§ MR. BIDDULPHsaid, he would beg to ask the Secretary of State for India, With reference to the notice recently given for the purpose of reducing the rate of interest on India Bonds from 5 to 4 per cent, on what principle a Notice was given in December last for the purpose of renewing the Indian 5 per cent loan 172 expiring in 1870, for another ten years at the same rate of interest, such Notice having been given gratuitously two years before it was due; and, whether he is aware that when notice of reduction of the interest on India Bonds was given on a former occasion, the experiment was unsuccessful?
§ SIR STAFFORD NORTHCOTESir, these notices have no connection with each other. The circumstances under which notice of the removal of the 5 per cent. loan was given in December last were these. It was at that time necessary to raise an additional sum by way of loan in consequence of the difficulty experienced by the Railway Companies in raising money, and as it was known that it would be necessary for the Government to renew the loan which expires in 1870, it was thought desirable at once to give notice of the intention to renew it for ten years in order to strengthen the stock and to obtain the loan which the Government desired to raise upon better terms than would otherwise have been got. With reference to the recent notice of the intention to reduce the interest upon India Bonds from 5 to 4 per cent., it was thought unreasonable that the Indian Government should be paying so high a rate as 5 per cent upon what are in the nature of Exchequer Bonds, when the Chancellor of the Exchequer of this country gives upon Exchequer Bonds only from 2½ to 3 per cent. It was necessary that a year's notice should be given, and that notice was given in the hope and expectation that we shall, when the time comes, be able to carry the reduction into effect. Of course it is possible that that expectation may not be realised, but in that case nothing can be easier than to withdraw the notice. If the last part of the Question relates to the failure of an operation under the Government of Lord Dalhousie, all I can say is that that operation was attempted under circumstances totally different from those under which we are now acting.