HC Deb 14 March 1862 vol 165 cc1546-54

House in Committee.

Mr. MASSEY

in the Chair.

£ 915,897, Packet Service.

MR. BAXTER

said, he rose to call attention to the increase of the Vote and to the possibility of gradually reducing it. As a foreign merchant engaged in commercial operations with all parts of the world, no one was more deeply interested that the ocean postal communications should be kept up with regularity and rapidity. He was quite prepared to ad- mit that moat of the existing lines of mail packets could not have been originally established, and that some of them could not even now be maintained, without the aid of Government subsidies. But he contended that the system of subsidies had been carried too far, and that the country was paying too much for the conveyance of its mails across the ocean. It was the duty of the Treasury not only steadily to set its face against making any new packet contracts, but to take immediate steps for gradually diminishing the excessive cost of that service to the nation. Of course, the existing contracts could not be interfered with, but must be allowed to run till their natural termination. That the practice of liberally subsidizing had reached extreme limits was clear from a few striking facts. In the financial year 1856–7 the Vote for the packet service amounted to £ 743,000; while in 1859–60, or only three years later, it had risen to £ 977,000, or nearly a million sterling per annum. According to the evidence given by Mr. Frederick Hill, of the General Post Office, before the Committee on the Packet Service, no less a sum than £ 450,000 out of the entire £ 977,000 represented the amount of the dead loss sustained by the revenue on account of this service; while again £ 215,000 of that loss of £ 450,000 was incurred upon the contract with the Royal Mail Company for conveying the mails to and from the West Indies. The last-named contract would be one of the first to expire; and he would therefore suggest that the Government should take advantage of that circumstance to consider whether the West Indian service might not be linked on at Halifax and Nova Scotia with the North Atlantic service. He believed that arrangement was approved by the Post Office. At all events, he hoped that they would soon see an end put to such enormous subsidies as that of £ 238,000 per annum for the "West Indian mails. Turning to the North Atlantic service, the yearly loss incurred by the revenue upon the Cunard line was £ 79,000, every pound of which might be saved to the country without prejudice to the efficiency of the service. It was only fair to say that the Cunard Company had conducted their line with remarkable regularity, rapidity, and efficiency, and that in former times their subsidy was well earned and well deserved. But since then circumstances had greatly changed, and he maintained that by the aid of the principle of competition the payment of heavy subsidies might now be rendered wholly unnecessary, and that, too, without sacrificing in any degree the efficiency or punctuality of our postal communication. A Parliamentary return showed that in the year 1860 the mail steamers which crossed the North Atlantic from the United Kingdom made 166 outward and 165 homeward voyages. Prom the very careful and accurate summary of marine statistics supplied by the Steam Shipping Journal, he found that in the year 1861 there were no fewer than fifty large steamers regularly employed in the North Atlantic trade. These vessels belonged to nine independent companies, and last year they made 226 outward and about the same number of homeward voyages; so that, excluding Sundays, it might be said that there was now almost daily communication with. North America. One of those companies—the Liverpool, New York, and Philadelphia—had repeatedly offered to carry the mails for the Government for the postage alone—an arrangement by which the whole of the £ 79,000 now lost by the contract with the Cunard Company would, of course, be saved. The average passages made by the Inman, an unsubsidized line, were under those of the Cunard, or sudsidized line. Instead of adhering to the present system of subsidizing a particular line, he would, therefore, suggest that the Government should advertise that every steamer which was of a certain size and tonnage, and passed a certain examination, should be deemed a mail steamer upon the following conditions—namely, that it should take up the mails on a certain day and land them on a certain day at some particular port in Ireland—Londonderry, Galway, or Kingstown—that the mails should be landed and embarked there, but that the vessel should be' allowed to come on to a port in England or remain where she was, as the owners chose. The circumstance of several of the companies having their termini in the sister country would be of greater advantage to it than the formation of a new company there with a special subsidy. That was the first condition. The second condition was, that the vessels should be paid in proportion to the number of letters they carried, and paid at the lowest rate any company would take by public tender. The third condition was, that all these vessels should come under the usual obligations imposed by the Government as to penalties, and their liability to be employed as transports. He was perfectly satisfied that by better arrangements they might in a short time have a daily communication, by efficient steamers, with North America. The payment of the companies in proportion to the number of letters carried would stimulate them to increased exertions. Such a stimulus was much required. Some of the companies had not kept pace with the times; they had not built new vessels as they ought to have done. The subsidized companies had built fewer than the others. The plan he advocated was entirely in accordance with the recommendations of Earl Canning's Committee of 1853 and the Committee of the House that sat in 1859–60. What he wanted was to get quit of an immense loss, and abolish the system of subsidies to the North Atlantic steamers. The plan would get rid of two Votes larger than any other in that Estimate. In reference to communication with the colonies, he did not see why the Government should not ask all the colonies to follow the noble example of Australia, that paid half the expenses of its mail communication with Point de Galle. The charge for the mails to the Cape of Good Hope was £ 32,400, but the Cape Colony got off with a payment of £ 6,000. New Zealand, Newfoundland, New Brunswick, and other colonies paid nothing. One charge that ought to be abolished was that for Government agents on board contract packets. He did not believe these gentlemen were of the slightest use; on the Cunard line they had been discontinued. The matter was of great importance. He had no hostile feeling to any of the companies. His remarks were entirely made with the object of putting an end to the undue growth and extension of the system of subsidies. He wished to save money to the taxpayers of Great Britain, and give a freer development to the maritime interest of the country. He might add that there was an item which he did not understand, and which he hoped the Secretary to the Treasury would explain to the Committee. It was the sum of £ 20,500 set down "Southampton, Vigo, Oporto, Lisbon, Cadiz, and Gibraltar," for the conveyance of mails. To that item a note was attached, "By agreement this service now terminates at Lisbon. Of the £ 20,500 nominally paid for these services, the sum of £ 15,500 is vir- tually on account of the India, China, Australian, and Mauritius services." That was the item on which Mr. Frederick Hill states a loss of £ 17,500 resulted on the Peninsular service, and the attempt made to set off the loss required explanation.

