COMMITTEE. ADJOURNED DEBATE. (Hansard, 28 April 1873)

§ MR. FAWCETT
called the attention of the Speaker to a point of Order—namely, whether this being a Money Bill for India, it was exempted from the Rule that Opposed Business should not be taken after half-past twelve o'clock?

§ MR. SPEAKER
said, the Bill was undoubtedly a Money Bill, and that as such it formed an exception to the rule to which the hon. Gentleman referred.

§ MR. FAWCETT,
in moving the Amendment of which he had given Notice, remarked that the Bill was a most important one, involving the disposal of no less a sum than £8,000,000. He begged to move that in the opinion of the House it was inexpedient that such a loan should be raised without a full explanation as to the purposes to which the money was to be applied. The Indian Government had already £23,000,000 of cash balances in its hands, principally consisting of the unexpended portions of previous loans.

§ GENERAL SIR GEORGE BALFOUR
said, in support of the Bill, that its object was to effect a very considerable reduction of expenditure in India. At the same time, however, he thought the House should have some check on the appropriation of the money.

MR. GRANT DUFF
The object of the Bill now before us is to authorize the Secretary of State in Council to raise £8,000,000 in England for the service of the Indian Government. The natural inference which anyone would draw from that statement if he heard it without explanation would be that, for some reason good or bad, the Secretary of State in Council meant to add £8,000,000 at no very distant period to the debt of India. But that is not so. This money is wanted chiefly for the purpose of paying off existing debt. About £1,000,000 of it 1110 is wanted for the purpose of paying off certain debentures which fall due in the month of August. There are £5,000,000 of these debentures in all, but the existing holders have agreed to renew to the extent of about £4,000,000. The debentures which are going to be paid off are 5 per cent debentures. The debentures which are going to be issued in their stead are 4 per cent debentures, and we can borrow at present at 4 per cent. So that the total gain to the people of India on this first part of the transaction, that is on renewing £4,000,000 of debentures, and borrowing £1,000,000 to pay off the rest will be as nearly as possible £50,000 a-year. I think under these circumstances the House will not object to letting us have £1,000,000 at least out of the £8,000,000. Now, however, for the rest of the money. For what purpose do we want that. Something more than £4,500,000 of it we want to enable us to carry into effect the provisions of a Bill which lately passed this House for redeeming the Stock of the East India Company next year, a transaction by which we shall gain at one sweep £450,000 a-year for the people of India; because under the arrangements made when the Company was obliged in 1834 by. Parliament to give up its China trade, the revenues of India were saddled with a payment of £630,000 a-year to the stockholders; in lieu of which payment we shall hereafter only have to pay, if this Bill passes quickly into law, 4 per cent on something like £4,500,000, or, say, £180,000. The rest of the money due to the stockholders being made up to them by the £7,500,000 or thereabouts of the Security Fund. Well, under these circumstances, I think the House will agree to let us have the £4,500,000 as well as the £1,000,000. So there is £5,500,000 accounted for out of the £8,000,000 for which I am asking. So far so good; but what do we want the other £2,500,000 for? I think I can easily show the House that in asking for this £2,500,000 the last thing we mean to do is to make an excessive demand upon the confidence of Parliament. So far from that being the case we might with the greatest ease have borrowed these £2,500,000, and more in this country, without coming to Parliament at all; because in 1869 Parliament gave us authority to borrow £8,000,000 for general purposes within 1111 the next three years, and we deliberately allowed our power of borrowing to expire when we had only borrowed £5,063,918. We did so because we disapproved of borrowing money merely to swell unnecessarily our cash balances, and we felt fully persuaded that Parliament, when we came before it with a reasonable proposal, would readily grant us the power of borrowing again. The net result of allowing us to borrow this £8,000,000 will then be this—we will have £5,500,000 borrowed at low interest to pay off £5,500,000 now entailing on us a very high interest, and £2,500,000 to be used as occasion may require—as a margin, in short—but certainly not to be spent for any unremunerative purpose. So that I think it is fair to say that we shall not, under this Bill, add anything to the yearly burden upon the Indian finances, but on the contrary, diminish that burden by about £500,000 per annum, and be it observed by £500,000 per annum which is payable at home and not in India—a very important consideration. The fact is, that when we are going into such a very large financial operation as that which is involved in redeeming the old East India Stock it is very desirable that we should have our hands as free as possible; and the financial authorities of the House will, I am sure, support me when I say that we might quite reasonably ask for a larger margin than £2,500,000. Nay, we should certainly have to do so if we had not already the power to raise £1,000,000, so as to have a margin of £3,500,000 in all. I need not say that it is absolutely necessary for the Secretary of State always to have a considerable margin if it were only because at any moment we might not be able to sell our bills on India profitably, and might at once have to borrow. A great deal has been said by the hon. Member for Brighton against those public works for which we pay out of borrowed money. Now I maintain that one of the most unhappy characteristics of our rule in India is the constant change of opinion in influential circles at home about important questions. Such is the ebb and flow of rival exaggerations on Indian matters that in one decade we are denounced in this House as unlikely to leave anything in India except pyramids of beer bottles, while in the next we are assured that we are hopelessly impoverishing the country 1112 by our railway and irrigation works. To-day the cry is all against public works, and the hon. Gentleman is its mouthpiece; but first let an unfavourable season bring another famine, and if not he himself then some one else will denounce a niggardly Government which not only neglects that development of India which is its bounden duty, but actually lets the people committed to its charge die by myriads rather than take the money which English capitalists are only too happy to offer at 4 per cent. The Government of India has been long doing its best to steer between these rival exaggerations, and while it is continually taking greater and greater securities for the judicious and profitable investment of the money which it borrows for public works, it trusts to this House to protect it from so great a calamity as having altogether to suspend those public works which cannot be made without borrowed money. Now, as to inserting in the Bill any statement as to the purpose to which it is proposed to devote the money. Such statements are very appropriate to speeches made by the Member of the Government in charge of the Bill, but are not appropriate to the Bill itself, being liable, as I have shown, to be varied by circumstances, for £2,500,000 out of the £8,000,000 we borrow avowedly to have a margin. As for a portion of this loan, or any other, being used as ordinary revenue, that is an idea which may be dismissed from the mind in the present state of affairs in India. Dark days may come upon that country, as they have come before, and the expenses of the year may have to be defrayed out of loans, as they were, for instance, in the time of the Mutiny; but in such a case necessity would have no law, and the true security which Parliament has against anything being done wrong in matters of Indian financial administration, as in matters of English financial administration, is its power of censuring the Government or the Minister under whose authority the censurable act has been committed. I have only to add, in conclusion, that it is a matter of very great importance that we should be enabled to get this Bill through Parliament as quickly as possible, and I trust that the hon. Member, after receiving the explanation which I have given, will not desire further to obstruct 1113 its progress. I repeat, in conclusion, that we are asking simply to be allowed to borrow £5,500,000 at low interest, with which to pay off £5,500,000 at high interest; and, further, to be allowed to borrow £2,500,000, which we had authority from the Legislature to borrow last year if we had thought it financially expedient so to do.

§ SIR STAFFORD NORTHCOTE
hoped the hon. Member for Brighton (Mr. Fawcett) would not further impede the progress of the Bill, the object of which was to facilitate operations that would be beneficial to India. At the same time it was only natural that the hon. Member should have sought the satisfactory explanations which had been offered.

§ MR. CANDLISH
thought his hon. Friend the Member for Brighton (Mr. Fawcett) was entirely justified in the observations he had made on this Bill, and if he divided he would support his Resolution.