HC Deb 23 March 1885 vol 296 cc347-60

Order for Second Reading read.


Mr. Speaker, in rising to move the second reading of this Bill, it is only right that I should offer a few words of explanation as to its object; and I think I can say that that object is quite as much, or perhaps more, political than financial, though, of course, it is true that the financial arrangements of the Bill are made upon satisfactory terms and upon satisfactory security. The Bill is for the purpose of enabling the Government to make a loan to the Cape Colony for the purpose of continuing the railway from Hope Town, on the Orange River, to Kimberley—a distance of 74 miles. Great inconvenience is felt at the present time in regard to matters of transport between those places, and even civilians experience the greatest difficulty in arranging for such transport. Indeed, we are informed that so great is the pressure for transport upon that distance between Hope Town and Kimberley that, although 6s. per 100 lbs. used to be the rate for the conveyance of goods, it is now the case, owing to the extraordinary difficulties of transport, that that sum of 6s. has actually risen to 15s. Of course, that makes the Cape Government very anxious, if possible, to complete the railway. It may be asked, why do not the Cape Government find money in the Colony for the purpose; but I am sorry to say that in the Cape, as well as in this country, there is depression of trade, and the Cape Government have found it very difficult to raise money either there or here for such an object; and as they were authorized in the year 1883 to raise £1,000,000 for public purposes, and as they still have unexhausted powers to borrow £400,000, they have applied to Her Majesty's Government to assist them in this emergency. Now, the question is, why should Her Majesty's Government, not having for some years past made any loans to any Colonial Government, or guaranteed any of their railways—why should Her Majesty's Government help the Cape Colony at the present time in the manner proposed? It is because this line, when constructed, will be of great assistance to the Military Expedition which is now in Bechuanaland; and it is calculated that if the railway were made, it would, so long as the Expedition lasts, lead to a saving of something over £2,000 per month—I believe the calculation is £2,250 per month. Her Majesty's Government therefore think that this is a matter which is deserving of consideration, and I may say at once that that is the main thing which has induced the Government to enter into this undertaking. Then there is the question, what is the security which is to be given for the loan? In the first place, the Cape Government transfer to the Treasury a sufficient number of 5 per cent debentures to the amount of £400,000, with a margin of £25,000 over the £400,000—that is to say, they transfer as security for the repayment of this loan debentures to the value of £425,000. They also undertake to complete the railway within eight months; and if it is not completed in that time, then, instead of paying 3½ per cent interest for the loan, they will have to pay 5 per cent. I therefore think it may be said that the arrangement is not an unsatisfactory one for England, and it is certainly a satisfactory one for the Cape. Under these circumstances, I think we may fairly ask the House to give a second reading to this Bill. No doubt the policy embodied in it differs to some extent from the principle in which we have acted of late years; but I think there are strong reasons for the proposals for carrying out this particular undertaking, and I beg to move that this Bill be now read a second time.

Motion made, and Question proposed, "That the Bill be now read a second time."—(Mr. Hibbert.)


I do not wish to discuss the financial details of this proposal, because I am quite pre- pared to admit that, so far as I can understand them, if the principle of this Bill be sanctioned there can be no objection to its details. But the hon. Gentleman has very properly stated that this is a measure of a very exceptional character, and contrary to the policy adopted by this House for many years past in dealing with the Colonies. It is a guarantee of money to a Colony possessing a responsible Government to construct a railway, the principal object of which is to develop the trade of that Colony with the interior. That is not a principle which would bear a wide interpretation or frequent application. The question is whether this particular case is so exceptional as to warrant the Bill which has been presented to us. The hon. Gentleman, looking to the nature of the undertaking, said that if it were merely considered as a commercial undertaking, it might be expected that the Cape Colony would themselves supply the money to carry it out. He went on to refer to the depression of trade in the Colony and the difficulty which the Colony had in raising money for any purpose. No doubt there has been a very great depression for the last year or two in the Cape Colony; but, without wishing to go at any length into this question, I may say that those who are most intimately concerned in the affairs of the Colony would almost unanimously admit that the present financial condition of the Colony is mainly due to that uncertainty as to its future which has resulted from the policy of Her Majesty's present Advisers. But the whole of the hon. Gentleman's argument in favour of this Bill was of a temporary character. He referred to the Imperial advantages which might be derived from this railway, if it should be at once constructed, by the Expedition which is now under the command of Sir Charles Warren in Bechuanaland. Well, no doubt that is a matter which deserves very serious consideration; and as it is put forward as an argument—and I admit a very important argument—in favour of the Bill, I hope we may have some statement from the Government as to the present position of that Expedition —that we may be told what Sir Charles Warren has done and what he is going to do. We have all seen telegrams from South Africa on this subject of a more or less conflicting character, as those telegrams always are. Speaking in the absence of any official information, it seems to me that Sir Charles Warren is performing his task with great firmness and courage, and that he decidedly deserves, not only the support, but the complete confidence, of Her Majesty's Government. But I should like very much to hear something more definite than we know at present as to the condition and progress of that Expedition. I will only express a hope that Her Majesty's Government will take care that Sir Charles Warren's proceedings are not brought to an end until he has completely carried out the whole object of his Expedition to Bechuanaland, and that there will be no undue haste in attempting to carry out the desire which has been expressed by the Cape Government for the annexation of that territory to the Cape Colony. I think, as was pointed out by Sir Charles Warren himself in his comments on the instructions which were delivered to him, that that is an essential element in the success of his undertaking. I do not want at this late hour to detain the House; but there can be no doubt, not only of the temporary, but of the permanent importance of this railway which the Bill is intended to develop.


