§ MR. WHITWELLasked Mr. Chancellor of the Exchequer, How it is that the Cyprus Government, a nominated body, has power to issue an ordinance authorizing the High Commissioner to take up a loan of money for £34,000, and to what amount such powers to borrow extend; whether, to borrow this £34,000, at the estimated rate of 3¾ per cent, it will be necessary to make the loan a first charge on the revenues of Cyprus next after the rent to the Porto, and in what manner the liquidation of the loan will be effected; and, if the revenues of Cyprus fall short from bad seasons, sickness, or any other cause, British Votes will be liable to meet the expenses for maintaining the government and police, &c. &c. of the island?
§ THE CHANCELLOR OF THE EXCHEQUERSir, I understand that an Ordinance will be passed by the Cyprus Government; but, in point of fact, the authority in the matter is really with the Secretary of State for Foreign Affairs and with the Treasury at home. I think I may just answer the Question of the hon. Gentleman by mentioning the substance of a communication that was made by the Treasury to the Foreign Office on this subject some months ago, when the proposal was sent home, with reference to some provision of this sort being made. The Treasury then expressed their opinion that the sound rule to be followed in borrowing for public works in Cyprus would be to borrow no more than the annual Revenue of the Island, prudently estimated, and with due allowance for uncertain allowance, can bear the interest of without a 670 deficit, in addition to such annual instalments as will discharge the principal in a period not exceeding, at the outside, 20 years, or, still better, 10 years. They proceeded to say that, subject to that rule, they considered the amount of borrowing and the objects of expenditure might, in the main, be left to the prudence of the High Commissioner, his particular recommendations continuing to require the approval of the Secretary of State and of the Treasury. The sum of £34,000 has been mentioned as the sum that might be required for the works in contemplation; but it is not, as I understand, the intention of the Cyprus Government to ask for power to borrow so large a sum as that. The sum that I have heard mentioned as the sum likely to be borrowed is about £22,000. That amount would be borrowed of the Ottoman or some other bank, and it would, of course, be on the security of the Revenues of Cyprus. There would be no necessity for us to consider what arrangements were made as between the Government of Cyprus and those who might lend. I believe my hon. Friend the Under Secretary of State stated this several months ago.