§ Sir J. D. REESasked the Under-Secretary of State for India whether the inflated balances now held by the Secretary of State in London are due to the departure of the present Government from the practice of its predecessor, whereby the Secretary of State only sold bills to the extent of his own requirements without taking into consideration the financing of India's trade; whether a reversion to the former practice would lead to the due absorption of the present balances and, if so, what action does he propose to take in the matter?
§ Mr. HAROLD BAKERThere has been no departure from previous practice regarding the sale of bills. In six of the nine years from 1896–7 to 1904–5, when Lord George Hamilton and Lord Middle-ton were Secretaries of State, the sales were in excess of the Budget estimate of the Secretary of State's requirements, and in some years by very large amounts.
§ Mr. RUPERT GWYNNEasked the Under-Secretary of State for India if, in view of the increase in the depreciation in the value of the securities held in the Gold Standard Reserve from £932,759 on 31st July to £1,004,824 on 16th October, representing a further loss in eleven weeks of £132,065, he has considered the question of realising the securities and henceforth following the recommendations of the Fowler Committee that the reserve should be held in gold, thus increasing confidence and avoiding the risk of further loss and the difficulty of realising, even at depreciated prices on forced sales, should a time of financial stress make it necessary to utilise the reserve.
§ Mr. H. BAKERThe form of the Gold Standard Reserve is varied from time to time to secure greater ease of realisation, and the matter is constantly considered; but so large a change as the hon. Member suggests is not now contemplated. In the period mentioned by the hon. Member the depreciation was less than the amount.
1459W stated. The valuation on 31st July, referred to was based, at the request of the hon. Member for North Islington, on the middle market price, while that on 16th October was based, in accordance with the India Office practice, on the minimum. If the two calculations had been on the same basis, the depreciation in the period mentioned would have been shown as £104,354. I may add that in the same period £143,688 was received as interest, bringing the total interest receipts to £3,242,584.
§ Mr. RUPERT GWYNNEasked the Under-Secretary for India if he can state what have been the sales of council bills in each of the last three years; what were the Home charges of the Government of India in these years, and of the balance of sales over Home charges; and what has been the general disposal of the money?
§ Mr. H. BAKERThe sales of council bills and telegraphic transfers in each of the last three years, the Home charges (i.e., the net expenditure in London charged to Revenue), and the balance of sales over Home charges have been as follows:—
Of the £25,055,839, the following sums have been added to the Gold Standard Reserve (in addition to the interest received in London) and to the Paper Currency Reserve:—
Sales of Council Bills and Telegraphic Transfers. Net Expenditure in London charged to Revenue. Balance. 1 2 1–2 £ £ £ 1909–10. 27,096,586 18,411,700 8,684,886 1910–11. 26,783,303 18,605,700 8,177,603 1911–12. 27,058,550 18,865,200 8,193,350 Total 80,938,439 55,882,600 25,055,839
— Gold Standard Reserve. Paper Currency Reserve. Total. £ £ £ 1909–10 … 8,090,000* 1,000,000 9,090,000 1910–11 … 600,000 2,545,000 3,145,000 1911–12 … — 1,988,333 1,988,333 Total … 8,690,000 5,533,333 14,223,333 * To restore the Reserve after the diminution which occurred in 1908–9. The remainder has been, and is being, used mainly towards the discharge of floating 1460W debt. The discharges during the period from 1909-10 to 1912-13, have been and will be as follows:—
£ India bills 6,000,000 India bonds 1,000,000 Debenture bonds of which the liability was assumed by the Secretary of State on the termination of contracts with railway companies 4,251,100 Total £11,251,100 Of this, the amount discharged from the proceeds of loans was 2,723,500 The amount discharged from the proceeds of the extra sales of council bills and telegraphic transfers was thus £8,527,600 The remainder of the proceeds of the extra sales of council bills and transfers has been and is being used to reduce pro tanto the amount of permanent debt issued to provide for the annual capital outlay on the construction of railways and irrigation works.