scheme, a loan of one-half of the wages paid to the settlers while engaged on preparatory work on their own farms, and a guarantee to the Victoria Government against one-half of any losses (with a maximum of £300) which they may incur through making advances (approximately £625) to the settlers for the purchase of stock and equipment.

(c.) New South Wales.-An agreement for assisting 6,000 persons to settle on farms in New South Wales over a period of five years. The contribution of His Majesty's Government takes the form of a payment of one-third of the interest on loans raised to finance the scheme, a loan of one-half of the cost of sustenance of settlers and their families during training, and a guarantee to the bank in respect of advances (approximately £500) to settlers. The agreement was signed on the 1st June, 1923, and will come into operation on the 1st January, 1924.

CO-OPERATION IN FINANCIAL ASSISTANCE TO IMPERIAL DEVELOPMENT.

The proceedings began with the following statement by the Chairman at the Seventh Meeting of the Conference, held on the 10th October, 1923 :

The Chairman: The next subject on the Agenda is the question of financial co-operation. I think it is apparent from all the discussions we have had that settlement, markets, Preference, and finance are really all different aspects of the broad question of development, and the extent to which development programmes can be carried out is the measure of the production which can be obtained and the measure of the extent to which settlement can be undertaken.

Acceleration of Development Schemes throughout Empire of vital Interest to Great Britain.

I will say at once that to us in this country it is of the most vital interest, both directly and indirectly, that the putting in hand of these development schemes all over the Empire should be speeded up. It means an earlier chance for settlers and for more of them; it means—you know our unemployment situation in this country and the prospects that are before us-it means immediate orders, and it means a growing trade coming from the development and the production which it fosters, and therefore we feel most strongly that no possibility should be left out of account which can help to speed up development. Now we have already taken up the question of Preference, and I want to put to you another aspect this afternoon, the question of direct finance. I think it is also clear from the statements everybody has made around this table that if the Dominions are to undertake large schemes of development, two conditions are necessary in the first place, as Mr. Bruce so well put it, a reasonable certainty that there will be a market for the produce of the population, and secondly that the financial commitments which are undertaken will not in the initial stages place an undue burden on the particular State or the particular undertaking.

The first of those questions we are going into on other subjects. I want to consider this afternoon whether we cannot use our credit to co-operate with you in the second, the purely financial question. I put in my opening of the Conference the general proposal. As I say, you have got programmes of development, every one of you, which you hope to undertake over a period of years. If we could speed them up on sound terms it is good policy and it is good business. We have been following that policy here. We have followed it in our home affairs under the Trade Facilities Act by the giving of guarantees. We are following it to-day in getting local authorities and Public Utility Companies to anticipate their programmes; to put in hand work they would not put in hand for some years, and we give them financial assistance in order to get that

done; the value to us of course being the immediate orders which we get and the development of sound revenue-producing schemes. It is a policy which we propose to follow in helping on the most rapid possible development through the Colonies. Now it is true. that we already grant funds under the Settlement Act and the money voted under that financial assistance goes for the development of settlement; but my broad proposition to you to-day is, if we can get the speeding up of the development programmes that lie before you over a period of years, if we could get the earlier undertaking of works which would place orders here, we should be prepared to assist directly and financially.

You will remember that in the early stages we tabled this as a subject for discussion. We sent to you last July a telegram, which was in these terms: "Following is general indication of lines on which His Majesty's Government, subject to results of discussion at Economic Conference, would be prepared to consider schemes of financial co-operation which may be proposed with view to assisting early development of public utility undertakings in Dominions and India which without such assistance would be delayed or not proceeded with. Undertakings assisted should be of a nature which if put in hand rapidly would confer direct benefit both on Dominion and India and on employment by placing of orders in United Kingdom. Conditions and limits of financial assistance and shares of co-operating Governments in such assistance would be settled in each case by special agreement. Without excluding from consideration any form of assistance His Majesty's Government consider guarantee of interest or advance of part of interest for limited period is likely to prove the most generally useful method. Specific proposals under an agreed general scheme would naturally be examined carefully by competent authorities both in Dominion and India and United Kingdom before approval." I need not elaborate here the question of guarantee. It is present to all your minds that in the first place there will be cases where a mere guarantee would not afford adequate financial inducement. In the second place the addition of a direct British Government guarantee might not give a material financial advantage; it might make little or no difference in the rate at which the money can be borrowed. I know there is also the question in considering guarantees which certainly you will have to take into account, whether the acceptance-and upon this I think opinions will differ-whether the acceptance of a guarantee to an issue would tend to depreciate the value of past or future unguaranteed issues.

