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Transvaal Loan (Guarantee) Bill

Volume 181: debated on Monday 19 August 1907

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Order for Second Reading read.

Several serious questions are raised by this Motion. The responsibilities of the Mother Country towards her Colonies are already generously discharged; and the financial obligations of the State seem now rather to require scrutiny and definition than extension. The amount of the loan is not inconsiderable. The depreciation of shares in South Africa, though partial, and as I hope, temporary, has doubtless had its effect upon the money market, which can scarcely have been more forbidding than at the present time. The House is bound to examine the purposes for which the loan is required, to test the security on which it stands and to call for precedents to authorise, and for reasons to justify, the policy of affording a guarantee to a self-governing colony, and to this one in particular. There is no need to exaggerate the effect of this loan on the national credit A great many worthy people are prone to attribute all the evils that come under their observation to any particular cause or effect to which from time to time they may have expressed their dislike. I notice this is particularly true of persons engaged in financial operations not wholly devoid of a speculative character. We are informed that the decline in high-class securities which now is unhappily general from America to Germany, and from Great Britain to Japan, is largely if not entirely due to the revolutionary proposals of the Scottish Land Bill, and that, of course, there can be no revival or recovery in British credit while the pernicious and evil shadow of the Transvaal Loan hangs over the money market. To such lugubrious and pernicious absurdities we ought to apply the corrective of a wholesome proportion. The year 1906 was a year of adverse circumstances so far as the money market was concerned. The amount of new capital created in the United Kingdom exceeded 100 millions sterling and the amount of actual cash subscribed exceeded £80,000,000 sterling. It is quite true that an ill-timed issue, even of so comparatively small a sum as £5,000,000, might exercise, at the present time, a disturbing effect upon the market, an effect out of all proportion to the sum involved, but the Government have taken great care in framing this Bill to prevent any such contingency arising by an arrangement in the measure which enables small temporary advances to be made from time to time, pending satisfactory market conditions for the flotation of the whole of the loan. I venture to submit to the House that it is very easy to over-estimate, if these precautions are properly observed, the effects upon British credit of such an issue as will be sanctioned by this Bill. At the beginning of this year the Crown Agents of the Colonies were able to float a loan equal in amount to this one without causing even a ripple upon the political and financial waters which are now a great deal troubled. That is one consideration to be borne in mind: the proportion of this loan to the operations of the British money market. Then there is another. I observe notices down upon the Paper for the rejection of this Bill. No doubt it is very convenient for right hon. Gentlemen to come forward as the champions of public thrift and warn us against the disadvantages of engaging British treasure in South African enterprise; but when we look back upon the past we can find occasions when vast sums of national treasure were expended in South Africa on enterprises, to put it mildly, which were far less beneficial than those contemplated by this Bill. I do not speak of the war, which was necessary to secure British territory from invasion, nor do I speak of the expenses necessary to procure the acquiescence of the Boer people in the annexation of their country. I confine myself entirely to the expenditure which took place after the Middleburg negotiations, in which the Boer leaders and generals were willing to come in upon the basis of the annexation of the republics. For seventeen months after peace could have been obtained on perfectly satisfactory and honourable terms the war was protracted at the enormous cost of £78,000,000 of war expenditure, to say nothing of the £29,000,000 which immediately followed the cessation of operations, simply and solely in the hope of being able to say that an unconditional surrender had been extorted from the Boers. I do, not wish unduly to dwell upon controversial matters, but I would ask those who pose as severe economists to bear in mind the standard to which their observations might be referred when they warn us against the disadvantages of engaging British treasure in South African projects. Whatever view may be taken of the consequences of this loan to the money market and British credit generally, whether that view be high or low, it does not rest with us to determine whether the Transvaal are to issue the loan or not. When General Botha came over here he did not ask whether the Transvaal Government might be allowed to issue the loan, but informed us that it was their intention to do so, and simply asked us to afford them the guarantee in order that they might obtain the money on the best possible terms. Our decision, important though it was, was a closely circumscribed decision. Every self-governing colony enjoys and exercises the right to borrow, when and where and upon what terms it thinks fit and its credit allows. By the easily satisfied requirements of the Act of 1900 such borrowing by any responsible self-governing colony automatically obtains admission upon the list of British trust securities. Whether the Act of 1900, for which right hon. Gentlemen opposite were responsible, was not altogether too widespread and sweeping in its terms, and whether, that being so, the consequences have not resulted to the detriment of British gilt. edged securities, are questions I do not wish to enter into. I am content with the plain solid fact, and I submit it to the House as the first salient proposition in the argument I will endeavour to apply: that our decision in this matter was limited to giving a British guarantee, and that the Transvaal Government if they wish to do so can place their loan upon the market without any reference to the British Government; so that the evil effects upon the national credit, whether real or imaginary, and all the strain upon the money market caused by the restriction of capital, would have resulted no matter what action we might take. Indeed, these effects might have been aggravated if the Transvaal Government had been left to its own resources. What could have been more injurious to British credit and more disturbing to money market operations than anything in the nature of a struggle between the Transvaal Government endeavouring to obtain its money on very high and unsatisfactory terms, and certain powerful and hostile financial influences endeavouring to prevent them from getting it? I ask the House to recognise the two general principles which are before us. The first is the modest proportion of this loan in reference to the scale of operations of the British money market; and the second, the closely defined and restricted limits in which our decision to record the guarantee is operative. The House will require precedents to justify the giving of the loan to a self-governing colony. Such precedents are numerous, ample, respectable and exact. I will recite to the House six of them which justify this loan. In 1857 a loan was granted to New Zealand of £500,000, described as for the payment of debts and for the purchase of native land. On the 3rd of May, in 1866, another loan was guaranteed to the New Zealand Government of £500,000 for the New Zealand War, for immigration and for other purposes. In 1870 a further loan of £1,000,000 was guaranteed to New Zealand for the construction of roads, bridges, and other communications, and for the introduction of settlers. This was challenged in the House of Lords, and defended by Lord Granville, who said it was a wholly exceptional case, and tended to afford employment and useful work for the natives who had been friendly during the war. La 1867 a loan was guaranteed for Canada of £3,000,000 for the construction of a railway connecting Quebec and Halifax,. and in 1869 a loan of £300,000 at 4 per cent, interest was guaranteed to the Canadian Government for the purchase of Rupert's Land from the Hudson Bay Company. Mr. Gladstone, in the debate on that loan, condemned the practice of giving loans to self-governing Colonies. They should not be given, he said, for any merely local or temporary object, and could only be justified on the broad grounds of Imperial policy. In 1873, a third loan to Canada empowered the Treasury to guarantee £3,600,000 as regards both principal and interest for the construction of the Pacific Railway, and for the improvement and construction of the Canadian Canal. It was attacked in the House of Commons because it was said that this particular guarantee was a bribe in regard to the Washington Treaty. The House will notice that this last loan resulted in greater benefit to Canada than the expenditure of almost any similar sum by the Dominion. These loans have nearly always been given by the Imperial Government in cases where there has been disturbance caused by war or as a concomitant of some constitutional settlement which the Mother Country approved and desired to make permanent. In some of these cases one of these conditions has been present, and in others both; but in none of them were both the conditions present in such a strong and overwhelming degree as they are in the case of the Transvaal Loan Bill. If I were to speak further of the numerous precedents, all of which justify the measure now before the House, I should refer to the guarantee of £35,000,000 given by the then Prime Minister and the right hon. Gentleman the Member for West Birmingham, to enable the Transvaal and the Orange River Colony to recover from the consequences of the war. Of course, I know I shall be told that they were Crown Colonies then. Yes, Sir, but in view of the fact that self-government had been promised, and its advent was admittedly only a matter of a few years, in view also of the fact that the right hon. Gentleman the Member for West Birmingham said that they were only technically Crown Colonies, and he intended to treat them as self-governing Colonies, and in view also of the fact that the services of this loan of £35,000,000 will have to be discharged during the larger portion of its currency by a local responsible, self-governing Parliament. I think the distinction is, after all, only a distinction in form, though a great deal might be made out of it for controversial purposes. The main fact stands out solidly that these right hon. Gentlemen guaranteed to the Transvaal and the Orange River Colony a loan of £35,000,000 to enable them to recover from the devastation of a terrible war, and to enable them to revive their agriculture, re-house their people, and construct and acquire their railways and public works, relying for repayment upon the good sense and integrity of the community, and that we to-day now propose to guarantee a further loan of £5,000,000 in the same confidence for the same objects exactly. When the resolution of the various bodies in Johannesburg was passed, asking for a guarantee of that loan, the amount specified was actually the amount of the £35,000,000, plus this £5,000,000, viz., £40,000,000. That was their estimate of the credit needs of their country. So much is this loan which we put forward to-day a continuation of the policy of that £35,000,000, so much is it the indisputable lineal successor of that loan, that some of the purposes for which this £5,000,000 is to be allocated are not merely similar, but actually identical with the purposes set out in the schedule of the Loan Bill passed by this House in 1903. Let us look at its objects. I would desire to justify them to the House in their general aspects only, because although the full account of the heads and sub-heads upon which the expenditure is to be met by loan capital is substantially correct, and has been tendered to us in the strictestbona fides by the Transvaal Government, the loan will not be wanted all at once, but will be raised from time to time. It is possible that some transferences and re-allocations between the different sub-heads will be necessary. In general, the allocation to which the Transvaal Government are precisely bound is the allocation of the schedule which divides the loan into two parts. Let us look at these two parts. First of all there is the Land Bank, for which £2,500,000 is to be provided. Although there is a steady consolidation of agricultural well-being, not only in the Transvaal and Orange River Colony, but throughout the whole of South Africa, the ravages of the war are far from being effaced in the two Colonies. When Lord Selborne toured through some of the more outlying portions of the Transvaal, he was much concerned at the very severe privations which once prosperous farmers, who had in many cases been possessed of valuable landed property, were suffering under. Some were found living in lean-to shelters against the walls of their ruined farms, and in some of the districts in the low veldt, I am credibly informed, almost the only food which some of the white population have to eat are the mealies which form the staple diet of the Kaffirs. The Land Bank is one of the means by which the agricultural position will be improved and assisted. When ordinary commercial banks lend money on mortgage they charge at a high rate of interest in South Africa, and reserve the right of fore-closure within three months. The effect of this Land Bank is two-fold. It accords to the farmers who possess good security and valuable property, reasonable rates for any money borrowed, and these farmers are assured that there will not be any sudden fore-closure, but the principal will be lent for a regular number of years, during which they will be able to make it fructify and pay. The idea of this Land Bank emanated from Lord Selborne, who appointed a Committee to inquire into the matter. That Committee reported very strongly in favour of the scheme and recommended that £5,000,000, not £2,500,000 should be devoted to the purpose. The Committee made many elaborate and detailed recommendations for the working of this scheme, so as to safeguard the interests of the State against those who would avail themselves of the advantages of it, and their recommendations have been embodied in the Bill of the Transvaal Government. The measure has been drawn up with the greatest elaboration by the Transvaal Government and it contains no fewer than sixty-five sections. No advance can be made upon the security of freehold or quit rent land which exceeds two-thirds of the fair agricultural or pastoral land value. No advance also, can be made upon any lease held for less than ninety-nine years. The bank is given full power of mortgage over all land upon which money is to be advanced, and the interest on the loan is to be at 5 per cent. so that the House will see that the sum will not only defray interest upon the capital involved, but will also provide an additional sum for the sinking fund and for the management of the Land Bank. I trust the House will consider this a worthy and suitable purpose. Everyone knows, after all, that the day will come when the gold mines in South Africa will be exhausted. Many of us think that it is an essential function of the gold mines to set on foot and establish other industries which in the near future will become more and more supplementary to it, and which will replace the gold industry when it has passed away. That is recognised on both sides of the House as being an important object, and I am quite sure it will be for the good of the Transvaal as a whole if the magnificence and splendour to which the great wealth of the gold mines gives rise stand upon the secure foundation of a healthy rural life, and the widespread standard of comfort and wellbeing of those who do not participate in the exciting and hectic industry of the pursuit of gold. The second part of the schedule is more varied, and contains several subheads, all of which deserve the attention of the House. The House will remember what the Inter-colonial Council was. It was a joint board established by Lord Milner to deal with the common affairs of the two Colonies. It derives its revenue from the whole of the railway returns; on the other hand the Inter-colonial Council has to defray the charge on the existing debt, the whole cost of the constabulary, and has to administer the whole guarantee loan programme of railway construction and other public works. If any deficiency arises in the Council's budget it is made up as to seven-ninths by the Transvaal and as to two-ninths by the Orange River Colony. After the treaty of Vereeniging, the Army transport waggons and stores which were in the hands of the military authorities were taken over by Lord Milner at a valuation of £2,000,000 and sold on credit to the Boers to enable them to start their farms again. This is called a repatriation debt. Farmers always complained of the prices at which these stores were sold. It is recognised on all hands that it was a period of unusual and abnormal prices. They were in desperate straits and they had no choice but to accept. They had always asked that the repayment of this debt should be postponed and that the charge with which they are saddled should be re-valued. The Crown Colony Government has already re-valued, I should remind the House, the land, stock, and implements, which were acquired by the British settlers, on this express ground of the abnormal prices; and in the same way the £258,000 which were advanced to civil servants to enable them to build houses for themselves has also been reduced on the petition of those gentlemen because of the very high prices for labour and material which prevailed in the country at the time they were call upon to build houses. It was long foreseen that a similar process of revaluing and reduction would have to be applied to the repatriation debt. The first instalment of £1,000,000 of the repatriation debt was due this year. If the Crown Colony Government had remained in power, whether under this Government or that of the right hon. Gentleman opposite, I am sure I am right in. saying that no attempt would have been made to collect these debts harshly, because nothing would have been more likely to cause devastation and disaster in the country districts. It has long been recognised that substantial reductions and abatements, and an extension of time, would have to be allowed on this head. That produced a very serious consequence. When the new Government came in they, of course, held those views more strongly even than their predecessors, and one of their first acts was to grant a postponement in the payment of those debts until next year. Meanwhile they were intending to examine the whole question, but the money obtainable from the repatriation debts which had already been created by the Inter-colonial Council was part of the assets which the Inter-colonial Council had counted on to develop its railway and public works programme. Consequently when the postponement was agreed upon the Inter-colonial Council became insolvent. It was nearly £700,000 short of the debt for the definite undertakings to which it was committed, and it could not finance any longer its railway policy or the other obligations which it had contracted. The new Transvaal. Government proposed to take over the repatriation debts for what they were worth, to collect them at their leisure and discretion and to meet the liabilities of the Inter-colonial Council from the proceeds of the new loan. Among its liabilities is an item of £85,000 for land settlement—that is to say, the settlement of British settlers who had been planted in the Transvaal. The House will realise that this sum of £85,000 is absolutely necessary for the Land Board which has been set up if it is to continue in existence. The House will remember that the Land Board administers the whole assets of the land settlement, amounting to £1,300,000 which has been advanced to 700 settlers who had been planted on the soil in order to secure to those settlers sympathetic administration, and in order, to use a phrase which has already been employed, to place a screen between the mortgagor and the mortgagee. The whole of the administration of land settlement was vested for a period of five years in a nominated Board independent of the Colonial Government. General Botha's Government was not attracted by this arrangement. They thought it was a waste of money. They thought it was a derogation from complete self-governing powers, and they were inclined, I think quite mistakenly, to regard it as an imputation on their fair dealing towards their fellow-subjects in the Transvaal. We were far from denying the force of some of their objections to the Land Board, but in order to allay the anxiety which I think was then quite genuine on that side of the House, and in the hope of carrying the right hon. Gentleman with us as far as possible in what we desired to make a national rather than a Party settlement in South Africa, we inserted in the Letters Patent provisions which enabled the whole question of land settlement to be handed over to a separate and outside Board. The insolvency of the Inter-colonial Council, however, placed that arrangement at the mercy of the Transvaal Government. Nothing would have been easier, if they wished to starve out the Land Board which had been created against their wishes, than for them to have delayed or resisted the financing of the Inter-colonial Council, but with complete self-restraint and strict observance of all the engagements into which they have entered as part of a great constitutional settlement, which they have accepted, they have come forward and without making any difficulty undertaken to finance the Inter-colonial Council in respect of land settlement from the proceeds of this loan, and in the meanwhile, pending the loan being raised, to supply them with money from month to month in order that the Board may be set up and continued. The right hon. Gentleman is going into the lobby this evening to vote against the granting of this guarantee, and if he were to succeed in his purpose—and no one ought to give a vote unless he takes the responsibility for the consequences that will follow on its success—if he were to succeed in this purpose, the first of the incidental consequences of his action would be that the whole of this money which would be available for the Land Board would be absolutely deflected, the Board would rapidly become bankrupt and break down, and all those elaborate arrangements which we were told by hon. Gentlemen opposite were so vital for the independence and the well-being of British settlers in the country would come to an end. I am anxious that the House should consider the reproductive character of the expenditure under the new loan. The sum of £600,000 represents definite commitments of the Inter-colonial Council for expenditure on railways, public works, and land settlement. I could give the House the sub-heads, but I am sure they will not wish me to state them in detail. The sum of £1,050,000 represents additional railway construction which is to be undertaken. The Delagoa Bay Railway represents £600,000, and some other railway projects and improvements. £200,000 represents the Klerksdorp Line, and £250,000 is set down for the Belfast and Lydenburg Railway which was projected by the old Government. It was agreed to by the late Government of this country. The sum of £100,000 represents expenditure on public buildings, and that is not wholly unreproductive, because the Transvaal is at present paying £48,000 in rent for buildings which they occupy. Irrigation is represented by a sum of £400,000, and the possible results of that expenditure we have seen proved by the highly remunerative results in Egypt. £300,000 represents agricultural development and land settlement, and £2,500,000 represents the capital value of land which, as it will let at a higher rate than that of the interest at which the money is borrowed in the market, will constitute no further charge on the Colony. It may be said that these objects no doubt are very reasonable in themselves, but what is the security we shall have for the loan? The security for the loan will be the whole of the revenue and the assets of the Transvaal—all the State may draw from the gold mines which last year, under the blighting hand of a Radical Government at home, yielded the respectable total of £25,000,000 sterling, or something like 125 times the sum necessary to defray the service of the new debt; all the resources which the Transvaal may derive from diamond mines, which produced £600,000 in 1905–6, and which are an entirely new feature of Transvaal economy. Of that sum the Government share amounts to not less than £360,000, and is estimated this year to aggregate something like £400,000. The debt will be secured further on anything which the Government may draw from the valuable deposits of coal and iron with which the country is studded, and, of course, on the whole of the rail ways, upwards of 2,500 miles long, which are owned, manned, and controlled by the State. The existing debt of the Transvaal, excluding the £800,000 to which I have already referred, is £35,000,000, of which the Orange River Colony is charged with a certain proportion. What that proportion is I cannot say authoritatively. For the purpose of this discussion, though in no wise prejudicing any decision that may be afterwards arrived at on the merits of the whole question, I will take nine millions as being the proportion of the loan which appertains to the Orange River Colony, that is to say, that the special debt of the Transvaal is £26,000,000, to which there will be added £5,000,000 for the new debt, so that it will be £31,000,000 altogether, or £24 7s. per head of the population of the country, taking black and white together. It would be a great mistake to compare this debt with, for instance, our own National Debt because our National Debt in the United Kingdom represents one thing, and one thing only. It represents gunpowder—a commodity which, although it may give some satisfaction at the moment of discharge, rarely leaves behind it any wealth-producing apparatus. But the Transvaal debt can more fittingly be compared with the debts of our great Colonies, where an enormous proportion is represented by very valuable State assets in the shape of public works, railways, and other things of definite revenue-producing character. if we take the Transvaal debt as it will stand when the £5,000,000 loan has been added to it, it will be seen that upwards of £20,000,000 is reproductive expenditure, leaving £10,624,000 of what I call deadweight debt, or per head of the population, black and white together, £8 1s. 8d. If whites only are considered, the deadweight debt will be £35 7s. 8d. per head. I submit to the House that with its unique assets and possessions that is not an undue burden for the Transvaal to bear. I submit to the House that there will be no difficulty whatever in meeting the interest and the sinking fund charges on the debt. I say that for the purpose of establishing security. The interest charges on this debt are, of course, placed on the revenue of the Transvaal, and they rank next to the £35,000,000 debt. But as this £35,000,000 is maintained by the Inter-colonial Council out of railway revenue, upon which it is the first charge by Order in Council, it is not unfair to say that this new £5,000,000 should constitute a first charge on the revenue of the Transvaal outside railway revenues. This revenue, outside railway revenue, is nearly £4,500,000 in the present year. A full statement of the Transvaal Budget has been laid before the House in Papers recently presented. In 1907–8 the revenue of the Transvaal is estimated at £4,469,000, and the expenditure at £4,520,000, or a deficit estimated at £51,000. It will be observed, first of all, that the estimates of revenue have been framed on the most conservative basis, and that the estimate of expenditure contains items of extraordinary expenditure not included in the Budget of previous years. That is without taking into account any reduction in the establishment which may be effected. There are two facts more important than these, which have to be mentioned. First of all, it has to be borne in mind that the Transvaal has a credit balance of £957,000, out of Which it is proposed to draw £67,000 this year, for the purpose of meeting extraordinary expenditure; and in the second place, retrenchments are being enforced throughout the Civil Service in the Transvaal. I should like to say a word on this latter subject. There is no need to criticise the scale on which Lord Milner initiated the Transvaal Civil Service. It was natural and desirable that those who were responsible in any measure for the war should have wished as quickly as possible to repair its injuries and wounds. I quite understand that after the great strain of the war, that wish was father to the thought that a good time would come. Lord Selborne has published a despatch in which he expressed appreciation of the work of the Transvaal Civil Servants. I am bound to say that since I have known more of the Government of the Transvaal, I believe that that appreciation has been thoroughly deserved. But when all these considerations have been stated, no one can doubt that the Transvaal establishment was vastly in excess of what is needed for carrying on the work of government, and considerably in excess of the resources and the state of development of the country. Before the change of Government occurred, a Commission was appointed to consider what retrenchments could be made in the Civil Service, and it is on the recommendations of that Commission that the Transvaal Government are now proceeding. More than that, Lord Milner engaged Mr. Marris, a man of great distinction in India, and thoroughly acquainted with all the machinery of goverment; and Mr. Marris came to the Transvaal to carry out the recommendations of the Commission. Mr. Marris has been retained by General Botha, and it is by his guidance and instrumentality that the retrenchments are being carried out. I have no doubt that these will involve hardships, but the Government will of course do what they can, without committing themselves, to relieve these cases of hardships from time to time, so far as it is allowable, through the Colonial Office. Well, there will be considerable saving—how much I cannot say—from these retrenchments. But there is a second item on which money will be saved in the current year as well as in future years. I mean by the reduction of constabulary, which is a direct result of the grant of self-government. It is quite evident that police arrangements which are necessary to hold a country down by force of arms and to maintain a non-representative Government in arbitrary authority are wholly different in character and extent from those which are required merely to preserve law and order among a people who are consenting parties to the form of government under which they live. A similar reduction is no doubt to be anticipated in the Orange River Colony. At present the constabulary in the two Colonies numbers 3,000 men, and the cost is £266 per annum per man, that is to say the charge on the two Colonies is £798,500 a year. The constabulary in the Transvaal numbers 2,000 men, and it is proposed to reduce them by 1,100, leaving 900 men who are to be re-organised with the existing Transvaal Police. They will be quite sufficient for the maintenance of internal security and peace. The saving which will result, will amount to £250,000 a year, or considerably more than is needed for the whole of the interest and sinking fund of the extra debt of £5,000,000 we are now proposing. I think there can be no doubt whatever of the ability of the Transvaal to pay the interest of this new debt. Now, from whom has the opposition to this new loan, both at home and in South Africa come? Who are those who are now going about saying that this loan will crush the Transvaal? They are the very people who were prepared to impose upon a nominated Government, without the consent of the taxpayers of that country, the obligation of a loan, not of £5,000,000, but of £30,000,000, which was not to fructify in the Colony itself, and become reproductive there, but which was to be sent across the seas and paid into the British Treasury. The right hon. Gentleman the Member for West Birmingham told us that he could "entertain and recommend to the House of Commons a sanguine expectation of the ability of the Transvaal to meet the liabilities involved." These liabilities are £35,000,000 Loan, and the additional payment of £30,000,000 to the British Exchequer. And the right hon. Gentleman the Member for West Birmingham laid on the Table of the House of Commons in 1903 a table, in which he precisely stated the amount he would recover from the Transvaal. "In the year 1903–4, the first instalment of the £30,000,000 Transvaal War Contribution Loan is to be raised, involving a charge at (say) 4 per cent. of £400,000, and reducing the surplus from £900,000 to £500,000. In 1904–5, a second instalment will be raised, reducing the surplus to £100,000. In 1905–6, the third instalment will be raised, involving a deficit of £300,000, if there is no increase of revenue. But Lord Milner estimates an increase in the three years of £600,000 in general revenue, which would leave a surplus of £300,000, after paying the interest on both loans." But that is not all. The very commercial and mining, houses in the Transvaal, who have to some extent shown opposition to the present loan, not only signed a guarantee for the repayment of the first £10,000,00 of the £30,000,000, but they were quit prepared to impose on the Colony a total burden of £65,000,000, or according to their calculation, of £70,000,000. The right hon. Gentleman who was Secretary of State for the Colonies a little while ago made efforts to obtain the first £10,000,000 of the £30,000,000 loan. He will, no doubt, now say that it might have been quite possible to have got all this money back if he had been allowed to have his way about his beautiful Chinese. But when the right hon. Gentleman the Member for West Birmingham submitted his statement to the House of Commons, there was no mention of Chinese; there was nothing like a bargain that the mine-owners were to have Chinese if they became guarantors for the issues of the first £10,000,000 of the loan. I have always understood that it would have been very improper if any suggestion of that kind had been made. I believe as a matter of fact that there was absolutely no suggestion that the Chinese entered into their calculation when they were prepared to place so vast a burden upon the Transvaal. I have endeavoured to submit to the House some of the arguments in support of this loan under the three principal heads—its purpose, its security, and the precedents for it. But, there are one or two observations of a general kind which I wish to make before I sit down. In the first place, what is the connection between the loan guarantee of the Imperial Government and the repatriation of the Chinese which is now in progress? We have heard a great deal about a bargain and about a bribe, and I think language has been used in that respect not at all complimentary to the Government of a responsible Colony. Hon. and right hon. Gentlemen opposite must realise one plain fact, and that is, that so far as the present Government are concerned we want to get rid of the Chinese, and we mean to get rid of them. That is the basis on which we start out to argue this question. The Transvaal Government and Parliament, newly elected, agree with us. They want to get rid of the Chinese, they mean to get rid of them, and they have declared that their policy is repatriation at the expiration of the indentures. Now I submit to the House that that is a matter of obvious common sense and simplicity. The Transvaal Government desire to raise a loan; they say that they are forced to raise a loan, and if they had not the British Government to fall back upon, they would have had to go cap in hand to Sir P. FitzPatrick, Sir Julius Wernher, Messrs. Albu and other defenders of the "gilt-edged Union Jack," who are so powerful and prominent in South Africa. And then these gentlemen would have been able to say "We will support your loan and enable you to get your money in the market, provided that you allow us to obtain the labour which we desire and which in our opinion is most profitable for the mines." If that situation had arisen it would have compromised the whole independence of the new Government. There was nothing underhand in the matter. Our desire was that they should be free and choose for themselves in the matter, and that their position should be one in which they could rid South Africa for ever of this detestable expedient. We should have been simpletons to allow the new Transvaal Government to be placed in absolute dependence on the very men with whom it is not only a matter of commercial interest but of political passion to procure the labour of the Chinese. I am well aware that the whole prosperity of the Transvaal is dependent very largely upon the prosperity of the gold industry. I do not know whether the interests and prospects of that industry are served by the extraordinary pessimism which is so freely indulged in by some persons who talk about it. But the conditions are by no means dark at the present time. The number of natives who are going into the mines is greater than ever before known, and greater than can be employed. All recruiting from the Cape has actually been stopped, because at the present time there is no means of accommodating the men from that source. In the meantime the Cape Government are arranging with the Transvaal Government for the much better regulation of the supply of natives from Cape Colony, and similar arrangements have been discussed with the Colony of Natal. I understand also that improvements in the machinery by which the mines are worked are steadily being introduced, and I understand that the new Gordon drills which have lately been invented, and which are now being tried, are calculated still further to relieve the pressure and to limit any shortage of natives. Therefore, I would say that a great future on a solid industrial basis lies before the mines of the Witwatersrand. But something is needed besides labour. So speculative an industry requires public esteem and the confidence of investors, and so long as the mineowners employ Chinese labour it will be a threatened industry, standing upon a basis which is going to be broken up, and the sooner they realise that fact the better it will be for them. The right hon. Gentleman has placed a Motion on the Paper which is equivalent to the rejection of this Bill. I am sorry to see it there, and I think the right hon. Gentleman has undertaken a some what ungracious task. I regret very much that so amiable a politician should have been cast for the part of "devil's advocate." Now that the country is definitely committed to the new arrangements which have been made, I had hoped that the line of cleavage in this House would not have followed purely party lines. At least in a matter so delicate as this, involving the fortunes of the new Government in its early days, and its relations with the British Government, I should have thought the official Opposition would have been content to accept somewhat of the guidance of those who bear the responsibility. After all, we still have a task of the utmost anxiety in South Africa. The great transference of power has taken place. We have transferred the power in South Africa from the basis of force to the basis of concession. The new Transvaal Government when it came into power was not a Government from the members of which we received any assurance. We received no assurance and asked for none, but with that Government we have had to do a mass of complicated business—questions of labour, native rights, the position of our Indian fellow-subjects, finance, military security, all questions on which disagreement might easily arise if there was not between us goodwill and mutual confidence, arising from the fact that the British Government are resolved to do their best to help the Colony and the Colony is resolved loyally to accept in the fullest possible spirit the constitutional arrangement which the British Goverment have made on their behalf. Is it to be wondered at that we should wish to make the people of the Transvaal feel that the British people can render services as well as bring about disaster, and that after the estrangement of the past we can co-operate in the re-building of South Africa? That is the broad Imperial policy which underlies the introduction of this Bill. We have had great difficulties, but we have a great deal to be thankful for. What can more raise the prestige of British statecraft than the anouncement of the gift of the great diamond which is to be made by the Transvaal to the King? That is a wonderful event. It has nothing to do with the loan, but it has a great deal to do with the relations between the British and Boer peoples. It will probably be remembered for hundreds of years after a great deal of the legislation on which we are engaged has been forgotten. The granting of the guarantee at this time no doubt involves a sacrifice; but compared with the tremendous issues in South Africa, with all the millions we have spent and all the risks we have run, it represents scarcely more than the harbour charges on some great ship coming safely into port after a stormy voyage. Motion made, and Question proposed, "That the Bill be now read a second time."

