ARMS INQUIRY

Evening Post, Volume CXXI, Issue 31, 6 February 1936, Page 13

ARMS INQUIRY

MANY DISCLOSURES

"BEST IN WORLD"

ANTI-AIRCRAFT GUN

The fact that Vickers' technical staff had designed an anti-aircraft gun which had proved its pre-eminence in competition with the world was disclosed by General Sir Herbert Lawrence, chairman of Messrs. Vickers, Ltd., and Messrs. Vickers-Armstrongs, Ltd., at a sitting of the Boyal Commission on the private manufacture of arms at Westminster, states the "Daily Telegraph." Sir Herbert also stated that since 1924 Sir Basil ZaharofE had taken no part whatever in Messrs. Vickers or its associate concerns beyond retaining an interest in the Spanish company. Sir Herbert Lawrence submitted on behalf of the companies a long statement in reply to a questionnaire which had been addressed to them by the Commission. . He stated that the question of the manufacture of arms by the State, or by private firms,, had been obscured by a certain amount of prejudice and accusations of corrupt practice, and by a very imperfect understanding of what was comprised in the term "armaments." "Such statements as I have seen, continued Sir Herbert, "have been largely distortions of facts which bear a simple explanation. The prejudice is the expression of an honourable but perhaps mistaken, ideal respecting the sanctity of life and the iniquity of war which must command sympathy." Assuming that armaments were required, it was clear that they must be modern, and in a mechanical age thoroughly up to date. To ensure this, if the manufacture of arms was to be a function of the State, the State would have to keep large plants in being without having the advantage of supplying the export trade or of engaging in commercial activities. To be in a position to pass rapidly from a peace-time to a war-time production it would have to manufacture on a scale far higher than was normally required. After a prolonged peace most of its production would be obsolete. BEST IN THE WORLD. The State had the right to acquire any patented new invention, which might be developed by the enterprise of private firms, a right which was of first-class importance. One of the most important counter weapons for land purposes to the aeroplane—which might be a determining factor in the war of the future—was the anti-aircraft gun. Vickers' technical staff had designed a gun, which in competition with the world had proved its pre-eminence. A demand from abroad had resulted in the development of a gun which was unrivalled. Our own Government, if it wished, could get full advantage of this development. The dockyards and arsenals belonging to the State were, no doubt, very highly efficient, but, in the event of war, they could not do much more than keep abreast of repair work as far as the Navy was concerned, and would be inadequate for the mass production of guns and ammunition. The State could, as long as private firms existed, fall back on them to supplement their normal production. An emphatic denial that Messrs. Vickers were a member of any international armaments ring was given by Mr. J. Reid Young, secretary and chief accountant of the company. "It is desired to state now," he said, "that Vickers Limited and its subsidiaries and associates are not members of an international armaments ring,' neither do they control any foreign companies whatsoever by shareholding, by nomination of directors, or by agreements." Referring to the dividends paid on the ordinary share capital of Messrs. Vickers since the inception of the company, Mr. Young stated that in 1886 it was 10 per cent. The peak year was in 1900, when 20 per cent, was paid. In 1912 the dividend was 10 per cent., for thej next five years it was 12i per cent., and in 1919 11J per cent. There were five years since the war when no dividend was paid. SIR BASIL ZAHAROFF. Sir Herbert Lawrence, in a supplementary statement, denied that Messrs. Vickers' association with banks, insurance companies, and other financial interests had anything whatever to do with armaments. "I think," he added, "that there has been a considerable amount of misunderstanding and misrepresentation in another matter—the association of Sir Basil Zaharoff with Messrs. Vickers. "I wish to say that since 1924 Sir Basil has taken no part whatever in Messrs. Vickers or its associate concerns, apart from retaining an interest in the Spanish company, S.A. de Placentia de las Annas. "Sir Basil takes no active part whatever in the management of Vickers or in any of its companies." Sir Charles Craven was asked by the chairman for particulars about the Spanish company. He, said that thß company, which was engaged purely in the manufacture of arms for the Spanish Government, employed about 250 people. The chairman also questioned Sir Charles regarding the association of practically all the principal iron and steel companies in England and Scotland. He asked whether this was for the purpose of controlling prices. Sir Charles said that there certainly were agreements. The Japanese and other foreign investments carried no control in any way. He also mentioned that his company had received contracts valued at many hundreds of thousands of pounds for the anti-aircraft gun. Sir Kenenth Lee, a member, asked Sir Herbert Latorence whether offensive weapons were never sold abroad until after they were available in this country. Sir Herbert: I don't know how to answer that. Take the anti-aircraft gun, for instance. The Government have not ordered any of them from us. He added that the Government had an anti-aircraft gun of their own, one used in 1918. Though it was a very good one it was not as good as the new one. There had certainly been no German director on any of their boards in the last eighteen or twenty years, and none of their directors had served on the board of a German armament company in that time. Sir Philip Gibbs referred to a letter which was produced at the American arms inquiry. This, he said, was from Sir Basil Zaharoff, who, they had been told that day, had ceased to have connection with the firm of Vickers since 1924. As a matter of fact, this letter from Sir Basil was dated May 19, 1925, an;i an extract from it read: "I desire no thanks for what I have done, because I am bound to attend to the interests of my firm of Vickers. . . .." After reading this, Sir Philip said: "In the popular imagination of the world there is no doubt that Sir Basil is regarded as a very sinister figure walking through the Courts of Europe and acting as agent for the sale ot munitions of war. May I ask what was his exact position in 1925?" Sir Herbert Lawrence: He had only

an interest in regard to the Spanish business. Sir Philip asked if he understood that Sir Basil was an agent, as he referred to the firm as "my firm oi Vickers." Sir Charles Craven, amid laughter, remarked: "I am afraid Sir Basil is rather an expansive person. He was our Spanish agent." Sir Philip then asked if it was true that a number of correspondents of "The Times" acted as agents for Vickers. He thought it was rather curious that a correspondent of "The Times" should be selected for this position. He was informed that there were two such cases, but it was emphasised that the appointments had nothing to do witrT "The Times" newspaper or the fact that the men were correspondents. • Sir Philip was told by Sir Charles j Craven that when Mr. Bryce, a "Times" , correspondent, was engaged, the firm was not aware that he held that position. 1 Professor Gutter-idge: I believe there , are actually three cases of correspond- 'j ents acting as agents. , ARMAMENT PROFITS. j Messrs. Vickers, in a third statement i which was submitted, emphasised that i the group of companies consisted of J the parent company, certain wholly- 1 owned manufacturing companies, a number of partly-owned manufacturing l companies, and wholly-owned finance i companies. 1 It was stated that the estimated < value of land, plant, buildings, etc., ', employed in the production of anna- ( ments and munitions of war that would ; be rendered redundant in the event of i the establishment of a State monopoly j would be £22,392,815. The firms mainly affected would be . the Supermarine Aviation Works, Vick- < ers Aviation, Vickers-Armstrongs Lim- ■( ited, Thames Ammunition Works Lim- ] ited, Whitehead Torpedo Company j Limited, English Steel Corporation Limited, and Darlington Forge Limited. ] In a statistical table showing the 2 yearly percentage of armament profit T of the Vickers group for the five years 1930-34, it was shown that the value of j the turnover was £32,123,523, the pro- j fit after charging special expenditure j was £2,779,740, and the profit before charging special expenditure . £3,569,575.