PALESTINE AND EAST AFRICA LOANS [GUARANTEE].

HC Deb 21 July 1926 vol 198 cc1321-66

Considered in Committee under Standing Order No. 71A.

[Mr. JAMES HOPE in the Chair.]

Motion made, and Question proposed, 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 thousand pounds; and
2. (b) a loan to he 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."—(King's recommendation signified.)

Lieut.-Commander KENWORTHY

On a point of Order. Might I put it to you, Mr. Hope, that these two loans are distinct, and that it would be for the convenience of the Committee if they could be taken separately, because they deal with distinct questions? One loan is for Palestine and the other is for Kenya, and I put it that they should wit both be taken in one Motion.

The CHAIRMAN

An Amendment may be moved to leave out either one or the other.

Captain BENN

Is it not the practice, if an hon. Member fake exception to a complicated Question, that the Motion is then put in its separate parts?

The CHAIRMAN

That is not necessarily so. A discussion may take place on one part or another by an Amendment.

Mr. WILLIAM GRAHAM

May I put this point to you, Mr. Chairman? Hon. Members are desirous of raising specific issues. There are hon. Members who wish to discuss the general finance of the scheme as embodied in the Financial Resolution, and I want to know if we should be prevented from doing that by the separation of the Motion into two parts.

The CHAIRMAN

I think such a discussion should take place upon an Amendment. On that hypothesis the discussion may be resumed or a general discussion will take place until an Amendment is moved. It is highly probable, however, that the right hon. Gentleman will have an opportunity of saying what he wants to say before an Amendment is moved.

Mr. GRAHAM

It might not be generally understood that it would be for the convenience of the Committee to have a general discussion.

The CHAIRMAN

It is not improbable that, before any hon. Member desires to raise a specific issue, such an Amendment may be moved as I have already indicated.

Lieut.-Commander KENWORTHY

I want to be quite clear on this point. There are two distinct questions being considered in this Resolution, but I am in this difficulty. I am not opposed to this Resolution, but I ask you, Mr. Hope, to put it before the Committee as two separate Questions, one dealing with the Palestine loan and the other with the loan for the African Protectorates.

The CHAIRMAN

It is already apparent that one general question and two subordinate questions are involved. I think we must first deal with the larger issue.

Mr. J. JONES

Might I ask you, Mr. Hope, if the new board of guardians in West Ham are going to pursue the same policy as these new people in Palestine?

The CHAIRMAN

There is no question concerning West Ham.

Mr. JONES

It is a question of loans in West Ham.

The CHAIRMAN

There is no question before the Committee of a loan to the West Ham Board of Guardians.

Captain BENN

There are two distinct questions raised here and it is in the discretion of the Chairman to divide a complicated Question into two parts. As a general rule, when a request has been made that a complicated Question should be divided, the Chairman has divided it. A recent instance was the Motion to suspend the Eleven o'Clock Rule, when an hon. Member pointed out that that was merged in another Motion, and Mr. Speaker divided the Motion into two parts and put them separately. I submit that unless the Chair acts upon the request of an hon. Member to divide a Question, it puts hon. Members in a great difficulty, and it is susceptible of great abuse, because it would be possible for the Government to put down one Money Resolution covering several Bills. The practice of the House in the case of a complicated Question is that it should be divided and put in and the different parts put separately.

The CHAIRMAN

I remember that in the case of the Finance Bill of 1909 I once put a similar point of Order to Mr. Emmott in Committee on the Finance Bill, and I got no satisfaction. There are three questions raised here. The first one is: That it is expedient to authorise the Treasury to guarantee the payment of the principal of and the interest on the following loans, and then come the amounts of the respective loans to be guaranteed.

Colonel WEDGWOOD

Has you attention, Mr. Hope, been called to the fact that these two loans which are to be guaranteed are really on a very different footing? The first one, to Palestine, is in the nature of a funded debt already held by the Palestinian people, and a large part of it is not new money; whereas the loan to the African Colonies is all new money. I submit that that raises two completely different questions, one of settlement obviously to the advantage of this country such as we are trying to effect at the present time.

The CHAIRMAN

Really, that is a matter for me. As a matter of order, I have ruled that an Amendment to confine the discussion to one or the other question would be perfectly in order.

Mr. JONES

Might I be allowed to ask .a question? In view of this question, seeing that West Ham represents a population greater than Palestine—

The CHAIRMAN

Mr. Amery.

The SECRETARY of STATE for the COLONIES (Mr. Amery)

As I understand the position, what the Committee is being asked to approve of to-night in this Financial Resolution is the general principle of Imperial guarantee for a series of loans which will be raised, not by two Governments, but by six or seven Governments. One of these Governments is the Government of Palestine, in the case of which the total amount is £4,500,000, while the others are the Governments of various territories in East Africa. I will certainly endeavour, if it is of any help to the hon. and gallant Member for Central Hull (Lieut.-Commander Kenworthy), so far as the discussion of the details of this Resolution justifies it, to separate the two main aspects of the question, and I hope, therefore, that no inconvenience will arise if the hon. and gallant Member wishes to confine himself later mainly to one of those two aspects. I should like, first of all, to deal with the larger item of the African loans and then go on to the proposal with regard to Palestine. I do not think that, as far as my hon. Friends behind me are concerned, there is any difference of opinion on the matter of utilising the financial credit of this country for developing the resources of the British Empire, but I may, perhaps, remind them that the Prime Minister, in the statement of policy which he laid before the country at the election, declared that The best hope of industrial revival lies, in toy opinion, in the development of the resources and trade of the British Empire. The policy of encouraging mutual trade in the Empire by measures of Imperial Preference, and of using our finance to promote Empire development and Empire settlement, is one which we shall steadily keep to the front. I do not think it is necessary for me to-night to argue in detail the general case for the development of Empire trade. I think it is sufficient to point out that the prospects of our trade with Europe since the War have changed very much from what they were before, and that the need of an alternative expanding market, more particularly for our manufactures, is marked. Nor do I think it is necessary to point out the extent of our economic dependence upon the United States. There was a time when our excess of imports from that great country largely represented the annual return upon our immense, investments. Those investments were sacrificed in order to help us win the War. To-day we buy something like £200,000,000 more a year from the United States than they buy from us, and we have to pay large sums annually in clearance of our honourable debt obligations; and anything that will enable us to draw upon other sources rather than the United States, especially sources linked with our financial system, would immensely relieve that position, as it will also be relieved, so far as we-can establish credits in the Empire by the sale of our manufactures, and by paying the United States in raw materials and other products from the Empire itself.

I should like to say one word about that part of the British Empire which is more particularly within the sphere of the Colonal Office, and for which the House of Commons is more directly responsible—I mean the Colonial Empire. It is in itself an immense Empire, covering nearly 4,000,000 square miles, nine-.tenths of it in Africa. It has a popula- tion of something like 50,000,000. It is a region the trade with which is essentially complementary—trade which is complementary not only because of the natural correspondence and co-operation of the products of the tropics with the industries of the temperate zone, but also because at present, and I believe for a long time to come, the products of our Colonial Empire, more particularly in Africa, will be primary products of the farm and the mine, and not competing products of industry. There are many in this House who have doubted the wisdom of a too rapid development, even in agriculture, as regards its effect upon the welfare of the native population. I do not think that anyone in this House would like to see a forced industrialisation of the natives of Africa. The expansion of our trade with the Empire as a whole has been a marked feature of our whole economic situation in the last 30 years, and in that imperial expansion the expansion of our trade with the Colonial Empire has been the most striking feature. If I might give the Committee one or two figures, our exports from this country to the Colonial Empire in 1905 were £17,500,000, while in 1925 they were £62,500,000. Those were mainly exports of manufactures — an essentially complementary trade. Imports —in the main essential raw materials and foodstuffs—were £18,000,000 in 1905, and 280,750,000 in 1925.

That, I think, is a very remarkable expansion. To come more immediately to East Africa, I should like to make it clear to the Committee that East Africa has certainly not been behind the rest of the Colonial Empire in development, even under present conditions of transport and communication. If I may take the various East African territories in succession, the exports of Nyasaland in 1901 were £37,000; in 1913—the last year before the War—they were £195,000; and in .1925 they were £564,000. The imports of Nyasaland in the same three years were respectively £134,000, £318,000, and £591,000. In the case of Uganda, the exports in 1901 were £32,000, in 1913, over £500,000, and in 1925 over £5,000,000, while the imports of Uganda in the same three years were £63,000, £590,000 and £2,583,000. In the case of Kenya, the exports in 1901 were £71,000, in 1913, £632,000, and in 1925, £2,750,000; while the imports for the same three years were respectively £450,000, £1,808,000 and £5,185,000. Right through, taking the same 25 years, there has been an enormous, steady development.

Tanganyika, of course, has only recently come within the sphere of our authority, hut even there progress in the last few years has been very marked. The exports of Tanganyika in 1920 were under £2,000,000, which in 1925 they were over £3,000,000. The imports of Tanganyika were £1,630,000 in 1920, and £2,860,000 in 1925. Other figures, such as those for railway traffic—and these are of interest to us at this moment—tell the same story. The gross tonnage carried over the Kenya-Uganda Railway in 1924 was 826,000 tons, while last year it was over 1,000,000 tons. The total revenue in 1924 was £1,635,000, and last year it was £1,993,000

Lieut. - Commander KENWORTHY

Are these Government railways?

