HC Deb 04 April 1922 vol 152 cc2186-205

Order for Second Reading read.

The UNDER-SECRETARY of STATE for INDIA (Earl Winterton)

I beg to move, "That the Bill be now read a Second time."

May I say, for the benefit of those right hon. and hon. Gentlemen who were not present during the Debates on the two stages of the Financial Resolution, that I then went very fully into the constitutional reasons for this Bill, and referred to the fact that we are exactly following precedent in applying for powers before our present borrowing powers are exhausted, that the security or guarantee for these proposed loans, if they are put on the market, will be the same as hitherto in the case of former loans of the same nature, and that the position is in effect unaltered by the Government of India Act, 1919. Lastly, I dealt with the question of purchasing material here, and on that point I should like just to add a word to what I then said. I stated that it was impossible, in view of the altered relations of the Government of India to the Government of this country, to give a pledge that railway material required to be purchased with the proceeds of the loans raised under this Bill will be purchased in this country, but I said that I had no reason to anticipate that the conditions in the future would be other than they have been in the past, when a very large quantity of such material has been purchased in this country. I said that I would give the figures, which I will give now, and they really are rather remarkable, for the last available year, namely, 1921–22. Up to the 24th March, 1922, including State loans and guaranteed contracts, the proportion of railway expenditure in India between British contracts and foreign contracts was as follows: £11,000,000 was spent on British contracts, and only £157,000 on foreign contracts. To those of my hon. Friends—some of whom have approached mc privately, while others spoke in the Debate—who have expressed apprehension, very largely on account of their constituents, in regard to the purchase of manufactured railway and other material required in India, I would say that there is no reason for their thinking that they will not get the bulk of this business; but, for reasons which I do not want to go into now, but which I gave on the Financial Resolution, it is impossible to lay down as a pledge that the material will be purchased here.

I will only add a few words about the need for money for capital expenditure on Indian railways, as I promised to do when I spoke on the previous occasion. Before doing so, I should like to refer to a point which was raised, I think, by my hon. Friend the Member for Kilmarnock (Mr. A. Shaw), as to whether the introduction of this Bill had anything to do with the Government of India's Budget deficit. That was a very pertinent question, in view of the fact that the Government of India have a serious deficit in their Budget, and I can answer it categorically in the negative, as, indeed, I did on the previous occasion; and I am able to add that the Bill was, as a matter of fact, drafted some weeks before the Budget discussions took place. In spite of heavy increases of taxation in India this year and last, the Budget for 1922–23 exhibits a deficit of approximately 9 crores. The financing of this deficit will probably involve more borrowing than the Government of India originally contemplated, and this will, so far as can be foreseen, entirely take the form of the issue of a larger number of Treasury bills in India than would otherwise have been necessary. But this is the point. The £50,000,000 which this Bill asks power to raise is intended purely for productive capital expenditure and has no connection with the deficit, and the loans under it will be issued as may be necessary over a period of years. The Government of India contemplates a railway programme of 150 crores—approximately £100,000,000 during the next five years. It will be seen that the amount for which the Bill asks sanction represents only half the total productive expenditure which is contemplated in the period to which I have referred. By the original Government of India Act we have to receive the sanction of this House for permission to borrow money from this country, and we shall, as hitherto, raise a considerable amount of money in India.

The Acworth Committee 6how, by very expensive quotations from the evidence they took, that the existing Indian railway system is entirely inadequate to meet the needs of the country, and that there is urgent need of drastic measures of reform and, reconstruction. In the mass of other material with which everyone has to deal in these days perhaps the importance attaching to the conclusions of that Committee have been rather overlooked, but they are of fundamental importance in considering the future of Indian railways, and incidentally of the whole of Indian commerce and trade expansion. They consider that the defects in the system are due primarily to the failure of the Government in the past to provide adequate funds both for capital works and for renewals, the inevitable results of a system which has not developed to meet the requirements of great commercial enterprise. Stress is laid on the fact that railway investment is profitable and is also indirectly to the benefit of the country. At a previous stage an hon. Member on the Labour Benches wondered what advantage the poorest people in India would get out of the Bill. They will get every advantage. There is nothing which will be more likely to benefit them. There is another point that I promised to deal with at this stage. The hon. Member for Ashton-under-Lyne (Sir W. de Frece) wanted to know how far this expenditure was supported by the Legislative Assembly in India. Perhaps I did not give as full an answer as I might have done. The Acworth Committee recommended an expenditure of 150 crores on capital charges spread over five years and definitely contemplates the raising of loans in the United Kingdom for the purpose. The Assembly voted appropriations amounting to 30 crores for capital outlay on the railways.

