PALESTINE AND EAST AFRICA LOANS [GUARANTEE].

HC Deb 01 December 1926 vol 200 cc1271-334

Further considered in Committee [Progress, 21st July].

[Mr. JAMES HOPE in the Chair.]

Question proposed [21st July], That it is expedient to authorise the Treasury to guarantee the payment of the principal of, and the interest on, the following loans:

1. (a) a loan to be raised by the Government of Palestine not exceeding an amount sufficient to raise four million five hundred thousands pounds; and
2. (b) a loan to be raised by the Governments of Kenya, Uganda, Northern. Rhodesia, Nyasaland, or Tanganyika not exceeding an amount sufficient to raise ten million pounds;

and to charge on the Consolidated Fund any moneys required to fulfil any such guarantees as aforesaid.

Question again proposed.

Mr. DALTON

The Committee is meeting to discuss this subject under a somewhat inconvenient procedure in view of the fact that four months have elapsed since 21st July when this Resolution first came before us, and we are now deprived of having the discussion initiated by a statement from the Government side. However, not, only did the Secretary of State for Dominion Affairs make a statement in defence of these proposals on that occasion, but my right hon. Friend the Member for Central Edinburgh (Mr. W. Graham) and my hon. Friend the Member for East Woolwich (Mr. Snell) explained that we did not approach these proposals in any spirit of opposition but rather in a spirit of seeking further information on various points which were not clear, and assurances on the one hand as to the financial and economic soundness of the detailed proposals and on the other with regard to the safeguarding of the interests of native populations in East Africa and of their share to benefit in the working out of these schemes. I cannot congratulate the Government on the efficiency with which they are pressing forward schemes of Empire development, about which at the last General Election a great deal was heard on Conservative platforms. The so-called Ormsby-Gore Commission, of which the present Under-Secretary was the Chairman, was appointed by the Colonial Secretary in the Labour Government and it was able to complete its Report two years ago. More than two years elapsed before any attempt was made to act upon the recommendations of that Report. Whether the recommendations were right or wrong, we were surely entitled to have some action based upon them before now. Furthermore, in the Report of what has been called the Schuster Committee, which was presented to the House four months ago, the proposals which are before us to-day were subjected to a great deal of detailed criticism.

I want to comment upon the delay which has taken place since the last General Election in making even a beginning in carrying out the various pledges then given by the Conservative party with regard to the development of the Empire on proper lines. We were told at the last election that in so far as the Conservative party had a cure for unemployment, it was to be found chiefly by encouraging trade within the Empire, and we have been told very plausibly that one argument in favour of loans to the East African Dependencies is that they will result in orders in this country for railway material. Indeed it was stated by the Colonial Secretary that not less than half the expenditure on railways under this guarantee will be spent in this country on orders which will do something to provide additional employment in the iron and steel and engineering industries which have been so greatly depressed. I should like to know why we have had to wait for two years—and we shall have to wait a good deal longer before these schemes begin to yield any additional employment—why there has been such gross delay on the part of the Conservative Government in carrying our the only policy they put forward at the last election for giving additional employment in the heavy industries, and similarly why there has been such gross delay in developing what we have heard described as the illimitable natural resources of these East African territories for cotton, for coffee, for all sorts of products which it is especially desirable to encourage the cultivation of because they in no way directly compete with our industries in this country and, therefore, such imports cannot be objected to even by the most virulent Tariff Reformer or Protectionist. Why has nothing been done so far to secure a more rapid development of these forms of cultivation and of trade between this country and the East African Dependencies, and why has so little been done, and that so slowly, to develop the resources of the mandated territory of Tanganyika which we legally hold in trust under the League of Nations Mandate since the Treaty of Versailles, and why, further, have the Government waited two years since the last election, during which time the national credit has deteriorated under the present Chancellor of the Exchequer, so that the difficulty of raising loans in the open market has become greater, since the prices of trustee securities have fallen from the relatively high level at which they stood when the Labour Government was in office to the deplorably low level at which they stand as the result of two years' experience of the present Chancellor's finance? [Interruption.] The right hon. Gentleman says that is a joke. He knows better. It is not a joke, but a very serious reality.

Mr. McNEILL

I did not say it was a joke. I said the hon. Member was a joker.

Mr. DALTON

The facts to which I have referred can be verified by a study of the prices of securities immediately before the Labour Government left office and after two years' experience of the Government that succeeded them. The point is a perfectly serious and solid one. We are being asked to provide the British taxpayers' guarantee behind sums of money which may aggregate nearly £15,000,000. The difficulty of raising these sums, even with the British Government guarantee behind them, is much greater now than it was two years ago. The terms which will have to be paid by Palestine on the one hand and by the East African Dependencies on the other will be more onerous and it would have been in every way better to take advantage of the financial improvements which were brought about while the Labour Government, was in office and, immediately after the Conservative Government came in, before the evil effects of their tenure of power made themselves felt on the stock exchanges of the country, to have proceeded forthwith to assist in the floating of these loans. It would have been much better business both for Palestine and East Africa. I hope, therefore, we shall have some account given as to why there has been such grave and prolonged delay in dealing with these important matters of Empire development.

I wish to ask a few questions about the allocation of the money with regard to East Africa, partly as to its allocation between different areas and partly as to its allocation for different purposes. First as to its allocation between areas. Many of us have been gravely dissatisfied with the state of affairs in Kenya. I do not propose, and I doubt whether it would be in order, to go into great detail as to the grounds of our dissatisfaction, but, shortly put, they are that the native policy in that Colony is very retrograde as compared with other parts of the Empire, and in particular as compared with West Africa, and that forced labour has on many occasions been resorted to. We have had occasional assurances that that is no longer so, but it has undoubtedly been the case to an extent unparalleled in other African Dominions.

Mr. ORMSBY-GORE

I should like to point out that practically all the railways in West Africa have been built by forced labour, locally called political labour, and very few in East Africa. The misapprehension is so common that I rise to correct it.

Mr. DALTON

I was saying, and I am glad to repeat it, that most of us have no serious quarrel with the policy which has been pursued in West Africa. Of course, there are more railways in West Africa. I was not speaking specifically of labour on railways. Indeed the chief complaints which have been made with regard to Kenya have been in regard to forced labour not on railways but in certain other directions for the benefit of white settlers. Many of us would be glad, in view of the unfavourableo way in which Kenya compares with other dependencies in East Africa, to see Kenya excluded from the benefit of this guaranteed loan. We should be glad on the merits, or I might say on the demerits, of Kenya's record. In making that suggestion I have behind me the high authority of Lord Delamere, the Mussolini of Kenya. I read in the "Times" of the 10th ultimo the report of a speech by Lord Delamere which, I suppose, has been conveyed to the Colonial Office: Lord Delamere, expressing the opinion of the elected members, urged that the loan be raised as a Kenya Transport Loan on the sole credit of the Colony without an Imperial guarantee, and to allow the country to work out its future untrammelled by Treasury control"— untouched by the cold and clammy hands of the Chancellor of the Exchequer and the right hon. Gentleman.

Lord Delamere considered of particular importance the proposed Dodoma-Fife Railway, which would unite Tanganyika, Nyasaland and Northern Rhodesia, and make it more difficult for a Defeatist Government in Great Britain to return Tanganyika to its former owners. I know the Colonial Office have been greatly influenced in the past by the forcible personality of Lord Delamere and I hope that proper weight has been given on this occasion to his desire to contract out of the benefits of this £10,000,000 loan. I am sure there are many projects in the other East African Colonies which could well compete for the balance of the loan. Many of us would be glad to see Kenya drop out of the allocation altogether.

In the second place, as to the allocation between different purposes, I hope we shall get a definite statement later on as to what proportion of this loan in East Africa is to be devoted to purposes of native welfare, to use a phrase which is found in this Report. We attach great importance on this side of the House to the development of native welfare through better health conditions, through proper research into diseases and through improved educational facilities, improved water supply and so on. A whole series of objects has been catalogued in the Report of the Under-Secretary himself and referred to in the Schuster Committee Report—objects of native welfare on which money should be spent, and if there is any sincerity at all in the talk, some of it I think rather cant talk, about trusteeship for the natives, if it is really true, as some of us believe, that we hold these territories primarily as trustees for the natives' interests, we want to know what is going to be done to transform that pious expression from a phrase into a reality and what fraction of the loan is to be allotted to purposes of native welfare. Furthermore, apart from native welfare, what proportion of the expenditure on railways, roads, and so on, is going to be devoted primarily to the opening up of areas in which the natives own or occupy the land and in which the native population constitutes the producing population and in which the natives produce for themselves, and not for white planters? What proportion of the railways it is proposed to build is going to serve predominantly native areas, and what proportion is going to serve areas inhabited by Lord Delamere and other white planters? Some of us have a suspicion that too large a proportion of this money will go to serve what we may call the white planter areas, and too small a proportion to the predominantly native areas. I hope that the Under-Secretary will be able to show us that that suspicion is unfounded.

I would like to comment upon one fact, in passing, from the point of view of trade. We have heard a great deal about the importance of opening up these East African dependencies in order to increase trade and employment in this country. It is exceedingly important to increase the purchasing power of the native population. At the present time—I am not going into detail—the purchasing power of the native populations in East Africa is miserably less than the purchasing power of the native populations in West Africa.

Mr. ORMSBY-GORE indicated assent.

Mr. DALTON

The Under-Secretary agrees. One way of increasing the purchasing power of the natives in East Africa is by allocating a considerable part of the proceeds of this loan to encourage native production and economic development on sound lines in areas inhabited predominantly by natives, as distinct from white planters Anyone reading the Schuster Report will be astonished to find the inefficient, slip-shod way in which these projects for railway construction, harbour improvement, and so on have been brought forward. One might say, without misrepresenting the Report, that the conclusions at which the Schuster Committee have come is, that the great majority of the schemes that have been put up for participation in this loan are schemes which have not been properly thought out or properly worked out at all. Proposals have been put forward for railways to be built, and they have, apparently, been put up by people who just took a map and said, "There is a railway there. There is a railway here. If we make a railway through the middle, we can make a connection and develop the trade of the country."

It is continually represented in the Report that no proper survey has been made of the routes which the railways are to follow, no economic surveys have been made, no topographical surveys, and no proper businesslike working out of the plans. That is a very serious reflection upon the competence of the Colonial Office. They have had over two years in which to prepare this matter. It is a reflection upon the competence of the local governments that they should ask for a guarantee for millions of money without having taken the pains to get businesslike surveys made, and details worked out. I do not wonder that the Treasury, always willing to take any excuse to stop expenditure, whether good or bad, should have pounced upon some of these proposals and turned them down, on the very obvious ground that they had not been clearly thought out and considered.

I should like to know what steps are being taken to comply with tile recommendations of the Schuster Report, including the recommendation in which they say: We venture to express the view that it might prove a sounder method for encouraging development, within the Empire to create machinery which would provide for the continuous study of new developments and afford the various Dependencies an assurance that they would have fair chances at all times to raise money for really sound and carefully prepared projects. Has any such machinery been created? Is it intended to create such machinery, or are we to risk embarking large sums of money upon plans which have no sound basis in foresight and preparation? These are questions to which a party, and the representative of a party, who pride themselves upon being Empire builders, should be particularly anxious to give satisfactory answers. The proposals that have been considered in the Schuster Committee Report are proposals not for Empire building but for jerrybuilding, of the very shoddiest description. I could read passage after passage. I would refer, for instance, to the proposal for a bridge over the Zambesi, referred to on page 20 of the Schuster Report, concerning which the Committee say: As a preliminary to any final decision, the following are required. Then follow nine separate inquiries, nine separate duties of surveying, investigating, estimating, and so on, to be carried out by competent people on the spot before it can be decided whether money should be embarked upon this project or not. What an instance of incompetence and slothfulness on the part of the Colonial Office that none of these things have been looked into. I hope the Under-Secretary will have something to tell us in extenuation of the very serious criticism implicit in the Schuster Report.

Now I turn to the question of Palestine. On that I have relatively little to say, beyond the fact that we are not making a loan of £4,500,000 or guaranteeing a loan of £4,500,000 at all. What we are doing is to guarantee them a loan in order that they shall pay back to the taxpayers of this country £1,500,000, and further sums amounting to £3,000,000 altogether, described as a clearance of past obligations. It is always worth while to guarantee loans to other people, providing that the proceeds of those loans pass back to us. I can imagine very good finance being conducted on quite a wide scale on that principle. We could guarantee a loan to France on condition that all the proceeds are paid back to us. That might be a final settlement of inter-Allied debts.

