That it is expedient to authorise the Secretary of State in Council of India to raise in the United Kingdom any sum or sums of money, not exceeding £50,000,000, for the service of the Government of India, on the security of the Revenues of India, and to make provision for other purposes relating thereto.
I hope we shall have some statement from the Under-Secretary about this loan. A loan to India of £50,000,000 at the present moment requires some explanation. I am aware that it has already been explained to the Committee, but the real point we have to consider is that the Committee stage was taken late at night when there was no opportunity for many Members to be present to discuss the matter. This £50,000,000 is to be spent on goods manufactured in this country. [An HON. MEMBEB: "Not necessarily."] That is a point which I wish to have made clear. The Indian Government now place their orders where they can get goods in the cheapest market. They have always followed that practice and in so doing have differed from other Departments. I want to know if that practice is to be interfered with by the provisions of this Bill. I want to know also how far the Indian Legislature has accepted liability for this loan. We have to remember that the position in India at the present moment is somewhat difficult. If you have the vast mass of the Indian people repudiating the loan and repudiating their liability for it, we are going to have great difficulty in the years to come. How far has this been authorised by the Indian Legislature, and has there been a majority of the elected members of that Legislature in favour of it? Can we have any sort of guarantee that no payment will be made on this loan until we get from India, through the elected representatives, an undertaking to assume liability for the loan and the interest thereof? We all know there has been quite recently a considerable slump in the stocks and shares of the Indian Government—
But not to the extent to which they fell when the extreme "Die-hard" Members of this House suddenly discovered that there was great danger of revolution in India and that therefore every investment in India was insecure. The result of that was an immediate fall in all Indian securities. It is true that since then there has been a certain amount of recovery, but it has been nothing like what it ought to have been. The fear is still there, and I think it will be accentuated rather than diminished by this large additional loan to India, unless it is perfectly understood that the elected representatives of the people of India take responsibility for meeting the loan, and unless we are assured that we shall not have any campaign for non-co-operation as regards liabilities towards the taxpayers of this country. The whole position has been made more difficult even than the Gandhi agitation would naturally make it by the extraordinary dealings in finance of the India Office in the question of fixing the rupee at 2s., and purchasing reverse Council drafts at an enormous expense to the taxpayers of India. I do not remember for how many millions the Indian people are holding the India Office liable as representing the cost entailed upon them by the purchase of these reverse Council drafts. The House will remember that, when the value of the rupee was fixed about 18 months ago, the Secretary of State and the India Council did their best to keep the rupee at 2s. In order to do that, they kept on buying reverse Council bills in this country, but, in spite of their purchases of reverse Council bills, the rupee kept dropping below the 2s. Finally the India Council, having spent millions in this way and involved India in a liability for millions, threw up the sponge and declined any longer to attempt to keep the rupee at 2s. It was allowed to drop, and it dropped with extraordinary rapidity down to nearly the present price. I think it dropped to 2s. 4d. inside a month.
I admit that I was getting rather wide, but I wanted to emphasise the point that the Indian people are holding the India Office liable for incurring very heavy debts and for imposing very heavy burdens upon them. I want to be quite certain that the Indian people are not going to try to set off, against this debt of £50,000,000, any of the loss which has been incurred through the purchase of reverse Council drafts in the attempt to keep up the exchange. The Committee which decided to keep the exchange at 2s. was composed of a certain number of Europeans and one Indian, and the Indian was against attempting to keep up the exchange. His view having proved to be right, the Indians are now, naturally, reluctant to be saddled with the responsibility for all that money. Therefore, I think it is more necessary than it otherwise would be that we should get from the Indian Legislature a specific recognition of this debt, and not only from the Indian Legislature, but from the elected members of that Legislature. Only in that way, in my opinion, will the British taxpayer be properly safeguarded against the liability for some form of partial repudiation.
