Labour said t h a t he h a d now come to the con­
elusion t h a t it would be impossible to a b a n d o n t h e idea of i n t r o ­
d u c i n g legislation t o give effect t o the scheme in C P . (47) 123 d u r i n g
the lifetime of t h e p r e s e n t P a r l i a m e n t . H e suggested, however,
t h a t a decision on w h e t h e r such legislation should be i n t r o d u c e d in
the 1947-48 Session m i g h t well be deferred.
The Minister
of Agriculture
said t h a t in t h e present c r i t i c a l
s i t u a t i o n t h e G o v e r n m e n t could not afford t o proceed w i t h legisla­
tion i n t h e 1947-48 Session, if they w e r e a d v i s e d t h a t by doing so
they would affect adversely t h e o u t p u t of steel in 1948. A f a i l u r e
to secure t h e m a x i m u m o u t p u t of steel would do f a r more h a r m t h a n
t h e postponement of t h e proposed Bill u n t i l t h e 1948-49 Session.
The Prime Minister
said t h a t the C a b i n e t were b o u n d to t a k e
account of the a d m i n i s t r a t i v e tasks which they h a d u n d e r t a k e n in
order to deal w i t h t h e p r e s e n t economic situation. To proceed with
t h e o r i g i n a l scheme might lead t o considerable disturbance in the
industrj^ a n d would a d d s u b s t a n t i a l l y t o t h e heavy burdens already
imposed on t h e M i n i s t r y of S u p p l y . For these reasons he would
favour a n announcement t h a t t h e Government d i d n o t intend to
proceed w i t h the scheme in t h e . 1947-48 Session. H e realised
however, t h a t a n y such a n n o u n c e m e n t would cause disappointment
a m o n g Government s u p p o r t e r s , a n d h e felt t h a t t h e predominant
view m t h e Cabinet w a s in favour of s t a t i n g t h a t , while the scheme
still r e m a i n e d in the p r o g r a m m e for t h e p r e s e n t P a r l i a m e n t , it was
doubtful w h e t h e r it would be possible to introduce t h e necessary
legislation i n t h e 1947-48 Session.
The
Cabinet—
A g r e e d t h a t G o v e r n m e n t s u p p o r t e r s should be informed
t h a t t h e Government a d h e r e d to t h e i r i n t e n t i o n to bring
a p p r o p r i a t e sections of t h e iron a n d steel i n d u s t r y under
public ownership, t h a t i t w a s doubtful w h e t h e r i t would
be possible to i n t r o d u c e t h e necessary legislation in the
1947-48 Session, a n d t h a t , before coming to a final
decision on t h i s point, t h e Government r e q u i r e d more time
to consider i t i n t h e light of t h e present economic
situation.
Indian
Sterling
Balances.
(Previous
Reference:
C M . (47) 58th
Conclusions,
Minute
1.)
7. T h e Cabinet considered a m e m o r a n d u m by t h e Chancellor
of t h e E x c h e q u e r ( C P . (47) 213) o u t l i n i n g t h e t e r m s on which it
w a s proposed to make a n i n t e r i m settlement of t h e question of the
I n d i a n s t e r l i n g balances.
The Chancellor of the Exchequer e x p l a i n e d t h a t , as a result of
t h e recent negotiations, t h e I n d i a n Delegation h a d advised their
G o v e r n m e n t t o accept a n i n t e r i m settlement covering t h e period up
to t h e e n d of 1947, u n d e r which all b u t £ 3 5 millions of the out-,
s t a n d i n g I n d i a n s t e r l i n g balances, a m o u n t i n g to £1,160 millions,
would b e blocked. Only about £ 1 5 millions of the £ 3 5 millions
released would be spent i n dollars^ t h e rest being used to meet
s t e r l i n g e x p e n d i t u r e o n I n d i a n i m p o r t s from A u s t r a l i a a n d the
U n i t e d K i n g d o m . N o commitment for f u r t h e r releases after the
e n d of 1947 h a d been o r would be m a d e in t h e p r e s e n t negotiations,
nor Were H i s Majesty's G o v e r n m e n t committed to recognise the total
of £1,160 millions. Moreover, t h e r a t e of i n t e r e s t on t h e balances
would n o t be allowed to increase. I n the exceptional political
circumstances of I n d i a a t the p r e s e n t time, h e d i d n o t regard the
p r o p o s e d settlement a s too generous, a n d h e hoped the Cabinet
w o u l d a u t h o r i s e him to a n n o u n c e i t w i t h i n the n e x t few days.
The Secretary of State for India s u p p o r t e d t h e proposals made
i n C P . (47) 213. I n d i a b a d l y needed food i m p o r t s a n d , if His
M a j e s t y ' s Government d i d not agree to t h e use of a reasonable
a m o u n t of t h e accumulated s t e r l i n g balances for t h e purchase of
food, t h e prospects of r e t a i n i n g the I n d i a n D o m i n i o n s w i t h i n the
Commonwealth would be j e o p a r d i s e d .
T h e Cabinet—'
A p p r o v e d t h e i n t e r i m settlement of the question of the
I n d i a n sterling balances proposed in C P . (47) 213 and
took note t h a t t h e Chancellor of t h e Exchequer would
a n n o u n c e t h e t e r m s of t h e settlement a t a n early date.
Cabinet Office, S.W. 1, 7th August, 1947.