§ [SECOND READING.]
§ Order of the Day for the Second Reading read.
§ * THE SECRETARY OF STATE FOR THE COLONIES (The Earl of ELGIN)
My Lords, this is a Bill of some importance, and even at this time of the session I suppose it will be desirable for me to make a short statement, and I will make it as short as I can, setting forth the reasons for which I ask your Lordships to read it a second time. The object of the Bill is to authorise the Treasury to guarantee the payment of a loan to be raised by the Colony of the Transvaal, so as to enable the Transvaal Government to raise a sum of £5,000,000 on better terms than they would otherwise be able to obtain. On that I think there arise two questions—first, whether there are good reasons which justify them in making and us in accepting this proposal, and, secondly, whether the method which it is proposed to adopt for raising the loan is a reasonable one under the circumstances.
The purposes for which this loan is required are set forth in the First Schedule, and they are are follows:—In the first place for Land and Agricultural Bank, £2,500,000; and secondly, for railways, public works, irrigation, agricultural settlement and development, the balance of the loan. This Bill I may say follows the provisions of the Act of 1903, by which a loan of £35,000,000 was raised for the Transvaal, except that in this case the rate of interest is left entirely open; and the objects of the Bill, as stated in the schedule to which I have just referred are, as I have said, for services for the development of the Transvaal, which are partly 338 services similar to those for which the former loan was raised, but which are all development services and in accordance with the spirit of that Bill. I think it will be admitted that these objects are in themselves proper and legitimate objects. There may be some differences of opinion in regard to the creation of a Land Bank. I suppose in all parts of the world there are farmers who desire to raise money for the development of their holdings, and many do raise it without any help from the Government. So far as I am concerned, I do not deny that I have sympathy with those who show independence in such a matter. But, at the same time, there can be no doubt that a condition of general indebtedness among agriculturists is a matter of State concern. Certainly anyone who has had to do with the government of India will agree with that statement; and it seems to me also that different countries must be dealt with according to their different circumstances. The means which are proposed in this Bill are not the invention of the new Government of the Transvaal. The Land Bank, I think it is well known, has had the support of the High Commissioner, who appointed a Commission on the subject, which, I believe, has also reported in its favour; and I think I may say to the House, without impropriety, that it has constantly been urged upon me by Lord Selborne. The matter came before me soon after I entered office-But at that time the Government were committed to the consideration of the constitutional position, and it seemed to us that it would be right to reserve our judgment on the subject until the future Government of the country was determined and elected. But I am confident that had it not been so the question of the Land Bank would have been pushed to the front at that time. The only doubt in my mind is whether it would not have been pushed in a more pressing manner even than it is now. With regard to the Land Bank, as I have said, a Commission was appointed by Lord Selborne, which went into this question, and Lord Selborne not only appointed a Commission to report on the subject, but he himself has written strongly in its favour. I do not wish to delay your Lordships, so I will not do more than quote a single paragraph. In a despatch 339 which was addressed, not to me, but to my predecessor in office, he says—I hope that I may receive your sanction to such a scheme. It will be a most popular measure among the Boers themselves. Wherever I have gone, the farmers have pressed such a scheme upon me. It will almost certainly necessitate the raising of a loan by the Transvaal Government. What the amount of such a loan would be it is difficult to say; that is one of the points on which the Commission will guide me"—[the Commission had not then been appointed]—"but I do not think it could be less than one million sterling.The Act which has actually been adopted by the Transvaal Government is a very elaborate one, with many restrictions and safeguards; and with an ample margin of interest on loans; and, if it is administered, as we believe it will be, with prudence and caution, I do not think there can be much risk of loss. To mention only one or two provisions in this Act, as regards security, no advance on freehold or quit-rent lands may-exceed two-thirds of the fair agricultural or pastoral value; no advance on leasehold of less than ninety-nine years, on occupation land, may exceed one-half the lessee's or grantee's interest; the covenants or conditions of the lease or grant must have been complied with; the land must be valued by an approved valuer, and his valuation must be placed on formal record; the Bank is given the fullest powers of a mortgage over the land on which money is advanced; interest is to be at 5 per cent., and the applicant must state the purpose for which the loan is required. So far, my Lords, with regard to the Land Bank. The other purposes which are mentioned in the Schedule are—for railways, public works, irrigation, agricultural settlement, and development; and of this a considerable sum, £600,000, is required to meet the liabilities of the Inter-colonial Council.
