COMMITTEE.

HC Deb 21 July 1868 vol 193 cc1557-604

Order for Committee read.

THE CHANCELLOR OF THE EXCHEQUER

said, in moving that the House go into Committee upon this Bill, he proposed to give some explanation of what had transpired with respect to the Bill since it had been sent upstairs. When the Bill was before the House on the second reading no arrangement had been come to between the promoters of the Bill and the railway and telegraph companies. With respect to the telegraph companies, the promoters of the Bill had offered them the actual price paid up, and, in addition, what an arbitrator would give them for the prospective increase likely to occur in their income, and an additional sum for the compulsory sale. That offer was declined by the electric telegraph companies, and therefore when he proposed the second reading of the Bill no terms whatever had been agreed upon. But as soon as the Bill was read a second time, and referred to a Select Committee, the electric telegraph companies became much more amenable to reason, and before the Bill passed through the Select Committee the terms were virtually agreed to between them and the Government; the basis of which was a twenty years' purchase at the present net profits. There were some minor points of difference with respect to some of the companies; but those were the terms upon which the agreements generally were based. With regard to the railway companies, before the labours of the Committee had proceeded very far those companies entered into an arrangement with the promoters of the Bill and withdrew their opposition to it. It would be recollected by the House that when the Bill was last under discussion it was urged that the Government were not dealing equitably and fairly with the telegraph companies; whereas now the accusation of some of the opponents of the Bill was that the Government had acted too liberally towards those companies. In his opinion one assertion was about as well founded as the other, because the Government had always intended that the companies should be equitably dealt with, and that the terms now agreed upon, although very liberal, were not more so than the companies ought to receive under the circumstances, and did not offer more than an arbitrator would have given had the matter been left to an open arbitration. Some urged that instead of a twenty years' purchase of the net profits it should have been a ten years' leasehold interest, and those who took that view in the Committee were very soon satisfied on examination that such a purchase could not be maintained. It was perfectly true that some of the companies had only a few years' agreement to run; but others extended over a considerable period, and the average duration of the agreements might be taken as twenty-six years and two-thirds taken by the mile line, and twenty-five and a half years taken by the line of wire, consequently they had not given twenty years' purchase for ten years, but a twenty years' purchase for a twenty-five or twenty-six years' leasehold interest. The terms of the agreement between the railway and the electric telegraph companies were such that it was perfectly impossible on most of the lines for the railway companies to oust the telegraph companies and turn adrift the present lessees; and therefore, as in the case of old leasehold interests, they might he considered as perpetual, the lessee having the equitable right, and could practically exercise the right of renewing the lease. Under the circumstances, he thought they had offered to the companies a very liberal amount for their property. Another point to which he wished to direct attention was that the twenty years' purchase was to be calculated on the amount of the present net profits, whereas the profits of the telegraph companies were increasing at the rate of 10 per cent per annum. He was satisfied that the more the House looked into the matter the more they would be satisfied with the bargain that had been made. He did not mean to say that some Members of the Committee were not of opinion that those terms should be reduced, because, in fact, one hon. Member below the Gangway had moved that the terms should be reduced from twenty to sixteen years' purchase; but only two other Members of the Committee adopted his view of the question, and he (the Chancellor of the Excheque) was certain it would not receive the attention of the House any more than it did the support of the Select Committee. With regard to the railway companies, on the other hand, they appeared to have a bonâ fide apprehension that, under the Government management, they would have some difficulty in transacting their business by telegraph. On the occasion of the second reading of the Bill he had stated that that point was capable of adjustment, and that the Government would be willing to render the railway companies every facility for the due working of their lines by means of telegraph communication along them. As soon as the Government had agreed with the telegraph companies, the railway companies one by one began to find that such a thing was possible. First the Scotch railway companies agreed with the Government, and it was well known that the Natives of that part of Great Britain were by no means deficient in shrewdness and practical knowledge of their affairs. The example set by the railway companies North of the Tweed was speedily followed by the companies on the South of the Tweed, and before that Committee had been many days engaged in their labours, the whole of the railway companies had made agreements with the Post Office as to the terms for the future. It was agreed that there should be a severance of the wires used for the telegraph purposes only and those used solely for the purposes of the railway companies; and while the railways consented, where such a course was advisable, to their posts being used for the wires of the Post Office, the Post Office, on the other hand, where such was needed, consented to their posts being made use of for the wires of the companies. There was also a pecuniary compensation to be made to the companies for the loss of telegraph, property so far as their interests in the wires were concerned. Now, there were certain railway companies who had wires for their own use, and who were also in the habit of transmitting messages for the public, and they were to be considered in, the light of electric telegraph companies. There were others who had arrangements with the electric telegraph companies for the despatch of railway messages, but not for the despatch of telegraphic business; and general clauses had been found to meet those particular cases. The compensation, for the former was to be the same as in the case of electric telegraph companies, and in the case of the others they took the average from the average increase of the last three years, with an allowance to those who were under agreement to the telegraph companies for way-leaves. The amount of compensation under those heads was to be decided on by an arbitrator. It was thus impossible to form any very accurate opinion of the sum that would be required for the purpose of compensating the railway companies and the telegraph companies; and consequently it would not be possible at the present period of the Session to propose to the House any money Bill with a view to carry out these arrangements. Such a Bill could not be proposed until the arbitrator had concluded his labours, and as the number of interests concerned were very complicated and the work was very heavy, they could not expect any award to be made for a considerable time. It would be in the recollection of the House that when he formerly addressed the House on this subject he stated, although he was unwilling to go into the details of compensation, that he believed the expenditure required would be covered by £4,000,000. In the same way he was no more prepared to go into the estimate at the present moment. Some of the Members who inquired into the Bill were anxious to go into particulars; but the difficulty was this—If the interests concerned were estimated at certain sums, these sums would of course be referred to when the matter came under the notice of the arbitrator, and it would be impossible for the Government in any case to insist upon a lower sum than the one they had estimated, because as that sum would be known the companies concerned would refuse to take less. Mr. Scudamore, whose ability with regard not only to this but also to other matters, had been of great service to the Government, had, however, given considerable attention to this matter, and Mr. Scudamore believed that £6,000,000 would be the outside figure, and his calculations had been submitted to and approved by Mr. Foster, the principal finance officer of the Treasury. The House might possibly think that this was a considerable advance upon the original estimate; but that advance was easily accounted for. The Government was now proposing to buy a much larger and a much more valuable property than was contemplated when a rough estimate of £4,000,000 was made out. As soon as they had managed to get on good terms with the companies, they found that they were better able to get information, and the consequence was that they discovered that the property was more profitable than they had anticipated, and also that there were other matters for consideration which they had entirely overlooked. The former estimate was based entirely upon the inland lines; but now their estimate embraced telegraphy in connection with the Continent, from which a revenue of £45,000 a year was now derived. They had found it necessary to purchase the Continental cable, now worked by Reuter's Company, a purchase which was not at first contemplated, and in addition to that they had obtained perpetual and exclusive way-leaves over the lines of railways. The latter was a very valuable matter, about which there might be some difficulty hereafter, if it was not included in the present terms of purchase. It should, however, be remembered that the amount he had mentioned was an outside sum. But Mr. Scudamore had also made two estimates, one of revenue and the other of working expenses. These estimates had been checked by Mr. Foster, who had expressed his satisfaction with the figures. The starting point, or business in inland messages taken over by the Post Office on the 1st July, 1869, and arrived at by adding annual rate of increase, which was taken to be 10 per cent, to the number of messages (6,000,000) delivered in 1866, would be 7,500,000 messages. That formed the basis of the calculation. Of that number 55 per cent were at the 1s. rate, and would be unaffected by a reduction in the rates, 4,125,000; 30 per cent were at the 1s. 6d. rate, and would undergo a reduction of rate to the extent of 83 per cent, 2,250,000; 10 per cent were at the 2s. rate, and would be benefited by the reduction to the extent of 50 per cent, 750,000; and 5 per cent would be benefited by the reduction in the rate to the extent of about 70 per cent, 375,000. The total expenditure was as follows:—the starting point of expenditure was taken to be the combined expenditure of the telegraph companies—namely, £330,000; from this was to be deducted for the saving which they could effect if they amalgamated, £55,000—leaving £275,000; £10,000 in consequence of no cost being any longer incurred for working Renter's cable, and working and maintaining cables to Holland. The working expenses would thus be reduced to £265,000. To that would be added £26,500 for working and maintaining Post Office extensions, and 33 per cent, or £87,450 for the cost of meeting the estimated increase of business. This would give a total expenditure of £378,950. That would leave a net revenue of £301,050, to which must be added £12,000 for Press messages, and £45,000 for Continental messages, leaving a total net revenue of about £358,000. By deducting one amount from the other we had £358,050, Mr. Scudamore's maximum estimate, which some might think excessive; but it had been framed in accordance with, the principle which governed all estimates, and which had guided the House on many previous occasions. The Government, however, did not intend to proceed upon the basis of this maximum estimate. Mr. Scudamore had framed a minimum estimate also. Taking the business as it stood in 1866, he had deducted from the revenue the expenses of working Reuter's cables and all other charges as before, and making no allowance for increase of business, except the average increase which the companies themselves might reasonably expect if the business remained in their hands, he found the result was £203,000. Mr. Scudamore had then taken the mean between this maximum estimate of £358,050 and the minimum of £203,000, and fixed on £280,500 as a safe basis on which to proceed. Valuing money at 3½ per cent, £280,000 a year represented £8,000,000; but Mr. Scudamore had estimated the purchase money at £6,000,000, so that taking even the mean estimate as the basis, the proposition showed a balance in favour of the Government of £2,000,000, and if the maximum estimate were taken the balance would be £4,000,000, because £10,000,000 could be raised on an income of £358,000 a year. Under these circumstances he presumed the proposition made by the Government would be regarded as satisfactory in a financial point of view. The way in which the money should be raised would be matter for consideration when it was known what would actually be required, and what were our available resources; at present he contented himself with showing that the estimate would stand any amount of examination by the House, as it had stood very careful scrutiny by the Committee, and that for the Government to carry out the scheme would not only prove safe but profitable. The Select Committee had not only to consider these matters, but other matters especially referred to them under the Instructions of the House. There were several matters which it was thought had not been sufficiently illustrated. One was whether the Post Office should possess a legal monopoly in the transmission of messages. When the Bill was first introduced the Government thought it inadvisable that the Post Office should have a legal monopoly; but it was believed that if we obtained all the undertakings of the telegraph companies we should have a practical monopoly; because, as long as the Post Office conducted its business properly, and availed itself of all new inventions in telegraphic science for expediting the transmission of messages, and kept the rates at the lowest possible figure, there would be no chance of any competition. The Select Committee had endorsed the views of the Government on that subject. It was suggested in the Committee by the right, hon. Member for the City (Mr. Goschen) that with lower rates, within certain limits in large towns, it might be possible to have effective competition with the Post Office, who, under the Bill, would have a uniform rate. The question, however, was examined, and the Post Office witnesses thought there would be no occasion for a competition, because as soon as possible the Post Office would reduce their rates, and that no private company could compete with them. Moreover, it was thought not desirable to establish the monopoly, because this would get rid of the stimulus which would otherwise prompt the Post Office to salutary action. The result was that on a division the "Ayes" against the monopoly were 6 and the "Noes" 1. The next point was as to whether it should be left to the discretion of the Postmaster General to make special agreements for the transmission of messages or news at reduced rates. During the discussion which arose on the Motion for the second reading it was alleged by some critics that the Post Office would have a monopoly of the news to be sent, and that the Government for the time being would favour their adherents by transmitting their speeches earlier or in a more perfect form than they would transmit those of their political opponents. Arguing on this presumption, it was urged that a Government Department should not be invested with such powers. In the question of Press messages, several newspaper proprietors gave evidence, and they should certainly be regarded as the best judges of the matter. They felt no alarm at the prospect of the Government having control of the transmission of messages, and expressed great dissatisfaction with the present arrangement, because the telegraphic companies had not only a monopoly of transmission but a monopoly of collection of news and sent only what news they chose. Beside this, they had actually threatened their customers if they did not take a particular line respecting this Bill. The arrangement proposed under this Bill if it became law would secure that the Post Office should not collect but only transmit news; the whole duty of collection would rest with the newspapers themselves, and he believed the newspaper proprietors had already formed themselves into an association to collect the news, and it would become the duty of the Post Office to transmit this news at rates not higher than certain charges named in the Bill. Clauses had therefore been put into the Bill enabling the Postmaster General to make special agreements with newspaper proprietors for the transmission of news, and upon this point the Committee came to the following conclusion:— That it should be left to the discretion of the Postmaster General, with the consent of the Treasury, to make special agreements for the transmission of certain classes of messages at reduced rates; but that any such special agreements should be laid upon the table of the House of Commons as soon as conveniently may be. The object of this was that if the Post Office made a favourable arrangement with one newspaper or one news-room, it should be obliged to make an equally favourable arrangement with any other. Provisions were also made for enabling a newspaper proprietor to have the exclusive use of a wire on certain terms. The next subject on which the Committee was engaged was the question of secresy. It was supposed, why he could not say, that the clerks of the Post Office would be more likely to violate their pledge of secresy than the clerks of the telegraph companies. He was of opinion that, as the Post Office was a great Department of State, any misconduct of this nature would more speedily be exposed than if it had arisen among the employés of any commercial company. It was said that the wires could be "milked" or "tapped," and that a Government messenger could ascertain the whole of the telegraphic correspondence which was going on. But this was represented to the Committee by the witnesses to be a complete chimera. It was admitted that it was possible; but it was clearly shown that the practice could not go on for many minutes without being discovered. However, to satisfy all scruples which might by possibility be entertained in respect of the preservation of secresy, the Committee had adopted a Resolution which made the violation of secresy in the transmission of messages a misdemeanour. In the General Telegraphs Act such violation of secresy was punishable by a penalty; but in this Bill it was made a misdemeanour. Then there was a point which, though not included in the Instructions, the Committee had taken into consideration. It had been suggested that the privilege of priority, to be enjoyed by the Government, might be abused by the officers of Departments in obtaining priority for messages not on Government Business, but sent for private purposes. In order to give the public a security against anything of that sort it had been arranged that all messages for which priority was claimed should bear the word "priority" stamped upon them, and that they should be filed in the Post Office for a year. It would therefore be observed that any such abuse as had been suggested would be exposed by the production of the message. The fourth and last point which the Committee had been instructed to consider was what arrangements ought to be made by the Post Office for working submarine cables to foreign countries. This matter was one which had offered some difficulty to the Government, and in order to meet it a clause had been inserted in the original Bill to empower the Government to lease any part of the cables which might come into their possession. It had been found on inquiry that in respect of those cables there were existing agreements between telegraph companies at home and other telegraph companies abroad; and it was thought that some confliction of rights or some confusion in respect of agreements might arise if the Government took up the working of the cables while those agreements continued to exist. Under these circumstances it had been the intention of the Government, if the Bill passed in the original shape, to lease the cables. Since then they had made an arrangement to lease to the Submarine Telegraph Company any cables of which they might become the owners. The Committee approved the notion of a plan of that kind; but in their Resolution on the subject they did not shut out the possibility that at a future time the submarine cables might be worked by the Post Office itself. He believed he had now gone through the salient points of the Bill; but perhaps he might be permitted to make some observations in reference to the objections put forward on the part of the telegraph companies when the second reading of the Bill was under discussion. On that occasion it was said, "You are going to carry the telegraph system into remote districts where the experience of the companies shows that it cannot pay." He believed that some hon. Members had been impressed with that argument; and the right hon. Gentleman the Member for the City (Mr. Goschen) had been desirous—and he thought properly so—to call the managers of the telegraph companies to learn what was their opinion on the subject. Some of those gentlemen were examined before the Committee, and they admitted that the object of the pamphlet put forward by the telegraph companies was to make as good a case as they could against the Bill; and that when they said it would not pay to extend the telegraph into districts to which the Government proposed to carry it that statement had re- ference to the position of the companies. They had not viewed the matter in the light of what might be of advantage to the public, or what would pay the Post Office. They felt bound to regard the question in a purely commercial light; they were expected to pay a dividend and a good dividend, and they had to reject what might ultimately pay if its immediate effect would be to injuriously affect the amount of the dividend. Again, an extension of the system under the companies would have involved very considerable expense for new offices and additional clerks; whereas in the remote districts to which it was proposed to bring the telegraph the Government had Post Offices and they had clerks who would perform the necessary duties in connection with the telegraphs for some addition to the salaries which they at present received. He thought those admissions entirely did away with the objections urged against that portion of the Government plan. He need not enlarge on the advantages which would accrue to the entire country if the Government should be enabled to carry out the scheme proposed in the Bill. He might, however, mention that instead of the telegraph offices being on the outskirts of important towns, they would be brought into the centre of those towns, and that in remote districts the telegraph would be extended to every place in which there was a money-order office. In addition to the advantage which the public would gain by a reduction in the rates for transmission, porterage would be included, without additional charge, to a much wider extent than that allowed under the companies. He could not but think that, by having the telegraphic communication of the country under a great Department which had shown itself competent to discharge the important duty of carrying letters and papers, and had, he believed, earned the gratitude of the public for the punctual and exemplary manner in which it performed that function, greater accuracy and increased expedition in the transmission of messages would be achieved. He confidently recommended this Bill to the House not only as one which would confer great advantages on the commercial interests and conduce to the comfort of private families, but as one which would bear a searching examination in a financial point of view.

