said the total amount of outstanding loans at the present time was £69,347,000. Out of that sum £592,000 had been written off as irrecoverable. There had been many restrictions in recent years owing to the fact that the Treasury objected to making loans to large local bodies on the ground that those bodies should be able, on the strength of their own credit, to raise such money as they required for their own purposes. They had thus succeeded in recent years in avoiding any large issue, and there had been no issue of local loans since 1904. They did not anticipate that in the near future there was likely to be any issue of this stock. The Bill in Clause 2 provided for the wiping out of some irrecoverable loans. Clause 6 contained the fulfilment of the undertaking given by the Chancellor of the Exchequer under the Labourers (Ireland) Acts, which would provide for an extension of the period of the repayment of loans which had been made under those Acts. This would, in the long run, bring a relief to the local authorities of Ireland, which would amount approximately to something like £40,000 per annum. That would be of considerable advantage to the local authorities in Ireland, and that, combined with the relief granted under the Act of last year, would bring the assistance given to those local authorities up to £70,000 per annum. Clause 9 provided for the wiping out of loans made in the case of the Cullen Harbour Commissioners. The Harbour Commissioners were entirely out of funds, the trade on which they depended a few years ago having entirely left the port. Unless the port was to be left derelict it was necessary that something should be done. Clause 3 dealt with Volunteer drill-halls, which were now taken over by the Secretary for War. Clauses 4 and 5 were entirely new in this Bill. Clause 4 dealt with a loan of £800,000 to the Colony of Jamaica. This loan was in addition to the Grant of £150,000 already provided for. It was to provide for the devastation brought about by the earthquake at Jamaica. It was quite possible that the individual claims which would be made on this fund would reach £800,000, but only £75,000 would be used for the purposes of the Government itself, and the total of £800,000 was the limit beyond which the loan would not go. Clause 5 dealt with the Northern Nigerian scheme, which was one of considerable magnitude. From the Treasury point of view, Northern Nigeria, in which the proposed railway was to be constructed, had been a source, not of profit, but of great expense to the United Kingdom. They had had to pay out grants-in-aid of varied amounts up to £350,000 per annum. At the present time the grant-in-aid to Northern Nigeria amounted to something like £300,000. If the Home Government wished to reduce that amount they would have to enter upon such schemes as would reduce the cost of the administration and the cost of the West African Frontier Force, and also do something towards increasing the commercial prosperity of that great territory. It was quite clear that unless the means of communication in that Colony were improved none of those things could be attained. We had always held that country with a small handful of men, and the expense of moving them about had been considerable. Therefore it was felt absolutely necessary that as soon as possible a railway should be constructed along the main lines of communication, not only for commerce, but for strategic purposes. This scheme had been very carefully thought out, so far as the Treasury was concerned, and he could assure the House that they had given their consent to it with the very greatest caution. His right hon. friend would be able to assure the House on the various points which had not been made clear in the course of the discussion. They had succeeded in the course of a year and a half or two years in arriving at the present stage of the scheme. Sir Percy Girouard, who was out in Northern Nigeria, would devote his skill to the construction of this railway, and they anticipated that, in the course of two years, a line of communication would be opened from Baro on the Niger to Zungeru, about 100 miles, and ultimately to Kano. This would absorb something like £350,000. From their point of view, it was absolutely necessary they should improve the communication, and there- fore the Treasury gave their consent to the scheme after it had been thoroughly criticised, and properly thought out, and the whole of the financial arrangements had been made with their consent. Funds had to be provided in one of three ways£Either by a direct grant from the Imperial Exchequer, or by a loan secured on the Colony itself, or by a loan on the security of some other self-contained Colony, which could be held responsible. They decided that a direct grant was absolutely out of the question, as they were not prepared to repeat the Uganda experiment of some few years ago. The second resort, that of a security on the Colony, was also out of the question, because the Colony was not self-supporting, and could only make ends meet by a grant-in-aid which amounted to nearly £300,000. The last resort was to deal with the whole of that area of Northern and Southern Nigeria from a new point of view. They considered how far these Colonies could be kept apart, and the ultimate decision arrived at was that for ordinary government purposes the ultimate aim must be the amalgamation of these two Colonies. If that was so, it was quite clear that the new Colony, of Nigeria would be in possession of a railway which had been constructed at the expense of the Imperial Government. A prosperous Colony like Southern Nigeria was not entitled to a great gift of this kind, and they, therefore, thought it was a feasible arrangement insomuch as South Nigeria now provided something like £70,000 as a grant-in-aid towards the expenditure of Northern Nigeria, that they might deal with that £70,000 as part of the transactions into which they had entered with Southern Nigeria; and the ultimate arrangement they made was this: They agreed to a loan being made out of the Local Loans Fund provided for in this clause. Having done that, they were prepared to relieve Southern Nigeria from the interest on this grant, by means of a deduction from the grant-in-aid which Southern Nigeria now made to Northern Nigeria, so that Southern Nigeria would not be out of pocket in the first instance. They were then prepared to consider the possibility, and, in fact it was their aim, that ultimately this debt should be a Colonial debt. When the Colony was given self-government, it was almost impossible to place on to its shoulders a debt which had been incurred in the creation of that Colony without giving at the same time a guarantee on the Imperial Exchequer. They thought that by this transaction, which they hoped to consummate in this Bill, they would provide funds for the railway which would be ample, and would place the liability on the shoulders of those who ought to bear it, and that they would in the long run provide that these two Colonies should bear the whole burden of the debt that had been created in their interest and for their benefit. As this was a new proceeding, he thought it necessary to point out that although it was new in the Public Works Loans Bill, it was not new in their financial arrangements. The House was aware that the Colonial Loans Act, 1897, provided for a loan being made for Lagos, which was now a part of Southern Nigeria, and also the Niger Protectorate, on exactly the same terms as were provided for in this Bill. There was also a loan to Cyprus, which was absolutely analogous to the loan which it was sought to make under this Bill. Therefore the transaction with which the Government were proceeding was not without precedent, and he thought that the precedent afforded on that occasion had not been a source of regret to any of those who were concerned. He hoped the House would consent to the Bill, and especially to those two provisions, the Jamaica loan and the Nigerian loan. In conclusion, he could assure the House that they hoped by this means to avoid any calls for money for this purpose. Under the clause inserted in the Bill of last year they were able to use funds which were at the disposal of the National Debt Commissioners—self-contained funds, if he might so speak of them, which would make it unnecessary for them to go to the money market for money required either in Jamaica or in Southern Nigeria. He had no doubt this would be a source of satisfaction, not only to the money market, but to Members of that House who were interested in financial affairs. Motion made, and Question proposed, "That the Bill be now read a second time."—(Mr. Runciman.)

said that the hon. Gentleman had stated that Clauses 4 and 5 were new to the Bill; he desired to submit to Mr. Speaker that they were beyond the scope of the Bill. The Bill was to—

Grant money for the purpose of certain local loans out of the Local Loans Fund, and for other purposes relating to local loans.

