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houses set in 5 acres of totally secluded
gardens in natural trust woodland
in an area of outstanding natural beauty
and archaeological significance, 5
minutes from Berkhamsted
station
TOP S E C R E T
WAR CABINET 5 9 8 .
Minutes of a Meeting of the War Cabinet held at 10, Downing Street, S.W., on
Wednesday, July 23, 1919, at 12 noon.
Present :
The PRIME MINISTER (in the Chair).
The Right Hon. t h e Earl CURZON OE The Right Hon. A. CHAMBERLAIN, M.P.
KEDLESTON, K . G . , G . C . S . I . , G . C . I . E . The Right Hon. G. N. BARNES,' M.P.
The Right Hon. A. BONAR LAW, M.P.
The following were also present:
The Right Hon. t h e Viscount MILNER,
G.C.B., G.C.M.G., Secretary of State for
the Colonies.
The Right Hon. W. S. CHURCHILL, M.P.,
Secretary of S t a t e for War.
The Right Hon. A. C. GEDDES, K.C.B.,
M.P., President of t h e Board of Trade.
The Right Hon. H. A. L. FISHER, LL.D.,
M.P., President of the Board of Education
(for Minute 5).
The Right Hon. C. ADDISON, M.D., M.P.,
Minister of Health.
The Right Hon. Sir L. WORTHINGTON
EVANS, Bart., M.P., Minister of Pensions
(for Miuute 7 ) .
The Right Hon. Sir R. S. HORNE, K.B.E.,
K.C., M.P., Minister of Labour.
Major-General the Right Hon. J . E. B.
SEECY, C.B., C.M.G., D.S.O., M.P.,
Under-Secretary of State for Air (for
Minute 7 ) .
Sir HAMAR GREENWOOD, Bart., M.P.,
Director of Overseas Trade (for Minute
7 ) .
The Right Hon. W. LONG, M.P., First
Lord of t h e Admiralty.
The Right Hon. t h e Viscount CAVE, K . C .
(for Minute 6).
The Right Hon. Sir J . MACLAY, Bart.,
Shipping Controller (for Minutes 1 - 5 ) .
The Right Hon. G. H. ROBERTS, M.P.,
Food Controller (for Minutes 1 - 5 ) .
General the Hon. Sir J . H. G. BYNG,
G.C.B.,K.C.M.G., M.V.O. (for Minute 7 ) .
Major-General Sir C. H. HARINGTON,
K.C.B., D.S.O., Deputy Chief of t h e
Imperial General Staff (for Minute 7 ) .
The Viscount PEEL, C.B.E., Under-Secretary
of State for W a r (for Minute 7 ) .
The Right Hon. H. W. FORSTER, M.P.,
Financial Secretary, War Office (for
Minute 7 ) .
The Coal Strike.
2
1. With reference to War Cabinet 597, Minute 1, the War
Cabinet had before them four reports on the situation in Yorkshire
by Sir Eric Geddes (Papers U.C.-9, 10, 1 1 , and 12).
. The Minister of Labour said that his information was to the
effect that Mr. Herbert Smith, the President of the Yorkshire.
Miners' Association, had made a pacific speech at a meeting of the
Yorkshire District Council. The feeling of the younger miners in
Yorkshire was that the abandonment of the pumps was the only
method of bringing the situation to a head, although the older men
were against this course. There was a general feeling now that the
pumps should be worked, and it was hoped the pumpmen would
return shortly. The Yorkshire dispute was receiving no' support
from the other coalfields. In South Wales the men were still at
work, and in Lancashire they were about to return. The strikes in
Nottinghamshire and Derbyshire were on issues not connected with
piece-rate awards. With regard to the situation of the pits in
Yorkshire, six had been entirely flooded, and the owners were quite
content that this should be so, as these were unprofitable pits to
work. Seventeen were getting into a dangerous condition, and it
was thought that the assistance of the naval ratings was being
obtained to keep the pumps going. Mr. Herbert Smith had told his
men not to interfere with the naval ratings. Sir Robert Home
added that the coalowners were very anxious that Sir Eric Geddes
should see Mr. Herbert Smith with regard to the 14'3 per cent., as
some of the owners were in favour of this increase being given
in full.
The President of the Board of Trade said that the Miners'
Federation had had a long discussion on piece rates at Keswick, and
he understood (through Mr. Hartshorn) that they had decided that
a 10 per cent, increase for all pits was all they could ask for, with
the exception of Lancashire and Cheshire, which they considered
should have 12'2 per cent., and Yorkshire something like 12'1 per
cent. In South Wales only did they consider the rise should be as
much as 14- 3 per cent. Mr. Hartshorn had informed him that
Mr. Smillie had compelled the Lancashire delegates to return to
Lancashire and inform the men that they had got to take 12"2 per
cent. There was another feature in the situation, regarding the
pumpmen who were not members of the Miners' Federation, as
distinct from those pumpmen who were members. These men were
being intimidated, and had decided that they would not return to
t h e mines until they had been paid their wages for the days on which
they had been compelled not to work by the Yorkshire Association.
If this claim was not met, and the men came out on strike after the
miners had returned, it would result in a more difficult situation
than the present one. These pumpmen were of the opinion that the
miners should be made to'pay their wages, but so long as they were
paid, whether by the owners or by the Government, he did not think
they would mind.
The Minister of Labour said that these men had many
grievances against the Miners' Federation, one of which was that
t h e Federation had refused to sit on the Sankey Commission
with them.
The Chancellor of the Exchequer said that he understood from
the Minister of Labour t h a t the two Yorkshire Owners' Associations
wished, to give way to the men and award them the 14'3 per cent, for
piece rates. This looked like an invitation to the Government to
go back on its decision. Such a course would condemn the Government
utterly and destroy its power to deal with further troubles.
The Prime Minister said that it would create a serious position
if the owners advised the Government to grant the 14'3 per cent., as
the fact that such advice had been given was bound, sooner or later,
- to be made public.
The Chancellor of the Exchequer observed that such advice was
on a subject in which the owners had ceased to have any pecuniary
interest.
3 WC5 r
The Minister of Labour said that the Scottish and South Wales
miners were against the 14- 3 per cent., and he believed only a few
miners in Lancashire, Yorkshire, and Warwickshire supported the
demand.
The Prime Minister said that such an advance would mean 6d.
or Is. extra on to the price of coal, which the country could not
possibly afford. As the Chancellor of the Exchequer had observed,
ix, was all very well for the masters to advise the giving of this
concession, but the money would not come out of their pockets.
The Secretary of State for War said that, with regard to the
general situation, he had received a private letter from the General
Officer Commanding, Northern Command, in which he stated that
the liaison with Sir Eric Geddes was working very well. Troops
had been sent from Clipstone to Wakefield, Pontefract, and Leeds.
He proposed to reinforce Clipstone Camp by one of the brigades frOrn
the fihine Army.
The Food Controller said that, with regard to the strike of the
Co-operative Societies' employees, he was able to report that they
were returning to work pending negotiations.
Nationalisation of 2. The Cabinet had some discussion on the desirability of
Mines, making a statement regarding the nationalisation of. mines.
The Prime 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 any information regarding nationalisation.
The Prime Minister said t h a t he was inclined to think t h a t there was
nothing to be gained by putting off a decision. The previous evening
he had dined with seventeen or eighteen Members of Parliament,
mostly Coalition Liberals, and he had asked them their views on
nationalisation, and with one exception they had all been against it,
though they were in favour of the nationalisation of the railways.
These gentlemen were, however, agreed that the miners should have
a voice in the management of the mines, and they were in favour of
the nationalisation of royalties and minerals. He thought it would
be wise to make a statement on the subject before the recess, but if
these strikes continued it gave the Government very little time to
consider such a weighty question.. Should there be a strike on the
subject of nationalisation, he thought it would be better to have it
in August than three months later. He was interviewing some of
the mine-owners shortly, with a view to an interchange of opinions
on this subject, and he would like the authority of the Cabinet to
press these owners to give representation to the men in the management
of the mines. The Prime Minister said that there was one
other subject on which he would like to make a statement to the
House before the recess, which was, the trade,policy of the country.
The Members of Parliament with whom he had dined on the previous night
had also pressed him to make a statement on the action the
Government proposed to take regarding profiteering. These
gentlemen favoured drastic and dramatic measures.
The Minister of Health observed that, while the Government
did not possess the confidence of the miners, unless a statement on
nationalisation was made, they would lose the confidence of the
general public also.
I t was generally agreed that a statement on the subject of
nationalisation was desirable before the recess, in view of the fact
that, if a strike was to come, the best month in which to have it was
August.
