§ LORD MONTEAGLEasked the First Lord of the Treasury in what mode, and under what authority, it was proposed to give effect to the contract respecting the acceleration of the Irish mails now OH the table of the House? The noble Lord expressed the apprehension he felt at the extent of the present Admiralty expenditure on account of postal services. It had already reached a million a year, which was one-third of the whole of the Navy Estimates in 1793. This expenditure had in a great measure grown up without the cognizance of Parliament, for although the amount of a particular contract was ultimately brought before the House of Commons, that was not done till the public credit had virtually been pledged. In the case of the Irish mails there had moreover been a direct violation of the law. Formerly these contracts were made by the Post Office, and the payments were made out of the gross receipts of that department. But by an Act of the 17th and 18th of the present reign, which had been passed at the instance of the right hon. Member for Oxford University (Mr. Gladstone) it was provided that the gross revenue of each Department should be paid into the Treasury, and that the cost of collection and management should be voted by the House of Commons, and in order to bring the expense of this service immediately under the cognizance of the House of Commons, it had been provided that the contracts for the conveyance of, the mails 1601 by sea should be made with the Admiralty. But in this ease the contract had been made directly with the Postmaster General, and not through the Admiralty; and therefore, beside the illegality of the act, his noble Friend (Lord Colchester) would find that he had made a contract which it was not in his power to perform. By this contract the noble Lord agreed that the sum of £105,000 per annum should be paid for certain services, out of the gross revenues of the Post Office, for fourteen years. That seemed to him (Lord Monteagle) to be a wholly indefensible proceeding; and he dared say his noble Friend was quite unconscious of the undertaking he had entered into without the authority or consent of Parliament. It might be said that similar contracts had been entered into in former times; and he believed that that was the only explanation the Government would have to offer. He (Lord Monteagle) should be the last person in the World to object to the present contract; only he contended that it ought to have been made in a proper manner. There was a Treasury Minute extant declaring that all contracts should be open ones; and indeed it was manifest that the whole system of contracts would become a mere delusion and a mockery if any restriction were placed upon the freedom of competition. He hoped that the result of this conversation would be to draw the attention of the lower House to an engagement which the Government had entered into in defiance alike of their own rules and of an Act of Parliament. He trusted that the House of Commons would exercise its just privilege, and would interpose between the Government and a violation of the law. In the early part of the Session the noble Earl (the Earl of Derby) was asked a question respecting a certain telegraphic scheme; and the noble Earl replied that the proposed contract was still a matter of negotiation. He said that a reservation had been made by the Government for the purpose of inquiry into the solvency of the company, and the benefits likely to be derived from the adoption of the route which had been proposed, and also for the purpose of securing the performance of the service in a satisfactory manner. No one hearing that statement of the noble Earl could for one moment doubt that the noble Earl's attention was awake to the difficulty of the transaction, and the importance of free competition. It had been said that contracts of the present kind wore for the 1602 benefit of the shipping interest; but a worse blow could not be struck at the prosperity of that interest than for the Government to adopt the artifice—he might almost say the trick—of making contracts which were not open to the whole of the shipping interest, without exception, or which were liable to imputations of favouritism of any kind.