Motion made, and Question proposed, "That Mr. Speaker do now leave the Chair."—(The Chancellor of the Exchequer.)

MR. GOSCHEN

said, he thought the right hon. Gentleman the Chancellor of the Exchequer would admit that the Select Committee on the Bill had curtailed their inquiry as much as possible, considering the magnitude of the interests involved. He had seen a criticism to the effect that time had been wasted, but the inquiry-lasted only nine days, while the proposed outlay was £6,000,000 sterling. Besides, the inquiry had been carried on under great disadvantages. An opposition, organized by private interests, had been changed into an organization of warm supporters of the Bill pending the inquiry. Before the Committee there appeared counsel representing the promoters, and, at first, counsel representing the original opposition to the Bill; but in consequence of the change in the views of the opposition who during the proceedings became friendly to the Bill, there was no counsel present to cross-examine the witnesses. Consequently, in the interests of the public, and in order that all the facts might be brought to light, Members of the Committee had to discharge the duty of cross-examining the witnesses. The same causes led to the result that the witnesses produced were all on one side, and it was only just that he should bear testimony to the ability with which Mr. Scudamore had brought forward his views and stood any amount of cross-examination in defence of those views. The Chancellor of the Exchequer had mentioned that he, as a Member of the Committee, had been desirous that some gentleman connected with the companies should be examined. The result had justified his wish. Considerable light had been thrown on the subject by their evidence. Now in the first place he wished to state it as his opinion that the evidence brought before the Committee was such as on many points to modify the hostile views which might have been entertained in some quarters with regard to the Bill. One of these objections he might allude to, though it was not much pressed before the Committee. It was contended that the present telegraph companies had a responsibility upon them for any loss or damage that might result from the sending of inaccurate messages, but that no such responsibility would be upon the Government, and that thus the commercial classes would lose a certain amount of security for the accurate transmission of their messages. That objection was examined into, and it was found that there was little force in it, for this reason, that no instance could be adduced of anybody having ever got anything out of a company for such a default. The witnesses who were brought forward on behalf of the commercial classes attached little importance to this point, and certainly in his own experience he never recollected of any compensation being paid in this way. There was a celebrated case of a mistake having once been made of 400 for 4,000, which caused an enormous loss, and even the ruin of the firm; but he never heard, either in that case or any other, of compensation, having been paid by the companies. He, therefore, thought that the transfer of the telegraph wires from the companies to the Government was not in this respect a move in a; wrong direction. The second point was that of secresy. He agreed with the Chancellor of the Exchequer, that, on the whole, the evidence showed there was not much to fear on that head. Witnesses from various Chambers of Commerce were called, and were examined very fully upon this head, and they stated very forcibly, though vaguely, that the general feeling of the towns from which they came was in favour of the transfer of these lines to the Government. As to the question of the scale of charges to be levied, and the mode in which the telegraph ought to be made to pay, the commercial witnesses, being unacquainted with the price proposed to be given by the Government, could not speak with any authority. One commercial witness said he thought the system ought to be self-supporting, and that if 1s. a message would not pay it ought to be raised to 1s. 6d. Another witness said that if 1s. would not pay a sum ought to be advanced temporarily from the Consolidated Fund till the system had time to work its way. He did not think, however, that much importance was to be attached to the evidence of these witnesses on points on which they had no peculiar information. On the question of secresy they were competent to give an opinion; and he, as representing a commercial community, was bound to say that neither from these witnesses nor from his own constituents had he heard a single doubt or suspicion that the com- mercial interests of the country would suffer from the transfer of the lines from the companies to the Government. They would sooner have their business conducted under the eyes of the Government than under the eyes of the directors of the companies. The case was somewhat different with regard to the political questions to which the right hon. Gentleman alluded. He thought, however, the general feeling was that those political occasions on which the Government might abuse their power were comparatively rare, and he must state the general feeling of the public ran in the direction that they were not afraid to trust the Government with the perusal of their messages. Another question arose as regarded the railways. It had been suggested that it would be impossible for the Government to conduct the messages for the railways with a due regard to the public safety. But that impossibility had been got over, as other difficulties were got over, by a very liberal outlay indeed; and the railways having been bought over, and overpaid too, that difficulty was removed. There was another point on which they had a good deal of interesting evidence—the facility with which the Post Office officials might be taught to work the telegraphs. The evidence on that head was very satisfactory. A police officer explained how he had taught policemen in a short time the use of the cryptograph, and the evidence generally went to show how quickly young boys and inexperienced people would acquire the art of telegraphy. It appeared to him that, upon the whole, the administrative difficulties connected with the system were not so great as might be anticipated; and he did not think that they afforded any reason for opposing the transfer of the telegraph system from the companies to a Government Department. Holding that view, he had voted in favour of the Preamble of the Bill, and he had voted against a Motion that further inquiry was necessary before passing to the clauses. But he wished now to say a few words on the next important point—if it was not the most important point—the probable financial results of the measure. As regarded the financial results, he admitted that Mr. Scudamore had shown himself to be a skilful financier; and the Chancellor of the Exchequer had explained how he had arrived at the results which were now submitted to Parliament. As the right hon. Gentleman put it, there was a minimum and maximum estimate. Mr. Scudamore's estimate of the number of messages appeared to him to be very liberal indeed, and he would show the House why he thought it was too liberal. Mr. Scudamore started with the year 1860, when the number of messages was 6,000,000; and assuming that the messages would show an annual increase at the rate of 10 per cent, he calculated that by the month of July 1869, when the lines would come into possession of the Government, the number of messages would then be 7,500,000. But since Mr. Scudamore gave his evidence they had got the data for the year 1867, and they knew the total receipts of the telegraph companies for that year. Now, Mr. Scudamore told the Committee that the average receipt of the telegraph companies was 1s. 11d. for each message, and it appeared to him (Mr. Goschen) that if they divided the total receipts by 1s. 11d., or roughly by 2s., the number of messages sent was not, as Mr. Scudamore calculated, 6,600,000,but only 5,500,000. Now he wished to point out to the House that if Mr. Scudamore was in error on this point to the amount of 1,000,000, that error involved another, because there was not only this difference of 1,000,000 on the wrong side, but the corresponding decrease on the additions which Mr. Scudamore expected to obtain in 1868 and 1869, and his estimate that the number of messages would reach 11,000,000 would prove incorrect. According to his calculation, estimating the number of messages by dividing the total receipts by 2s., the average price of a message, he estimated that there would be a deficiency of from £80,000 to £100,000 on Mr. Scudamore's estimated receipts. He put this forward as the result of his own calculations based on figures given by Mr. Seudamore for what it was worth. But there was another test. Mr. Scudamore had referred to the case of Belgium and France, and to the telegraphic system in operation there. Now in France the cost of telegraphing was higher than the Government here proposed to charge—it was 2 francs, or 1s. 8d. a message—though it was lower than the companies' present rates. But in France the number of messages was only 2,500,000 in a population of 37,000,000; while Mr. Scudamore estimated that in England there would be 11,500,000 of messages in a population of 30,000,000. He (Mr. Goschen) admitted that there was far more telegraphing in England than in France; but making all allowance for that, the difference still struck him as enormous. But how did the case stand with Belgium? Belgium was essentially a telegraphic country; and there they had a 6d. rate, which was considerably lower than that proposed by the Government. In Belgium there were about 1,000,000 of telegrams per annum for a population of 5,000,000. In England, with a rate twice as high, nevertheless, we were to expect the number of telegrams sent to be 11,500,000 to a population of 30,000,000; which was far beyond the Belgian proportion. Mr. Scudamore proceeded in his statement on this footing—There was to be no increase in the 1s. messages, but in the 1s. 6d. messages there was to be an increase of 33 per cent. Why? Because in Belgium a similar reduction gave a similar result. But the lower down they got the greater was the chance that the reduction would lead to increased telegraphy, and it did not follow that the same reduction on a higher scale of charge would lead to the same increase. In his opinion, Mr. Scudamore was sanguine in his estimate of 11,500,000 telegrams. He started from 6,000,000 messages, and brought up his estimates too high; and he should not be surprised if there was a deficiency at the end of the year of £100,000. In his estimate of expenditure Mr. Scudamore also appeared to too sanguine. He took the aggregate amount of the four companies and reduced it by £55,000 which would be saved by amalgamation. But he did not think because the companies would save that amount by amalgamation, it followed that the Government would conduct the business of the Department as economically as private companies. Assuming, however, that the Government would conduct the business as economically as the private companies under a state of things resembling amalgamation, and that the expenses of the directors would be saved, it should be remembered that the Department must undertake business from which the telegraph companies would have shrunk as unremunerative. The telegraph companies would not carry their wires into districts where the charges must be heavier than the receipts would meet, while the Government must, and he was sure would, consult the public convenience by bringing the telegraph into districts which the companies would not have undertaken, looking at the matter in a commercial point of view. He thought, therefore, that on this head Mr. Scudamore had made a too sanguine estimate. When he looked at the expenses of other countries, he felt justified in coming to the same conclusion. It was calculated that in Belgium every mile of wire cost £5 10s., in France every mile cost £5 to work. Now, admitting that the English Government would conduct their business as economically as France or Belgium, yet £5 a mile upon 80,000 miles of wire would cost £150,000 more than Mr. Scudamore's estimate. There was another result to which he wished to invite the atttention of the Committee. Mr. Scudamore, as the Chancellor of the Exchequer informed the House, had taken for the basis of his expenditure the aggregate expenditure of the four companies; but he had not taken into consideration the sums that were laid aside by the Electric International Company as a reserve