I turn from that to give a very few facts about the position of Indian railways which ought to be given in view of the importance of this proposal. I am afraid they are dreary statistics except to those who take an interest in the fascinating subject of Indian railway extension. The capital expenditure between 1910 and 1915 was £10,000,000, between 1915 and 1919 only £4,000,000, and between 1919 and 1922, £16,000,000. From that it will be seen that there was a heavy falling off in expenditure during the War, with the result that we have now got a heavy deficiency to be met for which a large capital outlay is necessary. Our receipts, taking the years 1916 to 1921, were 1916–17, £47,000,000 gross and £25,000,000 net, and 1920–21, £61,500,000 gross and £21,000,000 net. The figures for last year show a loss of about £1,500,000. It is the first year for many years in which there has been a loss. It may be ascribed to exceptional circumstances which operate in every country in the world, as affecting railways, resulting from war reactions, in particular bad trade conditions, the lack of sufficient rolling stock and other facilities which we require urgently and which we hope to secure with the capital which we are going to raise.

The Indian railways are State owned and either managed directly by the State or by companies which provide a small proportion of the capital. The bulk of the capital is provided by the State. The companies only take a share in the profit according to the provisions of their respective contracts. The total State provided capital expended on Indian railways is, roughly, £340,000,000. The capital raised by the companies amounts to about £65,000,000, but, of course, any proposal by private companies for railway expenditure by providing capital will always be considered carefully by the Government of India.

The figures for the distribution of mileage between the Government and the guaranteed companies, up to 31st March, 1921, are: Government, 8,929 miles; Indian States, 2,889; and companies, 25,211. The increase of mileage in the period 1910–21 has been 4,900 miles, of which 1,100 were constituted under the Lord Chelmsford's Viceroyalty up to the 31st of March, 1921. I was asked by the hon Member for Govan (Mr. N. Maclean) on a previous day whether, if the Government of India secure the powers which it is desired to obtain under this Bill, the money is going to be applied to strategic railways. It has been in the past a criticism of successive Governments of India that they spent a great deal of money on strategic railways. I do not say That the hon. Member has made this criticism, but as the point has been raised it is right to point out that of the total of 1,000 miles of railway projected or under construction last year there were only 26 miles which had reference to a strategic railway. That was the railway in the Khyber Pass. The other railways are all railways we are going to tap, valuable agricultural districts in India, and which will, there is little doubt, pay a good return when they are constructed. Finally I would refer to the fact that from 1910 to 1920 the number of passengers carried annually increased from 371,000,000 to 533,000,000, or 44 per cent., which is a very remarkable figure. The tonnage of goods carried has increased from 65,000,000 tons to 99,000,000 tons, or by 52 per cent., and during the same period the mileage of the railways has increased by 14 per cent. only. That shows there is room for expansion. Looking at it from every point of view, while any proposal to raise money, even if it be raised by the Government of India, is naturally regarded with jealous eyes in certain quarters in this country—this money is raised by the Government and the taxpayers of India will be, as they have always been in the past, responsible—it should be made clear that it is urgently needed to develop the railway system of that country and1 will bring in, I believe, a big return. Nothing makes people more discontented than the feeling that railway development in their country is prevented.


The Noble Lord has done his very best to meet the points raised by Members of the House on previous stages of the Bill and I am sure we shall all want to give him a Second Reading of the Bill without long delay. The Noble Lord, without referring to my questions specifically, has dealt with some of them incidentally. First, there was the point whether any of this money was to be acquired for strategic railways. He did not answer that question specifically, but I accept his statement as satisfactory.


None, except the Khyber Pass Railway.


That was in connection with the last loan. Will the Noble Lord give us a similar assurance with regard to the intentions now?


As far as can be foreseen.


