GOVERNMENT OF SUDAN LOAN BILL. (Hansard, 31 July 1913)

§ LORD STRACHIE

My Lords, the object of the Bill to which I now ask your Lordships to give a Second Reading is to authorise the Treasury to guarantee the payment of interest on a Loan to be raised by the Government of the Sudan for irrigation and other purposes. Not only may we say that it is an obligation on our part to assist in the social and commercial development of the Sudan and the maintenance of good government there, but while we are helping the people of the Sudan we are also able to say that we are helping our own people in this matter. The Loan which the Government of the Sudan 1554 propose to raise is mainly for irrigation, and in that matter the people of this country have a direct and very great commercial interest, especially the people of Lancashire, because the object of this irrigation is to enable a very large tract of country in the Sudan to be made available for cotton growing. Your Lordships are no doubt aware that there has been a very large increase in the export of cotton goods from this country. In the last ten years the increase has been something like £50,000,000, and we may fairly say that this country is the greatest exporter of cotton goods in the world; while on the other hand, as far as Europe is concerned, this country is the greatest consumer of raw cotton. From that your Lordships will see that it is very important to the commercial interests of the great cotton spinning districts of this country that there should be a large supply of cotton coming from different parts of the world. The more we can increase the supply of raw material the cheaper we can buy it, and the cheaper it can be bought in the raw state the cheaper is the cost of manufacture and the more easy it is for us to export the finished article abroad.

The British Cotton Growing Association, feeling the necessity of increasing our cotton supply in different parts of the world, sent out a Commission of Inquiry to the Sudan. The chairman of that Commission was Mr. Arthur Hutton, who reported on the possibilities of cotton growing in the Sudan and described a very large part as being an area which it would be very desirable to irrigate. At the present moment this area, the Gezira Plain, was described as being barren, sterile, and hardly growing anything—in fact, an absolute desert, useless for man and beast, except some 2,000 or 3,000 acres, which had been irrigated and was consequently a perfect oasis in that great desert. And where cotton was being grown at the present time in the Sudan he found that there was produced 550 lbs. of cotton per acre, as against an average in Egypt of 450 lbs. per acre, and in America of 200 lbs. Mr. Hutton, dealing with the Gezira Plain, this large tract of country of over 5,000,000 acres, described it in this way. He said— Practically every acre of it is capable of producing high-class cotton and of a quality which Lancashire requires in larger and larger quantities every day. It is also a country which can be irrigated at a comparatively small expense. 1555 No doubt your Lordships are aware that one of the difficulties of irrigation is not only that of getting the water upon the land but of getting the water off the land. The configuration of this particular tract of country called the Gezira Plain, the slope of it, is such that it is not only easy to get water on to the land but also off. It is proposed out of this Loan also to irrigate the Toka and Kassala areas as well, but they are comparatively small areas of 200,000 acres.

Lord Kitchener estimates that the irrigation of the Gezira Plain would cost from £1,250,000 to £1,500,000, and I might incidentally remark that this great scheme is only following out the policy of the noble Earl, Lord Cromer, who we all are aware did so much in Egypt as regards the vast works of irrigation that were carried out in that country, which have added so enormously to the value of the land there and to the revenues of Egypt. I should also state that in taking this water from the Nile for irrigating this Plain, great care will be taken that nothing shall be done to prejudice the irrigation works which have already been such an enormous success in Egypt. This will be safeguarded by not taking the water at the same time, or by taking it under conditions which will do no harm at all to the irrigation works in Egypt, because I am sure your Lordships will agree that it would not be right to do anything to benefit the Sudan at the prejudice or the harm of the Egyptian irrigation works. Lord Kitchener is sanguine that this undertaking will have the indirect effect of once more making the Sudan a largely-populated district. Before the Dervish disturbances the population was some 9,000,000 in this area. It was reduced after the Dervish raids to a population of something like 2,000,000, and at the present moment the inhabitants do not number more than 3,000,000. Lord Kitchener thinks that when these great irrigation works are carried out it is safe to reckon that in the next five or six years the present population of 3,000,000 will have doubled, because when good government and work are established there it will be certain that a large population from outside will flock into that district.

