§ Considered in Committee:—
§ (In the Committee.)
§ [Mr. EMMOTT (Oldham) in the Chair.]
§ Clause 3:
§ MR. LOUGH (Islington, W.)
said pe haps it would be convenient to the House if he stated with regard to the first Amendment in his name that while expressing his obligation to the right hon. Gentleman for the way in which he had treated this Bill and put this clause first, he refrained from moving his Amendment. His hon. friends whose names were on the Paper had kindly agreed to allow him to move the second Amendment which stood in his name.
§ Motion made, and Question proposed, "That the clause stand part of the Bill."
§ MR. LOUGH
, in opposing the clause, said he thought everyone would feel and recognise the consideration which had been extended to them in connection with this Bill, but everyone would also feel that this was a clause which required careful attention, because it was of a most extraordinary description. In his Parliamentary experience he had never seen anything like it. There was a transference of property arranged under it, and the price of that property was stated in it. If any Member of the Committee would add up the amounts he would see that they came to something like £23 000,000. He thought it was an innovation in Parliamentary practice that the price should be fixed in the way it was done in the Bill. He believed the clause to be a very difficult one to grapple with, and he asked the indulgence of the Committee in trying to bring the seriousness of the situation before them. The first reason which they might give for asking that the clause be omitted was the way in which the matter had been brought before Parliament. On the First Reading of the Bill no discussion what 568 ever was allowed. The Bill was introduced under the ten minutes rule, and although that was a very useful practice generally, yet, when he considered that the measure contained as one of its main provisions a clause of this kind, he thought it was a great misfortune that no discussion was allowed. If discussion had been permitted, the clause would have secured an amount of attention which it had not had up to the present time. On the Second Reading it was not quite as bad, but they had altogether a very stinted debate on that stage of the measure. The debate only lasted four hours, and it ranged over such a vast number of subjects that it was quite impossible to direct that close attention to the important principle embodied in this clause which it deserved. What was said on the Second Reading debate? It was said that the whole thing would be discussed in Committee. But when the Bill got into Committee there was a most extraordinary ruling given on this point.
* THE CHAIRMAN
Order, order. I must remind the right hon. Gentleman that whilst he is in order in reviewing the findings of the Committee, he will not be in order in criticising their proceedings.
* THE CHAIRMAN
The right hon. Gentleman can of course state that as a fact. What I mean is that he is not entitled to criticise the action of the Chairman.
§ MR. LOUGH
said that nothing was further from his mind. He left the action of the Chairman to the judgment of the House. He would accept the spirit of the Chairman's ruling. He only wished to point the attention of the Committee to the fact that when this question went upstairs to be considered it was immediately ruled out. They had the principles of the Bill stated in an admirable speech delivered by his hon. friend the Parliamentary Secretary to the Board of Trade—perhaps the most explanatory and useful speech they had had on this Bill. His hon. friend, on 569 the Second Reading, stated that the first principle was the establishment of a port authority; the second principle was that it should be a commercial body; and the third principle was that no charge would fall on the rates. His hon. friend also stated that no permanent charge would rest upon trade. These were the three principles of the Bill laid down in the House. Therefore, he thought it was a little unfortunate that, upstairs, this other question in Clause 3 was ruled out of the discussion. What was the result? In all the preliminary stages that the Bill has gone through, the main principle that resided in this clause had never been fully examined. That was the reason why he thought they were indebted to the Government for giving them this opportunity of justifying their appeal to the right hon. Gentleman in charge of the Bill to extend such consideration to their arguments as would lead him to make some large proposal with regard to the measure — for instance, that Clause 3 be left out; and also lead him to consider the point that this was the first time that this important issue had been raised in a proper way before Parliament. He left that point with the observation that the Government ought to hesitate before pushing through this purchase, which had not received sufficient consideration. The feeling of London was growing stronger against it every day. That was wholly the fault of the Government. The Government did not set the public to think of this problem as they could have done by a discussion in Parliament, and the result was that when the question was becoming important, and when it was known that it would be discussed in that House, public opinion was growing more hostile to the proposal every day. If the Government attempted to make a purchase like that now proposed they must follow what he might call the recognised lines in dealing with this property. They must deal with the matter as business men. A great mistake had run through many of their debates on this subject. The analogy of the Water Board had been dragged into this business. There was no analogy. He maintained there was no analogy between the position which the water companies 570 occupied and the position which these dockowners occupied. The Water Companies had statutory rights within their areas, and nobody could get water save from those companies. Therefore the claim which they might make in arbitration was of an entirely different character from that which dock owners might make. The dock owners were simply rival traders in London, with a valuable business, an historic business if they liked, a business which did not differ in principle one bit from that which was carried on by individuals and companies in this great centre of commerce. Therefore, they must get rid of analogies derived from buying up monopolies. These docks were not monopolies. In ancient days, all through the history of these docks, Parliament had taken care that they should have no monopoly, and that they should be simply trading bodies paid, like a workman, wages for the work they did. He did not think the truth of that statement would be disputed, and he hoped it would be borne in mind all through their discussions. What position were the Government in when they came to purchase? They were just in the position of business men when they came to purchase a business or property. What was the business they asked to look at? No doubt it was an old-established business with a large property, and considerable revenue; it was a fluctuating revenue, and rather a declining revenue. Now, what steps should the Government take in dealing with the matter? The steps they should take were quite clearly marked out. They were to separate the freehold property from the fluctuating income of the companies as traders; and the freehold property could be quite easily dealt with. They could get a valuation of it—nowhere better than in the City of London. They could pay the price fixed by this valuation for the property, and then they could deal with the income in accordance with recognised principles. That was the method of procedure which the Government were almost bound to adopt. He would first look at it from the standpoint that the Government was bound to get a valuation. That was a point which he would like to impress upon the Committee in dealing with his Amendment to leave out this 571 clause. The Parliamentary Secretary, in that splendid speech to which he had already alluded, made the clearest statement with regard to the valuation. He stated that they asked that their valuers should be permitted to report on the various properties—on the land and things of that kind which it would be necessary to calculate in the purchase; and he then proceeded to add that the London and India Docks had 750 acres of land. The Parliamentary Secretary went on to use words which required a good deal of explanation; for he said that the Government had the advantage of the services of Mr. Cruttwell, a member of the firm of Wolfe, Barry and Co., and of Mr. Bousfield, a member of the firm of Edwin Fox and Bousfield, and that the Government were quite ready to justify before the Committee every penny that they were going to ask the House to agree to pay. He must not be understood as putting too heavy a responsibility on his hon. friend the Secretary to the Board of Trade; no one would be more reluctant to do that than he. The Chancellor of the Exchequer also declared that what the Government did was to get the very best men available to value the property. They took the best advice, and on that basis they made their offer. When the matter went up to the Committee the Government put Mr. Cruttwell into the box, and he was asked whether he had made a valuation of the property. He replied that he had not, and that he had not been asked to do so. He was asked what state of repair the docks were in, and what sort of work they had been carrying on; did he think them suitable for the needs of this port, and had he measured how much water there was in the docks. He said he had done none of these things, and he had not been asked to value the docks at all. Mr. Bousfield was not put into the box at all, and Messrs. Edwin Fox and Bousfield had good reason to complain of the use made by the Government of their name in the matter. When the Committee asked where the valuation was, Mr. Plender gave the reply that no valuation had been made, and they did not think it necessary. There was an extraordinary conflict of 572 evidence. The Second Reading was procured by a declaration on behalf of the Government that they had obtained the services of valuers, and the names of the men were given, and when they went before the Committee it was said that no valuation whatever had been made and the Government did not think it necessary. That was a most extraordinary proceeding in a large purchase of this kind and one which no business man would have sanctioned. He wanted to allude to one point only which was brought before them, both by the Parliamentary Secretary and by the Chancellor of the Exchequer, as a matter of great and substantial value in these properties, the purchase of which Parliament was asked to approve. The Parliamentary Secretary said that certain of the docks had a large quantity of land—750 acres. Then the Chancellor of the Exchequer said those lands were of immense value, and he was quite certain they were worth over a million of money. He would like to ask the right hon. Gentleman how was he certain they were worth over a million of money. How had he any knowlege of the value of these lands? Then Mr. Plender, who appeared to be the only professional man who was really taken into confidence, referred to the matter and stated that lands of great value belonged to the companies. The attention of the hon. Member for Central Hackney, who was a member of the Committee, was called to this, and he said—and he did a great service by putting the question—"Are these 750 acres of land valued?" "Certainly," said Mr. Plender, "they were valued by Mr. Bousfield of Edwin Fox & Bousfield, at £3,600 an acre." His hon. friend was astonished, and he asked "Are you sure these were the vacant lands?" "Yes," said Mr. Plender, "these were the vacant lands." If that statement had proved to be accurate that would represent a value of £3,000,000 sterling, but the Government, fortunately for themselves, had a very careful man in the Committee, named Mr. Fitzgerald, K.C., looking after their interests. Mr. Fitzgerald created quite a sensation in the Committee by saying a mistake had been made. The lands that were worth £3,600 an acre were not the 750 acres at 573 all. No valuation was ever made of the 750 acres except by the directors themselves, and Mr. Bousfield's name was withdrawn altogether, and it was explained that the price of £3,600 an acre applied to 200 or 300 acres of land on which the docks themselves were built, which had been purchased sixty years ago at £200 an acre and now were worth this vast sum. These amateur valuers and buyers, in the only case in which they brought before the House a matter of substantial value, had made an essential mistake. These vacant lands had not the great value which the Chancellor of the Exchequer attributed to them. They lay, some of them at Tilbury and others at Crossness. They were scattered over Kent and Essex and they had no proof that any great value attached to them. The matter was of no great importance, except in this way. It showed that single items of value which the right hon. Gentleman and his colleague mentioned as important might be considered as quite illusory. He might almost say the Government were a little like those company promoters who, speaking of a mining claim in some remote country, said there would be found gold, and after the money was subscribed and the enterprise pushed on people began to ask where the gold was, and then they found the prospect very different from what they were led to expect from the glowing accounts given to them. The reason this was important was that it was the only information of a detailed character that they had got. If a man of that House was only buying a bungalow, he would ask some valuer to value it. He would ask for a description of the property. He would have looked at it and seen what it was, and he would have seen that he got something in return for what he was paying. The Chancellor of the Exchequer made an interesting speech, and he used these words—I think the docks suffer very largely in comparison with the docks of the Continent. I was surprised at some of the primitive methods of discharging, and the wheel-barrow business that is going on. In the short visit I paid to the Continent I never saw anything to compare with it. Of course, the Port of London suffers under a disadvantage in comparison with the docks of the Continent. They started after new ideas with regard to machinery, and more especially new ideas with regard to railways, came in. 574 These docks were started when we had hardly any railways here. They were constructed for cart business. Here the trade of the port is in the hands of one, or it may be two, railways, which are not trunk lines but little bits of local lines. Co to Antwerp, What do you find there? Your ship alongside the port, the railway track right by the ship. What have you got here? You have one little local line only.And words like these had led up to the purchase, at a price sufficient to be the National Debt of the Kingdom, of that property. Surely one would think from the Chancellor of the Exchequer's words that he was going to conclude by saying: "The properties are totally unsuitable for our purpose." He could not throw very much light on the properties. He only told hon. Members that if they wanted to see them to advantage, if they went to that very noble entrance that was made to the Tower Bridge in the East End of London, and if they looked on the right they would see the Tower of London, a splendid specimen of Norman architecture, a beautiful relic of antiquity, while if they looked on the left they would see these buildings which were called the docks. They would see a lofty wall springing up from the ground. If they went in very close they would see a number of houses like prisons with iron-barred windows, and in the centre of a huge collection of buildings of this kind they would find a pool of muddy water. These were the docks that they were paying this immense price for. He heard that many of the gates would not open, and t' at if they were open no ship could get in, that in many of the docks the entrance was only 40 feet wide, and to be of any use they wanted an entrance of 100 feet. Some of the locks were only 150 feet long, and if they were to be useful they ought to be 700 feet long. The depth of water had never been told them. He heard some were half full of mud. How many warehouses had they? Were they used? What was the value of them? No information whatever had been given on the subject. The right hon. Gentleman smiled. He hoped he would smile when he had finished. The truth was that these early Victorian or Georgian docks were built in days when this country had a tariff. That was the meaning of the barred gates and the huge warehouses. For a free trade country many 575 of these docks were absolutely and totally useless. The Government should have laid before the House a description of the property. They should have stated the valuers' opinion on which they had gone and then they could have proceeded in a sane and businesslike manner with regard to this transaction. Let him just say one word on another branch of the subject. The Government had, with that great art which resided especially in the mind of the Chancellor of the Exchequer, created an immense feeling in favour of this Bill. That feeling rested on a very questionable foundation. It could not be an intelligent feeling. They did not know what the thing was that was to be bought. This bargain as it stood now had no more authority than if it had been made between two fish women in Billingsgate. The House of Commons had to give validity to the bargain, and if this Committee said the proceeding was questionable and held up its hands it must stop. The Board of Trade had no right to proceed in this way unless the House approved. The whole business rested with Parliament, and no Member ought to give his sanction to this matter, if he was going to preserve the ancient rights of the House with regard to the handling of financial matters, without being thoroughly satisfied that it rested on a sound and business-like footing. He was glad the Chancellor of the Exchequer agreed with that statement. He had described what the Government did not do. He would now take the point of what they did do. They bought on income—on revenue. That was a perfectly customary proceeding and whenever a very doubtful business was to be sold it was always sold on income or revenue. Two methods were always uniformly adopted when the sale was based on income. The first was to select an artificial period for the income, which did not give a fair description of the business, and in the artificial period some doubtful procedure was carried on to inflate the income. There were two things which always distinguished properties when they were sold on income. This purchase by the Government was a most astounding illustration of these two propositions. The Government had bought upon a 576 period of six years, from 1902 to 1907, and they took the revenue for those six years. They said they would give a price which left a very small margin based on that income. The figures for the period of six years had been deliberately inflated for the purpose of the sale of the docks. There was an inquiry by the Royal Commission upon which the right hon. Gentleman opposite was a very useful member. That Commission inquired into this question of income, and the chairman of the docks, Mr. Scott, was one of the witnesses called before them. He complained that business was bad and that the income was not sufficient. That was in 1901. Mr. Scott was asked to what he attributed the bad business and the Commission pointed out to him that his company was not charging the full dues on ships. Mr. Scott replied: "Yes, I know, we have a statutory maximum of 1s. 6d. per ton, but we are only charging one shilling." The Committee said to him: "But why do you not charge 1s. 6d. per ton?" Mr. Scott replied: "We are loth to charge the full price lest it should drive away shipping from our docks. The port is already a very dear port, and if we raise the price I am afraid it might not be good for our business." He thought that was a good answer, but the curious thing about it was that it was made in 1901, and the experiment which the chairman deprecated was made immediately after the answer was given; the result of that experiment was before the eyes of the Government and yet it did not warn them about proceeding to purchase those docks on income. In 1902, although the chairman of the docks made this statement, a charge of 1s. 6d. was levied as dues on shipping instead of 1s., and the Royal Commission in its Report on that point deprecated the action of the docks which it described as a questionable experiment. He must trouble the Committee with figures for the two periods. He would first tell hon. Members how the income was proceeding during the three years previous to 1901 before the maximum charge was levied. He would quote his figures in round numbers. In 1899 the revenue was £661,000; in 1900, £676,000; and in 1901, £733,000, Those 577 figures showed a progressive income. Although the company was paying a very trifling dividend, he wished specially to call attention to the fact that the income was progressive.
