HL Deb 10 July 1885 vol 299 cc271-4

Order of the Day for the Second Reading read.

THE UNDER SECRETARY OF STATE FOR INDIA (Lord HARRIS),

in moving that the Bill be now read a second time, said, that it gave powers to the Secretary of State in Council to raise in the United Kingdom any sum or sums not exceeding £10,000,000 by the creation and issue of bonds, debentures, or capital stock bearing interest; and it was based on the Land Act of 1879, which was similarly based on previous East India Loan Acts. The need for these powers had arisen from the following circumstances. In 1884 the Select Committee on East India Railway Communication reported that— They considered the evidence in favour of a more rapid extension of railway communication to ho conclusive; and soon after that Report was issued proposals were received from the Government of India for a scheme of Fron- Lord Truro tier railways and roads, estimated to cost £5,000,000, while at the same time they urged the rapid construction of lines needed rather for commercial purposes and development of the country, and its protection against famine. The noble Earl the late Secretary of State for India therefore was doubly urged to render the Government of India every assistance he could in pushing on those public works. Now, the Government of India had the power to borrow in India, subject to the approval of the Secretary of State for India, but without coming to Parliament, and for use in public works; but their power of spending borrowed money on public works was limited to 250 lakhs of rupees in one year, and this Bill in no way deprived them of that power. They were still at liberty to borrow in India in preference to England when the state of the Market rendered it advisable; but what the noble Earl had to consider—and he believed the present Secretary of State in no way disagreed with him in carrying out the suggestions of the Government of India in the Select Committee—was not only what might be the manifest and immediate needs of India in the construction of public works, and what extra interest on borrowed money the finances of India could bear, but also what amount the Money Market was likely to be able to provide at a fair rate of interest. He came to the conclusion that instead of 250 lakhs the Indian Government might be allowed to spend 350 lakhs on public works in one year from borrowed funds; any further outlay deemed necessary must be met from surplus Revenue. Then, looking at the manifest need that this scheme of Frontier railways and roads should be prosecuted with the utmost vigour, that no interruption should occur from any uncertainty as to what sums of money might be forthcoming, and as far as possible that the other works contemplated, which amounted to about 4,000 miles of railway, should also be pressed forward, he decided to ask Parliament to grant the powers given under this Bill. At the same time, although it was intended to use these powers for public works, it might be very inconvenient if any pledge were given that they should not be used for general purposes. Previous to the placing on the Market on Wednesday of a loan of £3,500,000 the Secretary of State had powers, under previous Loan Acts, of borrowing £7,000,000. Now, by the notation of that loan, those powers were reduced to £3,500,000. The Secretary of State felt that that margin was not sufficient. A sudden pressure arising from external causes or from internal, such as famine, at a moment when Parliament was not sitting, might place the Government of India in such straits as might be most disadvantageous to the welfare of Her Majesty's subjects in British India. Therefore, though it was intended to use these powers for public works, no pledge to that effect was given. But it might be asked if the Government of India had the power to borrow in India up to 350 lakhs in one year for public works. Why should they not do so? There was nothing in this Bill to prevent their doing so, and, undoubtedly, when the Market there was more favourable, and they had fair prospects of the loan being taken up, they would do so; but we were face to face with this fact—that notwithstanding the absorption by India of large quantities of specie, at present the capitalists of that country showed a decided preference for loans on mortgage bearing a far higher rate of interest than it was necessary for us to give, or in the exceedingly unremunerative forms of hoards or ornaments. That want of confidence would, it was to be hoped, by degrees pass away; but until it did, or until the completion of such works as the Calcutta and Bombay Docks and the Madras Harbour, which had attracted Indian supplies of money, the Government of India would undoubtedly have to look to this country for some, perhaps all, of the money it was permitted to spend on public works in each year. These powers would only be put in force when there were not sufficient funds from surplus Revenue to meet the requirements of the year. It was hoped that the Frontier Works, on which the £5,000,000 were to be spent, might be completed in four years. They included 175 miles of railway from Nari to Shebo, with a branch to Quetta, costing about £2,000,000 sterling; 361 miles of railway from Lala Musa, with branch to the Indus, costing about £2,000,000 sterling; five miles of Ferozepore bridge, opposite Dera Ghazi Khan to Sher Shah, costing about £100,000 sterling; 250 miles of road from Dera Ghazi Khan to Pishin plateau, costing about £200,000 sterling; 190 miles of road from Dera Ismail Khan to Kushalgarh, costing about £300,000 sterling. Before sitting down he wished to refer to one circumstance arising out of the Frontier needs of British India. It was thought their prosecution would probably defer for a time the completion of those works, which, as being a protection against famine, were called protective works. That, if it proved to be necessary, was a matter of infinite regret; for, however great might be the horrors of war, they could not exceed the horrors of famine. Still, it must be clearly recognized that for the welfare of India, the protection of Her Majesty's subjects, and for the encouragement of trade, these Frontier lines were of paramount importance.

Moved, "That the Bill be now read 2ª."—(The Lord Harris.)

THE EARL OF KIMBERLEY

said, he must congratulate the noble Lord upon the complete knowledge he had shown of the subject, and upon the ability he had displayed in so readily grasping a very complicated question. He, in common with the noble Lord, regretted the unfortunate necessity under which the Government lay at the present time in having to economize in the expenditure for public works; but that had been rendered unavoidable by the extraordinary outlay in consequence of the condition of the foreign affairs of the Empire. His noble Friend the Viceroy might be trusted to exercise the wisest and most prudent economy. Above all ! it was essential that they should have a sound finance in India, and he should never view with satisfaction any system which rested merely on borrowing. But, in the present circumstances, borrowing could not be avoided; and, whatever might be said on the question of obtain- ing the money in England or in India, there could be no doubt that in the pre- sent financial condition of the latter country it would be impossible to place on the Money Market there the amount necessary for the conduct of the administration.

Motion agreed to; Bill read 2ª accordingly, and committed to a Committee of the Whole House on Monday next.