Mr. AMERY

Yes, they are run by a Joint Commission. These, I think are figures of considerable encouragement for the future, and cast an interesting light upon the pessimism that this House showed in many quarters when the proposal to build the Uganda railway was first brought forward. Mr. Labouchere said on that occasion that this railway of which I have just given the figures offered absolutely no prospect of commerce. It is true that when he spoke, the total trade was only a few thousand pounds, but last year the exports alone were over £5,000,000. Mr. Labouchere said a worse speculation could not be presented to the public than the investment of public money in Uganda.

Colonel WEDGWOOD

It has been a pretty bad speculation for the British taxpayer, has it not?

Mr. AMERY

No, the British trader has benefited, and the only reason why the British taxpayer is not getting some interest on the money spent in the original construction of the railway is because of the wise decision arrived at, if I remember rightly, when the right hon. Gentleman and his friends were in office, that the surplus earnings of the railway, at any rate till the year 1934, should go in extensions, which would he in the true and permanent interest of this country as well as of East Africa. Even the right hon. Gentleman the Member for Carnarvon Boroughs {Mr. Lloyd George) was a little sceptical in those days. He was afraid the cost of the railway could not adequately cope with the cost of policing it against the Masai, and he thought no board of directors would dream of embarking on such an enterprise with such inadequate knowledge as was possessed by the Foreign Office at that time.

I said just now that the policy of using our finances to develop the resources of the Empire was one that was put in the forefront by the present Prime Minister, and endorsed by his followers, but I want to make it quite clear that it is in no sense a policy with regard to which, at any rate in regard to finance, we differ from hon. Members opposite. There may have been differences of opinion in 1895, but in this matter of using our finance to develop the railway system of East Africa we were given a very valuable lead by the right hon. Gentleman the Member for Derby (Mr. Thomas) in securing in March, 1924, Parliamentary sanction for a loan of £3,500,000 for railway extensions in Kenya and Uganda free of interest for five years, and the right hon. Gentleman followed up this very important instalment of policy of railway development by appointing a Commission. under the Chairmanship of my hon. Friend the Under-Secretary, in which Members both of the Labour and Liberal parties took a very valuable part, and I am only sorry those two Members are not in the House to-clay to be able to give us the benefit of their first-hand experience of these matters. That Commission produced a very valuable and important Report, and recommended that £10,000,000 in all should be spent, upon railway, harbour and road development in East Africa. I do not think it will be necessary for me to repeat the passage in their Report in which they deal with the immense importance of transport in East Africa as the key to development, not only the economic development of industries directly controlled by the white man, but no less the welfare and development of the natives themselves in the industries in which they are primarily and directly concerned.

I remember a very interesting passage in that Report where they refer to the fact that last year something like 4,000 tons of ground nuts were carried a hundred miles on the heads of natives —an immense waste of time and also a sacrifice of what otherwise might have been earned by these people. That particular line of railway, I am glad to think, is being actually pushed forward. They recommended, therefore, that there should be an Imperial guarantee for loans up to a total amount of £ 10,000,000, and, further, that those loans, following the precedent set by the right hon. Gentleman the Member for Derby in the previous year, should be interest free for five years, and they coupled with that the suggestion that after 10 years the interest advanced by the Imperial Government should be repaid. The proposal I am bringing forward at this stage only deals with the guarantee. There is no question, as far as the present proposals are concerned, of any special concession with regard to interest as recommended by the Commission. I think that is a departure from their proposal which can be justified from the point of view that in the very large field of development which is required there is in the first line a number of measures which ought to pay their way so soon that it is not unreasonable to ask the Colonial or Protectorate Governments themselves to find that money, more particularly if, as has been recommended, they are allowed to add the interest during the period of construction to the capital cost. As regards more ambitious schemes which would require financial assistance of some kind, it would be obviously unwise to start with any of these schemes until we really have adequate information. We must know, before the expenditure of millions of money is embarked upon for many hundreds of miles of railway, which is the best route for those railways, both from the technical engineering point of view, but, also, what is equally important, from the point of view of economic circumstances, which route is likely to develop the. largest traffic and, therefore, make the railway pay at the earliest possible date.

Colonel WEDGWOOD

Does the right hon. Gentleman mean the finding of money out of the £10,000,000 loan for the railway which has been turned down by this Commission with a guarantee and also the interest paid by the State?

Mr. AMERY

The Schuster Committee took the view that it would take probably at least a couple, of years before we could know for certain what would be the right route for some of these railways or what were their prospects of paying. They recommended that when that information is to hand it would then be possible to see whether the railways should be constructed and whether their construction would only be possible at that date by some further form of financial assistance.

Colonel WEDGWOOD

Are you holding out hopes to these people that they may ultimately get the cost paid by this country?

Mr. AMERY

No. I am putting the same view that is expressed by the Committee. No time is being lost, but until the whole information is secured it would obviously be folly to start building these railways. When the full information is available, we shall know, first of all, how likely these railways are to pay, and whether they will pay from the beginning or at an early stage. We shall know what will be the financial position of the territories, and how far they will be in a position out of their own revenue to cover any possible shortage of earnings during the first few years. Failing that we shall then be in a position to decide whether to postpone the building of the railways until these territories can afford the money, or whether we should then consider some other financial assistance which would enable the railways to be constructed at once. That is the view held by the Committee under Sir George Schuster's chairmanship, which appointed some time ago, and which has produced a very interesting and valuable Report, and which, contrary to the ordinary rules of procedure in these matters, I thought it desirable to make public in order to help hon. Members and the Committee generally to realise the care with which this problem has been considered, and the impossibility of proceeding at once on large expenditure of money in some directions. It is essential that we should not act until we have reasonably full information.

The Committee divide the various proposals put before them, which already exceed £16,000,000. Schemes such as the extension of the railway from Tabora to Mwanza, they sanction at once. In the same category, but subject to further survey in the meantime, they include a sum of £700,000 for an extension of the Kenya-Uganda line north-west from Soroti and eventually to the Nile. The survey is in order to make sure whether the line should be extended to Nimule or near Lake Albert. Similarly, they include in the same category an extension of the southern branch of the railway nearer to Lake Victoria, the Busambatia-JinjaKampala extension. In the same category they have included £1,400,000 for re-equipment and improvement of the main line of the Uganda railway. That is the bottle-neck through which all the expanding traffic of East Africa between Kenya and Uganda has to come, and I do not think that any detailed justification of that recommendation is necessary. In Tanganyika an extension of the line to Lake Victoria is already recommended. They recommend a completion of the line from Moshi to Arusha, through a fertile coffee growing area, and, incidentally, they have recommended that the line should link up with the Kenya-Uganda system, and be incorporated in that System, They also recommend the expenditure of £660,000 on a new line from Itigi to Mkalama, subject to economic report.

Colonel WEDGWOOD

Is it fair to say that they recommend these particular features of expenditure, when they have particularly said that money is not to be spent? They only recommend them provisionally until they have further information.

Mr. AMERY

If the right hon. and gallant Member will look at the Report he will see that they are convinced of the general desirability of these lines, and they have allocated certain amounts of money for the purpose, subject always to closer investigation.

Colonel WEDGWOOD

The TaboraMwanza line they have recommended definitely, but not the others.

Mr. AMERY

In the other cases it is only subject to more detailed survey. In all these matters the last think that I should like to encourage anyone of these Governments to do is to burden itself by building an unnecessary railway in the wrong direction. I am only too glad to have the valuable help of the Committee, and I am also anxious that we should not act before proper economical and technical surveys have determined the precise routes. The Committee also recommend in Tanganyika the Dodoma-Fife line at an estimated cost of £2,700,000 in connection with which 246,000 is allotted for surveys, after which new methods of financing construction will have to be considered, if necessary. In connection with the Dodoma-Arusha line, which is estimated to cost £1,800,000, the same conditions apply, and here they also re- commend £46,000 for surveys. In connection with Tanganyika, they also provisionally allot an additional £360,000 for general improvement of the main line of the Tanganyika railway over and above £274,000 which they recommended in their first Report for re-equipment.

9.0. P.M.

In the case of Nyasaland, the important proposal, the key proposal, for everything else depends upon it, is the proposal to construct a railway bridge over the Zambesi, linking up the line from Beira to the Zambesi with the line to Blantyre and also the line to the Tete coalfield. In this matter the Committee have shown the caution which they have shown in all their recommendations. They consider that the bridge is an essentially desirable one to build, and they have provisionally set aside £1,500,000 for that and for railway development in Nyasaland, to be supplemented by a further £760,,000 from the old unexpended Loan Act of 1914. But they do recommend very strongly that no steps should be taken until it can be used as part of a co-ordinated scheme, which will include the whole of railway development and railway organisation from the Zambesi northwards to Lake Nyasa. This line will open up the Tete coalfields and the potentialities of those coalfields, and the Committee recommend that experts in coal mining and railway matters should go out to survey the whole of that area and present their report before any actual expenditure on the bridge could be sanctioned. Over and above that, they allocate, subject to further inquiry, and to the recommendations of the Imperial Shipping Committee in regard to the harbour at Mombasa, the expenditure of £2,363,000 for harbour developments at Mombasa and Dar es Salaam.