§ MR. LOUGH
said that was so, but there had been better times since. In January the charges were raised 50 per cent. He knew it was always very simple in business to suddenly put up prices by 50 per cent., but every business man knew that that was a terible risk to run, and they might find that they were doing worse after raising the price than they were doing before. What took place? Immediately the revenue sprrang up to £873,000, then it dropped to £813,000 for the next year, and then to £732,000, and at the end of four years the 1s. 6d. dues on ships had failed to produce as much revenue as the 1s. produced in 1901. That was a most remarkable figure, and it was almost inconceivable to men who were not accustomed to business. If he might be allowed to mention it, they had had an example of the same kind in this House. They once had a Chancellor of the Exchequer who was hardly driven, who thought it would be a very easy way of raising revenue to charge a 2d. stamp duty on cheques instead of 1d. As hon. Members knew, the House convinced the Chancellor of the Exchequer in a fortnight that he would not get half the income he was receiving with the 2d. stamp duty as he was actually receiving with the 1d. duty. The moment they raised a charge for any service over the legitimate amount they did not get a larger but a smaller sum. He had shown that after four years of the higher charges the dock companies were receiving a smaller amount than when they only charged 1s. per ton. In the fifth year the revenue was £749,000; in the sixth year, £763,000. Therefore, the Committee would see that the amount realised in 1907 with a 1s. 6d. charge was not nearly so great as they would have got if they had stuck to their 1s. charge all through. The period of 1905–6–7 was a period of inflated business, and with all this immense export trade caused by the war this 578 company were raking in no more revenue than they were getting before they raised their charges 50 per cent. What advantage had they got? They had got no advantage at all except that the Government somewhat impetuously accepted those six years, bringing in the first three years for which there was no legitimate basis. They brought those first three years into the general average on which the docks should be bought. He submitted that he had shown that an artificial period was selected which was quite different from the figures which would have been given three years before the price was raised. It was hardly credible that a House of business men would sanction the price which had been given. Nearly thirty years purchase of this fluctuating income was the price which the Government had agreed to pay. They were going to pay the same price for a fluctuating income as for the freehold property. The scheme was based upon twenty-six years purchase of the property and thirty years purchase of the income. That was a monstrous transaction as far as the income was concerned. He did not question the price for the property, but to buy a declining business like this at thirty years' purchase was ridiculous. The proper price was well known, and the Government should have paid about four or five years purchase for the income. One of the best businesses he knew of was Guinness's Brewery, and that business was sold at ten years' purchase of the income. Surely the Government did not suggest that this income of £800,000 a year in connection with these companies was anything like so large a concern to deal with. The profits on Guinness's Brewery were larger than this, and he submitted on those facts that the price agreed upon was a monstrous price, and it was a transaction which all business men in the House should hesitate to sanction. He had told the Committee how he thought they should have gone to work, and he had described how the Government did go to work. He hoped the Committee would bear with him while he went into the results produced by the setting up of this Port authority, and the bargain which had been made. The results were deplorable. The authority was to be created in a new 579 form from that in which any local authority was ever created before, and entirely because of this bargain. Anything like the way the unfortunate Port authority proposed by the Bill would come into existence was absolutely without precedent in this country. The purchase of the docks in the first place had upset the whole finance of the Port authority for ninety years to come. Its finances could never be right because of this first wrong purchase. The purchase price was to be £23,000,000, but the docks were no use as they were, and £5,000,000 must be spent upon them. When that sum had been spent and depreciation had commenced the sum of £1,100,000 a year would have to be paid in interest and depreciation and interest on the purchase price. That heavy burden would be thrown upon the commerce of this fair city for docks which were entirely unsuited to the needs of the trade. All this would have to be done before they commenced what he respectfully suggested was the real work of the Port authority to undertake. This purchase of the docks had led them aside from even contemplating the great problem which the Port of London presented. What was the Port of London? It was that noble stretch of river from London Bridge to the Nore which for all ages had been one of the greatest highways of ships that the world possesses. It was never frozen in winter, and there were no serious floods to make shipping dangerous. Long before these docks came into existence there was a splendid trade done in the river, and the essential thing the Committee should keep before it was that the river should be made to be in the future what it has been in the past, a great highway for ships suited to the commerce of this great city. This meant that they had to keep a depth of 30 feet of water from London Bridge to the Nore.
§ MR. LOUGH
said they would have to make the water as deep as they could in order to let the large ships up the river. Were they going to see the trade of London, which had existed 580 for thousands of years, snatched away by Southampton and Harwich and possibly by Continental ports? It would be a crime for the House to do that. Arrangements would have to be made for deepening the river at whatever cost, so that the commerce of London might have every due facility. That point had been entirely left out in the Government plan. They were going to buy shallow docks at the mouth of the river before providing the necessary outlay for deepening the river and making it a great highway. As regarded finance, the proposal was entirely spoiled by this plunge into the tremendous outlay provided in Clause 3. He was not going to repeat the excellent observations made upon the Second Reading by the hon. Member for North St. Pancras on this point. The hon. Member went into another aspect of the financial question, and he showed that owing to this purchase clause they would have to raise the money very dearly. The port stock would not be a trust security, and if that point alone were met by making it a trust security a saving of £100,000 a year would be effected. His hon. friend also pointed out that the stock of these docks had been greatly inflated and that £1,000,000 had been added to the dock securities. All this had taken place and more would take place if this clause was sanctioned. He thought he had said enough to show that the financial obligations which this part of the Bill would lay upon London in the future were far too great to allow the House to hurry along with this clause. The dignity of the authority was greatly lowered by the arrangement which the Board of Trade had seen fit to make in order that the purchase price might be paid. Anyone who looked at the Bill would find some extraordinary proposals. This poor Port authority would be over-ridden by the Board of Trade to the day of its death, and if it ventured to dismiss an office-boy he could appeal to the Board of Trade and get a special inquiry into his case, and the Board of Trade might order the Port authority to restore the emoluments to this naughty boy. If the holders of stock did not get their interest paid at the right time they, too, could go to the Board of Trade, and they 581 could get a receiver's order. The Board of Trade were bringing into existence in the City of London a body of this kind which would be dependent to the day of its death upon the Board of Trade. The dignity of the body had been sacrificed. There was no need to put provisions as to purchase into the Bill at all. What they wanted to do—and he appealed to the right hon. Gentleman to consider this—was to construct a Port authority. That was their proper business. He would say: "Let the Port authority first come into existence. Let it begin to deepen the river and look at the docks." They could then negotiate with the dock companies to buy them on a business basis. Let them do so, and if they could arrange for a purchase they could come to the House to get power to acquire particular docks. There was no need for proceeding in the rapid way for which the Bill provided. He would make another suggestion which he thought the right hon. Gentleman should consider, namely, the relations of the Port authority to the municipality. He would like to see the representation of the County Council increased. He would like to see a bargain made with the Council on the basis of increased representation on the Port authority on the one hand, and of the County Council giving the guarantees of the rates for the stock on the other. Then it would be a trust security, and there would be a saving in the raising of money. He would, in short, give to the County Council all the powers to protect itself which the Board of Trade was giving to the Port authority. He believed there was only one objection to that course, and that was that the present London County Council did not wish to take on the responsibility of guaranteeing the stock. The late County Council did not want to take the responsibility of guaranteeing the stock of the Water Board, but Parliament threw upon it the responsibility. He thought this Parliament ought to take the responsibility of imposing a similar obligation with respect to the Port authority. He did not think the County Council had been approached in the spirit of his suggestion. It had been approached by the Board of Trade, but not from the 582 point of view of giving the County Council such representation as would enable it to protect the rates. He put that before the Committee to show that he was not barren of suggestion in the matter. He thought the matter was extremely urgent. He took the action he was taking with the greatest regret. He was so busy with other things that he would have been glad not to deal with this matter at all. It was only six years since in the autumn session of 1902 he and seven other Members on 9th or 10th December fought against the proposition to create the Water Board, but they were swept away in consequence of one of those arrangements which were constantly made between the two front benches. They fought it out to the end, and he remembered almost the words he used in his concluding remarks on that occasion. He said that he hoped London consumers would not regret the step the House was taking, but that he believed they were bringing into existence an extravagant body which would lay heavy burdens on London. What was going on to-day? It was the most marvellous thing of which they had had experience in politics. He believed that in the Bank of England there was a man going about with a divining rod to see if a place could be found to sink a well because the Bank of England was not rich enough to pay the rates. Now he heard that stormy meetings presided over by the Lord Mayor were being held in the Guildhall to protest against the enormous burden this body was imposing on London. He appealed to the Government and to the Committee to have some mercy on London and not to inflict on the population another extravagant body which would be worse than the Water Board or any other board created up to the present. The Board of Trade was not going to pay this money itself. The Government did not propose to give the Chancellor of the Exchequer power to pay for the undertakings. They were going to make a bargain and make another man pay the money. On behalf of the Port authority yet unborn, and which when brought into being would have a troubled existence, he appealed to the Committee to reject the clause.
§ * THE PARLIAMENTARY SECRETARY TO THE BOARD OF TRADE (Sir H. KEARLEY,) Devonport
My right hon. friend has given in very eloquent but over-coloured language an interesting description of the properties we are proposing to acquire under the Bill. He has told us that anybody who likes to go there and inspect them will find that many of the werehouses have the appearance of prisons, that they are unsuitable for the purposes to which they are devoted and that they have served for over 100 years. Let me put this point at the commencement. In spite of the criticism which my right hon. friend brings to bear, we are contemplating the purchase by agreement under the Bill of three properties which have a gross revenue of £2,500,000 a year, so that we are not acquiring the worn-out class of undertaking my right hon. friend pretends that we are buying. He says first of all that one of his objections to this clause is that suitable opportunities have not been afforded to the House for the discussion of the principle of purchase contained in the Bill. He said that my right hon. friend the Chancellor of the Exchequer introduced the Bill under the ten minutes rule, and that on the occasion of the Second Reading, which I had the honour to move, only four hours were occupied in the discussion of the principle. He said that the debate was closured, and that the facilities afforded for ventilating opinion on the points which he brings up now were altogether lacking. But he did not stop his criticism there. He carried it to the Joint Committee, which investigated the matter for twenty-one days. That Committee consisted of some of the best intellects we have in this House and in the other House, and they gave every provision in the Bill most exhaustive examination. The principle of purchase had been affirmed here on the Motion for the Second Reading. I would remind my right hon. friend that that principle was unanimously recommended by the Royal Commission in 1902. That it was the main feature of the Bill of the late Government which was brought in by Mr. Gerald Balfour in 1903. The principle of purchase was reaffirmed by the Joint Committee of that year. It is 584 the principle of our Bill, and I myself put it definitely to the House. I took the liberty of using the exact words which were used by Mr. Gerald Balfour in 1903 when I put it to the House that by accepting the Second Reading we would be committing ourselves to the principle of purchase. My right hon. friend says that the Committee did not consider the principle of purchase. They examined it in the most exhaustive way, they had witnesses day by day from 24th June to 8th July, and the details of purchase were considered from every point of view, and what is satisfactory to the Government is that the Committee accepted the principle of purchase on the terms proposed by the Government on the Second Reading.
§ * SIR H. KEARLEY
I will have a word to say about that in a moment. That is not the point I was endeavouring to make good, in response to my right hon. friend's contention that we had not considered the principle of purchase. My right hon. friend complains that the Board of Trade in calling in two experts to advise them as to the method by which we should proceed in endeavouring to arrive at the basis on which purchase should take place, did not follow recognised lines. He laid down a programme of procedure for us, and I venture to say that if it was adopted or attempted to be adopted, we would be regarded as men insane or nearly so. The right hon. Gentleman referred to the purchase of the great brewery business of Guinness, and said that we should have gone on a basis of four or five years' profits. Let us look at the figures. It requires very little mental calculation to show how that would have worked out. The capital of these three undertakings was somewhere about £24,000,000. The exact figure is £23,750,000. If you take the basis of purchase at four or five years' profits, what would be the amount which would have to be given in consideration of the purchase of these vast undertakings? If you take the average profits at £800,000 a year, that would be, if we had proceeded on the lines suggested by my 585 right hon. friend, £4,000,000 for the £24,000,000 of capital.
§ * SIR H. KEARLEY
I can quite understand that my right hon. friend has forgotten some of the observations he made in his speech as to the method which ought to be adopted in regard to purchase. He said that we should have purchased on the basis of four or five years profits, and he suggested that we should have swept on one side the whole of the freehold property of the dock companies. I suppose he meant to convey that we should have left the dock companies in possession of their freehold property.
