HC Deb 06 August 1857 vol 147 cc1132-44

Order read, for resuming Adjourned Debate on Amendment proposed to Question [30th July], "That the Bill be now read a second time;" and which Amendment was, to leave out the word "now" and at the end of the Question to add the words "upon this day three months."

Question again proposed, "That the word 'now' stand part of the Question."

Debate resumed.


said, the whole of the New Zealand business was a very complicated business; he was not acquainted with the beginning of it, and he feared we had not seen the end of it. The security for the loan had not been very satisfactorily made out before the Committee, and must mainly depend on the good faith of the colonists. As the Government were very earnest in calling for the Bill he would not oppose that part of it which proposed some aid to the colony; though to one portion of it he was strongly opposed upon principle—he meant that part which related to the buying up of the lands of the natives, and unless the provisions with regard to that subject were modified or expunged in Committee he should feel compelled to vote against the third reading. He should, probably, not have consented to the Bill at all if he did not feel that the Government and the legislature of the country did not stand with "clean hands" upon the subject, but were in some degree responsible for the misfortunes which had occurred.


observed that he could not allow the Bill to be read a second time without making some observations upon it, for neither the discussion on a former occasion, nor the perusal of the evidence of the Select Committee, had satisfied him of the advisability of adopting the Bill. It had been his misfortune to see the commencement of the proceedings connected with this subject, to watch them, and to resist them, but he did not think it expedient now to revive the discussion of those proceedings. Much light had been thrown upon the transactions to which he referred in 1852, when the late Sir W. Molesworth called the attention of the House to the subject at considerable length and with great ability. The House then obtained from the Colonial Office detailed information with respect to the occurrences that had taken place, and, although he did not think they would bear very close investigation, he could not but regard the Act of 1852 as a condonation of those transactions. He had, however, hoped that the settlement then made was final, and that the exchequer of this country would not be liable, either directly or indirectly, to any further charge in connection with the proceedings of the New Zealand Company. He found that Mr. Merivale, who was examined before the Committee, was pointedly asked whether he believed that any liability attached to the British Treasury, and gave a somewhat equivocal answer, to the effect that he thought there was no liability under the statute, but that it was possible a liability might occur. Mr. Merivale was cross-examined on that point by the Vice President of the Board of Trade (Mr. Lowe), whom he (Sir James Graham) regarded with respect to colonial matters, and especially upon legal points relating to the Colonies, as the highest authority in that House, and it was impossible not to see from the questions that the Vice President of the Board of Trade differed from the Under Secretary for the Colonies as to the constructive liability of the Imperial Exchequer. The present question arose out of the debt due to the company from the settlers in the Middle Island, for otherwise there would not be even the shadow of a claim upon the British Government for assistance. The amount of the debt was £260,000, which was charged as a mortgage upon certain lands in the Middle Islands. As he understood the transaction, the New Zealand Company sought to compound the debt of £260,000 for a prompt payment of £200,000, to be raised by the Government of New Zealand, and which probably could not be raised without the guarantee of the British Exchequer. The transaction then assumed a very extraordinary aspect. The New Zealand Government—a representative Government—would not give their consent to this composition of the debt except in connection with two other transactions with which the British Government had nothing whatever to do—namely, the payment of £180,000 to buy up what were called native rights, and of a further sum of £l20,000 for debts due from the northern portion of the northern island. The total debt of the New Zealand Government proposed to be advanced amounted to £500,000, for a small portion of which, under very doubtful circumstances, the British Exchequer was collaterally liable. It appeared to him that the security on which the guarantee rested ought to be narrowly examined. Only yesterday the Government brought in a Bill charging the Consolidated Fund collaterally with a sum of £20,000 to be advanced to a small port in Haddingtonshire for the improvement of the harbour. On the same evening an advance of £40,000 was proposed to defray the cost of executing public works and maintaining educational institutions among the native tribes in South Africa, and the right hon. Secretary for the Colonies (Mr. Labouchere) plainly intimated that the Government might possibly propose a similar vote next year. He (Sir James Graham) must say, as between loans and grants to the Colonies, that he greatly preferred grants to loans upon collateral and contingent securities. He thought the relations between the mother country and the Colonies could not be placed upon a more insecure basis than that of creditor and debtor. Whatever aid was afforded to the Colonies should, in his opinion, be in the nature of a grant, the reasons for which might be assigned, sifted, and debated in that House. He regarded these dormant securities as dangerous, and he thought the motto on the entablature of the Colonial Minister's official residence in Downing Street should be this:— No lender be, For loan oft loses both itself and friend. He (Sir James Graham) could not say that he was a great admirer of the constitution of New Zealand. The constitution was federal, including six provinces, and the effect of a heavy debt might be to render it the interest of the Federal Government to take the first opportunity of repudiating this debt. It appeared from questions put to the witnesses before the Committee by the Vice President of the Board of Trade that the collection of the colonial customs' duties was entirely in the hands of the Central Government; and consequently, if the Central Government should think it inexpedient to continue high customs' duties—a measure which would diminish the security for the debt—although they could not reduce those duties without the consent of the home Government, they might, unless the reduction of the duties was assented to, be brought into collision with the Government of the mother country. It appeared that the Representative chamber of New Zealand had not approved by a unanimous vote the course now proposed by Her Majesty's Government. His objections to this measure were strong and deep-seated. He was sorry to see these collateral charges upon the Consolidated Fund multiplying so rapidly. He thought that such transactions with respect to the Colonies were only justified by extreme necessity, and he would much rather vote for grants from time to time to meet any cases of proved necessity than for such loans as that which the House was now asked to sanction. If, however, notwithstanding the growing changes both at home and abroad, and these financial questions, which were daily increasing in difficulty and importance, the Government persevered in pressing measures of this nature upon the House, he could only say that upon them would rest the responsibility of such a course.


