MOTION FOR A SELECT COMMITTEE.

HC Deb 12 March 1869 vol 194 cc1281-308

MR. SEELY

said, he rose to move for a Select Committee to inquire into certain contracts entered into by the Postmaster General with Messrs Cunard and Mr. William Inman for the conveyance of mails to the United States. On the 20th of March, last year, on a Resolution moved by the hon. Member for Montrose (Mr. Baxter), a debate occurred on the subject of postal contracts, when the practice of giving fixed subsidies to special lines of steamers was condemned by almost every person who spoke on that occasion. It was likewise contended that in the several contracts which might be entered into all the companies should be placed on the same footing as to terms of payment and conditions of service. The right hon. Gentleman (Mr. Hunt), who was then Chancellor of the Exchequer, said— He did not think there was any real difference of opinion between the Government and the hon. Member who brought forward the Motion."—[3 Hansard, cxc. 2017.] His right hon. Friend the President of the Board of Trade closed the debate, and recommended the hon. Member for Montrose (Mr. Baxter) to withdraw his Motion, and he did so. But anyone who would examine the contracts to which he was now calling attention would see that those two principles of no fixed subsidy and of equality of condition between the several contractors had not been complied with. On the 25th of June, last year, the hon. Member for Hampshire (Mr. Sclater-Booth), who was then Financial Secretary to the Treasury, in answer to the hon. Member for Montrose, said that— It was the intention of the Government in making new contracts for the conveyance of the mails to place all the companies on the same footing as to terms of payment and conditions of service."—[3 Hansard, cxcii. 2132.] But, instead of equality, it was found now that Messrs. Cunard were to receive a fixed subsidy of £70,000 a year for two services a week, and Mr. Inman £35,000 for one weekly service, while the North German Lloyd were to have no fixed subsidy, but only the sea postage, so that what they should receive was to depend on the number of letters they carried. Then Messrs. Cunard were not tied to perform the passage in any given time, nor was Mr. Inman, but the North German Lloyd Company, which had no subsidy, were bound to a particular time, under a heavy penalty if they did not keep it. Again, Messrs. Cunard wore to have a contract for eight years, if the House ratified it, and Mr. Inman for eight years also, while the North German Lloyd Company could be sure of their contract only for six months, when the Post Office might put an end to it, and he understood that the Treasury had written to the Post Office, recommending that it be put an end to. On the 20th of March, 1868, the right hon. Gentleman, who was then Chancellor of the Exchequer, said, that— According to the calculation of the Post Office the sum eventually agreed to be given exceeded by only £1,500 the spa postage they were likely to earn."—[3 Hansard, cxc. 2018.] It was now admitted, however, by the Post Office that the loss was £22,500. But if the Committee which he moved; for was granted, he would undertake to show that the loss, taking the sea postage only into account, would be much more like £40,000. The condition in former contracts that there should be a sorting-room on board the steamers had not been enforced in this case. It might be urged by the right hon. Gentleman opposite that the Government did the best they could, and that they had no option but to take the offers made to them. Now, he contended that there were other lines of steamers which would have been able to perform that service; but that was a question which was, perhaps, better fitted for discussion in a Committee. At the same time, he might mention that there were the two Glasgow Companies' steamers, the Hamburg steamers, the North German Lloyd's, and other Companies, with some of which he did not believe there would be any difficulty in arranging for the service to the United States—he believed that the Hamburg Company would have I given them a Saturday service if required—and the Post Office could compel Messrs. Cunard to have taken ship let- ters at 1d. each, and there were penalties for delay. He was aware that it would be urged that it was necessary that the vessels should call at Queenstown, but the Hamburg steamers could be got to do that. The Inman line when it had a contract which did not bind it to call at Queenstown nevertheless did so. All last year the Inman steamers called there, having only the sea postage, and they would have gone on doing it. He maintained that it would have been quite easy to get as good services as those they had now obtained, and in support of the assertion he would read the opinion of the Duke of Montrose, when Postmaster General, expressed on the 24th of October, 1867. His Grace's opinion was given in these terms— The Cunard Company, though no longer under contract with us, would, it is well known, continue to despatch their ships as at present, and would assuredly endeavour, and very properly endeavour, to place the packets under contract with us in a disadvantageous light. It has been thought that we might put ship letter mails on board the Cunard ships. If we did so, the Cunard Company would, no doubt, endeavour to carry those mails so well as to make the public draw an unfavourable comparison between the foreign company which was within, and the British company which was without, the pale of a contract with the British Government. That opinion was contained in Parliamentary Paper No. 42, page 37; and it appeared to him almost to dispose of the question. By the contracts now on the table of the House they would get two good services a week for £105,000; whereas on the basis of the tenders issued in 1867 they might have had three good services weekly for the sea postage only—namely, one by Mr. William Inman's vessels, one by the North German Lloyd's, and one by the Hamburg Company. The contract for 1868 contained no fixed time within which the service should be performed, and no penalty for exceeding the time; whereas, in 1867 there was a fixed time, with a penalty. It was now proposed—excluding the route of the North German Lloyd's, which was to cease—to have one line of Cunard's quick steamers, one line of Cunard's slow cargo boats, and one of Mr. William Inman's