I do not intend to follow the right hon. Gentleman in what he said in regard to his last topic, in which he made, I think, an unfortunate reference. That subject may be left to the admirable sense and tact which his Majesty always displays in affairs affecting his subjects. The right hon. Gentleman has spoken as if this matter presents little difficulty, as if there was ample precedent for it, and it was dictated by obvious expediency. In every case which the right hon. Gentleman has cited as a precedent there were actual subjects of value which were obtained for the loan. The loan itself in two cases was only half a million, in another case one million, and in two other cases three millions. The objects to which these loans were devoted were the purchase of great territories and the foundation of great trunk lines. What analogy can there be between those cases and a case such as this, where the Colony has a deficit, where it has an enormous indebtedness to us, and where there has already been—I am not saying it is the fault of the Colony—a very considerable failure to honour obligations? The right hon. Gentleman has considered it relevant to the discussion to mention the so-called extravagance of the late Government with reference to the war. It is less than decent in the right hon. Gentleman, with Members on each side of him like the Chancellor of the Exchequer and the Attorney-General, who cordially approved of the war, to refer to the matter as if it has any relevance to this state of things. The right hon Gentleman himself was a supporter of the war.

May I say without offence to the right hon. Gentleman that other persons more important than he and now sitting by him were supporters of it?

It is unnecessary to drag me into this matter. I certainly never supported what was described by the right hon. Gentleman as the undue prolongation of the war.

I gladly accept that exceedingly legal qualification. The hon. and learned Gentleman is a hearty supporter of £2,000,000 of that expenditure, and if that is so the only relevant argument that can be formed upon it is that the Government should be abundantly cautious of involving the credit of the country further. The latter portion of the right hon. Gentleman's speech was devoted to explaining and justifying the purposes of the loan. Nobody on the Opposition side will traverse the contention that the purposes for which this loan is to be spent are useful purposes, and especially that of land settlement. I do not suppose there is a Colony in the whole Empire in which an expenditure of £5,000,000 could not be well justified, and I do not think there is a single Colony which would not be glad to have it. The point, however, is not whether the money can be profitably spent in the Transvaal; the point is whether there is a justification for at this moment imposing this burden on the credit of the Imperial Government, and, more material still, whether it is right to facilitate and encourage expenditure to enable another £200,000 a year to be placed on the shoulders of the Transvaal taxpayer at a time when the financial condition of the Colony is not at all prosperous. While the right hon. Gentleman has purported to put the facts before the House, I complain that he has not put before us the Budget statement of the Colonial Treasurer. Great sacrifices have been asked and great sacrifices have been incurred by the British population in the Transvaal. They have loyally made the sacrifices asked of them, and they have at least the right to demand in this matter scrupulous impartiality on the part of His Majesty's Government in their dealings with them and their Dutch fellow-subjects. They have a right to work out together with the Dutch their own salvation, which should not be affected by any undue interference by His Majesty's Government. I ask the House to bear in mind certain cardinal points whilst considering the policy of this loan. Does it conform to these principles? Is it prudent, considering the interests of the Colony as a whole, for them to borrow a large sum more at the present time? Is it fair to the taxpayer of this country that their contingent liability should be increased in order to facilitate the operation? Is the policy of the loan now being carried out with ordinary and reasonable prudence and in conformity with the proclaimed intentions and policy of His Majesty's Government and with the aspirations of their own followers? These are the tests I ask the House to consider. On a previous occasion I informed the House of the warning given both by high financial authorities in the Transvaal against any further borrowing in the existing financial condition of the country and by the deplorable state of the revenue. It is not necessary to quote the cases which come from the general estimates of Mr. Hichens, a former Colonial Treasurer, and the recent Budget statement of the Colonial Treasurer bore out that statement more conspicuously still. I complain that the right hon. Gentleman has not placed before us the information we are entitled to have. According to that statement, the revenue of the Transvaal is falling all round; railways have produced £600,000 below the estimate; the expenditure has exceeded the revenue by £97,000; public works have been stopped, railway works stopped; the depression is becoming deeper and deeper; and there is little hope of providing means for its removal, while the Estimate for 1907–8 shows an antici- pated deficit of £91,000. Looking at the point of view of the Transvaal alone, there are circumstances which even the most reckless financier would regard, and say that the times were inappropriate for the raising of further money. The right hon. Gentleman said, ingenuously enough, that General Botha was going to raise this loan in any event. Of course, General Botha was perfectly right to say so to the right hon. Gentleman, but how would General Botha have been able to face his taxpayers if for a purpose such as this he was going to place a loan on the market at a time when, without the guarantee of the Imperial Government, he could not have raised it at less than 5½ or 6 per cent.? This Government of free traders, totally opposed to the unanimous wishes of the Colonies for Colonial preference, are artificially to disturb the conditions this of country and to prefer the Transvaal in these circumstances before all the self-governing Colonies. What possible reason is there for witholding from the Cape or Natal the remarkable accommodation which the Imperial Goverment is giving to the Transvaal? Does it show justice or impartiality to the minority in the Colony? That minority, which is mainly an urban and a British population, raises 85 per cent. or even more of the whole taxation of the country, and upon that urban population is going to be placed the main burden of that which will inure almost entirely to the advantage of the rural population. I was, I believe, the first man in this country who urged that the Dutch should be treated with the utmost generosity. But a great deal of water has passed under the bridges since then. The British taxpayer has provided a great deal for the Boer population. We guaranteed the 35 millions loan to the Transvaal in consideration of their paying 30 millions as a War contribution. The 30 millions are gone, but the saving to the Transvaal by the guarantee of the 35 millions was at least £350,000 a year. The whole of that sum is in the pockets of the Transvaal taxpayers at the present moment. In these circumstances are they entitled to special consideration above all other Colonies, and to have another five millions added to the 35 millions already guaranteed? We have also to consider our own case—the circumstances of the loan market in this country at the time this loan is guaranteed. There were qualifications, some weeks afterwards, of this promise to guarantee £5,000,000, but at the time the pledge was given it was given without any qualifications whatever; it was publicly announced in this House.

And interest, too. I do not know what guaranteeing a loan "in principle" is. However, the right hon. Gentleman is entitled to any qualification he pleases.

was understood to say that the terms were not stated at the time the loan of £5,000,000 was guaranteed in principle.

The right hon. Gentleman has given me an answer, and contradicted what I said. I said a moment ago that His Majesty's Government in this House unqualifiedly promised the guarantee of £5,000,000. That is a fact. That was understood by everybody. It had a disastrous effect on the price of Consols the moment it was made. It had so disastrous an effect upon the market that the Chancellor of the Exchequer, some weeks afterwards, by which time much mischief had been caused, stated what apparently was not known to the Government—in such reckless and hot haste had this been done—that the loan need not be issued for some considerable time, and only in small amounts. At this very moment the Transvaal Chancellor of the Exchequer does not know to what purpose he is going to apply a great part of the loan, and has declined to pledge himself in regard to the matter. At a time when we had almost unprecedented depreciation in gilt-edged securities—I need not pause to argue what was the cause of that depreciation—you made this statement, unnecessarily, as it afterwards was proved, that £5,000,000 was about to be guaranteed. You did not attempt to assuage the fears created by that statement until weeks afterwards, and then, after the mischief and inconvenience had been caused, the right hon. Gentleman the Under-Secretary for the Colonies comes down and states that the promise to guarantee this loan was only "in principle." That is very poor consolation for the people who have lost money—not speculators or mineowners, but those investors in these securities who are above all entitled to be considered. I think I may summarise the situation in this way. When this guarantee was promised, we had, from the Colonial point of view, a vast debt upon the Colony already. We had, first, £35,000,000. And that was not all. As the right hon. Gentleman ought to have known, we had a municipal loan of £8,000,000 to Johannesburg, which is, of course, a burden upon the community. We have £35,000,000 plus £8,000,000, plus £2,000,000, in respect of loans to the Boers for repatriation; and, finally, His Majesty's Government, who profess to encourage economy and thrift, in regard to this little community of 300,000 white inhabitants, who have already got a debt of £50,000,000 upon them, are actually facilitating and encouraging further obligations to the extent of £5,000,000, representing a charge of at least £50,000 or £60,000 a year. Concurrently with that, we have in this country a state of things into the origin of which I do not pause to inquire. A condition of things has arisen in which Consols are lower than they have been for many, many years. [An HON. MEMBER: Their natural price.] They had been made lower still by the operation of His Majesty's Government in connection with this loan. Consols fell on the announcement that you were going to guarantee this loan, and I challenge any contradiction on that subject. That has been done to the great prejudice of a great many people who are as perfectly entitled to consideration as anybody else in this country. While I admit that the amount of £5,000,000 would be a trifle as regarded ourselves, yet at the time the loan was guaranteed it caused grave inconvenience; and I say that nothing should have induced the Chancellor of the Exchequer or any sensible man in dealing with these matters to have given such a promise at that time, unless he considered that there was some urgent and immediate necessity for it. But there is not a single statement forthcoming on the part even of the professed advocates of this loan to show that it is at the present moment an absolute necessity. It is really of no use beating about the bush on the matter. The right hon. Gentleman has admitted what everyone knew to be the true reason of the issue. The right hon. Gentleman had been perfectly frank; he said that it was necessary for the Government to get rid of the Chinese.

said he had never stated that it was necessary for the Government to get rid of the Chinese, but that the Government meant to get rid of the Chinese.

I congratulate the right hon. Gentleman on his interruption. If the Government mean to do a thing, and say that they mean it, I suppose that it is necessary for them to do it. The right hon. Gentleman said on a previous occasion that no bargain was made, but I challenged that statement at the time, and told the right hon. Gentleman that very different interpretations were applied by different people to the word "bargain." The right hon. Gentleman might be right in repudiating the word "bargain," but, as I said on a previous occasion, no bargain is required in these matters. The Government wanted, and, indeed, found it to be necessary, to enlist the Transvaal Government on their side and to induce them to say whether they wished to get rid of the Chinese.

As distinguished from those pledges which they gave over and over again in and after the general election, their policy was repatriation and replacement. That was a very awkward policy for His Majesty's Government to deal with, because I expect they knew that although, owing to the stoppage of other works in South Africa and the universal depression there was an unusual flow of native labour, the moment prosperity approached in however small a degree, this supply of native labour would run down and react very much the old level. It was very necessary for the Government, therefore to get that statement and get apparent advocacy upon the part of the Transvaal Government. Why do I say that? Because all other methods had failed. They tried to intimidate the Chinese by telling them that they were slaves; but the Chinese would not believe it. Having tried terror and intimidation, and strong language, however mendacious about repatriation, they tried another plan. They tried cajolery and coaxing, and the Chinese also resisted coaxing and cajolery; they would neither be intimidated nor bribed. Never were there people so obstinately enamoured of their fetters. The right hon. Gentleman received a despatch from the Governor of the Colony in respect of 350 Chinese admitted owing to some slip of an official, and the Governor stated that he was advised by his officials there that if they attempted to send these men back again, though they knew the conditions of the service upon which they were about to enter, there would be a dangerous riot. The matter was becoming extremely awkward for His Majesty's Government, because their followers were not content with the lamentable and ridiculous exhibition on the part of their leaders, and they were pressing them in a formidable manner. A member of the Labour Party threatened to move the adjournment, and the hon. Member for Newbury expressed his deep displeasure. The Government noted these awkward symptoms. They had tried every other means of getting the poor Chinese to move. They still had not the courage to take the consequences of their own language. They did not say to the country, "We must make good the loss to the Transvaal if these men are moved. Please pay the bill." They like to be astride of both horses at once; to tell the taxpayers that everything they say is true, and that at the same time all their rash assertions will cost nothing. General Botha desires a guarantee for his loan. His Majesty's Government wish the Boers to be made to say the contrary of what they said at the election—that the Chinese should be at once repatriated. Both these desires were concurrently gratified: but there was no bargain. It is not an undesigned coincidence, however. The Under-Secretary has taken in nobody. Let him place these circumstances before any impartial tribunal in the world, and let it judge as to whether the cause has not been followed by the effect.

But has this further pledging of the credit of the country been effected with ordinary prudence, and with regard first to the legitimate rights of the Civil Service in the Transvaal? The Government were taking to this Colony some of the greatest boons that could have been given. The generosity was unprecedented in the history of the Empire. The Government had a position of immense strength for the purposes of bargaining. They might legitimately have required that the whole of that £500,000 should be definitely appropriated to our land settlers. They might have made provision for the relief of the hardship, which is admitted, to the civil servants, many of whom were attracted to South Africa by the belief that there was to be a longer stage of representative government, and had in result lost everything in the Transvaal, and many openings in this country. Surely when His Majesty's Government were going to place in the pockets of the Transvaal something like £10,000,000, it would have been legitimate to see that some consideration was given to the sufferings of the civil servants. I was glad to hear the tardy reparation made by the right hon. Gentleman to the Civil Service. It was not very long ago that, in the very speech in which he cast vituperation on Lord Milner, the right hon. Gentleman spoke of the Civil Service in the Transvaal—many of whose members have worked harder than any one in the House of Commons for the restoration of the country—as "a costly and not too efficient nominated and imported bureaucracy." The apology of the right hon. Gentleman is in much the same terms as that which he has given to-day, that the right hon. Gentleman knows more now of Sir Hamilton Goold-Adams and his staff than he did then.

I invite the right hon. Gentleman to quote any passage in which I cast vituperation on Lord Milner. As to my having used the expression "costly, not too efficient, nominated and imported bureaucracy" of the Civil Service, I withdrew the words "not too efficient," but it was certainly a bureaucracy, and it was also nominated and costly.

The speech of the right hon. Gentleman in December, 1906, was accepted as a disparagement of the work of the Civil Service. But the point is that, with all their power for bargaining, by reason of the boons they have given to the Transvaal, His Majesty's Government have done nothing for the civil servants, and magistrate after magistrate is being reduced—curiously, too, these men are of British birth. While the Government professes its desire to serve the Transvaal, there is no reason why it should have omitted any regard for the Transvaal Civil Service, now suffering grievous hardship. Time after time when I was at the Colonial Office, I was addressed in strong terms by hon. Gentlemen below the gangway as to the condition of the natives and British Indians. Warnings of what was the opinion of the Transvaal Government in respect of the natives were perfectly plain. General Botha, not many years ago, gave before a Royal Commission his opinions as to native labour policy in South Africa. His policy is to break up native locations and reserves, and by taxation to bring the natives into the mines. I have always agreed that there-is a balance of advantage in favour of native over Chinese labour, though many of the evils alleged against the employment of Chinese reproduce themselves in a more extreme form in the employment of natives. There is this lamentable difference—that the natives die off much more quickly. But what are His Majesty s-Government now doing by the removal of the Chinese? They are placing a tremendous temptation on everyone concerned in the revenue of the Transvaal to take for the mines natives who are physically unfit for the work. What means have you taken to safeguard the natives against that tremendous temptation, more serious when you consider it in connection with what General Botha said on oath before a Royal Commission? The Transvaal Government have only been in session for two or three months. What has been their admitted attitude to the natives in that short time? So soon as self-government was given them, and so soon as the guarantee of the loan was promised in this reckless and foolhardy way, then General Botha, feeling the necessity of the revenue to be derived from the mines, and feeling the necessity of replacing the Chinese whom he has promised to the Government to get rid of, saw at once the necessity of attracting natives into the mines, who, but for that attraction would not come, and in defiance of the opinion of the whole of South Africa and the Transvaal, itself vitally interested in getting natives to work in the mines, proposed a Liquor Bill to permit the sale of liquor to natives in the mines—a proposition which was so scouted by the entire public opinion of the country, and by a large proportion of the Government's majority here, that he was obliged to withdraw it. That Bill had been totally withdrawn. That shows what the attitude of the Government of the Transvaal is in regard to the subject, and how easily and naturally they yielded to this temptation. I will only mention that they attempted, or designed, to lure the natives into the mines by the temptation of liquor. There is another proposal which I will not specify, but which was equally scandalous. I expect, it was to deprive the natives of redress in the Civil Courts. After having lured them into the mines, they were to be deprived of the right to seek a civil remedy. I say that with regard to this matter with strict reserve, I have not seen the Bill. The right hon. Gentleman's account of it was not very lucid, and I desire it to be understood that I reserve comment on that until I have actually seen the Bill. There is only one other topic to which I will refer. There is the case of the British Indians. The warning was even plainer in regard to that. In my humble way I endeavoured to persuade, and successfully, the Transvaal against a course which was pressed upon me unanimously at the time I was in office. The Government had that warning before them. The Government had many other warnings since that it was inevitable that a similar attempt, but probably of a much more drastic kind, would be tried by the present Transvaal Government. It was inevitable that it would be tried. The very things which the Government and their supporters when they sat in opposition denounced us for day by day, namely, not permitting people to hold land, the special law about passes, the special law of identification marks and badges of slavery which were repeatedly flung into our face, this Government submitted to. They allowed the passing of such legislation in regard to British Indians without a murmur. Nobody knows better than I do the enormous difficulties of meeting opinion in South Africa upon this question, and I will go so far as to say that I doubt whether it would have been wise on the part of His Majesty's Government, once they decided to give self-government,to provoke another internecine conflict on this question, but I do say with all the earnestness in my power that it was criminal negligence on the part of His Majesty's Government to enter into this undertaking without getting some terms for those people. They now sit paralysed before the Transvaal Government. They have no means of redress. Everybody who understands this question knows that they dare not provoke a conflict with a unanimous Colony on such a subject as this. Their opportunity was before. In such reckless haste were the Government to get these declarations from General Botha about the Chinese that they actually surrendered the whole claim they had upon the Colony for the £30,000,000, the whole claim they had for the £350,000 which they gave to them, in return for the precipitate advance of the cause of self-government—the whole of this splendid negotiating power they threw away without lifting a finger in respect of these subjects which it was manifest they would have the greatest difficulty in dealing with, once that Government had acceded to power. I am sorry that such a course should have been taken. Everybody interested in any way in British credit must be aware that that which would not ordinarily have been a strain upon it, has been so at this particular moment. I think it is most deplorable, it is disastrous, that this exercise of British credit should have been made at this time when the Colony ought not to have had another sixpence put upon its debt. That opportunity, now, unhappily, is passed, and I believe there is for ever gone all opportunity of properly adjusting the relations between this Government and the Colony, as to the natives and as to British Indians in the Transvaal. I beg to move.