That is quite satisfactory. The Government of India, I understand, has not in mind any railways other than that short line for definitely strategic purposes. Can the Noble Lord tell us what profit is normally being made now on this railway organisation in India, and whether there is a definite profit being made on irrigation? He has not told us what proportion of the £50,000,000 it is intended to spend on irrigation, or anything as to the schemes of irrigation which the Indian Government has in mind. Can he say a word about that subject? Thirdly, I want to know what source of control or advice under the new constitution of the Provinces is given to the local legislatures and to the Ministers who are Indians in those legislatures? Are railways one of the Departments which in the ordinary province are looked after by a native Minister, or are they a reserve service? To what extent is Indian criticism and advice and Ministerial responsibility exercised now with regard to Indian railway policy? Has any negotiation passed with the Treasury as to the amount of these loans which are to be raised in the United Kingdom within the next financial year? I have a sort of feeling that the Treasury cannot want this market to be used more than is necessary for raising money. Can he tell us what proportion of the amount likely to be raised in the next financial year is to be raised in India, and what proportion in this country? I hope the Noble Lord would not mind my asking these question after all the kindness and candour he has shown in regard to this matter. I think they do naturally arise out of the question, and I do not raise them with any desire at all to obstruct or delay the progress of the Bill.


In asking the Noble Lord (Earl Winterton) a question I wish to thank him for the explanation of the point I raised on a previous occasion. My question is directed to Clause 5 of the Bill. There is a statement there as to the power given to the Secretary of State by this or any previous Act of Parliament to raise money by means of stock or other securities, that is to give him power to redeem stock at a premium, and to arrange for giving an option, subject to such conditions and so on as he may determine. The Clause goes on to say: Any stock or securities created for the purpose of an exchange under this Section shall not be taken into account in calculating the nominal amount of securities authorised to be issued under this or any previous Act. I do not claim to be a financial authority, and I ask this question purely for my own information and for that of others who may possibly be also under a misapprehension regarding it. Is this intended to mean something in the nature of putting that stock in practically the same category as stocks in this country that have received a very bad name and have had a great deal of criticism directed against them both in connection with our home railways and industrial concerns? I refer to what are considered to be watered stocks. If these stocks have to be paid at a premium, supposing that premium to be only 5 per cent., I take it that will mean that that stock will have to be redeemed at 105 per cent. whereas it will appear on the balance sheet as of a value of one hundred. I do not know whether it will be sold at a discount or not. In any case, there seems to be a danger of the same criticism being directed against it as against the watered stock of companies in this country. I shall be glad to have that cleared up if I am under a misapprehension regarding it.

We are really anxious, and I am certain the Noble Lord is anxious, that as much as possible of this money should be expended in this country. I take it from the Noble Lord's remarks that he is also of that mind in order to create employment here. I am speaking for a large industrial town which is concerned with the manufacture of railway rolling-stock. It contains three of the largest locomotive shops—the Hyde Park Works, the Polmadie Works, and the Atlas Works—all of which at the present time are in a very tad condition. If there is any possibility of some of this money being spent in the supply of railway rolling-stock and coming to Glasgow, I for one—[HON. MEMBERS: "Hear, hear!"] I am not speaking on behalf of my own constituency, because all three locomotive shops are at the end of the town outside my constituency, and I do not believe a single one of my constituents is employed there. I am speaking on behalf of the people of my own native town, where locomotive construction is carried out, which is recognised as first-class work in every part of the world. I am asking that the men there should be provided with an opportunity of getting some employment out of the £50,000,000 which the Secretary of State for India is getting power to raise.


This measure, in its previous stage, was subjected to comment mostly of a very useful nature. It has also been subjected to comment of a singularly useless and inept nature. Not many weeks ago I had the opportunity of discussing the railway question in India with Mr. Gandhi. I say "discussing," although it was a rather one-sided conversation. I put before him the railway problem in India, as it was summarised in the Report of the Acworth Committee. I pointed out the serious state in which the railways of India were, and asked him, as the leader of a great popular movement, if he had any policy to suggest regarding the rail- ways. His answer was "No. I have not thought it worth while to think about railways." He further said that it would be time enough to begin to think about the railways when a hand-spinning machine was to be found in every cottage in India.

