Order read, for resuming Adjourned Debate on Question [4th, March],
That the Contract, dated the 19th day of January 1886, for the Construction of a Submarine Telegraph Line from the Island of St. Vincent to the West Coast of Africa be approved.
§ Question again proposed.
§ Debate resumed.
§ MR. HENNIKER HEATON
I rise to oppose the Motion, and to move, as an Amendment, that the whole question should be referred to a Select Committee of the House. This, Sir, is a contract between Her Majesty's Government on the one hand and the Eastern Telegraph Company on the other. In consideration of the latter constructing a cable from the Island of St. Vincent to the West Coast of Africa, the British Government agrees to pay a subsidy of £19,000 a-year for 20 years to the Eastern Cable Company and its satellite, the Brazilian Company, both Companies being controlled by the same persons. Now, I want to direct the House's particular attention to the fact that this contract is dated 19th January, 1886; and it is solemnly stated therein that a cable of an approved character shall be constructed, and on condition of its construction this large subsidy of £380,000 shall be paid. Now, I am prepared to prove that on the day when the contract was signed, a rival Company, the India-rubber and Gutta Percha Company, without any subsidy or promise of subsidy, had completed a cable over this very line. Now, the object of a subsidy is to make up or make it possible for a Company to construct a cable. Where, then, was the necessity of this subsidy? It seems to me, therefore, that the Treasury Minute on this subject is entirely misleading. A reference to The Times newspaper of 13th October last will prove that the rival Company to that which obtained this contract had despatched a steamer with the cable on board to construct this line from the Island of St. Vincent to the West Coast 68 of Africa, and on to the Cape of Good Hope, and from thence to Australia. A further reference to The Times of 21st November following proves that, on that day, the cable had been completed all but a small section along the coast. Yet, on the 18th January of this year, the contract to construct a cable was signed by the British Government with a rival Company, which, for so doing, was to be paid this large subsidy. Now, we are informed that the Eastern Telegraph Company purchased the cable already laid, and takes the Government bonus. And who is the moving spirit in this transaction? A gentleman whose name does not appear in the contract, and yet a gentleman, I venture to say, who is greatly distrusted and looked upon with grave suspicion when matters of this kind have to be settled. The gentleman I allude to is Mr. John Pender. As an Australian, I must say we have had rather too much of this gentleman's monopolies in the Southern Hemisphere; and, in asking for a Select Committee to examine into all matters connected with this contract, I think I am making a very reasonable request of the Government. The contract which the House is now asked to sanction binds the British Government to pay £380,000 to John Pender and Company for the construction of a telegraph cable from St. Vincent to the West Coast of Africa. John Pender and Company have already a line of cable on the East Coast of Africa, for which the Government pay a subsidy of £25,000 a-year. By now obtaining the contract for the West Coast of Africa, John Pender and Company will obtain a practical monopoly; and I am sure that the House will not submit to a contract of this nature being entered into without the most searching inquiry. I believe that the time has come for the Government of this country to own these cables that connect England with our great Colonies; and the effect of this contract is to throw the monopoly of the cable to Australia into the hands of John Pender and Company. While these, large subsidies are being paid to one Company, there is no hope of inducing the Government to construct cables themselves. I have already given Notice of Motion, to the effect that the Government shall construct an alternative line of cable round the West Coast of Africa to the 69 Cape of Good Hope; but if this contract be approved my proposal cannot be adopted. As announced in The Times of the 13th of October, the Gutta Percha Company agreed to construct the cable from St. Vincent to the West Coast of Africa, and thence to the coast of Australia without subsidy. Without warning John Pender and Company came in, and, after the cable had been laid down, purchased the rights of the Company, and now endeavours to obtain a large sum of money from the Government as a subsidy for the construction of the cable, although, as a matter of fact, it was already laid down and almost in operation. I can prove that the Treasury Minute on this matter is erroneous, and I have other information in my possession which is more suitable for a Select Committee. I am desirous of avoiding saying anything offensive, and I shall not state the source of my information except to the Select Committee; but I can readily prove that this contract is of a character which, to use a very mild term, deserves inquiry. If the Government grant an inquiry, as I maintain they are bound to do, they will be enabled to examine various Papers, to call witnesses, and obtain other evidence, which will enable them to understand the transaction which has taken place, and that evidence will show that the transaction is not an honest one. I do not say one word against the Members of the late Government; but this contract was entered into just before they left Office, during a time of Election excitement, when they were influenced by information