The War Cabinet decided that—
(a.) The Prime Minister, in his interview with Mr. Smillie on
the following day, should inform him that the Government
would make a statement of their policy on
nationalisation before the recess ;
Xtis 6X-K3.is6r.
Visit of H.E.H. the
Prince of Wales to
the United States.
The Prime Minister, when interviewing the coal-owners,
should urge them to concede representation for the men
in t h e management of t h e mines.
3. The Cabinet had a short discussion regarding the venue of
the trial of the ex-Kaiser. -
The Prime Minister agreed that London was not a very suitable
place, and it had been his intention, in his speech on the subject, to
say that it would take place in England.
The relative advantages of Hampton Court and Dover were
discussed.
The Acting Secretary of State for^ Foreign Affairs made the
suggestion of the Channel Islands.
4. With reference to War Cabinet 589, Minute 1, t h e Acting
Secretary of State for Foreign Affairs reported that the United
States Ambassador entirely approved of the proposal that the Prince
of Wales should be lodged on his own battleship during his visit to
New York. This would relieve the United States of the difficulty
of finding a suitable residence, and would have the additional
advantage of enabling His Royal Highness to return hospitality.
The War Cabinet approved this proposal, and agreed that an
immediate announcement should be made regarding the
Prince of Wales' visit to the United States.
The Acting Secretary of State for Foreign Affairs
undertook to set in motion the arrangements he had agreed
on with Lord Stamfordham for this purpose.
Situation in North
Eussia. 5 T j i e p r i m e Minister said he wished to draw the attention of
the War Cabinet to the most recent developments in North Russia, as
revealed by two telegrams from General Ironside, which had just
been received. The first stated t h a t Onega had been handed over
to the Bolsheviks, after a mutiny. The railway position was the
same, Russian troops being disarmed in parties as t h e British arrive.
The state of t h e Russian troops was such t h a t his efforts to consolidate
the Russian national army must now be regarded definitely as
a failure. Unless the British force at Archangel was to be increased,
it was essential t h a t evacuation be carried out with the least possible
delay. The telegram expressed the hope that the naval contingent
in North Russia might at once be increased by two large warships,
to admit of landing parties in the town so as to release soldiers for
fighting. In conclusion, General Ironside asked whether he was to
commence the evacuating of any civilian population, as, if it was
decided t h a t this must be done, a start should be made as early as
possible.
I n the second telegram General Ironside said that he had
discussed the situation with General Miller, who agreed with him
t h a t it would not be possible for the Russians to hold on to Archangel
during the winter if the British troops were withdrawn. The
situation was difficult, as he had to stabilise each front with British
troops, and, with the river in its present state, movement was slow.
Monitors were standing by and bombarding the enemy, who was not
in great strength. The tactical situation might demand a withdrawal
on the Dwina and Vaga. All preparations were being made for an
evacuation slowly down the river, if the situation required it. As
regards holding on during the winter, and the number of British
troops required to do it, the safety of Archangel depended so much
on the situation in the rest of Russia t h a t General Ironside could not
estimate exactly what the requirements would be. He thought he
could hold practically what he had now without danger, with the:
WC 598
troops he had at present, provided that the odds against him were
no greater than they had been the previous - year. The position,
however, would always be one of active defensive only.
The Prime Minister said that the telegrams left upon him the
impression of a strong man, who was not afraid to face facts. They
undoubtedly revealed a very serious position. It was clear that
General Ironside contemplated the possibility of remaining on into
the winter. The first thing to be done was to eradicate this idea at
once. The Cabinet had some time ago definitely decided t h a t our
troops must be withdrawn before the winter set in.
The Secretary of State for War said that the War Office had no
intention of l e t t i ng General Ironside remain on, and they would take
steps to remove his misapprehensions at once.
The First Lord of the Admiralty said that the best men that
could be sent to General Ironside's assistance would be a fine
battalion of Marines, which it had been proposed to send to Schleswig-
Holstein, but had been retained in England for the present on
account of t h e Labour situation.
The Acting-Secretary of State for Foreign Affairs pointed out
that the situation in North Russia had changed since the Cabinet
had reached the decision referred to by the Prime Minister. At t h a t
time they had contemplated that when our troops withdrew they
would leave behind them a local Russian Government. It was clear
now, however, that directly we evacuated Archangel, t h e Tchaikovski
Government would fall, and the Bolsheviks take its place.
The Chancellor of the Exchequer said t h a t he and some of his
colleagues, when the Cabinet had approved of General Ironside's
plans for an offensive, had viewed the whole proposal with grave
misgivings, and the possible political advantages to be derived from
this action had not convinced them. They had yielded to strong
pressure on t h e part of t h e military authorities, who had represented
(a) that a strong forward movement was necessary to render the
evacuation a safe operation ; and (b) that, if we could hold on until t h e
river froze, t h e Tchaikovski Government could maintain itself during
the winter. In both cases the ground had now been cut away from
under our feet, and there was no reason for our troops remaining a day longer than was necessary. We
had, however, to consider the
question of evacuating the local population, and he wished to know
exactly what our obligations were in this respect.
The Secretary of State for War said that the British troops had
been in Archangel before he took over his present appointment. He
desired, however, that the position of the War Office in regard to
this situation should be clearly understood. They had never
diverged from their plan, which was to evacuate those troops as
soon as possible. We only maintained in North Russia a force just
sufficiently large to ensure a safe withdrawal. That withdrawal
might now have been completed had it not been decided to accept
General Ironside's plan, for reasons stated by the Chancellor.
When this plan had been before the Cabinet, Admiral Koltchak's
position had been so good that "the War Office felt bound to seize
what appeared to be a most favourable opportunity to establish a
junction with him and set up a secure local Government.
Unfortunately, these hopes had not been realised, so we had now to
revert to our original intention of evacuating as soon as possible.
The last chance of saving the Archangel Government had gone. He
did not think, however, that the general strategic situation in
Russia had undergone any great change. It was quite clear now
that General Ironside's plan to strike the Bolsheviks a heavy blow
was sound, and it was to be regretted that he had been.unable to
bring it off. The Russians at Archangel knew perfectly well that
we intended to withdraw, and they must now realise that, when we
went, they must endeavour to make the best terms they could with
the Bolsheviks. The Government, he thought, had taken a wise
course in announcing to Parliament their intention of evacuating.
I n any case, concealment would have been impossible, as we had to
promise the troops already there t h a t they would be brought back,
and, further, we had to give a pledge to other troops, volunteering
to go out and relieve them, t h a t they would be withdrawn before the
winter. In his opinion, it was quite evident that we must be
prepared to evacuate a certain number of the local population. We
could not, of course, allow Russians who bad fought for us to be
murdered, and he suggested that, we should offer to repatriate them
t o South Russia, where they could join General Denikin. He had
on the previous day seen a British officer who had j u s t returned
from Archangel^ who strongly urged that the idea of maintaining a
British Military Mission there during the winter should be abandoned,
as their throats would certainly all be cut.
The Prime Minister reminded the War Cabinet that our policy,
when we first decided to land troops at Archangel, was to assist our
Russian friends against the Germans. We had then had to remain
on in order to protect Russian troops, and others who were still
loyal to the Entente, against the Bolsheviks. It was most
unfortunate that Admiral Koltchak's recent, operations had definitely
failed. It was clear to him that Koltchak's present advisers
attached no importance to the Archangel Government. Archangel
possessed no population, no railways, no resources. For this reason
it was unlikely t h a t the Bolsheviks would pay very much attention
to it, as South Russia—where minerals, oil, &c, were found in
profusion—would prove a more powerful magnet. He t h o u g h t that
the War Office, in replying to General Ironside's telegrams, should
remove any apprehension he might have about the possibility of his
staying on into the winter, and should also inform him that our
honour was involved in saving as many of our Russian friends as we
could. For the rest, he thought we had no reason at all to reproach
ourselves. We had given Koltchak, Denikin, Archangel, and the
Russians generally, every possible chance of saving themselves from
the Bolsheviks, and this we had been compelled to undertake singlehanded.
We alone had supplied troops, munitions, and money,
while the French had only contributed promises.
The Chancellor of the Exchequer thought that the situation in
Siberia, to judge from General Knox's telegrams, was just as serious
as, or even more serious than, that in Archangel. As regards
the evacuation of the civil population, he thought the time had
come when we should tell them that we could not undertake to
continue to feed and finance them after they have been withdrawn
from North Russia. As the Prime Minister had stated, the whole
burden of assisting the Russian people to escape from Bolshevist
tyranny had been borne by ourselves. It was an unfortunate thing
that none of those we were assisting had ever taken our advice in
military or political matters.