said, he fully admitted the force of the observations which had fallen from his right hon. Friend, and he would say that no class of questions occasioned him—as charged with the responsibility of the Finance department—so much embarrassment as those relating to the assistance by guarantee or by loan of colonial Governments. The old view of Colonies was that, if they did not furnish revenue or tribute, at all events they were to be economical and advantageous to the mother country. They were placed under commercial restrictions, and their trade was regulated in such a manner as to create an imagined advantage for the mother country. They were, indeed, sacrificed commercially and financially to the mother country. That view had, however, been entirely inverted, and the Colonies were now allowed the utmost freedom with regard to trade, commerce, and navigation. At the same time our ancient policy with respect to the finances of the Colonies had been reversed. Instead of the Colonies being tributaries of the mother country, the mother country was now tributary to the Colonies; and if a financial balance were struck between this country and her Colonies, without regard to the commercial advantages which we undoubtedly derived from them, it would, he believed, be very heavily against the mother country and in favour of the Colonies. He apprehended that the theory of Parliament was, that by securing free trade with our Colonies, by preventing them from pursuing the policy of independent nations by excluding English manufactures or establishing high prohibitory duties, an immense commerce with distant regions was insured to this country. In that manner the trade and productions of Great Britain were benefited; and, in order to insure the prosperity and good government of her Colonies, financial advantages were afforded them—especially when they were young or in difficulties—at the expense of the mother country. It was upon that principle that he judged the plan now under consideration. He freely admitted that there were strong objections to imposing upon the Consolidated Fund a guarantee for a colonial loan of £500,000, but he asked the House to consider the position of this question. By an Act of 10 & 11 Vict. it was provided that if the New Zealand Company closed their proceedings within a limited period their debt to the Crown should be remitted, and a sum of £268,000 should be charged upon the lands of the colony. The company fulfilled the condition, and they were thereby relieved from the debt due to the Crown, while the colony became indebted, to them in the sum of £268,000. He thought it was unnecessary to reopen any inquiry into the merits of that settlement. He took as a fact the settlement deliberately sanctioned by Parliament, and that was the state of affairs when the noble Member for the City of London (Lord John Russell) held the seals of the Colonial Office. The noble Lord saw the difficulty occasioned by this debt of £268,000 due from the colony to the Company, and proposed that the Imperial Government should offer to guarantee loans to the extent of £200,000. The company, he believed, were willing to accede to the arrangement, and the proposition was submitted to the colonists, who rejected it on the ground that it would not effect a complete settlement of the difficulty, inasmuch as further embarrassment had been caused by the treaty of Waitangi, which sanctioned the principle that the land of a portion of New Zealand did not belong to the British Crown, but was vested in the native tribes. The consequence was, that as population and industry increased, the colonists were unable to obtain land without a purchase by the Government. This state of things was attributable to the legislation of the mother country, and there could be no doubt that the progress of the colony would be materially promoted by the extinction of the native rights. With that object, in addition to the guarantee of £200,000, the colony asked for a further guarantee of £180,000; and there were again other liabilities, amounting to about £120,000, which it was desirable that the colony should have the means of meeting. The total sum for which a guarantee was asked amounted, therefore, to £500,000. It must be borne in mind that the liabilities of the colony were, for the most part, owing to Imperial legislation and Imperial policy, but he felt that the colonists had no legal claim whatever upon Parliament. This was merely an appeal to the generosity and liberality of the House, and if they thought fit to reject the Bill, there would not be the smallest reason for complaint on the part of the colonists. He would, however, remind the House that the colony of New Zealand was in its infancy; it was in a temperate climate, where Englishmen could labour in the open air; its soil was fruitful; and there was a fair prospect that, if the colonial Government acted with good faith, they would be able to pay the interest of the loan and to provide a small sinking fund annually for the extinction of the debt. There had moreover been similar loans to some of the West India Islands, which were in a very effete and exhausted condition, and consequently did not offer the same probability of repayment. The right hon. Baronet (Sir James Graham) seemed to think it a disadvantage that the colonial customs duties, which constituted the main security for the loan, were collected by the central Government and not by the provincial Governments. Now, on the contrary, he (the Chancellor of the Exchequer) deemed that arangement an advantage. If there were any probability that the central Government would be subverted, and that the provincial Governments would obtain the control of taxation and of the application of the revenue, he might entertain some apprehension as to the security for the loan; but so long as the central Government was maintained, he believed that, unless some unforeseen reverses or calamities should occur—a reasonable expectation might be entertained that due provision would be made for the payment of interest and for the provision of a sinking fund. It was not a large burden on the resources of so large a country. He thought that by adopting the proposed plan they were following out the policy recognised by that House of giving assistance to a young colony, and contributing, by giving assistance to one limb of the empire, to the prosperity of the United Kingdom. He hoped, therefore, the House would assent to the second reading of the Bill.