fund. According to a witness before the Committee this sum was not a mere surplus dividend, but was intended to meet general casualties, and especially the losses on the submarine cable. Now, it was true that the depreciation on the land wires was not so great but that it might be met by the earnings of each half year; but yet there was a time not long ago when a snowstorm caused an outlay of £20,000. He contended that Mr. Scudamore had made no allowance for reverses such as these. Now, if he was right on these points, it was clear that Mr. Scudamore had not left a sufficient margin for expense, that his estimate was £50,000 too low, and if they added that additional £50,000 to the £100,000 by which he believed the revenue was returned too high, they would get a difference of £150,000. This would reduce Mr. Scudamore's minimum estimate from £300,000 to £150,000, and it would reduce his maximum estimate from £380,000 to £230,000. It might be said that £150,000 would still render it safe to go on with this bargain. Well, he did not say that the Bill ought not to proceed; but he contended that it ought to be carefully examined, and to be looked at from every point of view, so that the taxpayers of the country might not be led to take too sanguine an estimate of the advantages that were to be derived from it. He admitted that even if the profits were reduced to £150,000, it would meet 3½ per cent upon £4,500,000. On the other hand, if the maximum estimate were reached, it would cover an expenditure of £6,000,000. He was afraid the country was now pledged to the Bill. But he would ask, was it a proper way to go about the purchase—that they were content to give any amount that could be afforded without actual loss irrespective of the actual value? He knew it might be said that the property was worth holding, and that if we got what we wanted we need not mind the terms. Why should we begrudge the giving a handsome sum to the telegraph companies if we were to do so without loss to the country? But he would ask was that the proper thing for Parliament to do? The Chancellor of the Exchequer had wisely said nothing as to the amount of the assets they were about to acquire. The witnesses estimated their assets at £2,200,000, and it was admitted that if the Government were about to start fair, and begin the system for themselves, the wires could be constructed for less than, £2,000,000. They were therefore about to pay £4,000,000 more for the good-will, for the buying up of interests, and he might say, for the eagerness to do the thing in a hurry. In the first instance, arbitration had been proposed, and the Chancellor of the Exchequer stated that arbitration was looked upon as confiscation by the companies. For his own part, he did not wonder at that, because the arbitration clause contained an extraordinary provision that the arbiter was to be appointed by the Board of Trade, so that the companies had a right to say, "You are buying us by means of an arbiter of your own appointment." He (Mr. Goschen) asked Mr. Scudamore in Committee if the companies had asked for twenty-five years' purchase instead of twenty would you have given up your Bill? Mr. Scudamore said, "No; he should then have thought it fair to revert to the principle of arbitration." Now, if the Government thought twenty-five years was so extravagant a charge that they would have insisted on arbitration rather than accede to these terms, or leave them in possession of a monopoly, it was open to those who thought twenty years' purchase an extravagant sum to say the same. Let him show to the House in what a different position the companies stood as soon as the Government departed from the idea of arbitration. The shares of the companies rose 50 per cent as soon as arbitration was departed from and the present terms accepted by the Government. It appeared to him that that was primâ facie a strong argument that they were paying too high terms. Mr. Scudamore stated in his evidence that he would have paid the companies upon the highest value their shares had ever reached, which was then £150 per share, to which 15 per cent should he added for the compulsory sale. But even these terms would not amount to the £207 at which the shares of the companies stood now. Let him approach the matter from a different point of view. The terms of twenty years' purchase were defended because twenty-five years' purchase was inserted in the" Railway Bill of 1846. Therefore the telegraph companies maintained that, standing upon the same footing, they had made a concession of five years. But there was no analogy between the railways and the telegraph companies, for though they were both exposed to competition, the competition with railways would not be so imminent as with telegraph companies. And then, further, by a little slip in drawing up the contract, the terms were calculated on the profits of the present year up to the 30th June, 1868, so that they agreed to pay on the profits of the companies, six months of which were not yet before them. If they had taken the profits for the year 1867, they would have had the advantage of having all the accounts placed before them; but in the present year they might be sure that the companies, having this prospect of a transfer before them, would increase their profits by keeping down their expenditure to the lowest point. He held that the Government ought not to have taken the profits of one year at all. They ought to have taken the average of the last three years. The bargain was not only bad in itself, but it was a source of danger as a precedent. These terms would be quoted against the country on future occasions; and if the Government were called upon, for instance, to deal with the Irish railways, he had no doubt that these clauses would be quoted as a precedent in the matter. Why did he say that twenty years' purchase was too high? For this reason; putting aside the admission of the proprietors themselves—that telegraph property was liable to constant depreciation—he said that there was not a business of any kind in the country, yielding a profit of 15 per cent, that was worth twenty years' purchase. A business that yielded only 5 or 6 per cent might command twenty-five years' purchase; but to give twenty years' purchase for a business that yielded 15 per cent was most improvident. Was it to be supposed that a business yielding 15 per cent would not be liable to competition from those who would be content with 10 per cent? Why, there was a witness brought before the Committee by the Government who stated that he had a project for a new system of telegraph, and that he had a prospectus for the formation, of a company to work it in his pocket, and that he was only deterred by the present depression in the money market. He (Mr. Goschen) was bound to say he did not think the gentleman would succeed, but there was a proof that the monopoly of the companies might at any time be interfered with. But then it was said there would be no competition, because they had the command of the railways. Now, he was surprised to find out in Committee that they had not the command of the railways—that the property would revert to them, and after the Government had paid twenty years' purchase to the telegraph companies they would probably have to pay half as much again to the railways. It was true that with the Great Western the companies had a long lease, amounting almost to a perpetuity; but in the case of the North Western the lease expired in seven and a half years, and the North Western system comprised 9,000 miles of wire, or about one-eighth of the whole system. The railways felt their power so much in the matter that they pointed out to the Committee that they would not only be entitled to an increase in the rate which they now received as soon as the leases were expired, but they would also be entitled to an indemnification, for the loss they would sustain, in not being allowed to put the screw on the telegraph companies. It was true that the leases did not all expire at one time; but suppose that one district were free—namely, the district between London and Liverpool—it would be competent for the railway directors to insist on much higher terms than the company at present paid, or to start a new company. It was, therefore, impossible to say that these terms could be justified because the companies were in the enjoyment of a practical monopoly. He felt very strongly on this matter because he was convinced that it was impossible to find an instance of any private enterprize which, while it returned a profit of 15 per cent to its shareholders, enjoyed a monopoly for any great length of time. He did not, perhaps, think that at that period of the Session they could disturb the bargain which had been made, but he could not help feeling that from whatever point of view they approached the question, and whatever the profit or advantage that would ultimately accrue to the country, the precedent they had now set was one attended with great danger, The disadvantage in which the Government had been placed resulted entirely from their having commenced negotiating at the end of a Session instead of at the beginning. The Committee was deeply impressed with the fact that if it dissented from any of the arrangements come to between the Government and the companies the whole scheme would come to an end. So great was the Committee's fear in this respect that he had been unable to gain the simple point of substituting the 31st of December instead of a day in July as the end of the term for calculating the profits. But if it were true that the Committee sat there only to register the contracts of the Government, if it were true that the Committee considered; all the complex details of the scheme only to reject them, or accept them as a whole, without power to modify them, it had sat to very little purpose. The Chancellor of the Exchequer had omitted to call attention to one important point, which greatly reassured him respecting the Bill. The Money Bill would not be introduced until next Session, and until that had been sanctioned the contract would not be binding on either the Government or the companies. But it was held to be necessary to pass the Bill under discussion in order that the questions of compensation might be settled by the arbitrators, and the House might next year know exactly what the country would have to pay. Fearing that the faith of Parliament would be regarded as pledged if this Bill was passed, he had asked Mr. Scudamore in Committee, before the representatives of all the parties concerned, whether the passing of this Bill would be regarded as tantamount to a promise to pass the Money Bill next Session—as, in fact, a pledge to accept the whole scheme. Mr. Scudamore answered— I do not say you should rest satisfied with my statement, but that is all I can say. During the vacation the whole amount to be paid will be ascertained, and then it will come before the next Parliament to confirm it, and Parliament will then have an opportunity, even if this Bill be passed, of saying that we shall not buy, and the Bill will then be inoperative. He trusted the Government would make it known in the most explicit manner that the passing of this Bill did not bind the Government or the shareholders of the several companies. This declaration was required in justice to the shareholders, who should know that if they thought proper they had power to demand higher terms than those offered. The agreement could not be concluded except with the consent of two-thirds of the shareholders of each company and the passing of the Money Bill next Session. The hon. Member for Kingston-on-Hull (Mr. Norwood) brought this out very clearly when he referred to the last clause of this Bill, which says— In case no Act shall be passed during this or the next Session of Parliament, putting at the Disposal of the Postmaster General such Monies as shall be requisite for carrying into effect the Objects and Purposes of this Act, the Provisions contained in this Act or in the Agreements hereby confirmed relating to the Arrangements with Railway and Telegraph Companies, and all Proceedings thereunder, shall become void. It was clear, then, that the matter would still be left open, although this Bill passed. Had he not occupied so much of the time of the House he would have defended his proposition to give the Post Office a legal monopoly in the right to transmit messages; it had been found necessary in the case of letter-carrying, and he believed it would be found necessary some time in the future, if the present Bill became law, to give the Department a monopoly in this case also.