Finally, they have allocated, roughly, £1,000,000 for roads, waterways, road transport, and, last but certainly not least, the development of research. This is by no means the least valuable part of the Committee's Report. They lay great stress on the importance of research, not merely as an isolated matter concerning East Africa, but as part of a general scheme of research which ought to enhance the value of every part of our territory. In the same broad spirit they urge that the research provided from these loans should be very wide in its scope—and include, not only agricultural research or even research on diseases, but also research on all matters which affect the physical and mental well being of the native population. In view of some of the criticisms which have been launched in this House upon the attitude of the settlers in Kenya towards the native problem, it is interesting to note that the Kenya Government have suggested setting aside £100,000 out of this loan money for a scientific study into all matters which affect the physical, mental, and moral well-being of the natives, their traditions of life, their habits, all of which are of immense importance in dealing with the native at a time when he is being subjected every day to a changing economic environment. The Committee again, and very wisely, recommend that, though this loan is for capital expenditure as regards the money allocated for research work it should cover, not only the bricks and mortar equipment of research stations, but also intensive work for a few years on these various problems, which, when once done, will be an immense capital asset to the countries concerned.

That is all I need to say about the broad allocation recommended by the Schuster Committee. They recommend £6,620,000 for railways, apart from over £4,000,000 concerned with two large projects which cannot mature in the immediate future; £2,360,000 for harbours, which again may be modified in consequence of the recommendations of the Report of the Imperial Shipping Committe, which I hope will be made public before long, and, lastly, the allocation of £1,000,000 to research, roads and waterways. I have mentioned already how substantial has been the economic advance of these territories, but it may be worth while mentioning the actual expansion in revenue during the last few years in order to make it clear that in undertaking this policy of expansion we are not doing something, in regard to this guarantee, which is likely to fall directly upon the imperial Exchequer. These are communities whose revenue is developing and steadily increasing. The figures for Kenya are: revenue in 1924, £2,111,000; in 1925, £2,430,000; and in 1926, £2,516,000. That shows a steady improvement.

Sir F. WISE

Will the right hon. Gentleman say what the expenditure is?

Mr. AMERY

The expenditure was £1,861,000 in 1924; £2,339,000 in 1925; and £2,485,000 in 1926. There has been a surplus each year.

Sir ROBERT HAMILTON

Is that revenue apart from the railway revenue?

Mr. AMERY

Yes. I will give the railway revenue separately. In the case of Uganda, the revenue was £1,239,000 in 1924, against an expenditure of £918,000. In 1925 the revenue was £1,479,000 against an expenditure of £1,108,000. In 1926 the revenue was £1,306,000 against an expenditure of £1,298,000. The hon. Member is quite right in asking for the railway revenue, as the financial position of the Kenya and Uganda Railway is of greater interest in this connection than the position of the two Colonies them-selves. The earnings of the Kenya-Uganda Railway in 1924 were £1,635,000; in 1925, £1,993,000, and in 1926, £2,009,000, and, setting off the working expenditure in each case, the surplus for 1924 was £756,000; in 1925, £903,000, and in 1926 it is estimated at £832,000. There is thus a substantial surplus for renewals, betterment 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.

In the case of Tanganyika the figures are also very satisfactory. We began in that country when it was devastated and ruined by the War. It is not fair to compare our position when we took over Tanganyika in 1919 to what it was in 1914 when it was in German hands. In 1921–22 the actual deficit on the administration of the territory amounted to over half a million pounds. This deficit has been steadily reduced, and in 1924–25 there was a substantial surplus of not Li. short of £200,000, and, in fact, so rapid has been the recovery of this territory that it has not only paid its way during the last two years, but has steadily developed all its services, medical, educational and sanitary, and now finds itself in a position to arrange with the Treasury to pay interest to the Treasury on its principal debt of £2,096,000. Its revenue in 1924 had risen to over £1,500,000, and during the present year it is estimated it will be £2,113,000. In th7 case of Northern Rhodesia the, revenue has risen from just over £300,000 in 1924 to £356,000, the estimate for the present year, and I understand that according to the latest reports this has been substantially exceeded. In the case of Nyasaland the revenue in 1924 was £290,000, and in 1926 it is estimated at £312,000.

These figures are sufficient, coupled with all the evidence I have given as to the advancement of these territories, immediately transport is introduced, that in giving this guarantee we are not backing a venture which is likely to be a losing one and to involve, the taxpayers of this country in any obligations, but that we are simply enabling these territories to raise their money on better terms than they otherwise would with little or no risk to ourselves. We are also contributing to something which will mean a very substantial volume of orders for this country. Roughly speaking, about half of the total money expended on all this railway construction will be spent in actual orders for railway materials in this country. More than that, it will mean a general development of crade both ways, which will be of immense assistance to this country in working its way out of the difficult situation left behind by the War. I believe that we are taking a step, and I confess that I regard it only as an initial step as far as East Africa is concerned, in a policy which will be fruitful and immensely valuable in the result.

May I turn to the somewhat different problem with which we are dealing in the case of Palestine? There we are dealing with a country, not of immense spaces and immense potentialities, but a small country which has developed largely since the War and still is, within its possibilities, capable of considerable development. If I might give some of the revenue figures of Palestine to show the justification for this loan, I would say that the revenue and expenditure balanced for 1923–24 at £1,633,1000; in 1924–25 the revenue exceeded £2,100,000 and the surplus was nearly 2300,000; and in 1925–26 the revenue was very nearly £2,750,000 and the surplus exceeded £700,000. That, I think, is a very satisfactory figure.

Sir F. WISE

Why was there a Grantin-Aid in 1925?

Mr. AMERY

The Grant-in-Aid was, as far as administration is concerned, a Grant-in-Aid for Trans-Jordania, but there was also a Grant-in-Aid in respect of the defence forces which cover both Palestine and Trans-Jordania, and the justification of that lies in the fact that the recent surpluses have been in a period of rapid advance to prosperity. and that it is essential, in a small colony like that, which only three years ago was barely able to pay its way, and where we have had to cut down right to the bone, to build up something in the nature of a reserve. But I can assure my hon. Friend that we do intend progressively and rapidly to reduce any grant-in-aid that can be said to he spent even for defence in Palestine, and that position is fully accepted by the Palestine Government In trade, too, I think that the figures are interesting as justifying our policy. The total imports of Palestine in 1923 were under £5,000,000; in 1926 they were over £7,300,000. The exports in 1923 were just over £1,500,000. In 1925 they had gone down slightly to £1,200,000. It may be of interest to the Committee to have the particular figures in relation to this country. The imports to Palestine from this country, according to the Palestine statistics, in 1925 amounted to over £1,000,000; according to the Board of Trade figures they amounted to about £750,000. That, of course, is partly the difference between f.o.b. and c.i.f., and it can also be accounted for by transhipment through Egypt and other causes. According to the Board of Trade we imported from Palestine £1,155,004 of Palestine produce in the last year.

To come to the actual purposes for which this loan is to he devoted, the right hon. and gallant Member for Newcastle-under-Lyme (Colonel Wedgwood) was quite right in saying that a substantial part of the money is being raised for the purpose of repayment —in the first instance for the purpose of repayment to this country for the railways arid for expenses incurred by the Government during the period of occupation immediately after the War. The money will be used, in the first place, to repay a lump sum of £1,000,000 to the British Exchequer as part of the payment for the Palestine railway system which is being taken over by the Palestine Government.

Colonel WEDGWOOD

Part only?

Mr. AMERY

It is part and not the whole. The total value of the railway is about double. Palestine is paying £1,000,000 this year out of the, loan towards the liquidation of this debt to the Imperial Government.

Colonel WEDGWOOD

The rest remains a debt due to us?

Mr. AMERY

Yes. It is also going to pay a sum of about £260,000 in the present year in respect of a certain amount due to the Imperial Government for deficits during the period of the Imperial occupation, and for certain stores taken over from His Majesty's Government. Therefore, the total amount from this £4,500,000, or from the accumulated surpluses of the Palestine Government, which is coming directly to this country in alleviation of the burdens of the taxpayer here during the current year, will be about £1,260,000. I do not think that critics of our policy in making ourselves responsible for the mandate for Palestine five or six years ago would have admitted for a moment the idea that Palestine would be in a position to-day to pay off so large a proportion of her obligations in this direct fashion. Over and above that, a considerable amount has been borrowed by the Palestine Government from the Crown Agents in respect of railway improvements and other public works carried out during the last year or two. These various items, which are in the nature really of clearing off past obligations,will amount together to about £3,000,000. The remainder is wanted, in exactly the same way as the expenditure in East Africa is wanted, for necessary development, more particularly of railways and harbours.

There is a good deal of railway work which needs to be done. The largest items, however, will be the improvement of Jaffa Harbour and, still more important, the creation of a really adequate harbour at Haifa, which has all the natural conditions needed to make it one of the great harbours of the Middle East. I believe that a moderate expenditure—the highest expenditure estimated by the engineers and surveyors so far is £1.000,000—would provide a harbour there which would enable a very great development to take place, not only in Palestine, but, perhaps, throughout the whole Middle East, and I am not excluding even the possibility of railway development from Haifa across to Iraq.