§ MR. LOUGH
I appeal to the recollection of the Committee. What I said on the question of freehold property was that the full price which any recognised valuer stated it was worth should be paid and that when the freehold property which might be very valuable was acquired the goodwill of the business should have been bought at so many years purchase.
§ * SIR H. KEARLEY
I quite understand my right hon. friend's contention that if we had proceeded on his basis we should have purchased at a very much lower price than we shall have to pay. It is ridiculous to ask the House to affirm the principle of purchase at tins stage, seeing that the principle of purchase has already been accepted by the House on Second Reading and justified by the Joint Committee after a full examination of all the details, and I am prepared here and now to justify it before the House of Commons. Let us consider the principle on which we proceeded to make the purchase. There were two courses open to us. We might have proceeded to buy the under takings by arbitration, or to buy the properties by agreement. The Chan- 586 cellor of the Exchequer, when he introduced the Bill at the beginning of the year, gave pretty obvious reasons why we should proceed to purchase by agreement rather than by arbitration. He pointed out that by agreement we should avoid delay and expense, but above all, that we should absolutely avoid the uncertainty as to what the price would be. We should remember that the Bill itself would have to pass through the House of Commons before the arbitration could be entered upon, and that when the Water Bill was before this House the strongest possible objection was made to it on that ground. However, the Water Bill was based on arbitration and the measure was passed through the House without it having any knowledge whatever as to the ultimate price of the undertakings a necessary consequence of buying on arbitration terms. Having this very much in mind we decided not to proceed to purchase by arbitration, but only by agreement. Now, let me say a word in regard to delay. Suppose that we had proceeded to purchase on arbitration terms, there would not have been one arbitration, but there would have been separate arbitrations with regard to the London and India Docks, the Surrey Commercial Dock, and the Millwall Dock, and all that would have taken a long time and would have incurred an enormous amount of expense, every penny of which would have had to be paid by the Port authority, and would have constituted a permanent burden on the trade of the port. I am told by our advisers that there are many other considerations that come into play when purchase is made by arbitration. For example, allowance would have had to be made for surplus lands. If we had proceeded to purchase by arbitration, the arbitrators would have fixed a very high figure on the value of these lands. I am told that if we had proceeded to purchase by arbitration the arbitrators would have made allowances for the prospects of future profits. None of these things were taken into consideration by our method. And then there would have been large expenses incurred in raising cash to pay off the existing stockholders. It was laid down clearly in the Water Board arbitrations, 587 that where shareholders are being compulsorily expropriated, the option rests with them of saying whether they will take their compensation in cash or in stock. Does not the right hon. Gentleman see that that does not apply here? How did we proceed? We proceeded on an altogether different plan. I think I have shown why it was that we did not proceed to purchase by arbitration, but by agreement. And how did we proceed? My right hon. friend was very critical on this point, and he called in question the methods we adopted. I say that the only possible basis on which purchase by agreement could be made was that adopted by the Government. We first of all called in the services of one of the most eminent accountants in London—Mr. Plender, of the firm of Deloitte, Plender, Griffiths, and Co., which is recognised as one of the best firms in London. And he advised us. He said it would be necessary for me to get an under taking from the dock companies that I should have the freest possible access to their books; I must have an opportunity of calling in an engineer who will be able to advise as to whether the condition of the properties and the equipment of the works are such that the income earned now can be maintained. That is a very well understood basis in a process of this kind. My right hon. friend in his criticism of this matter showed considerable dexterity. However, we opened negotiations with the dock companies. We put it to them that we did not propose to purchase their undertakings in any other way than by agreement. They met us in the most friendly and generous way. They promised that our accountants should have access to their books and that any examination of their properties we desired might be freely entered upon by our engineer. These two experts between them set to work to arrive at one definite result. And what was it? They set to work to arrive at what is called the net maintainable income of the undertakings. What is meant by "net maintainable income? It is the amount which we are advised, the Port authority will itself enjoy as owner of the combined undertaking. They ascertained what was the net income derived over a period of 588 six years, and they had to calculate whether that net income would be derived in future from the combined undertakings. The investigation of the books alone was not sufficient for that purpose, it was necessary to call in an experienced engineer to ascertain definitely whether the property had been sufficiently maintained so that the undertakings would continue to earn in the future the income they have earned in the past. Mr. Cruttwell, one of the most eminent engineers in London, was our adviser. That gentleman is one of the partners in the firm of Sir John Wolfe Barry, an engineer of the greatest possible experience. My right hon. friend takes exception to the fact that we did not value these undertakings. He wants us to value the buildings and the dock walls, to measure up the water area, to try underground and see whether the walls are sound or not, and to ascertain what is necessary to be put in these erections. What Mr. Cruttwell set to work to do was to ascertain whether the condition of these undertakings was such as to ensure that they were able to maintain the net available income they were now yielding. That was the procedure he adopted. My right hon. friend says that we selected an artificial period and tried to palm off on the House of Commons what in effect was a fraudulent return. If in these investigations we have selected an artificial period, that means that we entered into this examination not in a straightforward way.
§ * SIR H. KEARLEY
What particular interest had we in making these investigations over what my right hon. friend terms an artificial period? He suggests that we took that artificial period as our basis of purchase because that represented an inflated income. We took an honest six years average, the reason for which was fully explained by Mr. Plender before the Committee. The fact is that in 1901 there was an amalgamation between the London and St. Katherine's Docks Company and the East and West India Docks Company. That is generally known. How could we make an investigation further back than the period of the amalgamation of the London and St. 589 Katherine's Docks Company and the East and West India Docks Company. It is important to note that the capital of the London and India Company as compared with the other companies is £18,000,000, or practically three-fourths of the whole. We found it was possible to take that period and no other. I come now to the purchase itself which I am going to justify by figures. Mr. Plender set to work to ascertain what was the net maintainable income of the undertakings, and taking the average of six years he found that the net income was the sum of £809,000 per annum. What are we giving in exchange for that? We are giving Port Stock yielding a smaller income. And that is what my right hon. friend calls a doubtful bargain! As regards the Surrey Commercial Dock, that company deals with very large importations of timber, and never since 1868 had the importations of timber been so low as during the period mentioned. That circumstance arose from the serious depression in the London building trade. As to the Millwall Docks Company, their trade is largely in timber and in grain, and owing to the disturbances in Russia and the economic conditions prevailing in consequence in that country, the importations of grain were very much below the average. In one year they were half the normal quantity of the six years under review. That again had a detrimental effect on the revenue of these docks. We had, therefore, to consider this extraordinary and abnormal depression in the timber trade and the grain trade.
§ MR. W. PEARCE (Tower Hamlets, Limehouse)
Are we to understand that the interest paid on the Dock Stock is less than the maintainable income? Are they not almost identical figures?
§ * SIR H. KEARLEY
My hon. friend wants to know what is the difference between the two. The interest on the Port Stock which we are giving in substitution for the Dock Stock is just under £800,000, so that there is a surplus of £9,000.
§ * SIR H. KEARLEY
It is not a large sum, I admit; but still, there are these special circumstances to be taken into consideration, and in the current year the trading gives an encouraging indication that we may hope for very much better results than in the six years period. My right hon. friend has twitted the Chancellor of the Exchequer with the statement which he made when he introduced the Bill, that we secured the surplus land for no consideration whatever, and to which he attributed a large value. The value of this surplus land, amounting to 780 acres, is estimated by the company at as much as £1,650,000. These lands are situated, not as my right hon. friend says, at Crossness and places where they have no value at all, but in the very best positions on the river, and the main portions of them are contiguous to and adjoining the existing undertakings. What does that mean from the point of view of the Port authority in possession? Does it not mean that it can proceed at once with those developments which were held to be so necessary by the Royal Commission, and everybody who has any knowledge of the subject? They will be able to develop those lands at once, without the extraordinary expenditure incidental to the acquisition of land which is so detrimental to the public interest generally. In addition to the land for which we paid not one single penny of consideration—land said to be worth £1,500,000—we shall succeed to the Greenland Dock, a magnificent dock, which is part of the Surrey Commercial undertaking, and a set of new warehouses, specially built to meet the needs of the American and Canadian produce trade, upon which there has been in the last twelve years expended a capital sum of £1,500,000. My right hon. friend made no reference—I thought he was rather ungenerous in not doing so—to what must have been obvious to him, that some of these properties we are taking over are absolutely up-to-date, with the newest possible equipment and machinery. The profits which entered into the six years average and formed the basis of the purchase price only included three years working of this property. I do not know 591 whether it is clear what I am endeavouring to convey, but everybody knows, and it is an admitted fact, that a new dock takes many years to develop its adequate revenue, and by adequate revenue I mean this—a reasonable return on the capital invested. Tilbury Dock, I am informed, took as many as twenty years to develop its adequate revenue. That is a very long period indeed. With regard to this particular Greenland Dock, from the way in which it has been patronised by shipping and its warehouses are being filled by people who trade to and from the United States and Canada, it will, in our judgment, show with great rapidity increasing profits, and we hope to see the full fruition of that great development in the next few years. The point I wish to make is this—that in this average profit of six years, the profits made from this Greenland Dock extension only come in, for three years. Therefore, the revenue must be largely increased by the profits of these new docks in the future. I am told by those who know the river that there is great congestion in the trade of the Port. Tilbury is full, with every berth occupied, and the same thing is to be found at the London and India Docks, and the service which will be rendered to the port by this Greenland Dock will be of the greatest possible advantage. It will give at once to the new authority a water area to which large ships will come, and so increase the revenue of the Port authority immediately.
§ * SIR H. KEARLEY
There is nobody in this House knows the river better than the hon. Gentleman does; and why should he cross-examine me when he knows the position of this dock and that it is doing a large and increasing trade?
§ * SIR H. KEARLEY
Now with regard to this question of value—and here I am on sound ground, and this my right hon. friend will be obliged to recognise and admit. Three years ago an agreement 592 was entered into between the London and India Docks Company and the Millwall Company for an amalgamation, which involved the purchase by the London and India Docks Company of the Millwall Dock. The London and India Company under the agreement they entered into agreed to transfer to the Millwall Dock Company an amount of their own stock that would give an annual value of £65,000 a year. That was the agreement that was entered into three years ago. Now what is our agreement? We give to the Millwall Dock substituted "A" and "B" Port stock; that will impose on the Port authority a charge upon the annual income of the Port of £56,000 a year, so that by our agreement made three years later we obtained much more advantageous terms. What I have to say in conclusion is this: That we have the fullest possible confidence in the bargain that we have made. We believe that the existing undertakings will earn and continue to earn the interest on the Port stocks that we have given in substitution, and instead of imposing upon the trade of the Port, as was suggested, a charge by reason of the interest obligation, we think that the surplus will grow year by year. We think that it must turn out to be a most favourable transaction, because we cannot lose sight of the fact that in the average of six years that we have taken there have been abnormally bad years brought about by the depression of trade—the corn trade of the Baltic—and the building trade in London—and we think these periods of bad trade were quite exceptional and not likely to recur. For these reasons I say again that we are as confident as we can be, after the fullest possible investigation, that the surplus income will largely increase in future, and I may say that we are confirmed in this belief by every indication that has reached us. Quite recently, with regard to this year's trade I myself took steps to endeavour to ascertain how the trade of these undertakings was proceeding, and as far as my information goes there is a decided indication of improvement which induces us to think that when the balance is struck at the end of the year, instead of the income being on the basis of the figures 593 which I have given as necessary to maintain the income, it will be something much larger, and so give a much bigger surplus than that which I have mentioned earlier in my speech. Are there no savings to be effected by this unification of the management? Does my right hon. friend, who has had a great deal of experience, suggest for a moment that the managerial staff of the three undertakings will not be capable of modification, when it is a unified undertaking with a unified management. And has he such a poor opinion of this new Port authority that he thinks it is not capable of dealing with the business committed to it in such a manner as will do something to improve the condition of the river and the trade of the Port? I am very hopeful myself. We believe that the new Port authority will enter upon its duties with a determination to eliminate all that is bad or doubtful in the port, to use its energies to attract to the port the best class of trade, and by intelligent supervision and good management produce a beneficial effect upon the trade of the Metropolis, which I hope under the agency of this Bill will enter upon a new era of development and prosperity. We believe that this Bill is a necessary and essential step towards securing for London, for all time I hope, that preeminence that she has enjoyed so long as the greatest port in the world.
§ * SIR F. DIXON-HARTLAND (Middlesex, Uxbridge)
said that as Chairman of the Thames Conservancy and having the whole of the conduct of that part of the river near the Port of London under his control, he thought he might give some expressions of opinion that might be valuable to the House. He considered that it was most desirable to have one authority, and he had spoken in favour of that course on the Second Reading of this Bill, but he could not hide from himself that the whole success or failure in the future of the Port of London entirely depended upon the question of the docks, their value, and price. As to value it had ben stated by the last speaker that he considered that they would continue to maintain their present income in the future as they had done in the past. He doubted that very much, and he 594 doubted it on this ground, that they knew that it was almost impossible to make an old dock worth anything. He remembered perfectly well after the North Eastern Railway Company bought the docks at Hull, it was stated by one of the directors of that company in the House that they had given £250,000 for the docks and had spent £250,000 upon them and they were worth less then than they were before they bought them. These docks must be materially altered if they were to be any success whatever. The amount of shipping coming into the Port of London was very different from what it was when those docks were made. The Tilbury Docks and the Millwall Docks to some extent were good up-to-date docks; the other docks were practically worthless. They tried themselves to get the London and West India Docks to lower their sills so as to allow larger ships to go in. The matter was examined into most carefully and it was found that it was utterly impossible without an enormous expenditure to allow those sills to be altered so as to obtain a greater depth for vessels coming in. Even if they could have done so they could not have lowered the sills more than a certain amount because the walls would have fallen in and destroyed the docks. It was better and would be cheaper to fill up these old docks and build new docks lower down the river if it was the intention of the Board to carry out that principle. The Bill took, and took rightly, the power to build wharves on the river. There was a long stretch down the river, miles in length, where wharves could be established; where they could be made with stages so as to allow a ship to discharge her cargo from various parts at one time; and which would allow trains to be brought up so that the cargo could be discharged straight into the trucks. That was the character of future shipping. Everyone wanted London to be up-to-date. Antwerp and other places that were competing with us had all these wharves built in stages on to which cargo from every part of the ship could be discharged at one time. One of the great objections to docks was the time that it took to get in and out. A large amount of time was expended on that. If ships were allowed to come up and discharge at a wharf all that time would 595 be saved. Lately there had been a great number of ships discharging straight into the lighters in the river in order to save time. Though he thought this was a very valuable Bill and wished to help it in every possible way, he thought this question of the purchase of the docks ought to be deferred, and that it ought to be left to the new authority to carry out such arrangements as they found were possible, and which would be more economical. They had heard about the saving on the staff very often. The Committee heard it with regard to the Water Board when it was said that if the staffs of the old companies were amalgamated a considerable sum would be saved. What had occurred? The cost of the Water Board staff was £49,343 5s. 0d. in excess of the cost of the whole of the other staffs. The same extravagance would be engaged in by this Board. The result would be to make London a dear port and to drive away all the trade that came here. More than that, it would take away the work of the riverside population, and do extensive damage to every part of the City. It was entirely a question of getting an income from tonnage charges. The tonnage on goods would be of a very different character from that which was expected. For instance 8,500,000 tons of coal were brought to London by sea. A very small tax, 1d. a ton, taken by the Port authority would result in this coal being taken by the railways instead of by the sea and the river. If this charge was made so heavy that it must be recovered in some shape or form it would drive all the trade out of the river, and the revenue would fall off. And when they talke' of there being only a margin of £9,000 between the price to be paid and that they expected to get it was simply absurd. He had never yet heard of a company which was content to take over a business on such terms as that.
