HC Deb 18 July 1905 vol 149 cc1162-4

Resolution reported— That it is expedient to authorise the Secretary of State in Council of India to raise in the United Kingdom on the security of the Revenues of India, by the creation and issue of capital stock, bonds, debentures, or bills, a sum, not exceeding £20,000,000, for the following purposes:—

  1. (a) The construction, extension, and equipment of Railways in India by State Agency or through the Agency of Companies.
  2. (b) The repayment of the principal of any bonds or debentures issued by any such company under the guarantee of the Secretary of State.
  3. (c)The discharge of any obligations incurred by the Secretary of State by reason of the purchase of any railway or the determination of any contract from or with such company."

MR. CALDWELL (Lanarkshire, Mid.)

asked the Secretary of State for India to give some explanation with regard to the £20,000,000 which it was proposed to borrow under this Resolution. If he did so the progress of the Bill might be promoted. He noticed that the Resolution authorised the raising of £20,000,000 in the United Kingdom upon the security of the revenues of India. He supposed that the ordinary rule would be followed and half the money would be raised in India. He assumed that it would not be necessary to have a Resolution of this House in order to raise part of this loan in India. If half the money was raised in India it would be raised at 3½ per cent., whilst if raised in be is country the interest would be 3 per cent. In the year 1903–4 the Government got more money in this country at 3 per cent, than they got in India at 3½ per cent. They might affect a saving to India by getting the whole amount at 3 per cent, in this country, and he therefore wished to have an explanation from the Secretary for India upon this point. If the security was the same, India should not be burdened with 3½per cent, unless there was some special purpose to be served. Some of this money was for the purpose of taking over the Bombay - Baroda line. He understood that the policy of the Government was to extend the railway system in India, and that was a policy which was approved of upon both sides of the House. He hoped that upon the Second Reading the right hon. Gentleman would give then a full statement of the purposes for which this loan was required and more particulars about the extensions. As this country had practically the management of the affairs of India, it was necessary to show that when matters came before this House affecting India they received some attention instead of being passed without anything being said about them.


said the money was to be applied to railway purchase and railway construction in India; and spread over the whole of the railways in India it gave a capital invested at the rate of neatly 5 per cent. That was a position to which he thought no other country in the world could afford a parallel. It was true that a rupee loan in India could only be raised at 3½ per cent.; but the Government had adopted the principle that money should be borrowed as largely as possible in the country where it was to be expended. That was the justification for paying a higher rate of interest in India than was paid in Great Britain. It was imperative that they should have this additional borrowing power at the earliest possible date, because the greatest object to be attained at present was the development of the resources of India. He hoped the House would confirm the decision of the Committee.

MR. SAMUEL SMITH (Flintshire)

approved of the policy of borrowing a portion of the money in India.

Bill ordered to be brought in by the Chairman of Ways and Means and Mr. Secretary Brodrick.