wished to point out to the House that this was the first proposal which had been made since the present Government came into Office for a Colonial loan. He believed the last proposal was made in the year 1879, when the late Government were in Office, under the West India Loans Act. It really was a very serious thing, when a Government had been in Office for five years, that they should come forward and propose that this country should guarantee another Colonial loan, especially after the numerous speeches which had been made by the present Prime Minister against Colonial loans. He (Mr. Monk) recollected that so long ago as the year 1869 he acted with his right hon. Friend now President of the Local Government Board (Sir Charles W. Dilke) in moving the rejection of one of these Loan Bills; and though there was a strong feeling shown in favour of that measure, it was only carried on a division by a narrow majority of 10. At that time the present Prime Minister said that before 1865 the practice had been slowly growing up of giving these guarantees, and the right hon. Gentleman contended that such guarantees ought not to be given except for objects of broad Imperial policy. He (Mr. Monk) was not satisfied, from the explanations given by the Secretary to the Treasury(Mr. Hibbert), that this railway would be of any great use for Imperial purposes. To begin with, it was proposed that the railway should be completed in eight months; but he very much doubted whether it was possible for it to be finished in that time, or for it to be of any use for their troops. What the House was asked to do was to recur to a most objectionable system—a system which had been condemned, he thought, by almost every Gentleman now sitting on the Treasury Bench. Unless some stronger reasons could be given by the Chancellor of the Exchequer in favour of departing from the rule observed by Parliament during the existence of the present Government, he hoped the House would not agree to this Bill. He moved that it be read a second time on that day six months.

Amendment proposed, to leave out the word "now," and at the end of the Question to add the words "upon this day six months."—(Mr. Monk.)

Question proposed, "That the word 'now' stand part of the Question."


said, that he rose to support this Bill, and he desired, in the first place, to point out to the House that the hon. Member for Gloucester (Mr. Monk) had misunderstood the character of the Bill. He had treated it as a case of a guarantee, which it was not, and therefore his objections to it failed. It was an advance to the Cape Government. He agreed, however, that such advances should not be made except in special cases, and he did not desire that this Bill should be treated as a precedent for making advances except in such cases. He thought this was an exceptional case, looking to the state of things in South Africa; and he understood that the right hon. Baronet (Sir Michael Hicks-Beach) took the same view, though he regretted—and in this regret he (Sir Henry Holland) shared— that the Government had given the House so little information as to the exact state of affairs in that country. He believed, however, that this railway, when completed, would prove of great and immediate service to the Cape Government, and he thought it might also prove of use to this country in the future, unless peace was restored in Bechuanaland. He wished to be satisfied upon one part of the financial arrangement provided by this Bill, which was not in the usual form. He observed that advances might be made by the Home Government before the Colonial Legislature had passed any law providing, to the satisfaction of the Treasury, for the repayment of the advances and interest thereon. That this was the case would be seen by a reference to Sub-section 3 of Clause 3 of the Bill, by which it was provided that if the Legislature of the Colony did not pass such a law within a reasonable time, &c, the Treasury might refuse "to make any further advance;" and the Colonial Government were, in such case, to pay interest at the rate of 5 per cent, instead of 3½ on the advances already made. Now, if the present Colonial Government, or their successors—and changes of Government were tolerably frequent at the Cape— declined to introduce such a law, or if the Colonial Legislature declined to pass it, it was clear that the Home Government could not enforce the return of any advances, nor the payment of increased interest. He presumed that in such case, though not a very probable one, the Home Government would recoup themselves out of the debentures to be deposited with them by the Government of the Colony under Clause 3, Sub-section 1. He wished to know whether he was right in that assumption?