Your Lordships will remember that the Inter-colonial Council has had the spending of the £35,000,000 loan, and it has not now sufficient funds to carry out its obligations; £154,000 of the £600,000 is required to carry out the public works programme; £83,000 is required to complete the allocation in respect of land settlement; and about £350,000 is required for railway purposes. It is no doubt the general rule that the 340 Government of a self-governing colony must cut its coat according to its cloth, and must not undertake larger expenditure than that for which it can provide funds. But the position here is very exceptional. The new Transvaal Government has to take over these schemes which are incomplete. Some of them were initiated, not by the late Government of the Colony, at least not directly, but by the Inter-colonial Council, which, it will be remembered, brought together the interests of the Transvaal and the Orange River Colony. This is particularly the case with regard to railways and to land settlement; and the case of the latter, in which, as I know, many noble Lords in this House take a special interest, is very much to the point. Among the liabilities of the Inter-colonial Council is, as I have said, the sum of £83,000 that is now due to the Land Settlement Board established under the Letters Patent. It is absolutely necessary that the Land Settlement Board should receive this sum; otherwise it will be difficult for them to carry out their duties. They will receive it out of this loan if it is sanctioned. If the loan is not sanctioned there will be considerable difficulty. The assets of the Inter-colonial Council consist largely of advances in regard to which it seems inevitable that there should be some extension of time for repayment. The Inter-colonial Council have funds owing to them due to the fact that certain repatriation advances have not yet been recovered. It was expected that a sum of about £1,000,000 would fall in in the course of the present financial year. But in April last the Ministry determined that to call in these debts at that time would cause great distress, and they have, therefore, postponed the collection of the debts for a year. In July, 1905, it was estimated that the outstanding debt recoverable in June, 1906, was about £2,000,000; but it had been assumed even then that there would be considerable difficulty in collecting the debt, for this sum was only arrived at by deducting 33 per cent. for bad debts. Besides this £600,000 for the Inter-colonial Council, there are the liabilities of the Treasury, and I may mention the following as being also in a sense liabilities of the Government—that is to say, 341 £200,000 for the purchase of the Klerksdorp Fourteen Streams Railway, £250,000 for the Lydenburg Railway, £600,000 for other railway projects, including the relaying of the railway to Delagoa Bay, £100,000 for public buildings, £400,000 for irrigation, and £300,000 for agricultural settlement and development. It will be seen that there are, on the one hand, as the largest of these assets, the repatriation debts to which I have referred, which I need not remind your Lordships were loans to Boer farmers to enable them to recover from the effects of the war, and there are, on the other hand, the advances made for land and stock to British settlers. I think it must be admitted that the only way in which the Transvaal Government can meet the immediate necessities of the Inter-colonial Council and the Land Settlement Board is by a loan, and they are prepared to take that course and to act up to their responsibilities.
So far I have been dealing with the first question to which I referred at the opening—namely whether the purposes for which this loan is required are reasonable and proper purposes. I think I have shown that they follow directly from the purposes for which the loan of £35,000,000 was raised, and was granted to the use of the Transvaal, and I submit, therefore, that it is not an unreasonable thing that this extra loan, to complete the obligation so undertaken, should be raised, and raised in the same manner. As to the second point, namely, whether the methods by which we propose that this loan should be raised and guaranteed are reasonable, I maintain that we have followed the precedent of 1903, and that we have followed it for similar purposes.
We may be asked—I think it has been asked—whether the Colony can bear the burden. I think if I give you one or two figures that will be pretty clear. In the first place, there is the question of the present state of the debt. There are debts of approximately £13,500,000, which represent the acquisition of railways. That is productive. Six millions represents fresh railway construction and the improvement of existing railways. That again, I think, we 342 may count as productive. I may mention that since the war the railways in the new Colonies have increased from 1,109 miles to 2,565 miles, or 131 per cent. £2,000,000 represents public works; £2,500,000 represents the debt of the old South African railways largely arising from public works; and £2,550,000 represents expenditure on land settlement. Therefore, as things stand now, we have the existing debt of the Inter-colonial Council of £35,000,000. If we wish to restrict ourselves to the Transvaal, we must deduct the share of the Orange River Colony, which reduces the debt to £26,000,000. That is the present state of the debt, If we add the £5,000,000 now asked for, the total future Transvaal debt will be £31,000,000. That is £24 7s. per head of the whole population, or £103 5s. per head of the white population alone. That, as I have said, is largely productive expenditure, and I would therefore like to add a word or two as to revenue. The estimated revenue of the Transvaal in 1907–8 is £4,468,500. Of course that does not include any part of the railway revenue which comes under the Inter-colonial, Council. The estimated net revenue of the Central South African Railway for the same year—and I believe it was expected to be an unfavourable year—is about £1,250,000. This does not allow for the debt charges on the guaranteed loan, of which £750,000 is charged in the accounts of the Central South African Railway. It is not possible to say how much is earned in the Transvaal, and how much in the Orange River Colony; but of the line working at the end of 1906 between three-fifths and two-thirds were in the Transvaal, and if the net earnings be divided between the two Colonies in proportion to the mileage they contain, the Transvaal must be credited with upwards of £700,000, making the total Transvaal revenue for the year (which it is maintained is a year of depression), not less then £5,175,000.
§ * VISCOUNT MIDLETON
May I ask the noble Earl if that revenue from the railways has been maintained in the present year?
§ * THE EARL OF ELGIN
This is an Estimate for the year 1907–8, the year which is not complete. I should like to refer to two opinions with regard to the ability of the Transvaal to bear an increased debt. I think I shall not be misrepresenting the noble Viscount on the cross benches if I say he has always been in favour of free expenditure on productive works in these countries.
§ * THE EARL OF ELGIN
I find that he has said on one occasion—We are in a position in which a considerable outlay on capital account is essential to any large growth of income. We must look forward for increased revenue to the increase of the sources of revenue, the growth of population and business, improved means of transport, and more productive agriculture.
§ * THE EARL OF ELGIN
These are objects which, as I maintain, we are seeking to foster by the loan that it is proposed in this Bill to raise. Then, if I may refer to Mr. Chamberlain, he arranged at one time for a total debt of £65,000,000, and he presented Papers to Parliament from which it appeared that the Transvaal after meeting the loan charges on £65,000,000 would yet have a surplus of £300,000. I think we are entitled to remember that in addition to the loan of £35,000,000 there was a proposal of a war contribution of £30,000,000, and that is the reason why I mention the sum of £65,000,000. If, according to the calculations of Mr. Chamberlain—and I believe they were assented to by the noble Viscount on the cross benches—the Transvaal could be reasonably expected to bear the burden of that debt, surely, then, it cannot be said that there can be any doubt that this loan of £5,000,000 is raised upon reasonable security.
