§ Considered in Committee:—
§ (In the Committee.)
§ Resolved, That it is expedient to authorise the creation of a Colonial Loans Fund, out of which loans may, if authorised by Act of Parliament, be granted to certain Colonies; such fund to be raised—
- (a) by the issue of Colonial Guaranteed Stock, the dividends on which are to be paid out of the Colonial Loans Fund, and in default, out of the Consolidated Fund; or
- (b) by the issue of Bonds, the principal and interest of which are to be paid out of the Colonial Loans Fund, and in case of default, out of the Consolidated Fund.
§ That it is expedient to authorise the payment, out of the Consolidated Fund, of the sums necessary to meet the guarantee in respect of the Colonial Guaranteed Stock or Bonds, or to make good any sum due from, but unpaid by a Colony, in respect of the interest on any such loan; such sums, so far as not repaid out of the Colonial Loans Fund, to be repaid out of moneys to be provided by Parliament.—(Mr. Chancellor of the Exchequer.)
§ *THE CHANCELLOR OF THE EXCHEQUER (Sir M. HICKS BEACH,) Bristol, W.
The object of asking the Committee to pass this Resolution is to obtain its assent to the general principle of raising a fund out of which Colonial loans may be granted, although it will still be necessary to ask the assent of the House to a separate Bill before any such loan can be made. This matter was brought before the House last year, 416 and leave was given to bring in a Bill which, I think, generally met with a favourable reception, but objection was taken to one or two points of the Bill. It was argued by honourable Gentlemen opposite, and by others, that it was not fair to sanction these loans merely by a clause in the Public Works Loan Act. It was considered that that Act, relating, as it does, to loans made by the Public Loans Commissioners, ought not to include this class of loan, because the loans made by the Public Works Commissioners are practically made by their authority, and any Colonial loan would be proposed to Parliament by the Ministry of the day. The present Bill merely forms the machinery for raising the fund out of which loans to the Colonies may be made. It does not in any way authorise the granting of any loans out of that fund, and any loans granted out of that fund must be the subject of a special Bill, as is the case now, carried in all its stages through the House, and therefore the authority of Parliament will be exercised precisely in the way in which it has always been exercised hitherto. The great advantage of my suggestion is this, that if a loan fund of a large amount is raised, instead of separate loans of small amounts, a better market price is obtained, and that is to the advantage of the Colony, and more fully utilizes the credit of this country. Provision will be found in this Bill, as in the Bill of last year, for making full inquiry into the circumstances of the Colony, both by the Colonial Secretary and the Treasury, before any such loan is recommended to Parliament, and for requiring any Colony, on whose behalf a loan is to be recommended, to pass an ordinance providing for interest and sinking fund, and something in addition, out of which the expenses of the management of the Colonial Loans Fund might be borne: any profit arising therefrom to go to the Exchequer in order to recoup any possible loss. The fund will be managed entirely by the Crown Agents for the Colonies under the direction of the Treasury. They will invest from time to time the repayments, and the whole of the financial arrangements of the Bill will be found to be more completely under the control of the Treasury than 417 was the Bill of last year. If I now receive leave to introduce the Bill, there will be a full opportunity afforded for discusing it upon the second reading. I hope, therefore, I may be allowed to introduce the Bill.
§ MR. BUXTON
I thought it my duty at the end of last Session to object to the Bill then introduced, and I did so, in the first place because it was so very late in the Session, and we thought that the Bill was in violation of the promise given by the Leader of the House, that no opposed Bill should be then introduced; and, secondly, on the ground that it was mixing up this matter of Colonial Loans with the Public Works Loan Act in a way which we thought was not satisfactory. Thirdly, we did not think that there was sufficient guarantee for the Treasury in regard to the control of the resources of the Colony to whom the loan was made. Practically all of these objections to the Bill seem to be removed by what has fallen from the Chancellor of the Exchequer. I understand him now to say that in regard to any loans made to a Colony under this Act, the loans will be made by a separate Bill, and that therefore this House will have an opportunity of discussing the merits of the Bill, the loans it intends to grant, and the reasons for which these loans are given. That provision removes the principal objection which I had to the Bill last year, and the announcement of the right honourable Gentleman that the Treasury have arranged for greater control in regard to these loans when they are given, removes the second serious objection which I had to the previous Bill. I hope that this Bill does not mean that we are going to advance money lavishly on a system of Colonial loans; I trust that when a loan is given it will be taken care that we have not only complete control in regard to that matter, but greater control over the Colony in regard to other matters by these loans than we have at present. Considering the very satisfactory explanation of the Chancellor of the Exchequer, I am very glad that he has introduced the Bill.
§ MR. LOUGH
I should like to know why the Bill is brought in now. I understand the right honourable Gentleman the Chancellor of the Exchequer 418 has not any particular Colony in his mind to which he wishes to make a loan. Will it not be well for us to wait until some Colony makes application for a loan? I have not been able to gather from the remarks of the right honourable Gentleman why he is seeking this power now if he does not require to use it at once. If he does require to use it at once, I shall be glad if he will tell us how he intends to do so. I quite agree with what my right honourable Friend has just said on the point of security, but I am still at a loss to know why there was any such pressure for this particular Bill at the present moment.
§ *THE CHANCELLOR OF THE EXCHEQUER
I am anxious to form a fund to enable arrangements to be made to meet any demands which Parliament may be called upon to sanction. There may be loans asked for during the present Session, but I am not in a position to state whether that is so at present, but if it happened to be so it would certainly be very advisable that a fund should first be set up as proposed by this Bill. Before a loan is made the proposal will come before Parliament, and full explanation will be given as to the reasons why it is asked for. In reply to the right honourable Gentleman, I do not anticipate a large extension of loans to Colonies, but my object is to see that, when such an advance is sanctioned, it shall be obtained on the best terms possible in the market, and this is the object of the Bill.
§ Resolution to be reported To-morrow.
§ House resumed.