§ The EARL of ELLENBOROUGHsaid, that in asking the noble Marquess opposite if he were prepared to lay upon the Table copies of the communications which had taken place between the Indian authorities in this country and the speculators in projected railways in India, he might as well state perhaps what were the circumstances which particularly at the present moment induced him to put the question. Her Majesty's Government had lately, he thought with great propriety, resisted the proposition to give the aid of Government to a great extent in constructing Irish railways. They had done that upon various grounds, but more especially upon financial grounds, under the impression that granting aid, to the extent solicited at least, would have a most prejudicial effect on the money market and finances of this country. He was desirous of knowing, then, if Her Majesty's Ministers were acting on the same principle in giving answers to the requisitions which had been addressed to them, or to the Indian Government, on the subject of the railways projected in India. For a long time he was under the impression that the Government had no idea of giving any guarantee whatever for any amount of interest on the money which might be expended on these railways; but certainly the rumours which reached his ears some short time ago were of such a nature as to induce him to entertain very great apprehensions upon the subject. Their Lordships knew that in this country money could be raised by the Government at about 3½ per cent, and that that might be done to a very considerable amount in successive years without producing any very material effect on the money market. But in India at the present moment, he regretted to say, money could only be obtained by the Government at 5 per cent. It was but recently that the Government of India had felt themselves compelled to open a new loan at 5 per cent. Yet it was understood that the guarantee of the Government was to be proffered to speculators in Indian railways, if not permanently, yet for a period of years, to the extent of 4 per cent interest on their stock. Now, the House would at once see, however great might be the desire of the Indian Government to put an end to the 5 per cent loan, and to return to the 4 per cent 207 loan, that that in point of fact was impracticable whilst money could be lent on railway stock at the same amount of interest, with the same security, with the additional advantage which might be derived from any excess of profits beyond the 4 per cent, and with a certain advantage, in some degree, of a share in the patronage, and, he was sorry to say, in the jobbing which would be connected with these speculations. Now, let the House look at this question, and see what a serious matter this would be, not only as affecting the people of India, but the great mass of individuals who vested their money in the securities of the Government of that country. The effect of opening the 5 per cent loan was this: Before it was opened, and when there was only a 4 per cent loan, the 5 per cents were at a very considerable premium, and the 4 per cents were, of course, about par; but the instant the 5 per cent loan was opened, the premium on the 5 per cent stock disappeared, nor would any man then purchase the 4 per cents at par. They fell considerably, and were now from 10 to 12 per cent discount. The combined operation of these two circumstances—the loss of the premium upon the 5 per cent stock, and the depreciation of the 4 per cent—caused in point of fact a loss of 4,000,000l. or 5,000,000l. in the value of the funded debt of India to the proprietors. In the month in which he landed in India, a 5 per cent loan had been opened; but so low was the credit of the Government, that only 35,000l. had been raised on the 5 per cent; while the 4 per cents had fallen to a great discount. Within eleven months he closed the 5 per cent loan: and when he departed, he could have raised any sum of money required, at 4 per cent. He left 10,000,000l. in the treasury, and had no doubt that, with a little assistance, he could have succeeded in reducing the rate of interest. Matters were soon changed; the 5 per cent loan which he closed was reestablished, and the 4 per cents were at as great a discount as he found them on arriving in India after the Affghan war. For this he attributed no blame to the Indian Government in respect to its expenditure, because they were obliged to extend the army, and move large bodies of men. These were necessary expenses; and he believed that the Gentleman at the head of the financial department of India, who was a man of great ability and honesty, must submit with great reluctance to the necessity of opening this 5 per cent loan. 208 But a recurrence to a 4 per cent loan would be rendered impossible if 4 per cent was to be guaranteed to Indian railway companies. The fault was in this country; and it was not fair to the people of India, when money could be raised here at 3½ per cent, that the credit of the Company in England should never be brought to bear in aid of the credit of the Company in India, but that the people of India should be obliged to give 5 per cent for money to be remitted here in discharge of obligations, thus paying 1½ per cent more for every 100l. raised for the use of the Indian Government, than need be given in this country.
§ The MARQUESS of LANSDOWNEobserved that the noble Earl had given notice of his intention to put a question on the subject of railways in India; he would, therefore, proceed now to state how the matter stood, without entering into the consideration of the general policy that ought to be pursued in India. The question put to him was, as to whether there had been any portion of the public finances pledged to the promotion of railways in India. He had no objection to produce any information that could be afforded as to the state of the case. Two months had now elased since the Board of Control had made known to companies desirous of speculating in railways in India, on what terms advances might be made in favour of those undertakings. Two months, he said, had elapsed since that statement had been made, and no answer had been received from those companies. This statement was in itself a good proof that the terms on which the advances were to be made, were not so very favourable, or an answer would have been received much sooner. It would, he thought, be premature, before the correspondence closed by an answer being received from the companies, to lay before the country what were the terms on which those advances were to be made. He was sure that when the correspondence was laid before the public, it would be seen that the utmost degree of caution had been used; and that at no time was it contemplated to make a loan for the purpose of assisting those undertakings. As to the general question, he said that he entirely agreed with the noble Earl in thinking that the same degree of caution ought to be used with regard to the promotion of railways in India, on any insecure foundation, as in any other part of the empire. When the correspondence was completed, he should state fully what had taken place 209 with respect to the establishment of railways in India.
§ The DUKE of RICHMONDHe hoped there would be no objection to give loans to Irish railways on the same terms as those offered to speculators in Indian railroads. He thought the rejection of the Bill introduced with regard to Irish railways, in another place, most unfortunate; and he hoped Ministers would not afford, by the superior facilities they held out for the formation of railways in India, an additional argument to those who demanded a repeal of the Union.
§ The MARQUESS of LANSDOWNEWe must wait until we see the terms offered to Indian speculators to judge of that.
§ The EARL of RIPONobserved, that when he was at the Board of Control, in consequence of applications made to him on the subject of Indian railways, which he regarded as advantageous for the purposes of internal communication and national defence, a commission was sent to India to make certain preliminary inquiries. At the time he left office, the preliminary inquiries had not been completed. If any decision had been come to by the commission, it was desirable that it should be made known.