There is one other fact which I think is worth mentioning, and that is that I believe at the time when the sum of £35,000,000 was adjusted and settled as the amount of the loan to be raised, the proposal was originally for a loan of £40,000,000. If that is so, and I believe it is correct, 344 we, in asking for the loan included in this Bill, are simply reverting to that proposition, and we do so, as I have stated and I think proved, for the same purposes for which the loan all along has been justified. Therefore, I claim that this Bill is justified by the circumstances. I maintain that it is reasonable and proper that the new Government should desire to complete the arrangements into which their predecessors entered, and for which the country has become responsible. Those arrangements were entered into with the approval and sanction of the Imperial Government, and therefore I think it is reasonable and proper also that the Imperial Government should continue to the present Government the support and approval which it gave to their predecessors. I believe that the security for the loan is ample, and therefore move the Second Reading of this Bill.
§ Moved, "That the said Bill be now read 2a."—(The Earl of Elgin.)
§ VISCOUNT MILNER
My Lords, I am most reluctant to detain your Lordships even for a short period in the present stage of our proceedings, especially in an academic discussion. There is, I take it, no one with the slightest idea of offering opposition to this Bill; but I should feel almost cowardly if I did not enter my protest, one word of protest, against this loan and against the whole policy of which it is the outcome. When I say that, I do not refer to the policy of granting self-government to the Transvaal. I stated my objections to that policy when it was first mooted, and I have nothing to retract. But it is an accomplished fact to-day, and every good citizen, whether here or in the Transvaal, must wish it to succeed, and must try to make it succeed. My view has always been that, while we should not be precipitate to grant self-government, yet having granted it we should abide loyally by the consequences of our own act, and abstain rigidly from all further interference in the domestic affairs of a self-governing Colony.
But this loan, as I shall hope to show, is part of a policy of continued interference and mischievous meddling in affairs which the people of the Transvaal 345 ought now to be left to settle for themselves. It is that which I object to—not self-government, but the departure from the principles of self-government which we ourselves have granted. I know there are a large number of people who hold the view, which is held by high authority, that the Mother Country ought never to guarantee the loan of a self-governing Colony. I cannot go that length. Everybody must admit that such a course is unusual. Precedents have been cited, but no precedent has been cited within the last thirty years; and that fact alone, I think, shows that the course proposed is a very exceptional one. Everybody will agree that it requires special justification. But I for one am not prepared to maintain that, if a strong case could be made out, the Mother Country would not be right in guaranteeing the loan even of a self-governing Colony, or that other Colonies would be justified in complaining on that account. But what I say is that it can never be right for the Mother Country to guarantee the loan of a self-governing Colony when the people of the Colony are not agreed upon the loan, when the question whether the loan ought to be raised or not is a burning question of domestic politics, and when, therefore, by stepping in and facilitating the raising of that loan the Government of this country is in effect taking part, and a very strong part, with one portion of the people of the Colony against another portion of the people. If the Government of the Transvaal, commanding a great majority of its legislators, is determined upon this exceptional expenditure, if it is determined to saddle this burden upon the back of the minority of the Transvaal, who are the people who will have to pay it, in spite of all their protests, I certainly do not suggest that we should interfere. The Government of the Transvaal are within their right, I do not dispute it for a moment; but they might surely be allowed to find that money for themselves. It is surely not our business to interfere, and to help them to saddle upon the backs of the industrial and the paying community a burden against which they protest, and, as I hope to prove, are perfectly right in protesting.
I object to being called upon to discuss the financial position of a self-governing 346 Colony; but it is not our fault that we have to discuss it; the blame rests with the Government which has dragged us into this business, which we had much better have kept out of. When they ask Parliament to guarantee the loan of a self-governing Colony they compel us to look into the financial position and to discuss it. And when we do look into it, what do we find? I am not going to trouble your Lordships with many figures, but the extent of the financial disaster which has overtaken the Transvaal Colony within the last two years is still so imperfectly realised in this country that I must call attention to a few leading-facts. I think that if there could be a valuation of all the assets of the Transvaal similar to valuations which are sometimes made in countries with highly organised statistical departments, like the United States, you would find that the value of all the assets of the country during the last two years had depreciated by something like 50 per cent. I have no doubt the fall has been heaviest in mining properties, but it is not confined to mining properties, it extends to all fixed properties, to lands, to houses, to everything which has permanent and substantial value. The fall in the valuation of the town of Johannesburg, entirely excluding the mining area, has been something enormous. I have been at the pains to take out the figures of the value as shown by the actual market price of seven of the leading industrial and commercial businesses in the Transvaal, and have compared the figures as they stood when His Majesty's present advisers took office, a few days before they initiated their famous labour policy with the first ukase which prevented further importations of coloured labour. I say I have compared the figures at which those businesses stood at that date with their figures last week. I beg to assure the House that I have looked only at concerns of the most solid character, concerns conducted with the most absolute integrity, the assets of which are notorious, and the accounts of which are open at all times to all the world. These are not wild cat or mushroom enterprises at all that I have looked into, and, moreover, at the time where my comparisons begin, December, 1905, they were not subject to any speculative inflation whatever; on 347 the contrary, they were already somewhat depressed, the shadow of coming disaster was upon them, and upon the whole industrial community. The value of those seven businesses in December, 1905, was £33,000,000 and to-day it is £17,000,000. If I had not taken some of the very best and most stable, the least speculative securities, if I had looked at what—if you will pardon the expression—might be called the "ruck" of Transvaal securities, the showing would be immensely worse. Do we realise what these figures mean? These businesses are the central pillars of the industrial and commercial fabric of that country. If in this country of ours the most first-class commercial and industrial businesses had fallen in less than two years by 50 per cent., and if the value of the whole of the industrial securities of this country contained in the Stock Exchange list had fallen by more than that amount, that would be the equivalent of the disaster which has actually befallen our latest Colony. And, my Lords, does it need proving? Will any man of financial experience, or any man of ordinary common sense, maintain that that is a state of affairs under which the Colony should take upon itself a new burden which would be the equivalent of something like a £100,000,000 issue of Consols if it were the case of this country—that it should take upon itself that burden, if it is one which can, by any possibility, be avoided?