said, that he agreed that this was not a question of the claims of the New Zealand Company which were settled by a mortgage on the Crown lands for £268,000. The question now was which was the best way of discharging the Crown lands from a debt which lay as an incubus upon the prosperity of the colony. It was an Imperial duty to assist the colony in getting rid of the incubus. The company, whether they had a legal claim on the Treasury or not, had an honourable claim; and he thought that now there was a favourable opportunity to get rid of the debt; even on grounds of self-interest, we should close with the proposal. It was in accordance with the general interest of the country to assist a rising colony. It was the policy of the Imperial Parliament which first created this debt. That policy might be questionable—doubt might be thrown upon the conduct of the company, but all this only increased the claim on the part of the colony. The debt originated with the mother country and was fixed upon the colony by the mother country, and both on grounds of self-interest and justice we ought to take the opportunity of a speedy termination of the difficulty. Believing, therefore, that it was the interest of all parties, the company, the mother-country, and the colony—that the matter with the company should be compromised, he should support the proposition of the Government. It had been said, however, that this might be a reason for a part of the loan, but not for the whole; but he found on examination that the smaller loan would be altogether useless without the larger. The six provinces into which the colony was divided were interested—some in the one liability and others in another; and, accordingly, they declined to accede to the one proposition unless the others could be carried out, in order that the general burden might be fairly imposed upon the whole of the colony. As to the security, every hon. Member could judge for himself of its value. The whole charge for the loan, including the sinking fund, would be but £30,000 a year, and this was charged on £100,000 annual revenue of the colony from customs, and £80,000 from land. These revenues were rapidly rising, and their present amount would soon be distanced by the enormous elasticity of the revenues of a British colony. It might rather be asked why, with revenues so increasing, the colony wanted the money. But it should be remembered that this loan was an act of justice; and, moreover, a young country, however healthy, could not raise money at the same rate that it could be raised by England. It had been said that the colony might destroy its own revenue for the purpose of cheating this country. This would be such an instance of madness as he could not believe of any colony of Englishmen. As to the objections of the right hon. Member for Oxfordshire (Mr. Henley) against our interfering in the purchase of the native lands, he could not think that the rules which applied to property in civilized countries should be applied to the transitory occupation of wandering and savage tribes. The sole purchaser, according to the Act of Parliament, was the Crown and that we were by our own colonial improvements to increase the value of these lands, and then only permit them to be sold in detail when they had reached their highest value, seemed to him a preposterous proceeding. If the natives obtained a fair price, there was no reason why they should object to dispose of their lands, and such a course would undoubtedly be most advantageous to the colony and the mother-country. Moreover, it was not necessary that any part of the loan should be applied to the purchase of new lands: he denied that there had been any unfair and underhand dealing in bringing this measure before the House. The composition of the Committees which had sat upon the subject was a sufficient proof that it would be fairly treated. In conclusion, he begged to tender his thanks to the right hon. Gentleman the Colonial Secretary for the manner in which he had treated the question.