The Acting-Secretary of State for Foreign Affairs said that in
March last the number of people, other than British, whom we
might have to evacuate from Russia amounted to some 18,000 ;
that is to say^ 9,000 of the local population, 4,000 Poles, Letts,
Lithuanians, &c, and 5,000 locally enlisted Russian troops. He
proposed to telegraph to our representative at Archangel to enquire
what his most recent estimate was of the numbers to whom we were
under an obligation in this respect. It would not be difficult to
repatriate the Poles, Lithuanians and others,, as their countries were
contiguous to Russia. The repatriation of the Russians was mainly
a matter of shipping. There were two classes of Russians to be
considered ; those who had fought with us, but many of whom had
since mutinied, and the ordinary population.
The Secretary of State for War thought it was quite probable
that in the course of the next two months the whole Koltchak
movement would crumple to pieces, unless the Japanese and the
United States went to his rescue, and the Bolsheviks would then
be able to concentrate towards the south. The repercussion of a
Government
Machinery for
Trade and
Commerce.
succession of misfortunes was bound to have an effect on, and might
even overwhelm, Denikin. He wished our policy in regard to Russia
had been more clearly defined. Mr. Churchill said t h a t he regretted
that the Chief of the Imperial General Staff was unable to be
present that day, but he hoped to bring him with him to-morrow or
the following day to the War Cabinet, when they would submit
considered proposals to meet the present situation.
The Shipping Controller said that he understood t h a t altogether
he would be required to find shipping for not less than 50,000 men
to be withdrawn from Archangel. This number included British
troops and the local population. The shipping situation was already
very serious, and it would be greatly accentuated if he had to provide
for the repatriation of any considerable numbers of Russians to the
Crimea. All shipping was not suitable for this purpose, and it
would probably be necessary to withdraw vessels from the Atlantic
services. It would mean that the repatriation of Canadians and
Australians would be interrupted. His Department could, he
thought, furnish the necessary shipping, provided they were told at
once exactly if the numbers for whom accommodation would be
necessary, and where they must be sent. The position was rendered
the more serious by the threat of a possible strike in Liverpool.
The War Cabinet d e c i d e d -
Co.) That the Acting-Secretary of State for Foreign Affairs
should ascertain from our representative at Archangel
the exact numbers of friendly troops and inhabitants
whom we were under an obligation to evacuate, with
special reference to the minimum number of Russians to
be repatriated to the Black Sea.
. (b.) That the War Office, in reply to General Ironside's
telegrams, should make it absolutely clear to him that
there was no intention whatsoever of t h e British Government
departing from its decision to evacuate Archangel
before the winter set in.
At a later stage in the meeting the First, Lord of the Admiralty
informed the War Cabinet that his Naval Advisers were being
pressed by the War Office to send a battalion of Marines to Archangel
without delay. Arrangements would be made for these men to start
within forty-eight hours, if the Government authorised their dispatch.
His Department were assured that the Liverpool men who had struck
would resume work at once if they could be told t h a t by loading the
ships they would be helping to bring our men back from Russia. If
the War Cabinet authorised the dispatch of the Marines, the
necessary shipping would have to be provided.
This question was reserved until the further discussion when
the Chief of the Imperial General Staff would be present.
6. The War Cabinet had under consideration the Report of the
Committee, established by War Cabinet 553, Minute 4, to examine
the question of Government machinery for dealing with trade and
commerce (Paper G.-253).
Lord Cave, the Chairman of the Committee, stated that the
enquiry of the Committee had been devoted to the machinery for the
development of British trade abroad. The Committee had investigated
the matter thoroughly, their principal object being to further
the development of British trade in foreign countries. He had
started the investigation with a bias in favour of the-point of view
put forward by t h e President of the Board of Trade, but the Committee
found, from the evidence before them, that there was a very
strong feeling amongst commercial men against the proposal that the
Department of Overseas Trade should be abolished or absorbed into
t h e Board of Trade. It was admitted that the Consular Service
must remain under the Foreign Office, and it would be impossible,
without the existence of the Department of Overseas Trade as a
link between the Foreign Office and the Board of Trade, to keep up
a proper connection between the representatives of the British
Government abroad and the Departments at home concerned
with trade questions. The Committee were of opinion that
the Department of Overseas Trade should be continued and
strengthened.. The fact that it had at its head an Under-
Secretary able to devote his whole time to foreign commerce would
enable it to do a great deal for British trade abroad. There was
no doubt that the accommodation occupied by the Department
had been disgraceful. It had been scattered through half-a-dozen
buildings in different parts of London, and had not had a fair chance.
The Department necessarily had in its register minutes and documents
which both of the parent Departments desired to see, and i t
was essential that it should be in close proximity to the Board of
Trade and the Foreign Office, and, if possible, that all three
Departments should be under the same roof.
The President of the Board of Trade said that he did not think
the solution proposed by the Committee would be satisfactory. The
work of regulating public services was in process of being taken away
from the Board of Trade, and the functions remaining to it would all
be of a/commercial nature, of which by far the most important would
be those relating to overseas trade, which were inseparably linked
up with questions of export. It was impossible to separate export
questions from questions of internal trade. While he would not say
that with good-will the scheme proposed by the Committee could
not be made to work, he was of opinion t h a t it was bad in principle,
and wasteful. He agreed that the main difficulty was the geographical
separation of the Department of Overseas Trade from the
Board of Trade! On the other hand, he believed that the real
solution was not to set up the Department of Overseas Trade as a
link under the same roof as the Foreign Office and the Board of
Trade, but simply to house the Foreign Office and the Board of
Trade together.' The dual allegiance owed by the Parliamentary
Under-Secretary at the head of the" Department of Overseas Trade
would necessarily be very difficult to achieve in practice. In any
event, he agreed with the recommendation of the Committee that
machinery should be set up for close consultation between the Foreign
Office and the Board of Trade. The, proposed Standing Council he
regarded as absolutely essential, whether the Department of Overseas
Trade were continued or not. The principal need, however, was to
get proper accommodation. If the Department of Overseas Trade
were to continue in a different building, the Board of Trade would
be artificially split up. The staff concerned with its most important
functions would be housed in a different building and would not be
known under the name of the Board of Trade at all. The staff of
the Department of Overseas Trade would be larger than that of the
Board of Trade, and t h e latter, being robbed of its principal functions,
would be placed in an invidious position.
. The Prime Minister pointed out that, under the recommendations
of the Committee, questions of commercial policy would still be
in the hands of the Board of Trade.
The Acting-Secretary of State for Foreign Affairs observed that
it was remarkable that the Committee had expressed a broad general
opinion in favour of the Department of Overseas Trade. He was
astonished at the almost complete consensus of commercial opinion
in favour of the control of foreign commercial policy being undertaken
by the Foreign Office. Three members of the Committee were
in favour of continuing the Department of Overseas Trade,
while the only dissenting member went even further and desired
t h e transfer of the supervision of foreign commerce to the Foreign
Office. In view of the opinion of the majority of the Committee
he did not propose to argue the case in favour of t h e suggestions, put
forward in the Minority Report, for the transfer of the Department
of Overseas Trade to the Foreign Office. He was of opinion,
however, "that the Government, having referred the matter to a
Committee upon which the commercial community were so largely
represented, would have great difficulty in refusing to adopt their
report. He gathered from the concluding remarks of the President
of the Board of Trade that the latter was prepared to accept the
solution proposed by the Committee.
The President of the Board of Trade interposed that was
so, provided the question of accommodation could be satisfactorily
settled.
Mr. Bonar Law said that he also had started with a strong
prejudice in favour of the Board of Trade case, which he retained,
but. as the Cabinet had submitted the matter to the Committee,
which had sent in a strong report, he thought that they were bound
to give the new scheme a trial.
The Minister of Health said that he was entirely in agreement
with the President of the Board of Trade. In his opinion the Committee
had been influenced, in coming to their conclusion, by a
wrong idea of the functions of the Board of Trade as a purely
regulating and controlling Department.
The First Lord of the Admiralty said that he was in agreement
with the President of the Board of Trade.
The Chancellor of the Exchequer said that, in his opinion, the
scheme proposed by the Committee was unsound, but he felt t h a t he
could not advise the Government to reject the report of so strong a
Committee with so powerful a backing of commercial opinion behind
it. He regarded it as of importance that commercial policy should be
controlled by the Board of Trade, and in his experience the late
Director of Overseas Trade had not always expressed the mind of
the President of t h e Board of Trade on questions of policy. H e had
particularly in mind the case of a scheme for developing trade with
Roumania.
