§ Order for Second Reading read.
§ Motion made, and Question proposed, "That the Bill be now read a second time."
§ MR. CALDWELL (Lanarkshire, Mid.)said that when the Bill was before the House in its earlier stages the Secretary of State for India promised to make a statement in regard to on the Second Reading, but now when they got to the Second Reading no statement was made. That was exactly the way the House was always treated when a Bill was introduced in Committee. It passed from one stage to another, but there never seemed to be a time when it could be discussed at all. He did not think it was fair to treat the House in that way. He had always said that they should ever allow a Bill to pass its first stage without discussion, because they did not know that there would Le an opportunity for discussion on another stage. In this case the Secretary of State proposed to raise by loan a sum not exceeding £20,000,000. The House certainly expected that some explanation would be afforded why this large amount was to be raised. It was a very much larger loan than had been granted on former occasions. The Secretary of State had informed the House that one or two millions of the 1901 loan was still unexpended.
The Bill proposed to raise the money for the construction, extension, and equipment of railways in India. Four-fifths of the railways there were under the direct financial responsibility of the Government, and they also exercised a considerable amount of control in the remainder. There was no indication, for example, given in the Bill as to the nature of the transactions in the Bombay-Baroda line, nor as to the terms and conditions under which the purchase was to be made. He did not understand how it was that the Secretary of State was not able to give them the terms and conditions on which 1040 the purchase was to be made. The amount at which it would work out might be a different question, but the-principle on which the transaction was to be carried out was a matter on which there could be no possible doubt. At the termination of the Bombay-Baroda line there was the narrow-gauge railway to the North-West of India. That narrow-gauge railway originally belonged to the State, and it was worked under agreement with the Bombay-Baroda Company, How was it to be worked in future? Was the lease to be renounced in consequence of the purchase of the Baroda line? They had no information about these matters. The Government wanted to borrow £20,000,000, and the House with, practically no information on the subject was expected to pass this Bill without a word being said in explanation.
It had been brought to his notice that there was a ruinous competition going on between the railways and the steamboat services in India. That had been frequently brought before the India Office, and probably the Secretary of State knew all about it. Steamboats were necessary on the Ganges and other rivers, and the complaint was that they were being unfairly competed against by the Government railways. It had been pointed out that while this competition might be very effective in putting down the steamboat traffic, the result in the long run would be that the districts served by the steamboats would suffer.
Perhaps the Secretary of State would tell the House what was the total amount of debt in respect of Indian railways. He himself would say that roughly it amounted to about £250,000,000. The return for Indian railways was nearly 5 per cent., and if the £250,000,000 spent on the South African War, which was money thrown away, had been spent in India what an enormous development there would have been to the trade of that country. That was the only way in which the country could realise the extent to which £250,000,000 could go in reproductive expenditure. He could wish some information as to-the extensions of railways on which these £20,000,000 were to be spent.
This was also the time to know how the new Railway Board in India was working. Formerly the railways were managed by one of the Public Works Commissioners, 1041 bat last year a special and separate Railway Board for India was appointed. There could be no doubt that such a board would be of considerable advantage. It consisted of three practical men, and, whilst the financial arrangements were still to remain under the control of the Secretary of State for India, all other management was to be decentralised, and the Railway Commissioners were to have the practical working of the railways and the arrangement of all questions of freight and the localities to be benefited. The board was not located at Calcutta or Simla, but travelled over the whole system with a view to superintend its development. When the Railway Bill was before the House he had taken a strong objection to having new Commissioners; but owing to outside pressure and the statement by Lord Curzon that it would be of great advantage to India the Bill was allowed to pass as an unopposed measure. Unquestionably it would be a benefit to the Board to have the whole control of the railways and to work them as a unit, so that the system might be developed all round. That was a point on which he would like a little information from the Secretary of State for India. He might say he threw out these hints to give the right hon. Gentleman some information on which to base his Second Reading speech.