The Act of 1887, Section 6, Subsection 1, referred to advances by Parliament of money for the purpose of loans to the Public Works Loans Commissioners, the Fisheries Board of Scotland, or the Commissioners of Works in Ireland, or to the Irish Land Commission, or for the purpose of similar loans by the Treasury, and he submitted that it was perfectly clear that under that Act the National Debt Commissioners were authorised to, advance money for similar loans to the Public Works Loans Commissioners, the Scottish Fishery Board, the Commissioners of Public Works in Ireland, and the Irish Land Commission. Under the Act of 1887 the Public Works Loans Commissioners were instituted for the purpose of granting money to municipal authorities, but there was in the Act a statement that the provisions of the Colonial Act of 1899 were incorporated, and on referring to that Act he found that it authorised certain public loans to certain Colonies or places. It was not described, like this Bill, as being for the purpose of granting money from local loans out of the Local Loans Fund and for other purposes relating to local loans. It was something different. Subsection 2 said the advances authorised by that Act—

Shall be local loans within the meaning of the National Debt and Local Loans Act, 1887, and shall apply accordingly.

The point he ventured to submit was this. The Colonial Loans Act was intituled—

An Act for the advance of public loans to certain Colonies or places.

A Bill ought to have been brought in. to grant loans to Nigeria and Jamaica. That had not been done, and as a matter of fact Clauses 4 and 5 of the present Bill were out of order, because they were beyond its scope. He submitted this to Mr Speaker as a point of order.

The Colonial Loans Act of 1899 contains Subsection 2, Section 1. It says—

Advances authorised by this Act

—that is, the Colonial Loans Act of 1899—

shall be local loans within the meaning of the Local Loans Act, 1887.

It would have been open, I think, to the draftsman of this Bill to have inserted that section in the Bill which we are now discussing, and if it were in this Bill I do not suppose the hon. Gentleman would raise his objection, because it would then have said, "Advances authorised by this Act shall be local loans within the meaning of the National Debt and Local Loans Act, 1899," and that Act would apply accordingly. That would have been the more direct method for the draftsman to adopt, but instead of that he has put into two clauses of this Bill a provision making the Colonial Loans Act applicable, subsection 2 of Section 1 being inserted in the Schedule of this Bill. I dare say there may be good reason for it, but it is a more roundabout way than that of adopting the subsection straight out of the Colonial Loans Act of 1899. The draftsman has put into the schedule the subsections he wants, and then he makes the provisions of the Colonial Loans Act as set out in the schedule applicable. I think the result is the same though the method is a little more roundabout. In other words, he says that these particular loans are to be considered as local loans, and if they be considered local loans then it is right and proper that they should come into the Bill, and they are within the scope of the Bill. I do not know whether I have made myself clear to the hon. Gentleman.

said the only point that, was doubtful was whether the first three lines of the Bill ought not to have been amended so as to include the loans to Colonial places. That would have followed the precedent of the Act of 1899. But they had not done that; they had not said it was a Bill authorising public loans to certain Colonies or places, and it seemed to him that the first three lines of the Bill should be amended, because they set forth that the Bill was to—

Grant money for the purpose of certain local loans out of the Local Loans Fund, etc.

They had the precedent of the Colonial Loans Act of 1899, and he certainly thought the point which he raised as to Amendments being required for the first three lines of the present Bill was one which required some explanation.

I did not say so. That subsection appears in the schedule. Clauses 4 and 5 refer to the schedule, and they make Subsection 2 of Section 1 of the Colonial Loans Act applicable to this Bill.

said that after the ruling which had just been given it appeared to him that loans to Jamaica could be considered local in the sense of the Bill they were now discussing. Any criticism from the Opposition side of the House would not be directed to Clauses 4 and 5, but rather to suggesting that the money should be voted in the form of a loan to Jamaica and Nigeria. They were not proceeding in the best and most suitable way. The Colonial Act of 1899 was an Act passed to sanction advances set forth in the schedule amounting to £3,351,000, and that was a clearly self-contained Bill authorising the Treasury to advance the money.

Yes. out of the Local Loans Fund.

thought it would have been better if the Government had followed the precedent of the Act of 1899, and made the grant to these two Colonies in the form in which it was made under that Act. He understood that the object of advancing this sum of money out of the Local Loans Fund was to avoid the necessity of going into the money market. By the precedent set under the Act of 1899, this money would come out of the funds of the Public Works Loans Commissioners, and he thought it would be much better to follow that example in the present Bill and bring in a separate Bill applying to these two Colonies and use the Public Works Loans Act for the purpose it was intended by this House and not complicate matters by the introduction of extraneous questions. There would be no objection raised to the passing of this Bill in its present form or in the more correct form he had suggested, but it could easily be amended by the omission of those two clauses and a Bill might be introduced which would carry out the intention of both sides of the House in a way more convenient and more in accordance with precedent.