I thought that in my conversation with Mr. Gandhi I had heard the most foolish thing I was ever likely to hear on railway matters, but I reckoned without some of my hon. Friends in this House. Only the other day we were solemnly told that railways had been thrust upon the people of India, and that the people of India did not want them. We were also told that, after all, this was a question of the workers' interests and, remembering that "every road leads to Rome," I conclude that every Bill and every question brought before this House leads to a Labour grievance. It is difficult to believe, even with the words on record, but one hon. Member—I am not sure that he is in the House to-night, and if he is he will forgive me—delivered himself of the remarkable statement that the worker pays, and will have to make up the deficiency on railways in India. Further, he said that we had to be careful in making railways in India, and in spending money on railways in India, lest we should bring into existence a body of workers who would lower the standard of labour in England.

12 M.

Did Mr. Gandhi, in the remark I cited just now, say anything half so foolish? Much more of that nature has been said in this Debate, ant I put it to hon. Members of the Labour party that they might have made contributions to the Debate of a slightly more useful character. They might, for instance, have told labour in England that the amount of work which came to this country was very largely dependant upon the industry, steadiness, and regularity with which the English worker attended to his work. Fears have been expressed lest orders placed with the money raised by these loans will go abroad. Some orders do go abroad, as the figures laid before the House by the Noble Lord have shown, and it is right that the possibility that orders may go abroad, even in increasing numbers, should be held up before the workers of this country, so that they may realise how much it will depend upon them whether this money is spent in England or abroad. Happily, as the figures show, by far the greater part has so far been spent here, but it should be recognised that the proportion which will continue to be spent in this country may largely depend upon the way in which the workers apply themselves to their work. There are very many aspects of this question which invite attention, but I know nothing of greater importance in connection with railway policy in India than that the railways should be put upon a commercial basis and stand upon their own feet, and that they should not be mixed up with the general finance of the Government of India. We want to see railway enterprise still commended to the confidence of the investing public in England, as it has been in the past. Some things were said from the Benches opposite the other night which, if they were believed in, or any importance were attached to them, would not help to strengthen the position of railway investments in this country.

We had brought before us a lurid vision of the possibility of the time coming when the Legislatures in India might repudiate these loans. I am sure that those remarks were not made with mischievous intent, but I was impressed by the fact that the hon. Member who spoke of the legislators of India in the future so far forgetting their duty as to repudiate the honourable obligations of the Indian State, had taken an active part in the passing of a Bill which gave the people of India the large legislative powers which now exist. If there were any possibility of those Assemblies so far forgetting their duty and the obligations of honour, they were not fit to enjoy the political powers which have been given them. I believe the people of India are fit for the full enjoyment of those legislative powers, and because I believe that I feel confident that there is no danger of such a dire calamity as the repudiation of one farthing of the debt of India. I feel that the Members of this House should more fully realise their responsibility, and if they did that we should not have such potentially harmful statements made as that to which I have referred. The present administration of railways in India has many grounds for appealing to the confidence of the people. Those who speak from what they probably con- sider the democratic point of view, and speak distrustfully of the railway administration in India are probably not aware that, in recent instructions from the Railway Board to the various railway administrations, express instructions have been give that the grants which are to be made for special expenditure shall be laid out primarily upon the improvement of third class accommodation. That is put in the forefront of the programme, a fact which shows that something like democratic sympathies do prevail among those who have responsibility for the control of railways there.

One of the questions that has been brought to notice lately—and it was specially brought to notice during the inquiry of the Acworth Committee—has been the increased employment of Indians in railway administration. A good deal of evidence was put before the Acland Committee on that subject, and very definite recommendations have been made on the point. May I say that, while it is a legitimate ambition on the part of the people of India that they should take a larger share in the administration and working of the railways, there has been a tendency lately to rush things and to hunt to death that hobby of the Indianisation of the administration. After all, the test must be that of efficiency, and so long as that test is applied we may trust to an efficient working of the Indian railways. Only the other day I heard of a very prominent Indian gentleman going to one of the administrative offices of one of the great railways and asking that a larger number of Indians should be employed in the higher posts. "Very well," was the answer of the chief administrator of that railway, "you send in a list of Indians whom you know to be fit for employment in some of the higher posts, and I will give the fullest and fairest consideration to their claims." I am told that not one name has been submitted.