said, the hon. Gentleman (Mr. Adderley) had greatly relieved him from a difficulty which he might, otherwise have had in voting, because he had clearly showed that the colony could not fairly require the guarantee of this country for the loan, since it was perfectly clear that even if the House should refuse the present application the colony of New Zealand would not be much embarrassed, for with a revenue of £180,000 a year the colony could have no great difficulty in borrowing so small a sum as £500,000. He understood from the Chancellor of the Exchequer that one principal reason for proposing the Bill was, that unless this country guaranteed the loan the colony of New Zealand would have to pay a much higher rate of interest than if the guarantee was given. Now, in all new colonies the rates of profit, and consequently the rates of interest, were high, and therefore the colonists of New Zealand could afford to pay a high rate of interest for the loan they required. When he looked to the probable demands upon the Exchequer of this country, and to the state of public affairs, he thought the House ought fully to consider the obligations they might be called upon to meet before they consented to afford guarantees for which it was evident no great necessity existed. He would, therefore, vote against the second reading of the Bill.


observed that the right hon. Member for Carlisle (Sir J. Graham) had said that the responsibility of this measure would rest with the Government. He (Sir H. Willoughby) could not agree in this, for he thought that as the Government had in a most straightforward manner brought the question before them, the House must accept the responsibility of dealing with the subject. He would also remind them that the Colonial Assembly was itself divided upon the very matter which they were called upon to sanction. There was only a majority of nineteen to ten; and this he considered a point for consideration, as, if any difficulty hereafter rose as to the payment of the loan, this would lead to increased objections. There was not sufficient information before the House; the Committee on the subject only sat two days, and examined two witnesses. He agreed with the right hon. Gentleman the Member for Carlisle that a grant would be preferable to a guarantee if a proper ground for it could be made out; and if there was in reality any pecuniary claim on the part of the New Zealand Company it should be treated directly and separately, and that the Imperial Government should enter into a distinct arrangement with the colonial authorities. He, however, very much doubted whether the company had any such claim upon this country, and the questions put by the Under Secretary to the Colonies (Mr. Lowe) clearly showed that he entertained similar doubts. He did not believe that the loan would be advantageous to the interests of the colony. Nor was it so clear, as had been represented, that the revenue of the colony was sufficient to pay the interest upon this loan. The revenue of £180,000 which had been mentioned, was not a surplus revenue, it was applied to civil payments and the necessary expenditure of a new province. They were laying the foundation for a financial squall. They were told that unless they lent half a million the colony would not borrow at all. He was very doubtful of this; and unless he (Sir H. Willoughby) heard something more satisfactory on the part of the Government, he should feel it his duty to vote in opposition to the Bill, as he believed it to be most impolitic to burden this country with charges in favour of the Colonies unless it was shown to be absolutely necessary.


said, that the security was not a valid one, and the whole proceeding most unwise. They were as little likely to be repaid as they had been in the case of the loan to the New Zealand Company. The repayment of the money would be refused, when it was forgotten that Government had authorized it. Ho could not understand why this country should be burdened with the security for the payment of this £500,000, for so far as he was aware we had derived no advantage from the colony. The purchase of the natives' lands would be most advantageous to the colonists, for the price of land was daily rising in value, and the colonists could well afford to buy them without the intervention of this Government. He hoped the hon. Baronet (Sir J. Trelawny) would divide the House, and he should be happy to vote with him.