Lord Cave pointed out that the scheme in question had been
drawn up by a high official in the Board of Trade, and that the
Department of Overseas Trade could not be held responsible if it
had not received the sanction of the President.
The Director of Overseas Trade observed that the ideal conception
would be that the offices of the President of the Board of
Trade and the Secretary of State for Foreign Affairs should be
united in the same person, but that was manifestly impossible.
Under the new scheme the President of the Board of Trade would
lay down the lines of trade policy. It would be impossible, however,
to dispense with the Department of Overseas Trade as a bridge
between the Foreign Office and the Board of Trade unless the
Consuls were taken away from t h e Foreign Office.
Mr. Bonar Law thought t h a t it was not possible to reject the
scheme. It was not enough to say that the Department of Overseas
Trade should be absorbed by the Board of Trade. Some provision
must be made for the supervision of the work of the Consuls. He
believed t h a t the proposal would work satisfactorily, provided the
Director of Overseas Trade realised t h a t he was an Under-Secretary
responsible to both Departments, and did not ally himself especially
to one or other of t h e Departments.
The President'' of the Board of Trade agreed that it was
obviously impossible to reject the scheme without proposing
anything in its place. If the Cabinet decided to accept the Report,
he pressed very strongly that the separate establishment of the
Department of Overseas Trade should be done away with, and that
t h e members of the staff should be carried on one or other of the
votes of the two parent Departments. That he believed to be
absolutely necessary. A separate establishment tended to provoke
a suspicion of aggression and to create ill-feeling in matters of
promotion. There would be no difficulty in conceding to the
D
Director of Overseas Trade the full control of any members of his
staff seconded from the Board of. Trade. If the Department had
a separate vote, the President would have no say in the appointment
of the staff. He was not inclined- to be responsible for trade policy
unless he had a say in the appointment of the higher officials of the
Department. He had not been consulted in such matters in the
past. He regarded this as vital to the effective co-ordination of
policy in trade and industry. He was . prepared to accept the
recommendations of the Committee so long as the separate vote
was not maintained. Otherwise, there was no certainty that he
would know what was being done in the Department of" Overseas
Trade.
Lord Cave thought that it would be dangerous to prevent the
staff of the Department of Overseas Trade from developing an
independent existence, with the resultant esprit de corps. He hoped
that the President of the Board of Trade would not insist upon this.
The Department had done exceedingly good work, and was covering
ground not hitherto covered by anybody. It had the support of the
commercial world, and he suggested that if the President of the
Board of Trade would give the scheme a fair chance for two or three
years, he would find that it would tend to gravitate in commercial
matters towards the Board of Trade. *.
The Permament Secretary to the Board of Trade said that he
attached more importance, from the point of view of administration,
to the abolition of the separate establishment of the Department
than to any other matter. A body of civil servants was growing up,
who were neither on the strength of the Foreign Office nor of the
Board of Trade, although the Department to which they belonged
was not, in fact, an independent department. That could only lead
eventually to the growth of a spirit of separation.
Mr. Bonar Law observed that, if the members of t h e staff of the
Department of Overseas Trade were in fact Board of Trade officials,
and.treated as such, the mere fact of there being a formal vote for
the Department would appear to make no difference. In his opinion,
the House of Commons would want a separate Estimate, and would
x-esent the splitting up of the vote for the Department between the
Foreign Office and the Board of Trade.
The Prime Minister said that, as one who had' considered its
establishment as a doubtful experiment, he was very gratified to
hear that the Department of Overseas Trade was giving satisfaction
in commercial circles, and suggested that the scheme should be
adopted as an experiment for a few months. With regard to the
question of accommodation, the First Commissioner of Works must
be consulted. The seventh recommendation of the Committee, that
the Board of Trade should remain responsible for the general commercial
policy, was very important, and should greatly strengthen
the position of that Department.
. The President of the Board of Trade said that the question of
accommodation was a vital matter.
The Director of Overseas Trade said that all the senior officials
at present belonged either to the Foreign Office or the Board of
Trade, and he would not think of appointing anybody of his own
selection.
The War Cabinet decided—
(a.) To approve the Report of the Committee as a provisional
scheme subject, to reconsideration if it should not be
found to work satisfactorily after some months'
experience;
(b.) That the separate establishment of the Department of
Overseas Trade should continue for the present, but
should be brought up for further consideration in three
months' time.
Disposal of Canteen
P r o f i t s -
(.,'
;
(
7. The War Cabinet had before them a Memorandum by the
Secretary of S t a t e for War (Paper G.T.-7595) on the subject of the
disposal of canteen profits, in which it was stated that the Army
Council had had under consideration the question of the ultimate
disposal of the large funds which had accumulated as a result of
canteen trading during the war. It was estimated that these funds,
which arose from various sources, amounted to over 10,500,OOOZ., of
which, after deducting that proportion which represented the profits
from purchases by Dominion, Colonial, and Indian troops, there
remained approximately 8,000,00OZ. as the amount available in
respect of Imperial troops. The policy of the Army Council had been to
conserve canteen and similar funds, with a view to their utilisation
after the war in the best interests of those who were.serving,
or had served, and their dependants, and in view of t h e fact that the
large majority of men who contributed as soldiers and sailors to the
profits of the canteens were now civilians, and that widows and
children were to share in the benefit from canteen profits, it was felt
that the administration of such funds should not rest with the War
Office, so far as they were concerned, but should be transferred to a
central authority representative of all interests concerned. A draft
scheme for administering the fund, giving the proposed constitution
of a central Council and a Board of Management representative of all
interests, was appended to the Memorandum.
The War Cabinet also had under consideration a Memorandum
on the same subject by the Chancellor of the Exchequer (Paper
G.T.-7764), in which attention was drawn to the following
paragraphs from the Fifth Report of the Select Committee on
National Expenditure :—
" 10. The Navy and Army Canteens Board conducts Army
Canteens on behalf of the Army Council. It is a trading
organisation with a gross annual, turnover of some 20,000,0001.
I t is financed by a Treasury guarantee of 3,000,000Z;, but the
Board occupies a quasi-independent position; its accounts are
audited by its own auditors, and not by the Controller and
Auditor-General. Its receipts are derived, first, from the
expenditure in canteens of the 6^d. cash allowance granted to - troops
for messing over and above the ration issued in kind ;
secondly, from the soldiers' individual expenditure in canteens. %
Ten per cent, of these receipts is given up by the Board,
four-fifths of the 10 per cent, to the units, one-fifth to the
Central Regimental Institutes Fund. The question whether
the profits derived from the expenditure of the 6^d. cash
allowance belong to t h e public purse or not was reopened after only
40,000Z. had been paid in respect of one quarter, and has not
yet been decided. This is a matter proper for the consideration
of the Public Accounts Committee, and pending their report
upon it we have suspended our enquiry into the operations of
the Board.
"11. A second question that arises in this connection
relates to the Central Regimental Institutes Fund. It is a
trust fund, vested in the Army Council, to be used for the
benefit of the soldier. At the end of the War it is likely to
amount to several millions. Meantime, however, it forms part
of the working capital of the Navy and Army Canteens
Board. The situation with respect to this fund needs further
investigation on the part both of the War Office and of the
Treasury. Among other considerations that should be borne in
mind is the fact that before the War we had a small
professional Army; after the War our forces will be reduced to
whatever peace establishment it may be found necessary to
maintain ; during the years of war the Army has been expanded
to include a great part of the adult manhood of the nation. It'
is from this vastly larger body that this fund has been drawn,
1
and the disposal of it should take these differences into account.
We consider that, in any event, the House of Commons should
have cognizance of the grants made from time- to time from the
Central Regimental Institutes Fund, and of any proposals of CJ
dealing with the accumulated balances at the end of the war.",
. The Memorandum further stated that, while the Chancellor of t h e
Exchequer did not support the suggested claim of the public purse
to any share in t h e profits of the canteens, he felt t h a t the following
points required consideration :—
(1.) The claim of t h e ex-soldier to share.
(2.) The claim of t h e House of Commons to be consulted.
(3.) Representation of the Pensions Ministry on the Central
Council.
The First Lord of the Admiralty stated that the Admiralty
were taking steps to ascertain whether the men of the Fleet wished
the Navy to join in t h e scheme.
The War Cabinet decided—
To approve in principle the scheme put forward in the
Memorandum of the Secretary of State for War (Paper
G.T.-7595); the details to be arranged in consultation
between the Secretary of State for War and Air, the
Minister of Labour and the Minister of Pensions.
