§ Considered in Committee.
§ [Mr. HARDY (Kent, Ashford)upon the Motion of Mr. A. J. Balfour, took the Chair as Deputy Chairman.]
§ (In the Committee.)
§ Motion made, and Question proposed, "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—
- (a) The construction, extension, and equipment of railways in India by State Agency or through the Agency of Companies.
- (b) The repayment of the principal of any bonds or debentures issued by any such company under the guarantee of the Secretary of State.
- (c) The discharge of any obligation 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. Secretary Brodrick).
§ MR. CALDWELL (Lanarkshire, Mid.)thought that in reference to a proposal of so far-reaching a character some explanation ought to be given by the Secretary of State. The Committee had no knowledge of the terms of the Resolution except by hearing it read from the Chair, and under such circumstances it was impossible adequately to comprehend its import. It was the more necessary that a, statement should be made on the present occasion, since, under the Standing Order recently passed, the Report stage could be taken after midnight, which meant that, 1477 practically only in Committee could there be any real discussion. It was true that there would be a Bill with its various stages, but the procedure connected with the introduction of the Resolution in Committee of Ways and Means had been devised in order that Parliament might adequately discuss such matters before sanctioning the expenditure. In the discussion on the Indian Budget, the right hon. Gentleman stated his policy with regard to railways, and he would admit that Members on the Opposition side had shown every desire to co-operate with him. It had been said that they got too little time for the discussion of Indian affairs. Now they had a good opportunity of discussing this section of Indian affairs, and it would only be consistent with the position they took up on the Amendment moved when going into Committee that they should now take an intelligent interest with regard to this proposal before the Committee. No doubt the Secretary for India would be able to explain the policy he had in contemplation, and possibly he might be able to give them some very good reasons for the step he was now taking. They wished to know exactly what railway development he had in contemplation. Surely he could not be asking for this Vote of £20,000,000 without having thought out the whole scheme. He assured the right hon. Gentleman that he would get his proposal through all the quicker if he would give them a full statement of his policy, and how he was going to develop it. On the other hand, if he simply gave them a few platitudes instead of a full explanation he could hardly expect to get his proposal through without some opposition.
§ THE SECRETARY OF STATE FOR INDIA. (Mr. BRODRICK, Surrey, Guildford)said the hon. Member opposite had every right to ask for an explanation, and had he anticipated that the House would have desired at this stage to know the precise purposes of this loan he would have been prepared with a fuller statement. It was already within the knowledge of all Members who took an interest in Indian finance that India had a large number of railways worked by companies whose charter provided that when time had been allowed them to obtain the 1478 profits to which they were entitled the Indian taxpayers should resume their rights and claim their share of these profits. The time had arrived for taking over one or two undertakings. There was a loan now running from which the ordinary borrowing of the Government of India could be made for the extension of railways. The last loan was raised in 1901, and there was a previous loan in 1898. The present loan was for a larger amount than on previous occasions, because it was now time to purchase the Bombay and Baroda Railway.
§ MR. CALDWELLThen why do you not go into the general details of it?
§ MR. BRODRICKsaid he could not give details, nor would it be desirable to do so. A margin was taken for the continuance of the policy of railway extensions, on which so strong and favourable a verdict was pronounced by both sides of the House the other evening. He had no desire to keep anything back. The proposals involved about 1,000 miles of railways each year and an expenditure of £5,000,000 or £6,000,000. They proposed to work upon the lines which he indicated to the Committee two evenings ago. Their desire was to give India such advantage as British capital could give in the prudent development of its railway policy, and he did not doubt that when the Bill was before the House it would receive the general assent of both Parties.
