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Leader's speech, Newcastle 1924

Stanley Baldwin (Conservative)

Location: Newcastle


A central theme of this address was the Dawes Report, which formed the basis of negotiations between the Allies and Germany to restore international stability, and ultimately to boost trade between nations. A key part of this strategy was the rehabilitation of German trade, a prerequisite of which was a loan raised by private subscription from the Allied countries. Although this loan was controversial, Baldwin believed it was necessary in order to strengthen Western Europe against the possibility of attacks from the East. A related issue was the proposed loan to Russia, which Baldwin opposed because it was to be guaranteed by the government. Moreover, he claimed, it was unlikely that the amount of trade between Britain and Russia that proponents of the Treaty promised would materialise.

My Lord Duke, my lords, ladies, and gentlemen. The first question which I proposed to put to you when I stood on this platform was ‘Are you ready?’ (‘Yes,’ and cheers.) I knew when I entered the hall that you were - (laughter) - and I want to congratu­late you not only on this meeting, but also on the successful conference which you are holding in Newcastle, on the handling of the problems which you have discussed, in the character of the speeches that have been made, and on the admirable spirit which has characterised the work you have done.

Nothing has given me more pleasure than to find that one of my ambitions is being realised, and that the working men of this country are coming to take their proper place in the ranks of our Party - (cheers) - ­and that a ladder is being set an amongst us which may serve them no less effectually than that ladder that exists today in the Labour Party, by which a man, whatever his means or his origin, may hope, by the exercise of his own natural ability, to ren­der service to his country into whatsoever office he may he called. (Applause.) We have suffered in the past from the lack of close association in our counsels with those who are in many ways nearest to us; and because of that many today are now in the ranks of Labour who ought to be with us - (applause) - for there are no more crusted Tories in England than many of those who sit not only in the Back but on the Front Bench of the Labour Ministry today. (Applause.)

I want to talk to you tonight for a short time on one or two topics upon which we ought to have clear minds before we go into the fight that is now imminent.

Dawes Report

I want to begin by saying a few words about the recent arrangement that has been made in London with the Allies and Germany with regard to what is called the Dawes Report. We have all been familiar for years past - and it has been put from every platform - with the theory of which I am myself a supporter - that you can get no permanent improvement of the trade of the country until you have stability restored throughout the nations of the earth. It was to that end that successive Governments have worked, and it has been reserved to the present Prime Minister to bring to a successful issue labours initiated by his predecessors. And I, for one, am not envious of him. I congratulate him, as I shall have something very different to say by and bye - (laughter) - on the result of the work done this summer in London. When the trade machine fails to function, through any large country being out of operation, the trade of the whole world suffers.

In the case of Germany, if her foreign trade be destroyed, or interfered with seri­ously, it prevents her from purchasing overseas, the results of which purchase result in the sacrifice for those countries which in their turn are employed in the purchase of manufactured goods, of which we in our turn are bound to get whatever share we may be able to. But it is per­fectly true that the increased trade that will come through the rehabilitation of Ger­many - that is to say, the increased world trade - must be coupled at the same time with an increased competitive power in Germany, and you have to weigh the bal­ance of advantage.

There is no doubt about regarding the world as the whole balance of advantage in the rehabilitation of German trade. The probability in my view is that the balance on the whole is to our advantage, but subject to one or two observations I shall have to make in a few moments. But it has been common knowledge to all students of this subject that no rehabilita­tion of German trade was possible until inside that country they could succeed in stabilising their currencies, and as a consequence regulating the foreign exchanges with that country.

Loan a Necessity

Now to achieve that result a loan is an absolute necessity. That has always been recognised, and those who have spoken loudest in the past in favour of securing reparations from Germany must have known, if they realised that reparations could only be paid from increased exports, that those increased exports could not come until that preliminary condition of stabilisation had been obtained. The Dawes report has shown clearly that the preliminary step is the negotiation of a loan for Germany. Now what kind of a loan is that, because I shall be speaking presently of the proposed loan to Russia, and I want you to remember clearly in your minds what the essential difference is between these two loans? (Cheers.) 