I will not follow my hon. and gallant Friend along the line he has taken, but I do think that the Noble Lord who represents the India Office should give us some definite undertaking, as I feel sure he will be able to do, that none of this money is likely to be used for covering the deficit in the Budget of India. I am in no sense of the word hostile to this proposal. On the contrary, I welcome it, and shall do all that I can to assist its passage through this House. I think that if this money is spent on irrigation and railways in India it will be a godsend to her people, and the only observation I have to offer upon its being spent at this moment is an expression of surprise at the lack of imagination on the part of the Indian Government, in that they have not asked, years before, for a large sum of money for extending railways and irrigation in India. When I think that in India, with its population of 300,000,000 or 400,000,000, the railway system is no bigger than the railway system of the Argentine, with 12,000,000, I feel that it is high time that the Indian authorities should look round to see what can be done to extend the railway and irrigation facilities of India. I listened last night to what was said by some of the Labour Members, and they do not seem to me to realise to what an extent the extension of railways acts, I will not say as a cure for, but as a protection against, famine, in enabling grain to be taken from various parts of India where it is plentiful to other places where it is scarce. There are many other reasons why this policy should be helped forward. I know very little about Indian affairs, but, like most Members of the House, I study them, and I remember that, in particular, the Chenab Canal in the Punjab not only resulted in benefit to that district, but the irrigation works in the Punjab have added to the revenues of India. The expense for interest on loans for these canals and irrigation works has been much more than covered by the revenue receivable, while, in addition, the prosperity of the country is, of course, increased.
There is also another side to this question. Quite apart from the fact that if you develop a country it is better morally and financially for its people, it is also, in the case of India, very much better for this country too. I would remind my hon. Friends on the Labour benches, however, that the ability of British manufacturers to sell materials and machinery to India for these developments depends upon the price at which British workmen and British manufacturers can produce the goods in competition with tenderers of similar goods in other countries. We hope, of course, that British workmen and manufacturers will be able to provide those machines and implements, but it must be remembered that you cannot ask India to come and buy in the dearest market. You can only ask her to buy in the cheapest market, and we must look to it, employers and workpeople, that we produce the goods in competition so that the orders do not go outside this country. Moreover, I would draw the attention of those who, last night, rather looked askance at this demand for £50,000,000, to the fact that the greater the quantity of raw materials produced in India, and the greater the ability of India to sell for export those raw materials, the better able she is to buy cottons and other goods in Britain. All that she sells to Europe or elsewhere will provide her with credits in Europe, and she is able, with this extended production of raw materials for export to use the increased credits which she draws to buy our cotton, our machinery, and other goods. And we need here, for home consumption, cheap and plentiful raw materials. Therefore, I think the Labour Members ought to do all they can to get this project through.
Last night the Noble Lord, replying to me as to the position of this House in relation to these loans, as they are of a trustee nature, said that, although the India Office comes here to ask for permission to issue these loans outside India this House has no responsibility for them, either as to capital or as to interest. Just now, before coming into the House, I looked at the newspapers, and I find that Indian Government Loans are still called British Funds, as they have been called as long as I can remember. Trustees and widows and orphans invest their money in India stocks, and they are looked upon, I believe, as trustee securities by the Court of Chancery. Therefore, it seems to me to be paltering with the position to say that this House his no responsibility for these loans. If that be so, why do the India Office come here? If the Indian Government only has the responsibility it should be made perfectly clear for the future that this House has no responsibility. What, then, constitutes the trustee quality of India stocks? We should be told. That necessity is increasingly great now, because the relations between this House and India have been entirely changed. Before the recent Act was passed which governs the conditions under which the Indian Government rules, the Secretary of State had a grave responsibility to this House for everything of importance that went on in India. At the present moment he has a much smaller responsibility, and, consequently, has much less control over the finances of India and over the security of Indian Government stocks into which home trustees and others put their money. Many hon. Members of this House are trustees, and they know very well that the loans of Colonial Governments, like those of Australia, New Zealand, Canada, and so on, are trustee securities; but the Colonial Secretary does not come here and ask permission for those loans to be issued, although they have a greater moral reason, and a greater financial reason, for being regarded as trustea securities than India stocks and loans. The financial reason is that, although the revenues of the Dominion or Colonial Governments are alone responsible for their loans, yet the Dominion or Colonial Governments have to fall into line with certain regulations under, I think, the Colonial Stocks Act. If we are going to continue these India stocks in the category of British funds, and available for trustees, either they should be guaranteed by this House—which I do not advocate for a moment—or this House should require all stocks of the Indian Government which are called British funds to conform with the regulations which are imposed upon the trustee stocks of the various Dominions and Colonies. It is, I think, proper at this juncture to draw attention to the point because the relations between this House and the Indian Government have been entirely changed recently.