MR. LEEMAN

observed that he had moved in Committee a Resolution to the effect that the imperfect information on the subject of cost, as well as the uncertain amount of revenue to be derived, would not justify the prosecution of the Bill until that information should be laid before Parliament. He fully concurred in what had been stated as to the position in which the Committee were placed. On the 18th June, when the Bill was discussed, the whole of the telegraph and railway companies were petitioners against the Bill; but between that moment and the time when the Bill came before the Committee the whole of these interests had been bought up by the Government. The Committee were placed in a most invidious position. They had to take the place of counsel for the purpose of bringing out the information which was now before the House. As he had stated on a former occasion, he entertained a decided objection to the Government undertaking the management of the lines, and would not now enter into that matter. He would confine his remarks to the financial part of the question. He contended that anything more imprudent than the arrangement come to by the Government could not be conceived, and the way in which they had gone about making the financial arrangement was one which he hoped would never be followed by any other Government. Mr. Scudamore, who was what he had been already described to be—a most able man—had not known up to the time of the second reading of this Bill what were the existing arrangements between the telegraph companies and the railway companies; and, subsequently, while still without the requisite knowledge on that point, he went and agreed on the part of the Government to buy the interest of the telegraph companies at twenty years' purchase—not according to their rates of dividend, which were not allowed to exceed 10 per cent, but on twenty years' purchase on their gross receipts, less the working expenses. In addition, it was to be remembered that the railway companies had reversionary interests which would come into operation after the comparatively short time for which their arrangements with the telegraph companies were to continue. In July, 1866, Mr. Scudamore estimated the necessary outlay on the part of the Government at £2,400,000. In February last another officer of the Government was requested to report on the subject, and he raised the estimate to £3,000,000; but it was not until the Bill came before the Committee that Mr. Scudamore said £6,000,000 would be required. He admitted that the original estimate of £2,400,000 did not embrace all that was included in the estimate of £6,000,000; but there was not sufficient difference between what the two estimates did embrace respectively to account for the difference of £3,600,000 in amount. He undertook to say that Mr. Scudamore was as wide of the mark in his estimate of £6,000,000 as he had been in his estimate of £2,400,000. At the expiration of their agreements with the telegraph companies several of the railway companies would have it in their power to compete with the Post Office for the transmission of telegraph messages. No doubt, this fact would be brought under the notice of the arbi- trators when the value of their reversion was being considered, and at what price would the arbitrators value this reversionary power of competition? Had Mr. Scudamore made any estimate on the subject? Owing to the position in which Mr. Scudamore had placed the Government, the railway companies had demanded terms in respect of their reversion which he, as a railway man, now said it was the duty of any Government to have resisted; and yet he thought that Mr. Scudamore's highest estimate could not be depended on. When asked during the inquiry by the Committee what amount would be sufficient, Mr. Scudamore replied, "I believe £6,000,000." When asked whether he would undertake to say that £7,000,000 might not be required, he repeated he believed £6,000,000 would be sufficient; and when asked whether he would undertake to say that £7,000,000 might not be required he again gave the same answer. Therefore, if they assumed that £6,000,000 would buy up the telegraphs they were proceeding on very fallacious data. Then as to the revenue to be derived from the working of the telegraphs by the Government. Nearly 60 per cent of the present receipts of the telegraph companies were obtained from the 1s. messages; but Mr. Scudamore expected that from the reduction of the higher-priced messages an increased income would be produced; and he quoted the cases of Belgium, Switzerland, and France in support of his views. Now, between the case of Belgium and that of England there was no analogy, because, while the charge for a telegram in Belgium was down to half a franc, or 5d., the rate of postage there, on the other hand, was 2d.; and under such circumstances a person might often prefer to pay 5d. for a telegram instead of 1d. for a letter; whereas if the telegram cost 1s., and the postage rate, as in this country, was only 1d., he might prefer to send a letter. Moreover, the utmost distance they could send a telegram in Belgium was 120 miles; but in Great Britain it might be sent 700 or 800 miles, from one extremity of the island to another. Much the same thing held good in Switzerland as in Belgium, in reference to the comparative rates of telegraphing and postage: and, moreover, in a very mountainous country like the former it was easy to conceive that the telegraph might often be preferred to the post, with its uncertainties and difficulties. Then, as to France, the whole of its telegraphic system had not cost that country, with its 37,000,000 of population, more than £952,000. Why, then, was this country, with its smaller population, to give £6,000,000 to the holders of the present telegraphs, when it was perfectly clear that by means of the facilities we enjoyed through the railways we could surely do what they did in France? Moreover, as the Post Office was not to have a legal monopoly, where would be the difficulty of the railways or other persons starting a telegraph at 6d., and running the Post Office off the road? With regard to Mr. Scudamore's notion of extending the telegraph wires largely into the remote country districts, what practical man, he asked, believed that into every village into which a money-order went there would necessarily spring up a strong desire to send 1s. telegrams? The existing telegraph companies had been endeavouring for a long time to carry their wires into the remote districts; but with what result might be judged of from the fact that 75 per cent of their entire receipts were obtained from fifteen towns, and one-half of them from London. The experience of France was much the same, one-third of the entire revenue from telegrams being received in Paris. Therefore, the notion under which the House and the country were asked to embark in an enormous expenditure—namely, that they could excite a hunger and thirst among the agricultural population for telegrams at 1s. each, when they could send letters for 1d., seemed to him, he confessed, most absurd. At the same time he was glad to hear from the Chancellor of the Exchequer that all the House was now asked to do was to assent to the principle that the Post Office might with advantage work the telegraph; and he hoped that the considerations which he had suggested in the course of his remarks would receive the careful attention of the Government and of the subordinate officers concerned in the framing of their scheme.

