From 2nd JULY to 9th JULY, 1924.


The Committee consisted of the following Members:

Mr. Turton (Chairman)

Apsley, Lord (Southampton)

Banton, Mr. (Leicester E.)

Barker, Mr. (Abertillery)

Bentinck, Lord Henry Cavendish- (Nottingham, S.)

*Chapple, Dr. (Dumfries)

Broad, Mr. (Edmonton)

Bromfield, Mr. (Leek)

*Caine, Mr. (Dorset, E.)

Clayton, Mr. (Widnes)

Cockerill, Brigadier-General (Reigate)

Cove, Mr. (Wellingborough)

Davies, Mr. Evan (Ebbw Vale)

Deans, Mr. Storry- (Sheffield, Park)

Dudgeon, Major (Galloway)

Dunnico, Mr. (Consett)

Erskine, Mr. (St. George's)

Falle, Major Sir Bertram (Portsmouth, N.)

*Gibbins, Mr. (Liverpool, West Toxteth)

Harmsworth, Mr. Esmond (Isle-of-Thanet)

Hayday, Mr. (Nottingham, W.)

Hill-Wood, Major Sir Samuel (High Peak)

Hirst, Mr. (Wentworth)

Hobhouse, Mr. (Wells)

Hore-Belisha, Major (Devonport)

Howard-Bury, Lieut.-Colonel (Bilston)

Hudson, Mr. (Huddersfield)

James, Lieut.-Colonel (Bromley)

Jenkins, Mr. William (Neath)

*Johnstone, Mr. Harcourt (Willesden, E.)

Leasing, Mr. (Abingdon)

Loverseed, Mr. (Sudbury)

Lumley, Mr. (Kingston-upon-Hull, E.)

*McNeill, Mr. Ronald (Canterbury)

Martin, Mr. Frederick (Aberdeen, E.)

Middleton, Mr. (Carlisle)

Mitchell, Mr. Foot (Saffron Walden)

*Moulton, Major (Salisbury)

Paling, Mr. (Doncaster)

*Ponsonby, Mr. (Sheffield, Brightside)

Rees, Captain Tudor (Barnstaple)

Remer, Mr. (Macclesfield)

Rhys, Mr. (Romford)

Royle, Mr. (Stockport)

*Samuel, Mr. Arthur Michael (Farnham)

*Samuel, Mr. Samuel (Putney)

Scrymgeour, Mr. (Dundee)

Seely, Mr. Hugh (Norfolk, E.)

Spencer, Mr. George (Broxtowe)

Spencer, Mr. Herbert (Bradford, S.)

Spender - Clay, Lieut. - Colonel (Tonbridge)

Stanley, Lord (Fylde)

Varley, Mr. (Mansfield)

Waddington, Mr. (Rossendall)

Ward, Lieut.-Colonel Lambert (Kingston-upon-Hull, N. W.)

Wells, Mr. (Bedford)

*Williams, Mr. John (Llanelly)

Williams, Mr. Penry (Middlesbrough, E.)

Williams, Major Ronald (Sevenoaks)

*Wise, Sir Fredric (Ilford)

Woodwark, Lieut. - Colonel (King's Lynn)

* Added in respect of the China Indemnity (Application) Bill.


MR. KINGDOM. Committee Clerks

1997 STANDING COMMITTEE D Wednesday, 2nd July, 1924.

[Mr. TURTON in the Chair.]

—(Application of China indemnity.)

(1) Any sums received at any time after the first day of December, nineteen hundred and twenty-two, on account of the China Indemnity shall, instead of being paid into the Exchequer and issued and applied in like manner as the new sinking fund, be paid to a fund to be called "the China Indemnity Fund," and, subject to the provisions of this Section, be applied to such purposes, being purposes which are, in the opinion of the Secretary of State for Foreign Affairs beneficial to the mutual interests of His Majesty and of the Republic of China, as the said Secretary of State may from time to time determine.

(2) Any expenses incurred by the said Secretary of State in or in connection with or for the purposes of the administration of the China Indemnity Fund shall be defrayed out of that fund.

(3) The said Secretary of State shall cause to be prepared, in such form as the Treasury may from time to time direct, in respect of each financial year an account showing the receipts and expenditure in that year in respect of the China Indemnity Fund, and the said account shall be examined by the Comptroller and Auditor-General, and shall, together with his report thereon, be laid before the House of Commons as soon as may be after the end of the year to which it relates.