§ THE EARL OF DERBYsaid, he had failed to gather from the notice which his noble Friend had placed on the paper what was the precise ground of objection which he was likely to take to the contract. He understood now, however, that his noble Friend took a double ground. First, he complained that Parliament had not beforehand been put in possession of the nature and object of the contract—he objected, in short, that Parliament had no knowledge of the intention to enter into it; and he stated, further, that the contract had been entered into in violation of an existing Act of Parliament. Now, in order to substantiate his case, his noble Friend had three times over inserted in the contract a word which did not appear in it, and which made all the difference in the argument whether there had been a violation of the law or not. His noble Friend had stated that under an Act of Parliament (the 17th and 18th of the Queen) it was provided that the "gross" revenue of all the different public Departments must be paid into the Treasury, and that an estimate must be laid before Parliament for the sums which were required for the collection and management of the revenue. He (the Earl of Derby) admitted that this charge was one which was covered by the terms of that Act; but his noble Friend had stated that the contract was to be paid out of the "gross" revenue of the Post Office department. Now he (the Earl of Derby) did not know where his noble Friend had found this. He had looked into the contract, and he certainly could not find it there. It turned out that the payments were to be made not out of the 'gross-revenues' but out of 'the revenues' of the Post Office. Then, with regard to the character of the contract, in the first place no contract whatever would be valid if entered into contrary to the express provisions of an Act of Parliament. The circumstances under which the contract had been entered into were these. Two years ago an Act of Parliament was passed, authorizing the London and North Western Railway Company, the Chester and Holy- 1603 head Railway Company, and the Dublin Steam Packet Company to contract with Her Majesty's Government to perform certain duties, and the Government of Her Majesty to make certain payments. In pursuance of the provisions of that Act Her Majesty's Government, in September, 1857, entered into a contract verbatim et literatim, identical with that now on the table of the House, which contract was signed by Mr. James Wilson, Secretary of the Treasury under the late Administration, and a Minute of the Treasury then authorized the Postmaster General to carry into effect that contract. It was in pursuance of that Act of Parliament, of the contract in pursuance of that Act, and of the authority so given by the Treasury to the Postmaster General, that his noble Friend the present Postmaster General had put his name to the contract which had just been the subject of such strong comment from his noble Friend opposite. Parliament had authorized the Postmaster General to contract for making certain payments to railway companies for certain services; and he should like to know from what fund the Postmaster General was to make those payments except from the revenues of the Post Office? He had no other funds at his disposal than those belonging to the revenues of the Post Office; and he could assure the noble Lord that neither on the part of the late Government nor on the part of the present Government had there been a wish either to depart from the course laid down by the law, or to conceal the arrangements that had been made; on the contrary, although the arrangements which had been entered into were that the payments should be made by the Post Office, those payments could only be made in pursuance of an estimate to be submitted by the Treasury to Parliament, and of Parliament then voting such payments, and thus enabling the Post Office to perform their part of the contract. Parliament, then, had, in the first place, sanctioned the entering into the contract which was drawn up by the late Government, and signed by the present; it always had been, and still was, intended that the contract should be carried out by money to be voted by Parliament. The contract was to come into operation in June, 1860; and his noble Friend (Lord Monteagle) was now complaining that in 1859 the Government did not lay on the table the whole particulars of a contract entered into under the authority of Parliament, and for which 1604 it would not be necessary to expend a far thing of the Post Office revenues till an estimate had been laid before Parliament and voted in 1860. That was the plain state of things; and he did not think that his noble Friend had any right to complain that there was in this arrangement any violation, in letter or spirit, of the Act to which reference had been made, either on the part of the late Government or the present, or that any attempt had been made by either to saddle a public Department with a responsibility which rested with Parliament itself.
THE DUKE OF ARGYLLsaid, the contract had undoubtedly received the sanction of the late Government, and he remembered questions having repeatedly been put to him by various Irish Members as to the degree of progress which the late Government was making with it. He did not remember what were the words of the instrument, but if they were at all contrary to the Act of Parliament, they could only have been used by mistake, and that there was not the slightest intention on the part of the Government to expend the sum in question without submitting an estimate to Parliament. At the same time, he must confess that while at the head of the Post Office Department he felt that the state of affairs with regard to contracts of this description was most unsatisfactory. It was true that these matters came before Parliament, but it was not until the public faith had been pledged; and it was consequently exceedingly difficult for Parliament to exercise any practical influence over them. In this particular service he thought Irish Members had a very strong claim to the support of Government to their wishes; but generally speaking he could say that the packet service was not altogether entered into with reference to the business or convenience of the public service. Undoubtedly the Irish Members had a strong case; for they often came over at great personal inconvenience; but if his noble Friend was as free to speak as he was, he would no doubt say that these services were considerably overpaid, so far as they merely related to the Post Office. He did not think that the Act of Parliament, which the noble Lord had referred to amounted quite to a Parliamentary sanction of the present contract. It was a private Act, and it gave the companies power to enter into a contract with the Government; but Parliament, in agreeing to that, by no means pledged itself to approve of this 1605 particular contract. He felt, in the present state of the public expenditure, that it was most important not merely that the sanction of Parliament should have been given beforehand in this matter, but that in future the particular arrangement pro posed by every Government should receive the sanction of the House of Commons, and that without that sanction the contract should not be signed. That was the only security they could have against undue influence being brought to bear on the Government, or against the public suspicion of such influence.