MR. KARSLAKE

said, he had been strongly opposed to the original Bill, regarding it as a measure of confiscation; but the House having affirmed the principle that this change should be made, there seemed to him a great advantage in: proceeding with the measure. If it passed this Session the companies would be bound to the agreements into which they had entered, although their profits were steadily increasing, while it would be open to Parliament to re-consider the matter; but, in the event of its not passing, these agreements would become null and void. He thought that the speech of the right hon. Gentleman the Member for the City of London (Mr. Goschen) afforded, when taken as a whole, the most cogent reasons why they should pass this Bill. The right hon. Gentleman had stated that he considered that it had been proved to the satisfaction of the House that it was desirable that the Government should work the telegraphs in connection with the administration of the Post Office, and that there was no force in the objection which had been urged against the Bill on the score of "tapping" or "milking" of the wires, as it was called. The difficulties in the way of tapping the wires would be be almost insuperable, and there was a clause in the Bill making it a misdemeanour. The measure might, therefore, do some good, and could not possibly do any harm. As to a combination between the railway companies to carry on telegraphs in opposition to the Post Office, the hon. and learned Gentleman (Mr. Leeman) should remember that if, without the sanction of Parliament, railway companies ventured to misappropriate their funds and turn telegraphers, they would speedily be stopped by injunction. [Mr. ATRTON said, railway companies were entitled by Act of Parliament to carry on telegraphs.] He should be glad to learn what Act had given them any such authority. Moreover, the existing agreements between the railways and the telegraph companies would expire at irregular intervals, one of them having as long as fifty years to run; and until all those agreements had expired no such combination would be possible. As to the terms of purchase, he did not regard them as too liberal. That they were advantageous to the companies was only fair, it being usual to pay liberally when property of any kind was taken for the public service, and it being clear that the profits of these undertakings were rapidly increasing. Even educated men had to learn the use of telegraphing; but when once acquired that use immensely increased, and he had known persons who, having originally a great dislike to telegrams, ultimately employed them almost as extensively as post-letters. He did not, however, believe that people generally would use the telegraph as commonly as the post, and he was not for calculating future profits on such an hypothesis. He presumed it would be at the discretion of the Post Office, as of the companies, to avoid incurring considerable loss by extending telegraphic communication to out-of-the-way villages; but, whereas the companies naturally looked for a dividend, the State would wish to accomodate remote districts provided it entailed no serious loss. As to the rise in value of the Electric and International Company's shares, this was no proof that the terms offered them by the Government were too liberal. Those shares were held as investments by investors rather than by speculators, and, as the rise commenced long before the agreement was entered into, he attributed it to the attention which the discussions in Parliament and in the Press had drawn to the highly remunerative and sound financial position of the undertaking. Difficult as it was to find secure investments, people had naturally thought they could not do better than buy shares in that Company. He was happy to find that they had arrived so near to a conclusion of this matter, and that they would go into Committee on the understanding; that the Bill would pass this Session. Though he could not conceive any better terms than those which had been referred to, he should not forget the important observation of the hon. Gentleman (Mr. Leeman) that next Session they would have a right to consider whether more advantageous terms might not be obtained for the public.

MR. GLADSTONE

said, he anticipated that the Bill would pass into law, and, as far as he was concerned, there were several motives which induced him to wish that it should not be delayed. The first motive was one to which he had alluded on a former occasion—namely, the manifest weakness and defects of the present telegraph system; for, whatever might be said of those who had led the way in this useful enterprize, the telegraph was an instrument which, as regarded the great mass of the people of this country, was very feeble, and was, in the hands of the Government, susceptible of great improvement. He likewise felt that the very great authority attached not only individually to the judgment of so able a public servant as Mr. Scudamore, whose mind had been employed upon this subject, but to the Department of the Post Office at large. He attached very considerable authority to the opinion of that Department when he considered upon how many great and seemingly doubtful enterprizes it had entered during the last thirty or thirty-five years, and how much the results of those enterprizes had tended to sustain the judgment of those by whom the public mind had been led. His third reason for wishing the Bill to pass was that it appeared to him that until the Bill had gone forward and the investigations contemplated under it had been made it would be impossible to know the ground on which they stood, or to have a certainty as to the sums with which they were dealing, or the relation between those sums and the property they were to acquire. Upon those grounds he wished the Bill to go forward, although he regretted that the unfortunate delay which had taken place in the discussion of the Bill until a late period of the Session should have placed both the Government and the House in a position of disadvantage. He did not propose to make that delay a subject of censure on the Government or the right hon. Gentleman the Chancellor of the Exchequer, because everyone who was conversant with the conduct of Public Business must know how very difficult it was so to adjust the great mass of questions that demanded the attention of the Legislature as to bring them forward at the time that was best for the public advantage. The Chancellor of the Exchequer himself must be sensible of the disadvantage of the delay, not only on account of the natural desire of the right hon. Gentleman to have his name attached to the measure, but also with reference to the public interests. He was quite disposed to concur with his right hon. Friend the Member for the City of London (Mr. Goschen), and to put aside—so far as that discussion was concerned—what might be termed the administrative difficulties of the question. With respect to the monopoly of the telegraph in the hands of the Government, he did not propose to raise any question under present circumstances. He would merely say that, as far as he had been able to examine it. his mind was by no means entirely satisfied that it would be found practicable for them to take permanently into the hands of the State the telegraphic communication without assuming a monopoly of the same character that they possessed with regard to the conveyance of letters. But it was not absolutely necessary to settle that question now. The utmost inconvenience that might arise would probably be in case there should be poachings on the best part of the manor of the Government, and purchases upon dis- advantageous terms might have to be made. But that would be an inconvenience within very narrow limits; and it was perfectly plain that the Government would be able, at any time the House might see fit, to assume the exclusive privileges which at present it had not been thought necessary by the Government or the Committee to advise. He never attached the slightest importance to the rumour that went abroad, or to the apprehension that was entertained, that Her Majesty's Government had devised under the form of this Bill an ingenious scheme for assuming into their hands previous to and in preparation for the General Election a vast quantity of additional patronage. He was never so sanguine as to think that they would be able to entertain so diabolical a plot, or that it would be possible for them with all the ingenuity that this world or the nether world could supply to carry it out. With regard to the terms of purchase he did not at all lose his confidence in the right hon. Gentleman opposite, or those by whom he was advised, nor was he by any means prepared to assert dogmatically opinions contrary to theirs. But he must say that no man could have listened to the speech of his hon. and learned Friend who had spoken last (Mr. Karslake), or still more to his right hon. Friend the Member for the City of London (Mr. Goschen), who went through every detail of the case—without having serious misgiving—not leading them to censure the Government, taking into consideration the time they had to act—whether they, as representatives of the people, were justified in giving, if called upon to give, a final judgment upon the high price they were asked to pay to carry out this project. He believed £4,000,000 was the sum the Chancellor of the Exchequer had adverted to on a former occasion as likely to be required.

THE CHANCELLOR OF THE EXCHEQUER

What I said was this—that I did not think it for the public advantage that I should name the precise sum, but I thought it would not be beyond £4,000,000. I thought that the outside sum.

MR. GLADSTONE

said, he supposed the right hon. Gentleman mentioned £4,000,000 then in the same sense as he mentioned £6,000,000 now. He thought his right hon. Friend the Member for the City made clear the principle on which such a purchase should be made. Again, he wished to point out that their duty in that House was to consider what was best for the public, without implying any censure on what the right hon. Gentleman had done. But it was impossible not to observe the great difference of the method which was proposed to be observed in that Bill from the method usually adopted in the compulsory acquisition of property for the public good. The manner in which Parliament proceeded when it wished to purchase land for the public good was that the terms of the purchase should be settled either by law or by arbitration. Now, neither of these methods was proposed by the present Bill; but the properly of the telegraph companies was to be taken on the terms proposed in the Bill, provided the companies accepted the terms. Then he must point out, because his hon. and learned Friend who had last spoken had not been very successful in dealing with this part of the case, that it was perfectly natural that there should be a rise in price in the prospect of purchase by the Government. But let the difference in the cases be observed. On the 2nd of January, 1868, he presumed the telegraph companies had no great knowledge of any proceedings of this nature.

THE CHANCELLOR OF THE EXCHEQUER

They had notice.