How is this money to be raised? I would not venture to criticise the way in which this money is likely to be raised for these excellent purposes were it not for one thing. Although I am not connected with India, or with finance, or with silver, or anything of the kind, but merely look upon this matter from the point of view of a trader and a student of economics, I have taken the opportunity on various occasions last session, more particularly in connection with the Export Credit Scheme, of criticising in this House what I consider to be the unsatisfactory manner in which Indian financial problems have been handled. It was mentioned last night that Sir Michael Hicks Beach some years ago said that the finances of Britain at that time were not managed so well as those of India. About a year ago, however, the Indian authorities were so silly—that is the only word I can use—as to try to harness gold to silver by fixing the rupee at a high sterling value. They put the Manchester trade out of gear to such an extent as to throw some £20,000,000 worth of cotton bills on to the hands of bankers. That trouble, caused by this silly action of the Indian Government in tinkering with exchange, prevented cotton buyers in India from taking up their obligations to Manchester; and, when I think of that, I hesitate to believe that the financial problems of India are now handled with the skill to which we were accustomed in past years, and with which they ought to be handled at the present moment. I should like to ask in what form it is proposed to raise this £50,000,000 from time to time, because I think that that is a point which might well be debated at this juncture. I hope, to start with that, before applying to the London market, as much as possible of India's requirements may be raised in India. I believe that the Indian people are willing—
That is a little wider. I will exclude from my argument any money raised in India, but, whatever money is raised or wherever it is raised, I think that we have an object lesson at the present moment in the fact that India 3½ per cent. Stock is to-day worth but 62. That is the stock of the greatest dependency among His Majesty's Dominions. On the other hand, Canada 3½ per cent. Stock to-day is worth 77. That is to say, the credit of Canada, or the methods by which the money is raised, enables Canada, for £3 10s. a year, to raise nearly £77, as against £62 in the case of India at the present quotations. There must be something wrong.
Quite so. The reason is that India 3½ per cent is irredeemable, whereas the Canadian 3½ per cent. is redeemable, I think, in 1950. That is a policy in borrowing which should be taken into consideration by the Indian Government. Take a small colony, say, Tasmania, with 250,000 people. Their 3½ per cent. Stock, redeemable in 1940, is worth 77. Quite recently the Indian Government brought out a 7 per cent. loan, I believe with no distant redemption date, and the consequence is that India has thus to pay a great deal more for her money than ought to be necessary. I do not like to use violent language, and I know the House does not like it, but I think it is scandalous that a great country like India should be raising money at 7 per cent. because of the form in which the loan was issued, even though the money market was greatly depressed in spirits at the time it was issued. Some better arrangement ought to be made. In the first place, when they raised that loan at 7 per cent. if they had attached further, a 40, or even 50 or 60 year redemption date at par—two generations—they could have borrowed that money at a better price. I think, however, there is a cheaper way of raising the money than by what is called Indian Government Loans. I would suggest to the India Office and the Noble Lord that loans if raised for these specific purposes, as we are told, of railways and irrigation should be called railway debenture loans, or irrigation debenture loans or debentures, and they should hold the guarantee of the Indian Government behind them—not the guarantee of this Government but of the Indian Government. Or if railway loans they could be ordinary stock of Indian Railways with a guaranteed return of 4 per cent., 5 per cent., or 6 per cent. by the Indian Government, plus a share of the profits between the Government and the shareholders. We have just had two instances when it can be seen that that type of security is preferred by the general public and foreigners to an ordinary Government loan. The French P.L.M., the Nord, and the Midi Railways have raised money quite easily in this country. The Nord raised money at 6 per cent. issued at 90. The French Government could not have raised money by Rentes here for Government purposes at anything like that price, although these railways are indirectly obligations and are even under the control of the French Government, because the French Government guarantees any deficit of interest.
The French railways with a Government guarantee commanded a better market than a simple French Government loan. The people here, or of Holland, and the United States, who invest in that type of loan much prefer a security like a railway security plus the obligation or guarantee of a Government under whose control these railways are to a direct obligation of a State.
I therefore suggest that when the time comes for looking into the matter as to how these loans should be issued we should lay down two or three principles. We should no longer countenance the Indian Government raising loans which are irredeemable or perpetual annuities. We should suggest to the Indian Government a sinking fund and a term for repayment, and we should then do better for India. We should not allow these issues to be called merely Indian stocks at all, but debentures secured on the railways and irrigation works, plus a Government of India guarantee- I have made these suggestions for what they are worth, and I hope the India Office will do me the honour to consider them. We in this House cannot allow the manner in which Indian financial general policy or problems have hitherto been managed to pass by uncriticised, and we put in a caveat now as to the form in which loans have been issued. Lastly, will the Noble Lord tell us how he can continue to allow India stock to be put into the category of British trustee funds now that the relations of this country with India have been so materially altered?