The loan proposed to Germany is a loan to be raised by private subscription with no form of Government guarantee. (Cheers.) That means that the liability for the loss, if any, will fall on those and those alone who subscribed to that loan. (Cheers.) The loan is to be subscribed for in the various Allied countries who took part in the war, and the largest part - as is only proper - is to be contributed by the United States of America. (Hear, hear.) Now, so far as the German currency may be stabilised, and the equilibrium in her exchanges affected by means of this loan, to that extent the competitive power of Germany will be reduced, because she will lose those fortuitous advantages that have accrued to her from the debased state of her currency, and from the unsettled state of the exchanges. But, all the same, there is a real risk to our trade in this country with Germany - relieved as she has been by the very debasement of her currency, relieved as she has been of all her mort­gage debts and prior charges - that she may have such an advantage in competi­tion that we may find that her exports may do us serious damage. (Hear, hear.)

Safeguards for Industry

On that I only want to say two or three words.

I want to repeat what. I have said on several occasions - that at this forth­coming election the general tariff is no part of our programme. We do not stand for it, but we hold ourselves at liberty to safeguard any efficient industry in which unemployment may be caused by unfair competition of any kind.

The safeguarding of that industry by such a measure of safeguarding as, after careful study and consideration, may seem to us the most effective instrument for that purpose. (Cheers.) That has all along been our policy since I declared it last January. It is a policy to which most people, irrespective of Party in this country, would today give their assent. It is a policy for which we stand, and it as an essential policy having regard to the fact that we support the findings of the Dawes Report - the Commission which we ourselves called into being. And, indeed, to support the Dawes Report and not to be prepared to take these steps that I have indicated would be an act of lunacy.

But there are opponents to the carrying out of the Dawes Report. There are oppo­nents to the loan to Germany, and there are opponents to the rehabilitation of German trade.

Now this has not been pointed out in public before, but it is a matter of very grave importance. Who are the opponents of the arrangements negotiated by the Labour Party, supported by us and sup­ported - I have no reason to think otherwise - by the Liberals? The opponents of the Dawes Report are the Communist Party.

Communist Opposition

Recently there was a whole column in the daily Press reporting a meeting of that Party and stating that they objected to the carrying out of this report on the ground that it would make Germany a servile State. But why do the Communist Party in England object to it? Because they have their orders from Moscow. Why does Moscow object to it? Because Moscow has now repudiated the ideas for which she has stood for the last few years to cause world revolution, and she knows that a settled Germany and a contented Germany will offer a barrier to her ambitions that a Germany in her present condi­tion cannot do. Because, although it may be a fact that there are men today in Germany who are making fortunes, it is also a fact that you cannot have a prosper­ous and a contented working class where your currency is debased or your values are changing from day to day and the rewards of labour are not comparable to the rewards of capital.

Western Europe has a civilisation to pre­serve, and it is our duty to do all we can to preserve it in these days. And the barrier of Western European civilisation must be made strong and firm against any subversive onslaughts that may come from the East - and there is no surer and better way of doing that than to begin by carry­ing out the terms of the Dawes Report, and bringing once more the great German market into contact with the markets of the world.

No one knows better than I do that cheap and easy arguments may be used against this, and I ask you to think seriously and deeply on this subject as to whether our plain duty to Europe and to the world is not, as I say, to do all that we can to strengthen that common civilisa­tion to which all of us belong in the West of Europe.

The West of Europe has its own problems, I know. It has its own problems of peace - and difficult enough they are.

We have one among us tonight, my old friend, Lord Cecil - (cheers) - who has devoted with rare enthusiasm his great abilities for years past to trying to solve those difficult questions at the League of Nations. (Cheers.) And we must all of us wish him in his efforts well, and hope that the Conferences of that League in time, guided by wisdom and by experi­ence, may render some real help in bring­ing about what is essential to us in this world, and that is a better prospect of a lengthy period of peace throughout that part of Europe to which we belong.

The Russian Loan

Now I pass naturally from considering the case of Germany and the Dawes Report, and the proposed loan to Germany to the proposed loan to Russia. I make no apology for speaking about that loan, for it is the very key and lynch-pin of the Russian Treaty.

I have read a very interesting letter in The Times from Dr. Shadwell, a man whose views I always regard with respect, and he gives reasons why he desires the confirmation of that Treaty. His reason is that if it were confirmed it would be such an object lesson to the people of this country in its result that they would learn - as they could by no other means - certain elementary lessons, of which they stand in need. If I were a tactician I would agree with Dr. Shadwell all the way. But unfortunately I am trying to be a statesman, and I cannot agree with him. And in spite of what may be said or thought of our action, I am resolved to do all in my power to prevent that loan ever becoming an accomplished fact. (Cheers.)