He noticed that this Bill was one with references, and that it brought in a great many sections of the Act of 1893. He did not know whether the Secretary of State knew what these sections were, but he thought it was necessary that the House should have some knowledge of them before the Bill passed. If the right hon. Gentleman was not going to explain what these clauses were it would be necessary for him to do it. There was a clause dealing with the method of raising money, which was practically vested in the Secretary of State for India. That high official might raise the money by any method, at any times, and at any rate of interest he thought fit. He might raise the money issued by bonds under the hand of a member of the Council, countersigned by the Secretary of State; by debentures, by 1042 bills, or by the issue of capital stock. As a rule, one half of the money was raised in this country and the other half in India, but for the money raised in India the Indian Exchequer paid 3½ per cent., while the money raised in this country was paid only 3 per cent. That difference of ½ per cent, was paid, so it was said, to give the people of India an interest in the debt of India. He thought that was not a satisfactory explanation. It did not at all follow that the part of the loan issued in India was taken up by the people of India. Moreover, the Indian stock bearing 3½ per cent, might be transferred to persons in this country; there was no restriction that the stock should be held by the natives of India. The result was that, after all, there was no security that the money was being invested by the people of India. It seemed to him, therefore, that the Indian Government should simply borrow the money required wherever it could be got at the cheapest price, and he did not see why the Indian revenue should be saddled with that additional ½ per cent. There was a clause which stated that the Commission which dealt with the payment to the East India Company of the composition in lieu of stamp duties should pay composition in respect of the bonds to be raised under this Act. The Secretary of State, he hoped, would be able to tell the House what was the amount for which the East India Company compounded for the stamp duties. As the loans increased obviously the composition would increase also, and what he wanted to know was what was the amount originally fixed, and what it would reach now. These were only a few of the questions which occurred to him on which information should be given by the Secretary of State. There could be no doubt whatever that the railway system was of the utmost importance to India, not only for strategic purposes, but for fighting famines, and for the purposes of trade and locomotion generally. He would like to know whether it was the intention of the Railway Board to utilise the Indian railways in developing the steamboat and other traffic on the great rivers of India. These waterways should be developed in every possible way, because carriage by them was cheaper and more profitable to the people.
§ MR. WYLIE (Dumbartonshire)said there was a very general impression among hon. Members, derived principally from speeches by different Secretaries of State, that the railways of India had been very well managed. On the contrary, the working and administration of railways in India could not be considered at all satisfactory. The Indian Government in 1902, quite conscious of this fact themselves, appointed a Commissioner of great experience and ability, Mr. Thomas Robertson, to make inquiry, and that gentleman reported very fully on the subject. Mr. Robertson stated that the conclusion forced upon him was that root and branch reforms in the railway system of India were necessary and would be productive of lasting good; that the development of railways in India should not be hampered in the way it had been, and that they must be wrought more on the lines of commercial enterprise than in the past. The present Secretary of State had, he believed, displayed great administrative ability in initiating many important reforms, and a Railway Board had been appointed composed of a chairman and two members, which would have the very best result in perfecting the railway System of the country. It was in the financial management of railways in India, he thought, that the greatest mistakes had been made, and private enterprise had been almost entirely crushed out. Mr. Robertson remarked in his Report that the only lines which the Government were prepared to allow private companies to take up were those which were not expected to be profitable to the State.
The new departure taken for the raising of the £20,000,000 would, he thought, give the Government a solid basis on which to work. With the large sum of £20,000,000 at their disposal, they would be able to proceed with their works upon a thorough and systematic basis with great advantage the country. On the whole it was with great pleasure that he heard the proposal, which, ha believed, would leave a greater surplus of Government Funds to be devoted to the important work of irrigation. He quite agreed with what the hon. Member for Mid-Lanark had said with regard to the higher rate of interest to be paid for that part of the loan to be raised in India. When the Indian Currency of 1044 1897 was passed, one of the principal objects which was brought before the House by the then Secretary of State for India was that the financial liability of India should be raised to the same level as that of this country. On the contrary, they found that it was going to be handicapped to the extent of ½ per cent. He did not see the necessity for that at all. If British money was ready to be applied to India at 3 per cent., why should they not raise the whole £20,000,030 from the capitalists of this country? But the raising of a loan of £20,000,000, whether at 3 or 3½ per cent, would be of the greatest advantage to India, and he hoped that in consequence a much larger percentage would be voted to irrigation works than previously. Far to little British money had been spent on railway extension, but ever so much less had been used in connection with irrigation works. He would press upon the right hon. Gentleman the great necessity that existed for extending the irrigation works. Those schemes had been thrown into the background by the railway schemes; but now that the railways were being properly provided for he hoped that the Secretary of State for India would see that the much more necessary irrigation schemes got the required amount of capital devoted to them, which would be even more beneficial to the population of India than the money spent on railways.