Amendment proposed—

"To leave out the word 'now' and at the end of the Question to add the words 'upon this day three months.'"—(Mr. Lyttelton.)

Question proposed, "That the word stand part of the Question."

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If I follow the right hon. Gentleman I hope I shall be able to keep rather more closely to the question actually before us than he has found himself in a position to do. Two-thirds of the right hon. Gentleman's speech have consisted of a thinly-veiled attack on the grant of self-government to the Transvaal, and an attack, certainly not veiled at all, on the policy which has been pursued by the responsible Ministers of that self-governing colony since they came into office. He suggests, though he does not actually declare, that something in the nature of a corrupt bargain—there is no other word to describe it—that is the sense in which it has been understood by some of the right hon. Gentlemen's supporters, that something in the nature of a corrupt bargain has been entered into between His Majesty's Government on the one side—

*

I am saying what is suggested and what is understood by hon. Gentlemen behind him—that something in the nature of a corrupt bargain was entered into between His Majesty's Government on the one side and the Government of this self-governing colony on the other, whereby, in consideration of our guaranteeing this loan, they have agreed to abandon the Chinese policy which they had previously adopted, and to substitute for it a Chinese policy more in accordance with the wishes and opinions of His Majesty's Government. That is the sense in which it is understood. No such bargain ever took place. There is not the shadow of a foundation for it. General Botha, I assert here, in the face of this House and of the country, is as free to-day to propound any Chinese policy he likes in the Legislature of the Transvaal as he was before the negotiations for this loan were ever entered into. Is that plain? I hope it is. The right hon. Gentleman, having suggested, first of all, the existence of this corrupt bargain, next attacked the Transvaal Government in regard to its native policy. He describes one Bill, which was introduced and since withdrawn, as scandalous, and another Bill, which he admits he has not seen, as, hypothetically, equally, if not more scandalous. Is there any other self-governing Colony in the Empire in regard to the proceedings of the Ministry of which a responsible statesman here would allow himself to use such language? I am not going—it is no part of my business, though I enter a protest against such language being used—to defend the policy of the Transvaal when we have given them self-government. We gave it with the intention that they should exercise it, and in the belief that they are capable of exercising it; but we have carefully reserved in the Constitution powers to the Imperial Government, which they would not hesitatate to exercise in fit and proper cases, over certain classes of legislation in which the interests of particular sections of the community are specially concerned. The real question before us is the merits of the Bill; but let me, before I deal with what I conceive to be the actual point, just note, in order that I may respectfully brush it aside, the argument of the right hon. gentleman which was relevant to the question. He told us, or he suggested, that this loan was a form, and a very invidious form, of colonial preference, because we were discriminating in our treatment of the Transvaal in a manner favourable to them, and giving them in the shape of this guarantee a boon which we did not propose to give to any other of our self-governing colonies.

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I am dealing first with the question of preference. The argument of the right hon. Gentleman is one which, I would point out, does not receive a shred of suppport from any self-governing colony in the Empire. So far as I know, and so far as the Government know, not a single responsible statesman in any one of our self-governing colonies has sent to us one word of protest or remonstrance or even of criticism. But they are supposed to be smarting under a sense of having been very badly treated through one of their fellow colonies receiving this preferential treatment.

made an interruption which was not heard in the gallery.

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I saw something in the papers about the Premier of South Australia—[OPPOSITION laughter]—Will hon. Gentlemen do me the courtesy of waiting till I have finished my sentence?—I saw the statement in the papers, but I believe that what he said was not favourably received by those to whom he said it. I was careful to say that no communication has reached His Majesty's Government from any responsible statesman throughout the Empire in protest, or even in criticism, of this loan. The truth is, I believe, that the self-governing colonies regard the matter entirely from the same point of view as we do, that the guarantee of this loan was an inevitable, though, no doubt, an unforeseen consequence of the war in which they played so conspicuous and honourable a part, and a necessary incident of the completion of a settlement based, as it is, on the free and full grant of self-government—a settlement which, as we know by the language used by Sir Wilfrid Laurier, has been ratified by the practically unanimous sentiment of all the self-governing communities of the Empire. I pass from that, nor will I enlarge on the question of whether there are or are not precedents which precisely meet the case. The Under-Secretary has quoted a number of cases in which loans have been granted in the past to self-governing Colonies. [An HON. MEMBER: None for thirty years.] What does that matter? Suppose there was no precedent at all? I say it would be quite necessary to create one. But we have the best precedent possible, as my right hon. friend has pointed out, in this very case, for less than five years ago a guaranteed loan of £35,000,000 was advanced to this very colony. True, it was then a Crown Colony. It was not technically in the samestatus as it is now, and there were for the time at any rate means of enforcing your security if occasion should arise, but the loan was granted to a Crown Colony which was about to enter, in the course of a few years, upon the full stage of representative self-government. Therefore, if the late Government looked forward to the future, as they were obliged to do, they were practically then guaranteeing the credit of a self-governing colony. But the real question is, first, as to the necessity, and next as to the security. Of course, in my character as Chancellor of the Exchequer a proposal of this kind wasprima facie an unwelcome proposal. I do not want to see any extension of the direct or of the contingent liabilities of this country, still less a resort either by the Imperial Government, or, so far as we have any influence in the matter, by any of our Colonies or Dependencies, in the present condition of the money market, to further loans. Therefore I naturally scrutinised this proposal with considerable jealousy. But how does the matter stand? We have heard from the right hon. Gentleman a very pessimistic account, to put it mildly, of the present financial position of the Transvaal. I may say that, if that account were in all respects justified by the actual facts, it would be perfectly clear that if the Transvaal were to borrow at all it could only borrow upon an Imperial guarantee, and therefore,pro tanto, all the arguments which were used to show the precarious or unsatisfactory condition of the Transvaal finances would go in the direction of supporting our proposal. But I must say that these arguments came with a singular ill-grace from right hon. Gentlemen opposite. As my right hon. friend reminded us, it is only four years since they came down here and obtained the assent of Parliament to a guarantee of a £35,000,000 loan, because it was part and parcel of a transaction the other element in which was a promise on the part of the Transvaal to raise a loan of £30,000,000 which would have involved, for sinking fund and interest, at the very lowest an annual charge of £1,200,000; and we were solemnly assured with an enormous parade of figures that the credit of the Transvaal was amply sufficient to stand that transaction, and that there was not the least fear that we should be called upon to make good our guarantee. To-day we are told from the very same authority—though it is true my right hon. friend opposite was not then the Colonial Secretary—that for us to guarantee only the interest of a loan of £5,000,000 is seriously to imperil the future of British credit, or, at any rate, to expose us to the serious risk of having to make good a loss. In all the annals of miscalculation there have been more unfulfilled promises in this matter of Transvaal finance than have ever been made before. I am not going to join the ranks of the prophets and expose myself to a similar refutation in the future. But extravagant as was the forecast which assumed, four years ago, that the Transvaal could add to its liability for the £35,000,000 loan another liability of £30,000,000, I cannot help thinking that there is a similar extravagance in some of the pessimistic estimates which are now offered. It Is quite true that upon the estimates for the current year, 1907–8, the Budget of the Transvaal shows a deficit of £51,000. But I must say for myself that, having examined those accounts with considerable care, I entirely agree with what my right hon. friend the Under-Secretary said, that the Treasurer of the Transvaal, in the first place, has taken a conservative view of the prospects of his revenue, and, in the next place, has made no allowance for retrenchments of expenditure which are obvious, which are easily effected, which we know are in contemplation, and some of which are in course of actual execution. Let me make one general observation in regard to the apparent falling off in recent years of the revenue of the Transvaal. Very largely it is due—to the extent of, at any rate, £1,000,000—to the reduction in railway rates, a reduction made in 1903, and the effect of which was very largely under-estimated by Lord Milner and those who advised him. I do not say that rates can go back to their old level—I do not think there is the least chance of it, and the only hope of making that good to any extent is by an increase of traffic. But I mention that as accounting, to some extent, for what would otherwise be unaccountable miscalculation. And then, again—and this is a more hopeful and more important consideration—there is a considerable cash balance of nearly £1,000,000 in the Treasury of the Transvaal, which, although it cannot be represented as liquid assets—a good deal was lent out in various ways to local bodies and to others—yet stands as a good debt, as part of the assets of the community, and to some extent—perhaps a considerable extent—could be made available in case of need. Further than that, it is to be observed—and this is, I think, one of the best features of Transvaal finance—that the Transvaal has during the last few years constructed and developed out of revenue a great many works which in almost all British Colonies are provided out of capital. A good deal of railway construction, agricultural development work, and public buildings have been provided for in that way. I find from the accounts that no less than £3,392,000 was expended in respect of such works up to 30th June, 1906, towards which sum only £520,000 was appropriated from loan money; and even after meeting these special charges, the accumulated balances of revenue over expenditure amounted on that date to no less than £1,325,000. Then, again, although the main sources of taxation—the Customs revenue, the profit and other taxes upon mining, the native taxes, and the receipts from railways—are probably not capable of (at least it would not be wise to anticipate any) very large development in the near future—though I see the Treasurer does anticipate a substantial increase of railway receipts—there are other sources of revenue which are clearly open to him in case of need. Take the Estate Duty. That duty is 1 per cent., and without going into any extravagant estimates, there would be obviously a considerable field there for the further development of revenue. And I think I am correctly informed that there is no transfer duty of any kind in the Transvaal, or, at least, it is merely nominal. [A MEMBER on the OPPOSITION BENCHES: Yes, 4 per cent.]. I am not speaking of the transfer of land, but of the transfer duty upon stocks and share transfers such as we have in this country. There, again, in a community of that kind there would seem to be a relatively fruitful field for the further development of taxation. But it is from the other side of the account undoubtedly, the direction of the retrenchment of expenditure, that the Transvaal Government may well look forward to a better financial position than it has to-day. Allusion has been made to the reduction in the Civil Service. Far be it from me to say one word in the way of disparagement or criticism of gentlemen, many of them men of great ability, who have been devoting their services to the Government of the Transvaal during the last five years. But they went there knowing perfectly well what were the contingencies to which their service was exposed. Nobody can say that they have been badly paid; on the contrary, the scale of salaries in the Transvaal has been substantially higher than in almost any other country; and nobody can possibly contend that any consideration of justice, still less of honour, was involved in retaining gentlemen of this kind, however able, in numbers which were excessive, at salaries which are beyond what the country can afford to pay, and simply for the sake of enabling them to work out what they thought were the prospects of their own future. There can be no question about it. It is, I believe, the unanimous opinion of the Commission appointed, not by General Botha's Government, but by the Government of the Transvaal when a Crown Colony, that a reduction should be made, and it is being carried out under the superintendence of a very able Anglo-Indian official, who may be relied upon to see that whatever reductions are made are not beyond the necessities of the case. A second and not less important matter is that of the Constabulary. I do not wish to say anything as to the lines on which that force was originally framed. No one can doubt that, man for man, it is the most expensive force now in existence in the world; £266 per man is the cost of keeping up that Constabulary, and it is a drain upon the combined resources of the Transvaal and the Orange River Colony to the extent of considerably over £750,000 a year. Now that we have passed to the stage of responsible Government there can be no justification whatever for keeping up a force on that scale and at that expense, and I do not doubt that the immediate reductions will be considerable and that revenue which will be set free by the curtailment of this extravagant form of expenditure——

*

I am told that at no very distant date a saving of something like £250,000 a year is anticipated. Let me point out that so far as the present year is concerned the additional charge imposed under this Bill upon the taxpayers of the Transvaal cannot be more than £40,000, because we have arranged with the Government of the Transvaal that they shall not raise during the present year more than £1,000,000 out of the loan of £5,000,000. Even assuming that the loan has to be raised at the rate of interest of 4 per cent., I have overstated the amount, because the financial year in the Transvaal ends in June, and we are now in August. I demur to the account given by the right hon. Gentleman of the manner in which this guarantee was originally announced. I never said it was going to be raised in a lump sum or at any one time. My right hon. friend, in using the words "in principle," which the right hon. Gentleman rather scoffed at, thought he was guarding himself equally against any such interpretation. Certainly I never suggested, and knowing the condition of things in the money market here, I was not likely to suggest, that the whole of the amount should be cast upon the money market at the present time. I do not think the injurous effect upon the price of Consols can be attributed to anything I have said. The fall in Consols is due to causes of a more far-reaching and widespread character than this little loan.

It is quite true that a rise took place when I announced this year that the whole sum was not going to be raised. I will make the right hon. Gentleman a present of that. I think I have shown there has been sufficiently careful scrutiny of the finances of the Transvaal, and that at any rate at present or in the immediate future there is an ample and sufficient sum to guard the British taxpayer against any danger of being called upon to make good the guarantee under this Act. I must say one or two words upon the necessity of the purposes for which this loan is to be provided. As my right hon. friend has explained, they are twofold. In the first place, as regards the Land Bank, the proposal comes to us with the very highest authority. It originated with Lord Selborne. Lord Selborne pressed it upon us time after time with arguments which seemed to me to be irresistible in their force. The original capital suggested was £5,000,000. That has been reduced to £2,500,000; and, as I understand the proposal, it is not to be assumed that £2,500,000 is going to be advanced all at once. Nothing of the sort. But there is to be power ultimately to advance £2,500,000; the process is to be experimental and tentative. My right hon. friend has put before the House one consideration of the greatest importance. It is that you should do all you can by legitimate means, without imposing an excessive or unnecessary burden upon any particular interest in that country, to multiply industries in the Transvaal. What needs development more than anything else is the agricultural industry. Irrigation, the stamping out of cattle disease and other diseases of animals, the provision of reasonable means of borrowing on the security of the land itself, are the means which, according to all authorities acquainted with the details of the matter, afford the best scope for establishing a really independent agricultural interest in the Transvaal. As to the other purposes of the loan, I cannot consent to the view which seems to be taken by the right hon. Gentleman who has just sat down, that these are things which can be brushed aside or at any rate postponed. Let us look at what they are; they are contained in the second category. First, they are purposes which may be said to be the leavings of the £35,000,000 loan. They are purposes which ought to have been provided for by that loan, but that loan has fallen short, and therefore these purposes cannot at present be fully met. That is true as regards the very important item of £85,000 to go to the purposes of land settlement; it is true also to the extent of at least £500,000, in regard to what are called the railway and other commitments of the Inter-colonial Council, who are already engaged in carrying them out, but as to which the funds have fallen short. To stop these things, or to stop the railways and other works when they are half or three-quarters completed, is the worst form of economy; it would involve the waste of the money that has been already spent upon them. As regards the other categories to which the balance will be applied, it is also to be devoted to railway extension and acquisition. It is admitted that the purchase of the Fourteen Streams railway is vital to the well-being of the Colony, and the improvement of the railway to Delagoa Bay is of very great importance to the commercial interest. The balance will go to irrigation and other works. At the risk of wearying the House with dry details, I have gone through these various points in order to show that, so far from this loan being recklessly assented to by us, we have carefully scrutinised every item of the programme, and we have satisfied ourselves that the expenditure is neces- sary, and that there is ample security for repayment in the existing financial condition of the Transvaal to prevent loss falling upon the British taxpayers. It is in that belief that we have brought forward the Bill for which we now ask the sanction of Parliament. I looked at it in the first instance from the point of view of the Chancellor of the Exchequer in raising such objections as seemed to me,from my point of view, to be proper. But I must add this. The Government found it their duty to look at the matter, and they did look at it, and I ask the House to look at it, from the point of view in which financial considerations—although by no means to be disregarded—necessarily assume a subordinate position. We commend this proposal to the House on the grounds both of justice and of policy. I say it is an act of justice because the loan of —35,000,000 is exhausted, although many of its purposes are not completely attained. Land settlement and railway construction are left unfinished, and we shall not be able to carry out the intentions of Parliament,. and still less shall we be doing justice to the interests that we have created in relation to this matter, unless we provide the means for completing them. But is is more than a mere act of justice; it is an act of policy. We are witnessing in the Transvaal the early and, in some respects, the most trying days of what I do not hesitate to describe as one of the greatest experiments ever made in the history of the world. You have there a people who less than six years ago were in arms against us, as regards a considerable number of them. We have granted to them in the freest and fullest sense complete liberty to manage their own affairs. That is one of the most arduous tasks which any community so situated has ever been called upon to discharge. But I believe we shall be ill-carrying out the ends of our policy, I believe we shall not be meeting the expectations and wishes of the great majority of our fellow-countrymen here at home, if we do not do everything in our power, not only to encourage but to aid our new fellow-citizens to perform that task, confident as we are that they will perform it and bring it to an end without finding any difficulty whatsoever in reconciling patriotic reverence for the best traditions of their own past with grateful and devoted loyalty to the British Crown.

said the right hon. Gentleman began by saying that some of the remarks which his right hon. friend had made were irrelevant to the topic under discussion. But if that was so he sincerely trusted that what he said would not be more relevant than those of his right hon. friend which were, he thought, extremely to the point. So far as the present generation was concerned this proposal to guarantee a loan to a self-governing Colony was absolutely new. The loan of £35,000,000 was guaranteed immediately after the War, when the Transvaal was a Crown. Colony. It was true there was an intention ultimately to make it a self-governing Colony, but the time for that change depended upon many considerations, one of which was that the Colony must be self-supporting. The Under-Secretary of State for the Colonies had told the House that Mr. Gladstone was in favour of this principle in 1869, and had quoted some words of that statesman, but he had done so apparently on the assumption that nobody else would read the report of those proceedings. As a matter of fact, the last time a Bill of this kind was carried it met with disapproval from every section of the House. It was strongly opposed by Sir Stafford North-cote. It was opposed in principle by Mr. Gladstone, who said it was a vicious principle, which had already received just condemnation within the walls of Parliament. Mr. Gladstone added that the Bill for which he was responsible was to put an end to this vicious system once and for all. It was left for this Government, whose Chancellor of the Exchequer before the election made a special feature of purity and sanity of finance, a Government who claimed to be the successors of Mr. Gladstone, to revive this vicious principle which he tried to end and which but for them would have been finally ended. But they did not need to go to Mr. Gladstone for precedents. At the time that Bill was in this House it was opposed by the House of Commons. It was opposed among others by one who was now a distinguished Member of the House. The words were not very strong, but they expressed the whole position very clearly and therefore he proposed to quote them. That Gentleman then said we should then look at those loans as things we might some day be called upon to take up; that they injured our trade; that we should look upon them as reducing our own credit, as an individual would look upon a bill he was asked to back; that when a Colony asked to be assisted to borrow on better terms than they could command out of their own resources it was likely to lead to extravagance in the Colony, and that if we lent the Colonies our credit they in return should bear part of our debt. Those were the views of the right hon. Gentleman the Member for the Forest of Dean. They were true then, and if the House would permit him he would endeavour to show how far they were true now. The first point he would take up was that they injured our trade. It was obvious that they must injure our trade to some extent, and he had never listened to anything which seemed so far from the subject as the statement of the right hon. Gentleman about new issues and the rest of it and the increase of capital in this country. The time when the issue of a loan was announced had a great deal to do with the effect upon our trade. Anybody knew that at a time like the present while our markets were disorganised the announcement of an issue of £5,000,000 would have a far greater effect than the announcement of a sum of £50,000,000 under more favourable circumstances. It had injured our credit. The Chancellor of the Exchequer said it had not, but the right hon. Gentleman at a luncheon in the City a short time ago, did a thing which was not wise; he prophesied what he did not know. He said that Consols had touched bottom.

That was the opinion of great financial authorities and I shared it, but what I was very careful to do was to say that it was not to be taken as an indication that I knew anything as to the course of the market.

said he did not appreciate the subtle distinction. The right hon. Gentleman prophesied without knowing. Everyone knew what had happened since to Consols. They knew how much they had fallen, and the right hon. Gentleman seemed to make it a matter of glorification that they had not only fallen at the time when this loan was announced, but that they had continued to fall since. But the right hon. Gentleman's conviction was a reasonable one. It might be taken at the time to be the fact that Consols had touched bottom but for one thing which was fatal, namely, the existence of the Government of which the right hon. Gentleman was a member. The next point in the speech of the right hon. Member for the Forest of Dean to which he had referred was that when we gave our credit we should get something in return. Here we were giving a great preference to one particular Colony. The House would notice that the Chancellor of the Exchequer seemed to think it could not be a preference because other Colonies did not complain. A great Colony like Canada would be slow indeed to complain about any action of His Majesty's Government which did not concern Canada. Nevertheless it was a great preference. It meant £50,000 a year to the Transvaal and probably more. It was generous, no doubt, but it was a kind of generosity not uncommon and not very commendable. It was generosity at the expense of other people, not only at the expense of Great Britain but of other self-governing Colonies which desired to borrow money but which had not the inestimable advantage of being the particular pet of His Majesty's Government. The next point of the right hon. Baronet was that it engendered extravagance in the Colony. The present Government of that Colony had many virtues, but certainly among them could not be counted that of rigid economy in anything which affected either themselves or their friends. The salary paid to their Agent-General in London was unusually large, and another point, which did not involve a large sum of money but which was the best possible test of the economy of the Colony, was that the Ministers had allotted to themselves salaries which wore far in excess of those allocated in other self-governing Colonies. Another point to which he would not have referred but for the fact that it was touched upon by the Under-Secretary, was the suggestion of the Transvaal to present the Sovereign with a Crown jewel. It was a kindly thought and did great credit to the hearts of the Colony, but it did not say much for their heads. Did anybody suggest that it was a proper thing when a Colony was not able to meet its expenditure out of its own resources to make a present out of borrowed money, however desirable the present might be. He might be of a suspicious mind but it seemed to him that there was a great deal of stage management about this matter. It was to him most suspicious that a thing which might have been announced at any time during the last few months should have been announced only a few days before this debate. He was not sure, but he would imagine that the right hon. Gentleman had something to do with this admirable stage effect.

said then he had only given the right hon. Gentleman credit which he did not deserve. [Cries. of "Withdraw."] There was nothing offensive in what he had said.

said the right hon. Gentleman had said it was offensive to the Colony. Perhaps the right hon. Gentleman would allow him to say that he was quite as good a judge as the right hon. Gentleman as to what was a proper thing to say with regard to the Colony. The last point of the right hon. Baronet was that we should look at the loan as one which we might be called upon to take up. Was that a contingency which. we could possibly overlook in the present case? It was a contingency that was in every case possible, but in view of the statements quoted by his right hon. friend, it was in this case an absolute certainty that if the depression in the Transvaal continued the British taxpayer would have to pay this £5,000,000. Hon. Members might think that an exaggeration, but in this connection he would like to ask the Chancellor of the Exchequer the meaning of the two parts of his speech. On the one hand the right hon. Gentleman said that without our assistance the Transvaal could not float this loan, and on the other hand that their assets were so good that anyone would advance a loan upon them.