Colonel WEDGWOOD

Will the right hon. Gentleman say whether any actual new railways have been made in Palestine?

Mr. AMERY

I do not think any new routes are being made, but I think there are some short cuts across the existing lines near Jaffa and a deviation through Jaffa itself are in contemplation. I must apologise sincerely to the Committee for having detained them at such length, but I thought that I had better, at this initial stage of the discussions upon this Measure, put fully the grounds upon which we believe that the Committee will be fully justified in sanctioning an Imperial guarantee in respect, not of a loan to be granted by this country, but of loans that are going to be raised by the various Governments concerned, loans which we believe will be amply covered by the revenues of those countries, but loans on which, in our interest as in theirs, it is desirable that they should secure the cheapest possible rate and not waste their substance upon an undue rate of interest in the general market. On these grounds I hope that these Resolutions will commend themselves to the Committee.

Mr. WILLIAM GRAHAM

My hon. Friends behind me, who have much more intimate knowledge of the territories in question that I can claim, will no doubt try to address the Committee later. All hon. Members will agree that on this occasion certain questions should be asked on the broad finance of this scheme. Beyond all doubt, the time to ask questions of that kind is the time of the presentation to the House of the Financial Resolution, the adoption of which the right hon. Gentleman has now moved. The broad facts of this case are that we in this country are asked to guarantee, as to principal and interest, an aggregate sum to be raised by those Governments of £14,500,000. While that is a small sum compared with the enormous liabilities of this country one way and another, it is not a sum the guaranteeing of which we can undertake lightheartedly or without very careful consideration at the present time. I am going to ask the Colonial Secretary to-night, and through him the Treasury for such explanations as I think the Committee should be afforded in a matter of this kind. The right hon. Gentleman has just explained to us that this loan, which is to be raised by the Government of Palestine, presumably in the open market, and which we are to guarantee as to principal and interest, is in part. a loan designed to repay to us a certain debt due on railways, and also in part to repay certain deficits associated with the period of administration. It must be plain to every hon. Member of this House at once that, as a financial proposition, a loan of that kind is to that extent at least in a different category from a loan which is raised for productive purposes for enterprises and will probably entail rather more onerous terms for the Government of Palestine than would otherwise have been the ease. What is the view of the Treasury in a problem of that kind? Are they justified in asking the taxpayers of Great Britain to shoulder the responsibility of guaranteeing as to principal and interest a loan of that description?

I pause at this stage to make it perfectly clear that we on this side of the Committee are not hostile to these schemes of development by any means. The right hon. Gentleman was so far well within the mark in saying that probably in all parts of the House there is a very keen desire to promote this development. Although we on this side want to take very definite steps to try to secure just conditions and the best possible terms for the labour employed, it is no part of our case to oppose development. Hon. Members will not misunderstand my criticism, which is devoted entirely to the financial aspects of the claim.

Let us come, in the next place, to the larger amount involved, £10,000,000 for the East African territory. The Committee is in possession of the Report of the East African Commission and also of this later document, the Report of the Committee over which Sir George Schuster presided, which for all practical purposes should be considered to-night when this Financial Resolution is before us. The right hon. Gentleman asks the consent of the Committee to a guarantee of a loan to be raised by these Governments for £10,000,000. One would say at once that, before a request of that kind is made to the House of Commons, there should be very full information, very precise details, regarding practically the whole of the part of the enterprise we undertake. That is very far from being the case. The truth is that, as anyone who studies this Report of the Schuster Committee will see—and we are at a disadvantage in having seen that Report only to-day—the Report from beginning to end is a mass of provisional statements and ends in very grave doubt as to the economic success of a number of the schemes for which our guarantee is being given.

I invite any hon. Member, as a purely financial proposition, to look at this Report, and he will find, as regards these railways, harbours, roads and other developments, that they recommend in almost every ease that a full survey should be undertaken and. only after that survey has been undertaken, in the midst of a great deal of doubt should we embark on this guarantee for the amounts they mention from time to time. That is a very remarkable state of affairs when £10,000,000 is involved. But, added to that, the Committee quite clearly contemplates that, particularly in the case of Nyasaland, nothing will be financially sound unless there are other changes of a substantial character in the financial and social life of the Colony involved. There are problems of land tenure and other difficulties which must be overcome to a certain extent before a guarantee of this kind, according to this Report, is financially sound. When the right hon. Gentleman comes to-night to the Committee, while we entirely sympathise with his broad desire, we are bound to tell him at once that this provisional part of the Committee's Report is one which must occasion perfectly legitimate doubt and hesitation at this stage. We must ask him why he should go for the inclusion of the whole £10,000,000 at this time and whether that is strictly necessary while all that survey has still to be undertaken?

It is rather a remarkable fact that upon all these Financial Resolutions we do not get the direct voice of the Treasury. I would very much like to hear what the Treasury has to say about this point and about this guarantee of £14,500,000. It is true that all parties in the House are practically committed to the scheme, but that does not in any way weaken our inquiries where the financial proposals are concerned. Moreover, we should certainly have heard the Treasury when we look at this guarantee of £14,500,000 of principle and interest and at the same time know that the Government are closing down trade facilities and certain other forms of guarantee on the grounds that they are not prepared, directly or indirectly, to pledge British credit further for those purposes. There is still some remaining money available for guarantees under the Trade Facilities Act. I would like to know whether that will be available rather than an independent Bill of this kind. Clearly we are here embarking upon a guarantee of £14,500,000, when the Chancellor of the Exchequer has announced to the House that he is going to cut down as far as he can subsidies of all kinds, direct and indirect, and yet the Colonial Secretary tells us that the object of this is to enable these Governments to raise the money in the market upon rather easier terms than would he involved in the absence of the Government guarantee.

I find it very difficult indeed to understand that state of affairs, and while, as I have said, we are not opposed to the development of these territories, the finance of this proposal requires more explanation. Further, the Committee will observe that there are certain charges on these undertakings at the present time, and the White Paper of the Government indicates that these things are to rank first—of course, after the obligations of the undertakings in force at the time of the passage of the Bill. I should have thought it would have been of vital importance to the Committee to know what these obligations are, apart altogether from the economic prospects of these districts, but no statement has been made on that point by the right hon. Gentleman. Of course, such a statement would be very largely a statement for the Treasury to make, but we have not had an opportunity of hearing the Treasury. I put in that criticism at the present stage, with this further question. If it be true that all this survey has to be undertaken, is it necessary to embark upon a guarantee of £10,000,000 in East Africa at this time; and would it not be wiser from the point of view of national finance, and without doing any injustice to these territories at all, to limit the aggregate amount of the guarantee until that information is forthcoming? We cannot separate even a £10,000,000 guarantee from existing financial conditions.

The Chancellor of the Exchequer and the Government have been reminding us in recent Debates that within the next year or two they have about £900,000,000 of maturing short-term debts, and they are anxious to get the best conditions they can for the conversion of that debt on a better basis. I agree that £10,000,000 is an infinitesimal sum by comparison, but it is the accumulation of these sums which prejudices credit because they are contingent liabilities. Accordingly, it is our duty to limit them to the very lowest point at this stage, provided we are satisfied that we are doing no injustice thereby.

The UNDER-SECRETARY of STATE for COLONIAL AFFAIRS (Mr. Ormsby-Gore)

Do I understand that the right hon. Gentleman's plan to be that the Treasury should advance cash for this survey, and then, as each survey is completed, present a separate loan for each of the 15 surveys to the House of Commons.

Mr. GRAHAM

Certainly not. I do not suggest any segregation of that kind. I am suggesting at the moment that you have not made out a case for the full £10,000,000 guarantee. My argument in support of that is the Report of the Schuster Committee. All I am suggesting at the moment is that, having regard to the arguments which the Government itself has advanced, you should lower this amount, and I think you could lower it appreciably without doing any injustice to these territories. No case has been made out for the higher sum, and that is the criticism which I advance at this stage. I cannot conclude without expressing regret that we have heard so little on the purely financial aspects of these proposals.

Mr. RAMSDEN

particularly welcome this proposal, because I feel we are now taking a real step in the direction of Empire development. We are now beginning to realise the possibilities and potentialities of East Africa, to which part of the Empire I propose to refer. By means of this guarantee we shall certainly be able to advance development in East Africa very considerably. In East Africa we are able to produce many of the foodstuffs and raw materials which are so necessary to this country, and we have heard from the Secretary of State how, year by year, they are not only increasing their exports, but are at the same time increasing their imports, particularly of goods from this country. In the future they are certainly going to play a more and more important part in relation to this country, and particulrly as regards that raw material which is so essential to the great county of Lancashire. In the past, unfortunately, we have been dependent for the bulk of our supplies on the United States, but I firmly believe that if only we can develop our Colonies in East Africa we shall in time make ourselves independent of the supplies which we now obtain from our cousins across the Atlantic. That would be a great boon indeed to the manufacturers of Lancashire.