Actually, when you have subtracted all of what I might call the bogus operations as far as the development of Palestine is concerned, you have left a sum of £1,500,000 actually to be spent on developments in Palestine, chiefly, I gather, on harbours, railways and so on. I am not aware that any Committee comparable to the Schuster Committee has been invited to examine and throw cold water upon those projects. I have not seen it, and it has not been published to this House. All I need say further on the Palestine issue is that the sum we propose to lend for development is relatively small, that we in the Labour party have always supported the Zionist experiment as being bold and hopeful, and we shall certainly do nothing to prevent it from receiving the financial help which is necessary to give it a fair chance of life and success in the future.

Sir GEOFFREY BUTLER

While I must confess that there were very many parts of the hon. Member's speech with which I profoundly and cordially disagree, there was one point which I think a good many Members on this side of the Committee may share in common with him, and that is, a certain questioning as to the wisdom of the delay which has been shown in acting upon what he terms the "Ormsby-Gore Report." It is not that we are surprised that the Schuster Committee should have watered-down, as he called it, the recommendations of that Report, because second consideration in a matter as complicated as this was almost bound to suggest doubts and to visualise obstacles. The Ormsby-Gore Report never pretended to be a detailed scheme. If hon. Members read the Report they will see that detailed recommendations throughout that Report were definitely eschewed. There are a thousand and one difficulties that must hold up any attempt to get too rapid a move on in this matter: difficulties connected with labour, and financial charges that are coming to the Colony in 1934. At the same time, it does seem to me that we cannot read the history of our Colonies without realising that there is a tide in the affairs of a Colony which, taken at the flood, leads on to fortune. Once they are neglected, one may never recapture the opportunity omitted.

Can anyone doubt at the moment, taking, for instance, the Colony of Kenya, which is occupying people's minds so much, that it has shown a rapid and singularly promising development? We have just sent to it a very able Governor, who has tackled, so far as one has, followed his speeches, the very many diffi- culties and problems with which that Colony is confronted, with singular tact and discrimination. A single false step from one in authority in Kenya just now might further embitter feelings which have been so greatly roused and stirred, very often through the unsympathetic treatment which certain of the parties out there have received from quarters in this country. We ought to look at this question particularly from the point of view of the man on the spot. There is a danger that if they continually find themselves checked from the home country, the people who are trying to pull the discordant elements together out there, may have their task rendered more difficult. We need to back the people who are doing good work there in pulling together the discordant elements, in developing scientific research, and in trying to turn men's minds out there from discordant quarrels to constructive harmony.

There is one further point, which I would like to emphasise, and that is, the whole question of the future status of the harbour of Kilindini. There, we had quite definitely a report from the people on the spot., which gas checked from home by another authority which reported in a different sense from that of local opinion. I am not for a moment saying that it had not a right so to report. It represented larger interests, and it represented, as the Governor said, the interests of those who approached the harbour from the sea rather than those who sent goods down to the harbour. This question has been held up and we cannot find out, although question after question has been asked, whether or when the Colonial Office are going to come to a final decision upon the future status of Kilindini Harbour. That is the kind of thing that breaks the hearts of the people on the spot.

Surely, even if the Schuster Commission is right, and I am not qualified to say whether it is or is not right, in holding up this improvement from the financial side, upon the question of getting a quick decision in regard to this harbour, surely there can be no doubt that we should so proceed as to reach the very earliest conclusion. It is the only thing that we can we interfere with the Government out there in all sorts of ways, and perhaps rightly, but it is our duty to meet them and to help them by giving them a clear and definite decision, and a quick decision. Until that is done, you have that bottle-neck which is never clear. The longer we put off the decision, the more difficult it is to balance the arguments for the development of the lighterage side and the docking side. I hope that before the Committee passes from this subject we shall have a definite statement from the Colonial Office that before the House meets again a decision will have been reached upon this point.

Mr. W. BAKER

As a supporter of the proposal to grant a £10,000,000 loan to East Africa, I find myself in very considerable difficulty in this discussion. I am in a difficulty because I do not understand exactly what value is to be attached to the Report of the East African Guarantee Loan Committee. I have read that Report very carefully. If I felt that we were considering that Report here to-night, and that the Report was to be the basis of the future action of the Government, I would be willing to acquiesce, and I would have nothing more to say. But I am very disturbed, because I feel that, while we have before us the Schuster Report, we have absolutely no guarantee that when the House has agreed to the money being spent, the Government will follow the lines which have been laid clown in that Report, and I would particularly draw the attention of the Committee to the Note which the Secretary of State for the Dominions has placed on page 3 as a preface to the Report. He says: The Secretary of State wishes it to he clear that in issuing the Report he should not be taken as having accepted the recommendation of the Committee and, in particular, that, he does not accept their recommendations as to the Amani Institute. What I have to say is not directed to the Amami Institute, hut those words, being there, I quote them. The Note continues: Further, he wishes to emphasise the fact that, in view of the urgency of the matter, he has had no opportunity of consulting the local Governments concerned, and that it will be necessary for him to invite and consider their comments before any recommendations contained in the Report are or are not accepted by him. I think at this point I might associate myself with the remarks of the hon. Member for Peckham (Mr. Dalton) with regard to delay. It does seem remarkable that the Government should place the Report of the Schuster Committee before the House for consideration without any definite understanding as to when and whether any of those recommendations in that Report are to be adopted by the Government when the Resolution has been passed, and my concern becomes the greater when I find, on reference to the discussion which took place on the 21st July, that the Secretary of State for the Dominions is reported as saying: The Committee (that is, the Schuster Committee) also recommend in Tanganyika the Dodoma-Fife line at an estimated cost of £2,700,000."—[OFFICIAL REPORT, 21st July, 1926; col. 1332, Vol. 198.] It may be that my ability to read the Report is at fault, but when I turn up the report of the Schuster Committee, I find that, instead of recommending the proposal, they absolutely turn it down, and give their reasons for so doing. That, I think, brings me to the point of criticism with regard to this Financial Resolution with which I am most concerned. I do not think there is any serious difficulty except in so far as Kenya is concerned. My hon. Friend gave expression to his feelings with regard to Lord Delamere. He quoted from one speech which was made by Lord Delamere, but I think there is more to be said with regard to that noble gentleman. Lord Delamere, as my hon. Friend said, is anxious to escape from the control and influence of the Treasury and of the Colonial Office, in order to work his Imperial purposes in Africa. I submit to this Committee that so long as Kenya occupies its present relation toward the British Empire, the leading spokesman for the settlers in Kenya should be a little bit more respectful toward the Colonial Office and the Treasury.

I want, particularly, to draw the attention of the Committee to a pronouncement by Lord Delamere, in which he stated that if the policy was to he that every native was to be a landowner of a, sufficient area on which to establish himself, then the question of obtaining a sufficient supply of labour would never be settled. I fancy that the question of labour is going to present very serious difficulties as far as this loan is concerned. I think we are entitled to ask the Government that in any expenditure which takes place as the result of this loan, no labour will be forced on to public works, and, further, that no labour will be persuaded to work on behalf of a public authority, when that labour is urgently needed for the development of the holdings which are held by the natives themselves. I am unable to give the quotation, but I understand the Under-Secretary has publicly declared himself in favour of helping the natives to develop and cultivate their own land. I am very glad the Under-Secretary has taken that point of view, because it would appear that the whole struggle is likely to centre round that point, and it is on that that the serious point of difference exists between the Colonial Office and the settlers in Kenya.

It is absolutely important that the developments which are to take place as a result of this loan shall be developments in the best interests of the whole community, and in the interests of the future of Africa, and I do hope the Under-Secretary will be able to give an assurance that influences will not be allowed to operate which will have the effect of substituting for the Report of the Schuster Committee other proposals which, in their effect, will be designed, not to serve the future of Africa, but to add to the large accumulation of wealth which many of the middlemen hope to secure. I realise how difficult it is. I realise that in this part of Africa, as in other parts of Africa, men have been persuaded to buy land at an excessive cost, in the belief that they stood a chance of developing the country to their own permanent benefit, and these men naturally, having bought the land, like to secure a return which is difficult to obtain unless native labour is available. I believe the Under-Secretary is endeavouring to hold the balance very fairly indeed, and my great hope to-night is that the criticisms from this side of the House will be accepted as an endeavour to strengthen his hands against those interested persons who are anxious to obtain freedom in order to thwart the Government in Kenya.

Sir FREDRIC WISE

The hon. Member for Peckham (Mr. Dalton) stated that there had been a fall in Government and trustee securities, and the Financial Secretary, I think, called him a joker. If only the Financial Secretary would realise what a fall there has been in Government and trustee securities since the Conservative party came into power, I feel that he would not take so lightheartedly the remark made by the hon. Member for Peckham. In fact, if it had not been for the fall, I certainly would not have been making a speech to-night, because should have felt it was not my duty to point out the tremendous amount of subsidy and guarantee which has been given by the present Conservative Government. I enjoyed the speech made by the Secretary of State on the 21st July. It was an optimistic speech, and I sincerely hope the Under-Secretary will consider that any criticism I put forward will be of a constructive kind. It is very easy to criticise, but I can assure him that in anything I can say I will endeavour to make it constructive.

I want to divide my speech into two special parts; one is financial and the other is development. With regard to the first—the financial—I think a broad view must be taken of any Empire financial development, but when it comes to the guarantee of the principal and interest of £14,500,000, I cannot help thinking that it is an immense sum, and, in fact, almost more than the country can bear at the present time. It can only be obtained from the savings of the people, and as they have gone down owing to the trouble we have had in industry, it makes the position more difficult. The interest of 5 per cent. on this gigantic sum comes to £725,000 a year. If is a great amount for any colony to pay, and the money is to be spent, roughly, about £8,000,000 on railways, £1,600,000 on ports, and £2,750,000 odd on roads, etc. But what is the policy with regard to this expenditure? I feel that if we are going to make this very large expenditure, we should be certain, as I think the hon. Member for Peckham stated, that there should be employment in this country. I had a question down to the Secretary of State on the 17th November last with regard to imports into some of these Colonies, and the percentage that was British. From Tanganyika, from January to July, 1926, only 40 per cent. represented imports from Great Britain; and from Kenya and Uganda, from January to July, 1926, 41 per cent. was British. But when we come to Palestine, from January to July, 1926, the percentage of British was only 10.3. I had a question down to-day to the Secretary for Overseas Trade with regard to Palestine, and I find in his reply that articles wholly or mainly manufactured which go into Palestine, out of a total from January to July of £2,197,000, £254,000 were British and £1,900,000 foreign. Is that the policy? That is not going to give employment to this country. I cannot help thinking that we are playing skittles with our credit in advancing this large amount for principal and interest guaranteed, and which is not to the benefit of this country. I do not know whether it is the view of the Treasury that this is perfectly safe, perfectly sound finance. All this £14,500,000 must come out of the savings of t4 people, and, I repeat again, our savings are considerably less to-day than they were previous to the coal trouble.

8.0 P.M.

There is one point I would like specially to bring to the notice of the Under-Secretary, and it is with regard to the Uganda Railway. He knows the Uganda Railway far better than I do, but why is it necessary to guarantee this at all? The hon. Member for Blackburn (Sir S. Henn) is not here, but he stated in a speech in July: What need is there to give a Government guarantee in the case of a railway which is paying its way?"— [OFFICIAL REPORT, 21st July; col. 1353, Vol. 198.] He, I understand, knows the country. Why should we give a guarantee on this particular railway Why cannot the railway raise the money without this guarantee of principal and interest of the taxpayer? I put a question down at the beginning of 1926 as to the net earnings of this particular railway. The reply showed that in 1923 the net earnings were £415,000, in 1924 £756,000, and in 1925 £778,000. Why should the taxpayer guarantee this railway? I am all in favour of trying to help the Dominions and Colonies in every way possible, especially financially, but money and savings are scarce and will be scarcer. But here is something that has been going on for many years and is paying its way, and why the taxpayers should guarantee a large sum on this particular railway, I do not see.

The right hon. Gentleman the Colonial Secretary said on 21st July: There is thus a substantial surplus for renewals, betterments, and loan charges, and the policy until 1934 is to use this surplus for the improvement and development of the railway system in East Africa itself, and only after 1934 to deal with the question of repayment to this country of the interest on the original expenditure incurred."—[OFFICIAL REPORT, 21st July, col. 1334, Vol. 198.] That is milking the taxpayer too much. I contend that it is not business. The Labour party when they were in power did almost as badly. They gave this particular railway £3,500,000 free of interest for five years. That is not business. Surely this House can endeavour to protect the taxpayer in a better way than it has done in the past. When you think that your National Debt is higher than it was in 1919, when you consider that your interest charges, the management charges of the National Debt were greater last year than they were in 1921–22, I feel that it is time that every protest should be made to help the taxpayer to reduce this gigantic expenditure. Anybody who looks at the Budgets of these small Colonies and Protectorates will see that the margins are very small. I should like to ask the Under-Secretary what would be the position of Kenya owing to the fall in the price of cotton. Mr. ORMSBY-GORE: Kenya does not produce any cotton.