said his right hon. friend was right in assuming that this Bill would not receive any strenuous opposition from that side of the House. He had, however, one or two suggestions to make. Perhaps the Secretary to the Treasury would accept his congratulations upon the clear statement he had made to the House. As to Nigeria, he was glad to hear that they were likely to get some return for the £300,000 they had been annually spending in that country. The Under-Secretary for the Colonies had also stated that the making of this railway would have the effect of opening up and developing wide productive areas for cotton growing. That raised a very important question. He thought the financial aspect of the Bill was perfectly sound. The Under-Secretary for the Colonies must be very happy in looking back upon Nigeria, because there was no portion of the Empire where such splendid work had been done by what he might call a mere omnibusful of British officials, in a country which was six years ago in a state of anarchy. In Northern Nigeria they had entered upon a country containing 262,000 square miles and in Southern Nigeria 47,000 square miles, inhabited by numberless warring tribes. He wished to pay the highest tribute to the splendid work which Sir Frederick Lugard and hisconfrères had done. Personally he doubted whether this railway would ever have been established for strategical purposes alone. Sir Frederick Lugard had been in Nigeria a number of years and he knew the conditions of the country. His Reports showed a very wide grasp of economic as well as commercial questions, and he recommended tramway which he said could be built at infinitely less expense than a railway such as that which was now projected. If it was the case that a tramway could have been erected, which when the railway was built might have been used to form branch lines to feed the main line, that struck him as an exceedingly reasonable proposition which had in it all the elements of common sense and reason and proceeded upon the lines of gradual development. The products of the country were very few. What was the policy of projecting this railway apart from strategical considerations? It was practically a policy of subsidy and bounty. The railway represented a very high protectionist policy.

No, no.

said the railway undoubtedly represented a policy of subsidy by which, before they got the products, they had to construct a line to tempt those products. The Government was prepared to accept the principle of a subsidy in regard to the all-red route. Was it in the hope of getting traffic for the railway, or in the hope, as in the case of the Canadian Pacific Railway, that there would grow up industries where there were none at present? The Under-Secretary for the Colonies represented a portion of a cotton constituency, but he would hesitate to suggest that the right hon. Gentleman had supported this railway the more strenuously because it would benefit Manchester if there was a great production of cotton in Nigeria. He submitted, however, that when the right hon. Gentleman went to Manchester again to ask a renewal of the suffrages of his constituents a card which he could play effectively was that he had pleaded for the establishment of facilities for cotton growing in Nigeria in order to give Manchester what she needed. There was another consideration to which he wished to direct attention. He presumed that it was still part of the policy to carry cotton from Northern Nigeria down to the coast free, that the Cotton Growing Association was to provide for the sale of the cotton in England, and that the Royal Company of Nigeria was to provide the seed. That was a very fine combination but there again they had an excellent system which all tariff reformers would support. He believed it was the case that the Cotton Growing Association insisted that the cotton should not be sold to any country but England. Manchester would benefit chiefly by that arrangement. He wished to know whether this railway which was for the purpose of developing cotton growing in Nigeria was only to carry cotton to be sold in England. If that was the case, it was a policy which corresponded to the most extreme form of protection practised by Germany, which would not allow Australian food stuffs to be carried by the North German Lloyd ships. That was what was being done by this so-called free trade Government of which the right hon. Gentleman was one of the most efficient and brilliant exponents. Did hon. Gentlemen opposite realise what this railway meant? In 1905 Nigeria produced £1,000 worth of cotton. In order to be independent of the other cotton-growing countries of the world, Manchester would require millions of bales from British Possessions, and therefore the statement of the right hon. Gentleman regarding the necessity of this railway for the development of cotton growing in Nigeria was one which was more brilliant on paper than in actual fact. Did anyone really think that this railway, on which we were going to spend between £1,500,000 and £2,000,000, was going to give Manchester in any limited period the cotton she required? He did not say that the right hon. Gentleman had supported this railway only for the purpose of developing cotton growing. He believed the right hon. Gentleman and the Government had supported it with the object of developing a new country. That was the policy which the Conservative Party would have pursued if they had been in power. He did not wish to support the Bill only for the reason which had been set forth by the Under-Secretary.

What reason does the hon. Gentleman refer to?

Cotton growing.

I specified three reasons, of which the third was cotton growing.

said the right hon. Gentleman would do him the credit of admitting that he began by stating the reasons which he gave. He was certain that the right hon. Gentleman supported the railway for strategical reasons and with a view to the general commercial development of the country, but he supported it specifically because it would develop a cotton growing area which would give this country cotton independently of the United States. [An HON. MEMBER: Why not? Of course, why not? He wanted the House to understand that he did not accept the suggestion conveyed by the right hon. Gentleman that this railway was going to make, within a limited time, any great difference in the cotton supply of this country. The considerations put forward by the right hon. Gentleman concerning cotton growing were not considerations which should weigh greatly with the House. He believed there was a very good prospect in regard to minerals in Nigeria. There was also rubber produced in the country, but he understood that what had already been sent out was not of a very satisfactory kind. The right hon. Gentleman would probably argue that the railway was not for the development of cotton alone, but also for the development of the other natural products which Sir Frederick Lugard and others had reported that the country possessed. He supported he Bill warmly because it was a good tariff reform measure. The right hon. Gentleman had brought forward a good protectionist policy. He asked the right hon. Gentleman to explain why the more expensive undertaking in the shape of a railway had been proposed in antagonism, or, at any rate, in contradistinction to the tramways suggested by Sir Frederick Lugard in his admirable Report.