§ SIR SAMUEL HOARE (Norwich)expressed his approval of the Bill. It had, he said, been his privilege to be associated with one of the largest railways in India. He had been chairman of it from the very commencement, and he was perfectly astonished at the work which the railways did in India. He re-echoed the words of his right hon. friend when, speaking the other evening, he said how much India owed to the railway system, and how important it was for this country to do all it could to further that system. He remembered going out to the opening of the railway with which he was connected, and meeting the Viceroy in the middle of what was then the jungle, and it was astonishing now to see what the railway had done for that district, and the immense amount of traffic which it carried. He felt that not merely the 1045 present Government, but past Governments also, had done a very great work for India in furthering the development of the railways. He was glad the Bill had been introduced, and he should be glad to see the floating debt on the Indian railways made more of a funded debt, because those associated with the railways knew how, from time to time, they had large amounts of debentures falling due which sometimes they could renew favourably and which sometimes they could not. It would be better if the floating debt were made a regular funding stock for the Indian railways. He considered it would be an advantage to India if the natives had an opportunity of investing their savings in their railways. He thought it would be a grand thing if they had that opportunity of taking a deep interest in a matter which had done so much for them; and he did not think there would be any great loss if they did encourage them to put their savings in the railways.
He expressed his appreciation of the great advantage of the formation of the new Railway Board. The railway system in India had got beyond that organisation which was satisfactory and which answered in its earlier days; something larger and more comprehensive was required, and he was glad indeed that there was now a Railway Board in India. In Mr. Upton, the chairman, they had an authority on Indian railways to whom all would listen with satisfaction. He could speak very highly of Mr. Wynne, who was agent and chief engineer of the line with which he was connected, and with the gentleman from England they would have the advantage of experience gained not necessarily on the Indian lines. He therefore looked for the greatest advantage from the formation of the board. All who had listened to the statement of the Secretary of State for India must have felt much satisfaction that he had taken the view that the capital was safely invested, and that it was producing so much income that there was no cost whatever. That was a satisfactory state of things of which they ought to be proud, and he congratulated the right hon. Gentleman on being able to make such a statement. He hoped that in future 1046 they would hear that the railways were earning sufficient to pay all the interest for which the State was liable and to bring in a large amount for the country.
§ THE SECRETARY OF STATE FOR INDIA (Mr. BRODRICK, Surrey, Guildford)said that the hon. Member who had introduced the debate had shown considerable knowledge of the subject, and while he had asked a good many Questions, he had supplied most of the Answers. It had been forced upon him that there really was no man so competent to speak on the Indian railway system, and he would, no doubt, when the proper time came take up a position on that bench and be able to speak with authority. He endeavoured on the previous occasion to give the House the figures which the hon. Member desired, and he went as fully into the question of the purchase of the Baroda line as the hon. Member himself would have done had he been in his place, and he had no more to say upon the terms. They might know, but they were bound not to say. They might buy the railway perhaps by the allocation of stock, or perhaps by the payment of annuities; but until the method of purchase was settled the whole question must remain a secret. The House had with a unanimous voice on the Indian Budget declared its strong conviction that the time had come to pursue a more generous and not necessarily quite so cautious a policy in developing Indian railways; and, having used up the money previously voted by way of loan, they now required a large margin of £8,000,000 or £10,000,000 with which to carry out those great operations, the benefits of which, in safeguarding the country against famine and in creating prosperity, were recognised on both sides of the House. They were not asking for anything extravagant.
His hon. friend had stated that irrigation had fallen into the background. He could assure him that that was not the case. Two very large projects had been started during the past year, and, although irrigation was necessarily bounded by certain limitations he could promise the hon. Member that those schemes would not be put in the background in 1047 consequence of any money spent upon the railways.
He would like to deal with two points to which the hon. Member had drawn his attention. In the first place, he had asked him how the new Railway Board was getting on. The speech of the hon. Member behind him had given the general view. The railway system had grown beyond the mere departmental control previously exercised over it, and the new Board had already taken up some of the most urgent questions as to the provision for third-class traffic, the equalisation of railway rates, the general co-ordination of the railway system, and the effect of Government competition upon private enterprise. The Board had sat now for several months, and he could vouch that it was doing good, sound, and effective work. The hon. Member had also asked him with regard to the rupee loans at 3½ per cent. as compared with the sterling loans at 3 per cent. That might appear to be an anomalous state of things, but the first thing they had to consider in India, as in every other country, was the care of the people, to give them to the largest extent possible opportunities of investing their money in the securities of the country. He wanted, and it was necessary, to interest the people of India in their own securities. They had had under consideration the question of rupee loans, and they were not otherwise than alive to the distinction between 3 and 3½ per cent., but whatever might be the ultimate result of their deliberations, the state of the money market for some years past had not been such as to justify any very large transactions or any large methods of conversion, but, if they would give them a little time, he thought they would be able to show a good return and that they were doing heir best for the community. The Bill was neither novel nor extensive in its scope, and he was sure it would be gratifying to the people of India and encouraging to those who were pressing forward a policy accepted by all parties, if they were allowed to make progress with it.