Sir F. WISE

Well, Uganda. I understand that there has been a very heavy fall, and it must affect the budget of that country. Who is going to pay the interest on a big loan? The margin of the budget will be smaller than ever. I do not want to disparage any development in Uganda, but I want to look at it from the taxpayers' point of view. I think it would have been far better if the Conservative Government had given a Grant-in-Aid instead of this large loan. But that is a matter of policy. With regard to Palestine, there is £4,500,000 to be guaranteed principal and interest and at 5 per cent. the interest would be £225,000, but Palestine is on quite a different footing from East Africa. That country has tourists, and about £500,000 subscribed annually by the Zionists.

Lieut.-Commander KENWORTHY

£2,000,000 a year.

Sir F. WISE

Well, the country is all the better off therefore, and it might be argued that there was no reason for guaranteeing this loan. That is all I have to say with regard to the financial proposition, and in regard to the guaranteeing this large loan of £14,500,000.

My second point is development. I am not hostile in any way to development, but we want wise expansion. We want not development in theory, but development in practice, and I mean by that that we should not develop unless we can see some sort of return on our money invested in the next two or three or four years. I have studied all the Reports that have been made in regard to East Africa, and I feel that anybody who studied the Schuster Report would never advance money against that Report. Take it down to the City, and ask if anybody will advance money on that Report. There may be some reason for it being bad, but in nearly every scheme proposed there is a suggestion of a survey. If it is a case of a survey, why not leave this guarantee alone, or reduce the amount until you have made a survey, but do not go and develop until you are certain that your survey is in order and is properly carried out. Then there is the Report of the Imperial Shipping Committee, which advises great caution, and states: It is no doubt that the ambition of Mombasa is to become the Bombay of East Africa, but it must not be forgotten that there are other ports in the same area, such as Tanga and Dar-es-Salaam, which will compete. The maintenance of the right proportion of wharves and lighterage involves the balancing of many factors. What appears to be the second best may in the long run prove to be the more progressive policy. This is very important. Money has been lost in other ports which have been developed, and I do hope that there will be very great caution taken before this money is spent. Anybody who looks back into history must see that after the Napoleonic Wars, Britain more or less built the whole of the railways of the United States of America, but we built them with individual money and not with the taxpayers' money or guarantee. Practically everyone of these railways have been in liquidation. The individuals lost their money, and I do not want the taxpayers to lose their money through any indifference on the part of this Government guaranteeing these large amounts. Take Canada; that country was in the same position. The individual who invested in the Canadian railways lost millions of money, but that again was the individual. The individual goes in at his own option. If he wants to invest he can do so and run the risk of losing his money, but why should the taxpayer run any risk at all? I contend it is against the interests of the nation to encourage these guarantees such as the Government have been encouraging in the last year or so.

In conclusion, I sincerely hope that the Financial Secretary and the Under-Secretary will look into this large amount-and it is a large amount—most carefully, before it is actually offered to the public. Let us see that every scheme is properly surveyed, and if we are going to guarantee this £14,500,000 let us see that British goods are bought co as to give employment and do good in this country and help to benefit this country. Let us have prudent finance and prudent, development in this great big guarantee which is before the Committee at the present time.

Lieut.-Commander KENWORTHY

I will not claim any immunity on account of a maiden speech, although I suppose that technically it is a maiden speech. I had intended to say a few words, but had I intended to reserve myself, the speech to which I have just listened would have brought me to my feet. The hon. Member for Ilford (Sir F. Wise) is recognised as the greatest financial expert on that side of the House. For three weeks I have not had the pleasure of listening to him. On the other hand, I have been hearing ad nauseam that the policy of the party opposite is to develop the British Empire. Yet the moment that the Colonial Office come forward with schemes for developing the British Empire and the mandated territory, we have this damaging, punching, wounding attack from the hon. Gentleman opposite. He tells us that we are asking the taxpayer to finance the railways in East Africa and that the City would not look at it. Those patriots in the City who at every election time have such a care for the British Empire and the Union Jack prefer to lend their money to Germany at 8 per cent. They shrink from putting any money into these territories which have been won at such a cost by British blood and sacrifice. The hon. Member for Ilford, one of the patriots for the City—

Sir F. WISE

I was never in the City.

Lieut.-Commander KENWORTHY

The hon. Member is above the City; I apologise.

Sir NEWTON MOORE

He is an ex-Mayor of Ilford.

Lieut.-Commander KENWORTHY

He represents the financial brains of this country. He speaks of £14,000,000 for building railways and harbours, and constructive developments, but we have in this country spent £8,000,000,000 on destruction. These £14,000,000 are to be spent on creating work, and yet the hon. Member for Ilford holds up his financial hands in horror at this terrible extravagance. He talks of "playing skittles" with £14,000,000, but he helped to vote £115,000,000 this year for the Navy alone. So much for the Conservative policy of binding the Empire together, and of developing our own great Imperial territories. However, I would like also to point out that my hon. Friend the Member for Ilford is finite wrong in his facts. This is not new money for Palestine. It is it in the nature of a public loan. The greater part goes to pay for works done by the British Army, and we are getting money back, and we are getting a much better bargain than in the case of Mesopotamia.

Sir F. WISE

We guarantee to Palestine £4,500,000, so it comes to the same thing.

Lieut.-Commander KENWORTHY

Yes, we are guaranteeing it for a railway which the British Army built, and which is now being used for the general traffic of the country. In the case of Mesopotamia we have wiped a similar debt off, and therefore we are actually getting money back in the ease of Palestine. I have a slight grievance in this matter however. In July when this Vote came forward the Colonial Office very astutely lumped the two together—Palestine and the African loans. The result of that was that we had an extremely interesting statement on the East African loans and the Rhodesian loans, and not one word about Palestine. Those of us who are in- terested in Palestine did not intervene in the Debate, but there were a few words from the Front Bench stating the official Labour policy. That is the only opportunity we have had of discussing this great experiment of carrying out an ancient aspiration. But I would point out to my hon. Friend the Member for Peckham (Mr. Dalton) that this is not really an experiment. The Balfour policy is not an experiment. It is setting the British seal on approval on one of the most wonderful human urges the world has ever seen.

Mr. DALTON

I did not desire to use the word "experiment" in any derogatory sense at all. I merely desired to suggest that after this great lapse of time this policy was somewhat of the nature of an experiment.

Lieut.-Commander KENWORTHY

I am much obliged to my hon. Friend. At any rate, he stated that the Labour party supported the proposal. Does the hon. Member for Ilford know that since the reconquest of Palestine £10,000,000 of Jewish money has been subscribed in small sums by the poor people of the ghettoes of Eastern Europe, and that this money has been used for the building of hospitals and schools and public works and roads. Not one penny of this guaranteed loan goes into the Zionist Fund at all. The Under-Secretary of State will bear me out in this; and it is all nonsense for a certain section of the anti-Semitic Press to say "all these millions for Palestine." It is absolute nonsense. The Zionists are subscribing the money themselves. They are ridding the country of disease, nursing the Arab sick, doing wonderful work, and getting not one penny from us. We are doing very well out of this indeed. When the hon. Member for Ilford speaks of the port in East Africa, where immense developments are taking place, may I refer him to what his new colleague the right hon. Member for Carmarthen (Sir A. Mond) has said about Palestine. The right hon. Gentleman went to Palestine the other day, and when he came back he passed severe strictures on British business men in not being more enterprising in pushing their goods in that country. He said that there were no signs of British enterprise there, and I have no doubt the hon. Member for Ilford will agree with me that his new colleague is a pretty good judge of these matters.

Let me draw attention to the heavy imports from Palestine into this country. The trade is good, and the Port of Hafia will be one of the greatest ports in the Near East. Most of the shipping that goes to this port is, I am glad to say, British shipping. T must renew my protest against the action of the Colonial Office. It is very unfair to link these two matters together in one Motion. Once again we have gut into an interesting discussion about the relations of Lord Delamere with the Government, and the Government's relation with the white settlers, and once that hare is started it will be chased all night and we shall have no opportunity of discussing the very interesting questions concerning Palestine. We have not had a moment's discussion of this subject. As soon as we get into the Colonial Office Estimates all the pioneers of West Africa and East Africa at once begin on their pet topic and the subject of Palestine is absolutely swamped.

If we are funding this loan for Palestine, may I ask this question? Are we really going to do all we can to encourage the settlement of Palestine? In every other mandated area we have tried to attract settlers by giving them good terms for land settlement. In the case of Palestine all the land has to be bought in the open market, and land speculators are having a very good time indeed. And the price is rising. That is not quite fair. There are certain lands which should be available, land which is known as Crown lands. Can the Under-Secretary give us some guarantee that the Government are alive to the evils of land speculation in Palestine and are seeking ways and means to make the land available for settlement. The Zionists are doing very good service, indeed, by pouring their money into the country, setting up a number of services, and sending not only poor refugees, but business men of experience, who are setting up factories and employing labour. I think they should he encouraged. There is a danger in another direction. The wicked Bolshevists are offering land for nothing in the Crimea. I do not. know how that experiment is going to turn out, but they are making that offer to the Jewish people, who have a land hunger, to settle in the Crimea. They are giving that land for nothing and also lending money. I do not think it will have much effect because I believe the call of Palestine is too strong. But I would point out that the action of the Russian Government in the Crimea stands out in such contrast to British action in Palestine as to constitute a slight danger to the Zionist effort in Palestine.

Mr. ORMSBY-GORE

May I suggest to the hon. and gallant Member that the land in the Crimea is available free because it has been confiscated from the previous owners. We are not confiscating the land in Palestine.

Lieut.-Commander KENWORTHY

The Under-Secretary of State is misinformed on that point. The land which is being given is former Crown property, grand ducal estates, the appenage of the Crown. The land the British Government holds in Palestine is former Ottoman Crown land, and it is occupied by Arab squatters, men without capital, without experience and unable to cultivate the land. They are not putting the land to the best use. However, I do not want to press this point too much because I know the Colonial Office is trying to find ways and means for dealing with this question. I know there are difficulties, but I hope the Under-Secretary will be able to tell us to-night that the Colonial Office is alive to the need of making more land available for settlement and stopping the land speculation. I know they are trying to do their best for the Zionists, and I hope we shall have a courageous statement from the Under-Secretary. In view of the fact that we have had no discussion of this extremely important subject since the present. Government took office, I think we ought to have a declaration to-night, and I invite the Under-Secretary to make it.

Sir NEWTON MOORE

I would like to congratulate the Labour party on the inclusion in its ranks of an hon. and gallant Member who shows such a keen interest in Empire development. With the hon. and gallant Member as Prime Minister, and the hon. Member for Ilford (Sir F. Wise) as Chancellor of the Exchequer to curb his enthusiasm, we should have an ideal leadership. At the same time I must say that, although I agree very largely with what has fallen from the hon. Member for Ilford, I am rather disappointed. If the men who were the original pioneers and developers of the Empire had had the same views as the hon. Member, very little would have been done. My memory goes back 25 years when a population of 60,000 people borrowed £3,500,000 to take water from the coast to the gold fields of Western Australia. At that time it was called "finance run mad." But the proof of the pudding is in the eating of it. That loan will be paid off next month. A 3 per cent. sinking fund was provided. At the same time the loan enabled the gold fields to develop and to produce no less than £160,000,000 worth of gold.

Sir F. WISE

Have guaranteed that money?

Sir N. MOORE

The guaranteed it.

Sir F. WISE

Not the British taxpayer?

Sir N. MOORE

No, but I am giving an example of what the hon. Members' narrow-minded policy would lead to in a country that wants to develop. I have the greatest respect for the hon. Member for Ilford, and I am very glad that we have in this House such watch dogs over financial expenditure, but I am not going to say that I subscribe to the whole of his doctrines. I speak as a surveyor and engineer. If I had had to put through railway Bills, and with as little information as is provided in this case, I had had to persuade the House to pass them, I would never have got them through. Fancy asking the House to give this money without a survey having been made, without any information as to what the tunnels or the bridges will be like! The information submitted here is an insult to the intelligence of ordinary business men who look at the matter from a business point of view. After the criticism that has been heard to-night, I hope that the Colonial Office will investigate the proposals carefully, and will take no action until it has been found, as a result of a survey and close investigation, that the works are advisable. One matter that has not been referred to, though of the greatest im- portance, is the question of the gauges. We must be careful not to repeat the mistakes, made in the past with regard to gauges. In Africa at the present time, from the North through Egypt and the Sudan, the gauge is 3 feet 6 inches. It is the same from the Cape upwards. Yet we have in some other places gauges of 3 feet 3 inches and 3 feet, and from Beira down to Lourenco Marques it is 2 feet. Provision must be made at terminals, in cuttings and on bridges, so that eventually it will be possible to use the standard gauge of 4 feet 8½ inches. I would impress on the Colonial Office and its engineers the necessity of taking special care that provision is made in construction work for this wider gauge.