No, no, I did not say that. What I said was that, as my right hon. friend had said, without our assistance the Transvaal could not raise the money.

said that that was so, but the right hon. Gentleman then went on to prove that they could easily raise the money because trade was so good—because their assets were so good. In what way would the right hon. Gentleman contradict that? Looking at the position as disclosed in the statements of the Colonial Treasurer, they found in the first place that even in the Estimates prepared for this year there was admittedly a deficit. The Colonial Treasurer then showed they had a means of making that good. No promoter of a company ever failed to show what a handsome profit he was going to make, but the careful investor not only looked at their statement, but examined it. One of the items of this £5,000,000 loan was to be employed in public building: £100,000 was to be utilised in that way, and they were seriously told that the spending of the £100,000 would result in a saving of £50,000 a year, or half the amount. Would anybody reading that in the statement of a company think it was either credible or possible? The next point to which he wished to draw attention in these Estimates was that as regarded every item of revenue which in any way depended on trade there had been a continual fall. In Customs there was a fall of £2,000,000, in Posts and Telegraphs £35,000, in Transfer of Property £45,000—in every item there was a fall, and as his right hon. friend had pointed out, the Government had not yet put before the House the Bluebook in which the Colonial Treasurer said that this fall was continuous, that there was no stopping it, and that he did not know where it was going to end. As regarded the question of the £5,000,000 being reproductive, both the Chancellor of the Exchequer and the Under-Secretary for the Colonies had maintained that there would be an immediate return of profit, but the fact was that this would affect precisely the same class of citizens to whom £2,000,000 had already been given, and of that £2,000,000 it was not possible to receive a penny. But more than that, General Botha himself had admitted that the prosperity of the agricultural districts of the Transvaal depended entirely upon the prosperity of the mines, and therefore the chance of a return depended on the manner in which the mining industry was treated by the Transvaal Government. Taking the next item of what they called reproductive expenditure, there was to be an expenditure on railways, which was a very good thing, but obviously there again there had been a big falling off; the decrease in the traffic had been continuous, and was still going on; no matter, therefore, how much more the Government spent, they could not get more return. Any return for the money depended on the encouragement of the mining industry, on which every other industry the Transvaal depended in turn. The first duty of the Government, looking on this as a business transaction, obviously was to see that those who were intended to have this power, should utilise to the best advantage the national resources of the country of which they were the governors. Had they taken that step? On the contrary, the right hon. Gentleman, as the avowed object of the Bill, put this as a reason for what the Government had done: they said that they wished to make the new Government independent of the hostility or the goodwill of local interests. He would ask the House to consider what that meant. Here was a country where 85 per cent. of the people lived upon one particular industry. The Government of the country was not in touch with that industry, had no direct interest in it, and he put it to the House whether it would not be a proper thing that the Government should be subjected to any fair and reasonable influence which the people who paid the money could bring to bear upon it. The object of the right hon. Gentleman was to get rid of that influence. What did he mean the House to suppose? He meant it to imagine that his object was to prevent the Transvaal Government from borrowing money from the mineowners. But how ridiculous that was. The Government had taken good care of that. The policy of the Government had itself secured that of all people in the world the mineowners were those the least able to lend money; they were more likely to want to borrow, if they could find anybody to lend to them. The fact was the Transvaal Government had the opportunity of raising money in the financial markets of the world like any other self-governing Colony. The mining magnates could not interfere with them. They could go to the markets of Berlin or Paris, or anywhere else if they did not like London, and they could get money on one condition, namely, that they satisfied the people who were to lend that the country was going to be governed in a reasonable way for the development of its resources. He did not expect hon. Gentlemen opposite to agree with everything he said, but he did expect them to agree with this, that in view of the viciousness of this principle of guaranteeing the loan, and in view of the risk attending it, the transaction was one on which the Government should not have entered without being able to make out a very good case. There was not a single argument which the right hon. Gentleman had used in favour of this loan which could not be applied with equal force to almost any of our Colonies at the present moment. The Government had made out no case. He admitted they had been greatly hampered. They had not been able to tell the House the real motive which alone accounted for this Bill, which was the result of a bargain, made by His Majesty's Government at home with the Transvaal Government for the sake of the party interest of the British Government. That was a statement which he admitted could not be proved except on circumstantial evidence. But the circumstantial evidence was so strong in this case that before any legal tribunal in the world it would hang the criminal, if it were a hanging offence. What was this Bill? They did not need any better evidence than that which had been given by the right hon. Gentleman himself—circumstantial evidence. The right hon. Gentleman had himself told them that the Government started this policy with the determination to get rid of the Chinese. Later on, he had told them that in dealing with the Transvaal Government they had had to enforce a labour policy on the new Government. The fact was that all the wire-pullers had told His Majesty's Government that it was of no use going to the constituencies until they had got rid of the Chinese. That was the necessity. They had the power to get rid of them, if they had chosen, when they came into office; they could then have turned them out bag and baggage on the spot, or if that had been too drastic, they could have made arrangements that they could go on until a certain time, when the whole of them could be taken away. That, in his opinion, would have been the only honest course after the statements they had made. They had not carried it out; they had been afraid to do it. But they had stuck at nothing to get anybody else in South Africa to adopt their policy; they had stuck at nothing to get other men to pull the chestnuts out of the fire. Once before, in these debates, he had given the House an illustration of the depths to which the Government were willing to go in order to buy support. They tried to buy the support of one particular mine-owner on the Rand. It was the most remarkable instance of its kind which had ever occurred in British policy. What were the facts? The Government proposed to give special recruiting facilities to one particular mine-owner. As soon as that had become known, other mine-owners on the Rand urged the Government to appoint a Commission to inquire into the whole subject. The Government refused. Then they gave a licence to this particular mine-owner, and the other mine-owners pointed out that in common fairness they should have the same privilege. "Oh, no," said the Government "we are now going to appoint a Commission to have the whole thing looked into. Until that Commission has reported no new licence will be granted." Everyone knew what it meant. It meant that another preference was given to a particular mine-owner. It meant an amount of money put into the pocket of that mine-owner which it was impossible to imagine, and all taken out of the pockets of the other mine-owners of the Rand. Then followed the sequel. The Government had to put pressure upon the Portuguese Government to get this licence, but by this time the Portuguese Government had realised the utter unfairness of the proposal, and broke the agreement with the British Government, not in the letter but in the spirit. They said, "It is true that we have given the licence to a particular mine-owner virtually that he might come and recruit, but we will not allow him to recruit." This was a breach of an agreement which no self-respecting Government would have submitted to, but our Government submitted to it. Why? Because it was a transaction which could not bear the light of day, because they knew that they dared not, in the face of the world, bring the whole diplomatic pressure of the United Kingdom to bear upon any Government for what was practically a job in favour of Mr. J. B. Robinson. But that was not the only instance of trying to bury support. They gave to the Boers in the Transvaal a representation to which their numbers did not entitle them. What were the facts? His Majesty's Government sent out a Commission to inquire into this subject of representation, and everyone expected that the Report, would be published, but it was not. The Boer Government said "Oh, it is all right; let bygones be bygones." The result was that the Boers got a representation to which their numbers did not entitle them, and the Government naturally thought that they had got their support for the repatriation of the Chinese. They found they were mistaken. They had to come to terms which were more reasonably appreciated by every human being. Votes would not do, but hard cash would. The next transaction was hard cash—£5,000,000 for the repatriation of 15,000 or 16,000 Chinese at the rate of £300 or £400 each. But did hon. Gentlemen opposite think they had got rid of them? When the 15,000 were gone there would still be almost as many as when the present Government came into office. If it took £5,000,000 to get rid of 15,000 or 16,000, it was a simple question of proportion how much it would take to get rid of the balance. The Government had stuck at nothing to get other people to do their dirty work. In that respect they had left nothing undone. He was bound to say that in the policy they had carried out they had been fairly consistent. A few months ago Lord Milner said the policy of His Majesty's Government was not their own, but that it was forced upon them by the wild men who supported them. He did not agree with Lord Milner, because on this question the Government were the wild men. The Government and all their followers were in the same boat, because they were bound hand and foot by the misstatements they made during the election. They had no reason whatever to be afraid of their followers, because when it was a question of Party interests they could be trusted to be docile enough. Since the Chinese election was fought they had found out that at the very time the Government were denouncing slavery in the Transvaal from every platform, they were signing an Ordinance which from every point of view of morality and humanity was infinitely worse than the Chinese Ordinance. The wild men had been tame enough about the New Hebrides Convention, and now they found that a new subject had arisen in the treatment of British Indians in the Transvaal. One of the main grounds upon which Chinese labour was denounced as slavery was the finger print impressions as a proof of identity. That was denounced as being unfit except for criminals. Now the Government had adopted the procedure in regard to British Indians. Another ground upon which Chinese labour was denounced was that the Chinese were not allowed to hold property. That condition was now being applied to British Indians in the Transvaal.

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said that he was strongly opposed to the proposal of the Government on different grounds from those urged by the last speaker. When he returned to the House just now the last speaker was quoting something he had said on one occasion against guaranteeing the loans of a self-governing Colony. There had been two instances of loans to self-governing Colonies since he had sat in Parliament, and one instance of a gift, and he had opposed them. The grounds for opposing this loan were infinitely stronger than the general grounds which applied to previous loans of this character, and he would try to meet the argument of the Chancellor of the Exchequer, which he was aware carried great weight with the House. The Chancellor of the Exchequer had appealed to the House on the ground that it was not right for hon. Members to interfere with the affairs of a self governing Colony, and he put aside as irrelevant the argument addressed to the House by the late Colonial Secretary as to native labour and the British Indian policy of the Transvaal Government. The right hon. Gentleman said that those questions could have no bearing upon his proposal because it was not for this Parliament to interfere in the affairs of a self-governing Colony. But the Government had reserved power to reject measures of that kind. They had already agreed to one measure passed by the Transvaal Government which they had protested against in the fiercest terms. This particular self-governing Colony stood in a wholly different position, because it was entirely different from any other of our self-governing Colonies. He admitted the force of the eloquent peroration of the right hon. Gentleman the Under-Secretary of State, in which he said that this loan was only the harbour charges of the great ship which was coming into port. He admitted that that was so, and it was a very special gift from that point of view. One of the great reductions claimed just now as making the Transvaal solid from the financial point of view was the enormous reduction to be made in the constabulary. What was the strength of the British Army there? What sums of money had they spent and were still spending upon building barracks in which to house the British troops who were doing not military but constabulary work? That fact showed the great difference between this case and the other self-governing Colonies which had been mentioned in the debate, Those who were against the war and the annexation, out of which all these evils had grown, welcomed the general language of the Under-Secretary, but that language fell short of proving the wisdom of granting this loan without securing, by friendly negotiation between equal Powers if they chose, a due regard for Imperial interests as well as for humanity which were not secured under this loan. The Chancellor of the Exchequer and the Under-Secretary for the Colonies had argued as if this was a mere question of humanity, on behalf of which they claimed to interfere. The questions involved were not mere questions of humanity. The position of the British Indians in the Transvaal was an Imperial interest of the first order. How could we hope to make our government popular with the people of India unless we gave our British Indian subjects the same rights in other parts of the Empire and made our rule acceptable to the vast majority of our subjects? Then the position of the natives in the Transvaal was not a Transvaal question; it was a South African as well as a labour question. In the scheme of federation the Transvaal could not act by itself; it must act with our concurrence, and we must take the definite step in bringing about the scheme of federation. A large portion of this money also was to be spent on the Delagoa Railway, thereby affecting not only the condition of the Transvaal, but also of Natal. It was therefore impossible to treat this question as one of internal administration affecting only Colonial affairs. He thought he had given to the House some reasons showing that they could not treat this question in a sort of water-tight compartment as a Transvaal question. The Chancellor of the Exchequer had deprecated prophecy, but the late Sir William Harcourt had prophesied the exact course of affairs now being revealed—the "Rake's Progress" in Transvaal finance, the mistaken calculations, the reduction of constabulary, the retention of the British garrison, and the relations affecting the natives and the British Indian subjects. All these warnings had now come true. The right hon. Gentleman in his speech only mentioned the natives once, but they were always brought in in the prophecies of Sir William Harcourt when these matters were discussed in the last Parliament. The right hon. Gentleman the member for West Birmingham made a pregnant speech on the whole of these subjects, except Chinese labour, to which he was opposed. In 1901, in answer to a question, by himself, when he complained of the worsening of the conditions of the natives under the Transvaal administration, the right hon. Gentleman admitted that the laws relating to the natives were "cruel" and "unwise," and "pledged" himself that at "the earliest moment" revision of them should be undertaken. Yet those laws had gone steadily from bad to worse, and more rapidly since the present Transvaal Government came into power. If the laws were "cruel and unwise" then, they were more cruel and unwise now, not merely from the point of view of humanity, but from the point of view of labour and the Imperial interests of which he had spoken. At that time they expected to get improvement in the laws, and they were told to expect large sums of money towards the revenues of this country. There had been no improvement in the laws, and no money had had been received. On 4th July, Lord St. Aldwyn, then Sir M. Hicks Beach, speaking on the Loan Bill, said—

"Almost every Member who has spoken has dwelt on the question of how much of the large debt, now amounting to £127,000,000, should be imposed on the Transvaal. I have expressed throughout my opinion that a considerable portion of the cost of this war should be imposed on the Transvaal."
He added that his view was a middle one between that of those who thought there was "illimitable wealth" in the mines and that of those who, like Sir William Harcourt, thought the revenue of the Transvaal would not be able to bear anything at all. On 14th April, 1902, Sir William Harcourt attacked the Milner expenditure on the Civil Service, pointing out that it was grossly extravagant, and not in proportion to the revenue of the Transvaal, and on the following day, in reply, Sir Michael Hicks Beach said the Transvaal was able to bear the entire cost of constabulary, the interest on the whole of the Kruger debts, and on the railways, and all the charges of civil administration. He
"proposed to earmark certain sources of revenue and apply them to the service of some portion of the loans raised by us for the war."
He said that besides the £30,000,000—
"subsequent additions would be made on the prospective increases of these sources of revenue."
The House would see how completely Sir William Harcourt's prediction had come true. How did matters stand now? It appeared from the Blue-book that the Transvaal was already making £350,000 a year direct from us, and now another £50,000 a year would be added. And yet, in spite of so large a contribution to the revenues of a self-governing Colony, we could not obtain decent conditions for British Indian subjects and for natives. The difficulties referred to in the Bluebook which had been laid before the House were also touched upon in the speech of the Treasurer of the Transvaal. In the Legislative Assembly on 12th July last, the Treasurer, in moving the second reading of the Guaranteed Loan Bill, said—
"When the announcement was made in England that the Premier had succeeded in raising a loan of £5,000,000 upon the guarantee of the British Government, there happened to be in London at the same time one of the great generals of the great Progressive army, and that great general arranged that he should be interviewed by the Press. The sum and substance of that interview was that the great Progressive army was as dead as the dodo."
This question had been treated in the Transvaal as a party matter, and unfortunately it had been treated as a party matter to-night. He wished to do as little as he could to make it a party matter. He approached it from the point of view of national interest rather than of party prejudice, and he held that this, degradation of the British Indians and of the natives was of far more importance than Chinese labour, because, while native labour in South Africa must be permanent, Chinese labour was merely temporary. In defending the new Letters Patent in December last, the Under-Secretary had expressed the hope that the Transvaal would come up to the Cape standard in its treatment of the native question. Did the right hon. Gentleman still believe that? He doubted whether the right hon. Gentleman would repeat that hope on that occasion. The Under-Secretary had stated that he believed that within a
"few years there would be a movement. in the direction of the admirable system which prevailed in Cape Colony."
The right hon. Gentleman, on 17th December last, said that the case of the British Indians was one on which he felt more strongly. Both were "used by us before the war." The Transvaal Boers would, he hoped, "become the, trustees of freedom all over the world."

was understood to say that he was then defending the interests of small nationalities.

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said there were other references to British Indians and the natives which contained that statement of the Under-Secretary's belief. The position since that time had greatly worsened. They had now before them Sir Godfrey Lagden's Report on Transvaal Native Affairs, as retiring Commissioner on the grant of responsible Government. He said—

"Questions have been asked as to what Government has done for the native. It has been urged that we have disarmed them and that they have been treated more harshly than formerly. It is true that they were disarmed…without the aid of a single white policeman.…What has appeared harsh may be that officers under the British Government are bound to carry out effectively the laws of the land. There is no doubt that they have done so. The police have been exceptionally keen and active.…The Pass Laws have been more rigorously administered than they were formerly. Defaulters in the matter of taxation…have been more speedily and effectively brought to book. This activity has given rise to native discontent and to unfair comparison.…The zeal of the officers of the law is a thing which the natives have got to get used to."
That was an admission that there was native discontent, and that it was caused by the facts stated. Under Crown Colony government we increased the taxes on the natives, and the higher rates had been continued. The Hon. Mr. Moor, Prime Minister of Natal, had stated that it was the increase of the taxation of the natives in the Transvaal which was the reason for the increase of the taxation in Natal. We had based our government on the "white male" population. We had excluded all natives from participation in it. We had exacted in an increasing degree rent and labour in respect of what was called squatting on Crown Lands. On that question his hon. friend the Member for Dumfriesshire had carried on a correspondence with the Transvaal Government in which he thought the hon. Gentleman had got the best of the argument. Sir Godfrey Lagden in his Report on Transvaal Native Affairs, said—
"My meetings with the natives followed closely upon the termination of the disturbances in Natal and Zululand. There is no doubt in my mind that these disturbances had a reflective action upon the natives of the Transvaal."
And he went on to say that—
"In some quarters alarm was felt, but in no single instance did any tribes in this Colony commit any disloyal acts."
And he warned the responsible Government of the Transvaal that—
"In some parts of South Africa native thought has taken a distinct shape."
Sir Godfrey Layden added that in the Cape there was a legitimate expression of that native thought as they had the franchise, but—
"In the New Colonies it is not so; there is clearly a significant wave of thought which requires to be realised and recognised."
And he quoted the Report of the Commission on South African Native Affairs of 1904, commending their con- clusions to the consideration of the Government. Now had anything been done in that direction by the Government? Had the Government done everything in their power, or had they washed their hands of the whole native question and the question of the position of our British Indian subjects in the Transvaal? Sir G. Lagden wound up this most important point by saying—
"Under responsible Government where the party system obtains there is the risk of sudden changes, and this makes it more important that opportunities for the expression of native opinion should be afforded."
The Under-Secretary for the Colonies had tried to get rid of recent alarms because, he said, the Bills had been withdrawn, and the Chancellor of the Exchequer was impatient when it was pointed out that the objections to these Bills had not been met. Would they be sane men if they did not take account of what was happening in the Transvaal Legislature? He wished to speak with extreme reserve with reference to the introduction and withdrawal of those Bills. Here were Bills of first class importance in their bearing on Federation and the relations between the Transvaal and the Cape of which the Imperial Government knew nothing and which had been withdrawn. That, he thought, showed a want of cordiality in the relations between the Imperial and the Colonial Governments unless some other explanation could be given. When General Botha was over here he was interviewed by a deputation who took a keen interest in South African affairs, and they got the impression—since confirmed by General Botha himself—that although he was not in a position to improve the legislation on native affairs, yet the administration would be so handled as to make their condition easier than before. That policy did not seem to have prevailed. Not only had the administration of native affairs not been improved, but it had gone from bad to worse, and there had been attempted legislation, although part of the Bill had been withdrawn. It was inevitable that the relations with the natives should have been disturbed by the War. In our dealings with the Transvaal in its desire to obtain control of Swaziland, Boer sympathies might have been revealed in some quarters, but an appeal was made to the Transvaal to show such moderation, wisdom, and statesmanship on that question that the time might be looked forward to when Swaziland would be incorporated in the Transvaal. Those hopes had been checked by the recent policy of the Transvaal Government. Who could say which of the "sudden changes" prophesied by Sir G. Lagden might not touch them when they had a Bill introduced for providing liquor to the natives—a practice which had always been prohibited by universal consent in all parts of South Africa? Then as to the Native Administration of Justice Bill, a summary of it had been published inThe Times andTribune, but these summaries were quite different except in one part. He put a question on 8th August in the House and was informed on the 14th instant that that part of the Bill had been withdrawn. The Bill was published on 3rd August, and it seemed to him curious in the circumstances that the Government had not obtained the Bill by telegram.

said that a telegram was sent to Lord Selborne asking him to telegraph the Bill, but his answer was that it was impossible to telegraph so long and complicated a measure, but that the Bill was reasonable and fair.