Now just one word as to the question of the necessity of this loan. It has been sought to be shown that there were commitments of the previous Government—that there were inheritances from it in the shape of liabilities which the Colonies were bound to meet. It has been stated that the Inter-colonial Council was £600,000 short, and that this sum at least must necessarily be provided. Even admitting it were necessary to raise the £600,000 that is no reason for raising £5,000,000. But even this statement is, I venture to say, somewhat misleading. What is this £600,000 deficit of the Inter-colonial Council? It is a deficit only if the £2,700,000, which is owing to the Inter-colonial Council from the Boer farmers, be wiped out. It is not altogether unreasonable to suppose that the debts for Boer repatriation may not be 348 entirely recoverable, and I admit that they are not entirely recoverable, but it is not at all too much to ask that at least one-fourth of this debt should be repaid; and if only one-fourth of this debt were repaid you would have more than the £600,000 absolutely required.
One other word on this point of interest in order to avoid any possible misunderstanding. The noble Earl has argued at great length that the Transvaal is able to bear the burden of this loan. In one sense I agree with him. I agree that humanly speaking there is no danger that the interest on the loan will not be paid. But that is not the question. It is not a question whether you can by some possibility screw out of that depressed and half-ruined country the amount of the interest. It is a question of whether it is right or reasonable to do it, and, above all, whether it is fair to do it when the whole burden, or almost the whole burden, will fall upon that section of the population which is most strongly protesting against being exposed to the burden at all.
Now, lest I should be supposed to be taking too unfavourable a view of the finances of the Transvaal let me quote some authorities who are certainly not interested in representing the matter too unfavourably. I have already had occasion to refer to a speech of a leading Tansvaal statesman—I mean the Colonial Secretary—in which he used the following words—Our revenue has been falling off at a frightful rate for many months. The fall is progressive; there is no stoppage to it.Since then we have had the Budget Speech of the Colonial Treasurer. What was the story he had to tell?—Every single item of revenue which reflects the trade and prosperity of the country is falling off enormously. Railway receipts are down by £600,000, or more than 12 per cent.; customs are down by £200,000 or more than 11 per cent.; Transvaal duties are down £44,000, or more than 35 per cent.; stamp duties are down £30,000, or more than 16 per cent.I see now on the front Opposition bench the noble Viscount (Viscount St. Aldwyn) under whom it was my honour to serve at the time when he was in charge of the revenues of this country. I think he will be able to appreciate the significance of figures such as these. We used to be in a great fluster in those days if some 349 great source of revenue declined by even 1 percent., or 1.5 per cent. or 2 per cent. What would Lord St. Aldwyn say to declines such as those I have just quoted? With their revenue dropping to right and left of them, the Government of the Transvaal, as the Treasurer said—I quote his very words—in those words spoken less than a month ago—had taken steps to curtail expenditure in every direction. They had hoped that these reductions would be sufficient to equalise matters. But their hopes had not been realised. Although enormous reductions were sanctioned, it was found impossible to effect a balance.The reductions were indeed enormous and most regrettable. Pour hundred officials have been retrenched, including some of the very best men in the service of the country. But it has been found desirable, or possible, to refill some of the vacant posts almost immediately by new and not that I am aware by better men, although there may be no reprehensible Anglo-Saxon ring about their names. But that is another story, and not a pleasant one. I am dealing now entirely with the financial point—the point whether it is wise at present to impose fresh burdens upon that country. The point is this, that the Transvaal in the financial year 1906–7, which ended on 30th June last, has for the first time since the war got a deficit. The Colonial Treasurer went out of his way to attribute the deficit to the extravagance of the previous administration. The extravagant and incompetent administration of which I was at one time the unworthy head, which took over the Transvaal after the war a total wreck and in three years set it upon its legs again, never had a balance on the wrong side in any one of the years I was there. It spent several millions out of revenue, over and above loan expenditure, entirely upon railway development and other public works which in every other Colony of the Empire are habitually defrayed out of loans, and handed over a substantial surplus to its successors, out of which this deficit of 1906–7 is now being defrayed, and which after defraying that deficit, still represents a sum which is now quoted, humorously enough, as one of the proofs of the capacity of the Transvaal to carry this new burden which is being imposed upon it. I 350 can confidently leave the financial record of Crown Colony government under Mr. Chamberlain and Mr. Lyttelton to the judgment of history. The year 1906–7, with its novel deficit belongs wholly to a period subsequent to their administrations. But I do not wish to indulge further in polemics, recriminations, and speculations as to who is to blame. I look only at the present facts. The facts are these, that, despite great and cruel retrenchments, the Transvaal had a deficit last year, and that the estimates of revenue and expenditure for the present year show a further deficit, which is to be covered, and I believe it will be covered, by further sweeping retrenchments. The point remains that the Transvaal is, to all evidence, in the lowest of low water, and I say that this is not the time when it is fair to the people of that country to en courage them to undertake a burden which, relatively to the resources of the Colony, is a very heavy one.
