File 1262/1915 Pt 2 'Persia: Financial assistance: The Moratorium' [‎324v] (412/424)

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trusts that their Lordships will, on reconsideration, withdraw their objections
to the provision in it of 100,000£. for the Southern Shan States extension.
I have, &c.,
The Secretary, the Treasury.
T. W. IIOLDERNESS.
ENCLOSURE No. G .—Treasury to India Office The department of the British Government to which the Government of India reported between 1858 and 1947. The successor to the Court of Directors. .
9667. Treasury Chambers,
Sir, 30th April 1915.
I have laid before the Lords Commissioners of His Majesty’s Treasury
your letter of the 16th instant (F. 1484) relative to the exclusion from the
Indian Railway programme 1915-16 of the item of 333,000?. for new lines.
In reply I am to request you to inform the Secretary of State for India
in Council that in deference to his representations they will no longer raise
objection to'the provision of 100,000?. of this sum for the Shan States
extension line, in addition to the amounts already agreed to for capital
expenditure on railways in 1915-16 by Treasury Letter of the 9th instant
(7202/15). I am, &c.,
The Under Secretary of State John Bradbury.
for India.
ENCLOSURE No. 7 .—Treasury to India Office The department of the British Government to which the Government of India reported between 1858 and 1947. The successor to the Court of Directors. .
No. 16147/15. Treasury Chambers,
Sir, 15th July 1915.
1 am directed by the Lords Commissioners of His Majesty's Treasury
to transmit to you herewith for the information of the Secretary of State for
India in Council the enclosed copy of a letter, dated the 6th instant which has
been addressed to the Secretary of State for the Colonies in which it is
suggested that War Loans should be issued locally by the Governments of the
several self-governing Dominions subject to the guarantee by the British
Government of the principal and interest of such loans.
It appears to My Lords that consideration should be given to the question
of the applicability with the necessary modifications of this proposal to the
special case ol India. The case of India differs from that of the self-governing
Dominions in several respects and particularly' in the fact that while the
Dominions are incurring heavy expenditure for war purposes and are
borrowing the money required for these purposes from the British Exchequer,
no war expenses beyond the normal peace charges in respect of the Indian
Army contingents employed overseas are being borne by the Government of
India and that Government is therefore not borrowing money from the British
Government. Accordingly in adapting the scheme to the case of India it will
be necessary to arrange that the whole proceeds of the War Loan issued in
India should be made available for war purposes by being placed to the credit
of the British Government. The operation would be equivalent in effect to the
raising by the British Government of a War Loan in the Indian market and
it might indeed actually take this form. But Mr. Chamberlain will probably
prefer that the Government of India rather than the British Government
should undertake the arrangements and responsibility for placing the loan in
the hands of the people of India provided that the Indian Government were
fully guaranteed against loss. In that event the issue if made would take the
foim either of an Indian Government loan guaranteed as to principal and
interest by the British Government or of a joint British and Indian Government
loan guaranteed by both Governments and managed by the Indian Govern
ment for and on behalf of the British Government which would be
responsible in the first instance for the due provision of interest and the due
repayment of principal and for the expenses of issue and management. The
latter alternative would appear in Their Lordships’ opinion to be preferable.
The main object of the issue of such a loan in India would be as in the
case ol the Dominions to attract such surplus capital as may be available for