2, Whitehall Gardens, &W.1,
July 23, 1919.
WAR CABINET 5 9 8 .
Minutes of a Meeting of the War Cabinet held at 10, Downing Street, S.W., on
Wednesday, July 23, 1919, at 12 noon.
Present :
The PRIME MINISTER (in the Chair).
The Right Hon. t h e Earl CURZON OE The Right Hon. A. CHAMBERLAIN, M.P.
KEDLESTON, K . G . , G . C . S . I . , G . C . I . E . The Right Hon. G. N. BARNES,' M.P.
The Right Hon. A. BONAR LAW, M.P.
The following were also present:
The Right Hon. t h e Viscount MILNER,
G.C.B., G.C.M.G., Secretary of State for
the Colonies.
The Right Hon. W. S. CHURCHILL, M.P.,
Secretary of S t a t e for War.
The Right Hon. A. C. GEDDES, K.C.B.,
M.P., President of t h e Board of Trade.
The Right Hon. H. A. L. FISHER, LL.D.,
M.P., President of the Board of Education
(for Minute 5).
The Right Hon. C. ADDISON, M.D., M.P.,
Minister of Health.
The Right Hon. Sir L. WORTHINGTON
EVANS, Bart., M.P., Minister of Pensions
(for Miuute 7 ) .
The Right Hon. Sir R. S. HORNE, K.B.E.,
K.C., M.P., Minister of Labour.
Major-General the Right Hon. J . E. B.
SEECY, C.B., C.M.G., D.S.O., M.P.,
Under-Secretary of State for Air (for
Minute 7 ) .
Sir HAMAR GREENWOOD, Bart., M.P.,
Director of Overseas Trade (for Minute
7 ) .
The Right Hon. W. LONG, M.P., First
Lord of t h e Admiralty.
The Right Hon. t h e Viscount CAVE, K . C .
(for Minute 6).
The Right Hon. Sir J . MACLAY, Bart.,
Shipping Controller (for Minutes 1 - 5 ) .
The Right Hon. G. H. ROBERTS, M.P.,
Food Controller (for Minutes 1 - 5 ) .
General the Hon. Sir J . H. G. BYNG,
G.C.B.,K.C.M.G., M.V.O. (for Minute 7 ) .
Major-General Sir C. H. HARINGTON,
K.C.B., D.S.O., Deputy Chief of t h e
Imperial General Staff (for Minute 7 ) .
The Viscount PEEL, C.B.E., Under-Secretary
of State for W a r (for Minute 7 ) .
The Right Hon. H. W. FORSTER, M.P.,
Financial Secretary, War Office (for
Minute 7 ) .
The Coal Strike.
2
1. With reference to War Cabinet 597, Minute 1, the War
Cabinet had before them four reports on the situation in Yorkshire
by Sir Eric Geddes (Papers U.C.-9, 10, 1 1 , and 12).
. The Minister of Labour said that his information was to the
effect that Mr. Herbert Smith, the President of the Yorkshire.
Miners' Association, had made a pacific speech at a meeting of the
Yorkshire District Council. The feeling of the younger miners in
Yorkshire was that the abandonment of the pumps was the only
method of bringing the situation to a head, although the older men
were against this course. There was a general feeling now that the
pumps should be worked, and it was hoped the pumpmen would
return shortly. The Yorkshire dispute was receiving no' support
from the other coalfields. In South Wales the men were still at
work, and in Lancashire they were about to return. The strikes in
Nottinghamshire and Derbyshire were on issues not connected with
piece-rate awards. With regard to the situation of the pits in
Yorkshire, six had been entirely flooded, and the owners were quite
content that this should be so, as these were unprofitable pits to
work. Seventeen were getting into a dangerous condition, and it
was thought that the assistance of the naval ratings was being
obtained to keep the pumps going. Mr. Herbert Smith had told his
men not to interfere with the naval ratings. Sir Robert Home
added that the coalowners were very anxious that Sir Eric Geddes
should see Mr. Herbert Smith with regard to the 14'3 per cent., as
some of the owners were in favour of this increase being given
in full.
The President of the Board of Trade said that the Miners'
Federation had had a long discussion on piece rates at Keswick, and
he understood (through Mr. Hartshorn) that they had decided that
a 10 per cent, increase for all pits was all they could ask for, with
the exception of Lancashire and Cheshire, which they considered
should have 12'2 per cent., and Yorkshire something like 12'1 per
cent. In South Wales only did they consider the rise should be as
much as 14- 3 per cent. Mr. Hartshorn had informed him that
Mr. Smillie had compelled the Lancashire delegates to return to
Lancashire and inform the men that they had got to take 12"2 per
cent. There was another feature in the situation, regarding the
pumpmen who were not members of the Miners' Federation, as
distinct from those pumpmen who were members. These men were
being intimidated, and had decided that they would not return to
t h e mines until they had been paid their wages for the days on which
they had been compelled not to work by the Yorkshire Association.
If this claim was not met, and the men came out on strike after the
miners had returned, it would result in a more difficult situation
than the present one. These pumpmen were of the opinion that the
miners should be made to'pay their wages, but so long as they were
paid, whether by the owners or by the Government, he did not think
they would mind.
The Minister of Labour said that these men had many
grievances against the Miners' Federation, one of which was that
t h e Federation had refused to sit on the Sankey Commission
with them.
The Chancellor of the Exchequer said that he understood from
the Minister of Labour t h a t the two Yorkshire Owners' Associations
wished, to give way to the men and award them the 14'3 per cent, for
piece rates. This looked like an invitation to the Government to
go back on its decision. Such a course would condemn the Government
utterly and destroy its power to deal with further troubles.
The Prime Minister said that it would create a serious position
if the owners advised the Government to grant the 14'3 per cent., as
the fact that such advice had been given was bound, sooner or later,
- to be made public.
The Chancellor of the Exchequer observed that such advice was
on a subject in which the owners had ceased to have any pecuniary
interest.
3 WC5 r
The Minister of Labour said that the Scottish and South Wales
miners were against the 14- 3 per cent., and he believed only a few
miners in Lancashire, Yorkshire, and Warwickshire supported the
demand.
The Prime Minister said that such an advance would mean 6d.
or Is. extra on to the price of coal, which the country could not
possibly afford. As the Chancellor of the Exchequer had observed,
ix, was all very well for the masters to advise the giving of this
concession, but the money would not come out of their pockets.
The Secretary of State for War said that, with regard to the
general situation, he had received a private letter from the General
Officer Commanding, Northern Command, in which he stated that
the liaison with Sir Eric Geddes was working very well. Troops
had been sent from Clipstone to Wakefield, Pontefract, and Leeds.
He proposed to reinforce Clipstone Camp by one of the brigades frOrn
the fihine Army.
The Food Controller said that, with regard to the strike of the
Co-operative Societies' employees, he was able to report that they
were returning to work pending negotiations.
Nationalisation of 2. The Cabinet had some discussion on the desirability of
Mines, making a statement regarding the nationalisation of. mines.
The Prime 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 any information regarding nationalisation.
The Prime Minister said t h a t he was inclined to think t h a t there was
nothing to be gained by putting off a decision. The previous evening
he had dined with seventeen or eighteen Members of Parliament,
mostly Coalition Liberals, and he had asked them their views on
nationalisation, and with one exception they had all been against it,
though they were in favour of the nationalisation of the railways.
These gentlemen were, however, agreed that the miners should have
a voice in the management of the mines, and they were in favour of
the nationalisation of royalties and minerals. He thought it would
be wise to make a statement on the subject before the recess, but if
these strikes continued it gave the Government very little time to
consider such a weighty question.. Should there be a strike on the
subject of nationalisation, he thought it would be better to have it
in August than three months later. He was interviewing some of
the mine-owners shortly, with a view to an interchange of opinions
on this subject, and he would like the authority of the Cabinet to
press these owners to give representation to the men in the management
of the mines. The Prime Minister said that there was one
other subject on which he would like to make a statement to the
House before the recess, which was, the trade,policy of the country.
The Members of Parliament with whom he had dined on the previous night
had also pressed him to make a statement on the action the
Government proposed to take regarding profiteering. These
gentlemen favoured drastic and dramatic measures.
The Minister of Health observed that, while the Government
did not possess the confidence of the miners, unless a statement on
nationalisation was made, they would lose the confidence of the
general public also.
I t was generally agreed that a statement on the subject of
nationalisation was desirable before the recess, in view of the fact
that, if a strike was to come, the best month in which to have it was
August.