said, he did not propose at that late hour (1 o'clock) to enter into the question of the policy of this particular advance. He was content to rely on what had been the long accepted principle of all Governments formed from the Liberal side of the House—that it was very injudicious to enter upon these advances to Colonial Governments. He thought the burden of proving the case rested entirely upon Her Majesty's Government, and he did not think the case had been satisfactorily made out by the Secretary to the Treasury. He wished to point out one very extraordinary portion of the agreement, so far as it appeared in the Bill, which was his first acquaintance with it. It had already been referred to by the hon. Baronet the Member for Midhurst (Sir Henry Holland). The Agreement was one apparently entered into between Her Majesty's Government and the Government of the Cape Colony; but it seemed to have been rather forgotten how very insecure in its position a Government at the Cape usually was, and how much it depended on a Parliamentary majority, which was very easily turned from one side to the other. It was an Agreement with the Government of the Cape, and had not been submitted to the Legislature of the Cape. If they were going to safeguard the financial interests of this country, they ought at least to secure that no advance should be made under the Agreement until the Legislature of the Cape had entered into an equal obligation with the Legislature of this country which we had entered into towards them. This was the first time he had ever seen in a Bill such an entity referred to as "the Government of the Colony," and he did not know what was the legal acceptation of the phrase. It might be, as the hon. Member for Midhurst had pointed out, that the Cape Legislature might fail to pass a law upon the subject. In what position would they be then as to the amount which, up to that time, might have been advanced? He thought it was clear that they would then be unable—because the Bill did not contemplate such a contingency—to exact 5 instead of 3½ per cent. If the Legislature of the Cape refused to ratify such legislation, how could they obtain from the Revenue of the Cape that extra charge which was to be the penalty for non-fulfilment of the contract? They could not propose, by any Agreement with the Cape Government, to impose a penalty upon the Cape Legislature. His hon. Friend the Secretary to the Treasury relied upon the debentures. He (Mr. Courtney) did not know whether there was any lawyer upon the Treasury Bench who could give them any light upon the subject; but he had very great doubt himself as to whether the deposit of those debentures could, under the circumstances he was suggesting, be made use of. He was supposing the case of the Legislature of the Cape proving hostile to the carrying out of this Agreement. He knew the Act of the Capo Legislature to which his hon. Friend had referred. It enabled the Colonial Government to raise money upon debentures which should be issued at par at rates to be settled by the Government from time to time. He was not quite sure, but he rather thought there was an actual legal decision under which, though a Colonial Government might have power to raise money upon debentures to be issued at par, it had no power to pawn the debentures—it was not thereby enabled to carry the debentures off to some other part of the world and raise money upon them by pawning them. Yet that was the proposal made here. A certain number of the debentures in excess of the amount of the loan were to be pawned. That was not issuing them at par, but at a discount, in direct violation of the requirements of the Act itself. The whole transaction amounted to this—that if the Legislature viewed the Agreement with hostile eyes and did not carry it out, they would have advanced money and they would be unable to realize the security. They would have advanced money upon an illegal security. Under those circumstances, and quite apart from the political objections to the transaction which were exceeding grave, the financial aspect required a good deal of explanation, and he hoped that some further information would be given to the House before the next stage of the Bill was taken.


said, he had no interest in the Bill, but he had had some opportunity since he first saw it of conversing with some people from the Cape who were sufficiently authorized to go into the facts of the case. He had ascertained in a way which satisfied his own mind that this proposal met with the approval of almost everybody in the Cape, and it was inconceivable that the Cape Legislature would refuse to ratify it, because they got, on very easy terms and in a very easy way, money to construct a work of great national importance to them. Therefore, although he agreed with some portion of the remarks of the hon. Gentleman who had just sat down, he thought they must take something for granted in discussing this question, and certainly they might feel perfectly secure that no Legislature at the Cape would venture to refuse to pass a law ratifying this Agreement, in view of its terms and of what it was designed to carry out. He wished to correct one statement made by the hon. Member for Gloucester (Mr. Monk), who had called this arrangement a guarantee. It was not a guarantee, it was an absolute loan, and it was made in the interests of this country as well as in the interests of the Cape.