MR. GLADSTONE

said, that at all events, at that time the companies treated the proposed purchase as a disadvantage. The price of the Electric Telegraph Company's shares was then £153; on the 23rd of June, just after the reference in Committee, the shares had risen to £165. The rise might be taken to represent the normal, fair, and legitimate improvement in the value of the property connected with the approximate realization of the plans of the Government. But what were they to say when, instead of a rise of £12 between the 2nd of January and the 23rd of June, they found a rise of £41 between the 23rd of June and the 21st of July? And would the reasoning of the hon. and learned Gentleman account for that? He had set up an ingenious theory, that there was something so delightfully scientific in the possession of telegraphic property that it attracted to itself, quite irrespective of vulgar calculation, what was known as a pretium affectionis; but he was afraid that the change which had occurred during the last few weeks must be attributed to considerations of a different character. The Electric Company's shares were £153 on the 2nd of January, £165 on the 23rd of June, and £206 on the 1st of July; and the Magnetic Company's shares were £115 on the 2nd of January, £125 on the 23rd of June, and £150 on the 21st of July. In the former case the increase was one-fourth, and in the latter it was one-fifth between June and July. Comparing the case of the telegraphic companies with that of the landed proprietors, he could not see any reason for a deviation from the established practice of resorting to arbitration. In the case of railways we could not do without the land required for them; but we could do without the property of these telegraph companies, and it was not necessity, but it was equity and policy, which led us to think it necessary to acquire them. It was only a sense of equity that prevented the State competing with the companies, as it was open to private persons to do at any time. Therefore, he did not see any ground of a high order for foregoing arbitration in the case of these companies. The position was undoubtedly an anomalous one. It was the misfortune and not the fault of the right hon. Gentleman that the House was called upon to give something in the nature of an assent to a presumptive bargain made by the Government, and which had received the Parliamentary sanction of a Committee at a time when it was impossible for the House to complete the operation by passing another Bill—first, because they did not know the facts, and, second, because the right hon. Gentleman would not under the circumstances enter upon such a financial operation. That would be a matter of comparative insignificance if the question were to be considered by the same body next year; but unfortunately a dissolution intervenes, and the case must be referred to an entirely different tribunal. The hon. and learned Gentleman stated that the new Parliament must come to a free and unfettered judgment with regard to the terms. Now, there were certain occasions in which, while Parliament was not legally bound, it was bound by the strictest laws of honour; and this Parliament had no right to put the Members of the new Parliament in the position of having it said to them, "You are not free; you are bound by the assent of those who have gone before you." The new Parliament would not, could not, and ought not to admit that it was bound. It must have not only a legal but a moral freedom of choice. No doubt it would give due respect to the authority of the Government, of the Department, and of any vote of the House; but these would come before it as the elements of the case for its final decision, and not as laws determined beforehand. It was of the greatest importance it should be thoroughly understood that this Parliament was not attempting to fasten on the new Parliament an obligation that would be ultra vires, and it was desirable that this should be placed on record by the unequivocal declarations of Members of Parliament. Feeling great difficulty about the terms proposed to be given to the companies by the Bill, and being convinced that discretion and good sense would govern the proceedings of the shareholders, and that they would not attempt to drive matters to extremities, he could not be satisfied without placing on record an expression of opinion that we should have acted more circumspectly and safely if we had adhered to the ordinary method of arbitration, and therefore he was glad the hon. Member for Pontefract (Mr. Childers) intended raising that question on the 4th clause. The right hon. Gentleman would see there was every disposition to support the policy of the measure, as far as possible, and his own wish was that, under the auspices of the right hon. Gentleman, the measure might be successfully carried through.

MR. NORWOOD

said, that although, the Select Committee laboured under difficulties which were not diminished when the opposition to the Bill disappeared, they did not fail to examine every point involving the interest of the country. Their chief difficulty was that they had before them a scheme the receipts and expenditure of which could not be exactly ascertained; but having a maximum estimate which showed a net revenue of £358,000, and a minimum estimate which showed a net revenue of £203,000, they adopted the mean of £280,500 as the revenue that might be reasonably calculated upon. Mr. Scudamore gave to the Select Committee the strongest assurance that all the rights and property of the telegraph companies could be purchased for £6,000,000, and a financial officer of the Treasury fully confirmed those figures. As to the bargains with the telegraph, companies and railway companies he was not satisfied with them. These companies, he thought, were about to receive a very large sum indeed. But the Select Com- mittee were placed in this position—they could not modify the arrangements made by the Chancellor of the Exchequer, and at that late period of the Session were obliged either to sanction the proposal in its entirety or to reject it. As the Government intended that every money order office in the kingdom should have telegraphic wires, there would be about 4,000 telegraphic stations, instead of a little over 2,000, and no one who perused the evidence could doubt that as the Government possessed a staff to work the telegraphs, they could afford much more and cheaper accommodation than the telegraph companies could. As to a legal monopoly, he did not think one was demanded by the circumstances of the case. The Post Office authorities would practically have a monopoly; but he saw no reason why, if a private company should be able to transmit messages at a cheaper rate, the public should not have the benefit of the competition. As to the profits of the undertaking, he was sanguine enough to believe that Mr. Scudamore's maximum estimate was not too high an estimate for the future. The proposed reform would be of inestimable benefit to the country—and next to the penny postage would be the greatest boon and blessing conferred on the people in recent times. In the course of a few years a rate of 6d. might not improbably be fixed for messages to every part of the kingdom, and the advantageous results of such cheap telegraphy could hardly be over-estimated.

MR. LEVESON-GOWER

said, it appeared to him that neither the House nor the country sufficiently appreciated the enormous importance of this question. He thought that that importance could scarcely be overrated, not merely as regarded the question itself, but likewise in reference to its furnishing a precedent for future legislation. This proposal was a step in a direction quite new to the Government of the country—an undertaking founded upon an opposite principle to that which had been hitherto acted upon by them—namely, the principle of leaving all such operations to private enterprize. Although he admitted there might properly be exceptions to that rule, still, as far as he knew, this was the first time the Government had offered to purchase from private individuals large commercial concerns with the view of carrying on the business of them themselves. He therefore thought it was a measure which ought not to be passed without the greatest deliberation. It appeared to him that the many considerations connected with this question had not as yet received attention. The right hon. Gentleman the Chancellor of the Exchequer introduced it in a speech of ten minutes, and moved the second reading in a speech of twenty minutes. He might remark, moreover, that early on the evening when the second reading was agreed to, the House received a positive assurance from the right hon. Gentleman that the measure would not be proceeded with. The breach of that promise ought not to be passed by unobserved.

THE CHANCELLOR OF THE EXCHEQUER

said, he did not quite understand the hon. Gentleman, who would, perhaps, explain his meaning more fully.

MR. LEVESON-GOWER

said, that early in the evening in question the right hon. Gentleman assured the House that after twelve o'clock the Electric Telegraphs Bill would not be proceeded with. He was aware, however, that the proceeding with it after that hour was justified on the ground that some understanding had been entered into between some of the opponents and the promoters of the measure. He maintained that that justification was not a sufficient one. Great inconvenience would result if those who were opposed to a particular measure felt they could not safely leave the House even after an assurance had been given by the Government that the measure would not be proceeded with that evening. Although he (Mr. Leveson-Gower) had a high opinion of the ability of the Gentlemen who formed the Select Committee to whom the Bill was referred, he could not say so much in favour of their impartiality, for with one exception—that of the hon. and learned Member for York (Mr. Leeman)—he believed they had all been favourable to the measure. Nearly the whole of the time of the Committee was occupied with the consideration of the amount of money that ought to be paid to the companies, whilst the many bearings of the question were wholly ignored or disregarded. It was desirable to ascertain what occurred in other countries; and he understood that in the United States the telegraphic communications, which were entirely in the hands of private companies, were acknowledged to be remarkably successful. Another question, which was not alluded to, was that of the improvements that were now going on in the telegraphic system of the country. After considering those improvements, it ill became the public or their representatives to throw dirt upon those companies. It was argued that great improvements would be effected in the system if the whole management were placed in the hands of the Post Office authorities. But why had not those authorities sought to co-operate with the companies in order to effect those improvements? After many discussions upon this scheme, whilst the question of its policy had been hardly touched upon, the House was called upon to inaugurate a new state of things fraught with the most serious consequences. He confessed he did not like to see large public companies, after declaring their opposition to a measure on great public grounds, withdrawing their opposition merely because they were to receive a large sum of money for their shares. He thought there was great force in the observation that the Irish railway companies or other undertakings which the Government would be likely to purchase would point to the present measure when estimating the value of their property. It was a great pity that this Bill should be pressed forward at so inopportune a time, when the difficulties of coming to an arrangement with the companies were necessarily greatly aggravated. In his opinion it would have been better if the Government had instituted a full and searching inquiry in the first instance, which he believed would have removed all the objections that could be raised against a scheme of this kind, and rendered subsequent legislation on the subject comparatively easy.

MR. E. POTTER

, having had much experience in the telegraph department of business, felt satisfied that the evidence given by Mr. Scudamore was sound and practical, and that it rather under-stated than over-stated his case. He believed that a 6d. telegraph would be three times more valuable than a 1s. one, and would prove a far more successful measure. Looking at the marvellous increase in the revenue of the Post Office within the last ten years, he considered that if the telegraph companies had reduced their terms in proportion that the proceeding would be attended with the same, or even better, results. He hoped that the Government would pass this part of the Bill that Session; and he felt satisfied that the next House of Commons would complete the arrangement by giving such a price for the property as would meet with the approbation of all parties concerned.

