GOVERNMENT OF BURMA ACT,1935. (Hansard, 6 March 1939)

§ Lieut.-Colonel Muirhead
I beg to move, That an humble Address be presented to His Majesty in pursuance of the provisions of Section 157 of the Government of Burma Act, 1935, praying that the Government of Burma (India-Burma Financial Settlement) Order, 1939, be made in the form of the draft laid before Parliament. Under Section 134 of the Government of Burma Act, 1935, His Majesty in Council is empowered to make provision for payment by Burma to India of the sums necessary to liquidate an equitable proportion of the net liability between the two countries at the time of the separation. In May, 1925, the Secretary of State presented to Parliament, as Command Paper 4912 of that year, the Report of the Tribunal under the chairmanship of my right hon. Friend the Member for Sparkbrook (Mr. Amery) which was appointed to formulate certain principles which were to govern this payment. In accordance with those principles, a committee known as the Application Committee was afterwards charged with the duty of drawing up the actual terms of the settlement. In November, 1936, the Application Committee presented their first interim report, on the basis of which paragraph 3 of the Government of Burma (Miscellaneous Financial Provisions) Order, 1937, was made. During the ensuing year, the two Governments mutually agreed as to the principle on which the charges in respect of pensions were to be met, and that point, therefore, was discharged and consequently excluded. A second interim report was presented in December, 1937, and the Government of Burma (India-Burma Financial Settlement) Order of 1938 was made shortly afterwards.
The figures which were inserted in the Orders in Council of 1937 and 1938 were necessarily provisional, pending a final report as to the amount which was payable on the basis of an annuity for a period of 45 years, and also pending certain financial arrangements with regard to pension payments. The Application Committee have now presented their final report, which deals, as I have just explained, with the 45 years annuity. Under that, the indebtedness of Burma to India at 1877 that date was 50 crores, 79 lakhs, 81,000 rupees, which had been reduced, by provisional payments during the years 1937–38 and 1938–39, to 49 crores, 72 lakhs, 86,558 rupees, on 31st March, 1939. [Hon. Members: "What is the value in sterling? "] Fifty crores represent approximately £38,000,000 sterling. The annuity required for the repayment of this debt, with interest at 3½ per cent., for 43 years from the latter date, is two crores, 24 lakhs, 55,964 rupees, payable in two half-yearly instalments on 30th September and 31st March in each year. That has been accepted by the respective Governments subject to adjustment, and it is accordingly provided for in paragraph 3 (1) of the Draft Order.
The provisions set out in sub-paragraphs 2 and 3, paragraph 3, of the draft, are necessary for various reasons. One is in order to give, under the terms of the Amery Tribunal Report, freedom to the two countries to make the necessary adjustments with regard to payments which may be mutually approved of by them. With regard to pensions, it has now been decided to adopt the principle that a percentage of the pensions paid by the Government of India as a central pensions charge should be refunded by the Government of Burma annually. The formula needed to secure this purpose is under examination with a view to inclusion in a subsequent Order in Council. The paragraph provides, in the exercise of the powers conferred on His Majesty in Council for the charging of the payment on the revenues of Burma. That means to say that the sums payable under the Order will be removed from the vote of the Burma Legislature.

§ Lieut.-Colonel Muirhead
I beg to move, That an humble Address be presented to His Majesty in pursuance of the provisions of Section 157 of the Government of Burma Act, 1935, praying that the Government of Burma (Shan States Federal Fund) Order, 1939, be made in the form of the draft laid before Parliament. Under Section 68 of the Government of Burma Act, 1935, His Majesty in Council is empowered to make provision for the financing of the fund of the Federated Shan States, and for payment from that 1878 fund to the revenues of Burma and vice versa. It was not possible before the Act came into operation to have an Order in Council on a permanent basis. Under the powers conferred by Section 136 of the Act, it has been possible to provide, for a period of two years after 1st April, 1937, that the payment should be settled by the Governor in his discretion. During that period a great deal of thought has been given to the subject, but it has not been found possible to arrive at final conclusions, or it is not thought that it will be found possible to do so before the end of that transitional period, on 31st March of this year. The investigations have been rather complicated. At the moment, a report by the Financial Adviser and the Accountant-General of Burma is being examined by the Governor. That report proposed still only a temporary scheme, but one which will go forward until 1942. Pending a decision by the Governor on that matter, it is necessary to have a further interim provision, particularly as it affects the question of the Burma budget, which is now under consideration, these sums being such that it is desired to make them non-votable. Therefore the arrangement which is contained in the Order under review is merely a temporary arrangement for the coming financial year.