As for the position of the Indian railways upon the Stock Exchange in London, notwithstanding what has been said in this House, we have happily had recently a very marked improvement in the values of gilt-edged Indian securities. In the last fortnight of March, I believe, the leading Indian Government loans went up by something like 4½ per cent., and we may look forward to Indian railways in the future enjoying as good a position as other first-class Indian securities. The railways have a difficult time before them. Unfortunately, their working expenses just now are very high—one could almost say appalling; something like 77 to 80 per cent.—but that is very largely the result of what I hope are passing conditions, mainly, the enormously high price of coal. It may be that before very long that may be reduced considerably, not only by a larger output from the Indian mines, but by the substitution of oil for coal in the working. When the working expenses have been brought down and the receipts have been increased, as they will be by the new rates, which came into operation on Saturday last, we may hope for a very marked improvement in the position of Indian railways.

Here may I make one remark, and that is that I think the Government of India did the railway companies a very bad turn and dealt unfairly with them when, a year ago, they levied a surtax upon freights. At the time I thought it to be a rather mean proceeding, because it took all the benefit for the Government and did not give the railways their due share of the surplus profits. That has been abandoned, and I am sure the Government of India, through the Railway Board, will give a free hand to the railway administration in increasing their rates. The people of India enjoy the lowest railway fares of any people in the world. Notwithstanding their imperfect provision for third class passengers, the railway administrations of India have, on the whole, been sympathetic and generous to the people. I have the fullest possible faith in the future of Indian railways, and I am sure the investing public of London will in the future show the same confidence in them as they have in the past.


I desire to make a protest against a Bill of this importance being taken at a late hour of the night. We are discussing after midnight a Bill authorising a loan of £50,000,000. It is not a party matter; serious questions are involved, and the Measure ought to have been taken at a different hour. The greatest apprehension was caused by the statement of the Noble Lord the Under-Secretary of State for India the other day. He quoted a Resolution passed last September by the Legislative Assembly that the High Commissioner for India in London should be instructed to buy stores in the cheapest market. We understood from that—and I am speaking here on behalf of a very important body of manufacturers—that the Government of India will in future buy anywhere on the Continent where they can get the cheapest prices. If the Government of India come to this country for authority to raise a loan, we think it is only fair play if terms are imposed on that Government providing that the money raised in this country should be spent here. We are in a position of the greatest difficulty, with a vast army of unemployed, with vast factories capable of supplying the needs of India idle, with men drawing unemployment pay, and everything in a thoroughly disorganised state; and yet we have a threat thrown out—and it has not been in any way modified by the statement of the Noble Lord to-night—that the Government of India will in the future buy in the cheapest market. I will quote to the House a resolution passed by the policy committee of the National Union of Manufacturers. It was to this effect: "That in view of the state of trade and unemployment in this country, and of the fact that British manufacturers are unable to tender in competition against manufacturers in Germany and other continental countries with a collapsed exchange, the meeting is of opinion that it is undesirable that Parliamentary sanction should be granted for the raising of a loan in this country except on the terms that so much of the money as is not spent in India should be expended in this country." I think that that is quite a reasonable suggestion to make to the Government. It is a matter of great concern to us in relation to employment, and I am surprised, nay, astounded, that the Labour party, who are so deeply concerned in unemployment, are practically absent to-night.


Some of us are here to voice the Labour view.


The hon. Gentleman says that he is the voice of Labour. He may in a very, very small sense voice Labour, but does he really represent Labour in this country? The point of this question was raised some months ago, last November, in a Resolution which was sent to the India Office, urging that it should be a condition in connection with loans raised in this country by countries abroad that the orders for the purchase of the material for each loan raised must be placed in this country. The India Office replied that the only new loan raised by the Secretary of State in the last 12 months was the Government of India Loan for £7,500,000 in April, and in this case it was stipulated in the prospectus (they said) that the entire proceeds of the issue should be utilised for the purchase of material in the United Kingdom. I want to ask my Noble Friend whether he is prepared to make the same stipulation in any prospectus he may issue in regard to this £50,000,000 Loan—that it is to be for material purchased in this country, and not for German or American material, or other foreign manufactures?