said the hon. Member for Gravesend had told,the House the reasons which induced him warmly to support this measure. But he was bound to say that he had never heard an argument which was more capable of producing the opposite of what was intended than that used in support of the view which the hon. Gentleman set himself to enforce. He hoped that in dealing with this matter of the administration and scientific development of a great territory they would not think it necessary to plunge into the controversy between free trade and protection. There was the widest possible difference between the policy of improving the communications by sea and land across the surface of the British Empire and any policy of erecting tariff walls and obstructing the free interchange of commerce. He asked the House first to realise what was the position in Northern Nigeria. When we took it over in 1900 from the Niger Company that company practically confined its operations to the banks of the Niger and Benué rivers; but we had been drawn on beyond those limits by irresistible forces which would readily occur to hon. Gentlemen, until now we had become responsible for the day-to-day administration of a territory something like 400 miles from east to west and of equal depth, and which comprised within its area nearly nine millions of persons. That administration was maintained by a comparatively small body of officials, military and civil, and the whole order and authority of the country was maintained, not through the instrumentality of any white troops, but through the agency of native troops commanded by white officers and non-commissioned officers. When one reflected that those troops were drawn from the people of the country in which they lived, and were subject to the same influences, nobody could doubt that the position which we occupied in Northern Nigeria, although it had enabled us in ever-increasing measure to set up a civilised Government and to put down altogether many of the most hideous disorders and crimes which had stained that country in previous years, was nevertheless a precarious position, so long as we held the country without any swift or speedy means of communication. It took weeks to send small bodies of troops from one garrison to another, and every ounce of material and stores, transport of all kinds, had to be carried 300 or 400 miles on the heads of men and women. He could not see any circumstance more likely to prevent the commercial development, and to continue the conditions of instability of Northern Nigeria than to hamper the Government in that civilised and scientific administration which was so indispensable, by the want of a line of railway buckling the country from end to end. Therefore the first solid and sufficient reason for such a road being built was its administrative and strategic necessity. There was another aspect to which his hon. friend the Financial Secretary to the Treasury had referred. A grant-in-aid of £300,000 had been made to the finances of Northern Nigeria. That, no doubt, was a very heavy contribution, but he did not see any prospect of that burden being substantially reduced unless the country was developed and thrown open to commerce, unless there was evidence of permanent occupation which would attract capital and enterprise. The strategic, financial, commercial and administrative reasons were sufficient to justify the scheme of the railway. But there were also economies in sight. It was hoped that when the line was complete it would be possible to reduce the expenditure now necessitated on the Northern Nigeria military force by £20,000. That alone would be a very considerable portion of the interest charges which the railway would involve. In the second place, there would be a great economy in the transport compared with the present time, and the system of head-carrying, which was organised by the Government on an elaborate scale, would be swept away and those persons engaged in it—who comprised a large portion of the population—would be set free for productive labour. Then the cost of the large staff of European officials who were paid large salaries—not too large when the dangers and the climate were considered—and who had a long period of leave, could be reduced. When these officials went on leave, on full pay, they were often forced to journey for six or seven weeks through the country before they could get from their stations to the coast and from the coast to their stations. A very substantial saving would be made from that source alone if the railway were built. Again, it was very important that any railway constructed in Northern Nigeria should be a cheap railway. He quite agreed with the hon. Gentleman opposite that it was of importance not to push on too fast, saddling the country with an expenditure which it could not suddenly bear. Sir F. Lugard had always been in favour of a light tramway, which he said could be constructed for £1,500 a mile, and he produced a proof of that in the case of the Bari Juko and Zungeru tramway. It was pointed out, however, that in that case only small sections of the line had been made, and that we could not take it for granted that analogous economies would result from departmental construction in the case of a large undertaking. Very careful investigation had been made, and the Government were gradually driven by friendly experts to the conclusion that a two-and-a-half foot gauge railway could not be built for less than £2,500 a mile. But it seemed a great pity that they could not go a step further and construct, at a cost of £3,000 a mile, a three-and-a-half foot gauge railway which would make the line absolutely uniform with the railway in Southern Nigeria, and so prevent delays and cost caused by the break of gauge and the transfer of traffic. It might be asked how a three-and-a-half standard gauge railway could be built at so small a cost as £3,000 a mile. It was because they were constructing a pioneer railway. That did not mean that it would not be a railway fully capable of discharging all the duties which could be demanded of it. Such a railway as they proposed to construct would only require one train to be run in a day and it need not go more than fourteen or fifteen miles an hour. If that were done it would discharge all the practical and essential needs of the country. Economy would be effected in the unimportant parts of the equipment of the railway. The rails, the permanent way and the sleepers would all be of a satisfactory character, but where they could they would economise in stations, quarters, the amount of rolling stock, telegraph erection, and wharves on the river Niger, and these could be quite easily improved. as the traffic grew. All those matters had been carefully investigated during the past eighteen months and every point had been canvassed. Sir Percy Girouard, the Administrator, thoroughly concurred in the estimates which had been drawn up by competent consulting engineers, and a thorough survey of the route had been made. Sir Percy Girouard was positive that a three-and-a-half foot gauge railway could be constructed at £3,000 a mile, or half the cost at which such lines had formerly been constructed. Sir Percy Girouard did not speak without authority, for he had constructed that marvellous railway from Wady Halfa to the Atbara in the Soudan at the extraordinary low charge of £3,000 a mile, excluding military labour, though it was capable of carrying heavy traffic. It might be stated that a tramway would have been inconvenient for many purposes—not the least, it would not have carried bales of cotton, which would be a leading feature in the produce of Northern Nigeria. It was indispensable that any system of railway development in Northern Nigeria must be based upon or connected with the navigable reaches of the Niger and the Benue. These rivers provided 1,500 miles of practical waterways. Even at the worst seasons three feet of water were available, and Sir Percy Girouard reported that the employment of one or two dredges would procure six feet of water over almost the whole 1,500 miles. During two months of high water ocean-going steamers could penetrate more than 800 miles from the sea. To neglect these natural communications or to provide a railway system not in connection with them would be a cardinal error. Therefore, they had selected Baro, a native village about seventy miles up stream from Lokoja, as the base from which at all seasons of the year a clear waterway could be had. From Baro the line would run to Bida, would pass a little to the East of Zungeru, thence to Zaria and on to Kano. Each of these sections would, it was estimated, take a year to construct. But owing to the fact that the railway material must be landed during the two months of high water (September and October), when ocean-going steamers could discharge at Baro, no track-laying could be begun till the end of next year. It was contemplated that Zungeru would be reached by the end of 1909, Zaria in 1910, and Kano in 1911. He would draw the attention of the House to the great advantages of the finance proposals advanced by his hon. friend the Member for Dewsbury. In the present state of the money market it was undesirable to force the Protectorate, which was poor, to incur unnecessary charges in raising the necessary money for the construction of the railway. Furthermore, they did not desire to increase the permanent liabilities of the United Kingdom for a railway which must ultimately become the possession of the Protectorate, and which would be a trunk line for Nigeria. By arrangement the money would be raised as substantially a debt due by Southern Nigeria, but the loan would be financed through the Public Works Loans Commissioners; and any extra charge which fell in consequence of this arrangement upon the finances of Southern Nigeria would be deducted from the contribution made by Southern Nigeria to the revenue of Northern Nigeria. The imperial grant-in-aid to Northern Nigeria would be proportionately increased by that amount for the time being, but he would point out that the revenues of Northern Nigeria were increasing at an average rate of £20,000 a year; and as the railway would not be completed for four years, and as the whole of the interest charge would not mature for four years, the strong probability was that the grant-in aid, in spite of being charged with this extra liability, would not be increased and the growth of revenue, as the rail way extended, would balance the accruing interest charges. He thought he had submitted to the House sufficient reasons financial, strategic and administrative, to justify the construction of the line, bu he had such a strong case that he ha( another ground on which to urge it. H was in the position of a military office who manœuvred, but who had not ye brought up his guns. There was another justification for this railway, stronger even than the financial and strategic reasons which he had given. The House could not ignore the enormous importance of cultivating cotton in Northern Nigeria. There was hardly any industry more solidly established in this country than the Lancashire cotton industry, in which something like 7,000,000 persons were concerned. That industry occupied a stronger position now than it did a few 'ears ago; because for a long time it had been exposed to competition hoped by inferior rates of wages and longer hours of labour in European countries. But those countries were becoming the scene of active labour movements, leading to large increases of wages and diminution of hours; with the consequence that the international position of our cotton industry would seem to be better for the future than in;he past. But the industry had one weak spot—an Achilles' heel. It was dependent on one particular source of supply; and when there was a shortage n the American market, the evil was aggravated by the operations of speculators. That introduced an element of fluctuation, uncertainty, and gambling, and had caused before now sharp pinches throughout Lancashire. It was the object of the British Cotton-growing Association to vary and multiply the sources of cotton supply, so that, with many fields available, the climatic risks might be averaged, and the deficiency in one direction made good by abundance in another. The association owed its charter to the late Government, who deserved great credit for the fact. It had ransacked the British Empire for cotton fields; and it was in Lagos that the most favourable results had been obtained. In 1903 there were 500 bales of cotton grown in Lagos. This quantity increased to 2,000 bales in 1904, to 3,200 in in 1905, to 6,000 in 1906, and to 12,000 in 1907. That was a geometric progression, and, although the quantity was still minute compared with the needs of Lancashire, the increase was greater than that which occurred in the Southern States of America when the cotton industry was first established there. But the Cotton Association had always asserted that Northern, and not Southern, Nigeria was the true sphere of activity. Southern Nigeria was, pervaded by the tsetse fly, which made the employment of draft animals impossible. But in Northern Nigeria that disadvantage disappeared, and cotton could be grown under exactly the same conditions as in America. This was not to embark on, a new industry, either; for cotton of an extremely high quality had been marketed there for over 1,000 years. It was an important additional reason for the construction of this railway that it would throw open Northern Nigeria to the operations of the British Cotton-growing Association, which conferred great benefits on the natives. It went into new territory and offered a high and uniform rate for all cotton grown by the natives, who at present not only grew the cotton, but worked it up. It was proposed that the natives should be encouraged to grow the cotton, and that we should send them back the finished product in return. There was even a reason for haste, because, in spite of the present difficulties of communication, Lancashire goods were filtering into Northern Nigeria, and the natives were ceasing to grow cotton; and there was a danger, therefore, of defeating our purpose. But the claims of one particular industry or part of the country would not alone justify the expenditure of public money. But when that expenditure was made good on commercial, financial, and strategic grounds, those claims constituted an additional reason for action. The working classes had paid a great deal in one way or another for the support of the British Empire at different times; and cotton was the most palpable thread that united the industrial population of our large towns with our tropical possessions across the seas. He hoped, therefore, that the House would not accuse the Government of want of thrift in regard to public money in making the proposals. Care had been taken to secure for the State any increment in the value of the land which might arise from the construction of the railway.

