§ 78. Viscount SANDONasked the Chancellor of the Exchequer whether he can give the substance of the evidence given before the Trade Facilities Board on which they based their original grant of a Government guarantee for the Corner-brook Paper concern; and whether any conditions were attached to this guarantee and, if so, what they were.
§ Mr. McNEILLThe guarantee in respect of £2,000,000 "A" Debentures isued by the Cornerbrook Paper Company was given after full consideration by, and on the advice of, the Trade Facilities Committee. It is not possible to set out the details on which the Committee in the light of their experience and knowledge recommended this guarantee; but they were satisfied that the proposed works would afford employment in the engineering industry, as they in fact did, and that the security was adequate for the loan which it was proposed to guarantee. Neither the Trade Facilities Committee nor His Majesty's Government are in any way responsible for the general management of the undertaking. The main condition attached to the guarantee was that, as required by the Trade Facilities Act, the proceeds of the guaranteed loan should be used in the purchase of plant, machinery and materials manufactured in the United Kingdom, and this condition has of course been fulfilled.
§ Sir F. WISEWhat was the value of the security when this £2,000,000 loan was granted under the Trade Facilities Act?
Mr. Mc NEILLI do not know quite what my hon. Friend means. The debentures were secured on the assets of the undertaking, subject to a prior lien, of which my hon. Friend is aware.
§ Sir F. WISEWas there any value in pounds, shillings, and pence attached to the security—any actual valuation?
§ Mr. McNEILLNo, the value, of course, was to be created by the under taking for which the loan was given, and the value has been created.
§ 79. Sir F. WISEasked the Chancellor of the Exchequer if any prior lien six per cent. first mortgage debentures of the Newfoundland Paper and Pulp Company have been issued since the last balance sheet, dated 30th June, 1926?
§ Mr. McNEILLThe answer is in the negative.
§ 80. Mr. LUNNasked the Chancellor of the Exchequer on whose advice the Government undertook, under the Trade Facilities Act, to give a guarantee up to £2,000,000 in the case of the paper and pulp works at Cornerbrook, Newfoundland; 855 and the amount of the valuation of such works which was given to the Government at the time the guarantee was arranged under the Trade Facilities Act?
§ Mr. McNEILLThe guarantee of £2,000,000 to the Newfoundland Power and Paper Company, Limited, was given on the advice of the Trade Facilities Act Advisory Committee. The original estimate of the cost of the paper and pulp works at Cornerbrook, which were erected with the assistance of the guaranteed loan, was approximately £4,000,000.
§ Mr. THURTLEMay we take it that the Government guaranteed this money without there being any physical asset at all available to set off against it?
§ Mr. McNEILLIf the hon. Member means, "Was the value there before the works were undertaken," certainly it was not. The loan was guaranteed in order that those works might be brought into existence.