But that is not, to my mind, the worst part of it. Despite all that has happened, I am a firm believer in the great potential wealth of the Transvaal. If this loan were associated with a sound economic policy I should not cavil at the amount, or even at a larger amount; though I might even then have a word to say as to the allocation of it, which seems to me open to serious criticism. But it is not associated with a sound economic policy. It is calculated to cover up the effects of a thoroughly bad one, and to lead people to further persistence in it. You are spending your money on the superstructure of the economic fabric, while all the time you are undermining its foundations. The prosperity of the Transvaal and South Africa is as dear to me as it can possibly be to any man. For all these objects to which the loan is to be devoted—Land Bank, railways, irrigation, settlements—I have, in my time, to the best of my abilities and my lights, striven hard for years, and I claim, with the generous support of His Majesty's Government and of the great statesman at the Colonial Office under whom I served, that I was instrumental in doing something substantial for the development of the resources of the Transvaal other than mining. But that does not in any way alter the fact that the mining industry is at the 351 present moment, and must be for a long time to come, the mainstay of the prosperity of the country and the feeder of every other form of activity and enterprise. That is the great, the supreme reason why you should do everything in your power to help it, or, at any rate, do nothing to injure it, for if left alone and accorded reasonably fair treatment, it will take very good care of itself. But during the last two years that industry has been subjected to an amount of meddling interference and arbitrary and unsympathetic treatment that would ruin any business in the world, however great and prosperous. And while that course is persisted in, it is my absolute and firm conviction that all money devoted to the development of other resources of the Transvaal will be money wasted. Take any item you like of this present programme. Take the case of the Lydenburg line, to which the noble Earl referred. It is a line which I am well acquainted with, and which in itself I absolutely approve. The line itself will not pay for many years. But I do not object to that. It does not matter, as I have said in similar cases over and over again, provided the agricultural district which it serves is benefited by getting to the market. It would pay indirectly if the produce of the agricultural district were brought to the market. But what market? Anyone who knows anything about the matter knows that, however much the agriculturists of the Transvaal may abuse the Rand, the one idea of them all is to get their produce to the Rand market. But what if that market is a dwindling one, as it is to-day? The bottom is knocked out of your whole policy of developing produce-carrying agricultural lines; and it is the same story in every other direction. I believe the Transvaal Government left to itself would very soon come to that conclusion. Whatever the difficulties in the way, whatever the prejudices with which it starts, whatever the obstacles arising from political and racial causes, it would very soon find out the necessity of taking into account the requirements of the industrial population and not merely perpetually promising to help them, but actually performing some of those promises. This loan is defended on the ground that 352 it is necessary to free the Transvaal from powerful financial interests. If the effect of the loan is to make the Government of the Transvaal think they can disregard financial interests, it will be a fatal gift indeed. The £5,000,000 will soon be spent. The supreme need of the Transvaal for private capital, not £5,000,000 but £50,000,000, will remain. I believe a great many people in this country have got Rand magnates on the brain. The magnates might go on strike, but if the Transvaal Government was pursuing a wise economic policy—a policy which would attract enterprise instead of scaring it away—there are capitalists all over the world who would be only too happy to take their places. For that the restoration of confidence is essential. So long as you do not get that restoration of confidence among the financiers of the world, so long you will see no prosperity in the Transvaal, and you are not justified in putting heavy burdens upon its depressed and half-ruined population. The worst advice which anybody can give to the present rulers of the Transvaal is to lead them to think they can carry matters with a high hand as regards the great mining industry and the great crux of the mining industry, the labour problem. Politically they are all-powerful. The industrial community is at their mercy; if they treat it without the slightest consideration, it can only languish and dwindle away, and in its decline it will involve the whole Colony in a common ruin. I will not anticipate any such disastrous results. I believe that common sense will yet prevail, and that people whose interests are so inextricably interwoven will learn somehow to live and work together with mutual consideration. But if that is to be the case, this must be the last attempt of the Government and Parliament of this country to interfere between them or to encourage the present rulers of the Transvaal to persist in a suicidal policy by seeking—vainly seeking—to render them immune from its consequences.
§ * VISCOUNT ST. ALDWYN
My Lords, I will not attempt to follow the noble Viscount on the cross benches (Viscount Milner) into a subject which is peculiarly his own—that of the present condition of the Transvaal, the policy 353 of this Government or the reasons, from the point of view of the population of the Transvaal, against this loan. But I may say this—that only a few months ago I was myself in the Transvaal, and that naturally I took the best means in my power to become acquainted with the condition of the country, and I can entirely corroborate what has just fallen from my noble friend as to the painful condition—I can only describe it in that way—of depression which characterised Johannesburg, and the town population generally of the Transvaal. It does not, under such circumstances, seem to be a very advisable policy to increase the indebtedness of any country, and I must say that I heard with very great surprise that His Majesty's Government were intending to guarantee a loan of £5,000,000 to that Colony. All that I could learn when I was in the Transvaal as to the intentions of the present Government of that Colony was that a loan was the last thing they contemplated, that their intention was to pursue the strictest economy, that they found it absolutely necessary to reduce establishments of all kinds, and that they looked to that economy alone, if not for some revival of prosperity, at any rate, to being able to readjust their expenditure with their revenue.