§ THE CHANCELLOR OF THE EXCHEQUER (Mr. LLOYD-GEORGE,) Carnarvon Boroughs
No, no, the right hon. Gentleman has not listened to my hon. friend. He has left out altogether the value of the lands which are valued at £1,500,000.
§ MR. LLOYD-GEORGE
My hon. friend said the lands would be taken at the value of £1,500,000, and that over and above that the balance was £9,000.
§ * SIR F. DIXON-HARTLAND
said he knew that, but he had heard that the land down there was such that it could not be let for any other purpose than docks. But supposing it was £10,000 a year, the margin between what they were bound to give and what they might receive was very small. Let them give the authority power to take the docks and the lands and let them buy them at their market value. If the docks companies had not the Government to deal with they would be willing to sell at a much cheaper price than that which they now offered to the Government. He protested against this great burden being put upon the Port of London. It would drive commerce away from this port and make them all sorry that they took this line at the present time.
§ * MR. RUSSELL REA (Gloucester)
said the hon. Member opposite and his right hon. friend behind him appeared to think there was no necessity for the new Port authority to buy up these particular docks; that the dock owners were only one set of traders among other traders; that they had no monopoly; that they were not essential to their needs and that it was quite open to the Port authority to ignore them. But it was necessary to consider this matter a little—a little historically. Nobody who had investigated the matter, neither the Royal Commission, the late Government, nor the present Government had come to any other conclusion than that it would be impossible to create a 597 new port authority which should not become dock owners and which should not be the owner of these docks. The strength of the claim of the docks lay in this. When they were instituted an obligation was put upon them which was called the obligation of "free water." That meant that these companies might buy land at a low price, say £40 an acre, fence it and spend £100,000 per acre upon it, and when they had done that everybody had a right to use the property as their free water. But against this privilege to the public, some compensations were provided for the docks companies, and they had some monopolies which lasted for twenty-one years. Ta[...]se then expired but they still had a natural monopoly created by the protective system which was then in vogue over the whole country. The cumbrous customs regulations gave these docks an absolute monopoly in the import trade. They lost that when Free Trade came in, and from that time to this they had had a struggling existence. They had come to the House of Commons again and again asking that they should either withdraw the privilege of free water or enable them to charge dues on goods. The House had refused to do anything of the kind. The House maintained the right of free water because various interests had been created and refused the docks power to levy dues on goods, because that practically put into private hands the power to tax the imports of this country. These docks were left in a position in which success was impossible, and to have instituted a port authority which could act independently of these docks and build up others would have killed them altogether. They had a claim which had been allowed by the late Government, the Royal Commission, and the present Government, which entitled them to some consideration. Then these negotiations came about. These docks were not taken over but there was a bargain which was submitted to the Committee upstairs. Although the Committee excluded the consideration of the principle that the Port authority should be dockowners they said that these bargains A., B. and C., must be justified before the committee. They were justified and he did not say that 598 the unanimous conclusion of the Committee was that they were extremely good bargains, but they were bargains of such a character that those who disagreed with them hesitated to take the alternative step of exposing the purchase to the risks of arbitration. He thought on the whole the bargain was a fair one. The property had not been purchased at much below its value, and very much above its value had not been given. The principle on which it was valued was a principle well known to all commercial men. The revenue basis was taken, and when his hon. friend talked about giving the capital value that was quite a different principle. It was almost impossible to mix up the two principles and utterly impossible to act on a capital valuation in such a case as this, because the value of a dock was nothing whatever except for the purposes of a dock, and the revenue it made. It was utterly impossible to act upon the valuation of capital in such a case as this, for a dock had no value whatever unless it commanded the trade. The criticism had been made that, if they took the maintainable revenue of the docks on the one side, and on the other side the obligations created under this Act, there was a surplus of only £8,000. The basis on which the calculation was made was one not to make a profit. It was meant to be a valuation so that as nearly as possible there should be no surplus revenue. The endeavour of the President of the Board of Trade was to give the dock companies a fair value, and the revenue had been investigated with that object. The hon. Member for Uxbridge spoke of the old docks as perfectly worthless. His own impression was that if they took the old docks of London, so picturesquely described by his right hon. friend behind him, and purchased them on a revenue basis to-day, they would probably get them very much below their capital value, for the value of this property in the heart of London was not to be estimated by the revenue which they got out of it by the present system of management, although there was now an extremely valuable warehousing business. As to the value of the surplus lands, it was not to be ascertained as 599 the hon. Member for Uxbridge said, by what rent would be obtainable for them. Their value was entirely for one purpose, namely, the dock purpose. They were not brought into use yet, but they were bought for dock purposes and for dock extension.
§ * MR. RUSSELL REA
said it would cost money, and what was the value of that to the dock owner? What would it cost the dock owner if he had to buy these lands when it came to making the extensions which were recommended by the Royal Commission, which were intended by the late Government, and by the present Government who introduced this Bill, which were needed by the port of London, and which were very much overdue. His right hon. friend talked of spending £5,000,000 to put the docks into order. The evidence was that the docks were in sufficiently good order to produce the revenue which had been stated to the Committee, which had been calculated by the most laborious, careful, and accurate investigation by Mr. Plender, who assured the Committee upstairs, and whose assurance was confirmed by Mr. Cruttwell, that the docks were capable of maintaining their present income. He stated that the docks were in sufficiently good order for the class of traffic they had now, and there was not the slightest doubt that there would in the future be the same class of traffic as now. It had been said that the dock companies inflated revenue by various devices with the object of producing a larger figure of maintainable revenue, but if anybody would think of it they would see that there was very little scope for a dock company to do anything of the kind. Anyone could see how various trading companies, and even railway companies, might do it, but dock companies could not do it to any great extent. It was proved to the Committee that they had spent nearly £100,000 per annum on the upkeep of their docks. The conclusions to which he came, and the collective conclusions of the Committee, were: First, that it was the duty, if possible, of a port authority to acquire docks, and to 600 acquire these particular docks. Secondly, that the bargains had not been bad bargains, and that the confirmation of these bargains would be infinitely preferable to throwing upon the new Port Authority the risk of having in the end to take all the chances of which they had had so much experience under arbitration. On the whole, he was a strong supporter of this clause and the next.
§ MR. BONAR LAW (Camberwell, Dulwich)
said he had very few remarks to make on this subject. He was really sorry that he could not emulate the enthusiasm of the Secretary to the Board of Trade with regard to this bargain. Everyone who listened to the remarks of the right hon. Gentleman the Member for Islington, whether they agreed with him or not, must have heard them with enjoyment. The right hon. Gentleman's criticisms seemed to be of that illusive character, that whether they agreed with them or not they must enjoy them. He began by comparing the Government, of which he was so renowned a supporter, with gentlemen in the City who bought a strip of land and floated a gold-mining company, and then looked for gold. That was not the way in which he should be inclined to speak even of his opponents. The right hon. Gentleman was almost picturesque in what he said of a mediæval structure, and something which was like the Bastille—these were the warehouses, the Committee would notice. Having said this much about what fell from the right hon. Gentleman opposite, he was bound to repeat that he did not share the enthusiasm of the Secretary to the Board of Trade about his bargain. The hon. gentleman thought he had made an extremely good bargain. That was his idea. The way in which he looked at the question, and what he thought the Committee had got to conside, was this: First, was it necessary to buy the docks? There was considerable difference of opinion about that. The subject had now been carefully considered for a very long time. The Royal Commission which first took it up decided that it was necessary to buy the docks. The late Government, of which he was a member, very carefully considered it also, and they came to the same conclusion. 601 And now the present Government, with the experience which the others had gained, had also come to the conclusion that they could not hope to get control of the river or effect any radical improvement of the port without becoming the owners and controllers of the docks as well. In the face of that experience he was bound to say that he put aside the idea that it was possible to make any progress without attempting to buy the docks out. Having admitted that they had got to buy the docks, the next point was what was the best way to buy them—whether by agreement or arbitration. He thought there was something to be said in favour of arbitration. He was bound to say, and he said it with all respect to hon. Gentlemen opposite, that if the Government of which he was a member had dared to propose to Parliament that they should make this bargain on their responsibility, and that somebody else, as the right hon. Gentleman said, was to provide the money, whatever the merits might have been there was not a man on the other side of the House who would not have opposed them in the strongest possible manner. He was sure of that. He did not know that much importance was to be attached to the fact that the present Government had a much more reasonable Opposition than had the late Government, and he was not at all sure that this was a sufficient ground for condemning the way in which the right hon. Gentleman had conducted his Bill. But he did say that if they were going to depart from all previous practice they should make perfectly certain that by their private bargain they were getting at least as good terms as they would get by arbitration. There ought to be no doubt on that point; he thought everyone would admit that. Was it quite certain that they were getting as good terms? He had the other day a deputation of gentlemen who were opposed to this Bill, and who told him that the docks could have been got £12,000,000 cheaper by arbitration. ["Oh!" and laughter.] Well, he got them out of the room as soon as possible after they had begun with figures so exaggerated. He thought there was not the slightest rea- 602 son to hope for a great reduction in the price. The right hon. Gentleman the Member for Islington not only did not accept the issue as between private contract and arbitration, but he was satisfied that Gentlemen sitting on that bench had made an extremely bad bargain as it was. He said—"You ought to have gone and valued the undertaking; you ought to have put a value on the fixed freehold property, and then given ten years (or whatever it was) purchase for the business as a going concern." He was bound to say that as a buyer he would like to adopt the right hon. Gentleman's attitude, but there was one little difficulty about it. The seller would not do business with him on those terms. That was the only difficulty. He had no doubt the right hon. Gentleman could get over that, and he was not sure that his friends could not help him. They knew something of the methods employed with regard to the Licensing Bill. He therefore came to this business with the idea that the probability was that they had got a better bargain by agreement than they would get by arbitration. But when the right hon. Gentleman pointed out to them what a splendid bargain it was, he was afraid that he must have a little criticism on that aspect of the subject. The business was quite properly based for this kind of undertaking on its value as a going concern. What he thought the right hon. Gentleman the Member for Islington had overlooked was this. Supposing it did go to arbitration, the usual and universal rule in an arbitration of this kind was to judge of the value of the property by the length of the maintainable income. There was a difference which was in favour of the Government. In addition to valuing it from the point of view of net maintainable income, the valuers would also have been bound to take into account the prospective value of the unused land. Therefore, so far as the method of arriving at the value was concerned, London and the country did undoubtedly get some advantage by paying only for the net maintainable income, if it was correctly arrived at, and not by having to pay for any value outside that which would have to be paid for in arbitration. The 603 whole point was, was this the net maintainable income? The Parliamentary Secretary to the Board of Trade said quite truly that Mr. Plender, the accountant appointed by the Government, was one of the best authorities on that subject who could be found in the City of London. He thought that was quite true. But in reading Mr. Plender's evidence, though he thought perhaps he was right in saying this was the net maintainable income, he was very optimistic about the future, and he thought he had conveyed that optimism to the Board of Trade. For instance, he gave the idea that a much larger income would be available in the future. He said that several times to the Committee. Then Lord Leith he thought it was, said—"On what is that view as to the future based?" Mr. Plender said—"In 1898 there was such and such an amount of trade as shown by the Board of Trade table, done in the Port of London. In 1907 that trade had increased enormously. That means an increased profit to the port in larger shipping dues." He wondered it aid not occur to the President of the Board of Trade that there was surely a very great fallacy in that argument. Taking the six years which were given as the basis of the profits the average of the last three years represented £40,000 less income than the average of the first three years. Yet if they took those figures on which the basis for the future was based, they would find there had been an actual increase in the second three years as compared with the first three years, and if that was the ground on which they expected those enormous profits in future, it ought to have applied to that period as well as the other. That was quite obvious. The hon. Gentleman talked about the three bad years. Did he forget the fiscal speeches for the last four years, pointing to those years of much golden trade as taking away all need of fiscal reform? Those years were big years of trade in London as well as the rest of the country. If he had been looking at those figures, simply judging by them as to whether or not this was a good bargain, he would, he was afraid, have drawn from them the conclusion that the outside 604 interests which were competing with the docks were rather gaining in the competition and the docks were rather losing. Then there was another matter. The engineering expert was asked—Are you satisfied that the docks are in a condition to enable them to maintain the income which they are making now?His answers were quite definite. A certain Member said—We ought to know a little more than that. We ought to know whether they are in a position to meet the changing conditions of trade, whether they are in a position, not only assuming that trade is to be done exactly in the way it has been done up till now, but assuming it is to be done in perhaps a different way to meet those charges.This was the question—You did not give any consideration to that point of view when you examined the docks?The answer was—No, I cannot say I did pay any special attention to that.The real fact was that in his opinion they had paid full value and rather more than full value for the docks, but that did not enable him by any means to condemn the Government. They had had experience in many other ways of arbitration, and, curiously enough, the right hon. Gentleman seemed to use as an argument against the Bill what had happened in regard to the Water Board, although they all knew the amount paid by the Water Board was the result of arbitration, and he, for one, believed, though it might be open to argument, that taking the cost simply they had got the docks cheaper by agreement than they would have got them if they had left it to arbitration. That was the whole essence of the case, and that was his opinion. But all the same, he thought it was a kind of proceeding which was pretty dangerous. Apart altogether from recrimination from one side of the House against the other, there was a great danger of mistake being made in this as in other trade dealings, and though he believed they would get on better by making a business bargain, he was not sure that it was a wise course for the Government to adopt, or he would be glad to see this precedent followed in similar cases. There was only one other word he wished to say before he 605 sat down. He would not condemn what the Chancellor of the Exchequer had done in regard to the Bill, but he remembered on the Second Reading a good many Members contrasted the brilliant achievement which they had made with the poor result that the late Government achieved. Even now, if he had been responsible for bringing forward a Bill like this, he would first of all have tried to do it on an entirely different footing as regards finance. In making a big amalgamation of this kind one of the great savings which people hoped to make was getting their money cheaper, and therefore making a saving of interest. There was nothing of that kind here. The new docks were paid for not by capital, which they could borrow on cheaper terms, but by giving an equivalent income, so that they gained nothing from the point of view of cheaper money by making the amalgamation. The Bill, as the late Government proposed it, was to get get from the County Council a guarantee of the payment of the interest on the debt. Ha know some hon. friends very much disliked that proposal. He thought it right, and he thought it right now, for this reason: that the interes of the port and of the City were so intimately connected that anything which saved money to the port was a direct advantage to the City. If he had been in the position of the President of the Board of Trade he would first of all have tried to arrange it on that basis.