SIR JOHN GRAY

said, he had listened with much interest to the discussion that had taken place, and was gratified to observe that the principle of the Bill was substantially accepted by hon. Members who had addressed the House from both sides. He felt that Ireland was largely interested in the promotion of the measure, and an hon. Member objected to the Bill as forming a precedent for the purchase of Irish railways not on its intrinsic merits. He (Sir John Gray) thought that the fact of its forming a precedent was no solid objection to a measure which would confessedly prove to be a first step towards increasing the commercial activity of that country. He saw in the details given in the evidence of Mr. Scudamore that only 5 per cent in number of the telegraphic messages that passed over the entire telegraphic system of the United Kingdom represented the telegraphic intercourse between Ireland and Great Britain. Every man who understood the commercial transactions of Ireland knew that the present trade of that country was principally a cross-Channel trade; and while the inland telegraph intercourse was represented by 95 per cent, the whole Irish cross-Channel trade was represented by only 5 per cent. This was admitted to be owing to the high tariff—which was from 3s. to 4s. per message—3s. to the coast of Ireland from London, and 4s. to the interior. In fact, there was a prohibitory tariff; and thus the growth and development of trade which resulted in other countries and in this from telegraphic facilities had absolutely no existence in Ireland. He therefore, as an Irish representative, watched the progress of this measure with special interest, as one the realization of which must be of great commercial advantage to Ireland. The leading points submitted to the consideration of the House by the Bill now before them he conceived to be these—The first point suggested was the propriety of placing the system under the control of the Post Office. That was conceded by every Member save one who addressed the House, and by none, he was happy to say, more cordially and more ably supported than by the leading Members of the front Opposition Benches, who, while objecting to the details of the agreements with the several companies, quite endorsed the principle that the public interest demanded that the Government, as representing the public, ought to obtain the management of the telegraphs of the kingdom. The next question was the question of price. He would not assume to be as good a judge of the price as the hon. Member who had preceded him (Mr. E. Potter). He felt, however, that all men who dispassionately considered the subject must admit that when a Government, acting on behalf of the public, and for the benefit of the public, assumed forcible possession of the property of a private individual or of an incorporated company for the public interest, the public were bound to give not only a good but a full, and even more than full price. The hon. Member who addressed the House last but one observed that the price given to the companies was too large, and added that it would be used as a precedent for giving an extra price hereafter for the Irish railways if the Government should determine to buy those railways. Now, he (Sir John Gray) hoped that it would have that effect. He hoped that if the principle of purchase laid down in this Bill were taken as a precedent, that on that precedent the Government would have to give a large price for the Irish railways, for if the price to be paid amounted to a large figure computed on a basis identical with the basis of this Bill—that of actual profits realized by working—and if the price were to be proportioned to the profits, then a large price given for the Irish railways would indicate increased activity, commercial progress, and the growth of wealth in Ireland. He (Sir John Gray) regretted to have to say that he did not think the right hon. Member for the City of London (Mr. Goschen) did justice to the financial statements laid before the Select Committee by Mr. Scudamore. That gentleman, in his very valuable evidence, gave, as stated, his estimates of the minimum and of the maximum returns. The minimum assumed that there would be no increase of messages as to number, and even on that he showed a profit of more than £200,000 a year over the maintenance charges and the working cost, taking the working cost to be the same as it was at present, modified only by the diminution resulting from amalgamation. With this estimate the right hon. Member for London did not deal. Instead of dealing with the minimum estimate as to returns, he entered into a computation with a view to show that the number of messages in 1867, which Mr. Scudamore deduced from the total number of 1866, with the average increase added, was not so large as Mr. Scudamore estimated the number to be. He knew he (Sir John Gray) was treading on dangerous ground when he ventured to dispute the calculations of so great a master of figures as the right hon. Member for the City of London; yet he must, with all deference, dispute the soundness of the basis of his calculations and with them the result arrived at. The right hon. Gentleman stated that he tested Mr. Scudamore's figures by taking the total earnings and dividing the total sum by 2s., which he took as the mean cost of the messages. He (Sir John Gray) ventured to think that this was a most fallacious mode of arriving at the gross number of messages. The evidence showed that of every 100 messages sent fifty-five were charged at 1s., thirty were charged at 1s. 6d.—thus showing that 85 per cent of the whole number were under 1s. 6d., and only 15 per cent at 2s. or more; yet the right hon. Gentleman, in order to refute figures that had no essential bearing on the question, took 2s. as the main cost of each mileage, though only fifteen of the 100 reached 2s. The right hon. Gentleman had also made an error of some importance as to the cost of working. Mr. Scudamore took the cost of working at its present cost as a basis. The right hon. Gentleman argued that Mr. Scudamore's deductions as to the cost of working must be in error, because he found that the cost of working in Belgium was £5 10s. per mile of line, in France, £5 per mile; and that would be for the Irish and British lines about £53,000 more than Mr. Scudamore said would be the cost of the working if the system were combined with the Post Office. The fallacy lay in this—The French lines are worked as a distinct Department and are not connected with the Post Office. The proposed system would connect the Post Office and the telegraph under one roof, in one office, and divide the cost of office and service equitably between them, causing a saving to both. As to the idea of giving the Post Office a monopoly, he (Sir John Gray) was opposed to that idea, for it would stop progress, stop improvement, and induce the monopolists to be content with matters as they found them. The joint-stock companies could not be induced to adopt the most improved instruments of Professor Wheatstone, because they had a practical monopoly. That distinguished elec- trician had invented a transmitter which would send from seventy to 100 words a minute, without possibility of error; yet, though several years invented, it was only recently tried. The right hon. Gentleman referred to a case in which 4,000 was inserted in by error for 400, and the error led to the ruin of a respectable house. That could not occur with the Wheat-stone transmitter; and he (Sir John Gray) being anxious that the Government should be in a position to be bound to test all improvements and adopt them if real improvements, objected to giving them a monopoly.

MR. PHILIPS

objected to the Post Office having to work the telegraphs of the country. The Postal Department was well conducted; but that was no reason why it should undertake duties that it did not understand, and which did not belong to it. Who were the parties that chiefly used the telegraph?—merchants, lawyers, and betting men, and they were well enough able to pay for their messages. The rate of messages might be reduced to 1s., or 6d., or even 3d.; but if any deficiency arose, the English taxpayer must make it good. As a merchant he objected to any such favour from the taxpayers, and he objected to its being done for the benefit of lawyers and betting men. Then, again, Irish railways were very likely to be dealt with on the same system, and he, for one, must object to these great industries being placed under the surveillance of the Government. He hoped at the next Election the whole of this important question would be impartially and seriously considered by the different constituencies. He was decidedly opposed to the Bill.

MR. ALDERMAN LUSK

wished to know if the right hon. Gentleman the Chancellor of the Exchequer had taken into account the depreciation in the value of the plant which he was about to purchase? He had seen, while travelling on a railway a few days ago, a number of telegraphic posts in a partially rotten state, and he had been informed that they would want renewing along the whole length of the line in two or three years. New machines were constantly being invented, and would be frequently required. Another point which should not be forgotten was that the Committee had sat only nine days, their Report filled 250 pages, 110 of which were taken up by the evidence of Mr. Scudamore, and therefore it was likely that the evidence would be one-sided. The reputation which the Government had acquired as shipbuilders was not encouraging, when it was proposed to give them the management of a great commercial undertaking. He warned the Government against entering into competition in business with the public; they would never succeed unless they had a monopoly, and he urged further discussion before the Bill was passed. Already the compensation had increased from £4,000,000 to £6,000,000, and probably the next sum named would be £8,000,000.

Bill considered in Committee.

(In the Committee.)

Clauses 1 to 3, inclusive, agreed to.

Clause 4 (Power for Postmaster General to purchase Telegraphs).

MR. CHILDERS moved to amend the clause by inserting the words— That the price to be given for each undertaking shall be decided by arbitration in the manner hereinafter to be provided, in lieu of the words beginning in line 40 to the end of the clause. This alteration would bring the Bill back to the form in which it stood before it went to the Selec Committee. He had been referred to before the Committee as having carried through a similar Bill in another country; and therefore no one would suspect him of being opposed to the principle of the Bill. He did not think that either the right hon. Gentleman the Chancellor of the Exchequer or Mr. Scudamore had in any degree exaggerated the prospects of the increase likely to arise in the use of the telegraph. On the contrary, while they had placed the number of messages likely to be sent out at 6,000,000, with an annual increase of 10 per cent, he estimated the number at 12,000,000 per annum, the proportion of messages sent to the population in the colonies, where this system was in force, being one message to every two and a half inhabitants. While giving the Bill his best support, however, he objected to the unusual proposal it contained, that the terms upon which the purchase of private property was to be made were to be settled between the Government and those whose property was to be purchased. What was the state of things before the Bill went into Committee? The right hon. Gentleman, as the promoter of the Bill, was opposed by the telegraph companies, who alleged that the Bill was one most injurious to the public interest. Each side was represented by counsel, and so long as there were two opposing parties concerned it was probable that matters would be fairly adjusted; but as soon as an arrangement was come to the opposition was entirely withdrawn, and the opponents of the Bill, having received money to support it, discovered that, instead of being opposed to the interests of the public, it was an admirable Bill. His hon. and learned Friend the Member for York (Mr. Leeman) was opposed to the principle of the Bill; but on the question of price, there was no one on the Committee to examine witnesses and endeavour to bring out facts but his right hon. Friend the Member for the City (Mr. Goschen). There really was no evidence that twenty years' purchase was a fair price, and the mode in which the price had been fixed in this case would be a bad precedent. The Government should not have fixed upon any number of years' purchase; but should have inserted in the Bill the usual compensation clause, and allowed the price to be fixed as it was in all analogous cases. He should therefore propose to introduce the common clause relating to arbitration and referring to the Consolidation Acts under which the arbitration would be made. As to the allegation that in this Bill the precedent of the Railway Act of 1844 was followed, he must say that in the case of that Act it was perfectly right to fix the number of years' purchase at which the railways which might be brought under its operation were to be purchased, because that Act passed before the Acts incorporating the companies to which, it referred. That Act had only a prospective operation, and the Legislature was justified in saying that if railways, which were not at that time in existence, should under certain circumstances have certain advantages, they should also be subjected to certain disabilities; but this Bill was retrospective in its effect, and in the case of the purchase of an existing property the invariable custom had been not to fix the number of years' purchase, but to leave that to the arbitrator. There was nothing in the evidence to support the principle of a twenty years' purchase. He moved that all the words after "successors" in the clause should be omitted, in order to insert "and the price to be given for such undertaking and property shall be decided by arbitration."