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said he was surprised at that. The Bill was published in full in anExtraordinary Gazette on 3rd August, and it was on the faith of that that the telegrams were sent toThe Times and theTribune. He wondered that the officials in the Transvaal had waited for the Home Government to make inquiry instead of despatching at least a summary of so extraordinary a measure. The newspaper summaries agreed in this, that for the first time the Minister for Native Affairs was to have the power to remove any tribe or any native to any part of the Transvaal—that was, to have the power to break through all the native reserves and to break down their whole tribal system, and that at the moment when there had just been reported a disturbance of the natives in Natal and Zululand, that the conduct of the Trans- vaal natives had been admirable, and that there was an absolute necessity of giving reassurances to these natives. On the facts at present before the country he could not take the same view as Lord Selborne that the Bill was reasonable and fair. The right hon. Gentleman had said that the Governments of the Cape and Natal had both proposed Federation and the Home Government must wait; they "could not lead but must follow." The Imperial Government was dominant in South African native affairs inasmuch at they were responsible for by far the greater portion of South Africa. It was this Government which was responsible for that dreadful problem of a colour bar being established in regard to the franchise. In giving this guarantee, in forcing a close financial relation in the future between this country and the Transvaal just as previous guarantees were forced upon this House, no one could shut his eyes to the bearing the Transvaal finances would have on the Federation of the South African Colonies. Dr. Jameson, Prime Minister of the Cape, announced a short time ago—

"We have not departed, nor do we intend to depart, from the principles enunciated by the late Cecil Rhodes and confirmed and acted upon by Lord Milner. You may rest assured that the present Cape Government will not consent to any scheme of Federation of which a condition is the sacrifice of the coloured people. Our efforts shall be directed to bring the other States up to the level of the Cape Colony in their policy, and not the Cape to go down to theirs."
The warning from the Cape concurred with that from Sir Godfrey Lagden who was our chosen representative, and the Government could not afford to neglect the grave advice which had been received from him.

said his objection to this Bill was a very simple one, namely, that we should use the credit of this country for the purpose of assisting a Crown Colony which denied to our fellow countrymen in that colony the rights which were generally accorded to civilised men. He was referring to the treatment of British Indians. It was an old story with which the House was very familiar, and he thought that the vicious treatment by the Boers of the British Indians was part of ourcasusP belli against the Transvaal. He did not wish to go into details, but he might quote the statement of Lord Lansdowne made in November, 1899, when he said—

"Among the many misdeeds of the South African Republic I do not know any that fills me with more indignation than its treatment of these Indians."
The War had passed over South Africa, our authority had been established, and yet to-day the case of the British Indian was worse under our flag than it was under the flag of the Republic. He had in his hands testimony to this effect. A correspondent wrote to him that he noticed in this mail's report of the proceedings in the Transvaal Legislative Assembly of the 17th ultimo the following—
"In reply to a question by Mr. Lindsay, the Colonial Secretary said: 'That in pre-War days several laws were passed regarding Asiatics, but they could never put these laws into force because as soon as they started to do so the British Government interfered. Now, of course, they were going to enforce the law properly. Once the coolies were out of the Transvaal, they would remain out of the Transvaal, which would be much less trouble."
That was sufficient evidence of the fact that the position of British Indians was worse under the British flag than it had been under the Boer flag. For this country to tolerate such a state of things was an act of national perfidy. What was the excuse of the British Government? They said: "We cannot interfere with a self-governing Colony." He would deal with that general proposition presently. But he submitted that in this case the excuse did not apply. Here we had a case in which we were asked for a loan of —5,000,000, and even in the case of a foreign state we could have made conditions. The Chancellor of the Exchequer said that there had been no bargain: that was just what he complained of. The request for the loan gave us a lever which the Government might have used if they had chosen to do so. It came to this, that we backed a Bill for £5,000,000 on behalf of the South African Colony, but whatquid pro quo did we get? We were apparently going to get nothing back but the great auk's egg. This Bill was going to be backed by a Radical British Government in order to bolster up the failing economic situation in South Africa, but he objected to our going to the rescue of any bad economic system. It was no part of our business to provide money in order to mitigate economic depression in the Transvaal or elsewhere. The object of the Bill was to get the Transvaal out of its present economic crisis, and if we did that it was the duty of the Government when thus pledging our credit to insist upon conditions which would redeem our honour. They had preferred, however, to become partners in a piece of legislation which was an outrage upon English traditions and which inflicted a gross insult upon 300,000,000 of our fellow subjects. What was this legislation? In spite of Lord Selborne's profuse promises it left unredressed grievances of which Indians lawfully resident in the Transvaal complained. They could not own land, although the right hon. Member for St. George's, Hanover Square, and Lord Elgin had insisted that they ought to have the right to acquire property in the premises which they occupied for business purposes. Natives, however, could own land, but although Indians were classed as "natives" so that they might not get the franchise, they were classed as "non-natives" so that they might not own land. Both views could not be right, and yet His Majesty's Ministers had given their sanction to this legal absurdity. The Indians were denied the municipal franchise though they were large ratepayers; they were excluded from municipal tramcars and from certain trains. What was the excuse for this? It was said that they belonged to a different civilisation, but in India they were accustomed to the very rights which were denied them in South Africa. They had the right to own land, they had the right to move freely from place to place, and the right to ride in any train or tramcar that they chose. They were accustomed also to the use of the municipal franchise and to serving on legislative councils. For three generations they had been accustomed in India to the liberties denied them in the Transvaal. But now a new insult was conveyed by the Asiatic Law Amendment Act sanctioned this session, which required every British Indian over eight years of age to take out a certificate impressed with his ten digits. The Indian could be called upon at any time to produce his certificate by a policeman. When General Botha was over here he was interviewed by representatives of the Government, and in June last the Under-Secretary was asked whether General Botha gave any assurances in the course of conversation with the Government on this point. To that question the Under-Secretary replied—
"He did give an assurance that, in regard to the regulations to be framed under the Asiatic Ordinance, he and his Government would endeavour to remove from the regulations some of the points on which they have been criticised. But any such changes had better be examined when they are made the subject of public statement in the Transvaal Legislature."
That answer was given on 6th June. On 18th June, in the Transvaal Parliament General Botha was asked by Sir George Farrar in reference to these promises—
"What disabilities in the Act will be removed?"
And the answer of General Botha was
"None."
He ventured to say that if General Botha thus played fast and loose with words His Majesty's Government were under no obligation to him. Lord Elgin had pooh-poohed the objections of the Indians and said that they were merely ,sentimental. But, he asked, "did sentiment count for nothing, and did man live by bread alone?" In the East poverty was still respected, and he would like to know what right Lord Elgin had, secure in liberties guaranteed to him by English law, to treat with contempt and to sneer at the sentiments of our Indian fellow-subjects?

said he was sure Lord Elgin never sneered at the sentiments of our Indian or Asiatic subjects. He had ruled over them for several years and had the greatest sympathy with them.

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said he apologised for the word "sneered," and willingly withdrew it, but he did think that the noble Lord had shown indifference in the matter. Many of the Indians to whom this Act applied were wealthy merchants. Their signature, even their word of mouth, was sufficient for transactions amounting to thousands of pounds. It was the wearer who knew where the shoe pinched. The men who had lived in the Transvaal for twenty years or more, and whose whole fortunes were bound up in it, were risking everything rather than submit to this humilation. He would like to call attention to the case of Mr. Ally, who addressed at least a hundred Members of the House and whose speeches created a most favourable impression. Mr. Ally wars born in Mauritius but lived over forty years in South Africa. He was now leaving the Transvaal with his wife and children, and his mother, aged ninety-five years, rather than submit to this new legislation. There was on the part of the people of this class a unanimous movement of passive resistance to the action of the Transvaal Government. Even worse procedure was contemplated. The Transvaal Government had recently brought in a new Immigration Restriction Bill which gave power to the Government to expel from the country any persons who failed to comply with the provisions of the previous Act. Under this Bill responsible Indians, whose only crime was a sense of self-respect, were classed with pimps and procurers. They could be arrested without warrant, and after arrest the burden of proving that they were legally in the country or of proving their innocence was thrown upon them. Under this law Mr. Naoraji, Sir Mancherjee Bhownaggree, and Ranjit Singh, loyal and honoured subjects of the King, would be excluded from a portion of his dominions. That might not be a hardship to them, but it would be to those whose homes were in South Africa. He would like to refer to a Memorial sent in November, 1906, to Lord Elgin from five Indian students from South Africa, now studying in England. It ran—

"We are all students from South Africa, four of us studying for the Bar, and one of us studying medicine.…We are all of us either born in or brought up in South Africa, and to us South Africa is more our home than India. Even our mother-tongue is English, our parents having brought us up to speak that language from our infancy. Three of us are Christians, one a Mohamedan, one a Hindu."
The Memorial went on to say that though they would obtain in England diplomas entitling them to exercise their professions in any part of the British Empire, they would not be able to avail themselves of that right in the Transvaal unless they succeeded in obtaining a permit to enter that Colony. This, if obtained, would have to be impressed with their ten digits, and they would have to produce it at any time on the demand of any policeman, who might march them off to the police-station to prove their identity, perhaps on their way to conduct a case in court. The Memorial concluded by appealing to Lord Elgin to consider the anxiety that such a proposal must engender in the minds of men—
"Who have lived in England and breathed its free atmosphere and who are here being nurtured in the teachings of English writers whose very names are a watchword for liberty."
These men were thus treated solely because they were Indians. No such restrictions were imposed on any Europeans. The off-scourings of Southern Europe were freely admitted into the Transvaal. He noticed that the last immigration Bill made special provision for Yiddish, a language used by the Jews of Southern and Central Europe. It was certainly curious that the very persons against whom this House passed an Alien Immigration Bill a years ago were admitted into the Transvaal whilst our own subjects, cultivated, refined, and capable, were excluded. Another curious thing was that alien Indians were better treated than British Indians. He noticed a case recently of an Indian student whose home was at Delagoa Bay. After a visit to England this man wanted to return to Delagoa Bay via the Transvaal. Permission was refused and he went to Delagoa Bay by sea. He then applied for a temporary permit to visit Johannesburg and Pretoria. His application was treated as coming from a British Indian, and the permit was refused. But he was born in Portuguese India, so he next applied through the Portuguese Government and at once received permission. So that it came to this, in a British Colony it was an actual disability to be born under the British Flag. This was the situation which the Government tolerated, sanctioned, and endorsed. Yet they claimed to be the heirs of the Party which Mr. Gladstone once led. If he had been alive to-day the whole country would have wrung with his denunciation of this dishonour to our flag, of this betrayal of the principles on which the Empire was founded. What was their excuse? It was that they could not interfere with a self-governing Colony. His answer was that the Transvaal was not a self-governing Colony. It was an oligarchically governed Colony. The great majority of the people of that Colony had no voice in the government. We had endowed a minority of the population with the power to govern all the rest. His Majesty's Government recognised that it was not a truly self-governing, Colony for they reserved to themselves in the Letters Patent the power of reviewing all Bills dealing with non-Europeans. The Government made that reservation and then refused to act upon it, so that the responsibility was really theirs. He went further and said that no Colony had a right to commit acts which were injurious to the welfare of the British Empire as a whole. In this connection he would like to draw a contrast between the United States of America and the British Empire. The position of a State in the American Union was very different to the position of a self-governing Colony. State rights in the United States were primary. That was to say, the separate when they Colonies, were fused together in one federation, took with them their original rights, whereas in the British Empire the powers of the Colonies were delegated by us. In the British Empire the first and last words rested with us, because it was we who maintained the force that defended the Empire. Towards the maintenance of that force the only element outside the United Kingdom which contributed was India, and it was well to remember that it was troops maintained on the Indian establishment which saved Natal from being overrun by the Boers. Indians in Natal also volunteered, but were not allowed to fight. They were allowed instead to act as bearers and risked their lives to save the wounded. Not only had we the right to enforce our will on the Transvaal, but we had the power. The Transvaal was absolutely dependent on our bounty even for the maintenance of troops employed on ordinary police work in the Colony. The troops were wanted for the money they brought, and one of the promises extracted by General Botha was that the troops should not be removed without giving him due notice, because of their economic value. The Transvaal was a suppliant for our charity, and yet we were told we could not interfere with what they were doing with our subjects. The whites of the Transvaal were afraid of being overrun by coloured races. His answer to that was that South Africa was not a white man's country, not because the land was not suitable, but because white men would not do rough manual work there as they would in England, Canada, and Australia. The right hon. Member for West Birmingham, speaking on this subject last year, said—
"I do not suppose anybody suggests that whites should be employed as labourers on Boer farms."
The Boers wanted blacks to work for them. Even if they were to get rid of the 13,000 Indians in the Transvaal they could not get rid of the million natives who made South Africa a black man's land. While the white population was stationary or declining, the black was increasing enormously, the reason being that whilst the whites were nearly all bachelors the blacks were very much married men. It would become more and more a black man's land, and the question we had to ask ourselves was whether in addition to the handful of whites we were to admit another handful of Indians into this black man's country. Why not? Indians would not go there if they were not required. They must obtain credit from the wholesale dealers and they must find customers for their goods. As a matter of fact the Indian got credit more easily than the white traders and did a flourishing trade among the whites as well as the coloured races. The complaint against them was not that they were poor, but that they were successful. He had seen letters in which it was stated that these Indians dared to ride to their business in their own carriages. Colonel Stone, formerly District Commissioner in the Standerton district of the Transvaal, wrote to theNorth American Review in 1905 pointing out that the Indian traders were industrious, sober, and trustworthy, that they managed their business well, and treated their employees well. The white storekeepers, according to Colonel Stone, represented every European nationality down to the lowest type of Jew from South Eastern Europe. On the other side Mrs. St. Clair Stobart wrote in theFortnightly Review this year in the interests of the white storekeeper. She admitted that in the large towns the white traders could hold their own, as in Calcutta where there were numbers of whites competing with Indians in storekeeping, in the courts, and as medical practitioners. But Mrs. Stobart said that we could not compete in the small towns. Boer customers required long credit, and therefore storekeepers must also do a cash business. But the British Indian was so patient in dealing with the Kaffirs that he got the business which would otherwise go to the white traders. The British Indian succeeded simply on his merits. The Indian succeeded because he was more patient and more courteous in dealing with the Kaffirs. Was it really contended that the superiority of the white race in South Africa depended upon reserving to white men, who might be Poles, or Greeks, or Levantines, the exclusive right to sell groceries or dry goods on cash terms to Kaffirs and on credit to Boers? Was it for this that 20,000 British lives had been laid down in South Africa, to give cash terms to the Kaffirs and not to the Boers? Was it for this that we had spent over £150,000,000? It was untrue to allege that the admission of the Indians meant the exclusion of the whites. The Under-Secretary for the Colonies some days ago had given figures on that point. He had told them that the Indians were first admitted into Natal in 1860, when the white population was 12,000, and the trade of the Colony was in a very bad way indeed. To-day the population of Natal was 95,000, and the Colony was doing remarkably well. And there was this striking fact, that though the Indians were engaged in skilled trades in Natal, the white artisan held his own as shown by the figures. The real basis of the supremacy of the whites depended on the superiority of the individual white worker. If that failed, supremacy disappeared. He spoke as a white man; he spoke as an Englishman. It was because he believed in his race, because he believed in his country, that he was opposed to these artificial barriers against other races and other nations. He held that competition developed our energy, and that in turn enabled us to maintain our supremacy. And of this, also, he was certain, that our dominion would not endure unless we made ourselves worthy of our responsibilities, by the justice of our rule, as well as the strength of our arms. Therefore, he appealed to the House to reject this Bill for bolstering up the credit of a Colony which under the shelter of the British flag insulted and oppressed British subjects.

said he quite agreed that the treatment of British Indians in South Africa was a disgrace to this country and to Parliament. On many occasions explicit assurances had been given to the British Indians resident in the Transvaal that we would protect them. In 1895, the right hon. Gentleman the Member for West Birmingham took a very strong stand against the South African Government and their treatment of the British Indians. On one occasion the Colonial Office actually vetoed a Bill in which the Natal Government had introduced an amending law so as to prevent British Indians from being put on the electoral roll. He thought the House would agree that this was strong action against the Colony in relation to their treatment of the British Indians. But on another occasion the right hon. Gentleman told the Boer Government frankly that he did not think they were doing what was right in excluding British Indians from the opportunity of doing a legitimate trade as legitimate business men. The whole grievance lay in this. In the first place, one of the main points that drove us to war with the Boer Republic was their treatment of the British Indians resident there. Under the old law of 1885 there were disabilities imposed by the Boer Republic on the British Indians, and time after time we made protests, with the result that the law became inoperative in many of its most stringent forms. What did they find? When peace was proclaimed, and when we constituted a Crown Colony of the late Boer Republic, some of the most stringent provisions of the law of 1885 were revived and imposed on the British Indians resident in the South African Colonies, so that they were worse off under British rule than they were under the old Boer Government. Anyone who knew anything of the subject would readily understand how at a mass meeting the British Indians passed two sweeping resolutions. The first resolution respectfully urged the Legislative Council of the Transvaal not to pass the draft Asiatic Ordinance in view of the fact that—

"(1) It is, so far as the Indian community of the Transvaal is concerned, a highly contentious measure; (2) it subjects the British Indian community of the Transvaal to degradation and insult totally undeserved by its past history; (3) the present machinery is sufficient for checking the alleged influx of Asiatics; (4) the statements of the alleged influx are denied by the British Indian community; (5) if the honourable House is not satisfied with the denial, this meeting invites open, judicial, and British inquiry into the question of the alleged influx."
The second resolution requested the local government and the Imperial authorities to withdraw the draft ordinance for these reasons—
"(1) It is manifestly in conflict with the past declarations of His Majesty's representatives; (2) it recognises no distinction between British and alien Asiatics; (3) it reduces British Indians to astatus lower than that of the aboriginal race of South Africa and coloured people; (4) it renders the position of British Indians in the Transvaal much worse than under Law 3 of 1885, and, therefore, than under the Boerrégime; (5) it sets up a system of passes and espionage unknown in any other British territory; (6) it brands the communities to which it is applied as criminals or suspects; (7) the alleged influx of unauthorised British Indians in the Transvaal is denied; (8) if such a denial is not accepted, a judicial, open, and British inquiry should be instituted before such drastic and uncalled for legislation is enforced; (9) the measure is otherwise un-British, and unduly restricts the liberty of inoffensive British subjects, and constitutes a compulsory invitation to British Indians in the Transvaal to leave the country; (10) the meeting further and specially requests the right hon. the Secretary of State for the Colonies and the right hon. the Secretary of State for India to extend the Royal sanction and receive a deputation on behalf of the British Indian community of the Transvaal in connection with the draft ordinance."
Subsequently a deputation was appointed to wait upon Lord Elgin, who, apparently having made up his mind on the question, frankly told the deputation, which was accompanied by several Members of Parliament, that he did not think he could do anything in the matter. But in spite of the strong statements and requests sent over by Lord Selborne in repeated despatches that the British Government would sanction a law that was attempted to be carried by the Legislative Council, Lord Elgin, let it be said to his credit, flatly refused to allow the ordinance to be carried in the Legislative Council until Letters Patent were granted for self-government in the Transvaal. One would have thought, from the action of Lord Elgin, that this Government and this Parliament would have certainly stiffened their back on this matter. But quite the contrary had been the result. When self-government was granted to the Transvaal, three or four laws were carried which had made the position much worse for the British Indians, who belonged to a civilisation older than our own, who could not be classed with the Kaffirs or Zulus, and who were most capable men, orderly, sober, and industrious. It was these men, British subjects, who were deprived of civil, social, and economic rights. When a man was deprived of those rights, be was a slave. They could not get away from that fact. These British Indian merchants were not allowed to trade in the ordinary way; they were watched by policemen, and chevied in every direction. For the life of him he could not understand why they should start self-government in this Colony by imposing disabilities of that kind upon British subjects. Not only that, they got the colour line drawn. Anyone who knew anything of that subject was aware that there was a great deal of difference between British Indian subjects and the ordinary Kaffir or Zulu. Personally, he did not believe in the colour line at all. He admitted that there were differences existing in the Colonies which might induce people to take a different view, but his point was that the colour line ought not to apply in any way to British Indian subjects in the Transvaal and generally over the South African Colonies. There seemed to be a conspiracy, a kind of compact among the South African Colonies, to come to some agreement to make this colour line relating to British Indians uniform over the whole of South Africa. In view of the strong action taken by the right hon. Gentleman the Member for West Birmingham, and in view of pledges made on public platforms up and down the country, he could not understand why they should let slip the power of bargaining in behalf of our British Indian fellow-subjects. He thought the position taken up in South Africa on this subject was largely taken up by the Jew, the Russian, and the German, many of whom could not speak English. They were the people who were trying to force the hand of the Transvaal Government and other South African Governments to take up this attitude against Indian subjects. The real reason had been voiced by Lord Selborne himself. Not long ago he (Mr. O'Gryda) asked a question in this House as to whether it was the intention of the British Government to protect British Indian subjects from the disabilities imposed on them by the late Transvaal Republic. The reply he received indicated the reason for the opposition taken to the British Indians in the Transvaal, and it showed clearly the quarter from which the pressure had come which induced Lord Selborne to take the action which he took. The reply was that the Asiatic law secured an improvement in the position of Asiatics in South Africa, and at the same time allayed the dread of a large increase in Asiatics. The whole question was one of trade jealousy. Let them take as an example his own union in London. Every German and French workman who came over into this country transferred to their union. If they could not hold their own in trade against other nations they ought to get a better knowledge of the trade. The scourgings of Europe went over to these Colonies and set up little bucket shops, and the Indian subjects who had helped to build up the prosperity of the Colony itself, and played such an important part in the War as loyal subjects, found that these men were able to undersell them. Why were the British Indians oppressed in this way? Simply because they were more sober and more industrious and better men of business. The Chancellor of the Exchequer said that the Government had reserved to themselves certain powers with regard to legislation carried by the Colonies which the Government could exercise if that legislation was of a wrong character. They had permitted three Acts of legislation last year which imposed disabilities upon our Indian subjects in the Transvaal, disabilities which, to him, would be absolutely intolerable. He wished to utter a strong protest against the action of the Imperial Government in allowing pressure to be put upon the Colonial Government to carry Acts of that kind. He hoped the Amendment would be pressed to a division, and although he did not agree with it in its entirety and wanted to see the loan guaranteed, yet upon the single point of the way in which they were treating their Indian fellow-subjects he should vote against the Government.

said there was a great deal of force in the remarks which had been made by the hon. Member who had just sat down, the right hon. Baronet the Member for the Forest of Dean, and the hon. Member for Preston in bringing before the House the question of the treatment of British Indians in the Transvaal. At the same time it did not appear to him that there was any direct connection between the treatment of the British Indians in the Transvaal and the subject matter before the House, which was the guaranteeing of the loan of £5,000,000 to the Transvaal. If the complaints were justified it was the duty of the Home Government to see that the Colonial Government secured proper treatment for all the black races under their control in the manner which had been laid down by the Government of this country. The Bill before the House had no direct bearing on the treatment of British Indians, and it appeared to him that there was full justification on the part of the Government for asking the House to consent to the Bill which had been introduced by his right hon. friend that afternoon. We had spent millions of money in South Africa in recent years, and there had been violent controversies as to the expenditure of that money. It must be the desire of everyone that the Transvaal should emerge at as early a date as possible from the state of hopeless oppression in which it now stood, owing largely to the events of recent years. It would be a short-sighted policy if in order to maintain certain ideals as regarded Imperial doctrine they refused to help the Transvaal in guaranteeing this loan because it was now a self-governing Colony, when by helping them they would be able to place the Colony in a satisfactory condition, and to a certain extent do something towards justifying the immense sums of money which had been spent upon that country in the past. The chief reason why he expressed his approval of the loan was that part of it was going to be devoted to land settlement in South Africa. He regretted that that question had not been specifically included in the Bill, but he took it that the statement of the Under-Secretary for the Colonies was made upon full authority, and that they could rely upon the fact that when the loan was raised there would be £85,000 specifically allocated to the Land Board. In his opinion there was no sum of money which would be spent for better purposes. There was no department in South Africa to-day where money was more urgently needed than to help the settlers. The 600 settlers in the Transvaal were in many instances in a most precarious and distressed condition. This was due to several causes, and from all the reports he had been able to obtain they were causes over which the settlers themselves had very little control. There had been bad seasons, and the crops had been disastrous; there had also been abnormal ravages of locusts and diseases, which had caused great depression and largely contributed to the diminution of the earnings of the land settlers. In addition to these natural disabilities, which were all the more severe from the fact that they had come in the early days of their settlement, there were other causes for which the settlers were not themselves responsible. It had been proved that in a large majority of instances the land which had been allocated to the settlers was considerably over-valued, and consequently the instalments to be paid had been abnormally high. This might have been due to natural causes at the time, and to the fact that there was a very small amount of land and a large number of applicants. To a large extent it was due to the fact that those who valued the land did not possess that skilled advice which was necessary. In addition to all these things the settlers had to work in the early years of their occupation under severe conditions imposed upon them by Ordinance, and they had been obliged in the first few years to build houses for themselves. Something like £49,000 had been expended in permanent improvements amongst the settlers, and only something like 25 per cent. had been refunded by the Government through the Land Board. This had gone a long way towards crippling the settlers, because every penny they should have been able to place in the land and invest in stock had had to be allocated to purposes of permanent improvement. Probably one of the most useful purposes to which the £85,000 could be placed in the early days would be the temporary relief of settlers. They had spent £39,000 on the permanent improvement of their holdings, and that might be allowed to stand as part of the capital charge on the holdings to be paid off over a period of years. The House generally would agree that the money should be spent on the most urgently needed purposes. He asked to what extent the Home Government would have control over the Land Board in regard to the disposal and allocation of the money placed in their hands. Would the Land Board be able to dispose of the money on their own responsibility, or would they have to come into communication with the Colonial Office in order to get sanction for the way the money was to be spent? No statement had been made on that important point by his right hon. friend. It would undoubtedly have been to the advantage of the settlers in the early days if agricultural banks had been established. Had that been done a great deal of the difficulty which they had had to face would have been obviated. He hoped that the money which was to be devoted to the establishment of agricultural banks would be placed fairly and impartially at the disposal of all classes of the community, whether British or Boers. This branch of the subject was not controversial. He was sure he expressed the general view of the House when he said they all rejoiced that a portion of the money had been definitely devoted to the help of our own settlers in the Colony. There was a sum of £500,000 properly due to the Land Board, but he supposed it would now be placed at the disposal of the settlers, and, therefore, they must be thankful for the small mercies which had been granted. If the next two or three years were tided over by the generous treatment of the settlers, there was no reason why they should not be able to prosper. In supporting the loan he desired to express his warm satisfaction that the British agriculturists in the Transvaal had not been forgotten.

