HC Deb 08 December 1893 vol 19 cc910-28

Resolution reported; That it is expedient to authorise the Secretary of State in Council of India to raise in the United Kingdom any sum or sums of money, not exceeding £10,000,000, for the service of the Government of India, on the security of the Revenues of India, and to make provision for other purposes relating thereto.

THE UNDER SECRETARY OF STATE FOR INDIA (Mr. GEORGE RUSSELL,) North Beds.

Mr. Speaker, when last I had the honour of addressing the House on a financial subject I was admonished by one of our friendly critics that on a similar occasion in future I must endeavour to guard against "mumbling and jumbling." That is a phrase which seems worthy to rank with "ending and mending," and "plundering and blundering," and other historical jingles. To-night I hope to profit by the admonition, and I should be without excuse if I fell into the error, because the tale I have to unfold is really a very plain one. There seems, in some quarters, to be a delusion that what the Government are now attempting to do is something unusual or abnormal. As far as I have been able to trace the history of financial precedents, it appears that what we are now trying to do in obtaining these borrowing powers from Parliament, is what has been constantly recurring since 1858, when the Crown assumed the direct government of India. In 1859 we came twice to Parliament. In 1860 we again came to Parliament. In 1861 we again came twice, and we also came to Parliament in each of the following years: 1869, 1873, 1874, 1877, 1879, and 1885. On these various occasions we came for powers to borrow sums ranging between £3,000,000 and £10,000,000; and in enumerating that list, I leave out of account altogether certain specific loans for special purposes which might be added, if necessary. The right hon. Gentleman opposite me reproached me with having tried to steal a march on the House by abstaining to make a statement on the Motion for Committee on this Resolution. I can assure the right hon. Gentleman and the House that nothing could have been further from my wishes or the wishes of my colleagues than to steal a march on anyone. Of course, it has never been my duty before to transact this particular department of public business, and all I could do was to resort to the usual advisers in such matters—namely, the officials at the India Office and the Clerks at the Table, by whom I was informed that the natural course would be to make the original Motion sub silentio, and reserve my explanation until the Second Reading. Of late years, at any rate, the precedents have been pretty equally divided. There are three precedents for the practice of making the statement on the Resolution, and four for doing as I proposed to do—for making it on the Second Reading. Something has also been said by the noble Lord the late First Lord of the Admiralty, as to the difference between Acts for general borrowing powers and those which have specific ends in view. Of the 11 Acts I have enumerated, all conferred general powers. True it is that many of them included some special and definite object, such as railroad building, or to meet the expenses of famine or what not, but in no one of the cases was there anything in the terms of the Act to limit the application of the moneys borrowed to that purpose. I have been at pains to read the introductory speeches, and I see that Ministers have generally said that so much money was required for a specific purpose, but that they proposed to take £3,000,000 or £4,000,000 or £5,000,000 more for what they termed a margin, to provide, that is to say, against contingencies which were not actually foreseen, but which might possibly arise. I venture, therefore, to submit that in every step we have taken so far, we have strictly followed precedent and custom, and have only done that which, as far as I am aware, has never yet been objected to by the leaders of the Opposition. Now, Sir, I have mentioned the number of occasions on which the Government have come to the House of Commons for power to borrow money for the purposes of payments connected with the Government of India. But it is not to be supposed that in each of these cases the full powers so obtained were at once used and exhausted. That was not the case. In the great majority of cases the power has been used and exhausted, but there still remained under these Acts of the past certain unexhausted borrowing powers, and the joint result of the unexhausted powers of these Acts was that in June of this year we had still left to us borrowing powers to the extent of something like £7,500,000. Then came the stoppage of the Mints. It is not my purpose now to defend that policy. I understand the whole question will be raised at a subsequent stage, and it will be incumbent upon the Govern- ment to defend an act which has been attended with such far-reaching and momentous consequences. For the present moment it is only necessary for me to recall the facts, and not to defend the policy. Last summer borrowing powers were left to the extent of £7,500,000. Then came the closing of the Mints, and that was attended with some necessary and inevitable disturbance of trade. I say "inevitable," because, according to the best financial and economical opinion I can collect, it is impossible to interfere with any law of currency without, to a certain extent, disturbing the ordinary operations of trade. It may very well be that a change in the law of currency may be attended in the long run with a great improvement and benefit to trade, and yet at its inception such change may be attended with a certain amount of disturbance and dislocation of trade. That would appear to have been the result of the action taken by the Government in closing the Mints, and, of course, the season of the year at which the change was made had a good deal to do with the disturbing consequences. However that may be, the fact is that the closing of the Mints was followed by a great falling-off in the sale of our Indian bills. It may be for the convenience of the House just to be reminded for a moment of the precise nature of these bills. We have to make certain large annual payments in England connected with India; that is to say, to meet the interest on the Debt, the charges for the Army, the pensions, the purchase of stores, and such like matters. These payments have to be made in England, and in gold. In order to obtain the necessary gold we have to sell our bills, which are, in fact, cheques payable in India in rupees, and if, owing to any cir-cumstances, the sale of those bills is arrested or diminished, our stock of gold proportionately declines. The closing of the Mints was attended by an inevitable disturbance of trade; I shall not say that that was the effect, for that would be tracing cause and effect; but the Mints were closed, and soon afterwards we were confronted with this fact: that, whereas the average sale of bills for the last five years had between June 27 and December 8 been something over 8,000,000 tens of rupees—last year it was nearly as much as 10,000,000 tens of rupees—this year it has been only 1,400,000 tens of rupees, which implies a difference in gold of £5,400,000 sterling. This failure to sell has obliged the Government to have recourse to some of the unexhausted borrowing powers that we had last June. These borrowing powers we have exercised to the extent of £5,636,000. This was done under the Acts of 1877, 1879, and 1885. And here I will beg leave to correct an error into which I fell, the other day, when I was asked by the late Chancellor of the Exchequer about the Act under which the particular loan which is now being raised was taken. That loan was taken under the Acts of 1877 and 1879.