Mr. RONALD MCNEILL: I beg to move in line 11, after the word "fund" to leave out the words to the end of Sub-section (1), and to insert instead thereof the words "and be applied to the encouragement of Chinese education upon British lines in China, the development of Hong Kong University, the encouragement of Chinese studies by British subjects in Great Britain, the support of institutions in Great Britain or China, which in the opinion of the Secretary of State promote the mutual interests of His Majesty and the Republic of China, or such other similar purposes as the Secre- 1998 tary of State, after consultation with the Advisory Committee, may from time to time determine." I was, to my regret, unable to be present in the House when the debate took place on the Second Reading of this Bill. Had I been I think that I should have thought it right to attempt to remove an impression, which I think was a false impression, given by my hon. Friend the Under-Secretary, naturally unwittingly, with regard to the history of this Measure. It is true that in the early part of his speech, he indicated, quite correctly, what the history has been, but nevertheless at a later stage he seemed rather to insist on the fact that as he says "this Bill was drafted by our predecessors," and he commented upon the fact that the opposition to the Bill showed therefore some inconsistency, as coming from Members on this side. I do not think that there is any inconsistency in my hon. Friends opposing this Bill, because although it is true that the Bill was drafted by the Conservative Government, that is not quite the whole truth. As my hon. Friend indicated, the desirability of this legislation arose from circumstances of a much earlier date, arising out of the War, and from the action of all the powers concerned, in consequence of China taking part in the War. When it came to a question of legislation it is true that a Bill was drafted, but, as my hon. Friend probably knows, that was a purely Departmental draft. So far as my information goes, it was never considered by the Cabinet at that time, and I doubt very much whether it was even considered, though it may have been seen, by the then Secretary of State. It was purely a rough draft for consideration, and I have very little doubt that, if it had reached the stage when it had to be considered by the Secretary of State and by the Cabinet, it would not have been brought before the House of Commons now in its present shape. My hon. Friend, in the course of the Debate, gave an undertaking to my right hon. Friend the Member for Chelsea (Sir S. Hoare). My right hon. Friend had proposed that the Advisory Committee, which the Under-Secretary had said was to be set up, should be a statutory Committee, and the Under-Secretary said that that suggestion would be borne in mind 1999 when we reached that stage. My Amendment, as the Committee will see, mentions an Advisory Committee, and if the Committee accept my proposal, I shall, at a later stage, propose to insert a Sub-section, setting up that Advisory Committee under the Statute, but the object of the Amendment which I am now moving is to provide that the objects to which this indemnity shall be devoted shall not rest entirely and exclusively in the discretion of the Secretary of State for Foreign Affairs for the time being, but that the Statute itself shall give guidance in that respect. It is drawn, as the Commitee will have observed, in fairly wide terms. It sets out a number of educational objects, any one of which, or all of which, might be very desirable objects—Chinese education upon British lines in China, the development of the University of Hong Kong and of Chinese studies by British subjects, and, generally, the support of institutions which, in the opinion of the Secretary of State, promote the mutual interest of the two countries. That is in accordance with the original undertaking, and announcement made by the Government of the day, I think as early as 1918, that the indemnity should be for the future devoted to some object or objects of mutual benefit to the two countries, and at the end of the Amendment there are the words "or such other similar purpose" which are very wide language, and owing to the well-known rules of interpretation, the other purposes would necessarily be ejusdem generis with those that are set out. It is very desirable that we should not adopt quite such wide language so as to leave absolute discretion in the hands of a single Minister, and, on the other hand, that there should be sufficient latitude to the Advisory Committee and the Secretary of State to secure that practically any purpose which would promote the mutual interests of the two countries should be open to benefit from this Fund. I hope very much that my hon. Friend will not object to accepting this Amendment. It will not in any way impinge upon the general principle of the legislation, and is really in accordance with the spirit of the first announcement that was made before any attempt was made to reduce it to a Bill. I think it very desirable that it should be accepted. I 2000 cannot imagine that the Government should have any valid objection to it, and I, therefore, submit it to the consideration of the Committee.

The CHAIRMAN: In order to protect subsequent Amendments, it will be necessary to put my right hon. Friend's Amendment in a slightly altered form. It will be, in line 11, after the word "fund," to leave out all the words down to the word "such" in line 12, and to insert instead thereof the words proposed by my right hon. Friend.

The UNDER-SECRETARY of STATE for FOREIGN AFFAIRS (Mr. Ponsonby): I cannot help rather regretting that my right hon. Friend has not been able to put this important Amendment on the Paper a little sooner, as I should like to have given it very careful consideration. It is rather difficult to do so without having the words before me even now. I think that notice that this Bill would be taken by this Committee was given some time ago, and Amendments have been on the Order Paper for the last two or three days.

Mr. MCNEILL: I must apologise to my hon. Friend. I quite see the reasonableness of his complaint, but it was only last night that I myself knew that I was to be a member of the Committee for this purpose.