The reason why this House has given its approval to the guarantee in the past has been that the expenditure would provide a certain amount of employment in this country. We have the total cost of the railway, but we are not told how much is to be spent on rolling stock or on rails. Those details are left to the imagination. I hope that in course of his reply the Under-Secretary will give us information on these points. No attempt has been made to give any estimate of what the revenue may be. As a rule, when a railway is constructed in a new country, the first thing done is to complete a survey of the new land. The land is generally classified so as to give some idea as to how many people will be carried, what sort of population there is, and whether the revenue will justify the construction. What has been said in regard to private enterprise constructing these railways is all very well, but in new countries private enterprise cannot do it. Private enterprise is not going to put down a railway through virgin country without knowing what the revenue will be. The only alternative is one which I would always recommend should be avoided, and that is to give a land grant to the railway. The experience of, Australia in one case, that of the Great Southern Railway, was that they got 12,000 acres per mile for every mile built, and at the end of the time it was necessary to buy the railways and the land. It is greatly preferable in a new country that the State should lay the railway. Everyone knows my views about private enterprise and State enterprise. There is a proper place for each. In a new country the State should build the railway and reap the benefit of the increment that will come. That is a sound proposition. It is a different question in old countries with big populations.

Mr. R. McNEILL

I did not intend to be drawn into the very tempting region which my hon. Friend touched upon in the concluding part of his speech. The real reason why I venture to intervene now is that my right hon. Friend the Member for Central Edinburgh (Mr. W. Graham), in a speech last Jul-, made some rather pointed references to the attitude of the Treasury, and commented on the fact that no representative of the Treasury had spoken that evening. I notice that my right hon. Friend has sat with great patience through the present Debate. I think it is due to if for no other reason, that I should make some response to the challenge that ho made, although it was made some months ago. I was not quite able to make out from the right hon. Gentleman's speech, nor could I make out from the speech delivered from the Front Opposition Bench this evening, exactly wheat the attitude of the party opposite is to the proposals which are now before us. The right hon. Gentleman certainly said that he was not opposed to the schemes of development which this proposal is designed to support. His words were: We are not hostile to the development by any means. At an earlier date the party opposite had shown that that was their attitude, because I find that as long ago as July, 1924, a Member of the party opposite, speaking in another place, announced that they were in favour of this country standing behind loans for the development of Palestine. Lord Arnold justified that attitude, because, although the needs of Palestine for development were great, it would be impossible for that country, without the British guarantee behind them, to get the necessary financial means, except on very prohibitive terms. Therefore, I am entitled to assume that the party opposite, as represented by the right hon. Gentleman and the hon. Member for Peckham (Mr. Dalton), who spoke this evening, are supporters of the general principle underlying these proposals, and that if they object to the proposals they object to them on matters of detail or of merit.

The right hon. Gentleman and some other speakers have laid a good deal of stress upon the attitude of the Schuster Report. They say that the Schuster Report is full of provisional recommendations and calls for a great number of surveys. They tell us that these are very insufficient grounds on which to ask the British Treasury to give these guarantees. It is quite true that there are provisional recommendations in the Schuster Report, and they do call for a good many surveys, but I think the attitude which some hon. Members have taken up on this point shows a good deal of misapprehension as to the method which will be pursued if we accept this Resolution and the Bill which will be founded upon it. If the hon. Members who lay so much stress on the insufficiency of the Report turn to paragraph 27 they will find the reason advanced by the Committee for not making a recommendation in respect of one of these schemes. They say: It does not appear to us justifiable to hold up other developments for which there appears to be an immediate need and commercial justification and which will probably exhaust the full amount of £10,000,000 for the sake of reserving so large a proportion of this sum for a project which is at present vague and undefined. This shows that although they took up an attitude of reserve in regard to a good many of the specific schemes with which they were dealing, they came to the conclusion that there was a sufficient number of schemes with commercial justification to exhaust the whole amount of the loan to be guaranteed. Supposing this view to be wrong—and this I think is where the misapprehension of many hon. Members comes in—supposing, in point of fact, that there is not a sufficient number of schemes which on close investigation prove to be sufficiently sound, and with good enough hopes of remuneration to justify a guarantee, then the guarantee will not be exhausted. Surely hon. Members do not think that this whole loan of £10,000,000 and also the smaller loan of £4,000,000 will be issued and guaranteed forthwith when this Resolution and the Bill which follows have been accepted, or without any further scrutiny as to how it will be used. That will not be the case at all. If the Resolution be accepted, the Bill will make it quite clear, in a form familiar to the right hon. Gentleman the Member for Central Edinburgh that the Treasury will not sanction guarantees until they have satisfied themselves as to the soundness of the particular ventures involved. They will consult the expert committee which will be in a position to advise them. It may well be, when some of the surveys recommended by the Schuster Committee have been made, that in the light of those surveys and of the advice given to the Treasury, they may say that schemes A, B, C or D seem useful from the point of view of the development of the territory and seem to hold out the prospect of sufficient remuneration to make them sound financial propositions. Then those schemes will be sanctioned and carried out within the limits of this sum of £10,000,00. The Resolution only says that the amount is not to exceed £10,000,000. It does not put any obligation on the Government or the Treasury to spend the whole of that amount at once.

Mr. MacLAREN

In the event of money being advanced will the Government take strict precautions to see that they are recouped for advances in respect of any of these ventures? I understand there has been some question with regard to ventures carried out previously in this connection, and it is not enough to advance the money without safeguarding the Government.

Mr. McNEILL

At every step the greatest possible care will be taken by the Treasury to see to that, as far as they can. The Treasury cannot themselves have personal expert knowledge of this country. They can only act on the expert knowledge which is available to them. They will, as far as possible, safeguard themselves against guaranteeing what might be described as wild-cat schemes. Whatever they guarantee will be considered by them to be good sound schemes, well-secured and likely to be of advantage from the point of view of the development of the territory and also, we hope, from the point of view of securing orders for our own trade in this country, and consequently giving employment to our own people.

The right hon. Gentleman the Member for Central Edinburgh, speaking in July last, referred to the strain upon our credit. I am not complaining of that at all. I agree with him. I think he said something to this effect, that although the sum involved might be a small matter compared with the total indebtedness of the country, still it was a sum which we ought not to guarantee light-heartedly. I agree. The hon. Member for Ilford (Sir F. Wise) was also concerned as to the strain which might be placed upon our credit in view of the undoubted need of conserving it to the very best of our ability, in view of conversion necessities in the future. That is all quite true. But these loans up to the amount of £14, 000, 000 are not going to be issued straight away. They will be issued from time to time as the money is needed for development schemes, and with careful watching of the money market, so that they shall be issued in the best circumstances, both from the point of view of the territories out there, and of the taxpayer here.

The right hon. Gentleman seemed to me to suggest, as did the hon. Member for Peckham, that a better alternative than to guarantee this sum now would he to set up some form of permanent machinery for dealing out such grants or guarantees as might be wanted from time to time as necessity would arise, and there is a paragraph at the conclusion of the Schuster Report which gives some support to that idea. One speaker this evening quoted that concluding part of the Report, and asked whether we proposed to set up some machinery of that sort. I do not agree with the Schuster Report in that particular, or with those who have taken that line. I am certain that, from the point of view of British credit, it is far better to let the whole world know exactly the limits of our liability once and for all, and that it is much better to guarantee this £14,500,000 under this Resolution than to give Parliamentary sanction to some machinery such as the Schuster Report seems to foreshadow, which would from time to time, as occasion arose, deal with British credit. That would be much the most dangerous way of doing it, and, therefore, it does not appear to me that there is any method which we can carry out for the purpose we have in view except the method adopted.

The right hon. Gentleman, who told us that he and his friends were not hostile to the principle of the Bill, said we could conceivably lower the amount. What would be gained by that? What would possibly be gained by lowering the amount except that from time to time, in respect of, t ay, £2,000,000 at one time and £3,000,000 at another, we should have to come and argue the whole of these cases, taking up the time of Parliament, without any corresponding gain either to the immediate strain upon the taxpayer or from the point of view of our credit? As I say, if the House accepts our proposal now, the money will only be used as and when it is wanted. One or two speakers following the right hon. Gentleman last July——I think the hon. Member for Ilford was one of them—said they hoped that the Treasury would very carefully scrutinize the policy embodied in this Resolution, and asked us, I think, to reconsider it. Very careful consideration by the Treasury was what the right hon. Gentleman opposite demanded last July. Well, I am sure the right hon. Gentleman knows the Treasury far too well to be under any misapprehension on that point. He knows perfectly well that before any Government could bring down to the House of Commons proposals of this sort, they would have to have gone through very careful consideration by the Treasury, and, therefore, he knows quite well—no one knows better than he—when he sees a Resolution like this on the Order Paper, standing in the name of the Financial Secretary to the Treasury, that it has had the very careful consideration which he thinks it ought to get.

There is only one other point of view on which I would like to say a word, and it is this: the Treasury is always reluctant, and rightly reluctant, either to make an extended use of our credit or to make any demand upon the taxpayer. The natural inclination of the Treasury is always, I am glad to say, niggardliness so far as it can be, but at the same time in a matter of this sort, where a great policy is involved, we have to took at the balance of advantage and disadvantage on one side and the other. The Treasury, in the scrutiny that they have given to the matter, have come to the conclusion, first of all, that there is practically no danger of any loss. There is no danger, so far as we can see, of the taxpayers being called upon to pay money. They have, as security behind them, not merely the revenue-producing schemes upon which this capital expenditure will be made, but, in addition to that, they have, as a second line of defence, and a very important one, the general revenue of these territories where this development is to take place. These territories are in a perfectly sound financial position. They have all, I think I might say, balanced their ordinary Budgets for some time past, and they are nearly all in the enjoyment of surplus revenue, and, therefore, so far as the Treasury are able to judge—and I think they can judge very well—we do not think there is any danger of our security being called upon.

But there is not only that. The figures of trade were given by my right hon. Friend the Secretary of State for the Dominions, in considerable detail, last July, and they show that the economic position of these territories, all things considered—considering how new they are and how little development has yet been put into them—is really favourable, and that their trade is expanding. Therefore, surely this is a case, if there ever could be a case, where the British Government may legitimately use either British money or British credit for Imperial development, where it is amply justified in doing so. I can only say, speaking, as I do, in response to the challenge that came from my right hon. Friend opposite some months ago, that, so far as the Treasury are concerned, we have no more misgiving than we are always liable to have in matters of either credit or cash, and we think this is an enterprise to which, as far as the finance of it is concerned, the House of Commons may very well give its sanction.

Mr. WILLIAM GRAHAM

It was not anticipated on this side that the Financial Secretary to the Treasury would speak at this stage, but may I say at once that I am grateful to him Personally for the information he has given, and I ask the leave of the Committee to say only one or two words in reply, especially as I believe that later to-night the Under-Secretary of State for the Dominions will deal with other speeches in the Debate. May I make it perfectly plain that the Financial Secretary has rightly inter preted our attitude, which is one of friendship towards these proposals, but the difficulty which some of us raised on a previous occasion is concerned almost purely with the finance of the scheme. It is perfectly true that the Treasury will, of course, in all circumstances see that the fullest safeguards are introduced, but if hon. Members turn to the White Paper, which gives details of the proposals, they will find that these loans — and am thinking here particularly of British East Africa—are to be guaranteed as to principal and interest by the Government of this country, that a sinking fund stretching over a period of 40 years is to be established, that the Government here are to be satisfied with reference to the application of the resources, and that the right to protection of this country is to rank after certain prior charges which already exist in these parts of the world. We come, in that proposal, to the real point at issue. The difficulty is that there is a great deal of controversy at the present time in those territories themselves. It may he perfectly true, as the Financial Secretary has pointed out, that they balance their budgets, but in some cases they have done so on a very narrow basis. There is a great deal of discussion to the effect that. their taxation is getting higher: attention has been called, particularly in the case of Kenya, to their capital liabilities; and one speech was made by a leading authority in that country pointing to what. the state of affairs should be in 1935. We have on one side the proposals of our own White Paper, with all the safeguards to which the Financial Secretary rightly draws attention, and, on the other hand, we have this mass of controversy in the territories, coupled with a strong desire on the part of some people to he rid of Treasury control altogether and to get complete freedom from any assistance of this description.

What is the practical position for any friend of a proposal of this kind in the British Parliament to-night? We have to remember that these loans are going out on to the open market guaranteed in their respective stages by the British Government, and surely it is our common duty to see that they go out on to the market under the most favourable conditions. In point of fact, do they go out under the most favourable con- ditions, if there is a controversy raging in these territories upon which many people in the British House of Commons have not made up their minds? The important point is that the Treasury have said nothing about any review, except of the most general character, of the financial position of these territories. We should like to know in very much greater detail what is to be done, and what is the precise form of machinery—whether by way of advisory committee similar to that which there is under the Trade Facilities Act, or any more general review—which may be introduced for the purpose of protecting their finance. The Financial Secretary excludes the possibility, as I understand his speech to-night, of anything of the nature of a general board, but he has emphasised that these great schemes of development in East Africa will be stronger and better if they are considered as far as possible as a whole. If they are to be coordinated, and if any kind of co-ordination of that description is in mind, it suggests that the finance must follow the schemes and must itself be on comprehensive lines.