MR. GOSCHEN (St. George's, Hanover Square)

The unexhausted balances of these loans?

MR. GEORGE RUSSELL

Yes; part of the unexhausted powers. Now, having borrowed £5,636,000, our borrowing power is reduced to £1,852,000. Now we have got to look ahead at least as far as next April, and by that time we shall have had to make payments to the extent of £8,000,000 sterling. As the borrowing powers we still have would only just carry us on to January 5, it is, therefore, obvious, we must come to the House for some extension of our powers. It is true it may be urged against what we are now proposing that we have a considerable surplus in the cash balances in India, and shall very shortly have more as the revenue begins to flow in, and it might be said that the Government might bring home some of that surplus, and use it for the discharge of our liabilities here. But if we could bring home rupees to the amount we actually borrowed for these payments here, it would cost (estimated at the low price at which rupees would be sold in England) at least 10 times as much as borrowing the same sum on temporary loan for 12 months; that is to say, the cost of exchanging the rupees in India for gold here would be £2,000,000 as against £200,000. That seems to me a sufficient reason for preferring the course the Government are now pursuing, even if it stood alone. As to the amount we ask for, some criticism, I believe, may be raised with regard to that point. But I do not think there is much scope for fault-finding even there. On all the previous occasions—at least in 9 cases out of the 11 I have quoted —so much was obtained for expenses of payments actually ascertainable, and a margin has been taken, beyond the sums actually falling due, for the purpose of meeting possible unforeseen contingencies. Now, the case stands at the present moment thus: If we get what may be called a good sale of our bills during the winter months from December to April, we should probably not need to exercise these borrowing powers at all. But that I am afraid is almost past praying for. On the other hand, if we only have poor sales amounting to something like 10 lacs a week, we should want to borrow £5,000,000, and if we are so unlucky as to have no sales at all we should want £6,000,000. The remainder of what we ask for is similar to that which has been asked for on previous occasions — it is a margin of equipment against possible contingencies or disturbances which we have no reason to anticipate, which we do not see looming in the future, but which might conceivably arise. This practice has been observed by the House. In at least two years it has been necessary to come to Parliament twice to ask for borrowing powers. That is a cumbrous and time-consuming process. We have thought it better that we should ask Parliament for borrowing powers, not only to carry us on as far as we thought it necessary to forecast, but to reserve power against possible demands which may arise, though we have no reason to fear they will arise. We have great hope that we shall not have need to use anything like the full amount of these borrowing powers, but still it seems to me a sum not unreasonable to ask; therefore I have considerable confidence in making this proposal on behalf of the Government. In order that everybody may see exactly how the case stands and the reasons for which we are obliged to ask for these borrowing powers, I ought to say that the present Bill is drawn generally on the lines of the former Bill of 1885; it only differs in certain details, which I will explain on the Second Reading, or I may answer if questions are put with regard to it to-night. As to questions generally which may be raised with regard to the whole of our policy, and with regard to this demand in particular, I have only to say that as in these matters affecting commerce and trade a rash or inconsiderate answer is apt to be attended with inconvenient consequences, I will reserve the answer to any question put to me to-night until we return to the subject on the Second Reading of the Bill.

