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1619
China Indemnity
HOUSE OF COMMONS
[Mr. Hannon.] Friend in what he says about the con- tribution which Australia can make, and it would be a genuine gesture of friend- ship to the Australian people if this declaratory statement were put in the Bill, and would show them that even in small matters we are thinking of them at a time when they are in great difficulty. I would not support this Amendment if it were in any way calculated to inter- fere with orders that might come to this country. My hon. Friend has made it clear that his Amendment relates only to that part of the indemnity which accrues between last September and 1945, and which is available for expenditure entirely at the instance of the Chinese Government overseas.
Mr. DALTON: The hon. Members who put forward this Amendment have made it clear that it would not operate in any way to divert from this country the moneys which will accrue to it under Clause 2 of this Bill, namely, the £3,000,000 of accumulation after deduction of the education grants, and the further £4,000,000, which is half of the £8,000,000 which was paid over to the China Committee in London. The Amendment will apply only to
the £4,000,000 which will become disposable by the Board of Trustees. The Govern- ment and I personally are very glad to do what we can by way of a gesture of friendship towards Australia, and, indeed, towards other dominions which might be interested in this Bill. We all know the merits of Australian hard-woods and possible if some other speaker were to give tongue, he would praise Canadian soft-woods. I am perfectly willing and glad to accept the Amendment, and in the event of the Bill passing into law, we should of course be able to assist Australia or Canada or any other part of the Empire through our commercial and diplomatic representatives in China. Hon. Gentlemen clearly realise that we cannot unduly bind the Chinese Govern- ment, yet we are hopeful that there will be a balanced programme for the re- habilitation of Chinese railways, and if orders for locomotives and steel rails come to this country, room will naturally be found for sleepers, which we hope might be supplied from one or other of the overseas dominions.
Amendment agreed to.
(Application) Bill.
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Mr. ARTHUR MICHAEL SAMUEL: I beg to move in page 2, line 2, at end, to insert the words:
"Provided that no disbursement shall be made under this section for the purpose of material until an purchasing railway
arrangement has been arrived at about the arrears of interest, and provision made for the service, of the Shanghai-Nanking, Hu Kuang, the Tientsin-Pukow, the Lung-tsing- u-hai,
other the Canton-Kowloon, and Chinese railway loans issued in Britain and now in default."
me to
I am moving this Amendment in order that we may straighten up the position of these railways. I have received a good many communications asking bring forward certain points. Proposals are now in the hands of the Govern- ment, and they have not met with the opposition of the Chinese Government; in fact, they have raised no objection whatever to the proposed arrangements. Perhaps the Minister will give us more information about those proposals. The Chinese Government will have no ob- jection whatever to the Under-Secretary tellin us, on behalf of H.M. ment,
much as
as he would enable us to see where we I have received a very interesting letter on this subject from a man quite un- known to me which I can show the Under-Secretary.
This man say very
truly in this letter:
Govern- It
are.
can.
"I subscribed to these bonds of the Tientsin-Pukow railway and for years have not had a shilling for my interest notwith- standing certain specific contracts made on the bonds when the loan was issued.” Such a state of affairs cannot go on. Hon. Members must remember that we owe a great deal of our overseas trade to generous lending overseas. When we lend new money overseas, part of that money goes out in the form of exported goods. It is a good thing for the ex- porter when new money is borrowed here. [Interruption.] It is not for the benefit of the export trade that, when securities are launched here on the over- seas market, those documents should be- come valueless. What happens? Later on, when other borrowers come here, the inverter does not lend the money and the manufacturer does not get the orders. We should not sit down in this way.
Interruption.]
There is another point which I would make. How is the money going to be spent on the railways in China? Is the
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19 FEBRUARY 1931
China Indemnity money to be used for railways financed with British money or for Chinese rail- ways? Take the case of the Hankow- Canton railway which, after leaving Hankow, goes up to Canton through two or three hundred miles of very sparsely populated country. Any development of that railway with this
hey would be of very little use to China. It could only be for military pur- poses, and the money would be spent on labour in China and not on materials in this country. Will the hon. Gentleman tell us how the money is to be spent on Chinese railways or on British financed railways, on labour in China or on British material? I am not going to press the matter to a Division, but I hope that this Amendment will give the Under- Secretary an opportunity of making an explanation to the House on this matter.
Mr. BOYCE: I beg to second the Amendment.
Mr. DALTON: I must condole with the hon. Gentleman on his lost voice. I do not know whether it is due to his elec- toral activities or some other cause, but, whatever the reason, I condole with him. I am glad he is under no illusions as to the possibility of our accepting this Amendment.
This Amendment would
lay down the extraordinary argument that we should keep large numbers of men out of work and keep industrialists out of getting their profit until a large number of persons had received their pounds of flesh of interest on their bonds. That is a proposition which the Govern- ment could not maintain for a moment. I would like to reassure him and to draw his attention, since he has raised the point, to a passage in the note from Dr. Wang to Sir Miles Lampson saying that, in view of the urgent necessity, in con- nection with
and the reconstruction development of China, for the reconstruc- tion of the existing Chinese railways, the Chinese Government would take the necessary steps to apply a part of the accumulated funds and the payments due shortly to the rehabilitation of those railways and 1 call his attention to these words:
"especially those lines in which British financial interest has been principally con- cerned, to which lines attention will first be given."
Consequently, we have an undertaking from the Chinese Government that their
1622
(Application) Bill. programme will be devoted, in the first instance, towards re-establishing the lines to which the hon. Gentleman has referred. It is a necessary condition to the financial settlement of these outstanding matters that there must be the actual physical rehabilitation of the railways so that traffic may run.
Mr. SAMUEL: What does the hon. Gentleman
mean by the physical re- habilitation of the railways? A large amount of rolling stock has been com- mandeered and engines have been taken That does not mean that a large amount of money is to be used solely for the purpose of making the track good. It must be used to replace the com- mandeered rolling stock.
away.
Mr. DALTON: No doubt that will be clearly in the mind of those drawing up the programme. My point is this. If we are to say that we cannot spend the money on rehabilitation of the railways until interest begins to flow on these bonds, then we are moving in a vicious circle. We have to provide this money for the rolling stock and the permanent way, and then we shall have much more hope with the present Chinese Govern- ment of making proper arrangements with regard to these bonds. As has already been stated, Sir Miles Lampson is actively engaged in pursuing this matter. We, following the principles accepted by the previous Government, have taken the view that we must keep perfectly separate the negotiations re- garding debts of all kinds and the negotiations regarding this indemnity. We cannot for a moment link up these two questions together as they would be linked in the Amendment, but, although they are separate, they will both be pur- sued. Sir Miles Lampson, as the hon. Member knows from answers in the House, entered into conference with the Chinese representatives in November of last year, and an outline was sketched out for the settlement of these outstand- ing questions of debts of all kinds. Sir Miles Lampson has since been collecting data as to the exact total of claims under various heads, their distribution, and so forth. That is being done now by the Foreign Office who are collecting this data. As soon as he is armed with this information, Sir Miles Lampson will re- turn to the charge and enter into a further discussion with the Chinese representatives. If this Bill passes in its
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