Mr. PONSONBY: I understand why the right hon. Gentleman was unable to put down the Amendment sooner. My right hon. Friend's Amendment covers a great deal of ground, but it appears to me to be somewhat restrictive in its wording. Though it specifies various institutions which might be supported, and various methods which might be adopted in the promotion of this educational purpose, nevertheless it is more restrictive than the actual wording of the Bill as it stands. None of the objects which my right hon. Friend has specified, and with which I am in entire agreement, are ruled out at present, and the Advisory Committee would have the power to administer the fund in such a way as to give support to the various and particular objects which my right hon. Friend has mentioned. But the disadvantages of specifying particular objects is that there is always a feeling that other objects are excluded, and it is therefore really better, 2001 when you are dealing with a fund of this sort—and it is a large sum of money—and you wish your committee to have a free hand to devote to educational and cultural purposes, to leave them unrestricted in any way. If I were turning down any of the excellent objects which my right hon. Friend has mentioned, I think that he would have every reason to object, but, as this Clause stands, none of these objects are turned down. They will, in all probability, all of them be most carefully considered, and be chosen. I think that it is advisable at this stage to keep the Clause as it is in its unrestricted character, and therefore I am afraid that I cannot accept the suggestion made by my right hon. Friend.

Mr. WADDINGTON: I hope that the Amendment will not be accepted. There are very many reasons why the scope of the Clause should not be extended. There is no reference in the Amendment which is put down to any support for the British medical work in China. That would be a most important and useful thing, but it would be taken out of the possibility of action by the Committee if this Amendment were carried. Then no support could be given to British students to travel in China. It may be very useful from the commercial point of view that British students educated in this country, who have made progress in applied arts and sciences, should proceed to study Chinese conditions on the spot. That is a recommendation which has already been put up to the Foreign Office, and under this Amendment it would be impossible for the Foreign Office to grant scholarships to those desirable students, because the Amendment says that they must be British students studying Chinese in Great Britain. It would be very unjust, particularly to the part of country from which I come, Lancashire, where we have so great and vital an interest in all that affects China, that her students should not be eligible for these scholarships. Another point is that by this restriction we might not be able to send out, say, a commission connected with the cotton trade, made up of representatives of both employers and employed, and of the merchants, to be educated as to the conditions which are actually operative in China. That would be an exceptionally useful thing to do at the present moment when 2002 the condition of our trade with China is one of very great gravity. We have lost a lot of ground. In 1912 we were sending to China nearly 50 per cent. of the cotton goods which went into that country. In 1922, the last year for which figures are available, our proportion of the cotton goods entering China had been reduced to 25 per cent. The Chinese were purchasing from other countries. In 1913 the total imports of all classes of foreign goods into China were £72,000,000. In 1922 the total imports were £177,000,000. Of that increase of £105,000,000, this country had only got £4,000,000. There is in Lancashire a very great anxiety that, under the provisions of this Bill, some steps should be taken to assist this commission representative of all classes of the cotton industry to go out to China to study the conditions on the spot, so as to ascerain why we have lost our trade and what is the best means of getting it back, and to put in a restrictive provision, such as is proposed by the Amendment of the right hon. Gentleman, would be prejudicial to the best interests of the trade, and I hope that it will not be accepted.

Mr. HARCOURT JOHNSTONE: I would like to be more clear on this point before we vote. I think that the hon. Gentleman is mistaken as to the purport of the Amendment. As I read it none of those objects are barred out.

The CHAIRMAN: I have put the Amendment in the form which I have indicated only in order to protect subsequent Amendments, but for the purposes of this discussion it must be taken that the right hon. Gentleman's Amendment is being fully discussed, and that the whole of the Sub-section after the word "fund" is to go out.

Mr. JOHNSTONE: The right hon. Gentleman not only puts in words which safeguard the authority of the Secretary of State and the Advisory Committee, but he enables this money to be applied to any other purpose they think fit, so that the speech of the hon. Member who spoke last, interesting though it was, was rather beside the mark. None of the objects, in support of which he spoke, are barred out by the Amendment of the right hon. Gentleman, and I like the Amendment, because I think it would be followed, as the right hon. Gentleman said, by a further Amendment to make 2003 statutory the Advisory Committee, which I think a very important point, I do not see, with the safeguard of the later words, why it should not be accepted, and if it will lead to a later Amendment making the Advisory Committee statutory, I conceive that the Amendment in itself will not do any harm and may be of value in leading to the further Amendment, because the point which the right hon. Gentleman has chiefly at heart is that the whole of this patronage—it is nothing more or less than £400,000 a year—shall not be under the sole and undivided control of the Secretary of State. Though hon. Members opposite, who support the Bill in its present form, may like that arrangement at present, they would not like it so much perhaps if the right hon. Gentleman, for example, became Secretary of State for Foreign Affairs in a Conservative Government. They would not like in those circumstances that he should have the sole control of the whole of this patronage. This Bill applies to all Governments, future as well as present, and this Amendment in no way, takes away from the powers of the Secretary of State and the Committee to devote this money to any purposes which they see fit, for the mutual benefit of the two countries. So far as it leads to a future Amendment to make the Advisory Committee statutory, I think that we ought to support it.