SIR J. GORST (Cambridge University)

The hon. Gentleman has given the House a perfectly clear sketch of what it is the Government proposes to do; but I cannot agree with him that in this short sketch he has given us any adequate or full explanation of the reasons which have induced the Government to take this course. Of course, I will not immediately after the statements of the hon. Gentleman attempt to discuss either the proposals of the Government or the reasons, whatever they may be, which have induced them to make such proposals. I will content myself with pointing out to the House that the course which the Government are taking on this occasion is unusual and abnormal. There may be very sufficient and satisfactory reasons for taking this unusual and abnormal course; but I think it is the duty of Parliament before agreeing to such an unusual course to have a full discussion of the circumstances which have led to it, and to have from the Government some very much more full and very much more distinct statement as to the policy which they are pursuing in this matter, and as to their intentions and prospects in the future. The hon. Gentleman said that the Government of India had up to the year 1885 constantly to come to Parliament, twice in one Session, for borrowing powers.

MR. GEORGE RUSSELL

There are only two years in which they came twice.

SIR J. GORST

I will venture to say that the Government of India have never come to Parliament with such a proposal for borrowing money as the present Government have in view. I cannot, of course, speak with any official knowledge of what took place prior to 1885; but during that time I had the honour to be connected with the Government of India the policy of the Government in reference to the sale of exchange was exactly the reverse of the policy which the Government are at present about to pursue. When I was at the India Office this difficulty of exchange and the difficulty to the financiers of India arising from the continual fall of the rupee was constantly present as an extreme difficulty. But we had also for a short time the experience of a rising rupee, because when the Silver Bill was passed in the United States of America there was for a short time a revival in the exchange value of the rupee, which was of very great assistance to the financiers of India, and which, of course, involved different considerations and a different policy to that which prevailed while the rupee was falling. But with both the falling rupee and the rising rupee the policy of the Government in the sale of exchange was fixed and constant. They had, as the hon. Member pointed out, certain requirements for which it was necessary to provide a certain amount of gold for payments which had to be made on the part of the Government of India, and that gold was procured by the sale of exchange. But the principle which was always pursued was that the Government of India sold the exchange at regular intervals, not on any particular day, but selling as the money was wanted, quite irrespective of the monetary price of the rupee. It was thought it was a policy which suited the Government, and that it was no part of the business of the Government of India to become speculators in the value of silver. It was considered necessary to have money at the time payments were required in London, irrespective of the monetary value of the rupee, and, whether it was going up or going down, that policy was always steadily and constantly adhered to. Of course, sometimes, by delaying the sale of exchange, the Government might have gained. And on other occasions by delaying the sale they might have lost. The principle was that the Government should not stand to either gain or lose by a speculation of that kind, but that they should sell at the time when the money was required in London. Now, the hon. Gentleman says that the stoppage of the coinage of silver in India has been attended with tremendous consequences; that it has caused disturbances and dislocations in the exchange and the money markets between London and Calcutta, and in consequence of that the Government have almost ceased to sell bills on India. I do not want it to be understood that at the