SOUTH INDIAN RAILWAY PURCHASE BILL.—(No. 105.) (Hansard, 24 March 1890)

* SIR G. CAMPBELL&c) (Kirkcaldy,
I do not want to oppose the passing of this Bill, but I do want some explanation in regard to it. The Bill gives power to the Government to acquire an important railway in India, and while I do not agree with the hon. Member for the City of London, who said he did not like such transfers, but, on the contrary, am strongly of opinion that these great lines of communication should be in the hands of the Government, I should like to know something about the principle of guaranteeing railways in the hands of private companies. Holding the opinion that it is desirable the Government in India should have the control of railways, I should like the Government also to construct the lines. But the course followed is this the Government guarantee interest on a railway, and when the railway, in consequence of this guarantee, has gone up to a premium, then the Government buys up the railway. I admit at once that the policy laid down by that great statesman, Lord Dalhousie, has been justified by success, but now that the Government have the great machinery in their hands, and have the means of making railways, and can get the money for the construction on terms much cheaper than a company, I cannot see why the Government should sacrifice the interests of the people of India in order to put great premiums into the pockets of syndicates in the City of London. No better illustration could be found than this South of India line. This is not one of the great lines laid down by 1796 Lord Dalhousie in old days; this a modern line. It never has paid its expenses, or anything like it, and yet we are required to sanction the purchase of the line, and to pay a high premium for it. What is that premium? Looking at the price current of the line, I suppose it is some 30 per cent., and that is the sort of price the Government have to pay. Now, I could quite understand the adoption of a policy that required the Government should have the railways in their hands, and, pursuing that policy, the Government declared they would guarantee no more railways; but, it seems to me, an extraordinary and most disadvantageous course for the Government to take, going round on a sort of circle, continuing to guarantee new lines, and when thereby the line has been run up to a premium, stopping in and buying it. Since the South Indian Railway was constructed the Government have guaranteed a succession of other lines, the Midland line, for instance, forced upon them by a syndicate, and the Bengal and Nagpore line which never can pay its expenses. But we guarantee these lines, and, then when, in the interest of the State, it is thought desirable to buy, then we buy at a high premium. I think before this Bill is passed we ought to have some explanation of what is to be the policy in the future. Do the Government think it is desirable that the railways in India should be owned by the Government, as I presume they do, else why these proposals to buy? and if they do, then why do they continue the system of guarantees, which inevitably end in a large profit to the Company, and as great a loss to the people of India? The premium is solely due not to the profitableness of the lines, but to the guarantee given. I hope we may have some explanation.

§ * MR. W. H. SMITH
There is but a short time before I shall be compelled to resume my seat, so I will briefly reply, and say the policy of the Government is to construct railways in the cheapest possible manner for the people of India. No fresh guarantee is proposed under this Bill. The proposal is to carry out an arrangement by which an economy of, £36,000 will be effected in the interest of the people of India. Under the conditions of the guarantee entered into in 1873, power was reserved to the Secre- 1797 tary of State for India to terminate the guarantee in 1890, and purchase on terms there specified.

§ SIR G. CAMPBELL
What are they?

§ * MR. W. H. SMITH
It is to give effect to that power reserved to the Government, and, to effect the economy I have mentioned, we ask the House to sanction the purchase. There is now no question of any new guarantee.

§ DR. TANNER
There are still a few minutes left, in which I think the right hon. Gentleman might have given us some better explanation. When the Bill was before the House last week it was clearly shown that though this line of railway is something stupendous in length, yet it has never yet paid its working expenses.

§ * MR. W. H. SMITH
It has paid 3 per cent, beyond working expenses.

§ DR. TANNER
And the guarantee is for 5 per cent. ! And we are asked to assent to this job without any explanation. I am giving but an individual opinion, but I certainly think some better explanation should be forthcoming; that we should be put in possession of some facts in relation to the case. I have always taken exception to hurrying through business at this hour—