put before them of an erroneous character. In consequence of the monopoly granted to John Pender and Company, a rival Company find that the concession granted to them is of no avail, and that they are entirely in their power. I maintain and shall prove that this contract is unnecessary; and, at a time when we are all suffering from depression at home, it is not a fitting time to throw away £20,000 a-year on the West Coast of Africa. And I maintain that the time has come for these subsidies to cease. As I said before, the time has come for the British Government to construct and own cables to all parts of Her Gracious Majesty's Dominions. I find that, if this subsidy is granted, it will make a total of £54,000 a-year given by the British Government to Pender and Company for 70 the construction of African cables. Seven years ago a contract was made with Mr. Pender to construct a cable down the East Coast of Africa, and for that he receives, and will receive for the next 20 years, the enormous sum of £35,000 a-year from the British Government. He has already received £250,000 sterling for that work, and now we propose to give him another £250,000 for the West Coast of Africa. I ask, Sir, for a Select Committee of Inquiry, and I pledge myself to produce documents to prove that the cable was laid, or a great portion of it; that the remaining portion was on board ship and being completed; that the subsidy was neither asked nor demanded, and it is not necessary to pay it. The late Government is not to blame, because, after the excitement of the General Election, the Ministry had much to do to prepare to meet Parliament. If the present Government will not grant the Committee, I shall consider that they do not wish to have the true and full facts made public. I beg to move that the matter be referred to a Select Committee of the House.
§ Amendment proposed, to leave out the word "approved," in order to insert the words "referred to a Select Committee,"—(Mr. Henniker Heaton,)—instead thereof.
§ Question proposed, "That the word 'approved' stand part of the Question."
§ SIR HENRY HOLLAND
said, that of course he did not know what line the Financial Secretary to the Treasury would take with regard to this subject; but if he might tender his advice, it would be not to allow this contract to be referred to a Select Committee. He was somewhat surprised at the insinuations which had been thrown out by the hon. Member for Canterbury (Mr. Henniker Heaton), who had stated that these transactions, which had been entered into by the late Liberal Government and by the late and present Governments, were not honest. The hon. Member further said that the decision of the late Government was arrived at during a period of Election excitement. On the contrary, he could tell him that one of the first matters which came before him (Sir Henry Holland) as Financial Secretary to the Treasury in July, long prior to the period of Election ex- 71 citement, was the question of this telegraph. He found that it had been decided by the preceding Liberal Government that it was absolutely necessary to lay down this telegraph line to the West Coast of Africa, and tenders had been actually called for and sent in. That was an opinion which had been arrived at by the then Secretary of State for War, the Admiralty, and the Colonial Office; and he ventured to think that it was hardly possible for the Treasury, under such circumstances, to refuse to consider the question of this contract, even if the opinion of the late Government had differed from that of their Predecessors. The hon. Member had averred that when this question came before the late Government a Company had started to lay down a cable. It was true that the India-rubber Company had agreed with the Portuguese Government to lay down a line from St. Vincent; but the line was a quasi-foreign one, with which Her Majesty's Government might not have been able to make satisfactory terms, and over which they had no control. The hon. Member said that this Eastern Company had now established a monopoly, and could charge what rate they pleased; but if he looked at the contract he would see that the rates were laid down and fixed by it, and many other useful and necessary conditions were imposed upon them. The hon. Member said that the India-rubber Company were ready to work without a subsidy. So far from this being the case, they tendered for a higher subsidy than the Eastern Company. Both Companies tendered, and they both required a subsidy. He denied that any line, or part of a line, had been laid in July and August last, when the terms of this agreement were under discussion. The arrangement with Mr. Pender's Company was, he believed, practically settled long before the India-rubber Company had laid any line. He might say, without breach of confidence, that very great care and trouble were expended in considering this question. The late Secretary of State for War, the late Colonial Secretary, and the late Chancellor of the Exchequer, and he himself, went again and again over the question of the amount of the tenders and the amount of the subsidy; and the result was that it was reduced to £19,000, which was lower than the subsidy re- 72 quired by the India-rubber Company. The Treasury had no option but to take the best terms they could obtain from the Company that would lay down the line to the West Coast of Africa. The Government had to say which Company offered the best terms, and after all the attention and examination which had been given to the matter it would be idle to refer it now to a Select Committee. He therefore hoped that the Secretary to the Treasury would adhere to that contract.