§ SIR HENRY FOWLER (Wolverhampton, E.)expressed ndebtedness to the 1048 hon. Members who had elicited the right hon. Gentleman's interesting statement, which he believed would enable them to render the support for which he asked. He himself took particular interest in this question, because it was eleven years since he had the pleasure as well as the duty of advocating a similar policy to the present in the India Council. He did not then anticipate that in so short a time so much progress would have been made, but he was bound to say that the India Council in London and the Indian Government had during the last ten years proceeded, if slowly, very surely, and the Indian railways had now reached a point at which they not only paid something over 5 per cent, on the capital invested, but were giving a large contribution, increasing at a great rate year by year, towards the general revenue of the country. There ought not to be any question of competition between irrigation and railways. The Government of India had never neglected irrigation, and he was satisfied that they were doing all that they could in the matter. After hearing the speech of the right hon. Gentleman, and after reading the very clear exposition of the irrigation history which Lord Curzon gave at the meeting of the Legislative Council some two or three months ago, he had formed the opinion that the Government of India were doing their best to carry out this work. He thought the appointment of a Railway Board would prove an economical and at the same time a very judicious administration of the railway system, and he hoped the House would put out of sight all Party considerations and support what he believed would prove a bold, progressive, and successful policy.
§ MR. FIELD (Dublin, St. Patrick)said the system of co-ordination and nationalisation of railways might be adopted in Ireland with great advantage. The railways in India were a national asset and formed a kind of security into which money could be put by the natives, and they developed the trade and commerce of the country. He thought an application of the same system would be very useful in Ireland. He congratulated the right hon. Gentleman on approaching the matter in a broad national spirit; and 1049 he trusted that the administration of the Railway Board would help India to emerge from poverty. He did not rise to oppose the Bill; on the contrary, he welcomed it; though he thought it should have been introduced earlier to have enabled them to discuss the details. He rose only in order to drive home to the House that what could be done ought to be done much nearer home.
§ MR. BRIGHT (Shropshire, Oswestry)said it did not seem to him advisable that in the present state of the money market the Government should have the opportunity of putting out further loans than their immediate needs. He therefore regarded the large margin of £9,000,000 as somewhat dangerous. He agreed, however, with the idea of raising some of the money in India. Although they might have to pay something more for it, it was exceedingly desirable that as much money should be raised in India as possible, quite apart from the advantage it would have of interesting the people themselves in the railways. He toped that the money market would be relieved by some statement that it was not likely that the full amount would be raised at the present moment.
§ MR. WEIR (ROSS and Cromarty)said he thought the right hon. Gentleman would have saved a great deal of time if he had in the first instance explained the Bill. The Government had been complimented on the way they managed affairs in India. The railways, however, were not well managed. He had not travelled on the Bengal and Nagpur Railway, but he had travelled on the other great railways, and he had never witnessed more disgraceful treatment of third-class passengers. They were shamefully bundled about by the police, and packed in carriages like herrings in a barrel. He knew that Lord Curzon had noticed this state of affairs, and it was one of the things which caused him to instruct Mr. Robertson to go to India and make a Report. The railways, no doubt, were splendidly managed from the shareholders' point of view, but they were very badly managed indeed in the interests of the natives. He hoped things would be changed and 1050 that third-class passengers would be very differently treated in the future. Ha agreed with his hon. friend that it was a bad time to go to the money market for additional money, and however much they desired to see railway extension in India, they might pay too dearly for it. The right hon. Gentleman had given no indication whatever as to what the "other purposes" were, and some explanation on that point was certainly required. The high rate of interest at which this borrowing was being carried out was absurd. It would be much better for the sake of India that the right hon. Gentleman should raise his money in the money market here and so reduce the tax on the people of India for interest. He was deeply disappointed that the Secretary of State had not referred to the points raised by the hon. Member for Mid-Lanark, who had devoted considerable time to his researches, and was entitled to some reply.
§ MR. BRODRICKmade a brief statement, which was inaudible in the Press Gallery.