said he and his friends on that side of the House rather regretted that the debate had tended to go on the narrow question of Indian immigration in the Transvaal. At the same time it was impossible to deny that the hon. Member for Preston and the hon. Member for East Leeds had a strong case against the Government. It would be grossly unfair not to recognise that the question of the British Indians in the Transvaal was one of great delicacy and difficulty, and he regretted that no mention appeared to have been made of that subject at the time the loan was arranged. The Under-Secretary had offered no justification of the policy of the Transvaal Government in regard to this matter. He hoped the right hon. Gentleman would deal with the subject, because there was a strong feeling in this country, and largely not of a party character, that the policy in regard to British Indians in the Transvaal was one to be viewed with great apprehension. It was remarkable that the new Government of the Transvaal should have passed so many Acts in so short a time affecting British Indians and the natives. The new laws were retrograde and repugnant to the feelings of a great many people in this country. While that was important, he thought it was undesirable that the main principle involved in this Bill should be lost sight of. The main question involved had been largely ignored by the Under-Secretary and by the Chancellor of the Exchequer. A great deal of suspicion had been aroused by the action of the Government in connection with the new Transvaal loan. Peculiar methods had been adopted in proceeding with it. If the Government had approached the question by a broad open road, possibly their action would have been less open to criticism, but, instead of doing that, they had approached it by the most devious by-road they could find. Throughout the Government had been as reticent and strategic as it was possible for them to be. On his side of the House hon. Members were led to inquire the reason for the secretiveness and the unusual diplomacy on the part of the Under-Secretary. It was easy to see why the Government and the right hon. Gentleman had adopted this attitude. It was because they were in reality attempting to wash out the dirty foot-marks of the last election. They knew perfectly well that the reasons for proposing to guarantee this loan were reasons which they could not publicly avow. One of the most remarkable things about the debate was that the Government had been constantly charged with having practically made a bargain with the Government of the Transvaal for the exclusion of the Chinese, and that they had never once denied it. They had denied that a bargain existed on paper, but it had never been urged from his side of the House that the bargain was committed to paper. The right hon. Gentleman was far too astute a politician to do anything of the sort. The fact remained that it had never been denied that the issue of the loan was part of a compact. Perhaps in that connection one of the most useful contributions made to the debate was that of the hon. Member for Preston, who mentioned a conversation he had had with a certain gentleman who was sent out by the right hon. Gentleman to investigate the labour conditions, and on whose evidence a great deal of misapprehension which prevailed at the last election was based. This debate would not have been in vain if it served to bring home to the people of this country the way in which the Government had acted from the commencement of the Chinese labour controversy in 1903. The most remarkable thing about it was that as time went on they endeavoured to make things worse, by every day making attacks on the motives and political morality of those who preceded them. He did not blame hon. Gentlemen below the gangway on both sides of the House, for wishing to get rid of Chinese labour in South Africa. The objections which they had always felt to Chinese and coolie labour were perfectly legitimate and straightforward—because it was cheap, in spite of their assurance that the white workmen of this country did not fear competition with Chinese and coolie labour anywhere. He did not say that they represented the feeling of the majority of Gentlemen on their own side of the House both above and below the gangway, some of whom were not altogether free from the taint of having in one capacity or another, as shareholders or as principals in companies, employed cheap Chinese and coolie labour. That might be a matter of the past, but it could not be denied that hon. Gentlemen opposite had a very real reason to say that Chinese labour should be removed from South Africa. The Labour, Independent Labour, and Socialist Parties made the principal plank in their platform at the general election opposition to Chinese labour and so-called Chinese slavery in South Africa, and so successful was it that the Liberal Party did not scruple to make use of it. The reason for proposing this Bill was perfectly easy to understand. The Government saw that it would be the easiest way to get rid of Chinese labour in the shortest possible time. He thought that the Government might have found a better way of getting rid of it if they had been more straightforward. At any rate, they could not have been less straightforward than they had been in this instance. He was surprised that hon. Gentlemen opposite should vote for this Bill, when so few details had been given as to the methods by which the money was to be spent. He was sure that a great number of them must feel some sympathy with British subjects who went out to the Transvaal to be civil servants at the time of the war, and for whom no provision was made in the Bill to prevent their being harshly treated by the Transvaal Government. There was a moral obligation on Parliament to say that these men should not be harshly treated, but that they should be recompensed if their services were dispensed with. Those who went out to South Africa as civil servants thought their situation would be permanent, and not one of them believed that he would be thrown overboard by the Transvaal Government. Now that this loan was to be granted he maintained that it would be a crying scandal and injustice if these men, after having studied South African affairs for the best years of their life, were to be dismissed from their situations. It showed the hurried way in which the Government had dealt with this matter, that they had introduced the Bill without mentioning the case of these civil servants.

said that as far as their resources went, and without giving any pledge, the Government would endeavour to mitigate the hardships involved; but it was admitted that there were too many civil servants and that they were too highly paid.

said that if there were too many civil servants, he was entirely at one with the right hon. Gentleman in thinking that it was desirable, so far, as possible, to cut down their number; but every effort should be made to give them compensation or a pension.

said there was nothing in the conditions of their original engagement that they were to have pensions or compensation.

emphatically maintained that this country was under a moral obligation to make some provision for them. The right hon. Gentleman had sufficient knowledge of the world to admit that if a man went ,out to South Africa, and took his family with him, he believed that his home there would be more or less permanent, and he made all his arrangements accordingly. To deprive him, therefore, of adequate compensation if his services were dispensed with was doing him the greatest possible harm. It was evidence of how small moment the right hon. Gentleman regarded this question that he had not mentioned it in moving the Second Reading of the Bill.

said he had fully admitted that cases of individual hardship would occur, and that the Government were anxious to do something, if it were in their power, to mitigate that hardship.

said he wished that that assurance had been given more prominence, or that something had been put into the Bill to make proper provision for these faithful civil servants in South Africa. There was a sum of money in this Loan Bill for the improvement of agriculture in the Transvaal. That opened a very wide question indeed. It was said that an agricultural bank was going to be established; if so, they were pledging themselves to rehabilitate the whole industry of agriculture in South Africa, but he believed that the sum mentioned in the Bill would not be nearly enough to set agriculture in the Transvaal on a satisfactory footing. He also believed that the sum allotted for land settlement was insufficient. It was said that the farmers in the Transvaal were reduced to live on mealies, which was the staple food of the Kaffirs, and it was to be hoped that the establishment of a land bank would be followed by better food for the farmers than mealies. Were they to understand that in granting this loan for the establishment of a land bank, this country was pledging itself to continue to give money to the Transvaal until the agricultural interest was put on a satisfactory footing? A friend of his, a large owner of land, who had taken an important part in life in the Transvaal, thought the agricultural depression would increase, and that three or four years would elapse before the industry recovered. It was possible that this money would be spent in the Transvaal to very little purpose, and it was quite conceivable that the Colony might demand more money, and they might have to ask for another loan to assist country districts. All these points had been ignored by the right hon. Gentleman, and they had also been lost sight of in the much bigger purpose which lay behind the reasons which had induced the Government to grant the loan. That was abundantly clear from the attitude of the Government, not only in what they had said, but in what they had left unsaid as to their reasons for the loan. The Party opposite was not ordinarily desirous of assisting the Colonies, and this sudden desire to lend a large sum of money to the Transvaal could only be explained by one reason, and that was that it was the only means of concealing the inaccuracy of their statements at the last election. He was rather glad that the Bill was going to be passed that evening, because he thought the people of this country were coming more and more to see the real object of the Party opposite. And when it was passed, the Bill would remain for a generation at least, as a mouument of the hypocrisy and duplicity of the Radical Party at the last general election.

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having observed that the speech of the hon. Member for Dulwich was the most unhappy in argument and the most deplorable in tone that he had ever listened to in that House, said that those Members on that side of the House who thought strongly on the question of the British Indians ought to press on the Government that the time had now come when they might take advantage of this loan—of this act of generosity towards a new Colony, of which he thoroughly approved—to stipulate for the better treatment of British subjects, and to ask that at any rate in these new rising Colonies they should not be treated worse by us than they were by the Boers. Of course, the question was full of difficulties from beginning to end. It was easy to understand that a small group of white settlers were anxious not to increase the coloured races round them, though one a little distrusted that sentiment when one found the commercial leaders of this new community going out of their way at the same time to import into their midst a large number of yellow men. Still the prejudice against colour was inevitably strong, and it was only men like President Roosevelt who had the grit and the wisdom to fight against it. He would like to see our governors and ministers in the Colonies do the same.

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said he admitted that it was difficult; but more might be done, and he would like to see the effort made. They all remembered proclamations issued by this country in which it was said that there should be no distinction in regard to treatment by reason of race or colour; but against that they had now the confession of Lord Milner that it would be not only impossible to put the blacks on an equality with the whites but "in principle wrong."Civis Romanus sum had quite gone out of fashion; and in its place another Latin. tag,nimium ne crede colori—" do not trust the coloured man too far "—had become apparently the motto of an Empire nearly nine-tenths of whose citizens were coloured men. For these reasons it was all the more necessary to take effective steps, whenever, as now, an opportunity offered, to preserve to British Indians in the Transvaal such a minimum of liberty and equal treatment as the strongest representations on our part could secure. It was common ground that before the War the restrictions put upon British. Indians were very vexatious, and Lord Lansdowne had said that he thought that the Boer treatment of British Indians was one of the worst features of their government. Since the War, however, the conditions in regard to British Indians had become worse. The Colonial Office was not to blame for this, but as soon as the War was over the British rulers of the Transvaal had in fact made the restrictions on the British Indians more drastic than before. The strongest illustration of this occurred a short time ago, when the Supreme Court declared that the old Boer regulations were contrary to law, and when Lord Milner immediately applied for the reimposition of those regulations, which the Courts had just condemned. Surely they were not going too far if they took their stand on Mr. Lyttelton's despatches, and urged the Government, while making this loan to the new Colony, to insist upon the grant to British Indians of the very guarded and limited liberties claimed for them by Mr. Lyttelton's despatch of July, 1904. He would ask the Under-Secretary whether it was not possible even now to make representations to the Transvaal, upon three points at least. One was immigration. If our Empire had any corporate existence, if the Party opposite who had devoted themselves to Imperial unity had any practical scheme of Imperial unity beyond taxing bread and mutton and butter and cheese, we should long ago have laid it down as a condition of Imperial citizenship that a British citizen should be at liberty to go anywhere and live anywhere in the British Empire without pass or permit, certificate or tax. But he admitted that was an ideal which we could not attain at present. We could not stop the Transvaal from preventing the immigration of undesirable settlers; but surely we could, at the last hour even, insist that the Immigration Laws of the Transvaal Government should not be made the pretext for exacting a poll tax from British citizens, or for insisting upon certificates and registration and thumb marks and all the processes of Scotland Yard. Secondly, as regarded locations, we must admit the right of the Colonies to locate and segregate any Asiatics that came into the Colony on the ground of health and sanitation, but we had a right to insist that these locations should be established on that ground alone. We would have no ghettos for British subjects in a British Colony which we enfranchised and endowed; least of all, ghettos imposed at the demand, not of the white population as a whole, but of a small body of local, polyglot traders, themselves dominated, controlled, financed by, and principally composed of Jews. The people of this country were not asking too much when they asked that the British Indian should be free, where-ever his personal habits justified that freedom, to live and move and trade without restriction in any part of the dominions of the Crown. The third and last point which he would submit was this, that British Indians in the Transvaal should be allowed to own and acquire land for all the ordinary purposes of life. The Indians were the best cultivators of garden produce, and in this Colony garden produce was exorbitantly dear;, but quite apart from that they should be allowed to acquire land on the wider ground that they were British subjects. When we were making, and wisely making, this generous grant to a young Colony already labouring under a great debt of gratitude to us, it was surely reasonable to ask at the same time that British subjects in it should be fairly treated, if the rights and obligations of Empire were to have any meaning at all.

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said that as during a great part of the afternoon he had been sitting in a Grand Committee he had not had the advantage of hearing the speeches made in the course of the debate; he therefore hoped the House would permit him to outline the views which led him to the decision to oppose this Bill and support the Amendment of his right hon. friend. The procedure of the Government in this matter was scarcely calculated to attract the support of hon. Members who were something more than a mere mechanical contrivance for registering the will of the Governmental oligarchy. At the fag end of a long session the House were asked to give their assent to a measure which would have the effect of further depreciating the national stock of the country, and which, if passed into law, would create a precedent of far-reaching importance upon the whole question of the obligations of the Mother-country from a financial point of view towards the self-governing Colonies of the Empire. By those who had not heard the speeches made there was only one obvious inference to be drawn. To what were they to attribute this apparently gratuitous, wholly unexpected, and certainly invidious example of Colonial preference? The action of right hon. Gentlemen at the Colonial Conference was not such as to lead anyone to expect from the Government any great generosity of this kind towards a particular part of the Empire. Was this particular grant to be a single isolated example of the benevolence of the Chancellor of the Exchequer, or was the right hon. Gentleman going to be ready on any future occasion with a grant to meet the needs which any one of the self-governing Colonies might put forward. If this was to be an isolated example, then why this favouritism to this particular Colony? The obvious inference drawn by a large majority outside the House was that the Government had been actuated largely by a desire to carry out their somewhat belated promises made at the time of the general election. He looked at this question largely from the point of view not only of people who lived in this country itself, but of English subjects who lived elsewhere. A short time ago when in China he was horrified to find he was confronted with all those infamous cartoons and statements, pictures of Chinamen in chains and being tortured by English employers, which had found their way from the Radical Press of this country to China, where the letterpress had been translated into Chinese type, and were being used by Chinese agitators for stirring up that race hatred, always too near the surface, against Englishmen trading in that country. He had experienced what it was to feel that indefinable latent antagonism of the yellow race against the white, which was under provocation always ready to burst forth in a flood of passionate fanaticism and hatred. He knew the danger of these cartoons being scattered broadcast among people like the Chinese, and he realised how great must be the desire of the Government to do anything they could to consign to a salutary oblivion all their procedure in the last election. Englishmen in China would inevitably come to the conclusion from this extraordinary and surprising offer to guarantee a loan to the Transvaal that the Government had made a bargain with the Government of the Transvaal for the repatriation of a certain number of the Chinese. He would be sorry if any Government in this country were accused of entering into such a bargain, as they would be accused all over the world, and, therefore, he should vote against the Bill.

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said that if the noble Lord had heard the speeches which he admitted he had not, he had no doubt in his own mind that he would have voted the other way. If he had been in the House he would have heard it stated from the Treasury Bench with emphasis that there was not a word or particle of truth in the statement that this was the result of a bargain. The opposition to the Bill, which was of the utmost importance, was based on four grounds. It was alleged that the Government of this country had made a bargain to get rid of Chinese labour; secondly, that we had not made a bargain to get rid of the restrictions imposed upon Indians; thirdly, that there was no precedent for it; and, fourthly, that there was no proper security for the money. With regard to the first two, they were mutually destructive. No bargain had been made in either case, because, to speak quite plainly, no bargain was possible. No bargain was possible with regard to Chinese labour, because the people of the Transvaal were pledged, and their Government were pledged even more deeply than this Government, to repatriate the Chinese. Supposing that General Botha had wished to make a bargain elsewhere by which he could have retained the Chinese in return for better terms from other sources, he would have been utterly precluded from so doing by the pledges he had made before the elections, and that were forced upon him by his supporters—although they had reason to know that it was his own view also. It had been said that the programme of General Botha was repatriation and replacement. ["Hear, hear."] He noticed that the hon. Gentleman cheered that statement as being his last hope in the matter. But surely the hon. Gentleman had not forgotten the speeches which General Botha had made before the election, in which he said—

"Chinese labour must go; we will not have it. We will not have the Chinese either with indentures or without indentures."
Did the hon. Gentleman deny that those words were used? Were they plain enough? How could a man who was Prime Minister of the State, and who had made that statement, do anything other than send the Chinese away? It was impossible that he could do otherwise; there was no basis of argument. [An HON. MEMBER: Replacement.] On the particular occasion to which he referred that was all that General Botha said. He was aware that the word "replacement" had been introduced since. There could be no doubt that General Botha had anxiously scanned the political and industrial future of the country of which he was Prime Minister, and all he had said was that he believed that labourers could be found to replace all the Chinese sent back to their country. Had he good reason for saying it? Did he not know, he who had lived in the country all his life, that if certain measures were taken there would be an ample supply of labour? And they had heard from the Under-Secretary that at this moment there was an immense supply of labour in South Africa. They were told that when prosperity came again, however, that this surplus of labour would cease to exist, that it was only temporary. That might or might not be; that was a matter for the future; the fact remained that at the critical moment, the moment that General Botha foresaw, there was an immense surplus of unskilled native labour. Therefore, he thought he might say that no bargain was made because no bargain could be made. He thought that General Botha's declaration, endorsed by the official declarations of both Het Volk and the Nationalist Parties, and endorsed by the Legislative Assembly by a majority of two to one, precluded them from doing anything else than send the Chinese back to their own country. It was just that those who fought these things, when they were in a minority and could hardly get a hearing, should now call attention to the fact that all they then said about the people of the Transvaal being opposed to Chinese labour had been proved to be right. They claimed in the words of the right hon. Gentleman the Member for West Birmingham, whose antipathy to this cursed experiment was pretty well known, that the principle should be laid down that Asiatic labour should not be introduced until the wishes of the Transvaal had been clearly ascertained. The right hon. Gentleman the Member for West Birmingham had spoken with justice and truth, and had his views been followed much of the evil which they deplored would never have occurred. There was no bargain. How could there be a bargain when the Transvaal on the one side was precluded from making a bargain? The Chinese labourers had got to go; the people of the Transvaal declared it; and the people of this country were still vehemently opposed to that Asiatic labour. Really, to hear hon. and right hon. Gentlemen opposite, one would say that they were like the Bourbons, and had learned nothing. Did they think that, because a few cartoons at the election were too severe, or had been proved in their opinion to be ill-founded, therefore the people of this country had changed their mind? No; the people of this country stuck to the principle that whoever went to a British Colony or came under the British flag should be free, and if they were not considered worthy to have freedom then they were not fit to come under the flag. The second point was that a bargain was not made about the British Indians. Here he thought they must make hon. Gentlemen opposite a present of the difficulties which existed. It was so; it was very unfortunate, but so the matter stood. It might be thought that we should have insisted before we granted self-government to the Transvaal that there should be no differentiation between British subjects, and that all who came under the flag should be free. That was the principle they sustained, but it could not be sustained together with the principles of self-government in Africa or in any Colony.

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pointed out that it was expressly provided in the Letters Patent that a law imposing any disability upon persons not of European descent from which persons of European descent were exempt should be reserved for the Home Government.

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said he was fully aware of the provision to which the hon. Member referred, but it was not quite so far-reaching as the hon. Gentleman thought. It was in fact perfectly possible for real distinctions to be made either here or elsewhere. Colonial opinion was so far divorced from British opinion on this matter that it was impossible to bring them together. If hon. Gentlemen would take the trouble to go through the Returns presented to Parliament they would see a number of cases in which the Colonies had proposed differential legislation and in which it had been vetoed by the Crown, and again proposed with some Amendment and passed. Of course it was easy for us here, who were not threatened by the yellow peril or the black peril, and who had fewer aliens coming to this country than any other country except Norway or Portgual, to set up a high standard; whereas these people in the Colonies who came in contact with the people who were described as of "inferior race," and who, in many cases, were of inferior race, were bound to take a different view. But even making allowances for that, he deplored it; still, if, they were to adopt the principle of self-government at all, they must permit the Colonies to make some differentiation. They had done so in the past, and Liberal Governments had permitted them to do it, and to say that they would not grant tl is loan to the Transvaal because they did not come up completely to our standard, was, he thought, to carry the doctrine too far, because, if we meant to say that, we should have said it before we granted self-government at all. The difference between the Chinese and the Indian problems was complete. In the case of the British Indians in South Africa they were not subjected to the disabilities which caused the Chinese to be regarded in the eye of the British law as occupying a condition of servitude. They were not subjected to disabilities which in the opinion of legal authorities as laid down in our Courts condemned them to a position which was not permitted by the British law. The contract into which the Chinamen entered was legalised by the Ordinance, but otherwise it was such as the Courts would set aside. He knew that would not be denied. He had challenged the right hon. Gentleman the late Secretary for the Colonies again and again to deny that statement. Were it not so, there never would have been a Chinese Ordinance. The Ordinance was passed only to legalise that which by British law was illegal.

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The right hon. Gentleman did not admit it. This was the first time during the controversy of three years that he had ever raised his voice in protest, and it was rather a belated protest. Again and again it had been asserted in that House, and it had been admitted on all hands that the object of the special legislation was to restrict the Chinese to a greater degree than would otherwise be permitted by law. In the case of the Indians this was not so. They were, it was true, subject to certain disabilities, but they were not so violently in conflict with British principles of liberty. It was impossible to make the bargain suggested in regard to the Chinese, and it was not done. It was also impossible to make the bargain in regard to the Indians, and that was not done. It had been said that there was no precedent for this proposal, and that good faith would not be kept. It was true that there was no precedent for the state of things they saw to-day in the Transvaal. Again and again this country had waged war, but never before so soon after annexing a country had they given it complete self-government.