THE CHANCELLOR OF THE EXCHEQUER

, said, he hoped the Committee would not accept the Amendment of his hon. Friend (Mr. Childers), but would take the Bill as it had come from the Committee. He thought his hon. Friend was mistaken as to the provisions of the Land Clauses Act. Under that Act the parties were, in the first instance, to endeavour to agree upon a rate of price. It was on their failure to so agree the aid of arbitration to fix the rate was invoked. In this case the parties had come to an agreement; so that the Government had adopted the first alternative in the Land Clauses Act, and they came to Parliament and stated what the agreement was. He thought that on the second reading he stated to the House that the Government had offered terms, and even mentioned what those terms were. No one then objected or stated that in having offered terms the Government had acted improperly. Now, as regarded what had been said about the extravagance of the price, he hoped the Committee would bear in mind that the transaction was one in the nature of a compulsory purchase. The Government had always regarded it in that light. It was quite clear that the parties with whom they had to deal were commercial companies which had been struggling during the earlier stages of their existence, but had arrived at the position of making a considerable profit of the undertakings. Now, if the Government went to arbitration on the question of the rate of purchase there could be no doubt that under such circumstances the companies would get liberal terms. He had never asserted that the terms which the Government had agreed to were not liberal. What he had asserted was that they were not too liberal. He doubted very much whether, if his hon. Friend succeeded in his Amendment, the companies would not get better terms. He was not prepared to give the figures, because, if he did so, he might prejudice the case of the Government in the arbitration on other points; but he had gone into calculations which induced him to believe that, in the interests of the public, it was better to pay twenty years' purchase than go to arbitration on the question of the rate. As to the comparison that had been made between the price in this case and that provided in the case of the railways by the Act of 1844, the Committee would remember that under the provisions of that Act the Government were enabled at the expiration of twenty-one years after the completion of a line of railway to take it into their own hands. But this provision only applied to railways constructed after the passing of the Act of 1844 and, consequently, the parties who made those lines did so knowing that they were liable to have that Act put in operation as against them. Those parties had therefore no right to complain; but there was no such Act as that of 1844 applying to telegraphs. The persons who constructed railways after that Act knew that the undertakings might be taken up by the Government, and yet they were to have twenty-five years' purchase on a three years' average. Again, as to competition, there was nothing in the Act of 1844 to prevent the railways from being subjected to competition; nor was there anything in any Act referring to railways of which he was aware which laid down that the Government must not compete in railways. It was said that the Postmaster General might obtain an Act to enable him to transmit telegraph messages, and otherwise to carry on the business of a telegraph company without purchasing the interests of the existing companies. No doubt he might; but would not the whole House come down and resist such a proposal did any Government venture to make it? Let him take the price of the shares in those companies. At the time when this bargain was made the price of the shares of the principal company was he thought, £172 10s. He believed that was on the 25th of May, though he was not quite sure. Now, he did not think the arbitrator would give less than the price of the shares in the market, and certainly he would add something on account of the purchase being a compulsory one. The compensation would be twenty years' purchase of the net profits of the companies, and the question as to what the net profits amounted to would be decided by the arbitrators, who would, of course, take into consideration the depreciable nature of the property and the sum laid by for repairs. Mention had been made of the immediate rise in the price of the shares as soon as the negotiations had assumed a definite shape. But the certainty attaching to a Government offer almost amounting to a Government guarantee, coupled with the establishment by a Parliamentary Committee of the soundness of the various undertakings it was proposed to purchase, would naturally cause an immediate and no inconsiderable rise in the price of shares. A great deal had been said as to the extraordinary nature of the agreement between the Government and the telegraph companies; and the hon. and learned Member for York (Mr. Leeman) said they would have to dip their hands into the Consolidated Fund if this Bill should be carried out; but to show how ill-founded these fears were he read a letter from a very eminent firm of capitalists in the City, dated the 21st of July, as follows:— I beg to inform you that we shall be glad to guarantee to the Post Office a yearly income of 4 per cent on the capital proposed to be raised under the provisions of the Bill now before Parliament, for the purpose of purchasing the property of the different telegraphic companies, on the understanding that we are to receive the net income from the telegraphs for fifteen years. We are ready to deposit with the Bank of England such guarantee as may be necessary. He hoped this offer of 4 per cent would tend to allay any apprehensions existing in the minds of hon. Members. He did not wish to detain the Committee any longer, although it had been said by the hon. Member for Bodmin (Mr. Leveson-Gower) that his speeches upon this matter were too short. That was not a common complaint in the House of Commons, and he thought he might venture now and then to indulge in brevity, if only for the sake of example.

Amendment negatived.

Clause agreed to.

In reply to an hon. MEMBER,

THE CHANCELLOR OF THE EXCHEQUER

explained that the Government had agreed to grant liberal compensation to those officers of the telegraph companies who were not re-employed by the Post Office.

Clauses 5 to 14, inclusive, agreed to.

Clause 15 (Postmaster General to make Regulations for Conduct of Business, and to fix Charges).

MR. AYRTON

objected to the clause, on the ground that it was really not appropriate to the present Bill, but properly belonged to the Money Bill which was to be introduced next Session. Besides, at present messages were forwarded from one part of the metropolis to another for 6d., and if this clause passed in its present form it would be tantamount to charging the people of the metropolis for the benefit of the rest of the country. He moved that at the end of the first paragraph the fol- lowing words be inserted:—"Except for the transmission of messages within the limits of the metropolis." This would allow the rate of charge for the metropolis to be in the hands of the Postmaster General, and he hoped that official would keep the price as it was at present—namely, at 6d.

THE CHANCELLOR OF THE EXCHEQUER

said, although the messages from one part of the metropolis to the other were only charged at the rate of 6d., yet; in most cases the companies charged porterage, and the price was thus brought up to 1s. Now under the Post Office system no porterage would be charged, therefore the people of the metropolis would be in no worse position than they were at present. The hon. and learned Member forgot that if they left out this part of the Bill they would leave out the consideration to the public. The Select Committee had considered the matter, and their decision might be taken.

MR. ALDERMAN LUSK

said, that messages were carried from one part of the metropolis to another for 6d.

MR. NORWOOD

observed that the only company he found to carry them at that rate was the Electric and International.

MR. AYRTON

said, as the clause stood the Postmaster General could not make an exceptional rate for the metropolis. He wished to have power given to the Postmaster General to do so.

THE CHANCELLOR OF THE EXCHEQUER

said, that there was no compulsion on the Postmaster General in respect of, the price to be charged, further than that 1s. was to be the maximum. The Post Office attached great importance to uniformity of charge. He was aware that the nominal price for the transmission of' messages from one part of the metropolis to another was at present 6d., but porterage brought the price up to 1s. in most cases. It was desirable that no change should be made which would alter the financial bearing of the Bill.

MR. HARVEY LEWIS

objected to an increase of 100 per cent being put on the charge for local messages in the metropolis.

MR. LABOUCHERE

complained that the metropolis, like the Jews in the Middle Ages, was looked upon on all occasions as a fair object of plunder. He protested against its being taxed for the benefit of Scotchmen and Irishmen. There was no doubt that under the clause metropolitan messages might be charged 1s., and he objected to such a system being introduced. He desired to forward his messages for 6d., as he was able to do at present. He hoped his hon. and learned Friend would divide upon his Amendment.

MR. KARSLAKE

hoped that hon. Gentlemen would bear in mind that 1s. was to be the maximum price.

SIR COLMAN O'LOGHLEN

called attention to the fact that the metropolis was not the only place where a message could be forwarded for 6d., because you could send a telegram from Dublin to Bray, or Dublin to Kingstown, for 6d., and he should not like to see that charge increased.

MR. LEVESON-GOWER

said, he was anxious that telegraphic communication should be made cheap to the entire country; but he did not think it would be fair to raise the price paid for the transmission of messages in the metropolis.

MR. TURNER

believed that the 6d. rate in the metropolis was charged in very few instances compared with the 1s. rate. Uniformity of rate was so essential to the success of a measure of that kind that he hoped the Amendment would not be pressed. If, however, it was pressed, he must vote against it. The benefit which the tradesmen as well as the merchants of London would derive from that Bill would be very great indeed; and he did not think the metropolis would lose anything by it.

MR. CANDLISH

said, he thought the right hon. Gentleman would do well to consider the question of a reduction of rate for short distances as applicable to towns.

THE CHANCELLOR OF THE EXCHEQUER

said, he held in his hand the rates of porterage charged by the Electric and International Telegraph Company for the delivery of messages. Those rates were as follows:—Under half a mile, no charge; over half a mile and under one mile, 6d., and by express messenger, 1s.; over one mile and under two miles, 1s., and by express messenger, 2s.; over two and under three miles by messenger on foot, 1s. 6d., and by express messenger 3s. Under that Bill the people of London would in all cases get their messages porterage free. He could not consent to depart from the principle of uniformity of rate.

MR. WATKIN

said, he thought that the principle of the reduced rate ought to be applied to all those large towns in which it was at present adopted.

MR. AYRTON

said, he was willing to have the scope of his Amendment extended so as to embrace all other places besides the metropolis, which now enjoyed the advantage of the 6d. rate.

MR. CHILDERS

said, he could not concur in the objections urged to the uniform rate by the hon. and learned Member for the Tower Hamlets. Still he confessed he was one of those who believed they would ultimately come to a uniform 6d. rate, though at first it might be expedient to charge 1s. The argument now was precisely the same as that used against Mr. Rowland Hill's Post Office Reform.

MR. E. POTTER

appealed to the right hon. Gentleman the Chancellor of the Exchequer to consent to a reduction of the rate to 6d., which would at once settle the question of uniformity.

THE CHANCELLOR OF THE EXCHEQUER

said, he was a great believer in the 6d. rate, and so also was Mr. Scudamore, who might be said to be the author of the Bill. He (the Chancellor of the Exchequer) thought that they must ultimately come to it; but that it would not be prudent to begin with so great a reduction. They ought to afford themselves an opportunity of seeing their way in that matter, and they ought not to make too great and sudden a jump.

Amendment negatived.

Amendment proposed, in page 13, line 27, after the words "part of five words," to insert the words— Provided always, That for messages sent and delivered within the limits of all corporate towns and nil cities having a population of more than thirty thousand, the rate for the first twenty words shall not exceed six pence."—(Mr. Watkin.)

MR. BAZLEY

said, he saw no just ground for making a distinction in this matter between persons living in a town or city above 30,000 inhabitants, and those residing in a city or town with a population below that number. He cautioned the Committee against establishing any such system of discrimination.

COLONEL SYKES

feared that a 6d. tariff would result in a burden being imposed on the Consolidated Fund.

MR. MONSELL

recommended the immediate adoption of a 6d. charge, the examples of France and Switzerland having shown that a reduced price led to a great increase in the number of messages.

Question put, "That those words be there inserted."

The Committee divided:—Ayes 25; Noes 68: Majority 43.

Clause ordered to stand part of the Bill.

Clauses 16 to 21, inclusive, agreed to.

Clause 22 (Postmaster General to pay Rates, & c).

COLONEL BARTTELOT

said, it was proverbial that both railway companies and electric telegraph companies had either never been assessed, or the assessment had not been carried out and was still pending. He wanted to know whether it was the intention of his right hon. Friend to leave things as they were or to have the property assessed, though such assessment had not been made up to the present.

THE CHANCELLOR OF THE EXCHEQUER

said, that it was intended to have the property pay the rates on assessment as Government property.

MR. HENLEY

pointed out that the clause would require amendment, otherwise this property would enjoy a permanent exemption.

THE CHANCELLOR OF THE EXCHEQUER

said, he would look to it.

MR. BAZLEY moved to leave out in line 6 the words "the passing of this Act," and insert "such purchase or acquisition."

Clause, as amended, agreed to.

Clause 23 agreed to.

Clause 24 (Providing for Payment of Costs to Railway and Telegraph Companies if Objects of Act not carried out).

MR. AYRTON

asked how contracts entered into by the telegraph companies would be enforced against them when the telegraphs were vested in the Crown?

THE CHANCELLOR OF THE EXCHEQUER

said, he would consult the Attorney General on the subject before the next stage of the Bill.

MR. AYRTON

said, that a similar question had arisen when the Government undertook to grant annuities. The proper course would be to have the Postmaster General liable to be sued as a subject in any place where the contract had been made or damage had arisen in violation of the contract.

Clause agreed to.

Schedule and Preamble agreed to.

House resumed.

Bill reported; as amended, to be considered To-morrow.