HC Deb 05 August 1869 vol 198 cc1324-34


(Mr. Dodson, Mr. Stansfeld, Mr. Chancellor of the Exchequer.)

Order for the Second Reading, read.


in moving that the Bill be now read a second time, said, that as he understood the Bill was about to be opposed by the hon. Member for Gloucester (Mr. Monk) he would shortly remind the House of the history of the negotiations that had taken place. These negotiations began in 1865, when four of the Canadian Ministers came to this country to discuss with the Government of the day various questions connected with the confederation of the North American Provinces, among which came up this question with regard to the transfer of Rupert's Land to the Dominion of Canada. The Canadian Ministers said they were willing to treat for the transfer on the ground of an indemnity to be paid to the Hudson's Bay Company, provided that the loan to be raised for this purpose should be covered by an Imperial guarantee. This was agreed to by the Government of the day, and his right hon. Friend the present Secretary for "War, who was then Secretary for the Colonies, wrote a letter to the Governor General of Canada, in which he distinctly promised that if negotiations were entered upon for the transfer of Rupert's Land from the Hudson's Bay Company, and if those negotiations should be successful and a loan were required to be raised under the sanction of an Imperial guarantee, the Government would then apply to the Imperial Parliament to grant the required guarantee. This was in June, 1865. The next step took place in March of the present year, when Sir Frederick Rogers by direction of Earl Granville wrote to the Canadian Ministers, Sir George Cartier and Mr. M'Dougall, who had come over to this country as Canadian delegates to negotiate for the transfer, that if the negotiations were successful the Government would, on their part, be prepared to fulfil the expectations held out in Mr. Cardwell's despatch of the 17th of June, 1865, and would propose that the Imperial Parliament should guarantee a loan of £300,000 for the purpose of completing the transfer. There were two Acts of Parliament passed having reference to this matter, to which he must now refer. The one was the Act passed in 1867, and which was known as the Confederation Act. The other was an Act which was passed through both Houses without discussion last year, to enable the Hudson's Bay Company to transfer Rupert's Land to the Dominion of Canada. The third section of that Act had attracted the attention of his hon. Friend (Mr. Monk), and it was that on which he understood his hon. Friend mainly based his opposition to the second reading of the Bill. By that section the Government were empowered to negotiate with the Hudson's Bay Company the terms upon which the latter should surrender their rights and territories to the Dominion of Canada; and it was provided that those terms should not be accepted until they had been embodied in a deed of the company, and in an Address to the Crown from both Houses of the Legislature in the Dominion; and there was also a proviso that those terms of agreement should impose no charge on the Consolidated Fund. The question raised the other night was whether the effect of that section was not to estop and prohibit the Government from proposing to guarantee a loan that Canada was seeking to obtain in order to enable her to carry out the terms of the agreement with the Hudson's Bay Company, and to estop and prohibit Parliament— if one Parliament could estop and prohibit any other Parliament— from assenting to such a guarantee being given. He need scarcely say that such could not have been the intention of the parties concerned. At the time that the Act was passed negotiations were being conducted upon the understanding that the Government for the time being would propose to that House that such a guarantee should be given. The true meaning of the proviso was merely that Parliament should preserve its liberty of action in the matter. The intention was nothing more than this—that in the deed which embodied the terms of the surrender of the Hudson's Bay Company, and in the Address to the Crown from the two Houses of the Dominion which embodied the acceptance, there should be nothing which in any way decided the question of a guarantee; that it should be left free to the Government to propose and to the House to agree or not to agree to the guarantee as they might think proper. In accordance with that stipulation in the Act of last year neither the draft deed of surrender, nor the Canadian Address contained any allusion to an Imperial guarantee. He made this proposal to the House not as one of the terms which had been agreed on in those documents, but to carry out the old arrangement; even if the House were to think it expedient to reject this proposition of the Government, still it could not be denied that the Government were adhering to their old pledges and those of their predecessors, and that was his justification for making the proposition confidently to the House.