MR. WHITE

said, he agreed with the position laid down by the hon. Member for Montrose. He believed when the time arrived for renewing the contracts a great reduction might be made in the present terms. He wished to draw the attention of the Secretary of the Treasury to the great inconvenience caused by the irregularity of the communication with China, caused by failures of the Peninsular and Oriental Company in performing its contract. Great complaints on that score were contained in a letter he had just received from a Gentleman in China who had formerly sat in that House.

MR. PEEL

said, he would admit that the Vote was a heavy burden on the resources of the country, but he wished to point out that the magnitude of the Vote was in part one of appearance only. The Committee should distinguish first of all between the foreign and colonial service, and the sea transit necessary for home service. A few years ago we paid £ 20,000 for the conveyance of the mails between Holyhead and Kingstown. This year the Estimates included £ 85,000 for that service—a payment obviously due not to merely postal requirements, but to considerations of national policy and the necessity of maintaining rapid communication between England and Ireland. This reduced the Vote from £ 915,000 to £ 820,000, and he was the more entitled to make such a deduction because these home mail-packet contracts involved a clear pecuniary loss, as the mails were carried without the imposition of any sea postage in return. Then even this £ 820,000 was not a total charge upon the revenue, because there was a set-off in the amount of sea postage received—namely, £ 470,000, which made the net loss arising from the carriage of those mails from £ 350,000 to £ 400,000. The hon. Member for Montrose (Mr. Baxter) had suggested various modes by which the loss on the Estimate might be reduced; for instance, that our colonies should be called to make contributions. He agreed with the suggestion, and the Estimates showed that it had not been neglected. An arrangement had been made with the Australian colonies, which were now required to contribute one moiety of the total cost of carrying the mails between the two countries. The only contribution made by New Zealand was £ 10,000 towards the postal service between that colony and Australia, for which service this country gave £ 14,000. Of course, New Zealand ought to pay more. The Mauritius, a rich colony, defrayed the entire expense of conveying its mails to and from Suez. The Cape mail service cost a large sum, towards which the colony only paid £ 5,000. That contract, however, would terminate in the course of the year, and the Cape Government had been told that the English Treasury would not recommend a renewal of the contract unless they were prepared, like Australia, to pay a moiety of the cost. Attempts had been made to reduce the charge in other ways. Up to that time the subsidies paid to the packet companies had included a consideration, not only for the conveyance of mails, but for the carriage, at reduced rates, of passengers, and even goods. The Government considered that future contracts should include only the amount paid for mails, and in furtherance of this view, a deduction of £ 15,000 had been agreed to be made at once from the subsidy paid to the Peninsular and Oriental Company. That reduction was on account of Government passengers, whose transport had hitherto been partly paid for out of the imperial funds; whereas either those passengers themselves, or the colonies for whose advantage principally they were sent out, ought to pay the amount. Another means of reducing the charge was by increasing the rates of postage, Thus, an additional charge of £ 18,000 for the additional mail to China had been covered in that way. In other recommendations made by the hon. Gentleman he concurred generally. No doubt, where a trade existed between this and other countries, sufficiently extensive to employ several lines of steamers, a subsidy is not needed to secure the mails being carried with despatch and regularity. But, unfortunately, that principle could have only a limited application. The four great mail services to Australia, to China and India, to the West Indies, and to North America, absorbed between them four-fifths of the Vote. The principle contended for did not apply to Australia, or to India or China, but it did apply to North America. Unfortunately, however, they had surrendered the power of acting upon it for some time to come, because the con- tract with Cunard had still six years to run. The West India mail contract would expire in two years, and the suggestion of the hon. Member that the mail service there should be linked on to the North American service would not be lost sight of. With regard to the £ 20,500 for the carriage of mails to Lisbon and Gibraltar the explanation was this:—For the original service for which this sum was payable, a reduced service had been substituted, extending no further than Lisbon; and for this, which was a fortnightly service, the Company received £ 5,000 per annum only. The remainder of the subsidy payable under the original contract had been transferred towards meeting the expense of establishing the additional communication with India viâ Bombay. He had only to add, as regards the contract question at large, that the Committee which had considered that subject, had recommended a plan which they believed would combine the responsibility of the Executive with the control of that House; namely, that the Government should make the contracts, but that a clause should be inserted requiring that they should be ratified by the House of Commons. He trusted that in that way there would be full concurrence of action between the House and the Executive, and he need not say that on the expiration of the West India mail contract nothing would be done to fetter the control of Parliament in respect of it.

