HC Deb 21 March 1890 vol 342 cc1605-12

Order for Second Reading read.

Motion made, and Question proposed, "That the Bill be now read a second time."

(11.34.) MR. A. O'CONNOR (Donegal, E.)

This, Sir, is a Bill which relates to a portion of the Empire, the inhabitants of which have no effective control over the administration of affairs in their own country. It is only in this House that there is the best chance of justice being done to them in any respect. With reference to this particular measure—which is a large measure of a financial character—a Resolution was submitted in Committee, and was passed in Committee late at night without a single word of explanation. That Resolution was reported with only a show of explanation when it was challenged, and the right hon. Gentleman who made that explanation will, I feel sure, not be offended if I say he did not appear to possess any more information than he was bound officially to possess, which was absolutely nothing. He did not inform the House of the character of the Bill, of the reason why it was introduced, or of the conditions attached to it. And now we are asked, after half-past 11 o'clock, to read the Bill a second time without a word of explanation as to its scope or the justification there may be for it. The measure proposes to enable the Secretary of State for India to deal with a sum of no less, than five and a quarter millions sterling. The Preamble sets forth that Whereas the Secretary of State in Council, by virtue of the power vested in him, under a contract between him and the Company, give notice on the third day of March, 1890, to the South Indian Railway Company, of his intention to purchase the undertaking of the Company. Be it enacted," &c. We have had no explanation how it is that the Secretary of State is vested with authority to go to a Company in India and say, "I will buy your Company for £10,000,000 or £15,000,000," or whatever he agrees to give, and how is it that then, without the people of India having an opportunity to express their views, an arrangement can be made to saddle them with an annual charge for an undertaking that may be perfectly worthless? I think it is clue to this House that some sort of explanation should be offered, not only with regard to the contract under which the Secretary of State has the power to offer to buy this South Indian Railway Company, but also as to the condition of the railway itself, and the reasonableness of the sum of money offered for its purchase. The contract exists. We are not told what its terms are. I am aware that in one case, at any rate, of a guaranteed railway, the Secretary of State undertook to contribute so much a year, or at any rate to pay a certain amount of interest for 25 years on condition that, at the end of the term, he should be at liberty to give notice of the purchase of the hue at a sum not exceeding 25 times the average annual profit of the last five years. But are these the conditions upon which this line is to be purchased? We are not told what they are. If they are the conditions, the Indian Government ought to get the line for nothing. We are to be asked to vote an amount of between £5,000,000 and £6,000,000 for the line. Before we are asked to consent to saddle the people of India, who are already exceedingly heavily burdened in respect of railways, with this further sum, we ought to be told what are the further liabilities which the Government will incur in respect of the line, over and above this large sum. For instance, what are the liabilities in respect of allowances which appear to figure so heavily in every Department of the Indian Service? Then I should to ask what is the condition of this line? Is it a line of some 654 miles in length, running from Madras to Trichinopoly and another place in the Presidency of Madras? I do not know what its condition is, and I defy any one who takes the trouble to wade through the Annual Reports of "the moral and material progress," as it is called, of the people of India, through the different Reports of railways furnished to this House, or the Annual Statistical Statements of the Indian Empire, to find any indication of the condition of this line. But what we do know from the Report of the Committee of this House in the year 1871, is that one of the railways started in India not so very many years before, and purchased at the ex- pense of the people of India, was in so bad a condition that within a very few years no less than 2,000 bridges and other important structures had to be rebuilt at the expense of the public. It may be that this line is in no better a plight. So much with regard to the condition of the line and the relations of the company to the Government. The Secretary of State is to be allowed to raise this money in bonds and debentures and stock at such interest as may appear to him to be necessary, or fit and proper. But we are not offered a single word of explanation as to what interest these bonds, or debentures, or stock are to bear, or at what prices or on what terms they are likely to be issued. Then what is the history of the line? Its history is, no doubt, in point of passenger traffic and goods traffic, in one respect satisfactory, because the number of passengers has gone up within a comparatively small number of years from 5,000,000 a year to about 7,000,000, and the amount of goods carried from some 827,000 tons to over 1,000,000 tons. These figures will be found in the Statistical Abstract for India, issued last Session, pages 161 to 169. But that is not everything. It is necessary to compare the receipts and expenditure for the corresponding periods. If we do that, what do we find? We find that of all the guaranteed railways in India this is far and away the most unsatisfactory. The Madras Guaranteed Railway is worked at a percentage of working expenses to gross receipts of 58. The Oude and Rohilkund Railway is worked at an average of 57.38, the Great Indian Peninsula at 46.2, and the Bombay and Baroda at 44 per cent. This line has been worked at a total of no less than 68.98. This is a highly unsatisfactory line, which you propose to buy at the expense of the people of England. The capital expended on the South Indian line to the 31st of December, 1888, was £4,695,000. The net revenue was £160,000 for the year, but the amount of guaranteed interest was no less than £213,600, so you have an annual loss of £53,000. And this is the Government you are going to perpetuate, and this is the kind of Bill which is submitted to the House of Commons, late at night, without a single word of explanation from any responsible Minister. I think there is good ground for objection against legislation of this kind, especially when it is in regard to a community which has no effective opportunity of expressing its grievances, or protecting itself from injustice. I believe you are buying a thing which, as regards real market value, is practically worthless. I should like to know all the conditions of the contract entered into by the Secretary of State with the Company. The House ought to be put in possession of the terms of that contract before it is invited to consent to the appropriation of this money. As a matter of fact, I think this railway ought to be left on the hands of those who own it, and if it can be worked at a profit, well and good. The State does not come down in England and buy rotten concerns in the shape of railways. It may be contended that this line is important from a, strategic point of view, but I hope, before any hon. member accepts that argument, he will carefully consider where this line runs—it runs down to near the southern extremity of the Peninsular from Madras. It is nowhere near the Russian Frontier; nowhere near Afghanistan, or any place where there may be frontier disturbances. These are considerations which strike one on looking at the Bill. Now, I have employed half the time allowed for the discussion. I leave the other half of the time for a satisfactory explanation, if it be possible, at the hands of the right hon. Gentleman who has charge of the Bill.


