PAPERS MOVED FOR. (Hansard, 15 July 1864)

§ MR. AYRTON

said, he rose to call attention to the unsatisfied claims of British subjects on the Portuguese Government, and to move for papers. However much hon. Members might differ with respect to the duties of a Foreign Secretary, there could scarcely be any doubt that he could not be more usefully employed than in protecting the interests of British subjects abroad. He was, therefore, anxious to bring under the notice of the Foreign Office a case which appeared to him to be one of singular injustice. He had already called the attention of the House to the case during the last Session, and he consequently need not trouble them again at any length. In 1858 the Minister of Public Works in Portugal was extremely anx- 1594 ious to establish a line of steam communication between Lisbon and the Portuguese possessions on the African coast. He sought to attain his object by setting up a national joint-stock company at Lisbon, but when the design was matured he found himself in the position—in which Foreign Governments did not unfrequently find themselves—of not possessing the means requisite to carry out his object, and naturally looked to England to supply him with the necessary resources for the purpose. Application was accordingly made to some shipowners in this country, who said they were quite prepared to treat with him for the sale of vessels suited for the proposed line of packets. They were, however, anxious to have adequate security for the value of their ships before they parted with them, and instituted very careful inquiry as to how they were to be paid. The Portuguese Minister after some time arranged that the company which was about to purchase the vessels—not having a large amount of ready cash—should buy them on the credit of shares, which should be made equivalent to money by being guaranteed by the Portuguese Government. A dividend of 7 per cent was secured on the shares, and a further sum was raised on debentures, the interest on which was fixed at 6 per cent. The owners of the vessels, however, would not part with them until an act of association was framed and the guarantee confirmed by a vote of the Cortes. They further pointed out that as their debtors were a Portuguese company, over which the English shareholders had little or no control, it was expedient that the Government of Portugal should find some means of preventing them from misconducting their affairs and thus rendering the shares of little or no value. The Minister of Public Works accordingly appointed two Commissioners to watch over the company, and the owners of the ships thought that everything had at last been made safe. The shares and debentures were accordingly accepted and the ships and the money supplied. After, however, the undertaking had been in existence two or three years, it appeared that the Government Commissioners, instead of taking care that everything should be conducted in an honest and straightforward manner, were rather conniving at the irregularities which were taking place. The result was that the company got into a state of insolvency and had to appeal to the Government, who advanced a sum of £100,000 to relieve them 1595 from their embarrassments, and thus as mortgagees became the principal owners of the whole undertaking. The English shareholders under those circumstances were naturally desirous that the affairs of the company should be closely investigated; but the directors, with the connivance of the commissioners, actually created a number of shares for the purposes of a meeting, and with the power thus attained they were able to outvote the rest of the shareholders, to dispose of the shares according to their own wishes, and to vote themselves free from blame or liability in the matter. The English shareholders found, of course, that the shares were, in consequence of those proceedings, very much depreciated in value; the affairs of the company went on from bad to worse, and the whole concern was soon brought practically to an end. Their creditors here, however, thought that at all events the debentures constituted a simple debt, of which there would be no difficulty in obtaining the discharge; they brought an action, and the jury found all the facts in their favour; but the Court, after keeping all the papers a long time, pronounced, without assigning any reason for it, a decision against them. He was, moreover, informed that the Minister at Lisbon having been made acquainted with the proceedings, had arrived, with respect to the matter, at a conclusion of a most unsatisfactory character, amounting, in fact, to a denial of justice. Now, it was desirable, he thought, that Her Majesty's Government should take some notice of these transactions, particularly as it would appear that the Portugese Government were meditating another venture in our well-stocked money market. Every opinion that had been given by the diplomatic authorities had been entirely in favour of those claimants. In consequence of representations which he had made in the last Session, the Government of Portugal bad been brought so far to a sense of its duty as to pay the arrears of interest up to the middle of last year. He hoped now that they would not only pay the interest which had since accrued but also the principal, and thus bring the matter to a close. He was aware of the difficulty which Her Majesty's Government had in getting the Government of Portugal to act rightly. A few years ago he had induced Her Majesty's Government to make representations in another case of injustice, and it had taken two years to bring the Portuguese Government to do what they were bound. He hoped 1596 the Under Secretary would exhibit now the same energy which he had shown on that occasion, and he begged to conclude by moving for the papers on the subject, in order that his hon. Friend might have an opportunity of giving some explanation.

§ MR. LAYARD

said, that the case to which his hon. Friend had called attention belonged to a class of cases with which it was extremely difficult to deal, and the difficulty had been rendered still greater by speeches which had been lately made in that House. He feared that Governments like the Government of Portugal were encouraged by such speeches to resist our demands. Without pledging himself to all the facts related by his hon. Friend, he believed his sketch on the whole was correct. British capitalists had been induced to invest their money in an undertaking which might to a great extent be called a Government one. That undertaking had not succeeded to the full extent, and the Government had repudiated the guarantee which it had given. An action had been brought in the Portuguese Courts, but, according to the opinion not only of our own agent but of the highest legal authorities in Portugal, there had been a gross maladministration of justice in the matter, and the English shareholders had not received fair play. Her Majesty's Government had referred the case to the Law Advisers of the Crown, and they gave it as their opinion that there were still tribunals in Portugal to which recourse might be had. As long as that was the case the Government could not make official representations. His hon. Friend the Member for Sunderland (Mr. Lindsay), who was somewhat connected with the matter, had gone to Portugal during the year, the Foreign Office furnished him with every assistance, he had been supported by Sir A. Magenis, and on his return home it was hoped that the affair had been settled. But the Portuguese Government had first 1597 repudiated the guarantee, and next the engagements into which they had entered. Friendly representations had been made to them over and over again through Sir A. Magenis, over and over again the Portuguese Minister had promised to settle the claims, and over and over again those promises had been broken. He could wish for their own credit that the Portuguese Government would settle these claims, and, indeed, it would be for their interest to do so. This was exactly the country which could develop the resources of Portugal by supplying it with money; but it was impossible that British capitalists should lend their money as long as the Portuguese Government remained guilty of so gross a broach of faith. He could assure his hon. Friend that the Foreign Office would do all it possibly could in the matter unofficially. It could not take any official steps on account of the legal difficulties that were in the way. The Portuguese Government said there was still an appeal. Her Majesty's Government held that appeal to be hopeless, and he believed the shareholders were of the same opinion, but still they could not act upon it. After what had passed in the House that evening, he hoped the Portuguese Government would feel it a duty which they owed to their own honour to satisfy the claims which were made upon them. He had not the least objection to produce the papers.