present moment I say that is right or wrong, but it is quite a new departure in Indian finance, and it is a departure in Indian finance of so momentous a character that it ought to be fully discussed by this House. The pros and cons should be placed distinctly before this Parliament, which is decidedly responsible for the finances of India, and we ought not to assent to the proposal of the Government until it has been fully considered and adopted by Parliament after due deliberation. That really is all I rose for the purpose of saying. The position, according to the hon. Member's own statement, is a very critical one. The Government will require £8,000,000 of gold by April next, and they propose by this Bill, which is to be brought in in the course of this Resolution, to take powers to raise that £8,000,000 of money entirely by borrowing, so that the arrangement of Indian finances is this: that while the Revenue is being paid in in India in silver, and the Indian Treasury are glutted with silver, the Government will be borrowing gold in London without, as far as I can make out, any certainty that they will hereafter be able to reduce the balance, and repay that gold by the sale of their bills in India; because the House must recollect that the Indian Government cannot raise except by borrowing—by revenue they cannot raise—any money whatever in London; and, therefore, their only prospect of being able to replace the- gold they so borrow in London will be by the subsequent sale of bills at some time or other in India. Of course, if the value of silver rises and if the exchange after April should be what the hon. Member called good, the transaction will be a very advantageous one for the Government of India. They will, during a period of depression of the rupee, raise the necessary gold for carrying on the Government in London by borrowing, and then, when the exchange has improved after April next, they will be able to replace the sums so borrowed by the sale of bills on India at a much higher price than they could sell them now in London. If it turns out in that way, it will be an excellent thing. But what prospect have we of that result taking place. Suppose, instead of rising, it falls still more? Then you will have to sell your bills, and make good this sum so borrowed in London at a worse exchange than now. You may have to sell them at a lower price than you could get for your Bills now. If that should be the result, the transaction will be a most disastrous one for the Indian Government. What we should like to know before the Bill is brought in and read a second time is what prospect the Government really have of finding themselves in April next in a better position than they are now? No doubt whatever it is a speculation. It is for the first time, I should suppose, in the financial history of India that the Government are going to speculate upon the rise in the value of silver. I should be very sorry to commit myself at the present moment to saying that such a transaction as that is not justifiable. All that I am endeavouring to press upon the House, and I hope on the Government, is that a transaction and policy of this kind should not be pursued without great deliberation, and without having not only the sanction of the Government of India, but also sanction from the Imperial Parliament of the particular policy which they desire to carry out. I have heard questions asked across the Table by my right hon. Friend the Member for St. George's, Hanover Square (Mr. Goschen), and have noticed a certain reluctance on the part of the Chancellor of the Exchequer to give the time necessary for this discussion and for this deliberate consideration of Parliament. Of course, I do not want to intervene in the arrangement which will be made by these two right hon. Gentlemen; but I think, after the statement which has been made by the Secretary of State for India, both the Government and Parliament will admit that in the very important and very new departure in the method of managing Indian finance it is most important that we should have full and ample opportunity for considering this matter before the Government and Parliament are committed to a policy so novel.