MR. W. WILLIAMS

said, he was quite of opinion that every facility should be afforded for the conveyance of mails to all parts of the world, but it was unjustifiable that a tax of £ 450,000 should be levied on the people of this country for the proper affording of those facilities. The fact was, that they ought to follow the example of the American Government, which had accepted the offer of a private company to carry the mails for the amount of the postage. There were items in the Vote which were very objectionable. For instance, for the mails between Brazil and the West Indies, £ 30,000. [MR. PEEL: That pays itself.] He would then refer to the charge of £ 25,000 for conveyance of the mails between Panama and Callao. They had nothing to do with the west coast of America. He knew they had an interest in Panama, as a means of direct communication, but not in the intercourse between the two points. He also objected to the charge of £ 14,000 for the mails between Australia and New Zealand. The whole Estimate required revision. He was glad to find the Galway subsidy was withdrawn, as it had been proved that each letter conveyed by that route to America occasioned a loss to the Imperial Exchequer of 6s. "Were it not that they were bound by existing contracts, he should feel disposed to take the sense of the Committee upon some of the Votes.

MR. CRAWFORD

said, the hon. Gentleman talked of taking the sense of the House; but it would be difficult for the House to take the sense of the hon. Member, He had never seen more ignorance displayed upon any subject. The hon. Member talked of there being no trade between this country and South America. [MR. WILLIAMS: I never mentioned South America.] He would ask where were Buenos Ayres and Callao if not in South America? The trade between this country and South America amounted to five millions annually, and for the maintenance of that trade it was necessary to keep up an effective communication. The line between Australia and New Zealand was part of the main line from this country, and recent events had shown how important it was to have frequent means of communication. He thought the hon. Member for Montrose had done good service in calling attention to the subject, and he generally approved of the views of that hon. Member. It was, however, necessary that the merchants of this country should have as speedy means of communication by steamers and by telegraphs as could be obtained. He had himself yesterday received a telegram which left Suez the previous day, the arrival of which had prevented a serious loss. What was beneficial to individuals must be beneficial to the State; and therefore there ought to be the most complete system of communication, although the utmost economy consistent with efficiency should be observed.

MR. KINNAIRD

said, he thought that commendation was due to the hon. Member for Montrose, and also to the Secretary of the Treasury, for his pledge to observe a rigid economy in future. The money that had been spent in contracts had not been wasted, because the Cunard ships had rendered great service in the Crimea, and recently in North America. Still he was glad to hear that all future contracts would be submitted to the revision of Parliament.

MR. C. TURNER

remarked, that he was opposed to a reduction in the postal subsidies as he thought that, on the whole, the Government were no losers by the contracts; while the important benefits they conferred upon the commercial interests of this country were undeniable. There was a very large trade with South America, and being connected with the Pacific Mail Company, he could state that the Government received fully the amount of payment to that Company.

MR. CONINGHAM

observed, that the hon. Member for Lambeth might be wrong in his geography, but he was right in his argument. He did not think that it was by subsidies we were likely to be best served, as they prevented competition.

SIR HENRY WILLOUGHBY

remarked, that nothing could be more careless than some of the early contracts; but his right hon. Friend the Secretary to the Treasury seemed alive as to what should be done in future.

MR. PEEL

said, that in the month of July they would have to decide with respect to the Cape contract, but nothing had been yet done about it.

Vote agreed to.

House resumed.

Resolution to be reported on Monday next; Committee to sit again on Monday next.