As your Lordships will see, this Bill only proposes to guarantee the payment of the interest on this Loan. But it is proper 1556 that your Lordships and the country should consider the financial position of the Sudan at the present moment. A few years ago there was no trade and no revenue to speak of, but now the trade has grown enormously. In 1906 the exports were £265,000; in 1911 the exports had risen to £1,400,000. And as regards revenue, in the year of the battle of Omdurman, 1898, the revenue was only £35,000. It went up in 1899 to £127,000; in 1905 to £665,000; and in 1912 to £1,424,000. The subsidy which Egypt used to make to the Sudan to assist them in their finances has this year come to an end, with the exception of a small sum that is paid for a small body of Egyptian troops who are kept in that country. Again I may mention, as this Loan is being also asked for by the Sudan Government for railways, that the railway receipts since 1909 have gone up from £330,000 to £505,000. As I have explained, this Bill does not ask this country to raise a Loan as a present for the Sudan; it only asks that the interest on the Government of Sudan Loan shall be guaranteed by the Imperial Treasury. As regards the payment of interest, power is given to the Treasury to guarantee the Loan at an interest not exceeding 3½ per cent., but the guarantee is not to be given until the Treasury and the Secretary of State are satisfied as to the provisions for raising and applying the Loan, and also that an arrangement for the establishment and regulation of a sinking fund for the repayment of the principal in thirty years or less has been made by the Sudanese Government. The Treasury are not responsible for the sinking fund; but no guarantee will be given until they are satisfied that due provision has been made for paying off the Loan in thirty years or less. The Treasury will also have to lay before both Houses of Parliament a statement of such guarantee and an account of the sums issued.

I may add that Lord Kitchener does not at all expect that it will be necessary to call upon the Treasury to make good this guarantee. The object of the Sudan Government and of Lord Kitchener in supporting this application is that they may be able to borrow the money at a cheaper rate, because it is clear that a Sudan Loan with an Imperial guarantee is a very different thing in the Money Market from a Sudan Loan without an Imperial guarantee. Lord Kitchener is 1557 of opinion that the irrigation work in the Gezira Plain, which is to be undertaken first, will be self-supporting. He is satisfied that the finances of the Sudan at the present moment are well able to bear the interest on this Loan until construction, and therefore there will be no call even during construction on the guarantors of the Loan. The Loan is for £3,000,000—for irrigation works, £1,900,000; for contingencies, £100,000; and for railways, £1,000,000. It is not proposed to raise the whole of this money at once but as it is required, and the guarantee in respect of the payment of interest will move pari passu as the money is raised. But, as I say, the contingency that any charge is likely to fall on the revenues of this country is very remote. The Loan will be paid entirely by the Sudan without the smallest chance of any charge falling on this country. I beg to move.

§ THE EARL OF CROMER

I trust that your Lordships will give a Second Reading to this Bill. I can confidently state that nowhere has the exercise of British influence produced better results than in the Sudan, and one of the main reasons why these results have been so good is that the system of government has been singularly well adapted to the requirements of the country. More especially decentralisation has been carried very far in the Sudan. Sir Reginald Wingate and the admirable staff of officers, civil and military, who have been working with him have been left practically alone to work out the salvation of the country. There has been practically no interference from London, and but very little interference and guidance from Cairo. The results have been in every respect admirable. When you consider the vast extent of this country, the savagery of a great portion of the population, the enormous distances of waste and desert which separate one place from another, and the general economic conditions of the country, the rapidity with which the Sudan has been regenerated is really marvellous. I often wish that those politicians and others who at times are apt to depreciate and to decry the work which their countrymen are doing in the distant parts of the Empire, could see a 1558 little more of these young men, for most of them are young, could hear them talk, and could realise a little more than they appear to do at times what is the work they are doing. If they did, they must be very curiously constituted if it did not evoke in their minds some feeling of pride for the work which their countrymen are doing abroad. I am particularly glad of an opportunity of stating this, because these Sudan officials, besides being very efficient, possess another good quality which is not common in these self-advertising days and to which I attach great importance—that is, they are very modest; they do not blow their own trumpets, and they are very rarely heard of in the Press. That, my Lords, is the more reason why those who, like myself, have had some opportunity of judging their work should bear testimony to what they have done.

A great deal has been done in the Sudan, but there remains a great deal to do. No doubt one of the first requirements of the country is that there should be considerable capital expenditure by Government on public works. A good deal of money has already been spent, and I should like to explain to your Lordships why more money has not been spent. It is because, as the noble Lord remarked in the course of his speech, capital is not the only requirement in the Sudan. It has also required population; and when I was to a certain extent responsible for the general government of that country it always appeared to me that it was both useless and unnecessary to spend vast sums of money 41 bringing fields under cultivation when there were no hands to cultivate them. Therefore I went slow. The waste of life in the Sudan during the Dervish rule, to which the noble Lord alluded, was something appalling. Be quoted figures based on the estimate of Sir Reginald Wingate. They were that the population before the Dervish rule was about 8,500,000, and in a period of twelve years that number had wasted to 2,000,000. That was by reason of inter-tribal warfare and the ravages of disease. I confess that when these figures were first revealed to me they were so startling that I hesitated to believe them, but I have no reason to discredit them, and I should like to state a thing which I saw myself which rather confirms them. I remember perfectly 1559 well the year after the Battle of Omdurman going to the town of Metemmeh, which lies 50 or 60 miles this side of Khartoum, and which had been a big town containing many thousands of inhabitants. I went into the square, where all the people assembled to meet me. There appeared to be very few of them and especially very few men, so I asked the local official in charge of the town what the population was. He told me that there were 1,300 all told, of whom only 150 were men. The fact was that most of the men had been killed. The most hopeful sign that I saw in my frequent visits to the Sudan was the large number of children about. No doubt good government has already attracted many people there from other parts of Africa, and I do not doubt that Lord Kitchener's estimate is correct that as time goes on further people will come in. The result is that we have now got to a stage when money may safely be spent upon irrigation purposes without any danger of outstripping the wants of the population.