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said the hon. Baronet who represented the City of London did not approve of granting self-government to the Transvaal so soon. He had said so all along and they admired his courage and consistency, but the vast majority of the people of this country did approve of it, and thought the granting of self-government was a wise and statesmanlike act. They were fortified in that view by the opinion of the right hon. Gentleman the Member for West Birmingham. He did not believe that because people were so recently in arms against us that they were more likely to break faith with us on that account. There were some people who believed that it would have been wiser to have maintained what was known as the Lyttelton constitution for another twenty years. [OPPOSITION cries of "No."] Then for how long?

said the leaders of the Boer people who had been chosen to govern the country would be their security. The leaders of the Boer people, upon whom they depended for security of this loan, had been chosen in the hard school of a guerilla war; and as these leaders had been most constant and faithful in war they would, he felt sure, be constant and faithful to their pledged word in time of peace. He thought they could trust the Boer leaders to keep their pledged word. From the day the treaty of peace was signed not a shot had been fired, and the Boers had kept their pledge to the letter. There was another ground why it was wise to guarantee this loan if it was so necessary as they had been told that it was. The Chancellor of the Exchequer had said that it was necessary to continue the work which was begun by the £35,000,000 loan, and he thought the House would do well not to squabble over a small matter like this if it was going to be the means of bringing peace and contentment to a country which had been distracted so long.

said he did not intend to follow the line of argument adopted by the hon. and gallant Member who had just sat down. He had stated that the Boer people, led by General Botha, had from the first said that Chinese labour must go. He (Sir Gilbert Parker) was rather disposed to question that statement, but that was not so much the point at issue. The statement made by General Botha and General Smuts was that the Chinese should not go unless they were replaced by natives. General Botha's words were to the effect that to speak of the intention of his Party to send the Chinese out of the Transvaal without replacing them by natives was stupid and misleading. He was certain that that was his exact meaning. Behind that lay the whole gist of the arguments which had been advanced on both sides of the House as to whether there was any question of an arrangement, written or spoken, between General Botha and the representatives of His Majesty's Government. The Under-Secretary for the Colonies had appealed to hon. Members on the Opposition side to take a high stand and a high view and not to allow themselves to be affected by party considerations. That was a very appropriate attitude for the Minister bringing in such a Bill as this to take, but he thought he was quite justified in replying that the right hon. Gentleman himself was more to blame than anybody else if party spirit had been imported into the proceedings on this Bill. When speaking of the co-operation which the Treasurer of the Transvaal had urged upon the Progressive Opposition in the Transvaal Legislature the right hon. Gentleman had used language which would have excited to riot in most political assemblies. The right hon. Gentleman need not have said, for instance, that the constabulary represented control by force and that the Government were going to replace that with control by consent. Did the right hon. Gentleman suggest that the late Government and his own Government kept the constabulary for the purpose of holding down the people by force? Did the right hon. Gentleman imagine that the words in which he referred to the mineowners were calculated to inspire good feeling in this House? Personally, he came down to the debate with no feelings of antipathy to the Bill, although he had good reason to criticise it. The right hon. Gentleman asked: "Were powerful, hostile, financial interests to be allowed to prevent them getting this loan? "That was the kind of language used when a Minister was appealing for sympathy and co-operation to carry the Bill and when he was asking the Opposition to take the larger view! The Treasurer of the Transvaal Government had made a similar statement and the reply of Sir George Farrer was very similar. The names of those hon. Gentlemen could not be mentioned without jeers and sneers from the benches opposite. They had, however, to approach this matter from another standpoint. He did not wish to be personal or to use thetu quoque argument, but he thought that this question ought to be approached with reserve and care. He agreed in that, but the Government had made it impossible to deal with the Loan Bill without referring to the Chinese question and to the understanding which he and his friends believed existed between General Botha and the Government in relation to the repatriation of the Chinese. The Chancellor of the Exchequer in a reasonable and fair speech breathed good-will, but he omitted the most salient things in the whole of the Bill. There were only four things mentioned in the schedule—the Land Bank, agriculture and irrigation, land settlement, and railways. What enlightment did the right hon. Gentleman give in reference to those questions? He gave no more, and he thought the right hon. Gentleman could give no more, than was given in the Transvaal Legislature, which was not much, and he expected them to vote on this Bill with the meagre information he had given to them. The right hon. Gentleman seemed to think that the finances of the Colony were satisfactory. That was not the opinion held by Mr. Hichens, the late Colonial Treasurer, or by Lord Selborne, or by Mr. Hull, the Chancellor of the Exchequer of the Transvaal. The position of the Transvaal at the present time gave no hope, so long as the policy of the Transvaal Government of deporting Chinese without natives to take their place was continued, of a satisfactory financial condition. Mr. Hull stated that the expenditure had exceeded the revenue by £97,000, and that public works had been stopped. They had been told that there was plenty of native labour, but if there was a surplus of native labour why had the public works been stopped? It was stated that the depression was due to the public works and development works having been stopped in the Transvaal. There was not a particle of evidence that a supply of native labour would be got from Cape Colony, Basutoland, or anywhere else. According to Mr. Hull the depression was becoming deeper and deeper, and he stated that there was little hope of devising means for its removal. The plea as to the soundness of Transvaal finance ought not to weigh with the House in regard to this Bill. [An HON. MEMBER: "Why not?"] He had endeavoured to the best of his ability to state the reasons. No one would be more grateful than himself if the Government did something to make land settlement permanent in the Transvaal, but he wished to point out that they were being lured in connection with this proposal. They were asked to give their approval to this Bill because it provided £300,000 for land settlement and agricultural development. Had the House the slightest idea whether that money was to go for fresh settlers, or to cover new loans to Boer farmers? There were debts amounting to £2,000,000 now due to the new Dutch Government, and naturally that Government would look with great sympathy upon their fellow countrymen in their distress. What he wanted to know was if the new loan the Boer farmers was for their repatriation, and for the relief of distressed burghers. The right hon. Gentleman said that the loan would provide a sum, a portion of which would no doubt be applied to the relief of distressed settlers. He contended that they ought to oppose a Bill, the money derived from which was to go for the relief of Boers, who had been relieved in amount far beyond what had ever been dreamt of. £9,000,000 had been expended by the Land Settlement Board, and £2,000,000 were owing by the Board. Were the Government without a word of explanation going to have land settlement in the Transvaal which meant the putting down of British settlers so as to redress the balance of population between Boers and Britons, or were they going to relieve further the Boers who had had all the relief which ought to be given to them, at the expense of the British taxpayer? The right hon. Gentleman had given the House no light on that subject. Would he or the Attorney-General tell the House why the schedule in the Bill was so limited? Again, as to railways, there was only a vague statement of so much for railways, so much for land settlement, so much for irrigation. The right hon. Gentleman said that the Transvaal had entered into commitments under the Bill of 1903 which should be fulfilled. He agreed with him to this extent, if those commitments were required to be fulfilled at once. The Members of the Opposition in the Transvaal and a good many of the town Dutch said that this Bill ought not to have been introduced until there was some sign of restored prosperty. In 1903 the railway policy in the Transvaal was approved by all parties. Why? Because there was prosperity in the Colony, and much as hon. Gentlemen opposite disliked Chinese labour, he ventured to say that the prosperity of the Transvaal in 1903–4–5 was due to the steady supply of labour. At the root of this whole business was the labour supply; and the development and progress had been stopped because there was uncertainty in the minds of every mine owner and mine manager as to the future. In 1904, Lord Milner said that his railway policy, with a steady supply of labour, would produce good results; and his point was that Lord Milner's policy justified itself with the prospects of a steady supply of labour. Nineteen railways had been started, and there was every belief that the prosperity would be continued, and that the commitments ought to be carried out. But he maintained that if these commitments were carried out now, it would only increase the burden on the Transvaal without giving any advantage to the trade and industry of the country apart from the mining industry itself. Had Lord Milner's policy been pursued and had the prosperity continued, not a single member of the Progressive Party in the Transvaal would have opposed this Bill. It would have been justified in the circumstances, but it was not justified now. When they remembered how the best mining stock was not speculative—

said he supposed that the hon. Gentleman imagined that all stock was speculative. [Cries of "Yes."] Well, he knew hon. Gentlemen on the Ministerial side of the House who were interested in mines, and who would say that the mining industry of the Transvaal was not a gamble. [MINISTERIAL cries of "It is."] It was like every other industry. It paid so much for work and machinery, and it turned out every month of the year so much. To speak of those mines as a gamble was absurd. The mines themselves were not a gamble. [An HON. MEMBER: "Every one of them."] He could not enter into a controversy with the hon. Gentleman, but he would repeat that in 1904 they were on the high way to prosperity in South Africa if there had been a full supply of labour for the mines—he did not care whether it was native or Chinese. Hon. Gentlemen should not attempt, for humanitarian or political reasons, to injure the mining industry in the Transvaal, and their action was absolutely unpatriotic and unImperial. He recognised the sincerity of hon. Members opposite with regard to the British Indians in the Transvaal, and with regard to their desire to get rid of the Chinese; but what he had always condemned was that they continued to misrepresent the facts of the Chinese in the Transvaal, and that, having gained power, they should pursue the policy of attempting to justify themselves by an anti-Chinese agitation, and bundling the Chinese out of the Transvaal without providing the labour to take their place. In spite of the speeches made that evening he ventured to say that no one in the House had really received any clear idea of the consequences which would follow from this Bill, nor had they had any clear expression of opinion of how it would affect the position in the Transvaal except that it would be all right. Did hon. Gentlemen opposite think General Botha or his Government were wholly justified in asking for this loan at the present time, the very worst time at which it could be asked—for a loan the proceeds of which would be spent chiefly on the agricultural population of the Transvaal, and the repayments of which would be made by the industrial population? The Government in his opinion had committed an error for which they would reap ultimate, if not immediate, punishment. The Bill was wholly unjustified in the circumstances. The time had not yet been reached for the repayment of the £30,000,000 loan; but he believed it would have been reached if a different Government had sat on the opposite Benches. The time would come when the wrong done to the people of this country, and to the British people in South Africa, would be brought home to the Ministers who now sat on the Treasury Bench, and when they would be turned out of office, not because of the Loan Bill, but because of the accumulated misdeeds which had alienated the country.

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said that the hon. Member who had just sat down had said that if a Conservative Government had been in office the Transvaal would have been in a state of smiling prosperity. Another hon. Member, the hon. Member for Dulwich, had made the same prediction, and his specific for the evils of the Transvaal was that he and his friends should be allowed to cross the floor of the House. It was difficult to connect arguments of that kind with the very practical policy proposed by the Bill. The debate had touched every conceivable topic of Transvaal administration. The fact that we had not yet reached a satisfactory condition of administration in relation to the native Indians was no reason for opposing this Bill. There were other questions that had been put to the Government which it was difficult to deal with seriously. His right hon. friend the ex-Colonial Secretary had referred to the legal tone of an interruption he had made. He could return the compliment. Legal features marked the whole of the speech of the right hon. Gentleman. He had spoken with animation and with that flexible manipulation of fact which had always been associated with the brilliant rhetoric of thenisi prius Courts of which the right hon. Gentleman was once a distinguished ornament. They were told that the Bill was the exacted price that the Government had to pay owing to some unfortunate bargain into which they had entered in order to get rid of the Chinese. That was the substance of a large portion of the speech of the hon. Member for Dulwich, who explained what the extraordinary bargain was. He had, he said, no direct evidence of that bargain, but very strong circumstantial evidence of such a character that a prisoner charged on such evidence with a capital offence would inevitably be hanged. If the circumstantial evidence which had been adduced by the hon. Member against the Government was all that he had to rely upon, then it was time that the Court of Criminal Appeal was established. It seemed to be imagined that what occurred was this. The Colonial Secretary had said to General Botha: "We want to get rid of the Chinese; what are your terms?" "Five millions." "Done"; and that was alleged to be the principle of the bargain. What were the facts? Before the late election in the Transvaal, General Botha declared most definitely what was his policy as to the Chinese. It was plain that he anticipated that the natives would displace the Chinese, and he announced that it was the intention of the Transvaal Government, as the engagements of the Chinese expired, to send them back to China. It was not intended to break the law or violate the contracts. What was the policy of the Government? It was clear that as the Ordinance could not be terminated the contracts must continue, but at the same time it was declared most positively that as far as their influence extended the indentures of the Chinese would be closed as they expired. So that the policy of General Botha and the long-declared policy of the Government were identical; and in these circumstances the motive for a bargain never came into existence. The Government had conceded nothing, and the arrangement was the natural result of concurrent views on the part of the Transvaal Government on the one hand, and the Government at home on the other. And if, when the two parties concurred, the House was asked to sanction a loan, the whole idea of a bargain was displaced by the evidence. Hon. and right hon. Gentlemen on the other side had rather disparaged this proposal because it was preferential treatment. If there were preferential treatment no doubt it was for good and rational reasons, and why should it not exist? Was the loan of 1903 preferential or not? It was a very large loan, £35,000,000, made to the Transvaal for the development of that country. It was true that the Transvaal Government was not at that time a responsible Government in the sense that it was now, but still it was preferential treatment, because there were other Colonies to which we had never made loans in anything like a corresponding degree. The loan was made to the Transvaal at a time when, if they had not self-government, it had been provisionally promised, and when they were taking what was admitted to be a step in the direction of that goal. Therefore, if at that time the financial emergencies of the Transvaal appealed to the generous consideration of this country and that appeal met with that generous response, was it rational to say now that they were not going to increase that loan of £35,000,000 by £5,000,000 because they had cast upon the Colony the increased difficulties and burdens of self-government, though that was in contemplation three or four years ago, at the time the loan of £35,000,000 was granted? He trusted that this preferential treatment argument would be disregarded in connection with this proposal. There was one part of the speech of the right hon. Gentleman which he could not pass over without observation, he hoped not too severe—he referred to the right hon. Gentleman's animadversion or, more correctly, his purely gratuitous and highly offensive attack on the Transvaal Administration. The right hon. Gentleman referred in strong language, too strong language, to two acts of administration by General Botha's Government. The right hon. Gentleman said there were two scandalous proposals brought by General Botha before the Parliament in the Transvaal, which would have had at this moment the effect of law if it had not been for the action of His Majesty's Government in the interests of the Home Government.

said that he reserved his opinion entirely with regard to the second proposal, because full information was not obtainable. As to the first proposal, that relating to the introduction of liquor, he did say that that was scandalous, and he said it now. With regard to the other, His Majesty's Government had no right to withhold documents which had been in their possession since the 3rd of the present month, and then make it a grievance that the Opposition were unaware of their contents. There were certain reports in accredited newspapers which gave, he understood, a digest of this proposal. If those digests were correct, the proposal was a scandalous one. If they were not correct, and he entirely accepted the possibility that they were not correct, then he reserved his opinion until he saw the document itself.

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said that it was not for a Member of the House, occupying the position of the right hon. Gentleman, to use such language in regard to a self-governing colony until he had had an opportunity of acquainting himself with the facts. The point was not whether the right hon. Gentleman had had all the information which he required. The point was that the right hon. Gentleman's words would be telegraphed to the Transvaal, and those words would wound the feelings of the statesmen who were charged with the administration of that country in the difficult circumstances in which they found themselves. Therefore he felt it his duty, having ascertained to some extent the facts, to point out what the two matters were and how they stood. The first charge was with regard to the Liquor Bill. He did not say whether it was a wise or an unwise measure, but to describe it as scandalous, and to impute moral obliquity in some way, was utterly unwarranted by the facts. The natives in the mines had been allowed what was called Kaffir beer, and the Kaffirs had learned enough of the qualities of beer to know that there was better beer brewed than Kaffir beer, and the result had been the establishment of an enormous illicit business with which the mine owners and the authorities were unable in any way to cope. It was suggested that there should be drastic measures to put down this trade, and to allow the natives the means of being supplied with a very mild, cheap, and pure form of ale. That proposal they were told was scandalous. He did not say whether it was right or wrong, but it was not scandalous. Hitherto in regard to cases tried by the native tribunals, there had been access by way of appeal to the Native Commissioners, and it was now proposed that there should be access to the Supreme Court, and that these appeals should go to that High Court instead of to the Commissioners. The present administration had provided a freer and clearer access to the High Court, and had ensured that the appeals should come before a tribunal mare capable of dealing with them. He had stated the true character of the proposals, and he repeated that the right hon. Gentleman should have made himself acquainted with the facts connected with the policy of the Transvaal before he used language of that kind.

said the two Bills, one of which was in favour of temperance had been withdrawn.

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said he had described the Bill, whether it was withdrawn or not. The fact that a Bill was withdrawn did not mean that it would not bear public criticism, because Bills were withdrawn here for various reasons; and therefore the right hon. Gentleman's rash and random and wild denunciation in the dark of the Transvaal Government's proposals was not justified by the facts. The right hon. Gentleman had furnished them with a new view of Chinese labour, and he thanked him most cordially for it. They had heard that Chinese labour was denounced for the purpose of influencing English opinion during the general election. That was the common view, and it was cheered by hon. Gentlemen opposite. The late Colonial Secretary however appeared to have grown out of that era of opinion and conviction, and he had lifted his head into a new atmosphere. He had told the House that the Government had denounced the Chinese as slaves with a view to frighten them out of South Africa. He said the Government had resorted to intimidation by maligning the Chinese and representing that they were not fit to live with civilised men. The right hon. Gentleman proceeded to argue that as this policy of terror had failed because the Government had found the skin of the Chinamen was thicker than they anticipated, they had next tried to bribe the Transvaal by offering them this loan. That was the kind of rhetoric which the right hon. Gentleman indulged in, but he thought the number of hon. Members who would attach any serious weight to such arguments would be very few indeed. He would like to say a word or two with regard to the main reason why this Bill should be accepted. Even those who had been the most critical in regard to this policy had been most trustful of the political character of the members of the present Government of the Transvaal. The members of the Transvaal Government, certainly General Botha and others, were men who won high respect in the late war. They were men whom this country respected for the way they did their duty to their own country when they were fighting its battles. Having won their respect he asked the House whether there was any reason why they should not transform that respect into a feeling of trust? Was there any reason to believe that the men who had proved so faithful and true to their own country would be entirely false in their professions of loyalty and patriotism in regard to this country?

I have listened to all the speeches made in this debate, and I have only heard two speeches which have given any support to the proposals of His Majesty's Government. The hon. Baronet the Member for the Chippenham Division supports this guarantee of a loan of £5,000,000 because out of it there is a hope that some £85,000 will be utilised for land settlement. Surely that is a very shadowy ground for committing this country to the expenditure of £5,000,000. The hon. and gallant Member for the Abercromby Division gave to the Government that whole-hearted support which he is accustomed to offer them whenever they are in trouble about Chinese labour. I think the hon. and gallant Member feels a certain amount of legitimate pride that on this point his past reputation is beyond all cavilling, and that he may permit himself to take a course of procedure which would be rather delicate for those who were more liable to suspicion than himself. With the exception of the two speeches I have alluded to we have not heard a word in support of this Bill except from the Government. Is it not a remarkable thing that the hon. and learned Gentleman who has just replied to the debate has not said a word in regard to the serious representations made by speaker after speaker upon all sides of the House? I really do not know why the hon. and learned Gentleman intervened, because his observations have been wholly directed to the speech of the Colonial Secretary, who was replied to earlier in the debate by the Chancellor of the Exchequer. I can only suppose that the reason was that the Attorney-General felt the weakness of the Chancellor of the Exchequer's arguments so much that he could not let the matter rest there. I am sorry that I cannot congratulate him on the success of his effort. The Attorney- General, with a certain amount of caricature, alluded to the arguments of my right hon. friend and others, but he has failed to meet them and has left them unrefuted. [Cries of "Divide."] I shall not detain the House many minutes, and I will make my remarks as briefly as I can. I object to the purpose of this Bill. I also object to its matter, and to the security and the position in which the whole transaction places this House and the country. The Chancellor of the Exchequer appears to think that he has answered the criticisms of my right hon. friend when he states that he never said that the whole of this £5,000,000 would be issued at once, or at one time. The statement made on behalf of the Government was that they had agreed to guarantee a loan of £5,000,000, and that statement was made without any qualification that it was intended to issue this loan in small instalments. The time chosen for that, was, perhaps, the worst that any Minister has voluntarily chosen for the issue of a new loan. If the right hon. Gentleman knew at the time that the announcement was made that the money would not be required now, and if he had already formed the intention of not now issuing the loan, I think he was culpably negligent in not at once taking the House and the country into his confidence. I do not think that the right hon. Gentleman knew anything of the kind, or that he had made up his mind. I think he thought that he could get £5,000,000 easily, and it was only when face to face with the City and the disastrous effects of the announcement he had made that he modified his intentions, and that weeks afterwards he made a statement which was intended to be, and was, so far as it went, of a reassuring character. As to the manner in which the loan itself has been proposed I would say that this is a Government that prides itself on nothing more than on its management of financial affairs and on the jealous care with which it guards the financial resources of the country and carries out its financial responsibilities. When in Opposition the Members of the Government and of the Party opposite were never weary of complaining of the late Government and their supporters for voting away money with insufficient information, and without due consideration of the burdens that might be inflicted on the taxpayers. What would have been said if we had produced a Loan Bill for £5,000,000 with information as meagre, and without either the Government or the House having power to watch over the expenditure of the money, as is done in the case of the present Bill? I think we have a right to complain of the meagreness of the information circulated in the Paper on the finances of the Colony. My right hon. friend has already expressed the view that we ought to have been put in possession of the speech of the Colonial Treasurer on the Budget, which has a most direct bearing on the advisability of issuing any loan of this kind at the present time. When that Gentleman introduced the Loan Bill he professed to give some information as to how the money would be spent, but when the Minister was questioned he frankly declined to bind himself in any way as to the allocation of the money. He claimed on behalf of the Government the right to vary at least half of the sum as they thought fit. I quite understand that that would be satisfactory to the Transvaal Legislative Assembly. They control the expenditure, and they can watch over it from day to day, and if the Government spend it in ways that they do not approve, and if objects that they think important are sacrificed in order that more money may be given to others, they call Ministers to account, and stop the evil. We are not in the same position. When we pass the Bill we part with all control over the expenditure, and we have nothing in the Bill which binds Ministers to carry out the scheme which is put forward as the object of the loan, and which is the reason for our guaranteeing it. In regard to the security, I have to say in the first place that if the Chancellor of the Exchequer's rosy assurances as to the satisfactory position of the Transvaal are correct, I cannot see why we should guarantee the loan for them at all. If they are in a position to show that with wise economy, and with ordinary good administration, they are able to meet all their liabilities, why are we called in to guarantee a loan? The fact of the matter is that they are not in a position to show that. It is all prospective and all speculative, and the assurance they can give of their ability to pay is not sufficient for those who, when asked to lend, only demand that they shall have sufficient security forthcoming for the money. But that is not all. The Chancellor of the Exchequer, in order to show that large reductions of expenditure are easily within the reach of the Transvaal Government, singled out as the largest subject of retrenchment the South African Constabulary. The reduction on the South African Constabulary would mean a saving on the police charge, while the whole of the military force is still maintained in the country. It is, in other words, saving a charge which is local in order to transfer the burden to shoulders which are Imperial. The only reason why the Army is maintained in South Africa at the present figure is in order to enable this reduction to be made in the Constabulary, and in order that soldiers may do work that ought to be done by the police. Does that not follow from the impassioned references of the Under-Secretary for the Colonies to this matter? He said, "Naturally you could do with a smaller force in a country which was governing itself, which was loyal to the nation which gave it self-government, than you could in a country which was being held down against its will by force of arms." But that is not a reason for reducing the police force; it is a reason for reducing the occupying Army. If that reduction can be made, it ought to be made in the military force in the Transvaal so that the taxpayers here would get the relief which they will get immediately a portion of the garrison can be brought home from the expensive conditions under which they are maintained in South Africa to the less expensive conditions under which they can live here. May I say a few words in regard to the position of British Indians in South Africa and our action on that question? This question is one of the utmost gravity. I do not suppose that anyone of the few Members who listened to the speech of the hon. Member for Preston did so without being moved by the story he told us as to the hardships to which our Indian fellow subjects were compelled to submit in the Transvaal. I suppose that if it rested with us to change these conditions we would gladly do so; but I do not think it fair or candid not to admit that if we were in the same position as our European fellow-subjects in the Transvaal we should not share the prejudices which they have in regard to coloured labour. The hon. and gallant Member for the Abercromby Division said in the course of his observations that the principle on which he and his friends took their stand was that whoever came into a British Colony should come in free or not at all. He may take his stand upon it, but if he attempted to carry it out in practice it would carry him off his feet. Do let us get rid of cant of that kind. I do not know on what principle we ought to take our stand, if we are unable to enforce it. The hon. and gallant Member himself admitted that this principle could not be maintained in any self-governing Colony.

said he had given the very same reason which the right hon. Gentleman gave as to why they could not enforce it, though he admitted it was rather hard on those who held the principle.

No, you cannot enforce that principle, and every man who has been Secretary of State for the Colonies acknowledges that. I warn the House with the utmost solemnity that this is one of the most dangerous questions that can be touched, and if there are attempts to interfere and enforce a principle where we have neither power nor authority to do so, it will lead to disaster. You cannot enforce a principle which you would otherwise like to see applied against the universal public feeling of our fellow-subjects in a self-governing Colony.