The War Cabinet decided that—
(a.) The Prime Minister, in his interview with Mr. Smillie on
the following day, should inform him that the Government
would make a statement of their policy on
nationalisation before the recess ;
Xtis 6X-K3.is6r.
Visit of H.E.H. the
Prince of Wales to
the United States.
The Prime Minister, when interviewing the coal-owners,
should urge them to concede representation for the men
in t h e management of t h e mines.
3. The Cabinet had a short discussion regarding the venue of
the trial of the ex-Kaiser. -
The Prime Minister agreed that London was not a very suitable
place, and it had been his intention, in his speech on the subject, to
say that it would take place in England.
The relative advantages of Hampton Court and Dover were
discussed.
The Acting Secretary of State for^ Foreign Affairs made the
suggestion of the Channel Islands.
4. With reference to War Cabinet 589, Minute 1, t h e Acting
Secretary of State for Foreign Affairs reported that the United
States Ambassador entirely approved of the proposal that the Prince
of Wales should be lodged on his own battleship during his visit to
New York. This would relieve the United States of the difficulty
of finding a suitable residence, and would have the additional
advantage of enabling His Royal Highness to return hospitality.
The War Cabinet approved this proposal, and agreed that an
immediate announcement should be made regarding the
Prince of Wales' visit to the United States.
The Acting Secretary of State for Foreign Affairs
undertook to set in motion the arrangements he had agreed
on with Lord Stamfordham for this purpose.
Situation in North
Eussia. 5 T j i e p r i m e Minister said he wished to draw the attention of
the War Cabinet to the most recent developments in North Russia, as
revealed by two telegrams from General Ironside, which had just
been received. The first stated t h a t Onega had been handed over
to the Bolsheviks, after a mutiny. The railway position was the
same, Russian troops being disarmed in parties as t h e British arrive.
The state of t h e Russian troops was such t h a t his efforts to consolidate
the Russian national army must now be regarded definitely as
a failure. Unless the British force at Archangel was to be increased,
it was essential t h a t evacuation be carried out with the least possible
delay. The telegram expressed the hope that the naval contingent
in North Russia might at once be increased by two large warships,
to admit of landing parties in the town so as to release soldiers for
fighting. In conclusion, General Ironside asked whether he was to
commence the evacuating of any civilian population, as, if it was
decided t h a t this must be done, a start should be made as early as
possible.
I n the second telegram General Ironside said that he had
discussed the situation with General Miller, who agreed with him
t h a t it would not be possible for the Russians to hold on to Archangel
during the winter if the British troops were withdrawn. The
situation was difficult, as he had to stabilise each front with British
troops, and, with the river in its present state, movement was slow.
Monitors were standing by and bombarding the enemy, who was not
in great strength. The tactical situation might demand a withdrawal
on the Dwina and Vaga. All preparations were being made for an
evacuation slowly down the river, if the situation required it. As
regards holding on during the winter, and the number of British
troops required to do it, the safety of Archangel depended so much
on the situation in the rest of Russia t h a t General Ironside could not
estimate exactly what the requirements would be. He thought he
could hold practically what he had now without danger, with the:
WC 598
troops he had at present, provided that the odds against him were
no greater than they had been the previous - year. The position,
however, would always be one of active defensive only.
The Prime Minister said that the telegrams left upon him the
impression of a strong man, who was not afraid to face facts. They
undoubtedly revealed a very serious position. It was clear that
General Ironside contemplated the possibility of remaining on into
the winter. The first thing to be done was to eradicate this idea at
once. The Cabinet had some time ago definitely decided t h a t our
troops must be withdrawn before the winter set in.
The Secretary of State for War said that the War Office had no
intention of l e t t i ng General Ironside remain on, and they would take
steps to remove his misapprehensions at once.
The First Lord of the Admiralty said that the best men that
could be sent to General Ironside's assistance would be a fine
battalion of Marines, which it had been proposed to send to Schleswig-
Holstein, but had been retained in England for the present on
account of t h e Labour situation.
The Acting-Secretary of State for Foreign Affairs pointed out
that the situation in North Russia had changed since the Cabinet
had reached the decision referred to by the Prime Minister. At t h a t
time they had contemplated that when our troops withdrew they
would leave behind them a local Russian Government. It was clear
now, however, that directly we evacuated Archangel, t h e Tchaikovski
Government would fall, and the Bolsheviks take its place.
The Chancellor of the Exchequer said t h a t he and some of his
colleagues, when the Cabinet had approved of General Ironside's
plans for an offensive, had viewed the whole proposal with grave
misgivings, and the possible political advantages to be derived from
this action had not convinced them. They had yielded to strong
pressure on t h e part of t h e military authorities, who had represented
(a) that a strong forward movement was necessary to render the
evacuation a safe operation ; and (b) that, if we could hold on until t h e
river froze, t h e Tchaikovski Government could maintain itself during
the winter. In both cases the ground had now been cut away from
under our feet, and there was no reason for our troops remaining a day longer than was necessary. We
had, however, to consider the
question of evacuating the local population, and he wished to know
exactly what our obligations were in this respect.
The Secretary of State for War said that the British troops had
been in Archangel before he took over his present appointment. He
desired, however, that the position of the War Office in regard to
this situation should be clearly understood. They had never
diverged from their plan, which was to evacuate those troops as
soon as possible. We only maintained in North Russia a force just
sufficiently large to ensure a safe withdrawal. That withdrawal
might now have been completed had it not been decided to accept
General Ironside's plan, for reasons stated by the Chancellor.
When this plan had been before the Cabinet, Admiral Koltchak's
position had been so good that "the War Office felt bound to seize
what appeared to be a most favourable opportunity to establish a
junction with him and set up a secure local Government.
Unfortunately, these hopes had not been realised, so we had now to
revert to our original intention of evacuating as soon as possible.
The last chance of saving the Archangel Government had gone. He
did not think, however, that the general strategic situation in
Russia had undergone any great change. It was quite clear now
that General Ironside's plan to strike the Bolsheviks a heavy blow
was sound, and it was to be regretted that he had been.unable to
bring it off. The Russians at Archangel knew perfectly well that
we intended to withdraw, and they must now realise that, when we
went, they must endeavour to make the best terms they could with
the Bolsheviks. The Government, he thought, had taken a wise
course in announcing to Parliament their intention of evacuating.
I n any case, concealment would have been impossible, as we had to
promise the troops already there t h a t they would be brought back,
and, further, we had to give a pledge to other troops, volunteering
to go out and relieve them, t h a t they would be withdrawn before the
winter. In his opinion, it was quite evident that we must be
prepared to evacuate a certain number of the local population. We
could not, of course, allow Russians who bad fought for us to be
murdered, and he suggested that, we should offer to repatriate them
t o South Russia, where they could join General Denikin. He had
on the previous day seen a British officer who had j u s t returned
from Archangel^ who strongly urged that the idea of maintaining a
British Military Mission there during the winter should be abandoned,
as their throats would certainly all be cut.
The Prime Minister reminded the War Cabinet that our policy,
when we first decided to land troops at Archangel, was to assist our
Russian friends against the Germans. We had then had to remain
on in order to protect Russian troops, and others who were still
loyal to the Entente, against the Bolsheviks. It was most
unfortunate that Admiral Koltchak's recent, operations had definitely
failed. It was clear to him that Koltchak's present advisers
attached no importance to the Archangel Government. Archangel
possessed no population, no railways, no resources. For this reason
it was unlikely t h a t the Bolsheviks would pay very much attention
to it, as South Russia—where minerals, oil, &c, were found in
profusion—would prove a more powerful magnet. He t h o u g h t that
the War Office, in replying to General Ironside's telegrams, should
remove any apprehension he might have about the possibility of his
staying on into the winter, and should also inform him that our
honour was involved in saving as many of our Russian friends as we
could. For the rest, he thought we had no reason at all to reproach
ourselves. We had given Koltchak, Denikin, Archangel, and the
Russians generally, every possible chance of saving themselves from
the Bolsheviks, and this we had been compelled to undertake singlehanded.
We alone had supplied troops, munitions, and money,
while the French had only contributed promises.
The Chancellor of the Exchequer thought that the situation in
Siberia, to judge from General Knox's telegrams, was just as serious
as, or even more serious than, that in Archangel. As regards
the evacuation of the civil population, he thought the time had
come when we should tell them that we could not undertake to
continue to feed and finance them after they have been withdrawn
from North Russia. As the Prime Minister had stated, the whole
burden of assisting the Russian people to escape from Bolshevist
tyranny had been borne by ourselves. It was an unfortunate thing
that none of those we were assisting had ever taken our advice in
military or political matters.