Lieut.-Colonel J. WARD:
Although I support the loan myself I should like to call attention to the way in which the middle-class view has been expressed by the last two speakers. My hon. and gallant Friend the Member for Newcastle-under-Lyme (Colonel Wedgwood) suggested to the Noble Lord that in granting this loan there should be no conditions as to whether or how it should be spent. I do not think myself he can possibly be speaking for the purely trade union movement of the country in making that suggestion.
I know there are qualms of conscience among a numerous body of trade unionists, who have discovered that their support of legislative independence for India has, to a certain extent, resulted in a Protectionist policy against British goods. On the other hand, my hon. Friend the Member for Farnham (Mr. A. M. Samuel), who looks at it from a totally different point of view, apparently takes the same standpoint as my hon. and gallant Friend. It is a surprising thing that when you get the purely middle-class trade view applied to anything, whether it comes from the Labour party, the Liberal party, or the Tory party, it is always the same. The suggestion was that whatever was done with this loan, whether it was used for the building of railways, which would necessitate the purchase of plant, or steel, or gates for irrigation, or all the works necessary for great public structures of that description, we should make no conditions whatever, that we should lend our money and leave India entirely to choose and to purchase her things in the cheapest market.
No. I did not impose that condition of right to buy outside Britain, but I understood that the Indian people themselves had insisted on being allowed to buy in the cheapest market. I would gladly put the condition in this loan that the money should be spent here, but I have always understood that the Indian people had claimed the right to which I refer and that the Home Government conceded it.
I can understand that in ordinary circumstances this country and this Government would be entitled to give India that opportunity, but the circumstances at the present moment are such, in regard to the exchanges of the world, that you would not be giving a loan or holding India for the purpose of any assistance it would afford to the other parts of the Empire, but you would really be controlling India and loaning the money to India for the purpose of assisting Germany and Belgium, particularly Germany, because her trade, owing to the difference between sterling and the mark, is almost making it impossible for British trade to be conducted in the Indian market on any terms whatever. German trade is already ousting British trade, and I beg the Noble Lord to realise that these £50,000,000 of capital that might be used in home industry if transferred to India, taken from the industrial produce and development of our own country, may be used by India in Germany to purchase things she requires, thus causing a volume of trade between India and Germany, and producing the result that eventually we shall be loaning the money for the purpose of excluding ourselves from the British-Indian Empire altogether. I say, therefore, that while I may be a Free Trader, I am certainly not prepared to carry it to the idiotic extent of saying that our capitalists and those who have money at home are to lend it to another part of the Empire for the purpose of destroying British trade and the chances of employment of British industry in England. Therefore, I want to say to the Noble Lord that he must not allow either of my hon. Friends, the one a Free Trader and the other a Protectionist, from the middle class point of view, to sway his mind, and he must not imagine for one moment that, though my hon. and gallant Friend speaks as the leader of the Labour party, he represents 1 per cent. of the workmen that that party is supposed to represent.
I will not enter into the quarrels between different Members of the Labour party, but as my hon. Friend the Member, for Farnham (Mr. A. M. Samuel) has raised some important points, I should like to reply to them. He said it was not certain whether or not the Indian loans were dependent only on the Indian Government. Let me point out to him that certainly for the last 50 years every single prospectus for an Indian loan issued by the Bank of England has borne this note:
The funds of the Indian Government are alone responsible for the capital and interest of this loan.
Therefore trustees know perfectly well, and have known all along, that the only people responsible for these particular funds are the Indian Government. That is a well-known fact.
I quite agree, and I was aware of that fact, but why does the Noble Lord—is it not a juridical nicety—come down and ask for permission about Indian stock if the House has no responsibility? He had better not ask in future if this House's intervention is meaningless. We may be deceiving the public by misleading them.