In order to carry out this development upon which, apparently, we. are all agreed, there are two great necessities. The first is that of transport. Easy transport is essential if we are to get any real value out of these countries in East Africa as well as in other parts of the tropical Empire. That part of the proposal which applies to the construction of new railways, roads and harbours, will be of the greatest value. There is not the slightest use in having a rich and fertile soil unless you can carry away from it the produce which is grown there. Only a short time ago I read that it required about 2,000 men to carry 100 tons of produce on their heads over a distance of 100 miles and it occupied one month. That appears to me to be a great wastage of labour. In connection with East Africa one often hears the phrase, "shortage of labour," but I think the word shortage is sometimes mis-used for the word "wastage." I think that instead of having 2,000 men employed in carrying produce in this way, they could be employed to much better advantage in producing. If by the construction of railways we can avoid this waste of labour, we shall be doing something which will be useful. The next necessity-in the development of each countries as East Africa is that we should use science to its fullest extent. We are, I hope, going to get very substantial sums from the £10,000,000 loan for this purpose It has been recommended by many different bodies because they realise that scientific research will render great service in opening up and developing East. Africa. In the report of the East Africa Committee, which was headed by the present Under-Secretary of State for Colonial Affairs, such work is strongly recommended and the Imperial Economic Committee have also recommended the use of scientific resarch to the fullest extent, while the recent report of pie East African Loan Committee also suggests such expenditure.

This report is very interesting only it appears to me that m one or two directions the Committee go wrong. Although they recommend scientific research which is so necessary, if the proper crops are to be grown and if we are to make the best of those crops, they seem to fall short with regard to one of the particular means of doing this and that is the Amami Institute. This institute was erected during the time when the. Germans were in occupation of that country, and it has unfortunately fallen into disuse. It certainly does give a great opportunity of carrying out practical experiments and research in the territories with which we are now concerned. I regret to see that the Committee were doubtful about expenditure on this institute at present and they seem to believe that no man worthy of the post of principal of the institute would be willing to accept the responsibility unless he were assured of proper support. I do not think there is the slightest doubt that this would be given to him, and if, instead of trying to make it more difficult for this institution to commence its work, and particularly more difficult for the man who will ultimately be placed in charge of it, they had frankly recommended that we should go ahead, they would have done something much more practical. Quite recently, at the Governors' Conference held in East Africa, the decision was arrived at to make use of this place, and every body, whether it be the Imperial Economic Committee or any other body, that has investigated the conditions has recognised that the Amani Institute is the one and proper place in which this work can be done. I, therefore, sincerely hope the Secretary of State will pay no attention to this part of the Report, but go ahead and liberally supply with funds this institution, which certainly can be made of very great value.

I am afraid sometimes that some of the people who make these investigations do not always recognise what such research can do. I do not want to bore the House with examples of what scientific research has done in tropical agriculture, but I would like to refer briefly to three. First of all, I will take the growing of cotton in India, where through the proper selection of plants and the scientific growing of the cotton they were able in a certain district in India to increase the production threefold. Then, take cocoanuts. It was found there that if the proper selection of plants was made, it was very easy, indeed, to get a crop 50 per cent. higher than otherwise would he the case. Again, in a West Indian island—I think it was one of the smaller islands—some time ago the cotton crop was practically wiped out with a blight known as the cotton stainer. Fortunately, the scientific research people were able to give the necessary remedy, so that this blight has been destroyed, and it is now possible to continue growing cotton there. I hope the very greatest help will he given to the work of research, and that it will be carried out, as far as the East African Colonies are concerned, at the Institute at Amani, which is so well situated for this purpose.

It will not only be necessary to set the Amani Institute itself to work, but it is essential to see that there are the proper lands around the institute where practical work can be carried on. I hope the administration of this institute will be placed in careful hands and that it will be allowed to become a practically independent organisation, and although it has to be situated in one of the Colonies, it must not for one moment be placed under the directorate of agriculture in that particular Colony. We must remember that the institute will serve the whole of East Africa, and must not become a local affair. It seems to me that East Africa can in future become the Eldorado of the twentieth century, and if we can only use the proper means we can do our share in bringing that about.

Sir ROBERT HAMILTON

I think the whole Committee is under a debt of gratitude to the Secretary of State for the Colonies for the very admirable exposition he gave us, except that on one point I am rather inclined to agree with the right hon. Member for Central Edinburgh (Mr. W. Graham), and that is in thinking that we might have had a little more on the finance side. It is true that we had very interesting figures showing the progress of the Colonies and Dependencies in East Africa, and I, for one, assure the right hon. Member for Central Edinburgh that the security is excellent, and that it is an improving security. But that does not alter the fact that it may not be necessary, at the present moment, particularly having regard to the Report of the Schuster Committee, that the whole expenditure of the £10,000,000 should be guaranteed at a time of financial stringency. We have been waiting for the opportunity of debating this subject for some little time, and I am afraid that I must enter a complaint at once that we have only had an hour or two in which to consider this very voluminous Report, which needs very considerable study, and we have not yet had the opportunity of consulting the large-scale map for which I asked the right hon. Gentleman some time ago.

I should like to ask the Members of the Committee who are discussing this Resolution to-night how many of them know where the Soroti-Lira extension may be, or what may be the alignment of the Busambatia-Jinja-Kampala Railway. We should have been in a much better position to discuss these matters if we had had the opportunity of seeing the projected lines before us on a large-scale map, and we are under a very great disability at present in having places quoted to us in this Report which cannot be found on an ordinary map.

Mr. AMERY

I understand that the large-scale map was sent to the Tearoom yesterday, and I hope it is there to-day. I am sorry it has not arrived earlier.

Sir R. HAMILTON

I have been looking for that map day after day for the last week or two. I gave it up to-day, and it has apparently been in for the last hour or so, since the Report was given to us. At any rate, it will be too late for most hon. Members to consult for the purposes of this Debate. The step that we are taking to-night is a new step in Imperial development. The whole country is being asked to take an interest in the development of its Dependencies oversea, not only in the interests of the Dependencies themselves, but in the interests of the whole country. It is a new departure, and the whole country is being asked to lend its credit for the development of these out-of-the-way parts of the Empire, and, therefore, it is rather unfortunate that we have not had a little more time to consider these matters before debating this Resolution. But other opportunities will occur later on, and so I shall confine my remarks to-night to the East African portion of the loan, and make them as general as I can. The right hon. Gentleman the Secretary of State, I know, realises the difficulty to which I have alluded, because in his introductory remarks to the Report he says that he has presented it at the earliest possible moment, which shows that he would have liked to present it earlier, if it had been possible We are very glad to have had this Report, but there is so much that is left open in it, and there are so many reservations, and on the top of that the Secretary of State himself makes further reservations, that we are discussing matters on what I might call a ratter unsure basis. There are many suggestions, and those suggestions are, hedged about with so many reservations, that there is very little that is really tangible in the Report. There are only two lines, as far as I can see, that have been definitely recommended, and those are the Moshi-Arusha extension and the completion of the Tabora-Mwanza line All the others are hedged round with reservations. I do not complain altogether about that. I think it is very desirable that we should move in this matter with the greatest caution. No greater mistake could be made than to act with precipitancy. The Committee, I think, are to be congratulated upon having so pointedly drawn the attention to the House that it is necessary to proceed with caution in these matters, and not to lay out the alignment for a railway between certain places when a railway or a road runs in several other places in the locality, until it is perfectly certain that the proposed line is the best line of route in that country, but the best, line to be chosen for that particular road or railway. The result is that a great deal of possible work under the present Resolution is pushed off into the far future, and we have to wait until all sorts of other considerations can be taken into account and thought out. As I said just now, I do not complain about that. I think you cannot act with too great caution.

I should like to draw the attention of the Committee to this point, that, after all, the amount of money that has been se aside, is a very small proportion of the £3,000,000—I am leaving out the odd money—for the extension of the railways alone. I take it the amount will be about £450,000. A large portion has been set aside for the improvement of the existing lines, and work on the existing lines, and workshops. That is quite right. If you are going to increase your feeders to the lines of railway, you must see that your main line is properly equipped, you may require to increase the width of the rails, double the line in many places, and establish workshops for dealing with the extended railway system. I would like hon. Members to bear that in mind. I think it was the late Mr. Joseph Chamberlain who said that the railway was the key to Africa. There is nothing like the laying down of a railway and the improvement of the roads for opening up the country. Our experience of every railway that has been put down is that it has succeeded. Sometimes we have had to wait a little, but success has eventually come. I want to lay particular stress upon that point, because people nowadays are inclined to be led away in undue fashion by the motor car and motor roads. But trunk roads in Africa are very dangerous and expensive. The upkeep of a road in tropical Africa is very nearly as expensive as the making of a railway, and will not carry anything like the traffic. Roads over short distances may be very useful as feeders to the railway, and help to bring the produce in from the neighbouring country, where it is not necessary to go to great expense of the upkeep of a metal road. The matter has been very well put in the Report, and I should like to draw attention for a moment or two to a quotation from page 11 of the Report, in which the position is very properly summed up:

10.0. P.M. The main principle which we take to underlie his memorandum of the 18th January, 1926, namely, that railway policy in the various territories under British administration in East Africa should be regarded as a whole, and that any new construction which is of more than purely local importance should be considered in its relation to a common policy for the development of these territories, and should only he undertaken after full consultation with the Governments of all the territories concerned. It is very important that all these various schemes in East Africa should not be regarded in piecemeal but as a whole, and that nothing in the nature of competition should be allowed between lines of railways in neighbouring colonies or dependencies. We shall have very shortly a line with its terminus at Tanganyika. It is very important that the roads and railways should be so adjusted that there will be nothing in the nature of competition between them. As regards the roads I should like to refer to one particular road in a district which I have been through because the Committee recommend a road in a place where the railway already exists. It seems a little unnecessary. reasons they give for it are that the roads do not go in exactly the same line as the railway, but the matter can be hardly understood without a map. It is said that it is unnecessary to make a road along the coast from Mombassa down to Tanganyika Water. My knowledge of the country would lead me to say that that road will be extremely useful and cover a wide area, and will help the bringing down of the produce to the main line. I should like to refer to the question of the interest on the money.