said that the right hon. Gentleman supported this Bill as representing an economic policy, but he was not sure that he could support it on that ground. Within the last six weeks the Government had asked the House to provide £17,500,000 by way of loans.

said the hon. Baronet was under a complete misapprehension. The money was not going to be raised all at once. It was spread over a number of years and it was all productive expenditure. The instalments were only to be raised in small quantities.

presumed that the loans were to be met by the savings in other departments.

No.

said there was some way at any rate by which the right hon. Gentleman was going to get his first instalment without going into the open market. This sort of thing could not go on for ever, The money the right hon. Gentleman was going to take for this purpose would have gone to some other object if it had not been taken for this. Money could not be used twice over, and if it was not used for Nigeria, or telephones, or the Transvaal loan, it would be used for some other purpose. This Bill provided by the first clause for a sum of £3,000,000 to be raised for local loans. He had always advanced the opinion, whichever side was in power, that these local bodies should not be allowed to borrow from the National Debt Commissioners at so cheap a rate, and on one occasion he succeeded in persuading the then Chancellor of the Exchequer to raise the rate. He objected to these large local bodies borrowing from the National Debt Commissioners by way of local loans. The original intention was that small municipal bodies who were unable to borrow on the market except on the most onerous terms should be able to procure money on easy terms. When money was cheap these large local bodies who were never intended to come in under this Bill borrowed on the market on easy terms, and when it was dear came to the Government and obtained it from them. During the whole time of the war when the Government had to borrow money for the purposes of the war, large local loans were being issued to these bodies at 3 per cent., the result of which was that it interfered with the Government's borrowing money for national purposes.

We are not borrowing money.

said the right hon. Gentleman was very careful to say he was not borrowing money, but he was using money from somewhere, and they did not know from what source the money came.

said it was money which came in to the National Debt Commissioners' Department from loans, and the National Debt Commissioners, instead of using it for the cancellation of local loan stock, lent it out again for this purpose.

said he was glad to have that explanation at all events. They now knew where it came from. It was money that ought to have been used for the cancellation of local loan stock. If it had been so applied it would have raised the value of that stock with the result that other Government securities would have risen also. He hoped the right hon. Gentle: man would see that the public credit was not taken advantage of by these municipal authorities which he did not think should be allowed to borrow on such easy terms. He would like to have an explanation from the Financial Secretary to the War Office of the appropriation by the War Office of half a million of money in respect of the repayment of certain mortgages which were held by the Treasury for money advanced to the Volunteers. That half a million, he contended, ought to have gone to the Sinking Fund. The two remaining clauses related to Jamaica and Nigeria. He was credibly informed that the clause relating to Nigeria was the commencement of a policy of tariff reform, and therefore he would say nothing further about that. With regard to Jamaica, everybody would like to see her assisted in her great tribulation. He was not sufficiently versed in the question of Nigeria to say whether the expenditure of this £3,000,000 would result in a profit, but in any case he did not think the argument as to savings derived from the officials was a good one.