THE CHANCELLOR OF THE EXCHEQUER (Sir W. HARCOURT,) Derby

The right hon. Gentleman speaks with great knowledge on Indian subjects, and any observations he makes are very well deserving of consideration. Now, I understand to-night we are not going to argue the original policy of the stoppage of the Mints at all. The point the right hon. Gentleman raised is a different one —namely, how to deal with the consequencies which have arisen from that? There is a certain sum of money which India has to pay in England for home charges of various kinds. In former days you had occasions when India was not able to pay that money, and consequently had to borrow. Say a famine occurs, or a war takes place, and India has not got the money, Parliament gives authority to borrow the money to meet that deficiency. Now the right hon. Gentleman says, and says truly, that that is not the case here. India has got the money. At this moment there is in India £6,000,000 of money which is available for the payment of these obligations, and the sole question is, what is 'the best way to transmit that money? It is not as if India had lost the money—it is there; but in the present state of exchange it is not a profitable way of transmitting the money direct from India. Well, the right hon. Gentleman says very truly that in former days we sold the bills at whatever price we could get for them. No doubt that was the former practice, but would it be a wise thing now, or during the last few months, to sell the Bills at any price we could get for them? The effect of it would have been to run down the exchange to a much lower rate than it is now. The one thing that the people of Lancashire have been asking for is a steady exchange. Whatever else has happened this has been done —the exchange has been steadied by the Indian Government not consenting to sell Bills below a certain price, the consequence of which is, as I am informed, that the exports of Lancashire have increased and have not suffered. That advantage, at all events, has been derived from a course that has been pursued. Well, now, I cannot agree with the right hon. Gentleman, that the question of whether a more favourable exchange will be depends solely upon the price of silver. That is not the fact. What we have suffered from is this, that at the particular time of the year when this measure was adopted, the exports from India have been at their lowest point; and the question whether they would get more favourable terms for their bills, or whether, during the next ensuing months, the exports would grow and so create a demand for the bills upon India, and, consequently, the price of bills would be sustained. What has happened is this— there has been an unusual diminution of the balances of exports as compared with imports in India, and this has affected the price of the Bills. It has not been only that, but another thing which has prevented the rise of the rupee is the closing of the Mints, and thereby raising the price by the simple process of diminishing the supply of minted silver. Therefore, the price of minted silver, as compared with unminted, will rise. That has made what the Indian Government believe is a temporary difficulty in dealing with their bills. They expect that in the early months of next year there will be large exports from India, that the demand for bills will rise again, and that we shall not be called upon to raise their borrowing forms to any great extent. That is their hope and expectation; but there is no doubt—no one has ever concealed the fact—that this measure adopted by the Indian Government and sanctioned by the English Government is a great experiment. It has always been so stated, and in the view of the Indian Government it is altogether too early to guage the result of that experiment. Everyone knows that a change cannot be made in the currency without other changes taking place, but he would be a very rash man who would anticipate what they are. But the Indian Government believe they are doing wisely during the early days of this experiment to adopt a cheap method of paying the money they possess in India by borrowing money in England, thinking, as they do, that upon the course of exchange in future they would have a more favourable and successful means of transmitting the money they have in India to England. That, I believe, is the suggestion, and it is, I cannot help thinking, a very proper one for the House of Commons to discuss.

MR. GOSCHEN (St. George's, Hanover Square)

I am glad the Government recognise to the full the very serious character of the situation, and of the demand which they think it right to make upon the House in respect of the present Bill. Something has been said about fault finding, but I have no desire to find fault in the slightest degree, and in reference to the phrase that the Government had stolen a march upon us, I have no intention of casting particular blame upon Ministers. We all know the Government are anxious to make progress with their business, and perhaps we were rather in fault in not challenging the matter upon that occasion. Well, now, the position seems to be this, that there are two matters which will come before us — one is the policy of the measure adopted by the Indian Government and endorsed by the British Government, and the other financial consequence at which we have arrived at the present moment. I am entirely in accord with the Chancellor of the Exchequer and the Under Secretary of State that on this occasion it would be out of place to discuss the general policy of the Government; but it is clear that that policy must be discussed on the Second Reading of the Bill. We must inquire Whether this is likely to be advantageous so far as we are able to form any judgment, and we must ask whether, so far as can be in- dicated, it is on the road to success. If we embark on a dangerous experiment— if there is, so far as we can see, danger in the experiment—it behoves the House of Commons to hold the Government responsible in explaining very fully why they considered that success was probable. Now, even the few sentences that fell from the Chancellor of the Exchequer and the Under Secretary show the enormous gravity of the situation, and I wish to indicate to the House this point—that the consequences, so far as they have already occurred, were not foreseen by Her Majesty's Government or by the Indian Government. Let me put this point to the Chancellor of the Exchequer:—Suppose Parliament had not been sitting at this moment; suppose we had not had an Autumn Session, what would have been the position of the Indian Government, who, according to the right hon. Gentleman, were only supplied with the means of borrowing up to the 15th of January next?