The Financial Secretary apparently excludes the possibility of any body which is going to review the problem on such a basis, and while it. is very difficult to draw an effective analogy between what has happened in Australia, still this fact remains, that—excepting New South wales—there is a kind of general loan council, and strong efforts are being made to bring New South Wales into that council for the express purpose of meeting this financial criticism which has arisen under the operation of the Colonial Stock Act, 1900, and the £600 million which Australia has raised in one way or another on the open market. What is the ground of that criticism to-night? It is closely related to some aspects of this problem. It is criticism to the effect that they have not established proper sinking fund arrangements, that they have abused the trustee rights which are accorded to them under the Act of 1900, and I, for my part an enthusiast for schemes of this kind, am very anxious to see that these difficulties are not repeated in British East Africa or any other territory over which we maintain some kind of financial supervision or guarantee.

9.0 p.m.

I am very far from being satisfied that we have taken all possible steps to avoid that result, and I can well imagine—and this is supported by some criticism in the City, that these loans may be floated—not 1:10,000,000 at once, I agree, but in varying stages—under conditions of doubt and criticism. It may well be that these countries would have to pay a little more in the open market, even with the guarantee of the Government thrown in. If because of doubt of that kind there is a very small extra percentage on the amounts which are raised, a serious risk will be run that the budgets of some of the territories for which we are incurring responsibility to-night will not balance. Let. us assume for a moment that they do not balance, and that there is criticism in the territory regarding the burdens, then we should get that prejudice reflected in all the further stages of the development—a prejudice arising because of certain grievances connested with the financial situation. I will not say more now, because we shall have the opportunity of discussing this problem at greater length on the Second Reading of the Bill, but I do want to make our position perfectly plain, because I think the House will agree that unless we are on the soundest ground financially this thing may perish in our hands, and no section of the House would deplore that result more keenly than hon. Members on this side.

Major GLYN

The Committee have heard with very great interest the speech of the right hon. Gentleman the Member for Central Edinburgh (Mr. W. Graham), and as East Africa has occupied a good deal of attention this evening I would venture to say a word on Palestine. In this Vote is a sum of £1,115,000 for harbour works for Palestine. When the War ended and Palestine was established and the Zionist movement began, there was an intention on the part of the House of Commons to do everything to make the position of the Arabs happier and more secure than it was under the regime of the Turks. Since then there has been a great advent of Jews into the country from all parts of the Continent, and the most amazing developments have taken place towards making very fruitful a country which was often supposed to be barren; but until we get effective harbour works somewhere or other in Palestine it will be quite impossible for the revenue of Palestine arising from that development to be such as to repay this House what we have already advanced.

I, Personally, have always felt that the House of Commons could only agree to set up a national home for the Jews provided the rights of the Arabs were respected. All of us who have had the opportunity of knowing the Arabs, and working with them to some extent, feel that we have a tremendous obligation towards them, and that we can best carry out that obligation if we provide the country, out of our experience and our knowledge, with the wherewithal to develop to the utmost. A great deal has been done by the Empire Marketing Board and similar bodies, and there is no doubt that a great many classes of fruit, notably grape fruit, can he produced in Palestine. As far as I know, the grape fruit produced there is far superior to that grown in almost any other place, and it can be conveyed to the London market with ease; but there must be proper facilities for shipment. Anybody who knows the Eastern Mediterranean, knows that sudden gales spring up, and that it is almost impossible to continue loading vessels by the ordinary lighterage methods. There are two possible places where harbours could be established in Palestine, one at Haifa and the other at Jaffa. There are certain reasons why Jaffa will have to be developed to some extent, but I think the main development in Palestine will have to be concentrated at Haifa. The Vote to-night includes a sum of £1,115,000, and I would urge the Committee to look upon this as a really great investment, which will assist Palestine, and Trans-Jordania beyond, to go ahead in their developments; and I believe that by voting this money, and seeing that this development is carried out, we shall prove to the Arabs that we are aware of our obligations to help them to develop, and I feel that under the administration of the present High Commissioner the Arabs fully realise that their rights are more than respected.

There is a feeling of renewed confidence, and although events in other mandatory territory around caused at one time great anxiety, I believe the policy of the Government has been copied by other Powers who exercise a mandate, and if we help them to go one better by establishing harbours at Haifa, Jaffa and Alexandretta, what we do in that way will help not only the Arabs and the Jews but this country as well. There are parts of Palestine where the soil has not even been scratched, and I hope there will be developments in that country which will enable extra prosperity to flow to the local government, which will enable them to establish better road communication, an improved education, better sanitary conditions, and all those things which we stand for, and I hope the cost will in the end come out of the development of the country.

I regret that in a newspaper, which deservedly has a great circulation in this country, there recently appeared an article in regard to this Vote which was exceedingly misleading. It seems to me that we cannot take our hand from the plough at the present moment. A great work is being done, and we have got to go forward this little bit more, and see to it that, under Treasury supervision, the money is properly spent, so that Arab, Jew and Briton may all prosper as a result of applying scientific methods and adopting the best means of sending the produce of that country to all parts of the world. I hope this proposal will go through with the acclamation of this Committee. I know there are enemies who are always trying to pick holes in our policy, but I hope we shall now decide to go forward with a progressive policy, which I am sure will be for the good of all concerned.

Mr. RENNIE SMITH

I have listened with great interest to the informed and sympathetic statement on Palestine which has been made by the hon. Member who has just sat down. I do not wish to carry any further the criticisms with regard to the finance of these proposals which have been so ably put forward by the right 17-on. Gentleman the Member for Central Edinburgh (Mr. W. Graham), but I do want to draw attention to the aspect of these loans in so far as they affect the principle of trusteeship, and especially in relation to East Africa itself. I gather that if the recommendations of the Schuster Committee are carried out, we shall be involved in spending in loans upwards of something like £10,000,000 in East Africa, £6,500,000 for railway construction, £2,500,000 for harbour works, and about £1,000,000 for roads and other works of development. These are the recommendations flowing from the East African Report, and that Report, in addition to recommending the loaning of that money with the authority of the British Government, also makes other recommendations. For example, it draws attention to the system of taxation which is prevalent in East Africa, and makes recommendations for a modification and improvement in the system of taxation, more particularly in regard to the introduction and the improvement of Income Tax. It may be worth while to draw the attention of the Committee to the recommendations made in the Report itself. On page 175 of the Report of the East Africa Commission they say: We feel that both trade and non-native enterprise should in the future pay a larger direct contribution towards the revenue of the Colony. Just as in Northern Rhodesia and Nyasaland and throughout the greater part of the Colonial Empire, where non- native enterprise exists, some form of Income Tax should be adopted. I should like in particular to ask the Under-Secretary of State for Colonial Affairs if he will state whether it is proposed to make one of the conditions of granting these loans for East Africa the definite adoption of Income Tax as recommended in the Report from which I have just quoted. The Under-Secretary knows better than I can inform him that, so far as the Europeans in East Africa, are concerned, money is there in plenty. The same Report, in the next paragraph, draws attention to the growing prosperity of the European farmers in Kenya, and I would like to ask whether, in working out the conditions upon which these loans are to be granted, the recommendations of the Report from which I have quoted are definitely going to be applied, and whether we are to see something like a permanent new system of direct taxation applied. This is most important, as hon. Members will appreciate, in so far as the repayment of loans and interest for development in this direction is concerned, because so long as an indirect system of taxation exists, it falls largely on the shoulders of the natives themselves, and directly it is restricted very much to a poll tax on the natives.

If the Under-Secretary replies that through the Customs duties the Europeans in East Africa are already paying their fair share and therefore it is not really urgent, then we can answer that just as is the case at home, it is absolutely impossible to make an indirect system of taxation approximately equitable. If the Under-Secretary says that there is a proposal in the Estimates for Kenya to tax the Europeans to the extent of £50,000 and that this represents a beginning in this direction, I should like to be told whether that is not a payment exclusively for education and whether that can really be described as a beginning in this direction. When we are told that a very good education is provided for the Europeans in East Africa, I would remind him that it is largely paid for by the natives. According According to the figures they are now having £40 per head spent upon them, and the native himself is largely paying for that. in view of these facts, I do not think the Under-Secretary will try to persuade the House that this £51,000 is really an attempt to lay down a solid foundation, and if these loans are granted I hope a really sound system of Income Tax is going to be introduced in East Africa.

With regard to the working out of our trusteeship, I do not think there is any more important test of trusteeship than the system of taxation in these Dependencies, and the labour conditions that it is proposed to attach to the loans that are to be granted. T do not think there is any part of the British Empire concerning which there has been more complaint of bad labour conditions than in East Africa. In 1919, much opposition was raised in this country concerning the labour regulations in operation, particularly in Kenya, and we did get to the position, in 1920 and 1921, of definitely stating to the natives in Africa that the British Government was not prepared to use the Civil Service organisation in those Colonies to bludgeon the natives into compulsory labour or force them to take up work which, under conditions of freedom, they would refuse. Recent statements rather seem to point to the fact that we are harking back to the old and had policy of 1919, and I should be glad if the Under Secretary would say whether, in granting these loans, what is commonly known as the dual policy in regard to labour conditions is going to be insisted upon in Africa, or whether, as has been the policy of successive Governments since 1922, the native is going to be left perfectly free either to work on his own estates or to go out and work for the European, without, so far as the organisation of the Government is concerned, any pressure, direct or indirect, being brought to bear.

In that connection I should like the hon. Gentleman to deal with a statement which the present Governor of Kenya is reported to have made on this subject in the course of the present year. He is reported, both in the "Times" and in the "East African Standard, "to be intending to make a very serious departure from that policy. In the "East African Standard" of the 23rd October he is reported to have said: The Kenya Government does believe that an attitude of positive energy on the part of administrative officials is of the greatest assistance in aiding the flow of labour from the reserves "; And again, in the "Times" of two days later, he is reported as saying: He believed an attitude of hostility or neutrality on the part of administrative officers hindered the flow of labour. Therefore, they were now definitely instructed to do their utmost to promote the flow of labour from the reserves, a matter which was of immense importance to the industries of the country. I should be very glad if the Under-Secretary could give the House a definite assurance that the policy implied in these quotations, if it be attributable to the Governor of Kenya, is not being followed, and that it will be repudiated in the conditions attached to any loan that may be granted.

Mr. ORMSBY-GORE

I do not think that either of those quotations purports to be a quotation from the Governor's speech. They are the gloss put on to his speech by the special correspondent.

Mr. SMITH

According to these papers they are actual quotations of the words that he used. With regard to the whole question of the treatment of labour in relation to the use of this money, whether for harbour construction, port improvements or railways, would the Under-Secretary say with a little more precision in what way native labour is to be used in the future? He knows, again far better than I can tell him, that in East Africa the whole of the responsible officials are complaining that there is a grave shortage of labour for tile purposes of native cultivation and for the purposes of European cultivation, and that a very large part of their problem, as compared with West Africa, arises from the fact that, while in West Africa labour is relatively plentiful, in East Africa, with the exception of Uganda, it is relatively scarce. Does not the hon. Gentleman think that, instead of attempting to revert to the old bad policy of 1919, and to what I should still say was the relatively bad policy of 1923, the time has come for the British Government to bring pressure to bear in order that men may not be driven or bullied away from their native land into relatively badly paid occupations, breaking up the whole of their moral and conventions and standards, and that, just because labour is scarce, it should be a part of the business of the Government, in the conditions of the loan, to lay increasing emphasis on the possibility of getting higher results when labour is scarce, through the introduction of better technique and better machinery, and the development of a wise, educational policy? Is not the very fact that labour is scarce an overwhelming reason for, may I say, a more reverential treatment of labour? The Under-Secretary knows as well as I do that one of the reasons for the higher wages in the United States is that for a century they have had a relative shortage of labour, which has driven them to improve the mechanical side of industry and develop the technique, so that even a man like Mr. Hoover, the Director of Commerce, tells us quite frankly that, if the waste under modern industrial systems be represented by 100, America is not prepared to give more than 10 in waste of labour, whereas in several cases he has examined he puts down 60, 70 or 80 as waste of capital, waste of organisation and waste in the use of labour.

With regard to research, including education, I gather from the recommendations of the Schuster Committee that it is proposed to spend on research something like £39,000 out of £10,000,000. When Lord Cromer was developing the Sudan, he laid it down as a principle that in any economic enterprise he always took care to see that a certain proportion of whatever money was used was definitely allocated for educational and research purposes, on the ground that without such allocation there would be an ill-balanced development, the natives would come into improved conditions without knowing how to use their money, and so on. In this proposed loan, we on this side of the House would like to see a much more generous application of that principle and a much better balance than £39,000 represents in relation to £10,000,000 from the point of view of a sound conception of how the best development of these East African Colonies can be secured.