§ THE EARL OF HARDWICKEsaid, he did not agree with the noble Duke's last suggestion, which, it seemed to him, would defeat the very object for which tenders were invited from the public, namely, to secure the best services at the lowest cost. Now that the entire service was performed by private contractors, he thought it would be far better to leave the whole matter in the hands of the Post Office Department, who were best able to judge of the nature of the service required, and of the sum proper to be paid for it, and who should bear the whole responsibility of the arrangements.
§ LORD STANLEY OF ALDERLEYsaid, he believed this contract was contrary to the Act of Parliament. The money ought to be paid out of the general revenues of the country. He was concerned to see the practice which had been growing up, and Ministers fixing the country with large amounts without the sanction of Parliament. It appeared that the Government had, of its own authority, and without the sanction of Parliament, made contracts with the Red Sea Telegraph Company and with another Company for conveying the mails between Galway and America, and with another for laying down a telegraph from the coast of Ireland to America. To say that there was a Parliamentary sanction to all this because a year afterwards the sums to be paid appeared in the Estimates, was absurd. He trusted that this matter would be taken into serious consideration. All contracts ought to be entered into subject to the approval of Parliament— not in a year or two, when they were called on to pay the expense, but no expense should be incurred until Parliament had given its sanction. The system which was now followed led to gigantic jobs, or to a suspicion of gigantic jobs, and ought at once to be abandoned.
THE MARQUESS OF CLANRICARDE1606 thought that if the contracts for the postal services were made by the Postmaster General they would be made at a cheaper rate than they now were. The contracts were at present really made for other considerations than matters connected with the Post Office. As to the contracts between this country and Ireland, the main matter of the contracts was not to attend to the requirements of Post-office communications, but to the convenience of passenger traffic. Such also had been the case with regard to the Menai Bridge and the Bangor Bridge; and what was the ground on which we were building those enormously large vessels for the mail services? Why, nobody supposed they were intended to carry letters or newspapers. They were for passengers. The noble Lord who had just spoken seemed to forget that we were under a monarchical government, and that there must be some degree of responsibility left with the Government. And he recommended, as a preventive against suspicion of jobbery, what, perhaps, he did not know, was the American practice. But had the noble Lord never heard of "lobbying?" There was, however, a large expenditure going on without the control of Parliament; and for this, he thought, some check ought to be provided.
§ LORD COLCHESTERsaid, that the heads of the Irish contract were drawn up while the late Government were in office, and the Postmaster General was authorized to complete the arrangement. There was no intention of taking any money for these purposes from the Post-office revenues which had not been granted by Parliament. There would be no necessity for passing any money votes for the current year; but next year, he presumed, money would be wanted, and for which Estimates would be produced, and then the question would arise as to the Government fulfilling their contract. There was no intention of withdrawing the matter from the notice of Parliament. In regard to carrying the mails to foreign parts, that was arranged by the Admiralty, under the direction of the Treasury. On the whole he believed the contract was one that had been made for the public good, and that the money was fairly expended.
§ LORD MONTEAGLErepeated that this contract was contrary to law, and he trusted that Parliament would sec to it. He believed, however, that the matter had arisen from copying an old form of contract. The whole revenue of the Post 1607 Office ought to be paid into Her Majesty's Treasury, and Parliament should vote the expenditure of the Post Office. He believed that next Session they would have a Select Committee to inquire into the postal contracts and similar matters, and if his noble Friend could show that there was any danger of the American system of "lobbying" being applied here, he would then have the opportunity of doing so; but he could assure his noble Friend that no one could have a greater contempt for those proceedings than he had.
§ LORD REDESDALEhaving expressed an opinion that the objections taken by the noble Lord were trivial, the conversation dropped.
§ House adjourned at a quarter before Eight o'clock, till To-morrow half past Ton o'clock.