§ THE SECRETARY TO THE TREASURY (Mr. HENRY H. FOWLER)
said, that the charge of the hon. Member for Canterbury was that they were entering into a contract that was not an honest one. The question had been before three different Governments for a succession of years, and it had been most carefully considered. The matter involved two points—namely, a question of policy and a question of internal administration. On the first question, he frankly conceded that the House had both the right and the duty to express its own opinion. That question was whether it was for the political and the commercial interests of this country that a telegraph cable should be laid to the West Coast of Africa. If the House referred to the Treasury Minute of February, they would find that the Treasury were of opinion that that scheme would be of advantage both to the West African Colonies and to this country, commercially and politically. The question was raised, in the first instance, under the former Administration of the present Prime Minister; and it was considered by the Cabinet of that day that it was for the interests of this country that there should be telegraphic communication with our Settlements in West Africa. Anybody who was aware of the grave public inconvenience that had been suffered from the want of that means of communication would be of opinion that that Cabinet decided rightly. That decision was confirmed by the Cabinet of Lord Salisbury, and again by the present Government. Of course the House might, if it chose, overrule the judgment of three successive Governments, and of those who, being responsible for the Military, Naval, Colonial, and commercial interests of this country, were all of opinion that it was necessary to have that 73 telegraphic communication. The next question was as to the terms of the contract for securing this telegraph. The Treasury, in its permanent officers, possessed a staff of the highest capacity and experience, which was totally incapable of a dishonest transaction. Their fault, if it was a fault, was their desire to safeguard the public interests, and to avoid, if they could, all undue expenditure; and it was not likely that the House could enter into a contract on better terms than the permanent officials of the Treasury could do. The Treasury invited tenders, and they received three—one of £23,000, another of £29,000, and another as high as £102,000. They decided to accept the one for £23,000. There was a difficulty in the way, arising in connection with the Island of St. Vincent not being British territory; but, that difficulty having been got over, the Company was in a position to complete the contract. Negotiations were opened, and he must express his admiration of the manner in which the late Chancellor of the Exchequer was enabled to reduce the subsidy to £19,000, of which the Colonies themselves would contribute £5,000. The English Government were only to pay half-rates; they were to have priority for their messages, and to have the right to nominate a Director to protect their interests; while in time of war they were to take possession of the telegraph. The House was asked to withhold its confidence from the Treasury, and to refer the contract to a Select Committee. That was not the mode in which the Public Business either had been or ought to be conducted. The hon. Member for Canterbury, before he concluded, had rather unveiled what was behind. The hon. Member said he was very anxious that there should be another cable laid to Australia, and that the Government should own all those submarine cables. They knew what that meant. They knew that the Government paid between £10,000,000 and 11,0000 sterling for the purchase of the telegraphs, which, he supposed, were not worth above half that sum. And now probably some people would like the Government to buy up the submarine telegraphs also. He, however, hoped that the Government would do nothing of the kind. The policy now being pursued of paying the Company 74 for the work they did was the wisest and the best that the Government could adopt. He objected to the appointment of a Select Committee, which, in fact, was a declaration on the part of the House that the Treasury was not competent to do its work. He submitted the whole matter to the House as a question of public policy, which had been decided unanimously by three successive Governments, without any element of Party conflict entering into the consideration of the subject.
§ MR. LABOUCHERE
said, he must congratulate his hon. Friend on having adopted the true and proper method pursued by Secretaries to the Treasury in answering inconvenient proposals. No one supposed that the Treasury officials were anything but honourable men; but when a contract was made and submitted to the House, surely the House had a right to consider whether it was wise, expedient, or desirable. The Secretary to the Treasury had himself explained how sharply the House ought to look after the Treasury and other Government officials. Preference had been made to the large sum of money which had been paid for taking over the telegraph system of this country. Why was this? Such a large amount of expenditure was due to the fact that the House left this matter to be settled by the Treasury and other officials; and it seemed to him that the hon. Gentleman proved that the House could not trust Government officials in matters of this kind, but that they ought to carefully overhaul every contract brought before them. The hon. Member who brought this subject forward did not complain that the contract was dishonest on the part of the Treasury, but that the contract was dishonest on the part of those with whom the Treasury dealt. The Secretary to the Treasury said there were two points to look at—one a question of policy, whether it was to the political and commercial interest of this country to have telegraphic communication with our African Colonies. He admitted that it was desirable to get this communication as cheaply as possible. What were the allegations made by the hon. Member? It was proved that three years ago the Treasury and the postal authorities thought that it was desirable that a cable should be laid between the Island of St. Vincent