§ MR. BUCHANAN (Perthshire, E.)asked the Secretary of State for India to supplement his statement by one or two further particulars. He wished to know what was the amount of unexpended capital for railway purposes and the proportion of the £20,000,000 to be spent on the purchase of the Bombay-Baroda Railway and on further extension of railways in India. He allowed that the House generally was in favour of the railway policy of the Indian Government, and that it had proved on the whole profitable both financially and from a political and economical point of view; but they should be assured that a sufficient amount of money was included in this sum for the further development of new railways in those parts of the country which were liable to famine. From the 1479 terms of the Resolution it appeared that there were other purposes to which this loan was to be applied. What were these purposes, and did the Government contemplate the purchase of other railways?
§ MR. BRODRICKsaid the sum remaining over from the loan of 1898 at the time the Bill was drawn was £1,000,000, and from the loan "for the service of the Government of India" generally £7,400,000. That was, of course, subject to the charge for construction of railways really commenced, and for which the money had not been actually borrowed when the Bill was drawn. The Bengal Central Railway Company as well as the Bombay-Baroda and Central Indian Railway had come into contemplation this year for purchase. The Southern Mahratta Railway, the Madras Railway, and others could be purchased in the future, although it had not yet been indicated whether the Secretary of State would do so. The other purposes which the loan covered were general railway purposes.
MR. GIBSON BOWLES (Lynn Regis)complained that the Committee were again in the serious position of discussing they knew not what. This always happened now in money Committees. The old practice was not to make a Motion which would fetter the House until the subject-matter had been fully explained and discussed. A practice had grown up of dealing with enormous sums of money upon a proposition read from the Chair which few Members heard, and still fewer understood. Upon this proposals were passed through Committee involving large sums of money. In the present instance the Resolution involved no less a sum than £20,000,000, and very few Members of the Committee could repeat the statement to which they were asked to assent. He had often appealed to Ministers when they brought forward Resolutions of this kind to have a few slips prepared and passed round upon which the amount and conditions might be stated.
§ MR. BRODRICKsaid he would have acted on the suggestion had he received it earlier, and he should be pleased to do so in the future.
MR. GIBSON BOWLESsaid he much obliged to the right hon. Gentleman for his promise, and he would not now trouble the House with the further interesting remarks he had intended to make.
§ MR. CALDWELLsaid that the Secretary of State for India had come down to the House with all the papers in his box but he had not got the information they required in his head. That was always the case. He scarcely ever remembered an instance where a Resolution of this kind in Committee had been placed before them with a formal explanation. They were told that they would get the information when the Bill came forward, but when that occurred they generally found that their discussions were very much restricted. The right hon. Gentleman was trying to shelter himself from giving information by saying that it was not advisable to divulge the price, but there were a great many other things which he might tell them, the particulars of which he had got in his box. He thought it was very important that the Committee should know what changes the Government were going to make in view of their becoming the owners of the Bombay-Baroda Railway. Were they going to work the railway by their own servants under their own direct management? He knew several railways which were now being worked upon that principle. There was a narrow gauge line in connection with this railway at Ahmedabad and he wished to know whether that would also come under the control of the State at the same time as the Bombay-Baroda Railway. Was is part of the bargain made by the Government in purchasing the Bombay-Baroda line to purchase also this narrow guage line? They would like to know what had been the result of the working of the guarantee in connection with this line and whether they had been working it at a loss. If so would the right hon. Gentleman state what the loss had been to the Government. No doubt he had got the information in his box.
§ MR. BRODRICKThe box is empty.
§ MR. CALDWELLsaid the next thing he should like some information about 1481 was how were they going to work the Bombay-Baroda line under their purchase agreement. He understood the railway had been purchased upon a certain actuarial principle which would work out mathematically, and it was not a definite fixed sum. He agreed that there might be considerable difference of opinion with regard to the method of arriving at the price to be paid for this railway, but surely the Secretary of State for India would agree that it was a very remarkable thing to ask the Committee to approve of the purchase of a line without knowing what the cost was going to be. In regard to this transaction the only thing that was left indefinite was the price. Why they should be asked to supply the money before the price was fixed was to him somewhat incomprehensible. Would it not have been better for the Secretary of State for India to have got his price fixed and then have come down to the House to get the necessary authority to borrow the money.