Grant of Interest during Initial Stages.

I think therefore the most helpful system is that of a grant of part interest over a period in respect of anticipated schemes which are put in hand before their normal time and which are reflected in orders placed here. Now let me take one or two concrete examples of what I mean arising out of the kind of statements which have been made here.

New Zealand's Hydro-Electric Schemes.

Let me take New Zealand. Mr. Massey spoke to us of programmes of hydro-electric development. Normally I take it those programmes are going to be spread over a period of years and the orders will come here. Well, we want orders as quickly as we can get them. This is our black time. You would be glad enough, I presume, to get the development quicker if you were satisfied with the financial conditions. Normally that development would spread over a period of years. Would you put it in hand more rapidly and place the orders here if we helped the accelerated part of it with interest during the initial stages?

Mr. Massey: Most certainly.

Australian Railway Schemes.

The Chairman: Now let me take again the kind of subject I think that came out in Mr. Bruce's speech and which have been constantly discussed here by Australian representatives. There are big tentative schemes of railway delevopment in Australia. Some are going forward in any case, but there are schemes of one kind or another which are postponed or not taken in hand yet because the immediate financial outlay would not be justified. If it can be arranged that there should be a grant of interest for some part of the initial period, part of the interest for an initial period, in respect, say, of that proportion of the capital of these anticipated schemes. which was represented by orders here and by freight, would you undertake those in the immediate future?

India's Development Programme.

Take India. Mr. Innes gave us a picture of a big programme. There was, if I remember right, £70,000,000 worth of orders which would be placed over five years. Now what I would put to you is: Supposing assistance were given in the matter of interest, would it be possible for India to increase the programme above the figure at present in their minds and/or alternatively-I put it for preference and "while increasing the aggregate of the programme to take some of the orders of the later years and put them in earlier years? For instance, you have this programme spread over five years, that is, say, £15,000,000 a year. Now can you take all or any part of the last two years' programme and put it in hand in the first two years if some assistance were given in the matter of interest? Those are the kind of things which I wish to see if we can accelerate to our mutual advantage.

Four Conditions of Proposed Scheme.

I think that in proposals of this kind there are four conditions which ought to be fulfilled.

First Condition.

In the first place we should have to be agreed as to the character of the schemes. I think they should be (and I use the word in its

broadest sense) schemes of a public utility character. I think it is plain that we could not be giving direct financial assistance in order to establish a competing industry with something that exists in this. country. Personally, I hold the view that the broader the development, generally the better it is in the long run for the good of the whole Empire. But it is one thing to take that view and it is another thing in a time when you have very serious unemployment to give direct financial assistance to establish an industrial concern; therefore I put it, that the type of scheme should be public utility undertakings; and those are the kind of undertakings which are the initial prerequisites of development. But granted that the undertaking was of a public utility kind, I think we should hold equally open to assistance such an undertaking, whether it is directly conducted by the State or by a Local Authority or by a Municipality or by a Company.

Second Condition.

Secondly, the scheme to be assisted must be a scheme the development of which is being anticipated. It is not possible, I think you will agree, to contemplate the giving of subsidies for work which in any case is going to be put in hand. That would tend on the one hand to raise prices and on the other to make people sit back on their haunches and say: "If we are to have grants for something which in any case we are going to do, then we shall not progress till we get them." But there is a clear distinction between work which is going forward in any case and what I call anticipated development work put in hand before its time, and this only applies to work put in hand before its normal time.

Third Condition.

Then the third condition (naturally the immediate interest to us is that we should get orders in this time of our very dire distress) is that these schemes should be reflected in orders placed here.

Fourth Condition.

The fourth condition is what I will call joint responsibility, that is to say, if a scheme is put up by a Dominion Government or by a Government of a State within a Dominion, we should both accept some share of responsibility for it. If the undertaking is a State undertaking of course you do accept direct financial responsibility for it, because it is carried out with money raised by you. It is a State Loan, and the financial liability of that loan is there.

If, on the other hand, it were put forward by a public utility company which we were asked to support, I think then, in that case, the project being for our mutual advantage, we should both take some share in supporting that Company. That condition would, of course, automatically apply wherever it was a State undertaking. The condition of dual responsibility would only have to be made effective in the way I have suggested where it is to be undertaken by a Company or Local Authority.