§ 64. Commander WEDGWOODasked whether the Government of India has been asked to consider the possibility of raising a War Loan in India to help the finances of this country; and, if not, will he say why this action has not been taken?
§ Mr. CHAMBERLAINThe question of an Indian War Loan has been carefully considered both in India and at home; but I have not seen my way to advise such an issue. My hon. and gallant Friend must remember, first, that the money available in India for Government loans is limited, and, secondly, that whereas India is, in normal circumstances, a large borrower in London for the urgently needed development of her railway and irrigation systems, a complete change in this respect has been made during the War. In agreement with the Chancellor of the Exchequer I came to the conclusion that the first and most effective help that India could give to the British Treasury in its capacity of borrower was to avoid recourse to the London market. By using Indian loanable resources to the full and by drastic reductions in the public works programme, we have avoided any Indian issue (except certain renewals of floating debt) since the spring of 1915, and we hope to do so until the end of the War. In addition we have paid off seven and a half millions of Indian floating obligations in London in the present year, and we have bought during the War more than seven millions of British Government securities for our reserves. I should add that I have reason to believe that there have been considerable private subscriptions from India to British issues, and I doubt 201 whether appreciably more money would have been obtained from India if a special War Loan had been issued in India.
§ Commander WEDGWOODIs my right hon. Friend aware that at the present time there is a certain superfluity of cash in Bombay, and will he make inquiries of the Bombay and Calcutta Chambers of Commerce as to whether a loan could not be issued in India without having recourse to Sir William Meyer?
§ Mr. CHAMBERLAINI regret the last observation of my hon. and gallant Friend. I decline to take any step in Indian finance without securing that the Indian Finance Minister is consulted.
§ Mr. R. GWYNNEIs the right hon. Gentleman aware that the Indian Finance Minister stated in the Legislative Assembly that India must keep her wealth for her own country?
§ Mr. CHAMBERLAINNo, Sir; I think my hon. Friend is not giving a quite accurate report of Sir William Meyer's view. What Sir William Meyer desired to emphasise, and what I have stated, is that the first and most effective assistance India, as a borrower, could give to the British Treasury at the present time was not to be a competing borrower in the London market.
§ Mr. GWYNNEWill the right hon. Gentleman circulate Sir William Meyer's speech?
§ Commander WEDGWOODWill the right hon. Gentleman read that speech of Sir William Meyer, of which I can send him extracts?
§ Mr. CHAMBERLAINI have read the speech. I do not wish my hon. and gallant Friend to take it that I should express myself exactly in the same way, but I do resent an attack on Sir William Meyer of the kind suggested in my hon. and gallant Friend's question, which I think is quite unjustified.