SIR W. HARCOURT

We should have come to Parliament before the Adjournment.

MR. GOSCHEN

Then I do not think the Indian Government have treated the public at all fairly, because in his Budget Statement, which was made since September, or, at all events, comparatively recently, there was not the slightest indication of the present situation. They have arrived at this situation through a difficulty in selling their bills. That is agreed; but the extent of the difficulty clearly was not foreseen by the Indian Government or by the Home Government, and I doubt whether it was even foreseen by the members of the Commission who recommended this course. What is the position? The Government have, as I understand, sold £8,000,000 less than in ordinary years. Well, now, let me put this—If they have sold £8,000,000 less than in ordinary years, and they have to sell the ordinary amount of £17,000,000 during the coming years, they will have to add to that amount the £8,000,000 and some for the amounts for sales they may not be able to make during the coming months. So it appears to me—I am open to correction—that the unsold amount of bills may reach even £11,000,000 sterling by April. All that is evidently contemplated by the urgency of this particular Bill. Therefore, they contemplate continuing this course for some time. By what they have done, I think they will probably find they have set the rate of exchange too high, and that they will not be able to maintain the rupee at 1s. 3¼d. or 1s. 4d., looking to the enormous difference that now exists between the price of silver and the nominal value of the rupee. The Under Secretary spoke of a loss of £5,000,000. On that point, in an otherwise clear and lucid speech, I was unable to follow him. I do not understand how he arrives at the loss. The loss, if it is a loss at all, is only a loss on paper. It must be the difference between the price at which they wished to sell their bills—1s. 3d. or 1s. 4d.—and the value of silver. It was a loss compared with what? The Chancellor of the Exchequer speaks of the rupee being steady at 1s. 4d. or 1s. 3d., but that is not the value of the rupee. What is the value of the rupee?

SIR W. HARCOURT

We have not attempted to fix any price.

MR. GOSCHEN

No; you may say that you have not attempted to fix the price at 1s. 3d., but you may say that you will not sell below. The Government have got the exchange to 1s. 3d and 1s. 4d. into their hands, and they calculate a loss which they expect to get back in the coming months. But, then, I come to this difficulty: They have got £17,000,000 to sell anyhow, and their expectation is that they will not only be able to sell that which was the ordinary amount at that fixed price, but the whole of the millions which they have not been able to sell this year. Well, now, there is another very serious point in connection with this matter, and one on which I trust the Government will be able to give us some information before the Second Reading of the Bill. The right hon. Gentleman said that the imports have been stimulated by the change in the rate of exchange, but may I ask, is it certain that exports will not be discouraged by this very same process? Is it clear that the exports have not already been discouraged by the action which the Government have taken? I have seen it stated that the exports of India to China have diminished as a consequence of the action which has been taken. It would only be natural if that were so; but, if that is the case, I think it is certainly a question as to how far the Government are right in their prognostications. I hope the House will be fairly unanimous upon one point, and that is— that this matter must be looked into not only from the point of view of the people of this country, but examined as to how far it will have an influence on the population of India and on the prosperity of that country. Much as it is desirable to maintain a stable ratio of exchange, at the same time we must watch this experiment with great care, and see whether the imports from this country to India would be favoured or whether the exports from India to this country would be checked. The position seems to be this: The effect so far has been very much greater than anyone imagined. Neither in India nor in this country were people prepared to see the results of an experiment which certainly was based on no scientific principle, but which seemed only possible in the shape of a stop-gap. Nothing is more dangerous than a stop-gap if that stop-gap is to last over a certain period; and it appears the Government have been alarmed. Possibly their hand was forced in the matter, but they have embarked in a gigantic speculation.

An hon. MEMBER: No; a "corner" in rupees.

MR. GOSCHEN

Yes; a speculation in rupees. There can be no doubt about it. They may have borrowed, but let us call it by the right name. That is its right name. My right hon. Friend says it is a corner in rupees. The Government have got a certain number of rupees with which in the ordinary mode of business they would pay their gold liability to this country. The Government keep their rupees certainly, but they are speculating to be able to sell their rupee paper at a much higher price than they can get for it at the present moment. Surely that is a speculation.