vessels. They might strike out the Cunard's slow cargo boats, because they were generally overtaken by boats which left one, two, and in some cases three days afterwards. By the proposed arrangement they would also be tied for eight years, and would in all probability not get a daily mail during that period. Now, in 1866, Lord Stanley of Alderley, then Postmaster General, said he thought a daily mail was a very desirable thing, and that it might be obtained. So under these contracts they would discontinue, in all probability, the North German Lloyd's service—a good service, costing £12,000 a year, the sum which they received for postage; and they would get the service of the Cunard's slow boats on the Wednesdays for £35,000 a year. As to speed, the Cunard boats, which would be under no penalty as to time, went at the rate of 12 knots an hour by the measured mile. On the other hand, the Hamburg Company had one boat the speed of which was over 13 knots by the measured mile, four boats the speed of which was over 14 knots, and it was no extreme calculation to say that in all probability, before these contracts expired, they might have boats which would go 15 or 16 knots an hour. He was informed that the Messrs. Cunard were not building any new vessels, while other companies were building new vessels and fast vessels. And he prayed the House to remark that of the twenty boats which the Messrs. Cunard kept to perform these services there were only six fast and fourteen slow vessels; and whatever time they took the Post Office could not say they had not fulfilled their contract, because it had accepted those slow boats, and knew, therefore, that a good speed could not be obtained from them. The United States sent no mails by the Cunard cargo line. The form of tender issued in 1868 required the different companies to be bound to time, and the fourth clause contained a penalty for not keeping time. The Messrs. Cunard and Inman struck out those clauses. By a Return he had got from the Post Office he found that between the 1st of January 1869—the commencement of the contract—and the 8th of February the Messrs. Cunard and Inman's boats made sixteen voyages, nine of which exceeded time. In two cases the excess of time was one day and a half; in another case, nearly three days; in another, over three days and a half; and in another, over four days and a half. The proper time was twelve days. The North German Lloyd's vessels during that period made five voyages; and in two cases they exceeded time—in the first case four hours, and in the second eighteen hours. Would it not be better, therefore, to dispense with, the slow boats and keep the North German Lloyd's boats? Again, he objected to contracts of this kind being entered into for a term of eight years, because they would in all probability be pleaded as an argument against any reduction of the rates of postage. The renewal of the contract with Messrs. Cunard in 1858 was alleged again and again as a reason why the post age should not be reduced from 1s. to 6d., and it was stated by the Postmaster General that that contract entailed a loss of over £100,000, whereas by arranging with other respectable owners of ships the postage might have been reduced and a saving of £100,000 a year effected. He confessed he looked forward with great hope to the reduction of the post age between this country and the United States from 6d. to 3d., or even a smaller amount. At all events, he felt satisfied that before long arrangements would be made for fixing the postage at 3d. Nay, he even went further and maintained that it would be wise for us to reduce the postage to Id., for he believed that the loss we should thereby incur would not be nearly equal to the amount we expended by reason of the contract entered into with Messrs. Cunard. He strongly objected to the system of giving fixed subsidies to particular firms. A kind of monopoly was by that means built up which was highly injurious to parties who did not share in it. On the 22nd of November, 1867, Mr. Inman wrote to the then Chancellor of the Exchequer a letter containing the following passages:— Any advantage given to them [that is, the Messrs. Cunard] can only injure the public service … We have as good a fleet as the Cunards; our company is seventeen years old. And in the same letter they expressed their willingness to take the sea postage. In another communication they stated that to give Messrs. Cunard a greater subsidy than the Inman Company would be to enable Messrs. Cunard "to under- quote our rates of freight" and make Inman's ships go empty. No doubt: these arguments were very telling as against Messrs. Cunard, but they could now be applied with equal force against Mr. William Inman. He understood, and in fact he knew, that Messrs. Cunard had informed the Post Office two days ago that if the Motion of which he had given notice were carried they would not call at Queenstown to-morrow. The Motion they alluded to was Ids original Motion, in which he asked the House not only to appoint a Committee but to withhold their approval of the contract until that Committee had made its Report. Since then, however, he had so modified the Motion that it only related to the appointment of a Committee. Now, he confessed that to his mind it was a somewhat strange and novel thing for a private company to place itself in opposition to the power of Parliament. He would say nothing about their want of patriotism, but it would be for the lawyers to determine whether, in the event of Messrs. Cunard's boat not calling at Queenstown to-morrow, they would not place themselves in a difficulty. At all events, the House of Commons ought not to allow itself to be influenced by a threat of this kind. He might likewise remark that the commercial men of London need not be under any apprehension that even if Messrs. Cunard should not call at Queenstown their letters would not be forwarded to the United States. He held in his hand the copy of an offer which a Hamburg Company had made to the Post Office to the effect that their boats for carrying the mails to the United States should call at Queenstown, and that they would comply with all the conditions in the contract of Messrs. Cunard, with the sole exception of that which bound them to allow the Government to purchase their vessels in the event of war; and they offered to carry the mails for £25,000 a year instead of £35,000.