In that connection I should like to ask whether, in the case of this loan, it is proposed to allocate money for the training of teachers in East Africa. The African Committee for Education, with which the Under-Secretary's name has been so honourably associated for the past two years, has done admirable work on paper, but, as he knows, its very excellent recommendations for the development of native education and of research in Africa are largely held up because there is no money available for the development. Would Le not consider in addition to the possibilities of co - ordination of finance and administration in East Africa, and the possibilities of a common policy for these colonies and dependencies, would he not -consider a substantial grant of money as part of this loan in order that there may be developed, 10, 15 or 20 years hence, a-s rapidly as may be, a new kind of native teachers, a great new staff of native teachers for the whole immense work which is fundamental to any sound conception of East African development? With regard to the Jeanes School near Nairobi, would he be prepared to put money into schools like that or would he be prepared to work out the idea of a college for teachers which would be available perhaps for the whole of those colonies or dependencies at the same time? Cannot a great deal more he done than seems to be imminent, judging from the several publications bearing on the loan? Does he propose to put money into Amani? Does he intend to overtake the breakdown of that institution since 1914, which has been such a great loss to the colonies?

Finally, I would like to emphasise this aspect of trusteeship with regard to the proposed loan and the great enterprises which it will make possible. The Labour party is keen all the time to secure effective and sound economic development at home as well as in all parts of the Empire. We have been trying for the last 18 months to put sensible ideas into the Tory party with regard to economics. It is one of the biggest national losses of the last hundred years that we have not succeeded in that. We stand wholeheartedly behind any economic proposal for the development of the material and other resources throughout the British Empire, but we are deeply concerned about the human aspects of this loan and the principles of trusteeship to which we are committed. There are three very definite principles which the Labour party has laid down with regard to the development of our resources. They are to be found in a recent publication by Labour's first. Colonial Secretary, entitled, "Land and the Empire, "My right hon. Friend the Member for Derby (Mr. Thomas) has said definitely that The Labour party will stand by all efforts to realise these three principles of trusteeship. They are:

1. (1) The natives must be assured sufficient land for their support, and therefore the land must he treated as the property of the native communities.
2. (2) The native must, as a worker, be a free man, and hence there must be no slavery, no forced labour, and no pressure upon him to work for settlers.
3. (3) The administration must make itself responsible for educating the native to take his place, both economically and politically as a free man in the conditions which Western civilisation hits imposed upon Africa."

The only criticisms we bring to bear upon this proposed loan, apart from its financial aspects, are those which we have continually brought to bear with regard to our economic life at home. We are anxious that the natives themselves, those who have to spend their lives in these colonies, should have, through the application of this loan, a real measure of civilisation brought to them. It is from that point of view that we wish to emphasise that, so far as we are con- cerned, the principle of trusteeship is fundamental. We wish to have some definite assurances that, over and above these great economic enterprises, the labour which will be involved and the conditions which will be attached to this loan will be such that we can say, not only here at home, but before the bar of judgment of the League of Nations, this loan does represent a real and concrete effort to apply the principles of trusteeship to one of the most difficult problems of citizenship in the modern world.

The DEPUTY-CHAIRMAN (Captain FitzRoy)

Mr. Ormsby-Gore.

Mr. SAKLATVALA

On a point of Order. Is it right and fair that both the spokesmen of the Government should make replies when they know there are other speakers waiting to put questions.

The DEPUTY-CHAIRMAN

That is not my affair. I am here to conduct the business of the Committee. I do not think the hon. Member has a grievance.

Mr, ORMSBY-GORE

I will give way.

The DEPUTY-CHAIRMAN

Mr. Gillett.

Mr. GILLETT

I am rather surprised at the way the financial question has been treated, especially by the hon. Member for Ilford (Sir F. Wise). He seems to be rather stretching the amount of money concerned by talking about £16,000,000 being a strain upon the finance of this country. It is like the case of a, man with an income of some hundreds a year and a debt of some thousands of pounds who adds to it a debt of £16. It would be rather absurd to talk about a sum of that kind being a strain on his financial resources. It is just as well to bring the sum of money back to the right proportions in which it really stands in regard to the financial position of this country. After all, £16,000,000 to-day is not like £16,000,000 before the War. While I fully realise the importance of the hon. Member's point as to paying due attention to the way this money is spent, it seems to me that one of the most effective ways in which this country can help both the Colonies and the Dominions is by the financial assistance which it has been able to give in the past. We have seen in Australia the advantages the Australian Colonies receive from the position in which their loans are placed upon the London money market. in the same way, while we have Colonies under our care, proposals of this kind are, provided the facts are satisfactory, one of the most effective ways of really helping to link together the different parts of the. British Empire.

I should like to ask one or two questions in regard to the guarantee which it is proposed to give. Looking at the Palestine proposal as well as the East African proposal, I would call the attention of the House to the fact that, in the first place, these proposals are the most satisfactory kind of debt that a country that has a debt can possibly have. If you are going to have a debt, it is far better to raise money to start railways or roads in parts of the country that need development. Part of the proposal for Palestine is to pay for a railway already put down, and it is only cancelling a debt already due to us. Therefore, we are looking at proposals which are satisfactory in the main. These proposals are better than naval or military expenditure, and we must remember that Singapore was estimated to cost as large a sum as this loan of £10,000,000 of which we are speaking. It is infinitely better to do this than to have military and naval expenditure, which, however needful some Members may think it, is often exceedingly extravagant. I would suggest that the hon. Member for Ilford should devote more of his attention to military and naval expenditure and rather less to expenditure of this kind, and he would be doing something for the general benefit of the country. I should like to ask whether it is a fact that there was a fairly large surplus in regard to the finances of Palestine at the end of the last financial year, and in the second place whether we are spending something like £500,000 mainly on the Air Service in Palestine, and if this is so, whether any proposal is going to be made that they might themselves bear the expense. I should also be interested to know what amount of money Palestine is to pay annually in connection with the share of the Ottoman Debt imposed upon her and whether any other country is paying anything in regard to the Ottoman Debt or whether the amount allotted to Palestine is one of the few exceptions where the country actually concerned is really making a contribution in regard to the debts of the old Ottoman Empire.

Passing from Palestine, I should like to say a word or two in regard to the liability for this debt and the effect it may have upon the people in Kenya and the other Colonies. I should like to ask why it is that the proposal made by the recent Commission that this guarantee might have been given and at the same time the Imperial Government might have borne some interest on the loan for a certain time was turned down, and whether the hon. Gentleman is quite satisfied that these Colonies are in a financial position to bear the loss which will probably fall upon them when the money is expended on railway development? Lord Delamere has been quoted a good deal; I should like to draw attention to a speech he made last September about the building of a certain line that he was exceedingly anxious to have built, when he said the Government were not in that case paying the interest on the loan during the period in which the railway was being built. It is obvious that he feels that is going to fall in some way upon the Colony. If so, who is going to bear that loss in the first, few years before it can he made a paying concern? In many cases it might be quite wise to put these railways down, but it may be many years before they are going to be a financial success. Many of the State railways in Australia are not actually paying concerns, but the defence of the Australian Government is that in order to develop the large stretches of land under their control, it is essential to be prepared for a certain number of years to run the railways at a loss. If that is going to be done in Colonies like Kenya and Uganda, who is going to bear the loss? That is where the point raised by my hon. Friend is of such importance, as to whether it is going to fall upon the white settler or upon the black. If it is going to fall upon the white settler, it is obvious that some such proposal as that recommended by the recent Commission with regard to Income Tax will have to be brought in. If that is not going to be done, how is the money going to be raised?

An answer to a question a few months ago showed how taxation was raised, one part by the Customs and the other part by more direct taxation. The amount raised by Customs duties was borne rather equally by the black and the white, but when you come to direct taxation, by far the larger amount was being borne by the blacks. Therefore, if you are going to rely on direct taxation, what is going to happen? You may bring about the very thing my hon. Friend is most anxious not to happen, and force the black man, by puting an extra tax upon him, to go and work, whether he likes it or not, for the white employer, away from his own reserve, where he will not be able to work for himself. That seems to me to be the outstanding danger of this proposal, unless the Under-Secretary can convince us that he is going to grapple with this question of taxation to meet what in all probability will be a difficulty, at any rate for a time. I feel far less enthusiasm about the scheme if it is going to lead to a kind of forced labour, which is the thing the white settlers are asking for. In the interesting Report of the Commission of which the hon. Gentleman was Chairman, he himself stated that the black in Kenya has not been given opportunities for developing his own industries in the same way that the native population in West Africa have. I want to support the plea that as much as possible should be done in order to give the black man the opportunity of developing his own industry. I read recently an illustration of what. has been pointed out from these benches, the extraordinary growth which had taken place in the number of bicycles sofa in that part of the world where the cotton industry had been developed to a large extent in the hands of the black population—a thing that comes before us in another capacity in regard to applications that are made in connection with sending bicycles out to this part of the world. It seems to me all this tends to strengthen what I believe is to a large extent the point of view of the Under-Secretary, the importance of trying to get the black man not to work simply for the white but to develop his own industry. I should like to urge upon the Under-Secretary the great importance of trying to spend more of this money in connection with research and schools and things of that kind. It is disappointing that out of this large sum only about £40,000 is allocated for that purpose. I hope, before the scheme passes through, the Under-Secretary will be able to give us some undertaking that that side of the proposal will be very carefully considered.

Mr. ORMSBY-GORE

I apologise for intervening at this stage. But we had a long Debate in July and we have had a considerable Debate to-day. This is merely a Financial Resolution leading up to the introduction of a Bill, and there will have to be a Second Reading, a Committee stage, a Report stage and a Third Reading of the Bill. Before we can in troduce the Bill, as it is a Money Bill, these preliminary purely financial stages are gone through. I am sure that no representative of the Government has any cause to complain either of the tone or temper of the Debate that took place in July or the Debate which has taken place to-night. There is common agreement throughout all parties, if I accept, possibly, my hon. Friend the Member for Ilford (Sir F. Wise), that the British Empire as a whole has a great deal to gain by a sound, sober and, if I may animadvert upon the speech of the hon. Member for Peckham (Mr. Dalton) who opened the Debate, without hurry or undue haste, development of these undeveloped territories. I am perfectly convinced that this country, in spite of difficult times, is wealthy enough to encourage and assist by any legitimate means, such as the Colonial Stock Act in the case of Dominions and Colonies and such as this Bill in the case of mandated territories and dependencies the investment of money in the promotion of the essential means of capital development in these countries.

Let me come at once to some of the points raised by the two hon. Members who have just spoken. No one would like more than I to have any amount of money to spend on education, medical services and the rest of it in Africa, but this is not the way to do it. Recurrent money ought to be found out of revenue. It is a sound principle of Colonial finance that, as far as possible, each of the countries should develop their own resources and their own revenues for these services, and that the British taxpayer should not be called upon to pay money for these recurrent services. Where the British House of Commons and the British Parliament can help is by enabling the peoples of these countries to create the wealth which will give them the revenue for these recurrent services. In the initial stages, it is absolutely essential, if this is to be done, that capital works should be financed cheaply and consistent with sound finance. That is the object of this Resolution and of the Bill which is to follow. It is in the nature of essential capital expenditure upon harbour works, upon railways, and to a less extent, upon roads. The reason why only a small proportion of the loan is to be set aside for research, is that the Treasury say, and they are perfectly right in saying, that they will only give money out of loan funds, and especially guaranteed loan funds, for capital expenditure in connection with research. Money will be forthcoming in this Bill for any further capital re-equipment of the Amani Institute. To the Amani Institute we have just appointed a director, and we are turning that into a second link in the proposed chain of tropical research stations, of which Trinidad is the first. It is going to be turned into a first-class scientific research institute.

Many points have been raised in regard to questions of policy which are really -more suited for the Second Reading of the Bill. I think I had better deal with one or two of the questions raised, and to suggest that in certain other cases it would be far better that the points should be dealt with by question and answer. The hon. Member for Finsbury (Mr. Gillett), for instance, asked me about the exact amount that Palestine is contributing to the Ottoman Debt, and what the other countries who formerly were part of the Ottoman Empire are contributing. That could best be dealt with by the hon. Member putting down a question and my giving an answer, because such questions tend rather to confuse the big issues that come into a Debate like this. Let me come to the point why this guarantee is necessary. That is the fundamental question. Why is it that a guarantee is necessary in this case, whereas in the case of West Africa or Australia no guarantee is necessary. It is mainly necessary because in this Resolution and in the Bill which will follow we are dealing, in the main, with mandated territories. Mandated territories did not exist when the Colonial Stock Act was passed. We cannot do worse by the mandated territories than we do by our own Colonies.