and the West Coast of 75 Africa. Tenders were submitted to the Treasury by various Companies. The lowest tender was that of the Eastern Telegraph Company; and the contract was signed on the 19th of January to construct and lay a cable from the Island of St. Vincent to the West Coast of Africa for the sum of £19,000 per annum during 20 years. Was this cable then constructed and already laid by another Company? The hon. Gentleman said no. Would the hon. Gentleman accept the news in the columns of The Times as a fair statement of the facts? In The Times of the 13th of October there was an account of a ship being sent out with a cable by the India-rubber Cable Company to lay this cable. There was a dinner and the usual festivities afterwards. In The Times of the 21st of November there was a statement that the cable had been laid. Consequently, the allegation was this—and it was a clear one—that the India-rubber Company did lay a cable from the Island of St. Vincent to the West Coast of Africa; and the reason was that they were obliged to lay it because they had land lines and small coast lines connecting Bathurst with the Cape of Good Hope. They were really obliged to lay the cable in order to fructify their land lines. When the contract was signed, therefore, with the Eastern Telegraph Company to construct and lay a cable for £19,000 a-year, he asserted that, unless those two statements in The Times should be contradicted, a cable had been constructed and laid by the India-rubber Company. The India-rubber Company had the exclusive concession of laying cables to the Island of St. Vincent. The Eastern Company, when they put in a contract below that of the India-rubber Company, knew very well that they could not carry out the contract; but when the India-rubber Company found that they could not obtain a contract the Eastern Company came and said—"Sell us your cable; then we will get a contract to construct and lay a cable from those two points, and we will obtain £19,000 per annum." The point which he wished to urge on the attention of the House was that a cable had been laid without any contract with the Government, and without any subsidy from the Treasury. This statement was in The Times, and he could not see the object which the Government had in 76 entering into a contract with the Eastern Company when the work had been done by another Company without a contract two months before. It looked like reckless benevolence on the part of the Government. Because the cable had been sold by one Company to another, they had said—"Let us give you £19,000 for 20 years." That was, altogether, £380,000. The whole system of subsidy was radically bad. It was of far more importance to Australia than to us that there should be telegraphic communication between that country and England. This route was a connecting link in the telegraphic communication between the two countries. We ought to consider what our Colonists desired, and ought not, by such subsidies, to prevent them from laying cables of their own. Two principles should guide the Government in making such contracts—the desires of the Colonists, and the desirability of buying in the cheapest market. We already paid to the Eastern Company £35,000 for telegraphic communication on the Eastern Coast of Africa; and now we were called upon to pay another large sum because this Company had suddenly bought a cable laid by and belonging to another Company. In these circumstances, he thought the hon. Member was justified in denouncing this contract.
§ MR. BADEN-POWELL
said, that the last speaker had said that the President of the Board of Trade did not know everything; but his own speech had shown, in the most extraordinary manner, that he did not know everything. He had said that the Australian Governments had objected to this contract, and that the hon. Member for Canterbury (Mr. Henniker Heaton) was speaking on behalf of these Governments. He had yet to learn that the Australian Colonies had expressed any opinion whatever as to this cable, which only went to the West Coast of Africa.
§ MR. BADEN-POWELL
said, this cable did not connect Australia with this country, and it was not likely that it ever would.
§ MR. BADEN-POWELL
said, that he had been in conversation with the official representatives of the Australian Colonies, and none of them mentioned that they had this route in view. Something had been said about the contract having been accepted after part of the cable had been laid; but the fact was that the matter was virtually settled two months before the India-rubber Company began to lay any cable. He would like some explanation of the statement that the two hon. Members who opposed the contract had met outside and arranged what to say inside the House.
§ MR. LABOUCHERE
said, he was in the Smoking Room, and simply asked the hon. Member for Canterbury to explain his case, and he did so, telling him what he meant to say.
§ MR. BADEN-POWELL
said, he believed that there was something at the back of what had been said, and that it was a purely personal matter, for he knew that one hon. Member, at any rate, had had business dealings with the Syndicate which had acquired the contract.
§ MR. LABOUCHERE
said, he could assure the hon. Member that he had not the slightest idea who was in the Syndicate, and, in fact, knew nothing of the matter until he came into the House.
§ MR. BADEN-POWELL
said, although he was not aware of any intention to run the cable to Australia, yet he believed it was intended to carry it to South Africa; and, if so, it would give that Colony the great advantage of an alternative route. When in Bechuanaland last year with Sir Charles Warren, they experienced great inconvenience from the want of telegraphic communication with England. During the critical state of affairs in Egypt, and the threatened war with Russia, their telegraphic communication was stopped for one month. He hoped, however, that the Government would take precautions against the evils that might arise in the way of excessive rates if both those routes were in the future to fall into the hands of the same Company; and if that was done he believed the contract ought to be passed, as he believed it was wise, expedient, and valuable.