MR. BAZLEY

, in seconding the Motion, said, he wished to state why he disapproved the contract which had been laid upon the table. In the first place, the system of subsidies had long been condemned by this House, and he therefore regretted that this contract should have been proposed. Like his hon. Friend the Member for Sheffield (Mr. Mundella) he was a warm advocate of a 1d. postage to America. The mere freight of letters across the Atlantic would not cost more than £5 per ton, whereas 1d. for each letter would mount up to £140 per ton. There was ample reason, therefore, for supposing that a 1d. charge would give a sufficient profit to induce owners of vessels to carry the mails. If there were no monopoly, we might have a daily communication with America. The Secretary to the Treasury of the late Government, during a discussion which took place last year, stated that it was the intention of the Government authorities "to put an end to subsidizing lines of steamers and establish free trade in the carrying of letters;" and the Chancellor of the Exchequer stated that he was desirous of seeing the postal service across the Atlantic self-supporting, and that it was in that spirit that future contracts would be entered into, but that it would not be advantageous to fetter the hands of the Government or lay down such a rule as was then suggested. He thought after such statements they would have some difficulty in explaining why these contracts had been so impetuously entered into.

Amendment proposed, To leave out from the word "That" to the end of the Question, in order to add the words "the Contracts entered into by the Postmaster General with Messrs. Cunard and Co. and Mr. William Inman for the conveyance of Mails from this Country to the United States be referred to a Select Committee of this House,"—(Mr. Seely,) —instead thereof.

Question proposed, "That the words proposed to be left out stand part of the Question."