§ MR. BONAR LAW
I am speaking with some knowledge of what took place with the majority of the Council at that time.
§ * MR. MCKINNON WOOD
I had the honour to be a member of the body at that time. I pressed the policy on them very strongly. The County Council, when the hon. Gentlemen was concerned in bringing in the Bill, supported him and 606 offered to give a guarantee. I was in favour of continuing that policy and pressed it on the County Council and they absolutely refused.
§ MR. BONAR LAW
I must accept that with some qualification for this reason, that the Motion which the hon. Gentleman pressed on the County Council was not merely a question of guarantee by itself, but the question of contributing something towards the expenses, which was a very different thing. That is my recollection of what took place.
§ * MR. MCKINNON WOOD
I must make the matter quite plain. The guarantee was pressed separately on the Council quite independently of that, and refused absolutely.
§ MR. BONAR LAW
said that probably the hon. Gentleman was right, but it was not his recollection. The average rate of money paid by big corporations like London, Manchester, Liverpool, and Glasgow was 3¼ per cent. If they had raised this £23,000,000 on the same basis it would have meant an annual charge of £749,000 instead of £802,000. That was to say it would have been a saving to the new Port authority of more than £50,000 a year. He was convinced, whatever the hon. Gentleman might think of what took place at the County Council, that the matter was never pressed from that point of view alone, and he thought the Board of Trade would have been wise to make a first effort to settle the matter on that basis.
§ * MR. W. PEARCE (Tower Hamlets, Limehouse)
said that looking at this as a question of balance of advantage, he felt obliged to vote for the Government Bill. He did this with some hesitation because, looking at the point of maintainable income, he felt it was still likely to be very much impaired. There were danger signals which the Board of Trade had not perhaps paid sufficient attention to. First of all, if he looked at the dock companies case, in their Bill of 1907, when they were proposing to provide a dock for £2,000,000 and they had to present a budget of what their financial requirements were likely to be, he found reading these 607 conditions, which were not dissimilar to the conditions that the new Port authority would have to face, they proposed to put dues on goods to the tune of more than £500,000. The London and India Dock Company themselves asked for an extra revenue from dues on goods of £270,000. He had taken the figure from the statement issued by the dock company. He felt, therefore, that when the Board of Trade assured the House that £180,000 was likely to be the limit of the port dues which would be levied, they were taking an exceedingly sanguine view, and he was afraid they did not realise the full danger to which the trade of London was likely to be subject. There was another danger signal. Looking at the figures that these three companies had been putting on one side for maintenance, repairs, and depreciation, he was certain they were altogether inadequate to the sums the new authority would have to spend. He felt that the maintainable income would be impaired by at least £100,000 which the new authority would find it absolutely necessary to spend in keeping the docks in the condition which, would then be demanded. Besides, the purchase had been in the air. It was only common prudence on the part of the directors to keep down their expenditure on this head as much as possible, and one would expect to find that these maintenance figures, on which very largely depended the maintainable income, had been kept at a minimum. He had not been able to check it, but he had seen it stated that in the old days the dock company themselves were accustomed to spend a sum roughly aproaching £200,000 instead of the £93,000 they had done in the last few years. He therefore felt that the present income could not be maintained, because of necessity there must be a dropping of the dues on ships and an increase in the cost of repairs and maintenance. He hoped the Government would be prepared at some portion of the Bill to put a limit on the port dues they proposed to raise. At present there was an unlimited liability on the trade and commerce of London, and the situation was so dangerous that unless the Government put some limit into the Bill, he might be obliged on the Third Reading 608 to vote against it. He understood, however, that the Government were likely to do that.
§ * MR. W. PEARCE
said that he wished to point out the other side of the case and state why he felt obliged to vote for the Bill. In the first place, if this Bill was refused there was not likely to be another Government Bill for a long while, and it would mean the hanging up of this question for an indefinite period. They had been waiting ten years for a new dock to accommodate big ships, because the present accommodation was fully exhausted. The dock companies were not able to undertake such work, and in consequence of this Bill for some time past various works right along the river had been hung up. The reason for this had been that the large wharves and large business enterprises had stopped their development expenditure because they had been uncertain whether the docks were going to be purchased or not, and therefore it was in the general interests of trade that the whole matter should be finally settled. He thought the Port of London had suffered by the general discussions on this question which had taken place during the last two or three, years, and if they had a new authority of reputation established, it might do a good deal to recover London's commercial position. It should not be overlooked that this Bill enabled the Port authority to get hold of the valuable vacant land in the present dock, and it was only by such arrangements as these that those sites could be obtained which were the most suitable for the purpose. There was a large tract of land adjoining the Albert and Victoria Docks suitable for dock extension, and, as a matter of fact, it was the only piece of land suitable for the purpose. Under the arrangements made in this Bill, that land came into the hands of the new authority. He spoke with a good deal of responsibility upon this question, because he had had much experience, not only in business, but locally, for he represented a constituency in the East End of London in which he had had 609 business relations all his life. Looking at this matter he had no hesitation in saying that to the best of his judgment—and he might say that he felt a great deal of anxiety on the question—he was bound to support the Government in passing Clause 3.
* MR. MCLAREN (Staffordshire, W.)
said the hon. Member for Dulwich had suggested that the Government would have done better and might have saved a lot of money if they had induced the London County Council to guarantee the port stock. Apart from the unwillingness of the London County Council to enter into such a guarantee he wished to make this point—the bargain entered into by the Government was not made upon a cash basis but on the basis of an exchange of stock. If it had been contemplated to issue stock upon the market and pay out the existing dock shareholders in cash there would have been a very considerable saving realised by the course which the hon. Member for Dulwich suggested. He would, however, remind the Committee that not only was it a very difficult time now to issue a large amount of stock upon the market, but if this had been done those present holders of port stock who re-invested in the County Council guaranteed stock would have had to put up with a smaller income, and that was one or the considerations which influenced the directors who were responsible for the conduct of the dock companies. Naturally it influenced their minds, because they believed their shareholders under the proposed arrangement would get an income exactly equal or nearly equal to that which they had been getting in the past. For all practical purposes the debenture holders and the preference shareholders of most of these dock companies had a well secured revenue, and if they had asked them to exchange their stock for one with a smaller revenue, even though it had been better secured by a County Council guarantee., it was very unlikely that they would have acceded to that proposition. Had they not acceded they would have had to give them a larger amount of County Council guaranteed stock in order to make their income equal to the income of the past. Therefore the saving that the hon. Member for Dulwich suggested could have been made might have been in 610 this way reduced to perhaps very moderate proportions. He was interested to hear that the hon. Member for Dulwich did not agree with the right hon. Gentleman the Member for Islington either in the gravamen of his charge against the Government or in the remedies which he suggested. He thought the gravamen of the right hon. Gentleman's charge was very largely that the price given was excessive. The steps which the right hon. Gentleman suggested might have been taken were, in the first place, arbitration, and in the second place that the Government ought to have based the purchase on a capital valuation. He also complained that the Government had not acted as business men in the matter. He was aware that business men very often did resort to arbitration, but as far as his information and observation went they usually resorted to arbitration when they had a thing to sell and not when they had something to buy. He did not know whether any hon. Member knew in his own personal experience of an instance where there had been compulsory arbitration in which the seller of property had not got more than his full market value. He thought that, in this instance, as in the case of the Water Board, if the Government had resorted to arbitration, and more especially if they had resorted to compulsory acquisition and arbitration, they would probably have had to pay a largely enhanced price. The right hon. Gentleman the Member for Islington said the valuation had not been made upon a capital basis. How were they going to value a dock on a capital basis? After all they could not value the site of a dock in the light of its being used ultimately for building cottage property or erecting factories. All they could do was to value the property as a dock, and the only criterion of the value of a dock was what it could earn. The money spent in the making of a dock was no criterion at all, and therefore the only possible mode of valuation was a valuation based on the income and not upon the capital value. He would urge upon the Committee that if the right hon. Gentleman the Member for Islington wished to prove his case, if he wished to prove that because of the price at which the docks had been taken over a burden was going 611 to be placed upon the trade of London, he had got to prove not only that the dock receipts would not increase but that they would actually diminish, because at present, as the Parliamentary Secretary to the Board of Trade had shown, there was a profit, although it was a very slight one, on the transaction. [MINISTERIAL cries of "No, no."]
* MR. MCLAREN
replied that the right hon. Gentleman must be aware that in the last three years there had been very exceptional circumstances which had made the profit of the docks—or at any rate of two of the dock undertakings, namely, the Surrey and Millwall Docks—a great deal less than they would otherwise have been. The question had been asked why it was that in a period of unexampled prosperity there had been such a falling off in the earnings of these docks. He defied anyone to prove that any hon. Member of the Committee had ever said that the last three years had been a period of unexampled prosperity in the building trade, and it was well known that it was the building trade imports which formed a very large proportion of the dock revenues. He would also submit to the Committee that during the last three years there had been a great many disturbances in the corn-growing areas in the Baltic, in Russia, and in that portion of the world from which our corn imports were largely drawn, and which in the past had supplied the Surrey and Millwall Docks with a large proportion of their trade and revenue. He submitted that it was much fairer to take the good years with the lean years in striking an average of profits, and, therefore, it was quite fair to go back over a period of six years and not three years as the right hon. Gentleman the Member for Islington had suggested. If the right hon. Gentleman wished to prove that this Bill would place a burden on the trade of London, it was incumbent upon him to prove that the average trade for the past six years was less, or that the working expenses would be greater than had been estimated. He 612 had suggested that a great deal of money would have to be spent is putting the docks into proper working order, but it was the universal experience of all those concerned in business of any kind that when they put money into improvements, be it a dock company, a railway company, or any other concern, the money spent was generally wisely spent, and generally led to a larger return than the old capital. He could conceive that if the new authority had to spend many millions in improving equipments and altering the docks, that capital would bring in a return exceeding the return on the old capital invested, and in that way would yield an additional profit to the Port authority. If it was urged that the trade of the docks would fall off, he would ask, where was that trade going to? Was it going to desert the docks and go to the river instead? The expenditure of money which the new dock authority would incur in improving the docks—if they had that total trade in the Port which was there at the present time—would surely enable them to keep the trade. Surely it might be hoped that the increased facilities which would be provided would attract increased trade, and that the trade would not be allowed to go away to other people. He had thought that the objections to this Bill which had come from the wharfingers and those interested in some of the riverside industries had been due to fears that the improvement of the facilities in the docks would have the effect of diverting a portion of the trade from the wharves into the docks. It was proposed to have an authority for controlling the Port which, perhaps, taken all round—and he was sure the right hon. Member for Islington would be the last to deny this—had the rosiest prospects of any port in the world. There was a vaster and a more constantly increasing population in London than in any other portion of the world. The Committee could hardly believe that any loss would be incurred by the new authority through a diminution in the trade of the Port of London.