Mr. S. SAMUEL: I have only just seen the Amendment of the right hon. Gentleman, but, in my opinion, its effect is to give the Government far greater power than is contained in the Bill itself, because the Bill itself is very obscure and simply mentions education. It does not say what sort of education, it does not say anything at all as to the committee that is going to superintend this, or to make the regulations for it. I think that I pointed out on the Second Reading of this Bill that under the terms of the American gift to the Chinese, the Americans have given to them the same facilities as those which are proposed in this Amendment, and I think that the Committee would be well advised to support this for the simple reason that it would give to the Committee here, presumably at the Foreign Office, facilities for utilising the fund for the University 2004 of Hong Kong where there are British subjects. As everybody knows there are large numbers of British subjects in China, and this would give British families, who are out there, facilities for sending their children to the University of Hong Kong where they could learn the Chinese language, and such students are in a better position, having been born and bred in China, to appreciate the conditions of trade in that country. After all, we are a commercial nation, and we want the children of our nationals to be educated as thoroughly as possible in China, and that is as much benefit to the Chinese as it is to the British nation. Under the Bill as it stands I do not think that the Government could claim that they have any facilities whatever for giving any education or doing anything for the British in China. In the case of the American gift, they have tried to utilise part or even the whole of the Indemnity money for education, and the advancement of American interests. Therefore I very strongly support this Amendment.

Dr. CHAPPLE: With the Under-Secretary, I regret that we have not had this very important and comprehensive Amendment on the Paper in order to discuss it with much greater care than is possible merely from hearing it read out. I am wholly against using this gesture—though we are getting tired of that term—to China as if we had some ulterior motive of some commercial benefit to ourselves. If we make it for the benefit of the Chinese people, through education and through moral and intellectual development, we are doing something, I believe, for the immediate and permanent benefit of the Chinese people. That is the spirit in which we ought to approach this matter. If we talk about cotton or trade marks, or ask for a quid pro quo, we are weakening the moral value of this generous effort towards the Chinese people. I would make one or two suggestions as to alterations in my right hon. Friend's Amendment, and I think that in an altered form it should commend itself to the Committee as being within the scope of the original intention of the promoters of this Bill, and it would carry out what many of the Chinese people have expected. I have received a telegram from the Chan- 2005 cellor of the Peking University, in which he says: "May I ask your and other hon. Members' further help by inserting a clause for educational purposes in the Bill on Boxer indemnity just introduced. Y.P. Teai." I have had the advantage of consultation with the ex-Prime Minister of China. He looks upon this Bill as giving an opportunity for intellectual development, and development along the lines of research and technical education, and medical services. It is along those lines I think we should proceed. The Bill as drafted, might allow the Secretary of State for Foreign Affairs to go in for railway development, cotton development, or commercialising the whole fund. I think that we should confine it strictly to a great educational purpose. At the same time we should not make it too wide. It should not, for instance, be used for religious instruction, either on our lines or on Chinese lines. The first suggestion which I should make would be that in place of the words "Chinese education" there 2006 should be the words "Education in China." Then the next improvement—

The CHAIRMAN: Does the hon. Member propose to move an Amendment to the proposed Amendment?

Dr. CHAPPLE: I will later on.

Mr. PONSONBY: I have just been handed some of the other Amendments, and I have not yet got the text of the original Amendment. I do not want to be discourteous in any way to the right hon. Gentleman's suggestions, but I really cannot give them proper consideration without further study. Therefore, in view of the fact that my right hon. Friend has put down so many important Amendments—and I quite understand that he was precluded from doing so earlier—I beg to more, "That this Committee do now adjourn until half-past four o'clock on next Wednesday."

Question put, and agreed to.

Committee adjourned at Five o'Clock until Wednesday, 9th July, at Half-past Four o'Clock.


Turton, Mr. (Chairman)

Barker, Mr.

Broad, Mr.

Chapple, Dr.

Clayton, Mr.

Dudgeon, Major

Dunnico, Mr.

Falle, Sir Bertram

Hirst, Mr.

Hobhouse, Mr.

Johnstone, Mr. Harcourt

Loverseed, Mr.

McNeill, Mr. Ronald

Middleton, Mr.

Moulton, Major

Paling, Mr.

Ponsonby, Mr.

Rhys, Mr.

Samuel, Mr. Samuel

Seely, Mr. Hugh

Spender-Clay, Lieut.-Colonel

Stanley, Lord

Varley, Mr.

Waddington, Mr.

Wells, Mr.

Williams, Mr. John

Wise, Sir Fredric

Woodwark, Lieut.-Colonel