The Acting-Secretary of State for Foreign Affairs said that in
March last the number of people, other than British, whom we
might have to evacuate from Russia amounted to some 18,000 ;
that is to say^ 9,000 of the local population, 4,000 Poles, Letts,
Lithuanians, &c, and 5,000 locally enlisted Russian troops. He
proposed to telegraph to our representative at Archangel to enquire
what his most recent estimate was of the numbers to whom we were
under an obligation in this respect. It would not be difficult to
repatriate the Poles, Lithuanians and others,, as their countries were
contiguous to Russia. The repatriation of the Russians was mainly
a matter of shipping. There were two classes of Russians to be
considered ; those who had fought with us, but many of whom had
since mutinied, and the ordinary population.
The Secretary of State for War thought it was quite probable
that in the course of the next two months the whole Koltchak
movement would crumple to pieces, unless the Japanese and the
United States went to his rescue, and the Bolsheviks would then
be able to concentrate towards the south. The repercussion of a
Government
Machinery for
Trade and
Commerce.
succession of misfortunes was bound to have an effect on, and might
even overwhelm, Denikin. He wished our policy in regard to Russia
had been more clearly defined. Mr. Churchill said t h a t he regretted
that the Chief of the Imperial General Staff was unable to be
present that day, but he hoped to bring him with him to-morrow or
the following day to the War Cabinet, when they would submit
considered proposals to meet the present situation.
The Shipping Controller said that he understood t h a t altogether
he would be required to find shipping for not less than 50,000 men
to be withdrawn from Archangel. This number included British
troops and the local population. The shipping situation was already
very serious, and it would be greatly accentuated if he had to provide
for the repatriation of any considerable numbers of Russians to the
Crimea. All shipping was not suitable for this purpose, and it
would probably be necessary to withdraw vessels from the Atlantic
services. It would mean that the repatriation of Canadians and
Australians would be interrupted. His Department could, he
thought, furnish the necessary shipping, provided they were told at
once exactly if the numbers for whom accommodation would be
necessary, and where they must be sent. The position was rendered
the more serious by the threat of a possible strike in Liverpool.
The War Cabinet d e c i d e d -
Co.) That the Acting-Secretary of State for Foreign Affairs
should ascertain from our representative at Archangel
the exact numbers of friendly troops and inhabitants
whom we were under an obligation to evacuate, with
special reference to the minimum number of Russians to
be repatriated to the Black Sea.
. (b.) That the War Office, in reply to General Ironside's
telegrams, should make it absolutely clear to him that
there was no intention whatsoever of t h e British Government
departing from its decision to evacuate Archangel
before the winter set in.
At a later stage in the meeting the First, Lord of the Admiralty
informed the War Cabinet that his Naval Advisers were being
pressed by the War Office to send a battalion of Marines to Archangel
without delay. Arrangements would be made for these men to start
within forty-eight hours, if the Government authorised their dispatch.
His Department were assured that the Liverpool men who had struck
would resume work at once if they could be told t h a t by loading the
ships they would be helping to bring our men back from Russia. If
the War Cabinet authorised the dispatch of the Marines, the
necessary shipping would have to be provided.
This question was reserved until the further discussion when
the Chief of the Imperial General Staff would be present.
6. The War Cabinet had under consideration the Report of the
Committee, established by War Cabinet 553, Minute 4, to examine
the question of Government machinery for dealing with trade and
commerce (Paper G.-253).
Lord Cave, the Chairman of the Committee, stated that the
enquiry of the Committee had been devoted to the machinery for the
development of British trade abroad. The Committee had investigated
the matter thoroughly, their principal object being to further
the development of British trade in foreign countries. He had
started the investigation with a bias in favour of the-point of view
put forward by t h e President of the Board of Trade, but the Committee
found, from the evidence before them, that there was a very
strong feeling amongst commercial men against the proposal that the
Department of Overseas Trade should be abolished or absorbed into
t h e Board of Trade. It was admitted that the Consular Service
must remain under the Foreign Office, and it would be impossible,
without the existence of the Department of Overseas Trade as a
link between the Foreign Office and the Board of Trade, to keep up
a proper connection between the representatives of the British
Government abroad and the Departments at home concerned
with trade questions. The Committee were of opinion that
the Department of Overseas Trade should be continued and
strengthened.. The fact that it had at its head an Under-
Secretary able to devote his whole time to foreign commerce would
enable it to do a great deal for British trade abroad. There was
no doubt that the accommodation occupied by the Department
had been disgraceful. It had been scattered through half-a-dozen
buildings in different parts of London, and had not had a fair chance.
The Department necessarily had in its register minutes and documents
which both of the parent Departments desired to see, and i t
was essential that it should be in close proximity to the Board of
Trade and the Foreign Office, and, if possible, that all three
Departments should be under the same roof.
The President of the Board of Trade said that he did not think
the solution proposed by the Committee would be satisfactory. The
work of regulating public services was in process of being taken away
from the Board of Trade, and the functions remaining to it would all
be of a/commercial nature, of which by far the most important would
be those relating to overseas trade, which were inseparably linked
up with questions of export. It was impossible to separate export
questions from questions of internal trade. While he would not say
that with good-will the scheme proposed by the Committee could
not be made to work, he was of opinion t h a t it was bad in principle,
and wasteful. He agreed that the main difficulty was the geographical
separation of the Department of Overseas Trade from the
Board of Trade! On the other hand, he believed that the real
solution was not to set up the Department of Overseas Trade as a
link under the same roof as the Foreign Office and the Board of
Trade, but simply to house the Foreign Office and the Board of
Trade together.' The dual allegiance owed by the Parliamentary
Under-Secretary at the head of the" Department of Overseas Trade
would necessarily be very difficult to achieve in practice. In any
event, he agreed with the recommendation of the Committee that
machinery should be set up for close consultation between the Foreign
Office and the Board of Trade. The, proposed Standing Council he
regarded as absolutely essential, whether the Department of Overseas
Trade were continued or not. The principal need, however, was to
get proper accommodation. If the Department of Overseas Trade
were to continue in a different building, the Board of Trade would
be artificially split up. The staff concerned with its most important
functions would be housed in a different building and would not be
known under the name of the Board of Trade at all. The staff of
the Department of Overseas Trade would be larger than that of the
Board of Trade, and t h e latter, being robbed of its principal functions,
would be placed in an invidious position.
. The Prime Minister pointed out that, under the recommendations
of the Committee, questions of commercial policy would still be
in the hands of the Board of Trade.
The Acting-Secretary of State for Foreign Affairs observed that
it was remarkable that the Committee had expressed a broad general
opinion in favour of the Department of Overseas Trade. He was
astonished at the almost complete consensus of commercial opinion
in favour of the control of foreign commercial policy being undertaken
by the Foreign Office. Three members of the Committee were
in favour of continuing the Department of Overseas Trade,
while the only dissenting member went even further and desired
t h e transfer of the supervision of foreign commerce to the Foreign
Office. In view of the opinion of the majority of the Committee
he did not propose to argue the case in favour of t h e suggestions, put
forward in the Minority Report, for the transfer of the Department
of Overseas Trade to the Foreign Office. He was of opinion,
however, "that the Government, having referred the matter to a
Committee upon which the commercial community were so largely
represented, would have great difficulty in refusing to adopt their
report. He gathered from the concluding remarks of the President
of the Board of Trade that the latter was prepared to accept the
solution proposed by the Committee.
The President of the Board of Trade interposed that was
so, provided the question of accommodation could be satisfactorily
settled.
Mr. Bonar Law said that he also had started with a strong
prejudice in favour of the Board of Trade case, which he retained,
but. as the Cabinet had submitted the matter to the Committee,
which had sent in a strong report, he thought that they were bound
to give the new scheme a trial.
The Minister of Health said that he was entirely in agreement
with the President of the Board of Trade. In his opinion the Committee
had been influenced, in coming to their conclusion, by a
wrong idea of the functions of the Board of Trade as a purely
regulating and controlling Department.
The First Lord of the Admiralty said that he was in agreement
with the President of the Board of Trade.
The Chancellor of the Exchequer said that, in his opinion, the
scheme proposed by the Committee was unsound, but he felt t h a t he
could not advise the Government to reject the report of so strong a
Committee with so powerful a backing of commercial opinion behind
it. He regarded it as of importance that commercial policy should be
controlled by the Board of Trade, and in his experience the late
Director of Overseas Trade had not always expressed the mind of
the President of t h e Board of Trade on questions of policy. H e had
particularly in mind the case of a scheme for developing trade with
Roumania.