From Kenya's point of view, and from many points of view, it is a matter of indifference whether Kenya is in this Bill or out of it. Kenya has good enough credit to raise any loan which she requires for her capital expenditure. I hope, Personally, that Kenya will be in. There are no railways in this scheme for construction in Kenya except at Kilindini Harbour, which was alluded to by the hon. Member for Cambridge University (Sir G. Butler). That is the principal subject where Kenya is concerned. But Kilindini Harbour is not only the harbour of Kenya; it is the harbour of the Uganda Protectorate and of a very important part of Tanganyika Territory and the mandated areas. The position, roughly, is that under our present law a colony, whether self-governing or non-self-governing, if it has the status of a colony can borrow on its own credit, but a protectorate or mandated territory or a con-dominion, such as the Sudan, has to come to this House for a guarantee before it can raise a loan on anything like the same terms as a British colony.

We could not defend our position before the League of Nations or before the world if we said that Kenya can borrow on advantageous terms, under the Colonial Stock Act, but Tanganyika is barred and prevented from borrowing on anything like such terms. The same applies to Palestine. That is why Palestine and East Africa come together. The major expenditure in East Africa, recommended both by the Commission of which I had the honour to be Chairman and by the Schuster Committee, which has carried the investigation of the problem a step further, is in regard to that great central country the Tanganyika territory, of which we hold the mandate. It is very essential that if we are to do our duty to these countries, not only in the interests of the natives and the white settlers but in the interests of the whole community of that country, we should enable the Tanganyika terri- tory to raise the capital necessary for its essential capital development and work at a reasonable cost.

The hon. Member for Cambridge University asked about Kilindini harbour. I can assure him that there is no ground for saying that there has been undue delay. First, we did appoint a local Commission to go into the question of the future of the harbour of Mombasa, vital as that harbour is to the whole of East Africa's progress. They produced a Report in the light of local evidence. It was only right that we should submit that Report to the review of the Imperial Shipping Committee. We only received the Report of the Imperial Shipping Committee after the Schuster Committee's Report was published in July. We sent the Report of that Imperial Shipping Committee out to the various Governments interested in Kilindini, and we are in course of receiving their comments and replies. Meanwhile, we have taken the most vital decision, namely, to authorise the building of the two further deep-water berths. This has been definitely decided upon by the Colonial Office, and, as a temporary proposal, we have made these ports a railway service. But in regard to the life and the payment of any possible deficits on the working of that port, there is still the necessity of negotiating between the view put forward by the local Commission and the view put forward by the Imperial Shipping Committee. That is under discussion at the present moment, and hope that a decision will be arrived at, and it certainly will be arrived at before the time is up when this ceases to be a railway service, namely, at the end of next year.

A great many questions have been, I think, due to misapprehensions, certainly on the part of my hon. Friend the Member for Ilford (Sir F. Wise) and also certain apprehensions on the part of the hon. Member for East Bristol (Mr. W. Baker). My hon. and gallant Friend the Member for Richmond (Sir N. Moore) also had the same misapprehension. They imagined that we have here and now ready schemes for expenditure up to the definite amount of £10,000,000. We have not. The first step, you may say, was taken by the Labour Government, when they sent my two colleagues and myself out to Africa with the terms DC reference. How can you accelerate the economic development of East Africa? We spent a few hasty months in travelling throughout the six East African 'Dependencies, collecting all the views we could from the people we met. [An HON. MEMBER: "And had a good time!" I We did have an extremely good time, and I hope also we did some good.

Mr. DALTON

Have you accelerated development?

10.0 p.m.

Mr. ORMSBY-GORE

Certainly, we produced the idea of further railway development and the idea of the £10,000,000 loan. We made a whole number of proposals which have now been given effect to, and, above all, we proposed—I put it, as a rough estimate, at £10,000,000, which is probably on the conservative side—in the near future—I put it at the next five years—for railway construction in that part of the world. Obviously, as the result of a four months' tour through these countries, I was not in a position, nor was my Liberal colleagues or my Labour colleague, to lay down finally that the railway must go here, or must not go there. We made general recommendations in the light of the evidence we had. Obviously, the Treasury before they could agree to that proposal required further information. Hence the Schuster Committee. My right hon. Friend has accepted the recommendations of the Schuster Committee, and the recommendations of the Schuster Committee are at this stage. They are the specific proposals of His Majesty's Government. Those proposals clearly say that before you embark on actual construction you have got to expend money in the necessary economic and engineering surveys. Remember that these have not taken place. The personnel in those countries is still few in number, and the countries are inadequately mapped. We have only been in Kenya for 32 years. In Tanganyika, the main block has only been mandated to us since the War, and so the idea that we are rushing forward with an ill-considered plan of railway construction is not to be envisaged for one moment. We shall proceed, as in all these cases, on the advice of eminent surveyors, and the first money which will be spent under this loan will be for the necessary expense on the survey which—

Sir N. MOORE

How long will the survey take?

Mr. ORMSBY-GORE

It has been continuously at work some little time, thanks partly to what was done by the late Government in the £3,500,000 which they advanced in cash—not a guaranteed loan.

Sir F. WISE

With no interest for five years.

Mr. ORMSBY-GORE

We have got a staff in Uganda at the present time which is capable, now that the preliminary work has been done, of carrying on the further survey, and that is being done. I hope this development will go on continuously for at least the next 10 years in all these cases. There is so much room for development that instead of attempting to say you will do so much and then stop, what you want is considered progress and steady development over a long period of years. Your labour policy alone will necessitate your going reasonably slow. These are large territories, rather sparsely populated. Fan HON. MEMBER: "What benefits will the natives get?"] Certainly I hope the natives will reap great benefits from these developments. I hope the natives will reap the major part of the benefits. [Interruption.] I should be the last person who would endeavour to impose land value taxes upon native holdings. That kind of thing might be very well for Henry George sitting in the study, but it is not practical politics to-day.

Mr. MacLAREN

If the hon. Member answers an interruption, he ought to understand the interruption correctly.

Mr. ORMSBY-GORE

I apologise if I did not understand the question. I thought I understood the hon. Member's point of view quite clearly. He wants any advantage that comes from the expenditure of the capital sum upon the development of railways not to accrue to the people who are opening up the country to trade.

Mr. MacLAREN

At present the land speculators are getting all the benefits from this land development, and hence there is no return for five years.

Mr. ORMSBY-GORE

I should be so interested to know who these land speculators are. I have travelled a good many miles on practically all the railways in British tropical Africa and if the hon. Member had gone out and seen some of the principal land speculators, I think he would have learned that his theories do not fit the facts.

Mr. MacLAREN

Read your Minority Report!

Mr. ORMSBY-GORE

The hon. Member for Richmond raised the question of gauge. We are taking care that in all these future railway developments there may be an expansion from the narrow gauge system if need requires, and we are having the steel sleepers specially constructed so that those sleepers can be used for the broader as well as the narrower gauge. This will not be an appreciable extra expenditure. It will be a little extra expenditure, but looking at the far future it is all important that we should be able to have the heavier gauge because there is no doubt that in the future, especially when the native production of crops such as cotton, grow, everything is going to depend on the cheapness of the traffic rates. Every capacity of being able to haul goods from the interior of Africa to the coast depends on having heavy locomotives and the big trains which can haul native produce. That is of the utmost importance in that area.

As to the allocation between the countries, as I have stated, the major portion will go, as far as railway development is concerned, to the mandated territories and to the Protectorates. Kenya is capable of financing its own internal development, but the cost is contemplated to come under this loan. On policy, hon. Members are, I believe, quite wrong in believing that there is necessarily an opposition know some settlers take that view, but I do not take that view. I do not take the view that there is necessarily some opposition between what is called native production and European enterprise. The "dual policy," as it has been called, is, of course, a definite declaration, that in the same area in East Africa you shall have both; that there shall he areas in the highlands where the European may be encouraged to grow crops which he alone, with the necessary capital and machinery, can cultivate, but that in other areas, set aside as native reserves, you can encourage native production, not only of foodstuffs but of economic produce. The essence of the dual policy is that the native should be absolutely free to choose between either kind of productive effort, that he can either produce on the land or in his own reserve. The Government say," If you decide to do absolutely nothing "—and it is very easy in a tropical country to allow your women folk to do everything—" then you will decline in your interest and in the world's interest, and will not be a producer." And that is what we are endeavouring to teach them. Not only in schools, but in every way we do want to encourage the African native to become a producer on his own land, growing cotton, growing cocoa, growing the native crops which he can manage, or, if he wants to, to let some of the boys do so. I think a great many of them would benefit, the majority of them at any rate, if they learnt something about scientific European cultivation.

There is an interesting parallel in this matter between Palestine and East Africa, both in this Resolution. The Jew is arriving in Palestine. He is introducing more up-to-date agricultural machinery, more up-to-date agricultural methods, more up-to-date scientific methods of cultivation and utilisation of the land, while the. Arab, much more primitive and much more old-fashioned, is learning rather rapidly from the Jew, who is coming into his midst with his modern Western scientific methods. In the same way, I have seen many a case in East Africa in a native reserve where a native has learned a great deal from going on a European farm, seeing the plough which he has never seen before, seeing how a team of oxen or a tractor can work and learning modern agriculture and modern methods. I am perfectly certain that the dual policy in the circumstances of East Africa is the right policy, and the injustice which many people imagine must be done is not being done, and that the community is going forward. You cannot possibly succeed in the highlands of East Africa without the good will and co-operation of European and native, and there can be no ultimate advance unless the native has also the guidance of white scientific methods and white interests. There is bound to be friction where you bring a race from one tribe and one industry, with immense equipment for dealing with the forces of nature, and put it into the middle of a primitive people only just emerging from tribal warfare and barbarism. The matter is alluded to in the three Resolutions which set forth the views of the Labour party on this matter. They insist on training the African in civilisation and in the modern conditions of the world. That is the problem of trusteeship. The problem oil trusteeship is not merely leaving the native just where he was 100 or 200 years ago. It is the problem of teaching him in the modern civilised world, in a country of enormous potential riches, of immense value to civilisation, producing products which are grown by the people both on the north and south of the great tropical belt.

One word about the Balfour Declaration. There is no new declaration or policy to make. There is no change in Government policy of the last four Governments: the Balfour Declaration stands. We are seeking to do justice to Jew and Arab. We fully realise that both require a better use of the land and the land problem there, as in East Africa, is by no means an easy one. The allocation of land is by no means easy. Surveys are going on and the work is being done and I am perfectly convinced that the recent avoidance of disturbances through the increasing co-operation between the Government and all sections of the community, and particularly between the Jew and the Arab, show that the British policy is being justified and that that country, which so many people a few years ago thought would be a liability, is turning out to be a valuable asset for the purposes of trade. Few people would have realised a few years ago that to-day we should have a surplus balance on the local revenues of Palestine of over £1,000,000 sterling and that Palestine is now in a position to raise a loan and pay off capital.

I agree with the hon. Member on this side of the Committee who said that the one further step which is required is to make the land profitable. I disagree with the misleading figures quoted by the hon. Member for Ilford. Most of the imports of Palestine are necessarily Egyptian. They come from all parts of the world, but the bulk is broken in Egypt, and they appear as Egyptian goods. But the one thing that is necessary is the provision of harbour facilities. If we can provide adequate harbour facilities, say, two harbours, I am convinced that there is a bright economic future before the country. It is a country of goodwill, peace, order and growing prosperity, due to the wisdom of successive British Governments in maintaining a consistent policy in the face of many detractors and many critics. I hope the House will now pass the Committee stage of this Financial Resolution and enable us to bring in the Bill, on which we can have further discussions during the various stages of the Measure.

M r. JOHNSTON

There will be further opportunity during the passage of this Financial Resolution for hon. Members to discuss in detail the labour conditions under which a considerable portion of the money to be guaranteed under this loan is to be spent, but there is one point to which I should like to draw the attention of my own colleagues on this side of the House. One of the grounds for the expenditure of this money is the building of a bridge over the Zambesi, and one of the reasons for the building of this bridge is that it is going to develop or will facilitate the development of the Tete coalfield. This coalfield will supply 300,000 tons of coal, which will supplant British coal on the African market, and, if you please, the proprietors of this coalfield are a Belgian syndicate! You have this curious position. The taxpayers of this country are to guarantee a loan, a portion of which is to facilitate the development of a coalfield which is to expel British coal from West Africa, and the proprietors of this particular coalfield are a Belgian syndicate. I have heard no justification whatever of such a proposal. The Financial Secretary considers that every proposal in this Money Resolution was going to assist British trade and relieve unemployment in Great Britain. I hope during the further progress of this Measure, we shall get some details of this Tete coalfield, and how it is going to assist British labour.