As the financial question has been raised, I may be allowed to correct what appears to me to be a misapprehension on the subject at the present moment, and to explain what the financial grounds for this proposal really are. The question is a very simple one. We were urged by the Military Department to assist the Cape Government in more rapidly constructing this railway in consequence of the advantage that would accrue to Her Majesty's Government in connection with the Bechuanaland Expedition, and because of the extremely onerous and expensive method of conveyance from the Orange River to Kimberley. There was no prospect of the railway being made during the course of the Bechuanaland Expedition unless Her Majesty's Government came to the rescue, and the Military Department would be saddled with a large expenditure for transport which would be necessary during the course of next year if there were no railway. That was the inducement for the Bill. I entirely concur on general principles in all that has fallen from the right hon. Baronet opposite (Sir Michael Hicks-Beach). Nothing would induce me to be a party to such a Bill if it were merely to lend money to a Colony for railways for the ordinary purposes of transit or commerce. But this is really in the nature of a military work, and is an exception to the general rule, which I accept quite as strongly as my hon. Friend the Member for Liskeard (Mr. Courtney). Then what was the arrangement which we had to make? My hon. Friend has asked—"Why did you not require an Act to be passed by the Cape Parliament in the first instance?"[Mr. COURTNEY: Oh, no.] I mean before an advance was made. Well, Sir, the whole reason was this. The Legislature of the Cape is not in Session, and it would be utterly unreasonable to require that Legislature to meet simply for the purpose of ratifying the arrangement under this Bill, if we had what we considered sufficient secu- rity without it. We, therefore, took this precaution, stated very plainly in the 3rd section of the Bill, that there should be deposited with us a sufficient amount of debentures, with a margin beyond the amount of the loan; and we conceived that there could not be any more proper security than the deposit of such debentures that we could possibly ask for. So far, therefore, from the debentures which we are to receive being foreign to the object of the Bill, as my hon. Friend appears to think, they are distinctly germane to its object, because they are debentures on which the Cape would raise money for the very purpose of constructing this railway. We are satisfied with the inquiries we have made. We think the Cape Government are perfectly competent to deposit these debentures with us, and that if the Cape Legislature does not pass the Act completing our security, these debentures will be available, and could be disposed of by us in this country in respect of the first instalment which is not met. The security of the Treasury is, therefore, complete. The whole case is this—that, finding that the Cape Government have power to construct this railway, we have agreed, for military purposes, to lend them the money on the security of debentures. If, after making the first advance, the Colony does not go on with the undertaking, Her Majesty's Government, under the 1st clause of the Bill, have power to say they will make no further advance. I think that I have now answered conclusively the point raised by my hon. Friend.


said, that having travelled over the country in question, he would like to make one or two inquiries of the Under Secretary of State for the Colonies. He believed that it would be an easy thing to construct this railway from the Orange River to Kimberley, because he apprehended that no engineering difficulties were involved; but he would be glad to know what it was proposed to do with regard to crossing the Orange River. There could be no doubt that when it was called into existence, it would be a most important line. The House was aware that the Diamond Fields at the Cape were of great importance to this country, and he might say to the world, and it was a great object to the Cape Government to extend the system to the Diamond Fields. It was obvious also that the military operations in Bechuanaland would be greatly promoted by the construction of the railway. He would be glad if the hon. Gentleman the Under Secretary of State for the Colonies would say whether it was intended to make a bridge across the Orange River?


said, his hon. Friend the Member for Devonport (Mr. Puleston) had treated it as a matter of course that the Government of Cape Colony would be ready to make this railway. The object of the Bill, as had been pointed out, was to advance a large sum of money to the Cape Government, who would be responsible for the construction of the railway, the avowed object of which was to assist Sir Charles Warren and his Forces in Bechuanaland. It appeared to him that the Capo Government were far from friendly to this Mission, and, indeed, almost hostile to any military measures being taken at all. Under the circumstances, he asked whether the Government had taken due security and guarantee from the Cape Government that this railway should be pushed on with the utmost possible celerity, so that it might be used by Sir Charles Warren's Forces in returning from Bechuanaland?


said, he looked with satisfaction on this railway, which would open up Bechuanaland. When he considered the fact that there was a Colony of 50,000 people at Kimberley, and that it would be on the line of the direct route into Africa, he could not help thinking that the railway itself would very soon reward the Colonists. He was of opinion that so far as the line itself was for a definite object the Colonists at the Cape would always regard it with satisfaction. The hon. Gentleman who introduced the Bill had brought forward, one very marked fact—namely, that the present rate for goods carried into the interior was 15s. per 100 lbs. weight. That alone was sufficient to show the need of better means of transport than the miserable waggon road which was at present the sole route by which goods could be carried into the interior.