§ * MR. STEADMAN
thought the Parliamentary Secretary to the Board of Trade replied to the right hon. Gentleman the Member for Islington in what he would describe as a rather 613 theatrical manner. He was astonished that the hon. Gentleman shielded his own position behind that of the late President of the Board of Trade. Mr. Gerald Balfour was a leading Member of the Conservative Party, and he could quite easily understand his position, but he could not understand the position of the present Parliamentary Secretary to the Board of Trade for this reason. Mr. Gerald Balfour was a member of a party whom Radicals outside always abused. They said to the people: "Oh! do not send them to Parliament; they are the party of privilege and monopoly. We are democrats, and we will support measures on behalf of the people." Well, he supposed the hon. Gentleman would go down to Devonport and say that to the voters On statements of that kind he got returned to the House, and when he had an opportunity of defending the administration of his Department he did not stand on his own merits, but fell back on an ex-Minister belonging to the Tory Party in order to shield himself. He was not a capitalist. He knew nothing about finance as compared with the majority of the Members of the House. When they were dealing with a matter of this magnitude it was always puzzling to know when hon. and right hon. Gentlemen get up to speak, how far they were financially interested in the subject before the House. That applied to both parties. There were two parties who in years past had been wrongfully abused, but only through the ignorance of the people who had been abusing them. One was the dock companies, and the other the Thames Conservancy Board. He said that without fear or hesitation, and he held no brief for the dock companies. The dock companies had done their level best to cope with the growing traffic of the river, but they had absolutely failed. An hon. Member spoke of St. Catherine's Dock and Commercial Dock—one at Wapping, and the other at Shadwell. At the Limehouse reach there was the West India Dock and the South Dock. When he was a young man those docks up the river were hives of industry. If the present President of the Local Government Board were to go down to the West India Dock, where he saw the right hon. Gentleman twenty years ago, to address, or attempt to address, a 614 crowd of dockers from the top of a hansom cab, instead of getting thousands round him as he once did he would not get hundreds. The South Dock was at one time a timber pond, and it was made into a dock in order to cope with the increased traffic on the river. Millwall Docks were built in his time. There was also the Surrey Commercial Dock. Well, the owners had no desire that the Government should buy that dock. He happened to know two of the directors of that dock. It was the best paying dock in the river. They had spent over a million of money in making a new entrance at the lower end. The south entrance was in the Limehouse reach, and the other in the Blackball reach. These docks ran quite parallel with what was known as the Isle of Dogs. In connection with the South Dock a lot of money was laid out some years ago in order to cope with the larger ships which were being built. The entrance was widened at the Blackwall end. The East India Dock was also a great work. They could not go there at one time without finding it crowded with ships. He went to that dock a few months ago, and there was not a ship at work in the dock. It was intended to accommodate the ships of the Castle Line, and on making inquiries he was told that the new basin could not accommodate the larger ships of that line. They were only doing one a week, instead of two. The ships were going to Southampton. He mentioned this to the hon. Member for Woolwich. He said to him: "There, Bill, you have the answer to the poverty in Poplar." Then they came to the Victoria Docks and the Albert Docks, which had been built in his time, and yet to-day they were years behind the other ports. That proved to him that the dock companies had invested their money and done their level best to cope with the requirements of the Port of London, but they had failed. He asked any one of the capitalists in the House of Commons—men who knew business, otherwise they would not accumulate money as they did—whether they would be foolish enough to purchase a business that was absolutely played out. Men did not make money in that way. 615 Why buy a thing because they had public money to handle which they would not buy if they were spending their own money? If he were to open, say, a grocer's shop in any district, and if he were doing a good business and making a decent living, the business might be destroyed through the competition of one of those gigantic companies which were formed nowadays. The working classes of this country had to fight for all they were worth against the combinations of capitalists. Wealth was the one thing which was socialised in this country to-day. If he were a grocer whose business was destroyed in the way he had indicated he could not come to Parliament for compensation. He would have to put up with it. For all the world cared, a man in these circumstances might starve outside or go into the workhouse. He did not want the President of the Board of Trade to take his word alone in regard to the docks. He asked the right hon. Gentleman to pay a surprise visit with one of his own officials to the West India Docks, or some of the other docks, in order to see for himself the state they were in at the present time He had nothing to say against the two experts who were employed by the Government, especially the actuary, but he did say as a mechanic that the engineer, however able he might be, could not in a period of fourteen days thoroughly overhaul the docks to ascertain whether they were in good working condition or not. The Thames Conservancy Board had been accused of neglecting its work with reference to the dredging of the river. Well, they deserved only a portion of the blame. He was a member of the Board and when the question of dredging was raised they were always mot with the cry, "We have got no money." Some years ago they were dredging below Woolwich. There was a factory on the river bank and the dredging was undermining the foundations of the factory. The owners got an injunction and stopped the work. The river could not be dredged even up to Blackwall, to say nothing of the channel near the Tower Bridge. At Blackwall they were met by the tunnel, and they could not get any more depth of water there than they had now. The river banks down to Silvertown were a mass of warehouses and factories. They 616 could not dredge the river there, because the moment they attempted it they undermined the factories, Now, they could get a depth of water of 35 feet at Gravesend; but the dock companies might say: "It is no use of us doing anything at all to our docks, because the Thames Conservancy do not give us the depth of water." His answer to that was that if there was a depth of water of 35 feet at Gravesend, the ships could not get into Tilbury at low water, because they had the sill to contend with, and they could not get 35 feet on the sill at low water. He was in hopes that this Bill would have compelled them to get that depth. He had the honour of being one of twelve members of the Thames Conservancy which visited the ports of Rotterdam, Antwerp, Bremen, Bremen-Haven, and Hamburg, and he said to his colleagues when they were at Antwerp on the River Scheldt: "That is what we want on the River Thames." They all admitted that it could be done. "Oh, but," said he, "we are bound hand and foot on the River Thames with the private monopoly of the dock companies." He knew that at Antwerp they had a small dock company in some form or other, but they had made the improvements nevertheless, and a good deal more. He knew of a man who bought recently London Dock stock at 90 which was going to bring in 3 or 4 per cent. interest. This was no fairy tale. An ordinary tradesman had to submit to competition and put up with the loss of profit. Why should not the dock companies do the same? It could not be supposed that the men who found the capital to build these docks did it to accommodate the shipowners. They did it because they knew there was money in it; and they had made their money. The fact was that these docks, like the railways, ought to belong to the State. What the dock companies ought to have done long years ago the State itself ought to have done, and not the big capitalists. The Thames Conservancy, with all its faults, passed a large plan for a deep water jetty, but it had to go up to the Board of Trade. That was where he objected to the inte ference of the Board of Trade. The Thames Conservancy could not pass a bye-law to regulate the traffic 617 on the river without submitting it to the Board of Trade.
* THE CHAIRMAN
The hon. Member is really going very wide of the point, which is that Clause 3 stand part of the Bill.
§ * MR. STEADMAN
said that he understood that the point before the Committee at the present moment was Clause 3, which dealt with the purchase of the dock companies' undertakings. His point was that the Board of Trade were interfering too much with this problem. He wanted to know from the Board of Trade what right they had to create a new Port authority, and before doing so, to go and purchase the docks, to the tune of £22,500,000, in order to hand them over to the new Port authority, so as to be a load round their neck for years to come. He knew that that was like the Licensing Bill. They were saddling the new Port authority with these docks, just as they were hanging a burden on the necks of the tied-house men so as to compel them to pay a high rate of interest on the money going through their hands. His remedy for that was that the Board of Trade ought to have created the new Port authority and left the docks alone, or given the new Port authority the option of purchasing them if they wanted to do so. Bat failing purchase their object ought to have been to compete with the dock companies. Of all the Continental ports he had visited he was most struck with Antwerp. They had a fine large dock there and they were building a much larger one. Apart from the docks they had some miles of wharfage, and ships came up alongside the wharves on which there was the railway. The goods were transferred direct to the railway trucks or else into barges which had a capacity of carrying 2,000 or 3,000 tons. He wanted to see the Port of London succeed, and he hoped and trusted that this Bill, which the Government were bound to carry as they had made up their minds to it, would do all that they expected it to do. But he maintained that the real solution of the success of the Port of London was not the docks but deep-water jetties. He would let all the docks up the river alone and buy up all the land between the Albert 618 Dock and the Tilbury Dock and turn it into one gigantic dock. He would give the docks 35 feet of water with new entrances so that the largest ship afloat to-day might get into them. Besides that he would provide deep-water jetties that would accommodate the largest ships. That, of course, would mean millions of money. But the Belgian Government handed over to the municipality of Antwerp £8,000,000 for their improvements. The whole thing was managed by the municipality with the assistance of subsidies which the Government gave to the municipality. But they would not get that here, especially just now. The Chancellor of the Exchequer had his sympathy, he could assure him. The right hon. Gentleman was in a bit of a tight corner just now. Still, he had faith in him. He knew the right hon. Gentleman had a large heart and would do a jolly sight more than he did if he had the means. Unfortunately, he had not; the means. In his judgment that was I the only thing that would remedy the unsatisfactory state of things that existed on the River Thames at the present moment. He was sorry to admit it, but the great curse of this country was cheapness. Competition was run so fine that it would not pay the big shipowners to have their ships lying idle for a tide before they could get into a dock. Wages were running on, and that meant a large loss on big vessels. When he was I at Hamburg he went on board one of the German boats, and a fine ship it was. But when they got to the river there was not enough water for the ship and they had to land in a tender. It was the same at Bremen Haven. But when they came to Southampton they found thirty-six feet of water and the biggest ships went there bang alongside the jetty without any waste of time. The passengers were landed, and the ship got her coal without delay. That was what they wanted in our London river. The President of the Board of Trade told him that the new port authority would have power to build deep-water jetties; but would they do it? Where were they going to get the money? He maintained that every penny-piece they put on dues in this port was going not to increase the trade but to take the trade 619 away. London, at present, was the cheapest port in the world, and that was the reason of its great commerce; but if they put dues on goods they would destroy that trade, and after all the merchant did not pay these dues although he might do so at first hand—
§ MR. STEADMAN
said he was sorry; but, after all, the dues fell upon the consumer, in his judgment. In conclusion all he had to say was that although he was opposed to buying out the docks, he was as earnest as the Government in his endeavour to improve the Port of London, and he wished the Bill every success which the Government themselves hoped for.
§ THE PRESIDENT OF THE BOARD OF TRADE (Mr. CHURCHILL,) Dundee
The debate has now proceeded for a good many hours, and I think the Committee is in a position very shortly to come to a decision on the question under discussion. I think that hon. Gentlemen who have listened to this debate must have been struck at the inevitable character of the purpose of the Government to carry the Bill through. At almost every step it has been forced upon us by overwhelming arguments and by the force of circumstances. The first question is whether the docks should be purchased or not. A Liberal Bill introduced by my right hon. friend, a Conservative Bill introduced by the late Government, and the Report of the Royal Commission—all equally affirmed the principle that the purchase of the docks should be an integral part of any scheme for the establishment of a real Port authority for London. If that be the first step to which I say we are driven by the practically irresistible process of circumstances, the next step is the sharp alternative between purchase by arbitration rather than by purchase by agreement. Of course, there are advantages on either side. But after having heard the admirable defence of purchase by agreement which my hon. friend the Secretary to the Board of Trade has given to the House, and also having 620 heard the very generous admission of the hon. Member for Dulwich that upon the whole he was of opinion that better terms would be got by agreement than would be got by arbitration, the House is aware that at any rate we know exactly where we are after having purchased by agreement, and we are not exposed to any of those indefinite chances which are the result of arbitration, especially where the value of the property is subject to many varying and complex conditions. If then we are brought to have to choose between arbitration and agreement, we are drawn to the conclusion that agreement is the right way, and we come directly to the question now before the Committee. My right hon. friend the Member for Islington has his own views of the terms of the agreement, and as every one knows, he has explained those views very fully, but the Committee will realise that purchase by agreement means purchase by agreement. It means that the buyer and seller must come to an agreement about the terms, and if that is so, it is really not open to anyone to assert, as did the hon. Gentleman opposite, that these docks ought to have been purchased by agreement for much less. The method employed by the Government has been fully explained. An actuarial inquiry was made with full knowledge to ascertain the true value. Engineering inquiry was made, not in order to ascertain whether the docks were up to date, or whether they were perfect for the purposes suitable for a great city, but in order to ascertain whether the earning capacity of those docks relatively to the ascertained income was adequately maintained. It was conducted by an engineer whose authority has never been challenged, whose discretion was never impugned. During the inquiry for two or three months upstairs, no one was brought forward—no serious witness was brought forward, no engineer, and no one of experience in the management of docks came to impugn in any way the experience or opinion of Mr. Cruttwell, that the earning capacity of the docks had been adequately maintained and that there was no depreciation of the proper capital value. We are told that these docks are obsolete and have long been neglected, but they have had spent on them during the last 621 six years an average of £125,000 a year, and in the year 1907 no less than £127,000 was expended on the improvement of these docks. But it is no part of the Government case that the docks which have been purchased are in every respect up to date. On the contrary, every argument which is used to show that they were obsolete or obsolescent and unsuited to the needs of the city—to show that they had a hampering effect upon trade, is an argument which proves the urgency of the measure which we have under consideration. When my right hon. friend the Member for Islington tells us that in his opinion these docks are obsolete, that their gates are never opened and ships cannot get in—
§ MR. CHURCHILL
When he tells us that some of their gates are never opened and ships cannot get in, that the warehouses are not opened and the docks are unsuitable for trade, when the right hon. Gentleman makes all these statements, they have not, I can assure the Committee, the slightest connection with the actual facts. In 1907, the London and India Docks alone disposed of over 7,000,000 tons of shipping and 11,000,000 tons of goods. But if these statements which are put forward by the right hon. Gentleman were as true as they are untrue, if they were as accurate as they are inaccurate, that would be the most powerful argument that could be advanced for the Committee's resolutely pushing forward with this Bill, which alone can effectually remedy such a deplorable state of things. When therefore, my right hon. friend speaks of a shady transaction, a shady business—
§ MR. CHURCHILL
