§ 29. Viscount SANDONasked the Chancellor of the Exchequer what was the estimated total cost for the completion of the project of the Newfoundland Power and Paper Company's plant at Corner-brook, upon which estimate of Armstrong, Whitworth, and Company, the Trade Facilities Board recommended the Government to guarantee £2,000,000; what was the actual cost of the completed project, including the debentures already issued amounting to £8,394,000; whether the British Government sent out engineers to supervise the work and officials to regulate expenditure in conformity with the estimates; and, if so, whether there was an understanding between the two Governments that the work of these officials also safeguarded the Newfoundland Government as to their guarantee of £2,000,000?
§ Mr. McNEILLThe estimated total cost of the Corner Brook scheme, on which the recommendation of the Trade Facilities Committee was based, was, approximately, £4,000,000, which covered the lump sum price for which the contractors agreed to carry out this scheme to a certain specification. The plans were approved and the expenditure of the guaranteed money was supervised and certified in accordance with the construction contract by technical advisers appointed jointly by the British and Newfoundland Governments, and responsible to both Governments. The actual cost of the completed project including additional works not contemplated by the contract is in the neighbourhood of £9,000,000. My Noble Friend will appreciate that while His Majesty's Government have guaranteed £2,000,000 of the securities issued by the company, they are in no way responsible for the conduct of the company's affairs.
§ Sir FREDRIC WISECan the right hon. Gentleman say if there is any truth 2292 in the report in the "Times" to-day that this property has been sold to the International Paper Company?
§ Mr. McNEILLI have no information to that effect.
§ Mr. MACLEANCan the right hon. Gentleman inform the House whether there is likely to be any loss upon this guarantee, and, if so, how much?
§ Mr. McNEILLNo, there has been no loss on it.
§ Mr. MACLEANI am asking if there is likely to be any loss.
§ Mr. McNEILLThat is speculation. I cannot say that.
§ Colonel DAYCan the right hon. Gentleman say whether officials and engineers were sent out to supervise this transaction, as is asked in the question, and, if so, how many?
§ Mr. McNEILLI could not say without notice.
§ Colonel DAYThe notice is in the question. The right hon. Gentleman is asked specifically if any officials or engineers were sent out.
§ Mr. McNEILL:I cannot give any further answer than I have already given.
§ Mr. CONNOLLYSeeing that the sale is now nearing completion, cannot the Government say whether they anticipate any loss, and, if so, what that loss would be?
§ Mr. McNEILLNo. Sir, because there are negotiations going on in reference to the future of the whole of this enterprise, and nothing can be said as to whether there will be a loss or not. There may be a gain.
§ Mr. T. WILLIAMSIn cases where large sums have been advanced under the Trade Facilities Act, do the Government watch the proceedings when any company is likely to dispose of its property?
§ Mr. McNEILLIn answer to a previous question, I have already shown that the actual loss over the whole field of the Trade Facilities Act is a very small proportion of the whole.
§ Sir F. WISEMay I ask one other Question, and that is whether the Treasury 2293 have been consulted about these negotiations now going on with the International Paper Company?
§ Mr. McNEILLI would not like to answer that question offhand.
§ Colonel DAYMay I ask the right hon. Gentleman how it is possible to give him notice apart from the notice given in the body of the main question, which asks whether the British Government sent out engineers or officials to supervise the work? How is it possible to give him further notice than that, if he cannot answer that now?
§ Mr. McNEILLI have said already in the main answer that:
The plans were approved and the expenditure of the guaranteed money was supervised and certified in accordance with the construction contract by technical advisers appointed jointly by the British and Newfoundland Governments, and responsible to both Governments.
§ Sir ARTHUR SHIRLEY BENNWill the Government take steps to see, if the sale takes place, that the raw material is not allowed to be exported, but that it shall be manufactured on the spot?
§ Mr. McNEILLNo, Sir, I cannot give any pledge of that sort.
§ Mr. MACLEANWhen advances or guarantees are made under the Trade Facilities Act, do not the Government consider very carefully the projects that are entered into, and what the money is guaranteed for, and how is that in this case things have been allowed to go so far that there may be a very considerable loss to the Government?
§ Mr. McNEILLBefore the Trade Facilities Committee are willing to guarantee a loan of this sort they satisfy themselves that the security is good. They took those steps in the present case, and I have no reason to suppose that they were wrong.
§ 30. Sir F. WISEasked the Chancellor of the Exchequer if he can give a list of the debentures, and the total amount of debentures, of the Newfoundland Paper and Power Company; and whether the 2294 A debentures guaranteed by the British taxpayer are a first charge on the property?
§ Mr.McNEILLI will circulate the figures as regards the first part of the question. As regards the second the A debentures guaranteed by His Majesty's Government are secured by a charge on all the assets of the company, subject only to a prior lien in respect of £1,000,000 6 per cent. first mortgage debentures. I regret that in a Supplementary Answer on the 6th July I may have misled my hon. Friend on this point, but the priorities are shown in the published accounts and in the ordinary books of reference.
§ Following is the information:
§ The debentures of the Newfoundland Power and Paper Company, Limited, as shown in the company's balance sheet at 30th June, 1926, are as follows:
| $ | |
| Bank Loan secured by £1,000,000 6 per cent. First Mortgage Debenture Stock, due 1943 | 3,240,588.45 |
| £2,000,000 4½ per cent. "A" Mortgage Debenture Stock, due 1948 | 9,733,333.33 |
| £2,000,000 5½ per cent. "B" Mortgage Debenture Stock, due 1943 | 9,733,333.33 |
| Bank Loan secured by $10,000,000.006 per cent. Debenture, due on demand | 10,000,000.00 |
| 6 per cent. Income Debentures, due 1948 | 6,524,500.00 |
| $39,231,755.11 |