I can assure the hon. Member for Andover (Mr. Francis Buxton), that if he will examine the Bill closely, he will see that security has been taken that the railway will be pushed on with all possible speed. It is to be completed within eight months, and in the event of that condition not being complied with, it will be a question with the Imperial Government whether to make any further advance or not. With regard to what has been stated by the right hon. Gentleman opposite (Sir Michael Hicks-Beach), the Government admit that this is an operation of an entirely exceptional character, which cannot be more strongly marked than by the fact that the proposals to the Treasury were made, in the first instance, not by the Colonial Department, but by the War Department. Representation was made by the Cape Colony that they were not in a position to proceed with it financially immediately, and they represented to us that, in view of the military operations in Bechuanaland, it might be an object of very great importance in prosecuting the war there. The question was considered by the War Department, and we were convinced that if those operations which are now proceeding under Sir Charles Warren, in Bechuanaland, were to be continued for any length of time, they would, by means of this railway, be greatly facilitated, and that if, unfortunately, operations more active than those now in operation were necessary, it would be of great advantage to have this railway—an advantage which could hardly be measured by any pecuniary cost. We thought this a question which might very properly be brought before the Colonial Office and the Treasury— that an advance might be made from the National Exchequer under the exceptional circumstances of the case. We believe that this would be a very proper use of the public money, and although the matter has passed out of our hands, I believe security has been obtained which will protect the Exchequer against any loss. The right hon. Gentleman has asked whether any information had been received with respect to Sir Charles Warren's Force, and the operations which have taken place. I am very sorry to say that the Government have very little detailed information as to the movements of Sir Charles Warren's Force, although I am expecting to receive fuller information every day. All we know is, that Sir Charles Warren has moved the Force under his command with great rapidity, with great energy, and apparently so far with success. He has, I believe, provisionally settled the affairs of Stellaland; he is now in Goshen, and, so far as we know, entire success has attended all the operations which he has undertaken; he has not only not met with any opposition, but I believe he has been cordially received by a very large proportion of the population, and apparently he is making very fair progress with the Mission intrusted to him. As soon as we are in a position to make a fuller statement to the House, we shall take an opportunity of doing so; but the information we have received is so very slight that it is impossible at the present time to make any detailed statement. In reply to another question of the right hon. Gentleman, I can assure him that there will be no undue haste on the part of Sir Charles Warren's Force to leave the territory; but until we have fuller accounts than we now possess from Sir Charles Warren as to the whole position of the situation, it will be impossible to state what will be done. Certainly, after the exertions we have made, and after the success which has attended so far upon Sir Charles Warren's Expedition, I may assure the House that the Government will do nothing which would tend to undo the work which Sir Charles Warren has accomplished, and that we shall do all in our power to give fuller information on the subject.


said, he should like to know what arrangement had been made with regard to the bridge across the Orange River?


said, that a contract for the bridge had been taken.


said, he wished to point out to the right hon. Gentleman the Chancellor of the Exchequer that he had not touched his point at all. He was afraid he had not made it clear. The point he had endeavoured to make, and which he wished his right hon. Friend to take up and look into before the next stage of the Bill, was that these debentures could not be used in the way proposed under this Bill. The debentures were issued under an Act of the Cape Legislature which gave power to issue debentures to meet its occasional wants. The words of that Act were not being carried out in the present case, and therefore it would appear that the security proposed under this arrangement was no security under the Act. His right hon. Friend would doubtless see whether there was anything in the point he had raised by consulting with the Law Officers of the Crown and the Treasury. The simple fact was, as it appeared to him, that the debentures supposed to be available as security could not be used for the purpose of a loan.


said, perhaps his hon. Friend was not aware that an Act had been passed by the Cape Legislature in 1884, which authorized the construction of the railway and the use of the money available under the former Act for the purpose of making the railway? The Government were satisfied that those two Acts, taken together, formed a perfect security.


asked if power was vested in the Cape Government to borrow money in this way?


said, that the Government were satisfied, from inquiries made, that the Cape Government could deposit the debentures for the purpose of the railway, and that there would be no question as to the security. He was quite willing, however, to look into the matter again before the Bill went into Committee.

Question put, and agreed to.

Main Question put, and agreed to.

Bill read a second time, and committed for To-morrow.