RED SEA AND INDIA TELEGRAPH COMPANY.—COMMITTEE. (Hansard, 31 March 1862)

§ THE CHANCELLOR OF THE EXCHEQUER
said, that papers would be presented that night by his right hon. Friend the Secretary to the Treasury, containing the correspondence between the Government and the two telegraph companies, which would give the House a fuller and clearer view of the transaction which it would be asked to authorize than could be readily conveyed in a brief statement from himself. The matter was rather intricate. The company which originally undertook to establish this telegraph, having failed in its design, proposed upon certain terms to give place to a new company, so that the Government had arrangements to make with both companies. The terms made with the old company were, perhaps, more liberal than on simple principles of equity it would have been entitled to; but the question was whether it would not be more far the public interest to deal with the company, even on such terms, than to leave them in possession, because there were no means of ousting them without their free assent. The terms made with the new company were fair and equitable, and though they appeared to offer it the possibility of obtaining an interest of, even 25 per cent on its capital, still it must be remembered that the property came into its possession in a worthless condition, and that it was invited to give value to that property with its own funds, without bringing the public under any new liability as far as it was concerned. The project wag in a very unfortunate position, and the Committee would, he thought, agree that the Government had acted wisely under the circumstances in giving encouragement for the accomplishment of a very useful public object. The line of telegraphic communication towards India had been lengthened by what had already taken place, and hopes were entertained of still greater and more beneficial results from this arrangement. The Resolution he had to propose, preliminary to bringing in a Bill to give effect to the arrangement, would convert the annuity now payable to a joint-stock company into a regular annuity charged upon the Consolidated Fund. The right hon. Gentleman concluded by moving a formal Resolution on which to found a Bill accordingly.

§ SIR HENRY WILLOUGHBY
said, he 326 wished to ask whether the original contract had really been so drawn that there was no help for the country except to pay an immense sum for a scheme having no results?

§ THE CHANCELLOR OF THE EXCHEQUER
said, they had no option, in honour, but either to concede such terms as the old company chose to demand or to leave matters precisely as they stood, with the property wholly useless, and yet an annuity of £32,000 payable to them for fifty years.

§ MR. WALPOLE
said, he would put the further question whether the law officers of the Crown had been consulted, and had given an opinion to the effect just stated by the right hon. Gentleman?

§ THE CHANCELLOR OF THE EXCHEQUER
said, the law officers of the Crown, about eighteen months ago, declared that, under the terms of the contract, the Government were not legally bound; and that being so, the Government felt that as an executive they would not be authorized in paying to the Company their annuity. They then had to look to the original intention of the contract, and they found on examination that there was no doubt the intention was that the payment should be unconditional—that was to say, it was not to be conditional on the continued success of the undertaking. They, therefore, last year brought a Bill before the House, that it might exercise a judgment on the matter. The House passed the Bill, empowering the Government to treat the contract as unconditional, and thereby the annuity became an absolute obligation.

§ LORD FERMOY
said, he hoped that as gutta percha had failed as an insulating medium, the Government would guard against its use by the new Company. They ought to insist on the employment of india-rubber, as recommended by the Royal Commission.

§ THE CHANCELLOR OF THE EXCHEQUER
said, the Government had thought it better not to interfere in the practical details of the question; so that the Company would be left perfectly at liberty to attach itself either to the gutta-percha or to the india-rubber interest.

§ MR. CONINGHAM
said, he thought the remark, of the right hon. Gentleman showed how desirable it was that the Government should altogether cease to manufacture for the public. The Government was spending millions in wholesale 327 manufacture; but, if it was incapable of forming a scientific opinion, it was incompetent to manufacture for the country.

§ SIR JOHN HAY
said, that the preparation of gutta-percha had been as yet very unsuccessful, and that the only perfect insulation was that procured by the use of india-rubber. As Her Majesty's Government had appointed a Commission to consider the subject, he trusted that the Government would not deem the matter unworthy of their attention.

§ THE CHANCELLOR OF THE EXCHEQUER
said, he had only meant that it was not the business of the Government to fish up the cable from the Red Sea.

§ MR. CONINGHAM
said, he had understood the right hon. Gentleman to say that it was inexpedient for the Government to charge itself with the decision of the relative merits of gutta-percha and india-rubber.