HC Deb 23 July 1900 vol 86 cc865-6
MR. GORDON (Elgin and Nairn)

I beg to ask the Secretary of State for India whether, in calculating the rate of interest under the contract powers for paying off (by annuities) the shareholders of the East Indian Railway Company in 1880, the Eastern Bengal Railway Company in 1884, and the Scinde Railway Company in 1886, the agreed results (namely, £4 6s., £3 17s., and £3 16s. 6d.) were the outcome of the same methods of interpretation as explained before a Committee of the House of Commons in 1879 by Sir Louis Mallet, Mr. Danvers, and Viscount Cranbrook.

* LORD G. HAMILTON

The East Indian Railway was bought under a special arrangement outside the contract which the Select Committee of 1879 (of which I was chairman) agreed to, on the † See page 465 of this volume. understanding that the rate fixed was not to form a precedent. In determining the terms of subsequent purchases under the Acts of Parliament the other two railways were bought under the contract, and the rate of interest was determined by the governor and the deputy-governor of the Bank as prescribed by contract. I have no knowledge of the view they took of the evidence given before the Select Committee of 1879.

MR. CORDON

May I ask whether the same method was followed on the three occasions?

* LORD G. HAMILTON

I should imagine not, because the Committee of which I was chairman distinctly laid it down that sanction was only given to the exceptional purchase in 1879 on the understanding that it was not to form a precedent.

MR. GORDON

I beg to ask the Secretary of State for India whether the rates of interest agreed to by the Indian. Government on the termination of the contracts of the East Indian, Eastern, Bengal, and Scinde Railway Companies during the past twenty years—namely, £4 6s, £3 17s., and £3 16s. 6d. per cent. —represented the average rate of interest received by persons who invested in the three India sterling stocks during the two-year period relating to each of those three contracts.

* LORD G. HAMILTON

As I have before said, the purchase of the East Indian Railway stands on quite a different footing from those of the Eastern Bengal and Scinde Railway Companies, and was not based on the average rate of interest received by investors. I have no knowledge of how the Governor and Deputy Governor of the Bank of England calculated the rate of interest for the annuities of the other two purchases.

MR. GORDON

Will the noble Lord make inquiry?

* LORD G. HAMILTON

According to. the contract, the Governor and Deputy Governor are given the power of deciding what the rate is. I think it would be most improper for the Secretary of State to interfere with their discretion in any way.