It has been urged in another place that General Botha came to this country with the fixed intention of raising a loan under any circumstances. It may be so—of course, I have no knowledge of that. But I will venture to say that I do not for a moment believe that but for this guarantee General Botha would have carried out his intention of raising a loan, and the argument that was put forward by the Under-Secretary for the Colonies in another place in justification of the guarantee by His Majesty's Government of this particular loan was a very remarkable one. He is reported to have said that General Botha intended to raise a loan, that the circumstances of the Transvaal were such that a loan could only be raised on something like ruinous terms, that the loan would have been so raised, and would have become a trustee security, and that therefore, by guaranteeing this loan, His Majesty's Government were taking a step calculated to protect the interests of trustees and 354 investors in the United Kingdom. That was the most remarkable excuse for guaranteeng a Colonial loan that has ever yet been presented to Parliament.
I wish to address myself not so much to the wisdom of guaranteeing this particular loan, but to the general policy which I fear this guarantee may initiate. Unfortunately I was unable to be in the House when the noble Earl the Secretary for the Colonies was addressing it, but I am informed that he did not dwell—at any rate, to any length—upon that, as it seems to me, very important feature of the present proposal. I have always been taught, ever since I have given any attention whatever to finance, that it was the opinion of those who were the greatest authorities in dealing with the finances of this country that you could not be too cautious in guaranteeing a loan to a self-governing Colony, and for this obvious reason—that when you have entrusted complete control over taxation and expenditure to a self-governing Colony, and are utterly unable to interfere with either of them, the guarantee of a loan in itself tended to encourage extravagance in the self-governing Colony, and the expectation that a Colony would thus be saved from the consequences of its own mismanagement worked far greater evil than could be compensated for by any good which could possibly be done, unless under very exceptional circumstances, by any particular guarantee. Mr. Gladstone, Sir Stafford Northcote, and other financiers, I know, held that opinion very strongly; and so it has happened that during the last fifty years there have been, I believe, only six instances in which this country has guaranteed a loan to a self-governing Colony. I think it was in 1857 there was a guarantee to New Zealand for the purpose of the native war. The Colony was at that time in very difficult circumstances, and was at the beginning of its career. Altogether, the amount of the three loans granted to it was only £3,000,000. Three guarantees on later occasions were given to Canada—one for £3,000,000 for the Inter-colonial railway from Quebec to Halifax—a decidedly Imperial object; another for £300,000 for the purchase of Rupert's 355 Land, which also, I think I may say, was an Imperial object, and another of £3,600,000 for the Pacific Railway, and improvements connected therewith—another Imperial object.
But what is there Imperial in the objects for which this loan is to be expended? Just let us see what they are. In the first place, there is the institution of a Land and Agricultural Bank. I am sure the noble Earl is very well aware that the Transvaal is not the only self-governing Colony that is considering the initiation of an Agricultural Bank. There is a considerable demand for such a step in the Orange River and Cape Colonies, and I believe the Governments of both Colonies have had the matter under consideration. Why should the Transvaal Government be favoured in this respect more than Cape Colony or Natal? Are the finances of the Government of the Transvaal very much worse than those of Cape Colony or Natal? The noble Viscount (Viscount Milner) has quoted from the Budget speech of the Finance Minister of the Transvaal. I have had the opportunity of reading the Budget speeches of the Finance Ministers of the Cape Colony and of Natal, and I am afraid that those speeches presented quite as gloomy a prospect as that set forth by the Finance Minister of the Transvaal.
Then another part of the loan is to be devoted to the construction of railways, public works, irrigation, agricultural settlement, and development. Irrigation, public; works, settlement and development are wanted in every part of South Africa as well as in the Transvaal. Why is the Transvaal to be especially favoured? As for the railways, the particular railways which this loan is intended to further are the purchase of the railway from Fourteen Streams to Klerksdorp, and the improvement of the railway from Pretoria to Delagoa Bay. If it be the case, as I think it may very possibly be, that the Inter-colonial arrangements for the management of the railways will before long be put an end to, the result will be that the Transvaal will have a competing line to Cape Town through its own territory and the territory of the Cape Colony by 356 this very line from Klerksdorp to Fourteen Streams in competition with the railways of the Orange River Colony, and probably very much to their detriment. As to the line from Pretoria to Delagoa Bay, the fact is this. No doubt that line is a very valuable means of communication, and is much in need of improvements, but there is another line from Pretoria to Durban, through Natal, on which Natal has quite recently spent very large sums, which also requires considerable improvement, and which is in direct competition with the line from Pretoria to Delagoa Bay. Why are you going to guarantee a loan to the Transvaal for improving their line to Delagoa Bay, a foreign seaport, while you are not willing to do anything—and I do not suggest for a moment that you should do anything—to help Natal in improving their line from Pretoria to Durban, an English port, with which the Transvaal line is in direct competition? I am not finding fault with the expenditure of this money by the Transvaal, I am only urging that the expenditure is by no means an Imperial necessity; it is a local necessity. It is a very good thing, I dare say, for the Transvaal, but it is expenditure to be incurred either on objects equally desired and desirable in other parts of South Africa, or in direct competition with the other Colonies of South Africa who are promoting similar objects; and I contend that this circumstance is a very grave objection to the Imperial guarantee of the present loan.