I think the answer to that is this. My hon. Friend alluded to the Colonial Governments. I think he forgets that India, at any rate at present, and I hope it will long continue so, is a part of this Empire and not a separate Dominion. The Colonial countries to which my hon. Friend referred are practically separate Dominions over which we have very little control. India, up to the present time, is practically just as much a part of the British Isles as England, or as Ireland was a year ago. Therefore, the two cases are not in any kind of way parallel. Then the hon. Gentleman said that certain Rules apply to the Colonial securities which are Trustee securities. At the moment I have forgotten what they wore. They were introduced by Sir Michael Hicks-Beach after the Boer war, when there was a great demand that Colonial securities should be made Trustee securities. I forgot what they were, but I believe they were more or less, to use a vulgar phrase, eye-wash, and were only put in in order to enable Sir Michael Hicks-Beach to say that he had taken those precautions. I do not believe it would have the slightest effect whether these rules applied to the Indian Government or not. Then he says that the Nord has issued certain stocks in a particular way, and asks why do we not do the same instead of issuing Government stock. My hon. Friend forgets that in India the railways belong to the Government, and therefore this loan has the guarantee of the Indian Government and of the railways—a double security. The Nord only has the security of itself. The Indian Government has control of the Indian railways, and therefore I do not think there is very much in that. When we come to the question of the Canadian 3½ per cents. my hon. Friend must remember that their price is due to nobody wanting to sell them. You could not issue at that price a new loan. Besides there is a redemption which is a very valuable asset—23 per cent. within 30 years I think it is. You have to add that on, and there is no parallel whatever. I am not as a rule a blind supporter of the Government, but I do not see that they have anything to be ashamed of at the present moment, nor do I think, speaking generally, that the finance of the Indian Government has been wrong. The Indian Government, like everybody else, are rather short of money, and they must raise it. Whatever may have happened a short time ago when they raised money at a rather unfortunate time, whether it is owing to the knowledge of my Noble Friend (Earl Winter-ton) or to accidental circumstances it seems to me that the present time is a particularly good time to issue a loan, when trustee stocks are earning 12 per cent. and there is a considerable demand for them. I have always understood that the time to sell is when there are buyers, and I am glad that my Noble Friend, by accident or by knowledge, has adopted this policy.
I can reply very shortly to the interesting points which have been made by various speakers. If the hon. and gallant Member for New-castle-under-Lyme (Colonel Wedgwood) had been present last night he would have heard most of his points answered when I originally proposed the Resolution, but I can give him the same answers to-night. It will be convenient and more symmetrical if I take first the technical procedure which it is necessary for the Government of India to follow before they can raise a loan, and then refer to the method of raising the particular amount named in the Resolution. The Government of India are free to borrow money in India without authority from Parliament. That has been the position ever since the Government of India Act in the fifties, and they do, of course, raise money in the way Governments raise money in India. But under the Government of India Act money can only be raised in the United Kingdom by the Secretary of State on behalf of the Government of India to such an extent as is authorised by Act of Parliament. For that reason, ever since the Government of India Act was passed, the Government of India, through the Secretary of State in this House, has come to Parliament from time to time to get authority to raise money in this country for its future requirements.
I cannot give the average time that has elapsed between each of these Bills, but the last Bill of this kind which the Government of India asked for and obtained was in 1910. The amount which was then raised would have been exhausted earlier than it was, but for the fact that, owing to the War, it was not necessary to carry out what in other circumstances would have been essential capital expenditure on the railways, such as replenishment of rolling stock and improvement of the permanent way, and things of that kind which it is now hoped to carry out. The hon. and gallant Gentleman asked why we are asking for such a large amount. The idea underlying his speech was apparently that we were immediately going to put on the London market a loan of £50,000,000. Of course, that is not so. So far is that from being the case, that there is, I believe, no immediate intention to issue any part of this loan. The Government of India may come to a decision to do so, but there is no immediate intention. But the Government of India's borrowing powers under the 1910 Act are nearly exhausted. There are only some £7,000,000 left, and we must have power, if necessary, to borrow this money which I hope we shall not require to borrow for some years. I could not give the actual number of years. One might put it at five, six or seven. So that there is no suggestion, as the hon. and gallant Gentleman seemed to think, that we are about to put a huge loan on the English market. It is only permission to raise a loan. The hon. and gallant Gentleman said he hoped, before any liability was incurred, the Assembly of India would be consulted. I do not know if he is aware that all Appropriations have to go before the Assembly of India. The money will go in the form of Appropriations before it is used in India.
This is not the occasion to raise that question, though it can be raised on the Second Reading. I cannot give any undertaking of that kind. But that is not the point the hon. and gallant Gentleman made. His suggestion was that there was going to be a hole-and-corner arrangement of which the Assembly was not to be cognisant at all. The danger which my hon. Friend the Member for Farnham (Mr. A. M. Samuel) foresees really does not exist. I do not know that it is necessary to say anything about it because my right hon. Friend the Member for the City (Sir F. Banbury) has answered him. The position is in no way altered from what it has been ever since the Government of India Act.