Motion made, and Question proposed, "That the Bill be now read a second time."—(Mr. Stansfield.)


rose to move that the Bill be read a second time upon this day month. He regretted that the question was brought forward at this late period of the Session, and he must protest against the preliminary stages of measures of this importance being brought on—as had been the case with this Bill —at three o'clock in the morning or during the quarter-of-an-hour before six on a Wednesday afternoon, when it was impossible that they could be discussed. Under these circumstances, he did not think it necessary to apologize for taking the earliest opportunity that had offered itself of calling the attention of the House to this subject and of informing the British tax-payer of the nature of the additional financial burden which it was proposed by means of this measure to lay upon his shoulders. The sole ground upon which the right hon. Gentleman based this measure was, that in June 1865, a promise had been given by the Imperial Government to the Government of Canada that, in the event of the latter acquiring Rupert's Land by purchase from the Hudson's Bay Company, the former would propose to Parliament to guarantee a loan to enable that purchase to be carried into effect. He had two objections to offer to the Bill now before the House. In the first place, he objected altogether to the principle of guaranteeing loans to the colonies; and in the second place, he objected to this particular guarantee, which he believed to be opposed not only to the letter, but to the spirit, of the Rupert's Land Act of 1868. In objecting to the principle of guaranteeing loans to colonies, he claimed the support of the present Prime Minister and the Chancellor of the Exchequer, both of whom, at the time when the proposed loan for the Inter colonial Railway of Canada was before the House, had expressed strong objections to loans of that character. The Prime Minister said the general system of colonial guarantees had come into just discredit within the walls of Parliament, and that it was only in cases of the highest urgency that they should be granted. The Chancellor of the Exchequer went even further upon that occasion, and urged upon the House, if they were determined to grant the loan, to make, at least some stringent provisions that the money should not be spent for other purposes—that it should not stick to the fingers of those who had to handle it. These were truly prophetic words. He wondered whether the Government was now satisfied, or whether the Law Officers of- the Crown were satisfied with the temporary use made of that loan advanced for the Inter colonial Railway. His second objection was based on the words of the Rupert's Land Act, 31 & 32 Vict. c. 105. At the end of the third section there were these words— Provided, further, that no charge shall be imposed by such Terms upon the Consolidated Fund of the United Kingdom. These words were plain enough: yet, in the face of that proviso, it was now proposed to impose a charge on the Consolidated Fund for the purpose of making good the purchase of Rupert's Land. The negotiations which led to the purchase had been entered into in the present year, but he contended that the words in the Act of last Session ought to have prevented Her Majesty's Government from entering into such an arrangement as that to which this Bill was intended to give effect. He granted that the Government had only gone the length of making a promise, the fulfilment of which was subject to the pleasure of Parliament; but the promise so made must be fulfilled in spite of the words of the Act of last Session. It might be said that Parliament was at liberty to undo this year what it had done last, but he did not think that was a course which his right hon. Friend at the head of the Government would recommend. He hoped the House would have some further explanation of the matter. He begged to move, as an Amendment, that the Bill be read a second time upon that day month.


in seconding the Amendment said, what he desired was that the House should have some general statement from the right hon. Gentleman at the head of the Government, as to the principle on which the Government intended to act in respect of colonial grants. He believed that his hon. Friend the Member for Gloucester (Mr. Monk) did not mean to press his Amendment to a division if there was a clear and satisfactory understanding as to the policy which should guide the Government in future.

Amendment proposed, to leave out the word "now," and at the end of the Question to add the words ''upon this day month."—(Mr. Monk.)