said he was then endeavouring to show that these savings as the result of economies would go a long way towards defraying the interest, and that no one should neglect any source of income for defraying the interest. The administrative economies were put at £10,000 a year.

said one-seventieth of what was required. He would give one word of warning. As he understood the £3,000,000 was given as a grant in aid to Northern Nigeria because the right hon. Gentleman thought the railway would develop the country and go a long way towards avoiding the expenditure now made in respect of that country. There was a good old adage, "It is no use throwing good money after bad." Clauses 4 and 5 should have been brought in as separate Bills. That was the practice of former years and there would be no opposition if such a course was taken now either from himself or those among whom he sat. He thought it would be more in the interests of good legislation if such a course was adopted.

said that this railway opening up the country would raise some difficulty in respect to putting down the drink traffic in Nigeria. The difficulty of maintaining the prohibition area in Northern Nigeria was bound to increase. He did not doubt that the Government firmly intended to safeguard the existing area, but with new means of communication smuggling was bound to increase and the difficulty of preserving the temperance zone was bound to increase also. Nobody wished to see this traffic increased, and only the other day he asked the right hon. Gentleman the Under-Secretary whether something could not be done to prevent it by increasing the railway rates and the customs duty.

said that raising rates where there was river communication would only have the effect of diverting the traffic to the river.

said the right hon. Gentleman had convinced him upon that point, and he would therefore ask whether it was not the fact that the only way to prevent this increase of this evil was to extend the prohibition zone to Southern Nigeria. He found that there were many villages in Southern Nigeria where the only signs of our civilising influence were piles of empty gin bottles on the outskirts of the villages. He thought that prohibition of sale to natives was a practical policy in the opinion of those who knew the country well, and the deficit in the revenue could be made good by direct taxation of the natives. They already had direct taxation in Northern Nigeria and he thought it was possible to get it in Southern Nigeria. The Government, he believed, did intend to extend the prohibition area twenty miles south, but that would only remove the border difficulty to another locality and he trusted that the Under-Secretary of State for the Colonies would take such complete prohibition of the sale to natives into his serious consideration.

said this was a measure of tariff reform, and therefore he was able to congratulate the right hon. Gentleman on his inexplicable and sudden conversion from those opinions which he formerly pronounced on free trade to the principles of the Tariff Reform League. Sudden conversions were not frequent, but the right hon. Gentleman was the exception proving the rule, because his conversions had been very frequent in the course of the last few years, for he was a convert on the question of Chinese labour and of the House of Lords, and so on. This was another instance of his becoming a convert, and on this conversion he was able to congratulate the right hon. Gentleman. The Under-Secretary for the Colonies held different views from those entertained on that side of the House with regard to preference, for he said there was a very considerable difference between raising tariff barriers and granting subsidies which were for the benefit of a particular part of the Empire. The right hon. Gentleman had gone on to point out that the supply in this country of raw cotton was dependent on one source, and that, therefore, this measure was very beneficial in that it would vary and increase the sources of supply to manufacturers in this country. He maintained that there was no difference between that policy and the policy of preference which tariff Reformers advocated, because they also desired to increase the sources of supply of valuable raw materials within the Empire.

It is the other way round.

said that the view of preference which they held was to increase the source of supply of raw material in the Colonies and in different parts of the Empire with a view to making the Empire as far as possible self-sufficing. In speaking the other day, the right hon. Gentleman had said that the difference between the preference on his side of the House and the preference advocated on the Opposition side was, that the former was based on sacrifice, whereas the other kind of preference was a matter of sordid dividends. He would rather like to ask the right hon. Gentleman whether in this instance the preference was one of sacrifice or of squalid dividends. He found that in the report of Sir F. Lugard it was stated that the Government at the, present time was conveying cotton to the coast of Nigeria free of charge. He wished to ask on that point whether, when this railway was built, it was proposed to carry the cotton as at present, free of charge. Unless that was done, or at any rate unless some facilities were given to the cotton growers, the railway would not have the effect which the right hon. Gentleman anticipated, namely, very largely to increase the supply of cotton from Northern Nigeria. He found that Sir F. Lugard said in another portion of his Report that, in his judgment, a railway constructed at the cost at which other West African railways had been constructed would be compelled to charge rates which might strangle the new industry at its birth. If the new industry was not to be strangled at its birth, it was quite obvious that these cotton growers should be given very considerable advantages in the shape of rebates, or else be allowed as at present, to have their cotton conveyed by railway absolutely free of charge. There was one other question he would like to ask the right hon. Gentleman, and it was as to the probability of this railway paying its own way. It seemed to him that a very large sum of money was to be expended, and so far as he I recollected, the right hon. Gentleman had nowhere indicated in his remarks whether there was any probability of its paying its own way, or what length of time was likely to elapse before that desirable state of things would be reached.

said that as one of the representatives of Lancashire, which had a great interest in this subject, he desired to support the Bill, because he thought the railway in Nigeria would be of great benefit to the Lancashire cotton trade, not only in regard to the employers, but in regard to the operatives also. Last year there was a great scarcity of cotton for supplying the mills in Lancashire. The cotton crop in America on which they very largely depended was very short, and the result was that the Lancashire mills could not be worked to their full capacity. For many months the operatives were working only four days a week, so there was a great loss. They set about to see if they could not by mutual agreement with their employers take some steps to prevent a recurrence of a similar state of things, and they formed what was known as the British Cotton Growers' Association. The operatives had subscribed many thousands of pounds to finance that association, and the result was that very large capital had been raised in Lancashire to promote cotton growing in the British Empire. At Lagos, especially, the best place had been found, and the extension of cotton growing there had been very rapid indeed, much more rapid than when cotton growing was started in the Southern States of America. There was no doubt that the development of the railway in Northern Nigeria would help the Lagos cotton trade to a great extent. There had been a great expansion in the trade in Lancashire. During the past two years mills had been built in large numbers. Over 100 mills had been built for the spinning of yarn out of cotton in addition to a large number for weaving. The rate of extension on the Continent convinced them that in a very short time the supply of cotton now open to them would be entirely inadequate, and it was absolutely neces sary they should have fresh sources of supply. Cotton had been grown for 'a long time in Northern Nigeria, and the best experts in America had been there and said it was the most suitable place in the world for the growth of cotton, and that in a few years a very large quantity could be got from there. The cotton that was grown in Northern Nigeria was exactly the class of cotton required for the Lancashire trade. There was a larger policy also connected with this question. He believed that development of this description would not only benefit the Lancashire cotton trade, which employed 10,000,000 people, but find them a market for their goods in return. He therefore thanked the Government for bringing in this Bill, and for building a railway in Nigeria.