said, that he wished to point out that the objections as to the insufficiency of the security, and the absence of the necessity for the loan, completely destroyed one another. The colony was young and rising, and he thought it only reasonable to assist it, as no doubt it would find it very convenient to raise this money at a difference between 4 and 10 per cent whatever its resources might be. The land fund of the colony would be in a far better state after this loan than it now was. At present that fund was swallowed up in the interest of the debt to the New Zealand Company and the purchase of native lands. It would hereafter be set free for the purpose of the encouragement of immigration, the formation of roads, and the construction of public works, and thus increasing the value of the very security which was given for the loan. The public opinion in the colony was very strong in favour of this transaction. In the two chambers it was carried—in one by a large majority, and in the other without any division. Government had on other occasions assisted in the same way our young colonies, and it did so in Canada at a critical period in the history of that colony, and the result of the experiment was such as to encourage the House to adopt a similar course in the case of New Zealand.


said, he objected mainly to that portion of the Bill which empowered the colonial Government to buy land, and he thought that, before the House assented to grant any loan for the purpose, a searching inquiry ought to be instituted as to the dealings of the Government Commissioners with natives with reference to the purchase of land. It was stated by one of the Commissioners for the extinguishment of native claims that 5,000,000 acres of land, worth £200,000, had been obtained by a payment of £5,000, and on the faith of certain promises which were not fulfilled. With regard to the guarantee, he objected to the Government going out of their way to become traders, whether as money lenders or in any other capacity. Either the security the colonists were able to offer was ample and satisfactory, in which case they might easily obtain advances in the money markets of the world, or the security was not safe, and if that were so, Parliament had no right to mortgage the industry of the taxpaying classes of this country to guarantee such a loan as that proposed. He would vote for the Amendment.


said, that the New Zealand colony was in a flourishing state. There were none who looked sharper after their interests than the natives of New Zealand, and, from personal experience in the colony he could speak to the advantages which would be derived from the loan. From the arrangements which had been made between the southern and northern provinces, the sum for the purchase of the native lands was necessary. When he was at Auckland a native chief had offered him land at £1 an acre, which he had purchased at 10s. an acre, which showed that the natives were well fitted to dispose of the land, and ready to take advantage of a rise in the market. Again, they were gainers by the clearing system, under which they undertook to clear waste lands for stipulated prices after having sold them. The natives, by all these transactions, as well as by being brought into contact with Europeans, were great gainers. In short, they were rapidly getting into trade, purchasing large vessels and exporting wheat to the amount of 300,000 bushels annually. They preferred commercial enterprise, and were anxious to sell their lands in order that they might purchase ships and enter into trade. The position of New Zealand was different from other colonies in this respect, that nearly the whole of the land had been purchased; while it was most desirable that the Government should have large quantities of land in readiness to be occupied by any colonist who should come there. He should support the Bill.


observed that the question was a very simple one. The Government of New Zealand, being burdened with debt, found that borrowing money on its own security it would have to pay 8 per cent, which would lead to an annual expenditure of £40,000, while with the guarantee of the Imperial Government it could obtain the amount required at 4 per cent, or at an expense of £20,000 per annum. The question was, then, whether it was the duty of the Imperial Government to render its assistance under such circumstances to a rising colony, and to prevent an unnecessary and useless exhaustion of the colonial resources. He held that such was the duty of the Government, and as they assumed the responsibility of the measure, and deemed that the securities were satisfactory, he would vote with them. He could not agree, however, with the notion of an hon. Member (Mr. Adderley) that the natives had no title to the land because they once had been nomadic.


said, he also must protest against the doctrine that the title of the New Zealanders to their lands was questionable. The title did not flow from us to them, but from them to us. The New Zealanders were a fine hearty race, and he did not think that it was our duty to take the land from them at a cheap rate. We should rather protect them, and encourage them in the improvement of those lands. Unfortunately, our colonial history was too much disfigured and disgraced by the injustice we had done to the natives of various colonies. He, therefore, should oppose the measure, chiefly on account of that part of it which would provide means for the purchase of the land from the natives.

Question put.

The House divided:—Ayes 78; Noes 23: Majority 55.

Main Question put, and agreed to.


hoped, as the latest day of the House of Lords for receiving Bills was nearly come, that there would be no objection to take the Committee that evening. Any discussion could be taken on the third reading.

Bill read 2°, and committed for this day.