§ Sir Arnold Wilson
I hope I may be in order, within the somewhat narrow rules of a Debate on a Motion such as this, in asking the Government whether the proposals under paragraph 2 of the Draft Order in Council refer to such adjustments as may be necessary in reference to the additional provision that will certainly be required, if my correspondents are correct, with a view to preventing the almost unlimited incursions of Chinese into the Northern Shan States as a consequence of the building of the trunk road from Burma into China. That road has been built on grounds of high policy, and it has penetrated a frontier which for untold centuries has been the frontier of Burma and has been inviolate. According to my information very large numbers of Chinese, much larger than ever before, are entering Burma by this route. The Shan States have a great deal of responsibility for the safety of their frontier and for preventing unauthorised migration 1879 from China into Burma. The Shan States, which are providing here 25 per cent. of their revenue to the fund, are entitled to the very maximum protection and financial assistance from Burma itself to prevent them from being overrun by Chinese coolies in very great numbers, whose entry into Burma will, for the first time, be very greatly facilitated by this road.
The road is of no use to the Shan States. It may be of importance to Burma or it may not, but the need for police protection, Customs, migration officers and for some measure to prevent Chinese entering is of first importance, and I should very much like to know from the Under-Secretary whether or not the Shan States will be indemnified to the full as a result of this temporary provision for any expenses which may be necessary in order to prevent Chinese migration. We are, I fear, going to do for the Shan States what we have done for the State of Burma. In the State of Burma, with the best of intentions, we have allowed 40 per cent. of all the land of Burma to be bought by Indians, who are as alien to Burma as we are to India, and unless very careful measures are taken we may have a great migration of Chinese into the Shan States, which are not really an integral part of Burma. These Chinese may begin acquiring land and settling in great numbers, and the Shan States and Burma may become, like Siam, almost an annex to China as far as population is concerned.
It would be out of order to enlarge on the subject, but I should like some assurance, firstly, that the Government of Burma are fully alive to the very real danger, to which I know public opinion in Burma is beginning to be alive, and, secondly, that the Shan States will not be called upon to pay any part of the expense of maintaining police to prevent the unauthorised migration of Chinese which may follow as a direct result of the building of this quasi-commercial, quasi-political, quasi-strategic road.

§ Lieut.-Colonel Muirhead
My hon. Friend raises a point of wide and considerable interest, and the words with which he ended his speech show the numerous aspects which attend the construction of the road and what it may bring 1880 with it. On the other hand, I think that he will agree that the point in respect of which he wants provision to be made is a hypothetical one. I do not think that anyone suggests at the moment that there is an unusual influx of Chinese or that the particular problems which he envisages are likely to materialise in an acute form during the next 12 months. The matter which we are considering in this Order is purely an arrangement for the next 12 months and does not deal with those particular hypothetical prospects which the hon. Member has raised with regard to the future.

§ Mr. Benn
Is any part of the cost of this new Burma-China road charged to the revenues of the Shan States?

§ Lieut.-Colonel Muirhead
The question of the expenditure on the roads is not the subject of this Order.

§ Mr. Benn
That is not the question I asked. I asked whether any part of the cost of building this new Burma-China road is proposed to be charged to the revenues of the Shan States?

§ Lieut.-Colonel Muirhead
Yes, a portion of it. The revenues of the Shan States will contribute part of the cost of the road as well as the revenues of Burma.

§ Sir A. Wilson
Might I ask the Under-secretary whether he will make specific inquiries so that if I put down a question in six weeks or two months' time he will be able to state what charge will be placed upon the revenues of the Federated Shan States in regard to this road and the cost of police?

§ Lieut.-Colonel Muirhead
I should like to give my hon. Friend any information which I can, but he raises now a question of the cost of the road and the cost of the police, which is rather different from the wider point of the general social implications which he raised originally. I might say that last December I travelled along the road and went into China. Although one met considerable numbers of Chinese on the roads, I was informed —I give the information for what it is worth; it is unofficial—that there were not so many Chinese going over the border this year as last year.