§ Captain BOURNE
I beg to move, in page 4, line 37, after the word "Act," to insert the words "by the Government of Palestine and."
I think it may be for the convenience of the Committee if we take this and the subsequent Amendment—in page 4, line 40, at the beginning, to insert the words:in respect of any loan raised by the Government of Palestine there were included under each of the heads 1, 3, and 4 in the First Schedule to the said Act, and as regards any loan raised by the Governments of Kenya, Uganda, Northern Rhodesia, Nyasaland, or Tanganyika.which stands in my name simultaneously, because the second one is really consequential on the first. I only put it down in this form to meet the exigencies of 775 drafting. I put down this Amendment to include Palestine, partly because in a reply yesterday the Chancellor of the Duchy made the suggestion that Palestine had in fact exhausted her credit under the Palestine and East Africa Loans Act, 1926, and it is on that point that I wish to ask a few questions. I have omitted from my Amendment any question of the purchase of railways and other capital undertakings by the Government, for which, under the Palestine and East Africa Loans Act, 1926, £1,000,000 was provided. I have concluded that such transactions have been carried out in the two years that have since elapsed. There were items for railways £1,640,000, harbour construction and port improvements £1,115,000, and Public Works, Telegraphs, etc., £745,000. I really put down the Amendment in order to ask the Chancellor of the Duchy whether all that money has been either spent or contracts entered into for its expenditure. If it has all been expended or contracts have been entered into for its expenditure, my Amendment has, of course, no further point. If, on the contrary, there is any substantial balance outstanding under any of these heads, I should like to know why the Government consider that Palestine should be excluded while other territories included under the Act of 1926 are to get the benefit under the new Bill. I put the Amendment down to ask for information and will content myself by moving it.
§ Sir O. MOSLEY
The Amendment as it stands on the Paper would not achieve the purpose the hon. and gallant Gentleman suggests, as it would have to be retrospective to affect the situation. The answer I gave last night was substantially correct. The power to borrow has been exhausted by Palestine. Therefore, as the words of the Bill contain the expression "after the commencement of this Act," a further Amendment would have to be made to make the Bill retrospective in respect of what Palestine has done. I think, on consideration of the position, the hon. and gallant Gentleman will not desire to press his Amendment, for there is no very substantial advantage to be derived by Palestine from the application of these provisions. In the first place, having raised the money, it is difficult to alter the period of repayment from 776 40 to 60 years. Obviously, that would not operate to the advantage of Palestine; while, as to the provision to allow the addition of interest to capital over a period of years, that is met in this way. Most of the money, I understand, has already been expended, and the money which has not been spent is at the moment invested and is earning interest, so that no very great advantage would accrue from the application of this Clause of the Bill to Palestine. I trust, in view of that explanation, that the hon. and gallant Member will not press his Amendment; but if the right hon. Member for Darwen (Sir H. Samuel) has any point that he wishes to raise, I shall be delighted to answer it if I can.
§ Sir HERBERT SAMUEL
Yesterday I had the opportunity of conferring with the hon. Baronet, and I gathered that the position is this, that the Palestine loan authorised under the Palestine and East Africa Loans Act has been issued to and subscribed by the public, and, therefore, there can be no question of extending the period of repayment from 40 to 60 years, as already obligations have been entered into to the persons who have subscribed the loan and who hold the bonds, which must be fulfilled. The other point, in regard to the payment of interest out of capital, might be of some advantage to Palestine. I do not think the hon. Baronet is quite correct in saying that the greater part of the money has been expended. A sum of £1,000,000 was handed over to the British Treasury in repayment for certain assets left behind by the British Army after the War, and some expenditure has taken place on railways and other objects, but the great bulk of the £4,000,000 odd—nearly £3,000,000—is still unexpended and is, as the hon. Baronet said, earning interest. It might be an advantage that when this money is being spent on harbours, railways, and other purposes interest should be added to capital instead of revenues being required to pay them, but I am informed that there is no great desire on the part of the Palestine Government that that should be done. Revenues are amply sufficient to provide the interest needed, and, therefore, I do not press the hon. Baronet to accept an Amendment covering that point.
777 I would ask him, however, to clear up one matter which was left in doubt yesterday, of a slightly diverse character. Does the Bill generally include Transjordan or not? The Under-Secretary of State, in introducing the Bill, said it was excluded from the whole Measure. I raised the point yesterday and suggested that, as I read the Bill, Transjordan was not excluded, and that possibly some portions of these moneys might be expended with advantage in the development of that very backward territory. Perhaps the hon. Baronet will inform me on that point.
§ Sir O. MOSLEY
The right hon. Gentleman is perfectly right. Tiansjordan is included in the Bill. The statement of my hon. Friend yesterday was due to a misunderstanding, but Transjordan is clearly included. As to the amount of actual expenditure, out of £4,497,375 issued in the Palestine Loan, I am advised that £2,859,223 was actually expended up to 31st July, 1928, and that the revised amount allocated to Haifa Harbour was £1,250,000. That accounts for the great bulk of the money. My right hon. Friend will see that in the present situation there would not be any very material advantage, as he has said, in extending the provisions of this Bill to Palestine.
§ Major GLYN
Do I understand that under this Bill the Government would be able to finance schemes which have been considered for a large number of years for the procuring of certain salts from the Dead Sea I know that application was made to the right hon. Member for Derby (Mr. J. H. Thomas), when, in the previous Labour Administration, he was Colonial Secretary, and that ever since that time various applicants have attempted to get a concession to obtain these salts, which I understand would bring in considerable revenue. The matter has ben held up for five years, and now it is being taken to The Hague Court to say that under the previous Turkish concession the British Government have no power to grant this concession of the Dead Sea salts to anybody.
§ Sir O. MOSLEY
It does not arise, in this way, that under Clause 4 we have no power to relate it to Palestine. It is under other Clauses that we have that power.
§ Captain BOURNE
Before asking leave to withdraw my Amendment, I want to explain that I realise that the Chancellor of the Duchy was giving his answer yesterday rather hastily and under great pressure, and I thought the situation as regarded Palestine wanted further elucidation. It was only for that reason that I put down my Amendment, and, after the reply given by the hon. Baronet, I ask leave to withdraw it.
§ Sir O. MOSLEY
The statement that I made, that Palestine had exhausted her power to borrow, was correct.
§ Captain BOURNE
I did not wish at all to insinuate that it was not correct, but I wanted to make clear what the situation was.
§ Amendment, by leave, withdrawn.
§ Clause ordered to stand part of the Bill.
§ Clause 5 (Short title) ordered to stand part of the Bill.
§ Bill reported; as amended, to be considered To-morrow.