THE MARQUESS OF HARTINGTON

said, that as the Government did not propose to offer any opposition to the Motion for the appointment of a Committee he should not trouble the House with any very lengthened observations on the subject. He should like, however, to enter a little more into detail than he had been able to do in answer to a Question which had been put to him a few evenings before, with respect to the course which the Government had taken in the matter, and the reasons which had induced them to take that course. As he had stated in reply to that Question, the Government, when they came into Office, found that the contracts were completed, as far as it was possible, by the action of a Government, to complete them. They had been agreed to by the Government and the contractors; they had been approved by the Treasury, and actually signed, and had it not been for that provision which had of late years been introduced into all contracts of the same nature, that they should be laid for a period of one month. on the table of the House, and not be binding if before the expiration of that time they had been disapproved by the House, it would have been impossible for the present Government to put an end to the contracts without a direct breach of faith with the contracting parties. The Government were perfectly aware that many Gentlemen on their own side of the House—many Members too, he believed, of the present Administration—were altogether opposed on principle to the granting of subsidies for the performance of postal service. They had, therefore, to consider whether they would make use of that power which the proviso in the contract placed in their hands, and take upon themselves the responsibility of recommending the House to withhold its sanction from contracts which had been entered into by their predecessors. They thought that, wholly irrespective of the policy of those contracts, it would have been very unwise and inexpedient that they should upset the action of their predecessors. They arrived at that conclusion on general grounds altogether apart from considerations of the policy of the arrangement. They were of opinion that the Government in future negotiations with commercial companies would be placed in a very disadvantageous position if such an element of uncertainty were to be introduced into their dealings as that, on account of a change of Government, engagements entered into on perfect good faith by both parties should be liable to be set aside. Besides he very much doubted, on looking at the Report of the Committee, on whose recommendation the proviso to which he had referred had been introduced into the contract, whether they ever intended it should be used for such a purpose. The Committee had pointed out that, under the system which then prevailed, the Department responsible for confirming the contract had very imperfect means of obtaining all the information which was necessary. They were also of opinion that the control which the House of Commons possessed over that branch of the public expenditure was very imperfect. With that view they introduced the proviso; but he did not find from the Report of the Committee that it had ever entered into the intention of any of its Members that the proviso should be used as a means of enabling any Government to upset the engagements of another. Un- der those circumstances the Government declined to take upon themselves the responsibility of recommending the House not to sanction the contracts. But they, at the same time, desired that if possible the House should have an opportunity, at an earlier date than that contemplated in the contract, of re-considering the whole arrangement. They had, therefore, entered into negotiations with the Cunard and Inman Companies with a view if possible to induce them to assent to a shortening of the term of the contract which was made by the late Government for seven years with one year's notice, or practically for eight years. They tried to get the Companies to agree to a curtailment of two years. On consideration the Companies refused to agree to any shortening of the term, but in the course of the negotiations Mr. Inman consented to alter the day of sailing fixed by the original contract from Thursday to Friday, which would be a considerable improvement on the whole arrangement. The Government certainly did not deem it to be their duty, because they did not approve of the whole arrangement, to act an over punctilious and somewhat pedantic part, and refuse to touch the contract even for the purpose of making in it what everybody must admit to be an improvement. He denied that there was any ground for saying that in the negotiations between the Government and the Companies there was anything which in the slightest degree diminished the freedom of action of the Government with regard to the contracts in Parliament. On the contrary, the action of the Companies in declining to agree to the shortening of the term which they proposed made it, to a certain extent, more difficult to defend in that House the contracts which had been entered into. He entirely repudiated the inference which he supposed was intended to be drawn by the Question which had been put to him by the hon. Member for Liverpool (Mr. Graves) that evening, that the Government in the negotiations had committed themselves to any greater extent than before. Having said thus much, he would very briefly state to the House what, in his opinion, were the advantages and the disadvantages of the arrangement, and why he thought the subject was one which might very well be inquired into by a Committee. It seemed to him that by means of the arrangement we should secure the continuance of that which we had enjoyed for a great number of years—that was to say, a very satisfactory and well-performed service between this country and America. Whatever might be the objections to the system, no one would, he thought, deny that the Cunard Company had conducted the service in a manner which, on the score of speed, regularity, safety, and general convenience, left nothing to be desired. The hon. Member for Lincoln (Mr. Seely) had made some observations about the boats which that Company now proposed to make use of, but so far as he was aware they had performed the service in the most admirable manner. The Company besides, he believed, pledged themselves—and he saw no 'reason to doubt the pledge—to perform those contracts in the same satisfactory manner. So that we should not only secure the advantage which we had hitherto enjoyed in that respect, but escape those disadvantages to which we should be subjected if the alternative course had been adopted. If the Government had refused to accept the offer which had been made to them by the Cunard and Inman Companies, there must for a time, at any rate, have been considerable inconvenience to be incurred. For a time we should not have the advantage of the ships of these Companies, and we should have to depend on the longer voyage which was performed by the German Company between Southampton and New York; while the mails would have to be despatched on a more inconvenient day for the commercial community, and we should have the further inconvenience of having our mails—he did not know whether the House would attach much importance to that point—conveyed not by a British, but by a foreign, company. There were, however, on the other hand, no doubt, disadvantages in the arrangement. It was much more costly than the alternative one at present, and would, he believed, very probably be more costly in future. But the great objection to which, in his mind, it was open was that it i bound us for a long term of years to one particular arrangement. As the hon. Member for Lincoln had said, there was a very great desire—and he believed a growing desire—to reduce very considerably the rate of postage between Eng- land and America. It was quite possible that that desire might become so strong that this country would consent to give up something of the rapidity and the punctuality of the mail service in consideration of obtaining a very great reduction in the cost. Even should that not be so, it was possible that, by adopting some such system as had been adopted by the American Government, we might get the service performed at a greatly reduced cost, and with equal efficiency. But under the present arrangement our hands would be tied for nearly eight years, and it would become a matter of very considerable expense to the revenue to effect any material reduction in the rate of postage between the two countries. There were, no doubt, other considerations to be taken into account, but those appeared to him to be the chief advantages and disadvantages of the arrangement, and they were matters which, in his opinion, might very properly form the subject of discussion before a Committee of that House. He was also of opinion that the Committee might very well get through the inquiry and report to the House within the time which had yet to elapse before the contract became binding, and that the House would have an opportunity of coming to a decision on that Report. The Government were further of opinion that the subject was not one on which it was their duty to recommend any definite course of action to the House. The Government as a Government had done nothing to put an end to the arrangement which had been entered into by their predecessors, nor to induce the House to assent to that arrangement. The contractors, they thought, must have been perfectly aware that the decision of the question would rest ultimately with that House, and there was nothing which could render it necessary for the Government either to be the defenders of their predecessors in the matter, to dictate any particular course of conduct to the House, or to prevent a full and impartial inquiry into the whole case, which would enable hon. Members to form their own opinions on the whole case. For these reasons the Government assented to the appointment of the Committee, and if the inquiry were conducted in the spirit which he had suggested, it might, he believed, be terminated within the prescribed time.