said Clause 3 of the Bill dealt with a remarkable transaction between the War Office and the Public Works Loans Commissioners. He did not understand, and it had not been explained, what was the need for this clause in the Bill. He found on looking back, that the authority for spending this money, amounting to nearly £500,000, was only obtained on the report of the Resolution of the House on the 12th March last. Four days later, this no doubt very complicated agreement, was entered into between the Secretary of State for War and the Public Works Loans Commissioners with regard to Scotland, and on the 21st with regard to England. Was the Secretary to the Treasury quite sure that the mere fact of his having got the Resolution authorising the expenditure of the money was a sufficient authority on which to proceed with the transaction? What was the meaning of this clause? The hon. Gentleman had got authority to spend this money in this way. He had made an agreement which set forth exactly what he proposed to do, and what was the use of rehearsing that, and duplicating the effect of a Resolution which had already been passed by the House? The Under-Secretary for the Colonies had told them with great force that the real ground upon which the proposal in Clause 5 rested was the prospect that in Nigeria there would be found a new supply of raw material for the great cotton industry. That was a very good and reasonable ground upon which to make this expenditure, but what he desired to call attention to were the dealings of the Government with the British Cotton Growing Association, to which the hon. Member below the Gangway had alluded. That association had been largely supported by contributions from the Lancashire operatives in conjunction with the employers to see what could be done to develop the sources of cotton supply in the British Empire. The Government had made this Association a grant of £1,000 a year. What had happened was that this association, which was being subsidised by the Government, had joined hands with one of several private companies called the British East Africa Corporation, Ltd. If grants of this kind were to be continued, some care should be taken to see that public money was not used to help one private company and give it an unfair advantage over other companies.

said that the grant to the British Cotton Growing Association was to assist in carrying out certain educational work in connection with cotton growing, and the association used for that purpose one of these companies.

said that that only reinforced what he had already said. His point was that the British Cotton Growing Association, which the right hon. Gentleman subsidised with public money, favoured the British East Africa Corporation as against other companies trading in the same region in exactly the same way, and he was giving them an unintended advantage with public money. Clearly the effect was to give this one private company an advantage over its rivals.

said this company was employed to perform a particular service and the money was paid for value received.

said it was public money and it gave this company a distinct advantage over the other companies. He hoped that in future loans dealing with Colonial matters would not be made out of the Local Loans Fund. That was utterly unprecedented. He trusted that the Government would not talk so much about financial control and financial purity. They should see that in future the Public Works Loans Bill was confined to the definite purpose for which the Public Works Loans Commissioners were instituted. Grants like these ought to be regularised, and not pitch-forked into a Bill where they ought not to appear at all. They should be put into proper form in a Colonial Loans Bill.

said the Under-Secretary to the Colonies had placed the greatest weight upon the argument that this railway would do something to broaden the area from which the supplies of raw material for the cotton industry was drawn. That argument was also supported by the hon. Member for Bolton. He hoped the arguments which had been brought forward in favour of broadening the basis of our cotton supplies would hold good with regard to sugar, and that the right hon. Gentleman would be prepared favourably to consider schemes to further any plans for increasing the basis of our sugar supply in order to avoid "corners." The Report of Sir Frederick Lugard proceeded on the assumption that the construction of tramways was preferable to the railway. He was glad the right hon. Gentleman had come to the conclusion that it was preferable to begin right off with the construction of a railway, although he hoped the Government would consider the advisability of using tramways as feeders of the railway. As to Jamaica, he did not see anything in the Bill as to the repayment of the loan. He imagined that', the Act of 1899 having been incorporated in this Bill, it was not necessary to state exactly the time, provided that it was any time within fifty years. If any time had been agreed upon, perhaps the right hon. Gentleman would state what it was. The Financial Secretary to the Treasury had suggested that possibly only £75,000 of the £800,000 would be required by the Government of Jamaica for Government purposes. He would like the hon. Gentleman to state exactly what was proposed to b3 done with the money. If it was only to repair or rebuild Government buildings, it might be ample, but if it was also to make good the sewers which had been broken by the earthquake in Kingston, he doubted whether £75,000 would be sufficient to cover the cost. It would be necessary to have a re-survey of the whole of Kingston Harbour and the approaches to it. At the present time the approaches were dangerous owing to the fact that the whole bottom had been shifted by the earthquake. That would entail considerable expense. Perhaps the hon. Gentleman could give some information regarding that, for as the Bill stood the Government of Jamaica might find themselves tied down in the use of the money to the repairing and rebuilding of Government buildings. Would the money cover the cost of reconstructing the sewers of the town?

said he would like to express his thanks to the Government for what it was proposed to do. He believed that their outlay would very shortly be remunerative in its character. The prosperity of Northern Nigeria was bound to be stimulated by such a proposal and in a secondary degree the prosperity of Lancashire would also be stimulated. As he happened to be connected with the cotton industry he would like on behalf of the cotton trade to express his thanks for the broad and statesmanlike interest the Government had taken in the matter. The proposal had been described as a step towards tariff reform. The term "tariff reform" seemed to have a wide and far-reaching elasticity, which made it very fascinating. He was in favour of tariff reform when it could be shown to be for the advantage of this country, he was against it when it could not be shown that it was for the benefit of this country. This policy of getting our raw material from Northern Nigeria would give us the advantage of a new source of supply, without restricting or impeding any existing sources of supply.