said, he had heard the speeches of his hon. Friend the Member for Gloucester (Mr. Monk), and his hon. Friend the Member for Chelsea (Sir Charles Dilke) with great satisfaction. He thought it obvious that they might put out of their minds the question raised a short time ago with regard to the intermediate transactions under the Railway Loan Act. The only use they could make of it was to take care that in this Bill the provisions with regard to the appropriation were sufficient. The subject was only relevant to that extent. His hon. Friend the Member for Gloucester need not have been afraid that any complaint would be raised against him by the Government; but on behalf of the Government he had to say that they had introduced this Bill first, on the ground of faith, and, secondly, on the ground of policy. The ground of faith was sufficient to justify the Government in recommending the arrangement to the House; but he was far from saying that because the Government were bound in the matter, Parliament was bound in it also. He did not say that because the Executive Government had entered into an arrangement of this kind, Parliament ought, therefore, to sanction it. When the Government of this country entered into any arrangements of this nature, everyone knew that Parliament was supreme. All the Government could do was to undertake to make a representation to Parliament. It could not bind Parliament; but, at the same time, Parliament had always felt it was not desirable to needlessly call in question any discretion exercised by the Executive Government. Parliament had not been in the habit of calling in question the discretion of Government as to such matters, unless it appeared that there had been an absence of reason in the exercise of that discretion. Thinking now as he thought in 1865, he thought that the engagements entered into by the Government with Canada at that time were amply justified by reason and prudence. He did not recede from the expressions which had been referred to by his hon. Friend the Member for Gloucester. He was ready to repeat them. Before 1865 the practice had been growing up of giving guarantees to the colonies for local and secondary objects. He contended that such guarantees ought not to be given except for objects of broad Imperial policy; but the purposes in regard to which the Government of Lord Palmerston, of which he and his right hon. Friend (Mr. Cardwell) were Membest, entered into the engagement with Canada were, in the highest and strictest sense, Imperial purposes. No one knew better than his hon. Friend the Member for Gloucester that in former times the North American colonies were entangled in a vicious system of dependence on this country. The Government wished to engender in them a spirit of independence in financial matters. They wished to wind up the old system and see the North American colonies make a new start in colonial life; but we could not have extricated ourselves from the vicious system to which he had referred without paying for it. Neither in public nor in private life could one escape the consequences of former errors without some cost. To put an end to the old system once and for all, the Government made arrangements with Canada which bound them to ask Parliament to assist the North American Provinces with the Imperial credit for purposes well known to the House. That was not to be a beginning, but an end. The House would remember the great transition through which our loyal fellow-subjects in Canada were passing at the time. The proposal of the Government was based on grounds the sufficiency of which he hoped his hon. Friend who had moved the Amendment might be disposed to recognize. The Government were aware of their responsibility in the matter, but it was one which they felt themselves perfectly justified in assuming.


said, he objected to the Bill for two reasons. The first was that he believed it to be in contravention of the third section of the Rupert's Land Act, which had been read to the House. From a despatch, dated June 17, 1865, and sent by the present Secretary for War (Mr. Cardwell), who was then Colonial Secretary, to Viscount Monck, it appeared that, at a conference between four representatives of the Canadian Government and as many Members of our Government, the Canadian Ministers undertook to negotiate with the Hudson's Bay Company for the termination of their rights, on the condition that the indemnity, if any, should be paid by a loan to be raised by Canada under an Imperial guarantee—a proposal which was assented to on the part of the Crown; and, therefore, independently of the Rupert's Land Act, the Canadian Government had an assurance that the Government of Lord Palmerston would apply to Parliament to sanction a guarantee. In 1868 came the Rupert's Land Act, which empowered Her Majesty to receive the territory of the company, and hand it over to Canada, upon an Address from both Houses of the Canadian Legislature; and the Act contained words which secured us against any arrangement which could impose a burden upon the tax-payers of this country. The Act forbade such an arrangement, but the arrangement was made without it; and the Address of the Canadian Legislature expressed satisfaction that, in fulfilment of the expectation held out in the despatch of Mr. Cardwell, the English Government would be prepared to propose to Parliament an Imperial guarantee for the loan of £300,000 to be paid to the Company. It was perfectly clear that the letter of the Act was complied with, and its spirit departed from on a most vital point. It was clear the Canadian Government made the arrangement on the faith of the English proposing the guarantee; but if this guarantee were to be given, what confidence could be placed in the words of an Act of Parliament? The Act said an arrangement might be made to effect a certain object provided no charge was placed on the Consolidated Fund; and if such a charge were to be placed upon it Acts of Parliament would afford no security in the future. Some months ago a Gentleman, not now in the House, pointed out the clause, and said it was perfectly impossible that the guarantee could be given, and that was the impression it produced on all whose attention was called to it. The effect of it was to throw off their guard those who were opposed to guarantees, to prevent them from asking for Papers, and to deter them from calling attention to the subject. For these reasons he would support the hon. Member for Gloucester (Mr. Monk) if he went to a division. There were other reasons which should induce the House to refuse the guarantee. If the territory ceded to Canada were really valuable, as it was represented to be, why should any charge be thrown upon us, and why should not the Canadian Government undertake the liability which the arrangement involved?