There is a further point to which I desire to draw the attention of the enthusiastic Under-Secretary of State for the Colonies. It is in regard to the figures for Kenya. The policy under which Kenya has been administered is as different from the policy on which we have run West Africa as night is from day. In West Africa there is prosperity, there is labour ownership, there is cooperation, and there is no capitalist exploitation. No concessionnaires have been allowed. Lord Leverhulme was hunted over the border by a very courageous and able Governor. He was compelled to go into Belgian territory to set up an exploitation factory. What is the result? The result is that the natives there, under these conditions, under what, for the sake of argument, we will call labour conditions, under co-operative and not exploiting conditions—the natives last year, per head of population, bought more British goods than did the citizens in the United States.

What is the situation in Kenya under Lord Delamere's policy? Here are some facts taken from the survey of Overseas Trade, which I assume is authoritative evidence. In 1920 34 per cent. of the total imports of Kenya were from Great Britain, but in 1923 the percentage had fallen to 27 per cent. Kenya was unable to purchase British goods. Where did she go for them? In 1920 Japan supplied only 5 per cent. of the imports of Kenya, but in 1923 she supplied 24 per cent. The Japanese cotton factories have supplanted Lancashire, because Japanese labour is cheaper and Japanese conditions are worse, for in Japan hours are long and she has contract labour and so on; and the native of Kenya has been forbidden to develop and have a purchasing power such as his brother in West Africa has, and the native in Kenya is unable to buy British goods and is compelled to go to Japan for a cheaper quality of goods. If that statement can be answered, I want to hear the answer.

The Under-Secretary said, in response to an interruption, that he did not know where the speculators were in Kenya. Let me give him some information. One syndicate got 500 square miles from the Foreign Office, over the head of the then Governor of Kenya. That is a fairly extensive slice of territory to be handed away. Then there was a grazing land syndicate, called the East African Syndicate, which applied for 320,000 acres, and Lord Delamere, a notorious figure in these parts, applied for 100,000 acres. If one syndicate gets 500 square miles, another gets 320,000 acres, and another applies for 100,000 acres, there is some prima facie evidence of speculators in Kenya. I think it is undeniable that the conditions of labour there are the most unsatisfactory to be found in any part of the Empire. The biggest scandals are there. It is no good whatever for this House to pass with acclamation a Motion such as this—the purposes of the major portion of which we all agree with—and to take no steps whatever to preserve the native in East Africa from the gross exploitation which is taking place there. There is forced labour in East Africa. The natives are compelled to give 60 days' labour in the year, and, in some circumstances, can be compelled to give 180 days in the year, and the present Colonial Secretary allowed this forced labour to be given in certain cases at less than the current rate of wages. That cannot be justified. It is a reversal of the whole British tradition. If there is no other way out of it, why not bring Sir Hugh Clifford back from Ceylon and put him in charge?

Mr. ORMSBY-GORE

I think every railway in Nigeria where Sir Hugh Clifford was Governor, had to have an element of what is called forced or political labour. In West Africa, it was a month in the year. In East Africa the maximum allowed was 60 days. Forced labour on railway construction, which is practically the only form of forced labour that is allowed—and that under special conditions—has been far more general in West Africa than in East Africa, where it has been the exception.

Mr. JOHNSTON

We have had West Africa under our control for a much longer period than East Africa. Let me quote Sir Hugh Clifford, who was Governor of Nigeria from 1919 to 1925. He says: I am strongly opposed to projects that have for their object the creation of European-owned and managed plantations to replace or even to supplement the agricultural industries which are already in existence or are capable of being developed by the people of Nigeria. He did everything he could in that matter, even to the extent of having a bitter quarrel with Lord Leverhulme, so that that late lamented Lord would not leave his yacht to shake hands with the Governor on his last visit there. The figures in regard to West Africa's trade with Great Britain are amazing. The Gold Coast in 1909 imported from this country £9,442 worth of motor cars, bicycles, etc., but in 1925 they were able to buy £193,583 worth, indicating working-class prosperity. In Kenya you have a reversal of that policy and you have poverty. [HON. MEMBERS: "No!" You have poverty when they go to Japan for goods. That is a fact you cannot deny. Your exports to Kenya are falling. Prosperity is indicated in West Africa by the exports of cocoa and so on, but East Africa is the only part of the Empire where you really have trouble of this kind. Before the House passes this Bill, the utmost possible care should be taken to see that there is a reversal of policy in East Africa. Instead of having the Masai's land planted and stolen from them, instead of having them driven into reserves and compelled to give forced labour not only on railways but in other businesses, there should be a policy of encouraging the native producer, of allowing him to be an owner, of developing co-operation and increasing his purchasing power. Only as this country can increase the purchasing power of her customers can we, in turn, become prosperous.

Mr. SAKLATVALA

I wish definitely and directly to oppose the financial provision which is put forward here, and I fail to realise how any genuine Socialist can possibly take any other point of view. My hon. and gallant Friend from Central Hull (Lieut.-Commander Kenworthy), who certainly deserves credit and admiration from everybody, inside and outside this House, for the magnificent victory that he won, broached the subject of Palestine. He assured us that he was not asking for the immunity accorded a maiden speech, and privately he has given me permission to take liberties with his speech as that of an old Member and not that of a maiden speaker. I realise that that was not a maiden speech from a new Socialist recruit. It was the same old Liberal stuff, and there were several passages in it which are still worthy of the Green Book, and which cannot yet be incorporated in any Red Book. I am not talking about it in any spirit of personal aggravation, but I think it is our duty to put our new colleague into proper shape.

I want to talk of Palestine as affecting the majority of the people there, namely, the Arabs, and also as a Socialist out and out. I am not quite pleased and satisfied with the argument, though the argument states a fact, and I, Therefore, do not support it. The argument used by the hon. and gallant Member for Central Hull was that in the pretence to assist Palestine with this guarantee we were making the best bargain for ourselves. That is true, and that being true, as a Socialist, I am opposed to it. It was pointed out by the hon. and gallant Member that the Arabs are there, but there without any capital, and he would like to see them displaced from their lands by our Jewish friends, because they went with capital. I am as much a friend of the Jewish race as of the Arabs or of my own people, but it is exactly my great objection that our Jewish capitalist friends are not to be encouraged in squatting there and appropriating the land, which should remain in the possession of the Arabs. Much was said about Haifa, that Haifa as a harbour is certainly the best place because it is most suited for British ships. So was Singapore, once upon a time.

I want to know from the Government-, in explicit terms, whether they are not putting Jaffa, the natural harbour, from the Arab point of view, into the background, and selecting Haifa for the reason that it will provide the shortest pipe line from the future oilfields to the sea coast; and whether it is not in their mind that Haifa will be a better Singapore than Jaffa, commanding the Red Sea, the Ægean Sea, and the Black Sea? It is all very well for us to talk of developing harbours, but what guarantee have we that this is not the first stage towards fortifying these harbours and making them naval bases? From the Arab point of view, Haifa has no preferential claim over Jaffa, and Jaffa would be a more natural place to select as a harbour for Palestine.

With regard to the railroad, I think the Government have pointed out in their explanatory note, and the hon. and gallant Member for Central Hull also candidly admitted, that we are making the best bargain for ourselves, and that is the complaint of the Arabs. It is admitted that the existing railroad was constructed in war time for military purposes, and not for the economic development of the Arab population, out they are to be made to pay for it. It is all very well for the Committee to talk about our guaranteeing this loan and that loan, but ultimately the payment of the money and the guaranteed interest has to come out of the very hard work put in by the Arabs in Palestine and the negroes in the African colonies. That fact must never be lost sight of, and we want to now whether any Arab organisation expressing the opinion of the Arab population has endorsed the scheme of the Government?

Lieut.-Commander KENWORTHY

May I interrupt my hon. Friend? Is he aware that the whole Arab anti-Zionist agitation is led by the Arab effendi class, and that the Arab working men are going into the same trade unions with the Jewish people? The whole agitation the hon. Member is voicing is led by the Arab land-owning aristocracy.

Mr. SAKLATVALA

I am not, as a Socialist, backing up one landed aristocracy against another, but I assure my hon. and gallant Friend, who has put me a fair question, that I have received direct complaints against this scheme from Arab working-class organisations—against Haifa being made a harbour, against paying money to the British Government for a useless railroad built for military purposes, and against the whole of this scheme of guaranteed loans.

Let me put forward my general opposition to the whole of this plan. I highly approve of the Labour Government's action—not to-night's expression of sympathy—in giving £3,000,000 in cash, without interest, for development. If we want an improvement in the economic development and physical welfare of the peoples of Africa and of Palestine, it is the duty of the Government to give them the money, and to see that it is used for no ulterior purposes by exploiters and Western financiers. We may be told that the local Governments in Palestine and East Africa are going to control any ambitious desires of individual financiers, but we know what happens under Government loans in connection with a scheme of this sort. I hope this Committee has not forgotten the scandalous way in which the Bombay Government carried out the Bombay Reclamation Scheme.

I want a guarantee that contracts will not be given out by the Palestine Government to their own nephews and cousins. We want a guarantee that these contracts will not be placed by some sort of a previous arrangement as, undoubtedly, the scandalous Bombay scheme was put through, to the ruination of the taxpayers of Bombay. I have heard almost all the speeches on the Labour side of this House, and, on the whole, they have been backing up this scheme. I object to this scheme on the fundamental grounds of Socialism, from which no genuine Socialist can afford to depart. I am perfectly sure that anybody who does not vote against these financial provisions is voting for the lowering of the miners' wages in this country. It is no use trying to put the blame on the Prime Minister, because he declared that his policy was to '.over wages in all the trades.

The CHAIRMAN

Those arguments seem to have no particular connection with the question of guaranteeing loans for East Africa and Palestine.

Mr. SAKLATVALA

It is this kind of financial provision which makes capitalist exploitation possible in countries where low wages exist, and this is the kind of thing which makes the task of the Prime Minister in lowering wages not only easy but inevitable and unavoidable. I appeal to all the comrades on the Labour benches to establish a principle not to vote for any sums of money either as guaranteed loans or as direct assistance or even under the Trade Facilities Act to corporations or to countries where labour is going to be employed at even less than 3s. or 6s. per day of eight hours. It is the bounden duty of every representative of British labour to recognise the fact that these guaranteed loans must, in the first place, further facilitate the exploitations of British capitalists in other countries. We must al I recognise that this provision to which we are urged to agree to-night means the further creation of cheaper and cheaper oriental labour amongst the Arabs and the negroes, and this policy is bound to pull down the standard of wages.

On these two grounds I feel staggered that anyone on the Labour benches should give his adherence to a scheme of this nature. I would certainly say that, if assistance is required to be given in the Socialist spirit of a richer brother giving it to a poorer brother, on the basis of share and share alike, it is all right, but when a Government guarantee is given for the furtherance of capitalist exploitation and expansion, what does that mean? We had a very sordid confession to-day in this House from the Front Government Bench giving details of the number of gunboats, British, French, Japanese and American, that have gone up the Yang-tse River. Why have they gone there? Because of the British, French, and American investments in somebody's country in the past. We are told that the British taxpayer is only taking just a nominal liability, that we are only guaranteeing the loan, and that we are not advancing money. It is the right thing to advance cash money, but it is the wrong thing to guarantee the loan simply to back up exploiters and speculators, instead of giving your own money and controlling the whole procedure of that development yourselves.

There will be a very heavy burden upon the British taxpayer on that account, not to the extent merely of the interest, but ten times the rate of interest on this £14,000,000. Within three or four years we shall be told, "Haifa is a developed harbour; we have guaranteed the cost of it; let us place two gunboats near it for its safeguard." We shall be told," Kenya and Tanganyika are no longer mere jokes; we have a liability of £10,000,000 there; our money is at stake; let us keep a big battleship round about those waters, and let us keep two or three regiments to strengthen the garrison in these Colonies and safeguard British interests and our Government liability." We know that this is the thin end of the wedge, that this money is not given for the sake of the poor Arabs and negroes. The hon. Gentleman told us the reason. Here are your Jew capitalist friends who, with their capital, go and settle there, and the Arabs have the privilege of looking on them and learning. So also there are our white settlements and reserves where the African negroes have the privilege of going and learning.

It is certainly not Socialism for Jewish capitalists from abroad to go and become the owners of the Arabs' land, to be the exploiting, profiteering capitalists, and to make the original owner of the land a looker-on and a wage-earner for all time at about 7d. or 8d a day. If it is the idea that the people of these countries should be given an opportunity of learning up-to-date methods and systems, surely the Government of Great Britain might easily achieve that result by sending out expert scientists and giving them sufficient money to buy agricultural implements, to teach the Arabs directly up-to-date methods of cultivation, without exploiting them and making them slaves to work for whatever exploiter comes forward with some plausible tale. I therefore say to this Committee that, on fundamental grounds, as a Socialist, I am an out-and-out opponent of this financial Vote to-night.

Resolution to be reported To-morrow.