said he was glad the Chancellor of the Exchequer had carried out the promise made to the Irish Members as to the rate of interest on local loans, in Ireland. He noticed that by Clause 7 of the Bill power was taken to take away from the Public Works Loans Commissioners the power to lend, and to hand it over to the Board of Works in Ireland. He was totally opposed to any such transaction and to the putting of further powers into the hands of that Board. He might be told that the idea of an Irishman objecting to that was against the general policy of which they were supposed to be in favour. If this were an Irish Board run by Irishmen he might agree that he was mistaken in the view he had expressed, but when he knew that it consisted of promoted private secretaries, and that on every possible opportunity it stood in the way of the development of the industries of Ireland he did not think they should be entrusted with any further power. He had listened to the instructive speeches which had been made in regard to the development of the trade and industry of Northern Nigeria. That territory was going to get £2,000,000, and the Under-Secretary h id made an interesting speech on the subject. But what was surprising was that the Government should be so carefully protecting the interests of Nigeria when they refused to take any step for the protection of a single industry in Ireland. The Irish Members were anxious to develop Ireland by a better system of harbours. The Irish Members, the Chief Secretary, the Vice-President of the Board of Agriculture, were all in favour of legislation on that subject, and one would have supposed that Ireland would have got it. But there stepped in the body called the Commissioners of Public Works, and by inserting in the proposed legislation some ridiculous clause they h d cause 1 the remedial legislation for the benefit of Ireland to be dropped.

The Commissioners of Public Works in Ireland drafted a Bill which was introduced by the Chief Secretary and the Attorney-General for Ireland, and it had the approval of the whole of the Government and of the English Treasury.

said that in dealing with this body he was fully entitled to refer to the methods they had followed up to the present time. He still said that the remedial legislation with respect to piers and harbours had to be dropped, owing to the attitude taken up by the Commissioners of Public Works in Ireland.

said that every item in the statement made by the hon. Member was absolutely inaccurate.

declared that these so-called Commissioners of Public Works had prevented efficient works from being carried out, and he was absolutely opposed to the granting to them of greater powers than they had at the present time.

said that no one would disagree with the proposals of the Government in regard to the construction of the railway in Nigeria, and the assistance to be given to Jamaica. He would support them in the policy with respect to both which had been ably explained to the House by the Under-Secretary for the Colonies. The only complaint he had to make was that the Colonial loans should be included in a Public Works Loans Act. He and his friends did not think that was the right way to ask the House to authorise a loan. The Bill proposed that £3,000,000 should be made available for loans to public bodies in Great Britain, and £700,000 to public bodies in Ireland, for the purposes of public works. There was nothing in the Bill to show the purposes to which these large sums of money were to be applied, and it was not within the reach of any ordinary Member of the House to ascertain how the money was to be spent. Some time ago attention was drawn to the unlimited expenditure of public money derived from the Public Works Loan Commissioners by local bodies throughout the country. Before this Government came into power, the policy of the late Government on that question was generally understood, but no statement had yet been made as to the policy of the present Government. It was eminently undesirable that the expenditure of the country should be increased by the increased expenditure of local authorities for local purposes, considering the large demand it made on the money market for money to provide these loans. He thought that some explanation should be made as to how this sum of £3,000,000 was to be provided, and how it was to be spent. There was nothing in the Bill, at any rate, to show how the money was to be spent. The question had already been discussed as to the extraordinary transaction between the Traesury and the War Office in regard to certain loans and mortgages which had been transferred. The explanation given by the Financial Secretary to the War Office only showed that there had been an agreement between the Treasury and the War Office that certain loans should be transferred from the former to the latter. But that transaction had been entered into without the authority of the House, and the explanation of the hon. Gentleman amounted to a confession that it was invalid, and could have no force whatever until this Bill was passed. He pressed for some information as to how the £3,000,000 provided for in the first clause was to be spent in the United Kingdom, and the £700,000 to be spent in Ireland.

said he rose for the purpose of supporting the hon. Member for Newry in the protest he had made against the course which was being pursued in relation to this matter, which was one of great importance. The Board to which it was proposed to transfer certain sums was one over which Irish opinion had no more control than over the affairs of the island of Jamaica. The Irish Members in opposing this step grounded their protest on the fact that the Irish Board of Works, with whose operations they were perfectly familiar, was an absolutely incompetent body which during many years of opportunity succeeding in doing nothing whatever that had resulted in any benefit to the country, with whose interests they were supposed to be concerned. He challenged this step. The very fact that the Board of Works was being entrusted with the power of giving loans would prevent applications from being made by local authorities for loans for the construction and improvement of piers and harbours. Who had asked, he wished to know, for the transfer of this power? Was any complaint made against the people who had formerly dealt with the money? Had the harbour or other local authorities asked for the transfer?

said that since 1875 the Irish Board of Works had been restricted in their loans for public works, and since then no Act had been passed enabling them to lend money to local bodies for public works. The transfer of the powers of the Public Works Loan Commissioners to the Irish Board of Works was a comparatively small matter, and no very large transaction was likely to be affected by this transfer, which had been made at the request of the Public Works Loan Commissioners themselves. Quite the contrary would be the case. He might mention that since 1897 the Public Works Loan Commissioners had granted loans to Ireland to the amount of £10,000,000,while England had been granted practically nothing. The Bill was intended to unify procedure in England and Ireland.

drew attention to the fact that for seventeen years the people of the West of Ireland had been asking Parliament to enable them to spend their own money on piers and harbours, and if the Vice-President of the Board of Agriculture would only visit that part of Ireland he would be able to see what a lamentable state of affairs existed there as regarded piers and harbours. Many such works were vitally necessary. Those who were responsible for the carrying out of marine works were quite willing that effect should be given to the wishes of the county councils, and he could not see why it was necessary that an Act of Parliament should be passed to enable them to spend their own money.

said that what the hon. Member was referring to was not relevant to the Bill before the House. The hon. Gentleman would require another measure to make what he wanted effective.

said he understood that the Bill before the House was to enlarge the powers of the Irish Public Works Board. In his opinion that Board was too powerful already; and certainly some way should be found for getting out of the dilemma so as to provide loans of public money for piers and harbours in the West of Ireland.

said that a grant to a particular harbour could not be introduced into this Bill. What the hon. Gentleman wanted would require special legislation. Qestion,, put, and agreed to. Bill read a second time. Bill committed to a Committee of the Whole House for To-morrow.—(Mr. Runciman.)