We are deeply concerned to-day in the attempt to revive industry. We cannot do it, we are not big enough in ourselves; and unless we can secure for our home manufacturers every particle of manufacture which can be provided either by our Colonies, or Great Dominions, or the Indian Empire, well, so much the worse. Again, may I remind the House of what the Prime Minister told us last October when we had a most important debate in the House on unemployment. He referred particularly to the railways in India and said they were short of material. He suggested that huge orders were to be placed here. He told us that goods were rotting in India because they could not be transported, and he quoted instances, one in a Madras works where 11,000 wagons were needed and only 2,000 or 3,000 were available. The right hon. Gentleman held out hopes that the books of all railway supply contractors were to be filled with orders. Those orders have not materialised. Now is the opportunity, if my Noble Friend is true to the faith he used to profess, and I hope he will see that this money, the whole of it expended outside India, is expended in this country, and does not go to other countries. That is the protest which I have to make, and I venture to think it is an important one. I hope my Noble Friend will be able either to give the assurance I have asked for or, failing that, that he will accept some Amendment to this Bill which will make it clear that this money, as far as is practicable, is to be spent in this country. If India thinks she can obtain the goods to better advantage in other countries, let her raise the money in India and not come to this country for it. It may be asked, why should we turn away good business—for the raising of the money is good business? My answer is that we want money for our industries here: many of our industries at this moment are starving for money. Here the Government come with a proposal which is backed by the security of the British Empire—a proposal to raise money. It may be asserted that the United Kingdom is not backing the loan it is the British Empire which is doing so, for we could not let the Government of India down. We shall have to see it through. It is also a matter of very great consequence to us because we have so much unemployment in our midst; our works are standing idle for lack of orders which it is possible for India to give us. If India says, "We will take advantage of the German exchange and of the Austrian exchange and of other collapsed exchanges to place our orders on the Continent," then it is only right and proper that we should leave India to raise the money herself. That is the whole point which I have to make. I ask my Noble Friend either to give an undertaking now that this money will be expended in England, or to agree to accept some Amendment to the Bill when we come to the Committee stage which will make clear what is the intention of this House in granting India the facilities which she desires. That is the point which I desire to urge upon the House, and I trust that my Noble Friend will be able to give me a satisfactory answer.

Major GLYN

By the Government of India Act which was passed by this House, control of the affairs of India is now in charge of the Indian Legislative Councils, and therefore it seems to me a pure waste of words to expect us to interfere in regard to this matter. The only way in which British manufacturers can hope to obtain orders from India is by turning out articles of such a character and quality and price as will enable them to compete with every other market in the world. As a matter of fact, when a loan was raised recently in the United States on behalf of Chili and the Argentine, the United States Government made it a stipulation that part of the money should be spent in the States with the manufacturers in that country, and the result was that the manufacturers in the United States put prices up to such an extent that the advantage of raising the loan there was overborne by the excessive charges made by the manufacturers. We must get away from make-believe as far as we can in this matter. I do not agree with the hon. Member for Chippenham (Mr. G. Terrell) that those who represent the British manufacturers want this. I know something about the locomotive industry in this country, and I have not heard any one say that they want State interference to enable them to carry on. Day after day we have been crying for the removal of State interference and yet the hon. Gentleman now asks for it, although he must know that the power of interference does not rest with us, as the matter is entirely in the hands of India. The Legislative Councils of India are masters in their own house. They are prepared and are anxious to buy materials they need in this country and the sooner the workers and the manufacturers realise that they can only hope to obtain orders as a result of prompt, cheap and good production the better it will be for them. I am convinced of one thing and that is of the vicious idea that this country can farm India for the advantage of our own people must cease. Half of our trouble in India has been caused by the wrong feeling in India that we have been farming that country for our own advantage. Personally I should regret very much if anything were done to encourage such a feeling.

I am prepared to believe that this Money Bill will be raised in India. In deed I rose to ask the Noble Lord if his attention had been called to page 73 of the Railway Report in which these words occur: The money required for Indian railways should, as far as possible, he raised in India. Then it is pointed out that the three provincial banks of India are now amalgamated into one Imperial Bank which is, quite capable, through its branches, of raising the money needed for the expansion of railways throughout the length and breadth of India. I am certain that the security of India can only be maintained not by troops with coercive measures, but by gradually getting the people of India to sell their trinkets and ornaments and to invest the proceeds in their own trade and industries. I am sure it is quite possible for this money to be raised in India and that they will do their best to buy what they require in this country because they know we can turn out far better goods than other people. In fact, we have the trade in our own hands if only we get to work. We need have no fear of competition, and I am convinced in my own mind that there is not a man in India who would not welcome the sending of orders to this country in preference to any other country. This is an opportunity for the Imperial Bank of India to make a real attempt for the first time to raise money in India for the benefit of the Indian railways.