I wrote down the words "shady business," and when he makes use of such strong language in criticising financial proposals put before the Committee in good faith on behalf of the Government, I should like to know where was the right hon. Gentleman when these proposals were put forward. The right hon. Gentleman has special business aptitude, he is connected with London and has a special knowledge of 622 it and London affairs. The right hon. Gentleman was a member of the Government long after my right hon. friend's scheme was made public and the Bill was printed and laid before this House. Why did not the right hon. Gentleman come forward, if not publicly at any rate in the Government, to give them the advantage of his counsel in these matters? He saw these transactions and he saw these disadvantages. He saw these shady transactions take place, and not one single moment did he spare from his labours at the Education Department to lend a hand to the Chancellor of the Exchequer in connection with this Bill. I venture to think the right hon. Gentleman has approached the subject this afternoon in a mood and with an expression that I think are not worthy of himself at his best. And when I turn from the question of the methods which we have employed, which really are not seriously challenged in any part of the House, to the price, I have only one observation to make to epitomise the discussion which has taken place. A price fixed by agreement will not enable you to make persons who possess existing properties accept an appreciably lower income than they have on the average been receiving. You will not get people to accept half or three-quarters of the income they have been accustomed to, but with that general reservation I say we have taken over these great properties substantially at their actual and real value. If you look at the income my hon. friend the Secretary to the Board of Trade has shown, it appears that we have purchased for stock which will show £800,000 interest, a stock which will show a value of £809,000 a year. It is quite true that it is only just a balance, but it is not to be expected that any greater advantage than that could be gained. If you take the Stock Exchange value, the average market value for six years of the old stocks which are still extant, would be about twenty millions and a half, and if you compare that with the Board stock so far as we can accurately forecast it, it is not anticipated that the average value of that stock issued will be above twenty-one millions. I only ask that hon. Members will not accept statements 623 as wild as those of the right hon. Gentleman, and will consider that the margin of unthriftiness under this bargain must at any rate be exceedingly small—a million or two one way or the other, and which way is an absolutely disputable and arguable point. When the narrow and almost exact balance has been established between the old and the new stock which is created, let the Committee also remember that no account whatever is taken of the undeveloped land. I do not wish to go into that at length, but there are 750 acres of land situated in close contiguity to the docks, which will be of the greatest possible value. The average prices for which the land was purchased are known and they are very high. [An HON. MEMBER: £400,000.] Thirty or forty years ago £400,000 was paid for the land, and there has been the great appreciation of value which has attended urban sites. These lands were valued by the companies at £1,600,000. So far as the evidence goes the Government are inclined to think that this is more than the actual value, but if we take it at half, or £800,000, a figure markedly within the limits of actuality, it would be equivalent to a premium on the whole transaction of 3.74 per cent. That is the case for purchase in its simplest terms, that there is a practical equation as regards the benefits which the holders of the stock will receive and a balance in our favour of the undeveloped land with all its advantages, once adequate capital is brought to bear upon it. But I should not be dealing fairly with the Committee if I were not to face the argument which has been used, that even if an equal income has been exchanged, the holders of the old stock surrendered a precarious and fluctuating income for an absolutely certain one. I advise the Committee to realise, in the first place, that the extant stocks of the dock companies were of very varying value. There is, first of all, a group of £16,500,000 of preference debenture and other stock of the highest possible class, and it is not in the least-true to say that is precarious and fluctuating, because over the whole area of finance that security was established by payments extending over a long period of time. In the next category 624 you have between £5,500,000 and £6,000,000 of deferred and ordinary stock. For these we have paid the "B. stock" to the value of £220,000 a year. During the last six years the average annual interest yielded on this stock was £228,000 a year. So that even on this second class of commodity the bargain can be shown to yield a balance, a very slight balance, in regard to the interest payable on the port stock as against the income derivable under the old system. There remains only one class further of securities—about £1,000,000 worth of very junior securities. They are of uncertain value, but they are certainly of some value. That £1,000,000 worth of securities we have purchased by agreement for £342,000. It must be remembered that although some of those securities have not paid a dividend in the years immediately preceding the purchase they are nevertheless valuable and marketable commodities, and that the value of these securities on the Stock Exchange and in the market so far as it can be estimated is, I am informed, far in excess of the £342,000 which we have paid for them. Again, I say in estimating the value of these stocks it must be remembered that the stock holders of all classes are entitled to their share in the value of the undeveloped lands and what might come out of it, and that any scheme of arbitration would have to take into consideration their substantial claims in that important respect. I venture to submit to the Committee that the bargain that has been made is, first of all, the best that could have been made under the circumstances in which we stand. Of course I agree with the hon. Gentlemen opposite that it would have been a very good thing if the London County Council, the great London authority, had been able to come forward and lend its credit to guarantee the finance of the dock authority. I should have much preferred that. I should have very much liked to have seen that life between the London Port Authority and the London County Council grow in the future. But that was not open to us; the advantages of that course were not open to us. I have that from my right hon. friend. The House knows perfectly well 625 that if anybody could persuade a Moderate or Progressive majority of the London County Council to favour such a scheme it would be my right hon. friend. But his sweetness was wasted on the desert air. We, therefore, cannot be blamed for not having the advantage of their support. I will take occasion when we reach the next clause to relieve the anxiety which has been expressed with regard to the burden which will be placed on the trade of the Port, and I think I shall be able to show that the bargain which we have made is not a hard bargain, but on the contrary a thrifty one, and I think it will be not less easy to show that the fear expressed by hon. Members is unfounded. I should be out of order in referring to that now. What remains? Only this other point as it seems to me. I mean the future of the Port in its financial and commercial sense. We have heard the most gloomy prophecies and the most melancholy predictions. We are told the change is not desired by persons who have ignored the fact that the timber trade has been disorganised, that the building trade through high rates for money has been much depressed, and that the grain import trade has been much disturbed in the last few years; and that the companies have themselves reduced their profits by protracted and fierce rate wars one against another. We do not believe that the future of the docks of London and the Port of London will be dark or restricted. We claim a free hand for the Port Authority, and shall all through this Bill ask the House to put them in as good a position to face their difficulties and solve their problems as if they were a private concern in all that is legitimate and fair. If that is done, we have good hopes for the future. We count on the economies of concentrated management; we count on the revival which fresh capital and improvements only can give to the high-class shipping of the Port; we count on the utilisation of vacant lands and on the reopening of the Greenland Dock, and the steady development of that most valuable property which has as yet scarcely begun to form part of the Revenue; and lastly we count on London, on the steady and ever unbroken expansion of the trade and wealth of this great city, which we 626 believe must continue inevitably by every improvement in science, the continuation of peace, and the spread of civilisation throughout the world. I hope the House will now come to a decision on the purchase terms, that when they come to that decision on the purchase terms they will understand what it really means. Let us decide once and for all whether the bargain is a good or a bad one. If we decide that it is a bad one, then this Bill must go. The scheme which is put forward will be rejected, the large public works that are being constructed in consequence of this Bill will be arrested, the enterprise which we desire to be centred in the Port of London will be prevented; and the docks which we are told are obsolete will be left to obsolesce into obsoleteness. But I believe that the decision of the Committee will show that we have acted judiciously and thriftily on the lines on which Governments and individuals alike may go. I take it that the decision may be taken as governing the bargain, because, I must remind the Committee that all parts of the bargain are absolutely interdependent, and the pulling out of any one part of this arrangement must absolutely destroy the whole basis on which it was arranged. Twenty conflicting interests have been adjusted in one way or another, and it is not possible for me to vary the details of the bargain without destroying the whole edifice which has been erected with so much patience, labour, and skill by my right hon. friend. I hope the House will recognise this, and discarding the weak cries of pusillanimity and suspicion which have been raised in one quarter and another, affirm that by a thrifty financial operation the Port of London is to be set free to maintain the position of this great city in the commercial supremacy of the world.
§ MR. RENWICK (Newcastle-on-Tyne)
said he had listened to the whole of the debate upon this Amendment, and while he quite recognised the ability with which the President and the Secretary of the Board of Trade had put forward the case of the terms upon which it was proposed to purchase these docks, he had failed to find, with the exception of the right hon. Gentleman and one hon. Member below the gangway, that the case had 627 been put before the House as to whether these docks ought to be bought or not. He was not in the House at the time when the Bill was before the Committee, but he understood that before the Committee the principle of buying the docks was not allowed to be discussed. He was in the House during the last Parliament and took a keen interest in the Bills introduced by the late Government in 1902 and 1903 in connection with this important question. In 1903 he headed a deputation of shipowners to the then President of the Board of Trade. He also made a speech in the House on the question, and ever since then he had taken a very keen interest in this important subject. Although he represented a northern constituency he claimed to have as great a knowledge of the Port of London as any hon. Member representing London. His business took him down to the docks two or three times every week, and he knew something about the docks of London. He had not the slightest hesitation in associating himself with the right hon. Gentleman the Member for Islington in his declaration that it was inexpedient to saddle the Port authority with the purchase of these docks. He believed that the purchase would hang like a millstone round the neck of the new authority, and that the reason the Bills of the late Government failed to pass was the doubt in the mind of the House as to the expediency of purchasing the docks. Had anything happened in the last six years to render it expedient to buy these docks now? If it was inexpedient to buy them six years ago, it was more inexpedient to buy them now. They had to remember, and it was important that they should remember, that the trade of London was carried on in two departments. About half was carried on on the river, and half in the docks. He could not help wondering, if it was expedient to buy the docks where half the trade was carried on, why it was not expedient to buy the wharves on the river where the other half was carried on. If it was expedient in the one case, it was expedient in the other. They had heard from the President of the Board of Trade that the Government were getting a good bargain in buying these docks. They were buying them on the 628 basis of the revenue value of the docks, and thought they were getting them cheap, but nothing was cheap, or a good bargain, if it was not required. He maintained that they did not want these docks, and where they were being purchased on the basis of revenue, the Committee must consider whether they would get the same revenues. He maintained that they would not. He maintained that directly the new authority took possession of these docks they would be faced with a great expenditure, not only for improving the docks themselves, but for bringing the wharves and warehouses up-to-date. He could enlighten the right hon. Gentleman as to the state of certain parts of the docks and wharves, at the present time. His own firm had applied to the docks to put them in a favourable position for their business, and they had been told that they could not do so because the authorities were not prepared to put any money into the docks. They had had to meet the difficulty by putting up the buildings themselves and paying the expense. That was the position with regard to some of the docks, and he maintained it was the position with regard to them all. When the Secretary to the Board of Trade asked the Committee to approve the purchase, and instanced the Surrey Docks, it was only because the Surrey Commercial Docks were an excellent and up-to-date institution. But the remarkable thing was that the authorities of the Surrey Commercial Docks did not wish to sell to this Board. They had brought their docks up-to-date, and had done that in a much more economical way and far more cheaply than this new Board was likely to do. He could understand a Labour Member looking round the docks and saying: "Here is a field for expenditure; here is a field for work for the unemployed"; but he maintained, as he maintained six years ago in the House, that the way to develop the Port of London was not by increasing the dock accommodation, but by increasing the wharf and jetty accommodation in the river, because to all intents and purposes, where it was possible to have wharves and jetties, docks were out of it. Take the River Tyne, about which he knew something. They had there docks and wharves. The 629 principal docks on the River Tyne did not belong to the River Tyne Commissioners; they belonged to the railway company. The River Tyne Commissioners themselves had docks, which were regular white elephants, and they would like to get rid of them. They had a demand for increased accommodation for large ships, not by way of in creased dock space, but by way of riverside wharves, and he maintained that that was the proper solution of the difficulty that they have to deal with in the Port of London. He was not one who took a pessimistic view of the trade of London. He was quite aware that the trade of London went on increasing, and he said fearlessly that there was enough accommodation in the Port of London for the ships that came. They heard a good deal about large ships requiring more accommodation, but there were no ships coming to the Port of London of upwards of 600 feet in length. Take the Atlantic Transport Fleet, their vessels were 600 feet long. The P. and O. Company's ships were 550 feet, and those of the Orient Line about 500 feet. All these ships could be accommodated in the present docks. Were they willing to build new docks to accommodate larger ships? That would certainly be entering upon an enterprise, the cost of which would be enormously out of proportion to the revenue they would be likely to get. They were told that 700-feet and 750-feet ships require accommodation, but they were not likely to come to the Thames. The "Mauretania," the "Lusitania," and White Star ships were not likely to come to the Port of London, and if they did, who would propose to build a dock to accommodate them? What would it mean? They would have to build enormous docks with a great depth of water, and they would have to provide on one side of the dock nearly 300 yards of quay—for what? So that a ship might use it probably once in three or four months. If they were going to deal with large ships they would have to deal with them by constructing wharves in the river.
* THE CHAIRMAN
I really think the hon. Member is out of order on the question before the Committee. I think 630 the hon. Gentleman is going too far afield when he talks about the accommodation of the future.
§ MR. RENWICK
said he was endeavouring to show that the new Port authority ought not to buy these docks, but should turn to the scheme before the Committee as to how large ships ought to be dealt with. He maintained that if this large amount of money was to be spent upon the existing docks, it was not the new authority who ought to have to deal with them, but the present proprietors. When a private company lost a portion of its capital it applied to the Courts for leave to reduce its capital. They rarely found an accommodating Government, such as the dock companies had found at the present time, to step in and relieve them in respect of loss of capital. He maintained that the fact that the Surrey Commercial Docks Company had been able to keep their docks up to date threw the responsibility on the present dock owners to keep their docks also up to date, and if they were not going to do so, then it was no part of the duty of this new authority to step in and carry out those improvements themselves. If they wanted to give the new Port authority a fair chance, let them entrust them with the administration of the river, give it ample powers to extend the wharves and to build docks, if they liked, but not saddle them with an enormous outlay which he was absolutely certain they were face to face with if they were to bring these docks up to date.
