§ MR. WEDGWOOD (Newcastle-under-Lyme)
I beg to ask the Under Secretary of State for the Colonies whether the Federated Malay States have lent $200,000 to the Protectorate of Brunei; if so, on what security the money has been lent; whether the Government of the Malay States exercises any supervision over the Government of Brunei; whether this money is being used to defray current expenditure; whether it is proposed to make it an annual grant; and whether there is any precedent for one Colony financing another.
§ MR. CHURCHILL
The Answer to the first Question is in the affirmative. The State was practically bankrupt when it was taken over by His Majesty's Government and the money was needed to enable the Government to buy out a number of monopolists and to organise a system of administration. So far as I am aware no question of security has ever been raised, but the administration of Brunei is entirely under the control of His Majesty's Government, who will see that the money is repaid when the financial position of the State makes repayment possible. The Government of the Federated Malay States exercises no 762 control over that of Brunei, but the High Commissioner for the Federated Malay States it also High Commissioner for Brunei. The revenue for last year did not cover the expenditure, and the deficit has, therefore, been met from the loan. I may perhaps point out that a British Resident was first appointed at the beginning of 1906 and that it must naturally take a little time to place the finances on a satisfactory basis. There is no intention of making an annual grant. A parallel can be found in the Malay Peninsula where the Colony of the Straits Settlements financed the Protected Malay States in their early stages and where the State of Pahang has been regularly financed by its wealthier neighbours.
§ Mr WEDGWOOD
asked whether the proposal to finance Brunei originated in the Malay Peninsula or at home, and whether the Government encouraged the financing of non-prosperous by prosperous Colonies.
§ MR. CHURCHILL
I cannot say where it actually originated, but I have given a precedent for this system of financing, i.e., the State of Pahang.