§ THE PRESIDENT OF THE BOARD OF TRADE (Mr. MUNDELLA)
said, the negotiations for this contract had been commenced by the last Liberal Govern- 78 ment and concluded by the late Government on the most economical terms. It was a reasonable and a good contract; and he considered that a very good bargain had been effected by the country. He could not understand how the hon. Member for Northampton (Mr. Labouchere) could, after a short confabulation in the Smoking Room, come down and oppose a step which had been taken after careful investigation and long consideration. The contract was put up for tender, and one tender was for £23,000 a-year, another for £29,000 a-year, and a third for over £100,000 a-year. The late Chancellor of the Exchequer, whose ability in this transaction everybody recognized, reduced the first tender to £19,000, and at that sum the contract was concluded, special care being taken in regard to the terms and conditions, and it being arranged that £5,000 a-year should be paid by the Colony towards the £19,000. Under such circumstances, he hoped the House would not allow itself to be led away by the hon. Member for Northampton, whose criticisms, he thought, had a little animus in them, but would determine to ratify the contract.
§ SIR MICHAEL HICKS-BEACH
said, that the responsibility of this arrangement rested entirely upon the late Government, and mainly upon himself. He had never taken more trouble with anything in his life; and he believed that in the contract, as cut down to £19,000, the country had an exceedingly good bargain. This cable might save many hundred thousand pounds by securing telegraphic communication between this country and the Governors of our Colonies in Africa, thus tending to guard us from Native wars. For commercial purposes, too, it would be of great value; and he did not believe that we could lay out £14,000 a-year—for that was the real amount—better than in the present contract.
§ MR. MOLLOY
asked whether it was not a fact that the India-rubber Company, a solvent Company, were prepared to lay the cable at their own expense, and that some person stepped in, purchased the contract, and then came to the House for a large subsidy? He thought that the Government was bound to give a clearer statement than they had done with regard to this contract. Unless a more satisfactory explanation was furnished he should oppose the Vote.
§ MR. MUNDELLA
begged to state, by permission of the House, what had been already stated half a dozen times, that the India-rubber Company asked for £29,000 a-year; that they only laid a small section of the cable, and when they got the contract for the whole distance they handed it over to another Company, who undertook to do it for £19,000.
§ MR. ILLINGWORTH
wished to know why only £5,000 out of £19,000 was to be charged to the Colonies? He thought that sum might have been divided equally between the Colonies and the Mother Country. If, instead of dealing with our kith and kin in South Africa, we had been dealing with India, in all probability a large share of the burden would have been put on the Indian Exchequer. Those who were primarily interested in this matter were the large owners of land in South Africa. They would have the main benefits. It was for the interest of that large landed aristocracy that many of our wars were carried on; but in these arrangements the heaviest share of the burden was inevitably thrown on the Mother Country.
§ SIR FREDERICK STANLEY
said, that the hon. Gentleman was quite mistaken, and could not have looked at the Motion that was before the House. This contract related not to South Africa, but to the West African Settlements. The fervid imagination of the hon. Gentleman had run riot with regard to large landholders. He did not know that the proprietors in the West African Colonies possessed even the traditional "three acres and a cow."
§ SIR FREDERICK STANLEY
Yes; but the objection was made to the Vote now proposed, not to that which might be asked ultimately. The hon. Gentleman thought £5,000 was very little for the Colonies to pay; but the fact was that the matter had been very carefully looked into, and the proportion of £5,000 was allotted on a fair basis. He believed this contract would be the means of securing the prosperity of a large portion of Africa, and saving a large outlay.
§ In reply to Mr. BRUNNER,
§ THE SECRETARY TO THE TREASURY (Mr. HENRY H. FOWLER)
said, 80 that the India-rubber Company asked between £20,000 and £30,000. The Company proceeded to lay a small portion of the cable—about one-sixth of the whole—and ultimately when they got the complete contract they sold the cable they had laid, with their rights, to a Company with whom his right hon. Friend opposite arranged better terms.
§ Question put.
§ The House divided:—Ayes 199; Noes 34: Majority 165.—(Div. List, No. 19.)
§ Main Question put.
§ Resolved, That the Contract, dated the 19th day of January 1886, for the Construction of a Submarine Telegraph Line from the Island of St. Vincent to the West Coast of Africa be approved.