To turn to the question of this Loan, I noticed that in the discussions which took place in the other House some objections were raised to the Loan because it was said that the money might better be applied to helping the agricultural population of this country. I do not propose to go into that question. It appears to me that a discussion on that point would lead us perilously near the dreary and tangled jungle of the fiscal question, which certainly I wish to avoid. Therefore I am going to leave that branch of the question entirely alone, and to consider the point on its own merits. There was another objection which was not raised to this Loan, but which might very well have been raised, and to which I think I had better allude. It might have been urged that inasmuch as the British Government does not guarantee the interest on Indian and Colonial Stocks, why, therefore, should it guarantee the interest on the Sudan Loan? I see my noble friend Lord Welby in his place, and I think he will bear me out in saying that that was a point to which in bygone days the Treasury attached some importance, and no doubt the objection is a rather forcible one. But I should like to point out to your Lordships why I consider that the Sudan in this instance may be differentiated both from India and the Colonies. The 1560 circumstances are very peculiar. In the first place, there is to some extent a precedent for this Loan, because in 1885, I think it was, the English Government in concert with the other Powers of Europe guaranteed the Egyptian Loan of £8,000,000. But that is not the only reason, and in order to explain the further reason I must allude very briefly to the political status of the Sudan.

You will remember that after the Battle of Omdurman the question of the political status of the Sudan had to be considered, and a very difficult question it was. On the one hand, the British Government did not in the least want to annex the Sudan. Far from it. They very much wished not to annex it, and had it not been for the capitulations and the ex-territorial rights acquired by Europeans in Egypt the best course would have been to have incorporated the provinces of the Sudan into Egypt and to have treated them as part of Egypt. But that was impossible. If we had done that, the whole of the cumbersome paraphernalia of mixed Courts and all the rest of it, which have done some good but which have certainly retarded progress in Egypt, would have been brought into the Sudan and would have rendered the government of the Sudan quite impossible. That being the case, we had to find a way out of the dilemma. In these circumstances, I undertook to propose to Lord Salisbury, who was then at the Foreign Office, that a hybrid form of Government, wholly unknown to international jurists up to that time, should be created, and that the Sudan should be neither British nor Egyptian but Anglo-Egyptian, with both the British and the Egyptian flags flying. That was a proposal which was novel and was certainly rather of a nature to shock conventional diplomatists. But I think its unconventionality and its novelty was rather an attraction in the eyes of Lord Salisbury, under whom it was my privilege to serve then, and he readily acceded to the proposal. The result was that the Sudan Convention was passed, and there is no doubt that the arrangement has worked very well. But it has had a certain disadvantage, and that is that being a complicated arrangement it has been very difficult to make the Egyptian people and the Egyptian Legislative Council understand it, and I must confess they are to be excused for not under- 1561 standing it altogether, for I doubt whether there are many people in this country who would understand it. A certain feeling of soreness was created in Egypt. They were constantly saying, "You say we are partners. The British and Egyptian flags are flying. There are considerable charges in respect of the financial burden, but the principal partner in the undertaking is paying nothing at all." I do not think these complaints were justified, because it must be borne in mind that this particular form of Government was created because of Egyptian complications. Moreover, it was Egypt much more than England which profited by the reconquest of the Sudan. At the same time, as I say, it was very difficult to explain; and for my own part I very much welcome this opportunity on political grounds of doing away, I hope, to a certain extent with that soreness which existed among Egyptian people when they said that the whole financial burden of governing the Sudan was left to them. Therefore I am glad this opportunity has been taken to show that British financial assistance will come to a certain extent to the aid of the Egyptian Treasury.

But in saying that I wish to utter one note of warning. There is nothing said in this Bill about the Egyptian liability. I do not complain of that. I do not profess to have gone into all the most recent facts of Sudanese finance, but I presume that His Majesty's Government and also Lord Kitchener have satisfied themselves that the Sudan Treasury can bear this charge and that in all probability no call will be made upon the British guarantee. But I think that the Egyptian Ministers and all in authority in Egypt should understand that the mere fact of this Bill having been passed does not involve their washing their hands entirely of all interest and all responsibility in Sudanese financial matters. Indeed I may go further and say that if, unfortunately, it should prove to be the case, as I trust it may not, that the Sudan Treasury cannot pay the interest and sinking fund under this Bill, I think it is conceivable that in the future questions of the extent to which some call may be made upon the Egyptian taxpayers may have to be revived.