They wished to know whether they were going to raise the £20,000,000 now or would there be certain stages at which they proposed to raise the money. There should be no difficulty in answering that Question and the information could be given without giving any indication as to how much was being given for the different railways. If the right hon. Gentleman looked at the method in which they raised this money he would find that they had a double plan. As a rule so much of the money was raised in India at 3½ per cent. interest and the other portion was raised in this country at 3 per cent. Would the Secretary of State for India inform the Committee the amount which he proposed to raise at 3½ per cent, in India and what amount at 3 per cent, in this country. If the right hon. Gentleman would look at the transactions of last year he would find that he got more money at 3 per cent, in this country and rather less money at 3½ per cent, in India. That fact was shown in the right hon. Gentleman's own explanatory statement issued in connection with the Indian Budget. That was the only conclusion one could come to from the explanatory statement and the figures which were given. Why 1482 was it that the borrowing was to be divided—£10,000,000 to be borrowed in India from time to time at 3½ per cent. and £10,000,000 to be borrowed in this country at 3 per cent.? It was most important that the House should know the price to be paid for the money. If a man could get 3½ per cent by lending in India, which was practically a cash basis country, why should he take 3 per cent. here? Who were the parties who would lend the money in India? If the money could be obtained in this country at 3 per cent. why pay more anywhere else?
In regard to the making of new railways he was not one of those who thought that the only thing to be considered was whether they would pay. There were very few railways in India now which were not under the State, and, though a new line might not pay, it might be good policy to have it because it acted as a, feeder, and brought to other parts of the system profits which otherwise would not be got. Apart from the question of finance, railways in India had another value. They helped to develop the districts which they traversed and they provided facilities for bringing produce to the market.
§ MR. BRODRICKsaid he was sure the hon. Member would acquit him of any desire not to give information. The last, half of the hon. Member's speech dealt with a subject which he himself had dealt with most fully a few nights ago. They had alternative methods of purchasing this railway. To state in the House what would be the method that would be adopted, whether it would be by paying a particular sum or by creating a particular class of stock, would lead to an amount of speculation which it would be impossible to contemplate for a moment. All they were now asking for was the authority of the House to exercise an option which was granted some years ago. They did not propose to raise the whole of the £20,000,000 at once. They could not put so large a loan on the market without creating a disturbance that they would all regret. No doubt there was a difference of a half per cent. between the rate in India and the rate in this country. On the other hand, it was of the essence 1483 of good finance and the national prosperity of any country that a large amount of its indebtedness should be indebtedness to the country itself, and not to foreigners. The Government had full regard to these points. They did not propose to issue £20,000,000, or anything like it, in a hurry.
§ MR. BLACK (Banffshire)said he agreed with the hon. Member for King's Lynn that it was undesirable to proceed with that discussion without further information, and without any statement as to whether this loan was to be put on the market in the ordinary way, or whether it was to be issued, not in exchange for cash in the market, but in the form of bonds for the purchase of this railway. It was important that the Committee should have that information before being asked to come to a conclusion as to the issuing of the loan. To authorise the issue of a loan which was to be placed on the market, was a different thing from authorising a loan which was to be handed over to the owners of the railway in exchange for the railway.
§ MR. BRODRICKsaid that was one of the points in regard to which it was desirable that the Government should have a free hand until they came to the completion of the negotiations.
§ MR. BLACKsaid in that case the Resolution should be delayed until they came to the completion of the negotiations.
§ Resolved, 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:—(a) The construction, extension, and equipment of railways in India by state agency, or through the agency of companies; (b) the repayment of the principal of any bonds or debentures issued by any such company 1484 under the guarantee of the Secretary of State; (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. Secretary Brodrick.)
§ Resolution to be reported upon Monday next.