The hon. and gallant Gentleman says that you can keep on trying and making representations and sometimes there may be an opportunity of making some of your representations effective; and he asks, "Why have not the Government made them?" I do not think it is possible once self-government was granted to the Transvaal to lay down restrictions to legislation in that country. But my contention is that the Imperial Government might have used its power to protect those British Indian subjects who were already there settled. They might have used it above all at a time when they were giving financial aid to the Colony, and have seen that under their administration things did not go back. That the Imperial Government might have done, but did not do.

said that during the time the late Government was in power this question was raised again and again, but they did nothing at all.

When the hon. Member makes an interruption he might at least take the trouble to be accurate. On the present occasion he is not only disorderly, but inaccurate. The Imperial Government might have made some use of the fact that they were conferring on the Transvaal a boon which the Transvaal had no reason to expect and no right to demand, to make very serious representations on the subject. I am not quite certain that they would have been successful in having all these restrictions removed. I am sure that the Colony would have been likely to say: "We will give up your guarantee, but keep our position." They might, however, have secured that our British coloured subjects should be better treated or at least treated as well as foreigners who came into the country. If the Government had been one-tenth as anxious to help our British-Indian fellow subjects as they were to get rid of the Chinese, they could have secured some concessions. I say again that this is a subject of the utmost difficulty and delicacy, fraught with the gravest dangers to the relations between this country and the self-governing Colonies. When you are establishing self-government, you cannot see how far that free government may go. It is one of my objections to a Bill of this kind that it brings subjects of this nature on to the floor of our House; that it bring us into connection with self-governing colonies whose legislation we do not approve or dislike, and makes us share in the responsibility which ought to rest wholly and solely on the local government. I will say no more on that point, but pass to the connection of this loan with Chinese labour. What other reason is there for making it? The attempt to find a precedent for it has been practically beyond the Chancellor of the Exchequer and the Under-Secretary for the Colonies. The right hon. Gentleman stated things which he said were precedents, and which he said were simple, but he did not attempt to prove them. The last was more than a generation ago, and related to a condition of things between a self-governing Colony and ourselves, which was entirely different from the condition. of things to-day. The Chancellor of the Exchequer said that this was not a preference, because no other Colony had objected; of course they would not object. But what they would resent would be if one day or other, when they were in need of money, they came to ask for a grant of a loan, and the Government refused to do for them what they are doing for the Transvaal. The Government are making it difficult for any Government that has to deal with such a circumstance whenever it arises. There is no part of this Bill, apart from the getting rid of Chinese labour, which would not be applicable to any other Colony who asked for assistance. Apart from the question of Chinese labour there is no reason, no precedent, no excuse for the Bill. The hon. and learned Gentleman was very indignant that any suggestion should be made that there was a bargain between the Home Government and General Botha. I do not say there was a bargain.

The Chancellor of the Exchequer seems to attach great importance to the words. I do not care about words. I care about facts, and the facts are these, that there was a marked change in the attitude of General Botha towards this country during the time he was over here. So far as the rest of my case is concerned, I rest on the admissions of the Under-Secretary for the Colonies. The right hon. Gentleman said the Government were in a grave position and face to face with a most difficult situation; that they had determined to get rid of the Chinese, and they had been obliged to enforce a labour policy on the people of the Transvaal. They were determined to get rid of Chinese labour, not for any benefit to the Transvaal, but in order to fulfil their election pledges, and it is justified by what the hon. and learned Gentleman calls flexible manipulation of facts, by what the Under-Secretary describes as terminological inexactitudes, but what people in the country call by a shorter and more ugly name. In order to do this they had to enforce a labour policy. You do not "enforce" a policy where people are anxious to adopt that policy. Having enforced this policy on the local government, the Home Government in order to allay the bitterness created, have to give a sop in return for their needless and unnecessary interference.

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Mr. Speaker, this debate is now over, and in a few minutes we shall divide. May I avail myself of the right of the Government to have the last word before the House comes to a decision? I do not know that I have ever had the honour to put a Motion before this House in the merits of which I felt greater confidence. I am quite prepared to admit that the course of this debate at times has been wetted by cross-currents. We have had two opposite streams directed against our policy. Extremes meet in this matter, for I doubt if in the whole school of political life in this country two gentlemen could be found more opposite in their views than my hon. friend the Member for Preston and the hon. Member for Dulwich. Yet those two hon. Members agree in resisting the Government from diametrically opposite points of view. The hon. Member for Preston criticises us because he is anxious that the Indians in the Transvaal shall get proper treatment; the hon. Member for Dulwich because he is annoyed at the fact that the Chinese are not to go on having improper treatment.

I am sorry to interrupt the right hon. Gentleman, but what I desire is not that the Chinese shall get improper treatment, but that the Government shall get proper treatment.

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To those two attacks I would ask the House for a moment to turn their attention. First of all, there is the very grave question of the Indians and the native policy, and I can very fairly share the views embodied in the speeches of hon. Gentlemen speaking below the gangway on that question. But the Asiatic law was an Act not designed to make the life of the resident Indian in the Transvaal intolerable, but to prevent the influx of non-resident Indians. When the war began the Indians in the Transvaal left the country, and after it was over they came back and with them a large and indefinite number who said they had been in the country before. That influx produced intense anxiety among the white population. I admit frankly that there is a large part of this legislation which we on this side of the House do not like. As to the criticism which this Bill has received in this House in regard to the rights of the Indian subjects of the Crown, I will remind the House as to what our policy is in regard to our Asiatic and Indian fellow subjects in the Transvaal. I say we ought to go very far and work very patiently and work long and insist upon those who are there getting fair and decent treatment. But on the other hand I must assert the right of such a Colony as the Transvaal, upon which self-government has been conferred, to protect itself against Asiatic labour. Asiatic labour has become much more fluid of late years than it was before, and the great labour markets of the world are liable to an influx of that labour. If, however, 100,000 Asiatics were to invade this country, there is not a trade union here who would not demand that measures should be taken to protect our standards of life and wages, and we must recognise the conditions in the Transvaal. My right hon. friend the Member for the Forest of Dean has been very severe upon the course which we have pursued, but I really do not see to what conclusion my right hon. friend would lead us. He was strongly in favour of the grant of representative government to the Transvaal, and was strongly in favour of everything which made for a democratic settlement. My right hon. friend is opposed to the loan. He would withdraw the garrison from South Africa. He would have no nominated second Chamber. Yet he expects us to enforce views and opinions upon the white population to which they are unanimously opposed. I permit myself to ask how? It is quite true that before the war broke out we were able to bring great pressure to bear upon the Transvaal Government. Why? Because we were prepared to go to war with them and could even take the opportunity to pick a quarrel with them. It is the fact that this Government has more influence over a small State with which it is prepared to go to war than over a Colony which has been gathered within the folds of the British Empire. The Transvaal Government have withdrawn the Liquor Law which had been introduced—I do not know what its nature is—in deference to the opinion of a minority in the second Chamber. That fact does not weaken my confidence in the Transvaal Government; on the contrary, it shows that they are perfectly prepared to deal with enlightened opinion even it it is only that of a minority. We have heard a great deal about bargains, bribes, and illicit pressure. There was no sordid bargain on a money basis about the Chinese. But what is this doctrine of the hon. Member—of bargaining? A bargain about the Chinese is infamous, wicked, and vile: a bargain about Indians, or natives, or civil servants is noble, necessary, indispensable! We will try our very best to acquire influence with the Transvaal Government by making them feel that we are going to help them, to be their friends, and on the basis of that good will, which is growing, and watching our opportunities, we shall no doubt succeed in making them our friends and in procuring a great and sensible amelioration of the difficulties to which the hon. Member for Preston and others have referred. Let me say a word about the attack of the hon. Member for Dulwich, who, hon. and right hon. Gentlemen will be surprised to know, once occupied the responsible position of Parliamentary Secre- tary to the Board of Trade. I say that because I think the hon. Gentleman has not in the least assumed an air of responsibility in speaking about this measure. There is one feature in all the speeches made on this subject on that side of the House. The Transvaal Government no doubt is very wicked; they do not treat the natives properly; they do not make proper provisions for land settlers, and they forget all the other things they ought to do; but from whatever point of the compass the road starts, all the roads of argument which are followed lead to Pekin—they lead to the Chinese labour question alone, which is at the bottom of the opposition of the Party on the other side of the House. What authority have they to come forward and ask to guide the House in this? If we look back on the course of South African policy, even in the short time we have been in office and responsible for it, we find that they have been almost always wrong in every prediction they have made, in every attempt to judge the South African situation. I reminded the House to-day of some arguments they have used. They told us that the Transvaal could easily pay £30,000,000 as a contribution, and it is admitted now by themselves and by everybody on that bench that they were wholly wrong. They had informed us that the result of the introduction of Chinese labour into South Africa would be to bring great prosperity into that country. To-day they dwell on the lamentable condition of affairs there. Lord Milner formed the estimate that for every 10,000 Chinamen landed in South Africa, there would be employment for an extra 1,000 white men. I read out the other day statistics, which nobody can challenge, and which show that the proportion of white men to natives employed in the mines has been reduced, during the period since the introduction of Chinese labour, by nearly one-half of the original proportion, and by nearly one-third in reference to the amount of ore actually hoisted from the mine. When they plunged into political speculations as to Transvaal election their views were even more erroneous. They told us that the Progressive Party were the sole representatives of the British in South Africa. When it came to the election, the Progressives had not a majo- city even in Johannesberg; they did not poll an actual majority of our British community in South Africa. Lastly, they told us, and it was the hon. Gentleman the Member for Dulwich who distinguished himself in that matter, that the Boers, when they found themselves a great element in the new Government, instead of getting rid of the Chinese, would keep the system in full practice, because they were really strongly in favour of it. The right hon. Gentleman said, and I noted the passage very carefully—

"They were paid for but not bought."
That is the kind of language which he uses habitually about honourable men—Well, the hon. Gentleman has made various charges and a great many gross and undesirable insinuations—insinuations for which we on this bench care nothing at all, for we know that we have got the country overwhelmingly with us, and we know the people will treat those attacks at their proper value, but which we regret very strongly when applied to a new Government and to men who have so strange and stormy a record in their association with the British power. Whether the hon. Gentleman referred to the licence we granted to Mr. Robinson, which I have justified to the House on several occasions; whether he referred to the constitutional settlement which has enabled the Progressives to get into the Parliament of the Transvaal with a smaller proportion of votes than any other class; whether he referred to the Loan Bill now before the House, his argument was always the same—it was a corrupt, base bribe to obtain the expulsion of the Chinese from South Africa. And the hon. Gentleman repeats that assertion. I say that it is wholly untrue and absolutely devoid of foundation, and, although no doubt the hon. Gentleman wishes to insult those who sit on these benches, the only result of his words is to make mischief, ill-feeling, and bad blood in the Colony. The right hon. Gentleman the Member for East Worcestershire said, in the course of his remarks, that this loan is the most objectionable form of Imperial preference. There is a great difference between the relations which he and others would establish with the Colonies in the system of preference. Our relations with the Transvaal will be founded on a spirit of sacrifice and not on profit-sharing. Our relations with the Transvaal will depend. on services reciprocally rendered, and not on dividends eagerly grabbed, which is the policy of preference of which so many advocates are sitting opposite. Ours is a wise method of affording assistance to the Colony in a critical and difficult situation. I think that there are one or two Members of this House, if I may say so, who have rather short memories. I say there are those sitting on that bench who have long held important offices in the State, but who are quick to forget the tremendous issues and deep emotions of the South African War, and the enormous sacrifices which this country made at their recommendation and bidding. My hon. friend the Member for Preston on the other hand, has completely forgotten the agony, the suffering, and the ruin which the war brought to the Boer people. When they have accepted the constitutional settlement we have made, I do not think we should sneer and snarl at all their works. After all we must not forget that their country has been ruined and blackened by the scourge of military operations. There has been that terrible loss of life in the concentration camps which all our exertions could not prevent. It is a great wrench to men who love freedom and nationality to lose their own country arid their independence. If all these things are borne in mind, and even if you throw in this Loan Bill, I am not so sure that we have a great deal to plume ourselves upon or that one should dilate upon the favours with which we have loaded the Boers. I believe it will be an enormous advantage to have this brave race against whom we fought so long included in the circle of the British Empire, and I regret to find that when they come forward and stretch out their hands to us they are rebuffed and snubbed, and insulted and jeered at by men who profess to be patriotic Englishmen. I think such conduct requires a strenuous protest from all who desire to see South Africa permanently united to the British Empire.

said that when the right hon. Gentleman the Member for East Worcestershire was referring to the question of the British Indians in the Transvaal he ventured to remark, without in any way wishing to be disorderly, that when the late Government were in power they did absolutely nothing whatever to remedy the conditions under which British Indians lived in the Transvaal. The right hon. Gentleman contradicted that statement, and replied that he was ignorant of what he was speaking about. In 1896 and 1898 the right hon. Gentleman the Member for West Birmingham sent two despatches to the late Mr. Kruger. That sent in the year 1898 related solely to the question of the position of the British Indians in the Transvaal, and called the attention of Mr. Kruger to the fact that they were British subjects and were entitled under the Convention to full franchise rights. He would like to remind the right hon. Gentleman what his right hon. friend the Member for West Birmingham did four years after. Nothing had been done to give to British Indians a vote, and consequently the representative of British Indians in the Transvaal in 1903 wrote to the Government describing the position of British Indians under Lord Milner's administration as being worse than under the administration of the Boers. The right hon. Gentleman the Member for West Birmingham replied that the whole subject was under the consideration of the India Office and the Colonial Office. Therefore, he was right in stating that when the late Government of which the right hon. Gentleman the Member for East Worcestershire was a Member were in office, they did absolutely nothing to

AYES.
Acland, Francis DykeBerridge, T. H. D.Causton, Rt Hn. Richard Knight
Adkins, W. Ryland D.Bottomley, HoratioChance, Frederick William
Ainsworth, John StirlingBowerman, C. W.Cheetham, John Frederick
Alden, PercyBrace, WilliamCherry, Rt. Hon. R. R.
Asquith, Rt. Hn. Herbert HenryBramsdon, T. A.Churchill, Rt. Hon. Winston S.
Baker, Sir John (Portsmouth)Branch, JamesCleland, J. W.
Baker, Joseph A. (Finsbury, E.)Brigg, JohnClough, William
Balfour, Robert (Lanark)Brodie, H. C.Clynes, J. R.
Baring, Godfrey (Isle of Wight)Brunner, J. F. L. (Lancs., Leigh)Collins, Stephen (Lambeth)
Barnard, E. B.Buchanan, Thomas RyburnCollins, Sir Wm. J. (S. Pancras,W
Barnes, G. N.Burns, Rt. Hon. JohnCooper, G. J.
Barry, Redmond J. (Tyrone, N.Byles, William PollardCorbett, C. H.(Sussex, E. Grinst
Bell, RichardCampbell-Bannerman, Sir H.Cowan, W. H.
Benn, W.(T'w'r Hamlets,S. Geo.Carr-Gomm, H. W.Craig, Herbert J. (Tynemouth
improve the position of British Indians in the Transvaal. He had always been in favour of the introduction of Chinese labour in South Africa, but if there was a sufficiency of native labour in South Africa which could be recruited, no one would rejoice more than himself if the Chinese were sent back. There was an abundance of native labour at the present time. He would remind the late Colonial Secretary that in defending the Chinese Ordinance drawn up by the last Administration, he stated distinctly that the Chinese were only imported into South Africa to meet a temporary difficulty. Surely the right hon. Gentleman would not now say that if there was a sufficiency of native labour there was any necessity for the Chinese to remain. He hoped the Government of the Transvaal would not be guided in this matter by the wishes and opinions of some hon. Members of this House, but would look at the question solely and wholly in the interests of the Transvaal itself. The last election was fought upon a wholly false cry. Having given the people of the Transvaal the rights of citizenship hon. Members had no right to come down to this House, finding fault with the acts of the Transvaal Government in times of difficulty. The Government of the Transvaal should be left to work out its own destiny, and if this House did not place restrictions on it that Government would yet accomplish a great work for South Africa, and would bring to the Transvaal peace and prosperity. Question put.

The House divided:—Ayes, 199; Noes, 62. (Division List No. 432.)

Cremer, Sir William RandalKelley, George D.Rea, Walter Russell (Scarboro'
Crooks, WilliamKing, Alfred John (Knutsford)Rees, J. D.
Crossley, William J.Laidlaw, RobertRichards, Thomas (W.Monm'th
Cullinan, J.Lambert, GeorgeRichards, T. F. (Wolverh'mpt'n
Curran, Peter FrancisLamont, NormanRickett, J. Compton
Davies, Timothy (Fulham)Lea, Hugh Cecil (St.Pancras,E.)Roberts, Charles H. (Lincoln)
Dickson-Poynder, Sir John P.Leese, Sir Joseph F.(AccringtonRoberts, G. H. (Norwich)
Dobson, Thomas W.Lehmann, R. C.Roberts, John H. (Denbighs.)
Duckworth, JamesLever, A. Levy (Essex,Harwich)Robertson, Sir G. Scott(Be'df'rd
Duncan, C. (Barrow-in-FurnessLevy, Sir MauriceRobertson, J. M. (Tyneside)
Dunn, A. Edward (Camborne)Lewis, John HerbertRogers, F. E. Newman
Edwards, Enoch (Hanley)Lloyd-George, Rt. Hon. DavidRowlands, J.
Elibank, Master ofLough, ThomasRunciman, Walter
Erskine, David C.Lupton, ArnoldRussell, T. W.
Essex, R. W.Lyell, Charles HenrySamuel, Herbert L. (Cleveland)
Esslemont, George BirnieMackarness, Frederic C.Samuel, S. M. (Whitechapel)
Everett, R. LaceyMacnamara, Dr. Thomas J.Sears, J. E.
Fenwick, CharlesMacNeill, John Gordon SwiftSeely, Colonel
Ferens, T. R.MacVeagh, Jeremiah (Down, S.Shaw, Rt. Hn. T. (Hawick B.)
Ferguson, R. C. MunroM`Crae, GeorgeSherwell, Arthur James,
Ffrench, PeterM'Kenna, Rt. Hon. ReginaldShipman, Dr. John G.
Findlay, AlexanderM`Laren, H. D. (Stafford, W.)Silcock, Thomas Ball
Fowler, Rt. Hon. Sir HenryMaddison, FrederickSimon, John Allsebrook
Fuller, John Michael F.Mallet, Charles E.Sinclair, Rt. Hon.John
Gibb, James (Harrow)Manfield, Harry (Northants)Snowden, P.
Gill, A. H.Markham, Arthur BasilStanley, Hn. A. Lyulph (Chesh.)
Gladstone, Rt Hn. Herbert JohnMarks, G. Croydon (LauncestonStrachey, Sir Edward
Glover, ThomasMarnham, F. J.Strauss, E. A. (Abingdon)
Goddard, Daniel FordMason, A. E. W. (Coventry)Summerbell, T.
Grant, CorrieMassie, J.Thompson, J. W. H (Somerset, E
Greenwood, G. (Peterborough)Menzies, WalterTrevelyan, Charles Philips
Grey, Rt. Hn. Sir EdwardMicklem, NathanielUre, Alexander
Harvey, W. E.(Derbyshire, N. EMolteno, Percy AlportVerney, F. W.
Haworth, Arthur A.Money, L. G. ChiozzaWalters, John Tudor
Hazelton, RichardMontagu, E. S.Walton, Sir John L. (Leeds, S.)
Hedges, A. PagetMorgan, G. Hay (Cornwall)Ward, John.(Stoke-upon-Trent)
Henderson, Arthur (Durham)Morrell, PhilipWardle, George J.
Henderson, J. M.(Aberdeen, W.)Napier, T. B.Waterlow, D. S.
Henry, Charles S.Nicholls, GeorgeWeir, James Galloway
Higham, John SharpNolan, JosephWhite, J. D. (Dumbartonshire)
Hobart, Sir RobertNorton, Capt. Cecil WilliamWhitehead, Rowland
Hobhouse, Charles E. H.Nuttall, HarryWhitley, John Henry (Halifax)
Holland, Sir William HenryO'Connor, John (Kildare, N.)Wiles, Thomas
Holt, Richard DurningO'Connor, T. P. (Liverpool)Williams, J. (Glamorgan)
Horniman, Emslie JohnParker, James (Halifax)Wills, Arthur Walters
Howard, Hon. GeoffreyPearce, Robert (Staffs., Leek)Wilson, Henry J. (York, W.R.)
Hyde, ClarendonPearson, Sir W. D. (Colchester)Wilson, John (Durham, Mid.)
Illingworth, Percy H.Pearson,W. H. M. (Suffolk, Eye)Wilson, P. W. (St. Pancras, S.)
Isaacs, Rufus DanielPirie, Duncan V.Wilson, W. T. (Westhoughton)
Jenkins, J.Price, C. E. (Edinb'gh, Central
Johnson, W. (Nuneaton)Pullar, Sir RobertTELLERS FOR THE AYES—
Jones, William (CarnarvonshireRadford, G. H.Mr. Whiteley and Mr. J. A.
Jowett, F. W.Rainy, A. RollandPease.
Kearley, Hudson E.Rea, Russell (Gloucester)

NOES.
Arkwright, John StanhopeCastlereagh, ViscountFaber, George Denison (York)
Ashley, W. W.Cave, GeorgeFell, Arthur
Aubrey-Fletcher, Rt. Hn. Sir HCavendish, Rt. Hn. Victor C. W.Fetherstonhaugh, Godfrey
Balcarres, LordCecil, Lord John P. Joicey-Fiennes, Hon. Eustace
Balfour, Rt Hn. A. J. (CityLondCecil, Lord R. (Marylebone, E.)Fletcher, J. S.
Banbury, Sir Frederick GeorgeChamberlain, Rt Hn. J. A(Worc.Forster, Henry William
Banner, John S. Harmood-Chaplin, Rt. Hon. HenryGibbs, G. A. (Bristol, West)
Barrie, H. T. (Londonderry, NCochrane, Hon. Thos. H. A. E.Gretton, John
Beach, Hn. Michael Hugh HicksCourthope, G. LoydHarris, Frederick Leverton
Bowles, G. StewartCox, HaroldHay, Hon. Claude George
Boyle, Sir EdwardCraig, Charles Curtis (Antrim,S.Hills, J. W.
Bridgeman, W. CliveCraik, Sir HenryHunt, Rowland
Bull, Sir William JamesDilke, Rt. Hon. Sir CharlesLaw, Andrew Bonar (Dulwich)
Campbell, Rt. Hon. J. M. H.Douglas, Rt. Hon. A. Akers-Long, Rt. Hn. Walter (Dublin, S)
Carlile, E. HildredDu Cros, HarveyLowe, Sir Francis William

Lyttelton, Rt. Hon. AlfredRawlinsonJohn Frederick PeelThomson, W. Mitchell-(Lanark
Magnus, Sir PhilipRidsdale, E. A.Turnour, Viscount
Nield, HerbertRonaldshay, Earl ofYounger, George
OGrady, J.Salter, Arthur Clavell
Parker, Sir Gilbert (Gravesend)Stanley, Hn. Arthur (Ormskirk)TELLERS FOR THE NOES—Sir
Paulton, James MellorStarkey, John R.Alexander Acland-Hood and
Pease, Herbert Pike (Darlingt'nTalbot, Lord E. (Chichester)Viscount Valenta.

Main Question put, and agreed to.

Bill read a second time.

Bill committed to a Committee of the Whole House for To-morrow (Tuesday).—( Mr Asquith.)