There is a very strong argument for the point of view that the Colony, which is building an undertaking on which it is spending a large sum of money, and possibly receiving nothing in return during the course of construction or for some little time, afterwards, should pay something, but perhaps it is beneath our dignity that we cannot make some easier terms for the Government of the Colony than the terms which are suggested. I can quite understand the Treasury point of view. They may say that there is a necessity that we shall receive some return for our money. It is quite right that the necessity for paying the interest on the loan should be brought home to the Colony which receives the loan, but I do think that some easement might be given to the burden of the loan during the first two or three years, even if arrangements were made whereby the loan was repaid at a later date when the undertaking had become more self-supporting or even a profit-making undertaking.

I want to say a word or two in regard to research. I want to emphasise what the hon. Gentleman opposite has said in regard to the great importance of mining. I was very glad to note that the Secretary of State has spoken specially in regard to the recommendations that the Committee make in regard to mining. I do trust that before this matter is finally disposed of it will be settled that Amani is to be so equipped as to become the most important research centre for tropical agriculture in the whole of Africa. If difficulty is found in equipping it with the best brains, nothing should stand in the way of obtaining the best possible brains not only from this country but from other countries, whether they be French, German or Italian. Science knows no frontiers, and if we have the means of obtaining the best brains where-ever they can be found, I think we ought to get them, and we ought to see that they are placed in those laboratories at Amani, which should be equipped as no other laboratories can be equipped throughout the rest of the world. The situation and the place is ideal. We all know what the great school in Trinidad has done for agriculture in another portion of the world, and there is no reason why what has been done there should not be done in East Africa, and not only should be done but should be eclipsed. I hope we may see the Secretary of State succeed in getting Amani equipped as it ought to be.

I think hon. Members in all parts of the House will back him up in that. There should be no hesitation in a matter like this. It is no use doing a thing like this by halves. As the Committee has said it is better to leave it undone than to equip it badly or to half equip it, and Members in every quarter of the House will lend their weight to the Secretary of State if he goes to the Treasury and says that Amani must be properly equipped. The Colony of Kenya is, I believe, especially asking for a large sum to be set aside for research into native welfare, though I understand that the particular Report of the Governor dealing with this matter has not yet arrived in England. This is a matter to which the Committee should give special attention. We all know how dependent we arc in these Colonies on the native. We cannot move hand or foot without him. After all, it is the natives' own country, and we have declared our trusteeship to the natives. I am not one of those who ever thought it was desirable that the native in Africa, should be left alone to get on as best he could by himself. That could not be done. We have gone there for good or bad, and we hope it will be for the good of the natives, and we can make it for the good of the natives in the light of our past experience if we will only benefit by the mistakes of the past, and take steps to see that those mistakes shall not be repeated in the future.

I think we all realise what a mistake it has been in the past to pay insufficient attention to the welfare of the native. Take the medical question and the question of sanitation and the effect of taking the native away from his own reserve, away from his women, and putting him to work on railway works on different conditions of food and climate to those to which he has been accustomed in his own reserve, and perhaps leaving an insufficient number of natives in the reserve to provide sufficient food for the tribe. The result undoubtedly has not been for his good. This most important of all matters should be attended to, not only for the benefit of the native, but for the benefit of ourselves in that country and for future development of the whole country. I am not an old man, but I can remember the days of Livingstone. I can remember the final breaking up of the Arab slave trade. Then I have seen the scramble for Africa by European nations. I have seen railways built in Africa for military purposes, but to-night we see the beginning of a national effort on behalf of a trusteeship which we have declared for the natives in Africa, the building of railways, ports and roads, and the making of research in the interests of peaceable civilisation and development.

Sir SYDNEY HENN

I must begin by endorsing what was said by the previous speaker in regard to the issue of this White Paper. There has not been time in the few hours it has been in our hands to make a thorough study of it, therefore I intend to refer to one or two main subjects in the Report and to say as little as I possibly can. In the first place, I think there is an hiatus in the history of this matter. It is a year since the Report of the East African Commission was issued to the public. For many months the matter was considered by the Government and eventually we were told that a Bill would be introduced to give effect to its recommendations. But it is only tonight that we learn from this Report that there has been taken away much of what was recommended by the Commission. There has been cut out from this Report a number of projects and schemes that those of us who have studied these matters for years expected would be included as some of the principal objects of the Committee's recommendation. There has been cut out the construction of the main line from the Tanganyika Central Railway down to the South Western Highlands. If there is one project among others which is important for improving the communications, this is the most important of all. There are several reasons, but I will only cite two. In the first place, it will bring into direct communication two of the largest white communities in tropical Africa which, at the present time, are entirely separated by an area of undeveloped country. The second reason is, that as long as that country remains undeveloped by the construction of means of communication, so long will it remain the reproach of the Germans that we have taken over a mandatory territory and are not developing it as we should.

The same remark really applies to the failure to recommend a generous contribution towards the reopening and the maintenance of the Institute at Amani. I endorse all that has been said on the question of Amani this evening. I think it is its greatest failure that this Report should have passed over the matter so lightly. The members of the Committee have been ready enough to support projects where, so far as they could see, there was every likelihood of an immediate return on the money, adequate to cover the payment of interest. I could not help thinking, as the Secretary of State was reading out the figures of the profits made by the Uganda Railway in the last few years, "What need is there of a Government guarantee in the ease of a railway which is paying its way so handsomely as that is?" I do not grudge them the guarantee; but there are many other projects for the development of East Africa which really require money, and can only obtain it by means of a Government guarantee. One other project is dealt with in the Report—the Zambesi Bridge. It is quite true that a recommendation has been made to reserve provisionally a large sum for it; but I would like to urge upon the Committee that this, again, is one of the most important works required in East Africa. The development of a, great area is held up for want of that bridge. We have spent years discussing the matter, but nothing has happened to date, and now all that the Report does is to advise that another Commission be sent out to see what further recommendation can be made. This is one of the most important works for the development of Central Africa as well as East Africa, and I sincerely trust that when the Bill comes before the House there will be a strong expression of opinion in favour of constructing that bridge, even though it may entail the British Government having to fwd the interest for a. limited number of years.

It will be seen that the sum set down for the development of Kilindini Harbour is £1,800,000. I think there must be some error in this figure. So far as I am aware, all that has been proposed in recent years is the construction of two more wharves. We have been told that so much of the work has already been done in connection with the construction of the first two wharves that some £300,000, £400,000 or £500,000 would finish those two extra wharves" making four in all. How is it possible that before those wharves can be constructed so large a sum as £1,800,000 should be required? I think that requires some explanation. Some of the money would be far better spent in other directions. In conclusion, 1 wish to say that I think it is time this Bill, in whatever form it leaves the House, was passed and the work of developing the transport system of East Africa got on with as rapidly as possible.

Mr. SNELL

I will try to compress into a very few minutes a statement as to what I personally think are the views of the majority of the Members of the Labour party on this Measure. I do not propose to criticise the details of the Schuster Report, for the simple reason that it is better not to quote it at all than to misquote it, and, like all other hon. Members who have spoken, I have not had a chance to go into it in detail and to consult the maps which are necessary to an understanding of it. There are two points of view from which to approach this question. The first is the effect which the development of Africa will have upon our home conditions and needs; and the second is as to how such development may affect those who are living in the territories affected, whether they be natives or settlers or traders. The development of territories which are required to open out to us markets for our industries at home is not a purely academic question or one for idle speculation, but is of very great urgency and real and vital importance. So we are compelled to look at it first of all from that point of view. I will not go into the reasons why the expansion of our trade is necessary if our people are to be fed in this country. That is common knowledge to every Member of the Committee, and I do not propose at this time of night to recite the reasons. I will, however, allow myself to say that the Labour party, in its approach to this problem, has always urged the development of our national estate in this country, including the full development of our land, our minerals, and all the resources at our disposal which would provide employment for our people and enrich the nation as a whole.