said, that having been a party to the arrangements of 1865, he felt bound to say a few words upon the subject. He shared to the utmost extent all the objections which were raised against colonial guarantees in general; but the question now was whether the arrangement of 1865, entered into for the purpose of bringing about a more wholesome state of things between us and our North American Provinces, was or was not an arrangement which the House would feel it expedient to ratify. In 1865 an intimation was received of that which had now become a reality—namely, the intention to form the Provinces of British North America into one great Confederation. This arrangement was made between four Canadian Ministers and those who represented the Government of that day, and the Report of it was then laid before Parliament, and the project of confederation was afterwards brought before Parliament by the Government of which Lord Carnarvon was Colonial Secretary in 1867. Parliament passed the Confederation Act, knowing the terms on which the Canadian Government had arranged to acquire the company's territory. Just before Parliament was dissolved, in 1868, the Rupert's Land Act was passed to supply a defect in the Confederation Act, which did not enable Her Majesty, without further statutory powers, to accept the surrender of the rights of the company and transfer them to Canada. He was cognizant of the proviso in the third clause when the Act was passing through Parliament, and he understood it was inserted with a purpose different from that suggested by the hon. Member who had just spoken. It was framed, as he understood, for the purpose of preventing anything being done under that Act which should commit Parliament. Having been most careful to carry out all that was involved in his own despatch, the Government felt that nothing ought to be done which could by implication fetter the freedom and discretion of Parliament. He be- lieved that to have been the simple meaning of the clause; and he was fortified in that belief by other considerations. It was not in the power of Parliament to say that a future Parliament should be less free to do anything than their predecessors were. He held this to be the true and necessary construction of the proviso in the 3rd clause, and he did not think that anything of importance turned upon it. Coming back to the question of policy, he held that this arrangement, which was contemplated in 1865, and which the House was now asked to ratify, was an arrangement, not exclusively for the benefit and advantage of Canada, but was one which was largely beneficial to this country. We suffered from the inconvenience and disadvantage of exercising rights of sovereignty over one of the most inaccessible regions of the earth—the Hudson's Bay Territory. Continual embarrassment arose on account of the traversing of that extensive region by bodies of Indians, who entered from time to time the neighbouring American State of Minnesota; no settled Government was established there; and when he was Colonial Secretary there was a continual demand for creating the Hudson's Bay Territory into a Crown colony. A more undesirable proceeding on the part of the British Government there could not possibly be, for they had no advantage to expect from such an arrangement, which must necessarily have been attended with expense and risk; and, therefore, he was most happy to be a party to an arrangement by which—the sovereignty of this region remaining with the Crown—the rights which the Sovereign exercised were transferred to the Colonial Government. In return, all that we did was to give a guarantee for a loan of £300,000, and when the House went into Committee it would be seen that adequate security was taken in the Bill. He therefore recommended this measure to the House, not merely on the ground that the Government had pledged its faith in respect of the guarantee, for such a pledge would not bind Parliament—but on the ground of policy. As to pledges given by Government, he ventured to think that whenever Parliament thought the Government well advised in thus acting, it was good policy not to discredit the Crown and enfeeble the hands of the Executive Government by refusing to assent to that pledge. He did not put the case any higher with regard to the pledged faith of the Government, but he rested his support of this measure chiefly on the ground of policy. Canada had interests in this territory not possessed by our- selves, and in inducing her to undertake this duty, and thus relieving ourselves from a charge which in some form or other would have come upon us, he believed we had made an arrangement which was advantageous to the mother country—an arrangement cheaply purchased by the guarantee of a loan for so small a sum as £300,000.


said, that these guarantees were decidedly injurious to our financial comfort, and we had ten or a dozen of them at this moment. Among the rest were the Greek Loan, the Sardinian Loan, the Russian-Dutch Loan, and several others, of which the tax-payers of this country were paying the interest, and of which they would have to pay the principal in the end. It was highly impolitic and injurious to the interests of the country that we should embark in these guarantees at all. The Prime Minister of the country had stated that the faith of the country was pledged to it; but the right hon. Gentleman who had just sat down modified that by saying that it did not bind a future Parliament. No doubt, technically, it did not bind a future Parliament; but any such pledge given to a foreign Government, or to one of our colonies, was morally binding; and, therefore, reluctant as he was to give his consent to any further guarantees, still, in this case, he thought we could not help ourselves, and he felt bound to give his consent to the guarantee.

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

The House divided:—Ayes 65; Noes 10: Majority 55.

Main Question put, and agreed to.

Bill read a second time, and committed for To-morrow.