I want to give you my objection - my principal objection - to the Treaty. There are many objections and it will be argued very closely in the House of Commons, and I do not propose tonight to go into details. But I can give you in a few words why I am opposed to assenting to that Treaty.

A Question of Honour

If there is one thing in this world which England stands for it is the honour of her word once given. (Cheers.) Our credit is based upon it, our reputation in every country of the world.

No Government could honestly affix its signature to that Treaty because if it did so it would give an implicit under­taking to the Soviet Government that this country would guarantee a loan to them at a future date.

The Government must know as well as I know, and you know, that in no circumstances would Parliament or the country at any time guarantee a loan to that Government. (Cheers.) Therefore, by affixing our signature to that Treaty we are pretending that we are going to do something that we know we cannot do - (hear, hear) - and we are leading the Russian Government to believe that we shall do something which we have no intention of doing - (hear, hear) - and for that our honour, our word, suffers. No Government has any right to give that implicit assurance unless it knows that it has the assent of the country behind it. (Hear, hear.)

Now, what does the guarantee involve? I told you that with regard to the German Loan the loss, if any resulted through default of interest or principal, would fall on the investor and the investor alone. The investor is presumed to be able to look after himself but, with a guaranteed loan, if the person to whom you lend the money under the guarantee fails in the matter of this interest or of principal, the taxpayer of this country has to make good the deficit. (Hear, hear.) That is the difference and, for more than a generation, this country, to the best of my recollection, has never in any circumstances guaranteed a loan to a foreign country. The only guarantee that I can recall that has been made was the joint guarantee under the auspices of the League of Nations to help Austria to recover her credit, and the guarantee of the loan was coupled with the most stringent conditions, under which a nominee of the League of the Nations was given practical control over the finances of Austria until they were rehabilitated - a completely different thing. (Hear, hear.)

Incalculable Folly

This country has not so much money today that she can afford to run these risks. (Cheers.) The guaranteeing of a loan to Russia at the price - if, indeed, any price would bring subscriptions - (laughter) - the guaranteeing of a loan at the price that might bring subscriptions would tend to depress all the Government stocks in this country. And to contem­plate a loan of that kind - and I say nothing tonight about the Russian Gov­ernment - let me merely say that in a country which is but a secondary market to us, when you think of our Dominions - ­(cheers) - it is to me incalculable folly.

I may perhaps ask here - not that I can get an answer, but we shall ask it in the House of Commons - what the Prime Minister meant on the 18th of June in the House of Commons when he said that the Government did not propose to consider a guarantee to any Russian obligation, and then, within seven weeks, at 24 hours’ notice, he was prepared not only to con­sider it but to accept it?

Again the Prime Minister gave us a pledge that he would consider amend­ments, whereas Mr. Ponsonby - (‘Oh’ and laughter) - in a report just published for the use of the people, has told us that any amendment to the Treaty would alter the principle upon which it was based, what­ever that may mean, and would be a mere subterfuge on the part of those who had a cowardly fear of taking the responsibility of direct opposition. We shall endeavour to effect a reconciliation of these statements.

Fate of Georgia

For the rest of the Treaty there is hardly a clause in it that will stand examination. I do not propose to weary you tonight; but I would remind you that Mr. Lloyd George, who has a far wider vocabulary than I, and could rise to infinitely greater heights and, if I may add, plumb far pro­founder depths, has described it. I endorse his description. (Applause.)

Let me remind you in passing while I am on this subject - if I may devote five minutes to it - let me remind you of the fate of the Socialist Republic of Georgia. Let me remind you of the praise it received from the present Prime Minister, and how he and the Minister of Labour (Mr. Shaw) went out there in 1920, shortly after the month of May of that year, when it had been guaranteed independence by the Soviet Government, and how they reported that it was a model of everything that a Socialist Republic should be. Let me remind you of that guarantee of indepen­dence by the Soviet in May 1920. In February of the following year the Red Army, without any declaration of war, overran that little country, overran it and gave it up to pillage, murder, and rapine. They took possession of it. They destroyed its Constitution. They took its oil, and it is now part of the Soviet Union. (‘Shame.’)

I mention that because a little over a year ago we had one or two questions in the House of Commons from Mr. Snowden, the Chancellor of the Exchequer. He asked the Government, of which I was then the head, if we were aware of the executions and persecutions of the Georgian people which were being carried out by the Bolshevist Government, and so on. And we had to admit the accuracy of the fact, and lament, in answer to supple­mentary questions, that we were unable by any ordinary diplomatic methods to do anything to help them.