If we apply the same idea to our colonial dependencies we are following out a line of consistency that means to us the development of our Commonwealth estate for the benefit of everybody concerned in it, not white settlers alone, and traders, but the humblest native who resides in Africa must benefit by these developments just as much as the richest settler or landowner who may be there. Our attitude as a Labour party has been clearly expressed in the resolution passed at the conference in Liverpool last year, and it was more clearly expressed in the Prevention of Unemployment Bill which the Labour party presented to this House in February this year. If the Committee will allow me I will read one Clause of that Bill that will express in closer language than I can, our attitude on this question. Dealing with national unemployment and development, Clause 2 says: The Board shall have power to make advances out of the funds at their disposal, to he expended either in the United Kingdom or in any other part of the British Empire, to or through such Government Departments, Dominion or Colonial Governments, local or public authorities, or associations of persons or companies, either by way of grant or by way of loan, or partly in one way or partly in the other, and upon such terms and subject to such conditions as they may think fit, for any purpose calculated, in their opinion, to promote employment, including the better utilisation and development of land, capital undertakings, transport and mines, and electrical undertakings. That expresses officially our attitude towards the general question, and the record of the Labour Government during its short period of office was consistent with those general lines. That is, roughly, the point of view from which we look at this problem of Colonial development as it affects our home conditions. I have not time to fill out the details or to argue upon it at any length, but will pass on to the question of Colonial development as it is likely to affect those living in the territories concerned—natives, traders and settlers. Our attitude on that matter is that, with proper and adequate safeguards for native welfare, we are not opposed to any scheme which will promote development in Africa or anywhere else, but those safeguards are, from our point of view, essential, and we can give no support to any scheme which will leave it in doubt whether the rights of the native peoples .are being adequtely protected or not. Our final attitude towards this Measure will depend upon whether the native is going to share in the benefits it is sought to confer, whether he is going to be protected in his rights and in his security for land, and whether the taxation he is going to pay is going to he expended, in a great measure, upon things that will benefit him. Then we place a considerable importance upon native production, and we should like to know whether these new transport facilities—whether railways, roads, or whatever they may be—are going to help the native to produce more in his own way for his own needs, or whether he is going to be made into a new kind of wage slave on his own territory. We are rather alarmed at the outlook owing to certain information which comes to us from time to time from those territories themselves. For instance, a resolution passed by a conference of settlers' representatives from all the East African Colonies, which was called. by Lord Delamere at Tukuyu, in Tanganyika, in December of last year, states that The active encouragement by Government of the growing by natives of economic crops such as Arabian coffee, tobacco, and cotton, in European-settled areas, was to be deprecated. That is, very frankly, the view of the white settlers in East Africa, and we very much want to know what the Government attitude upon that matter is going to be. We stand for what we may roughly call the West African method of production in these matters rather than the plantation system, which the white settlers in Kenya and elsewhere would appear to desire. The motive of the resolution I have quoted seems to be clearly to keep the natives in such a position that they will be compelled to work for the white settler, and that raises a question which I hope the House, at subsequent stages of this Measure, will take into account. We should like to be-assured that there really is a labour supply available for the operation of these railways when they are built. We are quite aware that, as was pointed out by the hon. Member for North Bradford (Mr. Ramsden), if you waste human energy you are doing wrong, but it may happen that you may build a railway through a particular territory with the only result of draining from that territory the labour which ought to be kept on it for the agricultural purposes and needs of the tribes who live upon it. That is a very great danger which I hope will not be overlooked.

Then we should like some assurance, either now or at a later period, in regard to compulsory labour. In some districts the labour is simply not there, or at least, it cannot be spared from its rightful purpose of producing food on the land which the natives occupy, and anything that would bring compulsion upon the native to leave his home and his land, and to undertake speculative work on a railway some distance away, is not going to help African development in the way we desire to see. Therefore, we shall be entirely opposed to the starting of any system of wage slavery along those lines. Finally, we want to be assured that, wherever labour is employed in this developmental work, it will be adequately paid, and the labourers will be properly treated. Some reference bas been made to-night to the likelihood of great development of trade with these areas if this development takes place, and we are told that it would lead to a great expansion in our exports, and so on. Let us assume that would be so. It would only be so if the native were well paid for the labour he did.

I do not know if the Committee would allow me to quote a statement made by the Chief Commissioner of natives races in Rhodesia last year, and what is true of Rhodesia would apply to East Africa and elsewhere. Mr. Peter Nielson, speaking at the South Rhodesian Missionary Conference in 1924, he said: I have always found that the native who gets 20s. a month spends little or nothing in the stores; that the native who gets 35s. or 40s. spends part of his money in buying what for him may be termed luxuries—a relative term—and that the native who has become skilled enough to earn £4 or £5 a month spends all or nearly all his wages in providing himself with what he has come to regard as necessaries. To indulge in luxuries until they become necessaries is to raise the standard of living. Therefore, if my observation has been sound—and I think most employers of native labour will agree with what I have said—the raising of the native standard of living so that he shall not become an inimical competitor with the white man must naturally follow the adoption of the principle of equal pay for equal work. I think it is a sound generalisation and one that applies to the Bantu as well as to Europeans, that the more a man earns the more he spends. It is no use our spending money in East Africa or anywhere else for the development of native life there if the wages that are going to be paid are just those which will keep him on a bare subsistence level. That would defeat the very object which hon. Members have expressed as their own desire. I associate myself very fully with the desire that research work in Africa shall go on, and I think it would be a reflection upon our holding the mandated territory of Tanganyika if we were to let the great scientifific institution built up by the German nation fall into disrepair. From every point of view, from its practical utility and also from our own sense of honour, I think we are bound to keep that great institution in working order and to make it as perfect and as useful in the service as we can.

The possibilities of trade with the African Colonies are really very great if the African Colonies are properly treated. We must have long views and not short views. We must not think what is going to pay a given dividend this year or next, but what is going to happen if, taking the long view, we do the right thing, and it is interesting to note the present position. The per capita purchases of British goods in 1925 by British possessions in Africa in comparison with those of certain other countries are significant. The West African Colonies, including British Togoland, Nigeria, including British Cameroon, purchased British goods to the amount of 12s. 6d. per head. The British East African figures, based on the combined purchases from Great Britain of Tanganyika territory, and Pemba, Kenya, Uganda, and Nyasaland Protectorates, are 9s. 6d. per head as compared with 9s. from the United States and 9s. 6d. from both Italy and Spain, so that already the trade is not inconsiderable and I hope the Committee will remember that. Remember also that it can only expand if the wages of the native are adequate and if he is given a proper chance of developing on the spiritual and educational side as well as on the material side of his life. That is all I desire to say on the question of East Africa.

I hope the Committee will allow me to say something on the other proposal, that of Palestine. Here, it appears to me, we have a problem of very great interest and complexity. Within 9,000 square miles or so we have a community of Moslems, Christians and Jews, each. with almost every possible subdivision of interest and functions of sect and nation, and the problem of settlement is very difficult. In this country our minds run upon the rough division of interest as between the Arabs and the Jewish people. I do not propose to go into that question, except to say that it is our desire on these benches to see that both have a square deal, and that if development takes place it shall be a development which will affect the whole population, to whatever race, sect or religion they belong.

There are one or two questions upon which I should like to ask information. We should like to know something more of the details of development? We have complaints from the Jewish Labour organisation that Government work in Palestine is given out to the cheapest trader by tender, and that the tender is based upon the cheapest kind of woman and child labour. We hope that this House will not lend itself to expending money in a way which is undignified in that sense. We note that very little, if any, social legislation has taken place in Palestine, so far. We would like to ask for the inclusion of a Fair Wages Clause in whatever contracts are involved in the application of this loan? Finally, we feel that contracts, whenever given, should not be made the excuse for the importation of the cheapest form of sweated labour from the Sudan or elsewhere, to the exclusion of labour amongst the Palestinian people themselves. That is a matter to which we shall have to direct the attention of the House in the subsequent stages of this discussion. For the moment, I think I may speak for practically everyone on these benches when I say that we do not wish to oppose the development of our Colonies in any way, but we do wish, and we shall insist so far as we can, that the development shall be such as will bring blessings to the humblest person living in them as well as to those who are more prosperous.

Sir PHILIP RICHARDSON

This Debate has contained much that is of interest. I propose to add to it personal experiences. I am probably the last recently returned Member who has visited these parts of our Dominions. Listening to the Debate, I have realised the great necessity for visits on the part of Members of this House to these portions of our great Empire. I am heartily in accord with the proposals of the guaranteed loan to East Africa. I propose to deal with those portions of East Africa with which I am personally acquainted, and not with those which I have not visited. I can reassure the last speaker on one or two points. He has referred to the conference which was held at Rungwe, and if Lord Delamere deprecated the encouragement of the growth of Arabica coffee by the natives, it was because the natives had been encouraged to go in for the more easily grown Robusta coffee. My experience during a lengthy tour through these Colonies was that there is every desire to encourage the natives in every possible way.

The hon. Member referred to the question of compulsory labour. I can assure him that compulsory labour does not mean wage slavery. We all have to labour in order to pay our Income Tax according to the best of our ability. Some give their brains and some use their hands in order to maintain the services of our country. In a country where the development of the native is so very low, he has only his hands with which to perform labour. He cannot perform other services, and in certain parts of East Africa the native chiefs, not the white men, exact from the natives Income Tax, which is devoted towards the development of the country. With regard to the question of pay, we have to take the labour at the rate at which it is offered. People sell their services in order to obtain certain advantages. In East Africa you have to deal with a native in a low state of development and with very moderate desires.