Nothing could be more legitimate than for the hon. Member, who is interested in the subject, to ask for an explanation of the measure, but he does less than justice when he says I have offered no explanation hitherto of the provisions of the Bill. When I moved the formal Motion in Committee, on Friday last, I stated to the House that it was intended by the purchase of this line to save the revenue of India £37,000 a year—1 think I said about £40,000. I could do no more at the time, but on the next occasion I gave fuller explanation, though, unhappily, it was at such a late hour it could not be listened to. I shall be happy to give such other explanation as is in my power, though I admit I am at a disadvantage owing to the absence of my right lion. Friend (Sir J. Gorst) who is attending the Labour Conference at Berlin. I think, however, I can satisfy the House there is no job in this matter, and that it is a profitable transaction to the revenue of India. I need not go into the political question. Those responsible for the government of India have well considered this matter, and I think they are entering into a transaction which is for the benefit of India. I ask the House to consider, in the first place, that, unless the line be purchased, the Government of India is committed to pay a guaranteed interest of 5 per cent. for 999 years upon the capital expended in the construction of this railway. It was one of the early railways of India, formed upon a comprehensive plan, and calculated to develop the resources of India, providing, as it did, the main trunk routes. At the time the guarantee was made, 5 per cent, was the normal rate of interest in India. In 1873 there was an amalgamation of two separate lines, and the opportunity was afforded to the Secretary of State to take power to purchase the undertaking in 1890, by giving notice after the 1st of March upon a valuation on an average of the price of the stock during the last three years. On the 3rd of March, accordingly, the Secretary of State gave the requisite notice, and valuations were made on his part and on the part of the Railway Company, which did not greatly differ. The difference was readily adjusted, so that the value of the 5 and 4¾ per cent, stocks, calculated on the average price of the last three years, was reckoned at an amount of £4,197,557. That is the price of the 5 per cent, stock., together with a small quantity of 4¾ stock —only, I think, £142,000; and there are debentures which mature at periods dating from 1891 to 1896. The annual saving by this transaction will be £36,813. The hon. Member asks what security is there to the public that this line will not involve a heavy additional capital expenditure? Will the House take it from me that that security is afforded under the provisions under which guaranteed lines are inspected by officers of the Government of India, and the necessary amount expended annually? I state this from ray own knowledge, having administered for five years railways over a large part of India, which is under the Bombay Government for railway purposes. I assure the House that every care is taken that the railways are maintained in a thoroughly regular manner, so that no further capital charge can fall on the State. The hon. Member has referred to the fact that the working expenses of this line are 68 per cent, of the gross receipts. That is true, and there is an annual loss of Rx 64,000 on the guaranteed interest of the railway. That loss will be diminished by the sum I have mentioned. It is an exceedingly useful line for the general purposes of India, and its receipts are increasing. It is really too late now to debate the question of a general railway policy. The railways have been made, and are, broadly speaking, remunerative. No doubt there are some railways which do not earn the interest guaranteed on their capital, besides the military lines. But they are protective in another sense, not less important. They indirectly repay their cost, and some are in themselves guarantees against famines. The railways are very closely scrutinised and administered by highly honourable men, and it is an unworthy thing to say that the accounts are not correct. There is no question that this expenditure on railways has been highly profitable to India, and I submit that the House would do well to sanction this purchase.

(11.55.) MR. A. O'CONNOR

I should like, with the indulgence of the House, to explain that I have examined all the Blue Books sent here from India, and I find it is perfectly impossible to reconcile any two of them, that the annual statement of revenue does not agree with the Railways Returns, that the figures are given differently, sometimes in rupees and sometimes in pounds ster- ling, and that it is quite impossible to make the thing out.

*(11.56.) SIR J. LUBBOCK (London University)

I am sorry we have not longer time to discuss this question. Nevertheless, I think we are indebted to the hon. Gentleman for bringing this question forward. I regret this purchase, not on the ground the hon. Member has stated, but on a different ground. I believe it is not to the interest of any country that its railways should be in the hands of the Government. Railways are much more likely to develop under a system of open competition, and if the hon. Gentleman goes to a Division I shall certainly follow him into the Lobby. At the same time, I wish just to explain that I am satisfied there is no job whatever in this matter, and that the Indian Government have exercised every care in the provision they have made with reference to this purchase.

(11.58) SIR U.KAY-SHUTTLE WORTH (Lane., N.E., Clitheroe)

; I should like to point out that this is a case in which there is a guarantee from the Government, and that consequently there is a loss every year which the Government has to meet. This contract will result in a saving of £36,000 a year, and therefore in the interest of the Indian people we should do well to consent to this Bill.

DR. CLARK (Caithness)

We have never yet received any satisfactory reason from the Government as to why they pick and choose between the railways. Why not buy the Great Peninsula Railway?

It being midnight, the Debate stood adjourned.

Debate to be resumed upon Monday next.