Just look what it lays us open to in all parts of the world. Are you going, if any self-governing Colony applies to you for a guarantee for similar objects, to give an Imperial guarantee for these loans? If not, what sort of feeling will you arouse in other Colonies—which may have equal need of similar assistance—if you refuse to them what you have given to the Transvaal? Why is the Transvaal entitled to this specially favourable treatment? Only three years ago, at the close of the War, while the Transvaal was a Crown Colony, we guaranteed £35,000,000 to set the Transvaal on its legs. That was a very necessary thing, but it was an act of the greatest generosity to the Transvaal and its people: and to put that fact forward, as it has been 357 put forward, as a reason for guaranteeing this further loan is to embark on a most dangerous argument. Because, if we are to go on referring to the guarantee of past loans as a reason for guaranteeing further loans, then I am afraid that the anticipation of my noble friend on the cross benches (Lord Milner) will be fulfilled, and that when the Transvaal purse is empty again, the Transvaal Government will again come to the Imperial Government for similar assistance. I contend that in this policy, for which, so far as I can see, there are really no sufficient grounds at all, His Majesty's Government have set a very dangerous example to the self-governing Colonies of the Empire. I trust that before this debate is concluded we may hear something from the Government to prove that they recognise that anything like a regular system of guaranteeing loans to the self-governing Colonies is a most dangerous proceeding on the part of this country, as regards the liabilities of our taxpayers, and very bad for the Colonies themselves, as encouraging them in extravagance at our cost; and that under these circumstances there is every reason for the Government of this country to pause before they impose further liabilities of that kind on the taxpayers of this country.
I only wish to say a very few words on one aspect of this question, and that is on behalf of the settlers. The responsibility to the settlers is a responsibility which lies equally on both sides of the House. I have frequently wearied your Lordships by advocating in this House the cause of the settlers. They have been placed on the soil during the last four years, and they are men who have fought against the conditions arising from the nature of the land and the soil, and from the fact of their going to a country which was unknown to them. And I think, in connection with this loan, their position requires to be closely studied.
My Lords, I would like just to go back for a moment to ask you to compare the attitude of His Majesty's Government in granting a loan to the Transvaal in August, 1906, with the character of the loan which is to be granted in August, 1907. In 1906 Lord Selborne, speaking 358 as the mouthpiece of His Majesty's Government, and by their instructions, issued a letter of which I would ask the leave of your Lordships to read a paragraph. Lord Selborne said—In respect of land settlement, the Government feel that they have a special obligation to those who became settlers during the period when they have been directly responsible for the Governments of the two Colonies, and it is a matter in which the United Kingdom takes a great interest. They would therefore like to see land settlement placed under a Board appointed by themselves and altogether divorced from politics, and to that Board they would like to see handed over the responsibility for all existing settlements, for the administration of the assets derived from the £2,500,000 guaranteed loan which has been devoted to the subject of land settlement and for the expenditure of the further sum of £1,500,000 which His Majesty's Government suggest should be devoted to this purpose from the new loan.This was the policy of the Government exactly a year ago—a £4,000,000 loan, of which £1,500,000 was to be used for land settlement in South Africa. These were the terms upon which His Majesty's Government at that time were prepared to guarantee this loan. What are the terms to-day? The noble Lord the Minister for the Colonies has stated to your Lordships the terms of the proposed loan, and so far as the settlers are concerned there is to be spent out of this loan the magnificent sum of £85,000, of which, £40,000 is a natural debt to the land settlers, £18,000 is a claim which the land settlers can make with respect of what they have not been paid, and some £10,000 has to go to the Orange River Colony. £68,000, there-force, of this is already allocated, leaving the magnificent sum of £17,000 which is all that is got out of this loan of £5,000,000 for the settlers of this country.
I must say a word on the subject of "bargains," because the subject has been so often raised in another place that really one believes there must have been some bargain. If there is a question, it has either been a bargain in which the Chinese have come prominently forward, or it has been the worst bargain that has ever been struck. This proposition that. I have quoted—the £4,000,000 proposition—was brought forward last year. The leaders of the Boers were asked their opinion of it, and declined to accept it. They came for 359 another loan this year, and presumably it would have been possible to get some terms for the settlers out of them, because, as the noble Lord (Viscount St. Aldwyn) who speaks with such authority on subjects of finance, has stated, it would have been impossible otherwise for them to have raised this loan. And yet here it is—this miserable £85,000 which is all that is given to the Land Settlement Board to conduct the affairs of these wretched settlers.
Lord Elgin, in a statement of 14th November of last year, stated that he certainly hoped and intended that sufficient sums would be available to carry on the work of the Imperial Board. Are there sufficient sums? We have seen that the sums that these men would get would come from the Repatriation Loan and the hire of the land themselves, and were to come, in the second place, from the Inter-colonial Council. With an Inter-colonial Council which is bankrupt how much money is going to come from them, and from these men, who have undoubtedly had their land originally over-valued, who took it under circumstances under which they paid for their stock and implements at enormously enhanced prices—what chance have we got of any sufficient return from them to make the Imperial loan a going concern? May I take an exact parallel between the men who started under our lands settlement scheme and those who were under the œgis of the Boer Government? In a statement made two days ago by General Botha he said—these are his exact words according to the report which has come over to this country—"The Goverment intend"—that is the Transvaal Government—"to put an end to the repatriation debt"—a debt of £2,719,000, That debt is to be put an end to. Have we heard anything said here, or have we heard of any possibility, of putting an end to the debt of these settlers, who started, after all, on the land on no better terms than the repatriation Boers did on returning to their land? Have we heard anything to the effect even that their land was going to be re-valued in order to give them a chance? I do not, any more than Lord Milner, object to the fact that an end is to be made of the debt of the Boers on the Repatriation Loan. 360 They undoubtedly paid more for their oxen, more for their implements, and found it more expensive to live in every way than before, and were saddled with many difficulties which were in no way their own fault. But is not the condition of the settler absolutely similar? Is there any fact to show that His Majesty's Government take the very least interest in what the fate of these men is eventually going to be? There has been, I admit, a Land Settlement Board appointed for a term of five years, but Land Settlement Boards are surely a perfect farce unless they have some money to administer in order to look after the welfare of these settlers.