Anyone who knows anything about India and the Indian people must be aware of the wonderful resources of that country, and must also realise how essential it is to promote the development of the railways of the country in order to provide employment for the people. The example being set by the India Office in this matter is one which might well be extended to our own country.

It has been said that the financial banks of India are now amalgamated into one Imperial Bank, and that that bank is quite capable through its branches to raise the money to defray the cost of expansion of railways throughout the length and breadth of India by gradually getting the people of India to sell their gold trinkets and their ornaments and getting them to invest this money in their own industry and trade. I am certain that it is quite possible to do so. I am surprised at the speech of the hon. Member for Sevenoaks (Sir T. Bennett). I agree with him in the criticism he has made that such an important Measure for spending 50 millions in India or in any part of the Empire should be introduced at this late hour. What I cannot understand is his criticism of the action of the Labour party, who should have more sense than either he or I, in going home at such an unreasonable hour. It seems that we are the only fools to do so. However eloquently the case has been put for India by my hon. Friend to-night, other Members on these benches can put just as eloquent a case for the development at home of our resources. We want to say that it is just as important that we should have railway expansion at our own doors as it is that there should be ex- pansion in India. We know that India has the finest rivers and the finest hills and mountains, and the finest dews to fertilise the land.

It is essential that we should spend not only 50 millions, but substantially more in India, in order that employment might be found for the people there and that employment might again percolate to this country through the supply to India of engines and other things they are in need of. But why could not they do it themselves as was suggested? And why could not they do it out of their own resources? I cannot understand the criticism of the Labour party last week. We were misinterpreted. We quoted to show that we were rather apprehensive as to the development of India. We quoted from civil servants and others in India who suggested that India ought to be developed by expanding and developing the mines and importing coal here. If my hon. Friend had gone on with the quotations he would have seen the apprehensions of members of the Labour party, and that it was not against the expansion of India and the development of her resources so much as the pecuniary interests of certain individuals. I was surprised that it was suggested that the reason they could not find the means to develop and expand was the high cost of production due to the high price of coal in India. We find the same arguments that the hon. Gentleman used tonight against expansion used in this country where the high cost of coal is also given as the reason for the diminution of enterprise.

In reply to a question of mine, we find that the wages dropped from 10d. and 4d., and yet my hon. Friend hopes that if we get over this loan and economies are effected by the reduction of the wages of miners in India, they might be able to launch on their own initiative by putting the mines on a more economic basis, and also the railways. I hope this country will not recognise any such policy. We know that these are plain facts, and there are Members in this House sitting on that bench who suggest that we ought to use the coal that is produced in India to batten down the wages of the miners in this country. We hope that we will go on and expand the resources of India, but, at the same time, we must not forget the great cost put upon the taxpayer and the ratepayer. If it is good for India, it is also good for us that we should launch out and develop our own resources. Our resources are just as valuable as those of India, and we also have rivers that might be harnessed. But all we can do to men out of work is to provide doles and demoralise them and make them depend on charity. We want to see the development of India, but we must not forget the wealth at our own feet. I hope the policy in India will percolate through to the Departments in this country, so that useful and reproductive work might be found which will be a benefit to the nation, add to the nation's wealth and, at the same time, reduce the taxes of the nation.


I will deal first with the points raised by hon. Members. My right hon. Friend asked in the first place whether we intend to carry out an irrigation policy as a result of this Bill, and whether irrigation would be profitable. I explained that we have taken power to raise money for irrigation purposes in case we required it, but there is no intention to spend the money at present. The only other point is as regards the negotiations before this Bill was issued. I understand the Treasury were informed and raised no objection to the Bill being brought forward. I think the other points raised in the Debate were all raised on the previous stage, and I venture with diffidence to appeal to the House now to come to a decision.


I should like to put a question on Clause 6. The point I want to ask about is whether the Indian Government compounds with British revenue or does it get off scot free?


I think that is a question of detail, and perhaps my hon. Friend will raise it on the Committee stage.


Will the Noble Lord tell us if he has any idea what proportion of this money may be raised in India and what proportion will be raised here?


The Indian Government will no doubt try to raise as much money as they can in India, but the Bill gives them power to raise money in this country also.

Bill accordingly read a Second time.

Bill committed to a Committee of the Whole House for To-morrow (Wednesday).—[Colonel Gibbs.]

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