Mr. J. JONES

Wallop your own nigger.

Sir P. RICHARDSON

And accordingly one question is that of educating the native so that he may develop—

Mr. JONES

With a whip.

Sir P. RICHARDSON

I do not know what I have done to merit these interruptions. They do not disturb me, because I am certain, from my experience, that the use of the whip has long since disappeared.

Great Britain in Africa has conferred certain definite advantages on the native, and I was pleased to hear the remarks of the hon. Member for Orkney and Shetland (Sir R. Hamilton). There are few persons in this House with a greater knowledge of these territories. He referred to the days of Livingstone and the slave raids. The first thing we have done is to give to the natives security for life and property. This did not exist within the lifetime of some of us. We have secured the native against the raids of the slave trader. That is the first great blessing we have conferred upon him, and we have also secured him in such property as he wishes to possess. He may have been. transferred from one district to another, but in all the many thousands of miles I travelled the natives were satisfied where they were and are enormously benefited by the administration of Great Britain. One thing which has impressed me more than anything else is the entire ignorance in this country on the condition of the natives in Central Africa. The native there has very few wants indeed, and his possessions consist in the number of his cattle. When rinderpest attacks his cattle he loses his property, and one of the blessings we have conferred on the native is the establishment of medical research for the purpose of protecting his cattle.

It is quite easy to pick small faults in an administration, but it was an eye-opener to me, in going through Central Africa, to find that one could walk more safely there than in the East End of London, whereas only 20 years ago—[Interruption]—the reason being that the native is entirely satisfied that the white man is there as his friend and not as one who is going to exploit him. It is not the understanding of the native that he is exploited. His understanding is that from British domination he has received enormous advantage. I went to farms, I went among the traders, and in all parts, right through from Nairobi, a thousand miles to Tukuyu and the Belgian Congo, I found that the native had benefited enormously by the presence of the white man. I have risen to bear testimony to that which the white man has done, and to the progress that we are making in those countries, and cordially to support further progress. There are very few Members, possibly, who realise the extent of this country. Even a man who had lived there for a very long time was apparently ignorant of where the Soroti to Lira line was. These are important posts giving an outlet to the cotton districts of Uganda. We have all to realise the enormous extent of this country and its enormous potentialities.

There are those who talk about the advantages which we may get through our trade, but before we obtain a reciprocal trade with the native we must understand the country in which the native is placed. There is country which is white man's country, and country which is black man's country; that is to say, country in which the white man can live and prosecute his operations successfully, and black man's country where, because of malaria, sleeping sickness and other causes, the native alone can be the worker and the white man must be the administrator. So far as Kenya is concerned, the highlands are very much a white man's country, and it is very desirable that that country should be developed from that point of view. Uganda is very much the black man's country. It is at a lower altitude, much hotter, and quite unsuitable for development by white farmers. That is an area which has been exploited by us as cotton-growing country. But whilst the natives have grown the cotton the desires of the natives for the advantages of civilisation are not so pronounced. I was talking to a planter with whom I was stopping, and congratulating him upon his native servant, who was very well dressed indeed in a white shirt. He said to me: "This is a funny country. I gave the man two months' leave, whereupon he oiled his body and covered himself with red earth, and went off on a honeymoon trip." In this part of the world people are in a very low state of civilisation.

The result of the whole of my tour was to convince me that the advent of the British people was to the very great advantage of the native. It added to their happiness and prosperity, but one thing it has not so far added in adequate measure, and that is education. Everything that adds to our knowledge of the country, everything that lends itself to research, everything that will advance the prosperity of the native means that the native will have More wants, will have more desires, will be impelled to make an effort on his own account, and then the native will be able to exchange the product of his labour in greater measure with the product of the labour of the people in this country.

Captain GARRO-JONES

Can the hon. Member give us a little information about the consumption of gin and other spirits?

Sir P. RICHARDSON

My con-consumption of gin was very small. I know nothing whatever about the consumption of gin by the natives. I can only tell the hon. Member that in all the thousands of miles I travelled I never saw a native drunk on gin. The natives are decent, clean people, who have now been freed from the domination of the Arab slave trader. This part of the world lends itself to enormous developments to the mutual advantage of the natives and ourselves. When we talk of harbour and railway development, we must not forget that it is not harbour and railway development alone that is necessary, but the development of the native, so that he will have greater wants. It is not sufficient that we should ask the native to grow cotton if the native grows rich on £5 a year and then ceases to grow cotton. That is a problem that has actually arisen in Uganda. It is not sufficient to urge him to grow coffee, if we do not educate him in the way of growing coffee. It is not sufficient to ask him to preserve and breed cattle, unless we introduce measures for preserving these cattle, which are, in fact, the natives' bank balance. We are proposing in this Measure to vote a guarantee of £10,000,000. I hope that this may be only the first of many guarantees, because East Africa is a vast Dominion with vast potentialities for development in the British Empire, and £10,000,000 will be a mere flea-bite in its Imperial development.

Colonel WEDGWOOD

I think this House has as much reason as the native of East Africa to congratulate the hon. Member for Chertsey (Sir P. Richardson) on his safe return from this perilous voyage. I gather that to the native of East Africa as well as to the hon. Members of this House that voyage has been profitable and that we now, understanding the position, can approach with clear minds the problem that is before the Committee. It seems that East Africa is divided into good lands where the white men live, and bad lands where the black men live.

Sir P. RICHARDSON

No.

Colonel WEDGWOOD

And all that is required is to get one to go to the other. That seems to be the normal solution of things in Africa. What I am anxious about is why our money should be used to effect the union. After all, this is a Financial Resolution. We are this evening, amid hilarious joy, committing the British taxpayer to guaranteeing the interest on £14,500,000. Some goes to Palestine, some to East Africa—

Mr. J. JONES

Less than the population of West Ham.

Colonel WEDGWOOD

You could put them all into West Ham and roll them up.

Mr. J. JONES

Give us £10,000,000, and we will pay everything.

Colonel WEDGWOOD

The same thing would apply in East Africa. As this Debate rolls on, we learn one or two home truths. I am beginning to understand now why this valuable report of Sir George Schuster has been so long delayed and why it is that week after week, month after month the introduction of this Bill has been postponed. We now understand the attitude of the Colonial Secretary and above all of the Under-Secretary. They knew that that fell report was upon them—a cold water douche to succeed the generous enthusiasm of the Under-Secretary's report last year. Anyone who has read the Schuster Report will bear me out in saying that it is extremely cooling to the energies and enthusiasm of the people who imagined such great things in the previous East Africa Report. Anyone listening to the speech of the right hon. Gentleman who introduced the Resolution, would hardly imagine that there was any conflict between the views of the Colonial Office last year and the views of the Schuster Report, but, as a matter of fact, when you look into this Report you find that the Colonial Office must have had a very bad quarter of an hour when they read it first. The Resolution is for £10,000,000. Sir George Schuster and his Committee started out with applications—more or less gingered applications—from all these four Colonies for money, but as soon as the Colonies found that they were going to have to pay interest on the loans, they became less enthusiastic, and their suggestions for assistance from the British taxpayer became more and more tentative. Still, £16,000,000 was applied for, and the committee went through the applications with some care. They did their best, and in every case where the scheme was not obviously a hopeless financial proposition they recommended that, at any rate, money should be spent on a survey. Out of the whole £16,000,000, when they had gone through it very carefully, they could only recommend the guaranteeing of enterprises amounting to £1,300,000. All the rest is postponed to another season. All the rest is to await the generous energy of the local governors in finding the proper ways to spend the money which we are now asked to guarantee. That is all very well, and we are very grateful to Mr. Schuster for this careful —[HON. MEMBERS:" Sir George!" I gather that Sir George Schuster—

HON. MEMBERS

Hear, hear!

Mr. AMERY

If I may make a suggestion to the right hon. and gallant Gentleman, I would say he has obviously had no chance to develop his views on this subject to-night, and there are other Members who wish to speak. On the other hand, there is the Report stage and also the Second Reading of the Measure and, if the suggestion meets with the right hon. Gentleman's approval, perhaps we might take this stage to-night. If it does not meet with the approval of the right Lon. Gentleman and hon. Members opposite, I should not like to press the suggestion, but as there will be more than one occasion for dealing broadly and on general lines with this subject, I put before the right hon. Gentleman the possibility of taking this stage to-night.

Lieut.-Commander KENWORTHY

I would point out that £4,500,000 of this sum is for Palestine, and, with the exception of about four sentences by the hon. Member for East Woolwich (Mr. Snell) and of course the somewhat elaborate speech of the right hon. Gentleman in what was really a statement introducing the Colonial Estimates, no mention of Palestine has been made in the Debate.

Colonel WEDGWOOD

I hope the right hon. Gentleman will not press for the passing of this stage to-night.

Mr. AMERY

I will not press it any further if the right hon. Gentleman disagrees.

Mr. J. JONES

On a point of Order Is it possible on this Resolution to introduce the case of West Ham?

Colonel WEDGWOOD

I do not think—

It being Eleven, of the Clock, the Chairman left the Chair to make his Report to the House.

Committee report Progress; to sit again To-morrow.