I would like to ask a question or two of the Colonial Secretary. I admit I do not very much expect an answer, because unfortunately I am not in the habit of getting answers to any of the conundrums which from time to time I feel it my duty to put to the Government. Still, I put forward these questions which I put forward exactly a year ago in identical terms. I put them forward in the hope that perhaps by now some solution may have been arrived at. I would ask the noble Lord first, if he could give me some intimation as to the income the Land Settlement Board will have; and I would ask him in the second place whether there is any intention in future in view of General Botha's expressed intention of practically abolishing the Repatriation Loan, of estimating or re-valuing the land of the settlers who hold under practically identical terms? I would ask the noble Lord further about this £500,000 which, after all, is the property of the Land Settlement Board in South Africa. Three millions was voted for land settlement, but only £2,500,000 has been expended, leaving a residue of £500,000, which should be the property of the Land Settlement Board for administration and to carry on the work. I would like to press those questions because, after all they turn on one central question, and that is, are His Majesty's Government going to give equally fair terms to settlers under the Land Settlement Board as the Boers are going to get from their own Government at the present moment? The settlers—and I have had many opportunities of knowing this in 361 the numerous visits I have paid to South Africa, and I also know from the numerous letters I have from them—wonder more than at anything else at the apparent hypocrisy of the Government in announcing as a fact that they are going to give them a Land Board, while they give no money to carry out what should be done by that Board. They say that the Government have abandoned their policy of land settlement, and that now they have definitely abandoned the settlers themselves.
§ * THE EARL OF ELGIN
While they are fresh in my head, my Lords, I will try to answer the questions which have been put to me by the noble Lord opposite (Lord Lovat). I think he is under some misapprehension with regard to the comparison he drew between the £4,000,000 mentioned in Lord Selbome's letter of last year and the £83,000 which I referred to as coming out of the assets of the Inter-colonial Council. The £4,000,000 was a proposition which was put before the Colony, and not accepted, and it therefore died a natural death. The £83,000 I only drew attention to because I wished to show that the sum which was really due from the Inter-colonial Council to the Land Board should be paid—I did not say that that is the whole amount which is available for land settlement purposes. The noble Lord must be quite well aware that the Letters Patent laid down quite distinctly what property it was intended to hand over to the Land Settlement Board for the time of their existence, and so far as I know there has been no deviation from that policy. But with regard to the sum of £83,000, that is a sum which ought to be paid by the Inter-colonial Council to the Board and must be paid in fact if the Land Settlement Board is to carry on its work, and I hope will be paid. There were some other questions which the noble Lord put, and I am sorry to hear that he never gets any answers, because I endeavour to give him answers as far as I am concerned. He asked me on the spur of the moment to tell him the income of the Land Settlement Board and other details, but I am glad that he summed up his questions by asking a further question which he 362 called a simple one—whether the Government were prepared to give equally fair terms to the settlers as the Boers were prepared to give to their friends. The Government dealt with the land settlement question in the Constitution, and the noble Lord knows that, as I have said, the Government then handed over to the Land Settlement Board all the funds at our disposal. We had nothing more to do with the matter. After the term of the Land Settlement Board's existence the question of land settlement will have passed into another phase, which is described in the Letters Patent. But I believe—I speak, as I say, without any previous notice, but I believe, from some of the facts which I have had put before me previously, that one of the difficulties arising with regard to the whole question of funds is, not only the repatriation loans, but the re-valuations which have been forced upon the Government in the ease of the settlers also. That, I believe, is the case, but I would not like to be taken, without further inquiry, as giving any more specific answer.
I really do not think it would serve any useful purpose if I attempted to follow, or reply in any way to, the speech of the noble Viscount on the cross benches (Viscount Milner). The noble Viscount approaches this matter from an entirely different standpoint from that of the Government. He is responsible, giving him all the credit which he claims, for the good work which he has administered in South Africa; and I may remind him perhaps that in recent papers which have been published a statement appeared showing how great and extensive that work was. We are perfectly willing to recognise the good work which has been done since the War by the Crown Colony Government, but there are very many things, if this was the proper time to go into them, which we should have to criticise, and I must not be taken to accept the statement which the noble Viscount has made as being in any sense a fair prophecy of the future of the country.
With reference to the noble Viscount opposite (Viscount St. Aldwyn) I should just like to say this. We entirely recognise that it would be a dangerous thing to adopt any general policy 363 of guaranteeing loans to self-governing Colonies, and nothing is further from our intention. The noble Viscount said that he was not in the House when I was speaking before, but if I made anything clear, I attempted, at any rate, to make clear this: that we treat this matter entirely as justified by the exceptional circumstances of the case. It is not, I hope, probable that any other Colony will come before us to seek help in its recovery from such a war as that which devastated South Africa; and I endeavoured to show that this loan of £5,000,000 was intended, not as a new thing, not as establishing any new system or practice, but rather as a matter thrust upon us in order to bring to completion the work which the late Government undertook, and for which it gave South Africa what I quite agree with the noble Viscount was the liberal and generous assistance of £35,000,000. No doubt that was given to a Crown Colony, and that is, of course, one of the exceptional circumstances of the case. But, my Lords, I think under the whole circumstances of the case that we were justified in considering that this was a singular instance in which we might depart from the sound rule which the noble Viscount laid down, and give to the new Government of a new self-governing Colony the assistance which this guarantee affords. I have now answered the noble Viscount as far as I am capable of doing, and I hope that the Bill may now be passed.
§ On Question, Motion agreed to.
§ Bill read 2a accordingly. Committee negatived. Then (Standing Order No. XXXIX. having been suspended) Bill read 3a and passed.