This point is a somewhat tenuous one. The question of the control of this House does not arise on this Resolution or on the Bill. This is purely a proposal to give the Indian Government permission to raise loans in this country. I hope I shall satisfy my hon. and learned Friend if I say that the conditions under which these loans are raised, as regards those who raise them, and the guarantees they give, are in no way altered by this Bill or by anything that has happened under the Government of India Act. Exactly the same proposal will be made as has been made ever since the issue. If he wishes an answer on the point he raised last night, under the Trustee Act any capital stock is issued by the Secretary of State for the Governor in Council and is charged on the revenues of India as a Trustee security. There is no change in the conditions at all. It is exactly the same. When my hon. and learned Friend asked why, that being so, it was necessary to come to Parliament at all, he showed that he was not a very close student of the conditions under which Indian loans are raised. They always have to come to Parliament for authority to raise money in this country, and they continue to have to do so. That is all that this proposal and all that the Bill asks for. I think that disposes of my hon. Friend's difficulties, except that any suggestions coming from an eminent financial authority, who has had experience—I understand he has had considerable experience in these matters—will be carefully considered by the Secretary of State. He has made certain suggestions as to the method in which the loan should be raised, which he thinks would be an improvement on the existing method.
The only other point of importance is one which is, I think, more a Second Reading point than a financial Resolution point, though I do not deny that it can be raised on the Resolution, as to whether or not the Secretary of State and myself, speaking for him in this House, can give a pledge that the money which
may be raised in the future by these loans on the British financial market will be spent in this country. The purchase of railway stores and material in this country for the Indian State-managed railways is in the hands of the High Commissioner for India, and in this matter he acts on the authority of the Government of India. There has been, as there was bound to be in a country in which an advance has been made on the path of self-government, great attention given in India, not merely in the Legislative Assembly, but in the Press and elsewhere where public opinion operates, to this question of where contracts should be carried out, and the Legislative Assembly last September passed a Resolution:
This Assembly recommends to the Governor-General in Council that the High Commissioner for India in London should be instructed by the Government of India to buy ordinarily the stores required for India in the cheapest market consistently with quality and delivery, and every case where this rule has not been followed should be-communicated to the Government of India with full reasons for the information of the Legislative Assembly.
The Government of India, the Secretary of State, and further, the Government of this country, are bound to give attention to a Resolution of that kind, whatever views we may hold on Free Trade or Protection. He would be a bold man, whatever party he belonged to, who said a Resolution of that kind must be absolutely ignored.
The fullest opportunity, of course, will be given to British firms, as it always has been in the past, to tender for these goods. Certainly it must be the hope of everyone that they will, in view of the state of trade and employment, be able to tender for them. I cannot give the figures at this stage, but I will on the Second Reading. There is no reason to think that a very large proportion indeed of the material will not be purchased in this country as it always has been in the past. The hon. and gallant Member for Stoke (Lieut.-Colonel J. Ward) used the argument that it was wrong to loan money in this country. Of course the people who will loan the money are not the Government or the people through the Government, but the general investing public, and while the loan may be issued in England it may well be subscribed to by the investing public in France, America and elsewhere, because we believe, and we have reason for our belief, that in spite of present conditions we have sound financial security in India. The hon. and gallant Gentleman used the argument that it was wrong that people should loan money from this country if that money was not all going to be spent here.
No, I did not mean that. I took it for granted that the British Government, from the very fact now stated by the Noble Lord, are able to give better facilities for issuing loans than has any other country in the world, and I think if any conditions can be made, consistent with fair play to India, that some at least of the money should be spent in the country that guaranteed it—for it amounts to that—they should be made.
I have endeavoured to answer that point. I can give no pledge on the subject, but naturally no Minister would be doing his duty if he did not express the hope that it will be possible to spend the greater part of the money here. But to suggest that it is a bad thing for the people of this country to loan money to a country which has good financial security is to suggest an absurdity. I do not pretend to be a professor of economics, but I always understood that one of the things it was most necessary to do at present was to become more of a creditor nation and less of a debtor nation. I could not agree to the proposition that it is not right to use the London financial market for a loan in a part of our own Empire without conditions. I am much obliged to the hon. and gallant Gentleman for warning me against the danger of being swayed by my hon. and gallant Friend the Member for Newcastle-under-Lyme. I have sat opposite him for a good many years and he is my hon. and gallant Friend in more than a Parliamentary sense, but I have never experienced the slightest fear in my own heart that I should ever be swayed by his political opinions or arguments.