And Mr. Snowden said - and it is in Hansard of the 17th of July of last year - ‘Should the question of the recognition of the Soviet Government arise, will the British Government, in considering the matter, insist in the conditions of recognition that the independence of these States should be recognised?’

Question for Mr. Snowden

I want to know if that question was considered when recognition was granted to the Soviet Government. If not, I want to know if Mr. Snowden has changed his mind. And, incidentally, while I am ask­ing, very respectfully, a question of Mr. Snowden, I would like to know if he approves, or not, of the loan to Russia.

I have only one or two more observa­tions to make on this Treaty, the life of which I think is limited. I would make this observation following on what I have just said about Georgia. If you throw your mind back some years, you will remember that, under the old regime, events used to take place in the Turkish Empire that filled our people - and the Labour Party as much as anyone - with horror.

I have no recollection that recognition was withheld from Turkey, but I venture to say this - that if a proposal had been made by our Government to guarantee a loan to the Turks at that time there would have been some objections raised in the Labour Party. (Laughter and cheers.)

I should like to know whether the Dominions were consulted in that 24 hours during which the Government decided to come to an agreement with Russia as to the terms of the agreement. We have had more than one debate during this last Session on the importance of consult­ing at every point, in negotiating foreign Treaties, the Governments of our Dominions - (cheers) - and the present Secretary of State for the Colonies has expressed himself no less anxious to take that course than any other section in the House. Was that course taken, and if so what replies were received from the Dominions? (Hear, hear.)

Repudiation of Debt

One other point. In signing this Treaty we tacitly assent to the Russian doctrine of repudiation of debt. (Hear, hear.) Has the Government considered how we compromise the position of our old Allies, especially the position of France - (hear, hear) - whose people probably hold more stock in the various Russian loans than any other people in Europe? Have they considered how far more difficult we make it for them when the time comes for them to negotiate on behalf of their nationals by the surrender we have made in con­sidering the case of our own nationals?

And have the Government further con­sidered how difficult they have made it for any future British Government in negotiating on the question of Allied loans due to this country, when we have dealt separately, or propose to deal separately, with Russia - which was at one time an ally, and, as an ally, received large loans from us - in accepting their position that they will only pay, if at all, what they think they will be able, which means, in other words, what they can get out of us. (Laughter.)

It is rather curious, when you look at that part of the Treaty, to hear what is said, and to read what is written in Labour literature about the immense potential wealth of Russia. I offer no comment myself at the moment on what that potential wealth may be, but if Russia is, as they represent, the country of immense potential wealth, why allow her to say that she will never be able to pay more than a fraction of her debts? I wonder again what the Chancellor of the Exchequer, who is the guardian of all our pockets - although during that guardian­ship he reserves to himself alone the right to rifle them at pleasure - I wonder what he has to say to that.

Uneconomic Wisdom

Shall I say that our objections to this Treaty are political, and did exist only because we dislike your form of Govern­ment, although they are always ready to say in the House of Commons that they do not like the form of Government them­selves? No, it is not that.

If the Russian Government was a Government of angels, and I were Prime Minister, I would say they are such silly angels that in their uneconomic wisdom I would not attempt to do business with them.

We should be inundated by and by with promises - no, they cannot be greater than the promises made before, but promises of the amount of trade that this Treaty would bring us from Russia. But I cannot help thinking myself that the promises, from whatever quarter they may be made, are a little shop-soiled. Last year our trade with Russia amounted to about one-third of one per cent. To believe that there is an immense trade to be done with Russia at present is a delusion. It is a delusion, like the bulging corn bags, which, if they bulge at all, bulge with nothing but gas. (Laughter.)

No Treaties can make trade in the absence of just one or two little things. I have said it before many times, but I am going to repeat it - trade will only go when the trader feels that he will be paid for the goods he delivers, and when he can obtain justice in the country where he sells in case of trouble.

Question of Trade 

Just insofar, and no farther than those conditions are fulfilled, trade will increase with Russia. If those conditions can be fulfilled, trade will begin to increase more rapidly. But let us remember this - and this is where I think the Labour Party are inclined sometimes to go off the rails - you can never call a man an educated man until he knows what he does not know - (laughter and applause) - and if that be a test, many of my friends who sit opposite to me in the House of Commons cannot yet pass it. (Laughter.)

