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Indian Railway Stock

Volume 90: debated on Thursday 7 March 1901

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I beg to ask the Secretary of State for India whether he can state the cause for the continued refusal by the India Office and the Bank of England to explain to the 15,000 shareholders of the Great Indian Peninsula Railway Company the details and methods recently employed: in calculating the average rate of interest received and paid on Indian Government Stock in London during the two-year period under consideration; whether he is aware that the amount of stock referred to in this contract and by the Bank of England is about £120,000,000, but that by an oversight the Bank of England has omitted from the calculation about £100.000,000 stock, and only dealt with that proportion which was invested in during the two-year period; whether he is aware that this intrusion of the key-word "invested," instead of "received" is contrary to all precedent; and what steps will be taken to satisfy the shareholders of the Great Indian, the Bombay, and the Madras Railway Companies that the India Office itself feels a direct responsibility for the due completion of their contracts.

(1) The letter from the Bank of England dated the 9th November, 1900, which gives all the information, in my possession as to the methods employed in calculating the rate of interest, Was immediately communica ed to the Great Indian Peninsula Railway Company, and if the hon. Member likes to move for the correspondence in continuation of that already given to the House, I have no objection. (2, 3, and 4) The hon. Member is no doubt aware that, under the contract, the decision as to the rate of interest lay, not with the decision as to the Governor of the Bank of England; and that his decision, when challenged, was upheld by two courts of law. This appears to me to create a very strong presumption that it was a sound and proper decision; but, in any case, the Secretary of State is bound, like the company, to accept it and to act upon it. He has no option in the matter.