§ Order for Second Reading read.
Motion made and Question proposed—
That the Bill be now read a second time.
§ MR. SYDNEY BUXTON
said that last Session, in consequence of the objections he raised to this Bill as it then stood, the measure was withdrawn, but as far as he understood it, those grounds of objection had been removed from the present Bill, and he should no longer oppose it. The last Bill practically took the control of the matter out of the hands of the Mouse, and did not give sufficient control to the Treasury over the finances of the colonies to justify the granting of the loans. It was proposed, not that there should be a separate Bill for each loan, but that the proposals should be hidden in the annual Bill of the Public Works Loan Commissioners. But, although those blots had to a certain extent been removed, he still failed to see that there would be complete control on the part of the Treasury or Colonial Office over the colonies to which the loans would be advanced. The Colonial Secretary had told them that no money would be advanced except where full control was given to the Colonial Office, but that surely meant the abrogation of the Constitutions of the colonies borrowing. With regard to Dominica and Antigua, that had practically occurred, but there were to be loans to Barbadoes and St. Vincent to the extent of about £50,000. Would these cases come under this Bill?
§ MR. SYDNEY BUXTON
said that in that case his objection was rather greater than before, for last year the Chancellor of the Exchequer stated that the West 540 Indies would not come under the provisions of the Bill.
§ MR. SYDNEY BUXTON
said the Bill was introduced last year on the understanding that the West Indies would be excluded, but now it was proposed that the first two loans under it should be to colonies which could only be described as semi-bankrupt colonies. He wished to enter a caveat in regard to this matter. They had some suspicion that the main object of the Bill was to render more feasible the granting of loans for the purpose of bolstering up some of our semi-bankrupt colonies. That certainly was not the desire of the House of Commons. Further, he desired to know if the Bill would be utilised for the general consolidation of outstanding loans of Crown colonies. That was an object he would like to see attained, as many colonies had to pay high rates of interest, and the Bill would enable them to be placed on a better fiscal system. Some idea was entertained of making use of these loans for the investment of Savings Bank funds, but if there were only to be loans of £50,000 here and there that would be no assistance, seeing the large amount the Savings Bank had to invest. He now wished to ask if the House of Commons would have by a separate Bill full control over any loan proposed to any colony and if the powers would be used for the consolidation of existing Colonial loans; also would there be efficient financial control on the part of the Colonial Office and the Treasury over the different colonies to which the loans were made?
§ * SIR SAMUEL MONTAGU
said he considered the Bill an exceedingly good one, bearing in mind that it recognised our responsibility towards the Crown colonies, the finances of which were absolutely under our control. He hoped that no colony of ours would fail to meet its engagements. He assumed the Bill did not apply to self-governing colonies?
§ * SIR SAMUEL MONTAGU,
continuing, said that for a Crown colony to be in default would be something like a crime. 541 He could not accept the description of his honourable friend of any colony as semi-bankrupt, for the Imperial Government could not deny its responsibility. The Bill provided for making the necessary advances to Crown colonies to rank after existing loans, and they would therefore be of the nature of a second mortgage, and existing loans would be a first mortgage and would disappear by sinking fund arrangements or other means. An offer should be made to consolidate existing loans, putting them on a sound financial basis, and converting them into Government securities, suitable for trustees, with a saving to the colonies of, £40,000 or £50,000 a year. These colonial loans would then offer a good form of investment for Savings Bank funds, a subject on which he was glad to know the Chancellor of the Exchequer was about to institute an inquiry.
§ MR. DILLON
said he could not support the provisions of this Bill. He scouted the idea that a Crown colony could not be semi-bankrupt. It was well known that many of them were, and it appeared to him that the Bill was calculated to facilitate the borrowing of money by these unfortunate colonies. Clause 6 contemplated that provision should be made for the case of these colonies. Colonial catastrophes might and would arise, making payment of liabilities impossible, and a claim would then lie made on the Consolidated Fund under the clause. The House ought to be invited to consider the measure of responsibility it undertook in accepting this Bill. He supposed they would be told that it was in the interest of the spirit of imperialism that the Mother Country should take over responsibility for the liabilities of the Crown colonies, but he thought we ought at least to have some statement of the ultimate expense of the operation. He doubted if the proposal would benefit the colonies, while it was calculated to inflict a future liability on this country of the extent of which they had no definite estimate. He particularly objected to Sub-section 2 of Clause 7, and to the policy it embodied of lending the guarantee of this country to any British Protectorate or protected State. This provision was too wide, because it would include Uganda, the Soudan, East Africa, and Rhodesia. Where would they stop? Would all the West African States come 542 within that category? He was by no means friendly to the principle of the Bill, and he should strongly oppose some of its provisions in Committee.
§ * SIR M. HICKS-BEACH
I do not think the honourable Member quite appreciates the fact that no loan can be made under the provisions of this Bill. It merely provides financial machinery through which loans can be made if the House should assent to a separate Bill, which would have to be introduced, with regard to any such loan. It is impossible, therefore, that there can be a wide extension of loans throughout the Colonies and the Protectorates, such as the honourable Member supposes, without the sanction of Parliament. Replying to the honourable Members for Poplar and Whitechapel, as to the consolidation of the loans of Crown colonies, I do not think the House has always remembered the responsibility which we already bear on behalf of those colonies. It is quite true that we do not in any way guarantee their loans; they borrow on their own credit, and it is often very good. It is unfair to describe Crown colonies as bankrupt or semi-bankrupt colonies.
§ * SIR M. HICKS-BEACH
The credit of some of the West Indian Colonies is good at the present time, and taking the Crown colonies generally, money might be lent to them under the system proposed by the Bill on as good security, as a rule, as can be got anywhere else. The House should bear in mind this point—if a Crown colony becomes bankrupt or semi-bankrupt, the ultimate responsibility now lies with Parliament and the country. Therefore the increased responsibility we may incur through the operation of this Bill and the Bills which might follow it authorising separate loans, is not so great as the honourable Gentleman supposes. The question of the consolidation of loans has occupied my attention, and I hope it may be effected to some extent under the provisions of the Bill. But we cannot consolidate existing loans unless those who hold them are willing to accept reasonable terms, and it is possible, judging by the price of: the loans in the market, that they may 543 prefer to keep their existing security until the loans are paid off. The Bill will enable the Government to utilise funds which at present they have great difficulty in utilising, and which, I believe, will be utilised through its provisions on ample security, producing great benefit to this country as well as to our colonies.
§ SIR JOHN LENG (Dundee)
said he believed that with the safeguards to which the right honourable Gentleman had referred, there need be no apprehension that the Government or Parliament would wantonly and recklessly squander the funds committed to their charge. With regard to Savings Bank funds he would much rather favour some means of investing them in a manner calculated to be of advantage to the colonies, than consent to hastily attempt to reduce the rate of interest on the deposits, or make any great change in the amount allowed to be deposited in any one year. It was a mistake to suppose that a large percentage of the depositors consisted of persons who might properly invest their money in other ways, for the number of deposits exceeding £100 was comparatively small. They ought to encourage depositors to invest their money in the Savings Bank, and it would be unfortunate if, when he had reached a total of £100, the depositor found the door closed to him. It was also desirable to encourage useful works in our colonies, and on the whole he thought the Government were to be commended for having brought in the Bill.
§ Question put and agreed to.
§ Bill read a second time, and committed for Monday next.