Lord Cave pointed out that the scheme in question had been
drawn up by a high official in the Board of Trade, and that the
Department of Overseas Trade could not be held responsible if it
had not received the sanction of the President.
The Director of Overseas Trade observed that the ideal conception
would be that the offices of the President of the Board of
Trade and the Secretary of State for Foreign Affairs should be
united in the same person, but that was manifestly impossible.
Under the new scheme the President of the Board of Trade would
lay down the lines of trade policy. It would be impossible, however,
to dispense with the Department of Overseas Trade as a bridge
between the Foreign Office and the Board of Trade unless the
Consuls were taken away from t h e Foreign Office.
Mr. Bonar Law thought t h a t it was not possible to reject the
scheme. It was not enough to say that the Department of Overseas
Trade should be absorbed by the Board of Trade. Some provision
must be made for the supervision of the work of the Consuls. He
believed t h a t the proposal would work satisfactorily, provided the
Director of Overseas Trade realised t h a t he was an Under-Secretary
responsible to both Departments, and did not ally himself especially
to one or other of t h e Departments.
The President'' of the Board of Trade agreed that it was
obviously impossible to reject the scheme without proposing
anything in its place. If the Cabinet decided to accept the Report,
he pressed very strongly that the separate establishment of the
Department of Overseas Trade should be done away with, and that
t h e members of the staff should be carried on one or other of the
votes of the two parent Departments. That he believed to be
absolutely necessary. A separate establishment tended to provoke
a suspicion of aggression and to create ill-feeling in matters of
promotion. There would be no difficulty in conceding to the
D
Director of Overseas Trade the full control of any members of his
staff seconded from the Board of. Trade. If the Department had
a separate vote, the President would have no say in the appointment
of the staff. He was not inclined- to be responsible for trade policy
unless he had a say in the appointment of the higher officials of the
Department. He had not been consulted in such matters in the
past. He regarded this as vital to the effective co-ordination of
policy in trade and industry. He was . prepared to accept the
recommendations of the Committee so long as the separate vote
was not maintained. Otherwise, there was no certainty that he
would know what was being done in the Department of" Overseas
Trade.
Lord Cave thought that it would be dangerous to prevent the
staff of the Department of Overseas Trade from developing an
independent existence, with the resultant esprit de corps. He hoped
that the President of the Board of Trade would not insist upon this.
The Department had done exceedingly good work, and was covering
ground not hitherto covered by anybody. It had the support of the
commercial world, and he suggested that if the President of the
Board of Trade would give the scheme a fair chance for two or three
years, he would find that it would tend to gravitate in commercial
matters towards the Board of Trade. *.
The Permament Secretary to the Board of Trade said that he
attached more importance, from the point of view of administration,
to the abolition of the separate establishment of the Department
than to any other matter. A body of civil servants was growing up,
who were neither on the strength of the Foreign Office nor of the
Board of Trade, although the Department to which they belonged
was not, in fact, an independent department. That could only lead
eventually to the growth of a spirit of separation.
Mr. Bonar Law observed that, if the members of t h e staff of the
Department of Overseas Trade were in fact Board of Trade officials,
and.treated as such, the mere fact of there being a formal vote for
the Department would appear to make no difference. In his opinion,
the House of Commons would want a separate Estimate, and would
x-esent the splitting up of the vote for the Department between the
Foreign Office and the Board of Trade.
The Prime Minister said that, as one who had' considered its
establishment as a doubtful experiment, he was very gratified to
hear that the Department of Overseas Trade was giving satisfaction
in commercial circles, and suggested that the scheme should be
adopted as an experiment for a few months. With regard to the
question of accommodation, the First Commissioner of Works must
be consulted. The seventh recommendation of the Committee, that
the Board of Trade should remain responsible for the general commercial
policy, was very important, and should greatly strengthen
the position of that Department.
. The President of the Board of Trade said that the question of
accommodation was a vital matter.
The Director of Overseas Trade said that all the senior officials
at present belonged either to the Foreign Office or the Board of
Trade, and he would not think of appointing anybody of his own
selection.
The War Cabinet decided—
(a.) To approve the Report of the Committee as a provisional
scheme subject, to reconsideration if it should not be
found to work satisfactorily after some months'
experience;
(b.) That the separate establishment of the Department of
Overseas Trade should continue for the present, but
should be brought up for further consideration in three
months' time.
Disposal of Canteen
P r o f i t s -
(.,'
;
(
7. The War Cabinet had before them a Memorandum by the
Secretary of S t a t e for War (Paper G.T.-7595) on the subject of the
disposal of canteen profits, in which it was stated that the Army
Council had had under consideration the question of the ultimate
disposal of the large funds which had accumulated as a result of
canteen trading during the war. It was estimated that these funds,
which arose from various sources, amounted to over 10,500,OOOZ., of
which, after deducting that proportion which represented the profits
from purchases by Dominion, Colonial, and Indian troops, there
remained approximately 8,000,00OZ. as the amount available in
respect of Imperial troops. The policy of the Army Council had been to
conserve canteen and similar funds, with a view to their utilisation
after the war in the best interests of those who were.serving,
or had served, and their dependants, and in view of t h e fact that the
large majority of men who contributed as soldiers and sailors to the
profits of the canteens were now civilians, and that widows and
children were to share in the benefit from canteen profits, it was felt
that the administration of such funds should not rest with the War
Office, so far as they were concerned, but should be transferred to a
central authority representative of all interests concerned. A draft
scheme for administering the fund, giving the proposed constitution
of a central Council and a Board of Management representative of all
interests, was appended to the Memorandum.
The War Cabinet also had under consideration a Memorandum
on the same subject by the Chancellor of the Exchequer (Paper
G.T.-7764), in which attention was drawn to the following
paragraphs from the Fifth Report of the Select Committee on
National Expenditure :—
" 10. The Navy and Army Canteens Board conducts Army
Canteens on behalf of the Army Council. It is a trading
organisation with a gross annual, turnover of some 20,000,0001.
I t is financed by a Treasury guarantee of 3,000,000Z;, but the
Board occupies a quasi-independent position; its accounts are
audited by its own auditors, and not by the Controller and
Auditor-General. Its receipts are derived, first, from the
expenditure in canteens of the 6^d. cash allowance granted to - troops
for messing over and above the ration issued in kind ;
secondly, from the soldiers' individual expenditure in canteens. %
Ten per cent, of these receipts is given up by the Board,
four-fifths of the 10 per cent, to the units, one-fifth to the
Central Regimental Institutes Fund. The question whether
the profits derived from the expenditure of the 6^d. cash
allowance belong to t h e public purse or not was reopened after only
40,000Z. had been paid in respect of one quarter, and has not
yet been decided. This is a matter proper for the consideration
of the Public Accounts Committee, and pending their report
upon it we have suspended our enquiry into the operations of
the Board.
"11. A second question that arises in this connection
relates to the Central Regimental Institutes Fund. It is a
trust fund, vested in the Army Council, to be used for the
benefit of the soldier. At the end of the War it is likely to
amount to several millions. Meantime, however, it forms part
of the working capital of the Navy and Army Canteens
Board. The situation with respect to this fund needs further
investigation on the part both of the War Office and of the
Treasury. Among other considerations that should be borne in
mind is the fact that before the War we had a small
professional Army; after the War our forces will be reduced to
whatever peace establishment it may be found necessary to
maintain ; during the years of war the Army has been expanded
to include a great part of the adult manhood of the nation. It'
is from this vastly larger body that this fund has been drawn,
1
and the disposal of it should take these differences into account.
We consider that, in any event, the House of Commons should
have cognizance of the grants made from time- to time from the
Central Regimental Institutes Fund, and of any proposals of CJ
dealing with the accumulated balances at the end of the war.",
. The Memorandum further stated that, while the Chancellor of t h e
Exchequer did not support the suggested claim of the public purse
to any share in t h e profits of the canteens, he felt t h a t the following
points required consideration :—
(1.) The claim of t h e ex-soldier to share.
(2.) The claim of t h e House of Commons to be consulted.
(3.) Representation of the Pensions Ministry on the Central
Council.
The First Lord of the Admiralty stated that the Admiralty
were taking steps to ascertain whether the men of the Fleet wished
the Navy to join in t h e scheme.
The War Cabinet decided—
To approve in principle the scheme put forward in the
Memorandum of the Secretary of State for War (Paper
G.T.-7595); the details to be arranged in consultation
between the Secretary of State for War and Air, the
Minister of Labour and the Minister of Pensions.
2, Whitehall Gardens, &W.1,
July 23, 1919.
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