§ LORD STANLEY OF ALDERLEYsaid, it would be in the recollection of their Lordships that on Friday night a short discussion took place with respect to the Red Sea Telegraph, when the noble Earl at the head of the Government was understood to state that the guarantee would not take effect until the contractor had delivered into the hands of the company the line in an efficient working state. A letter had Since appeared in The Times, signed by Mr. Peel, the secretary of the company, stating that the guarantee would take effect from the time the contract was entered into between the company and the contractor. He wished to know which version was correct. It was reported, moreover, that an instalment had actually been paid by the Treasury to the company, although no Vote had been taken in the House of Commons, and the Bill had not passed through Parliament.
§ THE EARL OF DERBYadmitted that his statement on Friday night was in some 1829 respects incorrect. What he wished to convey was, that the liability of the Government was, to a certain extent, although not altogether, covered by the contract which the company had entered into with the contractor. If the contractor should fail in executing the work, the company would be entitled to proceed against him for non-performance of contract, and the Government, on the other hand, would have the same right to recover from the company any advances which it might be disposed to make. It was true that a payment had been made by the Treasury in anticipation of a Vote by the House of Commons, but that was no more than what had been done in all previous cases of a similar kind. The late Government, indeed, made a contribution to the Mediterranean Extension Company in the shape of an actual payment, not simply of an advance, and it did so without the sanction of Parliament. He thought, however, that this was not a very regular course, and he hoped that in future no such payments should be made except out of funds provided by Parliament.
§ LORD STANLEY OF ALDERLEYwas understood to say, that in the case of the Mediterranean Extension no money was paid until the line was completed.
§ THE EARL OF DERBYsaid, that his observation did not apply to the completion or otherwise of the line, but referred to payment having been made without the authority of Parliament.