§ * SIR A. SPICER (Hackney, Central)
said he wished to make a few observations after the able speech of the President of the Board of Trade. There were one or two features of this subject which had not been touched upon, but which were really the crux of the whole question of the purchase of the docks, and he thought his remarks might be some reply to the hon. Member for Newcastle who had just spoken. He thought they must bear in mind that the Royal Commission, the late Government, and the present Government determined, when they considered this question, that the docks must be purchased as the property of the 631 Port of London, and he thought also, that they should bear in mind something of the history of the Port of London. They had to bear in mind that long before the docks they had a free river, they had free water; and when the docks were permitted to be built under legislative sanction free water was still retained. That was all very well so long as the docks had a monopoly, and then when that monopoly ceased, they still had the advantage of the protective policy under which this country was then, living, and which practically drew all the goods into the dock warehouses. But when free trade was introduced gradually goods left the docks to come closer to the actual market, and when, in 1866, Mr. Gladstone swept away practically all the remaining duties, with the exception, of course, of a few special ones, it went from that time very hard with the docks. Those who had since that time enjoyed the benefits of free water had to bear in mind that it was not all gain, and that, if they could go through that period again, they would realise that it would have been much better for them to have given up something of those privileges, and have enabled the docks to earn a sufficient income to extend their docks in harmony with the growth and size of the ships to be accommodated. From 1866 onwards the docks had been struggling against insufficient income. Though they, the users of free water, had for years had that advantage, they had had the great disadvantage that the larger ships had not been sufficiently directed to London, and that in some cases they had not been able to come, and consequently they had lost their share of the trade that those ships would have brought with them. He thought this was a point which had not been mentioned all through the discussion in Committee, and he thought it was a very important question for consideration. He had had to do with commerce in the City of London for forty-three years. He occupied, at the present moment, an official position in connection with commerce, and he honestly said that he would not willingly vote for any measure that would inflict increased burdens upon the commerce of London. He 632 knew the position of both sides. He knew that not only had every Government who had looked into the question thought it necessary to purchase the docks, but the whole history of the docks and the history of the port of London made it expedient in every way. With regard to the question if it was right to purchase, he replied yes. Whether they were buying in the right way and whether at the right price he frankly said that was one of his anxieties on the Committee, and if he criticised the Board of Trade it would be to say that he did not think that they were altogether frank enough with the Committee in the information they laid before it. He felt a good deal of anxiety from time to time, and anyone who had taken the trouble to read the evidence would see that anxiety brought out in the questions he asked, and he only wished, because he thought it would have been a good deal more satisfactory at the time, that a great deal more information had been placed before the Committee. They had bought the docks—he did not say at a great bargain, but he thought at a fair price—at a lower price than they would have done if the whole matter had gone to arbitration. But about the future. With the price that had been paid were they imperilling the future of the commerce of London? Let him give two figures which were brought before them in Committee, and which he thought were extremely interesting. The tonnage that came into the River Thames and went out in the year 1906 was 29,000,000 tons. Of that, 18,000,000 tons used the river alone and never went near the docks. The other 11,000,000 tons entered the docks and went out of the docks. But of these 11,000,000 tons only 2,500,000 tons paid dock charges, so that the whole revenue of the docks of London was obtained from the 2,500,000 tons out of the 29,000,000 tons. Of course, some would say that this showed that the greater part of the trade was done in the river. But, after all, they must have docks, and they could not get larger ships into the Port of London unless they had docks suitable to accommodate them. They must remember that. They had to provide sufficient capital, and on the present lines they had not allowed the dock companies to earn sufficient revenue 633 to raise the capital necessary to supply the dock accommodation. The hon. Member for Newcastle had raised the question of what happened to the docks during the last few years, during the time after the last Government Bill was withdrawn, a Bill which he should have been perfectly prepared to see passed. They had distinctly gone back because they had been doing nothing to provide further accommodation for the larger ships which he believed would come to London. He said that the figures which he had quoted showed that between 2,500,000 tons and 29,000,000 tons there was a splendid margin on which, if there was only a small charge made—and the charge would have to be very small—there would be sufficient to provide revenue for the purposes they required. He confessed that these figures were given to them by the representative of practically the only petitioner who really wanted to kill the Bill. Nearly all the other petitioners, as far as he understood the petitions, did not want to kill the Bill, but only wanted to get some extra privileges for themselves. The firm he referred to was William Cory and Company, who handled some 5,000,000 tons of seaborne coal out of 7,000,000 tons coming into the Thames, and who, did 90 per cent. of their trade in the River and used the docks for only 10 per cent. of it, It was a witness from this firm who gave the evidence that out of 29,000,000 tons that entered and went out of the Port of London, only 2,500,000 tons paid dock charges. It appeared to him that that fact was one of the most hopeful features in connection with the whole matter. While he fully realised the difficulty of the position, it was a little difficult to find exactly the condition in which those docks were. The evidence before them did not altogether reassure him, but he went to see the whole of the docks and he could not help thinking that if his right hon. friend the Member for West Islington had seen the whole of the docks right away from Tower Bridge to Tilbury, including the Surrey Commercial and the Millwall, he would not have given them quite such a doleful account of their present position. It was perfectly true that the warehouses of the upper docks were the main features, but they were uncommonly well built, 634 and were just as useful to-day as warehouses as ever they were. Considering the insufficient income that they had had he thought the dock directors and managers had simply done splendidly with the small funds at their disposal and the very fact that the dock companies had had to struggle for the last twenty or thirty years to pay even a small dividend, had produced a staff which, if properly used by the new authority, would enable them to bring this new enterprise to a success.
§ * MR. MORTON (Sutherland)
said that to his mind it was to be deplored that there should be any attempt to rush through a Bill of this sort, that they should have had only ten minutes on the First Reading, that the Second Reading should have been closured, that they should have been denied on inquiry before the Committee, and finally at the fag end of an exhausting autumn session they were expected to rest satisfied with this discussion. The hon. Gentleman who had just sat down said they must have docks. Did he know anything about how the trade of the world was carried on? They had no docks in New York, and that was a big port where big ships went. They had no docks in Glasgow, or in Hamburg, or Rotterdam. It was an extraordinary thing that they found Members so utterly ignorant on this subject that they said there were docks in Hamburg when there were not. There were no docks at Bremen. [Cries of "Oh, yes."] He advised those people to go over the whole port with the authorities as he had done.
§ * MR. MORTON
said then they were there on some other business. There were docks at Bremerhaven and he supposed that was what they meant. There were twenty-one miles between Bremen and Bremerhaven. Now he had shown the ignorance of his hon friends. When they went to the arbitration meeting at Berlin they were in such a state that they did 635 not know Bremerhaven from Bremen. Whether that was on account of seasickness or of drinking too much tea he could not tell, but they had proved that they Were utterly ignorant of what they saw there and how they saw it. Practically at Southampton the business was done at the wharves. When he told them what his hon. friends did not know yet, that the White Star Line ships had been removed from Liverpool to Southampton—from docks to where they did not use docks—he had proved up to the hilt that they did not want docks. There was a rumour that the "Mauretania" and "Lusitania" were both going to Southampton. In Antwerp they had some docks and they were building others. He found that the Government there and the municipality and harbour authorities had settled on a new scheme of fortification, and part of the dock scheme was no doubt part of the fortifications. As a matter of fact the making of the business of Antwerp had been at the quays and wharves, and not in the docks at all. The hon. Gentleman was by this time convinced. He should think that it was possible to do business with the very largest ships without having docks at all, and every authority he had been able to consult agreed that where it was possible to have deep water-jetties, wharves or quays, that was the most suitable and the most economical for their business. The hon. Gentleman had tried to make a point about the amount of tonnage that did not go into the docks, and that which did go in but did not pay dues. It was quite true that of the twenty-nine odd million tons that came into the Thames 18,000,000 never went into the docks at all, and of the 11,000,000 that did go in 8,500,000 was loaded into barges and never put on the dock wharves at all, and might be just as well unloaded in the river. Therefore what his hon. friend proposed was that this 8,500,000 tons, to help the authority out of the scrape that they had got into should be called upon to pay dues. That, to his mind, would be a most absurd proposal. It was only fair to consider the case of 636 Antwerp where they had some docks. Our Consul-General in his report said—I mentioned that in that year the spaces allotted to vessels were re-arranged, and the most regular lines of steamers were given good berths on the river, thus avoiding the necessity of their entering the docks and the loss of time therein entailed.He went on to say—It has been mentioned to me that against the wish of shipowners they have been driven to put their ships into the docks when they wanted to use the quay.And that was what probably would have to be done in the Thames. They would have to endeavour to take the business away from the wharves and quays for the sake of getting profits for the docks. That had been condemned very strongly by the shipowners who used Antwerp, and our own Consul said distinctly—While not in any way wishing to suggest that what is the case at Antwerp would necessarily apply to other great ports, it must be stated that berths on the river quays at this point are much more sought after than berths in the docks.He went on to say—It is recognised by shipowners that river quay berths are superior to and more advantageous than dock berths at Antwerp. At Antwerp it is undoubtedly a fact that as regards saving of time and facility of manœuvring large vessels the verdict is greatly in favour of river quayage.He went on to show that the business of the Port of Antwerp had undoubtedly been made up at the quays, and not in the docks, and that all shipowners practically now were anxious to have accommodation at the quays instead of in the docks on the ground that it was more economical. The President of the Board of Trade had accused the right hon. Gentleman the Member for West Islington of making a wild speech, but he thought the speech of the President himself was a great deal more wild than the right hon. Gentleman's. He could understand him, but he could not understand the President at all. The right hon. Gentleman told the Committee that the Royal Commission and the late Tory Government and the Liberal Government had come to the conclusion that they ought to purchase the docks. The Chancellor of the Exchequer 637 made a speech a little over a year ago in which he said that he was not going to purchase the docks, and at that moment, at any rate, he had concluded not to purchase. The right hon. Gentleman went on to tell them that he did not care about any further reports of experts because all they wanted to make use of was this question of fixed income. Now the question of fixed income was looked upon differently by different authorities. The Parliamentary Secretary to the Board of Trade just now stated that the profits would amount to £809,000. As a matter of fact the figures sent round to them as coming from the Joint Committee stated distinctly that the last year, namely, the year 1903, showed that the net profits were £765,101. In 1905 the figures was £665,107, and in 1906 the total was £739,872. Those were the figures for the three years. For the other three years the amount went up in one year to £850,000. He was taking the three years, which was the best way of looking at it. How they could claim the profits to be £809,000 he confessed he could not understand, but he thought he would be right in calling it very wild arithmetic. These figures showed a loss of £45,000 at least in the payment of interest alone on the new stock, because they had to pay interest whether they liked it or not if this bargain was carried out. There was no doubt there would be a loss of £45,000 to £50,000 on that transaction. Looking over the accounts of the dock companies he found that they had never made any allowance for depreciation or sinking fund, or anything of that sort, and undoubtedly there would have to be some allowance in this respect in any calculation for the future. The right hon. Gentleman did not seem to think it was absolutely necessary that his expert engineer should let them know anything about the matter beyond a general statement that it might produce a certain income if it went on as before. What he should like to know was whether that engineer had made a report in writing. He knew it was asked for by the Committee, but the Board of Trade refused to give that report. He wanted to know why they should not have that report so as to know what the engineer's 638 opinion was as to these docks. There must be some reason for keeping back that report, and he took it that it was being kept back because it was unfavourable to the Government's proposition. If the Government would only produce that report it would settle that matter, and he hoped that even now for their own credit the Government would produce a report of their own engineer.
§ SIR F. BANBURY (City of London)
Does the hon. Member say that that report was demanded by the Committee and refused?
§ * MR. MORTON
said he knew the report was asked for on the Committee, but he did not know whether "demand" was the right word to use. It was asked for and the Board of Trade objected to producing it. It had been asked for in the House since then by his right hon. friend the Member for Islington, and it was refused on that occasion. As far as his recollection went, when people were promoting companies, and more especially when they proposed to buy property, they made no secret of the report of the engineers or experts they employed. Such reports were generally produced and sent abroad with the view of getting people to put money into the company, and they were always given as independent reports for people to judge for themselves. Having got this report, he wanted to know why the Government refused to produce it. He thought he was right in assuming that it was rather against them. In fact he could not understand any respectable professional man, desirous of saving his own professional reputation, ever making a report in favour of buying docks at the price mentioned here. He knew from his own personal experience that these docks were not in good order and they did and would want a large sum of money spent upon them before they could be brought up to date. He hoped the Government would reconsider that particular point and let them have that report, in fairness to Mr. Cruttwell himself and in fairness to everybody concerned in regard to this particular matter. The Parliamentary Secretary to the Board of Trade made a speech just now, but neither in 639 his speech nor in the speech of the President of the Board of Trade was any attempt made to show why they should purchase the docks at all. He knew the Parliamentary Secretary finished up his speech with a fine flourish such as he had often heard used by company promoters, but it was not convincing, because he told them everything would depend upon what would happen at the end of the year when there would be a fresh balance sheet which they had not seen and which they could not see yet. He told them that bad trade had had something to do with the falling-off in the trade in the river. He did not think that bad trade had affected the river at all yet. He knew that tonnage kept increasing, and it could hardly be true that bad trade was affecting the trade of the Port of London when the tonnage was on the increase. They could see this from the dues paid to the Thames Conservancy, which were increasing. He could go back a good many years, but he did not know any year when the business seemed to be going back on the river except during the war between Russia and Japan. At that period owing to the sudden removal of the Japanese vessels from the Thames they lost a little in tonnage dues in that year, but it was made up afterwards on the ending of the war. Therefore, he was not satisfied that there was anything at all in that proposition. Some hon. Members spoke about gross revenue being over £2,000,000. He could not understand what the gross revenue had to do with the matter at all, because they had to do with the net revenue of those docks and what it was likely to be by-and-bye. Then they were told that they objected to arbitration. Those who did not want anything to do with this business at all and did not desire to purchase the docks, had never said that they ought to settle this matter by arbitration or by agreement. He could understand purchasing docks if, like Glasgow, Hamburg and other places, they would thereby get command of the port. By purchasing the docks in London they did not get command of the port at all, because they left the biggest percentage, amounting to 18,000,000 tons of business, in the hands of the owners of the wharves 640 and jetties, and they really commanded the river trade. If they were going to buy the whole lot of them up, he could understand it, but nobody had proposed to buy up the wharves and jetties, which were estimated to be worth over £100,000,000, and nobody was likely to make a proposition of that kind without seriously considering the matter. He was opposed to this clause, because he objected to purchase on the one hand, and to the price to be paid on the other hand. His opinion was that the Board of Trade had arranged to give not only more money than the docks were worth, but actually more money than they cost to construct. In his opinion they did not require these docks at all for the purpose of working the port business. If they wanted a really up-to-date dock they had better go and build it, and instead of spending £23,000,000, with another £5,000,000 to put the docks in repair, they had much better build an up-to-date dock capable of taking any vessel that could possibly come to it. If they wished to have such a dock, then build a first-class up-to-date dock such as that which was suggested in the neighbourhood of Grays, where the promoters offered to build a dock which would take all the ships that were wanted for £5,000,000. Supposing he put that at £8,000,000. If for that sum they could get a really good first-class dock capable of taking any ship or dealing with any business, surely it would be a right and proper thing to, build a dock of that sort, and not pay over £23,000,000 for obsolete and useless docks. [Cries of "Divide, divide."] Was it not a fact that if they would only look after the river and promote the construction of deep-water jetties and quays they would give the traders what they want—a cheap port?
And, it being a quarter past Eight of the Clock, and leave having been given to move the Adjournment of the House under Standing Order No. 10, further Proceeding was postponed without Question put.