Russia has never yet been, and I don’t believe ever will be, one of our principal markets. Geographically and linguisti­cally, the conditions are against it, just as those same conditions are against us in trading on the lower waters of the Danube.

I know trade is done, special trade, and here and there people have done well out of it.

But our natural markets are the Dominions - (cheers) - and South America and the East. There we have a better chance of competing with the world.

Germany’s Advantage

Whether we like it or not, the natural exploiter of Russian trade is Germany. They have always done the largest trade in Russia, because geographically they are most favourably situated, and they study the Russian language. They understand Russian methods of business.

And, in my view - and I expressed this last year - the best thing for world trade, of which we should get our share, would be the development of Russian trade, as and when it becomes possible, by Ger­many - that she should turn into that market, which some day, but not yet, would be a great market - and return to that country that surplus of exports which has to provide for the payment of reparations, and, incidentally, some of our interest to America. That she should do, rather than that the bulk of that surplus should be turned either into this country or our own special markets which I have described.


No, there is something mysterious in the present - and I hope temporary - affinity between the Labour Party and Russia. I think it has come through so many of them following that unhappy Will-o’-the­-Wisp called Internationalism. If you judge a tree by the fruits, the only fruits of Internationalism I have been able to perceive are fruits of hatred, and those fruits are poisonous. But I recognise that many men, especially among the working classes, in their attraction to what is called Internationalism are led by an ideal, however misleading it may be. And although in my view it can only lead the way to disaster, I think that the difficulty arises perhaps in this way.

It is very difficult for foreign nations to understand one another, and those who know least of them, of their history, of their language, of their culture, perhaps least realise those difficulties. (Hear, hear.) There can be in reality no common measure of progress between races and countries which are in different periods of evolution in history and in economic history. There can be little really in common to enable us to understand each other without study and imagination between a people like ourselves, who have lived through the Renaissance, the Reformation, the scientific studies of the last century and a half, and nations like those in the East of Europe who, owing to their his­torical circumstances, have experienced none of these things. (Cheers.)

No. Isn’t it true that if everybody in the street tried to sweep everybody else’s doorstep it would be the dirtiest street is Newcastle. (Laughter.) Surely the wise thing is to make your own front step so radiantly beautiful that everybody else will desire to emulate it. (Cheers.) And so it is that I believe that in talking too much of internationalism you are beginning at the wrong end to achieve what we desire to achieve. (Hear, hear.)

Just as the man who is a good father, a good husband, a good son, makes the best citizen, so the man who is the best Englishman makes the best citizen of the world. (Loud cheers.)

There can be no loftier ambition than to spend your life in service for your own people whom you know, in the knowledge that in that way better than in any other will you be rendering not only service to them, but to the whole world. (Hear, hear.)

The Struggle Ahead

We are meeting tonight at a very critical time. We may find ourselves once more before long taking part in an appeal to the country. (A Voice: ‘I hope so.’)

When that appeal comes I think our course is clear. We can never compete - and I shall not attempt to compete - with anyone, whoever he may be, in the making of promises - (cheers) - I want people to believe, as I think they are beginning to believe - when the Conserva­tive Party says it will try and do some­thing it will try and do it. (Cheers.)

But I believe that when that appeal comes there will be a very great rally of the sober common sense of the country to try and secure a stable Government of this country, to give it a majority which will enable it to function, and which will prevent these frequent appeals being made to the country which only arouse its passions and disturb the course of its business.

Outside Support

We have a programme to which not only is our own Party devoted, but to support which we may expect many of those will come who cannot call them­selves by our name. We were all rejoiced to see the help we had the other day in Edinburgh from Mr. Churchill. (Cheers.) In one of those brilliant speeches which he alone can make, showing that on all the essential issues of the day he is whole­heartedly with us. We welcome his co-operation and we welcome the co-opera­tion of those who may find themselves able when the time comes to render similar help.

Now with regard to you whom I see before me tonight. There is no need to ask for your help. You have been waiting to help, and I know that whenever the time comes - whether in the immediate future or a little longer than we expect your answer will be the same.

You will go to the essential work which will require to be done with faith, conviction and energy that will carry all before it, and will put once more into power in this country a sober, steady, honest Government - (cheers) - which will be strengthened in its grave undertaking by the knowledge that it rests secure on the will of the great majority of the people of this country. (Cheers.)

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