§ 9. Mr. RUPERT GWYNNEasked the Under-Secretary of State for India, whether his attention has been drawn to the statement made by Messrs. Samuel Montagu and Company in their letter to the India Office, dated 8th January, 1912, to the effect that, if silver was purchased through them, it would not in the least disturb the market, that no one would have the remotest idea that the Government was buying, and that prices would not, as in the past, be run up; and, in view of the fact that the price of silver in March, when the purchases commenced, was 26fd., and the average price at which the silver through them was eventually bought was 284½d. is he of opinion that this statement by Messrs. Samuel Montagu and Company was an accurate forecast?
Mr. BAKERThe answer is in the affirmative. The possibility referred to in the letter quoted, was that the price might be affected by the knowledge that the Secretary of State was a purchaser. This was prevented by the policy adopted.
§ Mr. GWYNNEIs the hon. Gentleman aware that in 1907, when much larger purchases were made through the Bank of England, the price of silver was only run up l½d., whereas in this instance it was run up 1½
§ Mr. SPEAKERThe hon. Member must give notice of that question.
§ 10. Mr. GWYNNEasked the Under-Secretary of State for India if his attention has been called to the statement of Messrs. Samuel Montagu and Company, in their letter dated 8th January, 1912, to the effect that putting silver in the Bank of England is such an every-day occurrence that it would create no comment, that there would be no need for the Bank of England to be acquainted with the purchases, that they need only be told that they were to receive the silver against loans, which would close every possibility of a leakage, and to a further communication from the same firm, dated 16th April, 1912, in which they state that the chief advantage of postponing the purchases (at an additional brokerage to themselves and 3 per cent, on the cost) would be to avoid any premature transactions with the Bank of England, for the movement of actual business from their office to the Bank of 192 England might cause comment; and will he say whether the former statement, that it would create no comment, or the latter, that it might cause comment, is the correct one?
Mr. BAKERThe letter of 8th January stated that "putting silver into the Bank of England is such an every-day occurrence just now that our doing so would create no comment." The letter of 16th April said that "the movement might cause comment, though we do not believe for one moment that anyone would guess the nature of the business." The purport of the two statements is substantially the same; and the Secretary of State cannot say which of them was the better expression of a matter which was to some extent one of opinion. I explained on 3rd December and again on 8th January that the Secretary of State's reason for deciding on the postponement of the earlier purchases was to avoid not the deposit of silver at the Bank of England, but premature entries in the India Office monthly accounts which pass through many hands.
§ Mr. GWYNNEWill the hon. Gentleman say how he can reconcile a direct affirmative with a direct negative?
Mr. BAKERIf the hon. Gentleman will look at the exact terms of the letter, and not take his own paraphrase, he will see it is not a question of a direct affirmative and a direct negative: "We do not believe for one moment that anyone would guess the nature of the business."
§ Mr. GWYNNEDoes it not go on to say it might cause comment, whereas the previous letter said it would cause no comment?
§ 13. Mr. GWYNNEasked the Under-Secretary of State for India if, as officially stated, purchases of silver were postponed in May, in the interest of secrecy, so as to avoid including payment in the India Office monthly accounts, which pass through many hands and of which an abstract is published in the "Gazette of India," on what grounds did he think that payments could be made in this manner from 1st June onwards and secrecy maintained?
Mr. BAKERThe monthly accounts for June reached India at the end of July. At that time silver for £2,000,000 had been bought at a reasonable price; and, although secrecy was still desirable and the risk of disclosure still existed, the 193 consequences of disclosures would then have been much less serious than at an earlier stage.
§ Mr. GWYNNECan the right hon. Gentleman say how it was that in May the information reached India in a month when he told me on 17th December that in August it was only conjecture, seeing the matter passed through the same hands?
§ Mr. GWYNNEBut would it not be conjecture in May in the same way?
§ 14. Mr. GWYNNEasked the Under-Secretary of State for India whether his attention has been drawn to the statement in the letter of Messrs. Samuel Montagu and Company, dated 8th January, to the effect that they receive consignments of silver from special clients averaging about £50,000 per week, which they have to sell at market price, and suggesting that this silver should be secretly sold to the India Office, and so avoid the market price of silver being run up; and whether the Finance Committee considered if this device was suggested by Messrs. Samuel Montagu and Company in the interests of the Government at the expense of their clients who were selling or vice versâ?
Mr. BAKERThe proposal was in accordance with the usual practice of the bullion trade. The effect was to meet the wishes of sellers who desired to sell at the market price and of the Secretary of State who desired to buy at that price.
§ Mr. GWYNNEDoes the right hon. Gentleman not see—
§ Mr. SPEAKERThese supplementary questions which the hon. Member puts are all in the nature of argument, and very suitable for use in discussion; but they are no use as questions asking for information, and they are not therefore proper supplementary questions at all.