An hon. MEMBER: There are the exports.

MR. GOSCHEN

Yes; but the exports must be such that in the year they will be able to sell the £10,000,000 as usual plus the £10,000,000 you have not sold this year. I will not call it speculation; I will call it any other name which does not imply what the right hon. Gentleman sees objectionable in the word "speculation." I say, as my right hon. Friend says, this may be the right course to follow, but it is a very highly experimental course, for which there is absolutely no precedent, and in no country of the world has any experiment of this kind been tried. It is said it has been tried in France, but France has not to pay £17,000,000 in gold, come what may —that is the difference between the case of France and that of India. Of course, that would make a difference. I do not wish to add more on the present occasion, but I wish to impress upon the House that this is not—as I fear the Government thought in the beginning—a Bill of an ordinary character, like previous Bills of the Indian Government for loans for railways or other specific objects. This is the first time that it has been proposed to make a large loan for the purpose of maintaining the exchange, and it is the duty of the House to examine the proposal on all sides; certainly not in any Party spirit. The right hon. Gentleman must be aware, so far as I myself have been personally concerned, I have been studiously silent with regard to expressing an opinion on the experiment, because I thought it ought to be fairly treated. In view of the serious consequences which have occurred, no Government can fail to see that we should not be doing our duty to India, to the exporters of Manchester, to the money market, or to the other interests involved, unless we invited the attention of the country to the great operations in which the Government is engaged. Before I sit down I should like to ask the Chancellor of the Exchequer on what day he can bring forward the Second Reading? I trust the right hon. Gentleman will do his best to conform to our wishes that the Report should be given speedily.

SIR W. HARCOURT

I will try to fix it for an early day.

MR. GOSCHEN

I further hope that the right hon. Gentleman will see that this matter is not brought on at the fag-end of a Sitting, but that he will put it as the first Order of the Day.

SIR R. TEMPLE (Surrey, Kingston)

In the very few moments that are left to me, Sir, I do not think it is possible for me—indeed, it would be impossible—to do justice to this great subject—a subject upon which I had the honour recently of delivering an address, in which I tried to support the action of Her Majesty's Government. I believe it would be found that, under very difficult circumstances, they have done the best possible, and that they have ample justification for their action. I do not want to enter into that justification now. But I may point that on the facts mentioned by the Under Secretary, and without going into argument, that the argument of the Chancellor of the Exchequer is well-founded, and that he has evidently been well-informed from an Anglo-Indian point of view. The real point is whether the Secretary of State would be justified in selling at any price. He could have sold at an embarrassing price; he could have sold at a price which would have had a very bad effect upon the Exchange; but, Sir, silver has been sufficiently damaged by many circumstances during the past few years. There is no doubt the Government have made a great experiment, and it has been carried out with the utmost prudence and circumspection, and I think it is important it should have the fairest possible play. But the circumstances are abnormal. From various causes, the exports from India to England have not been very favourable during the last few months. That has been the reason for the suspension of these Bills —the balance of trade is not in favour of India just now. That is owing to no action of the Government, but is purely owing to the operations of trade. According to the inquiries made—we will have explanations made to the House, I presume, why the balance is not in that direction; but there is no doubt, at all events, that there is a temporary revival of the ordi- nary balance of trade, and that is the reason why the bills are not saleable at the proper rate. I go further, and I say that the Government of India and Her Majesty's Government are justified, and even bound, at the present crisis not to embarrass the financial relations of the two countries by allowing the Council bills to be sold at disadvantageous rates. They should give their experiment a fair trial; the circumstances are temporary, and they will shortly be relieved. The subject is an extremely difficult one. I am full of the subject, Sir, but I shall not pursue it further to-night, and I shall simply do what I resolved to do, and that is to ask and entreat the House to suspend its judgment upon the facts before it.

Resolution agreed to.

Bill ordered to be brought in by Mr. Mellor, the Chancellor of the Exchequer, and Mr. George Russell.