MR. GRAVES

said, as it would probably become his duty to divide the House upon this Motion, he regretted that so important a subject should be brought forward at so late an hour—half-past twelve. It was not, apparently, a mere question of these particular contracts, but the whole principle of subsidies had been raised. The noble Marquess who preceded him had told them how tenacious a Government should be before upsetting the acts of a preceding Government; but what must have been the impression produced by the speech of the noble Marquess upon every candid and impartial mind? Upon his mind the impression certainly was that, though outwardly the noble Marquess desired to preserve neutrality, inwardly he desired that the acts of his predecessors should be upset. As to the hon. Member (Mr. Seely), his quotations about subsidies and his general objections respecting them would have been much more in place if made last year, but since March 20 of last year this House had confirmed and ratified a most important contract with the West India Royal Mail Company, extending that contract on terms infinitely more advantageous to the Company than those proposed in the present case. By preserving silence at that time the hon. Member was a consenting party to those contracts, and to the principle of subsidies. As to the statement that no time was guaranteed in the performance of this contract, the answer was that Messrs. Cunard had never guaranteed their time; but did experience of the way in which the service was performed show that there was any need for such a guarantee? Their own imputation was a far better guarantee than any condition as to the number of days and hours could be. Again, comparison was made with foreign companies, and one might really fancy that one was not in a British, but in a foreign House of Parliament, to see the evident sympathy that existed for foreign competitors, and the hostility shown to English companies. These foreign vessels were not built under such a survey as was imposed by our Government; they did not even come under a passenger survey; and he believed that there were 200 tons less weight of material in their construction than English vessels had to carry. That would account for speed in the foreign vessels, but he maintained that the Cunard and most of the Inman boats delivered their letters in New York sooner than the boats of any of the foreign companies. Some allusion had been made to the fact that Messrs. Cunard were building no vessels, but this House was to blame for that fact. It was the temporizing policy of Parliament and the uncertainty of the continuance of the contracts which had prevented Messrs. Cunard from building; but as soon as these contracts were ratified they were prepared to go on building the class of ships that were suited for the conveyance of the mails. A remark had been made by the hon. Member (Mr. Seely) which he hoped was unintentional—namely, that the owners of these boats should be compelled to carry the mails at 1d. a letter. On reflection, the hon. Member would hardly adhere to this remark, for it could not be the wish of Englishmen so to deal with those who maintained the maritime supremacy of this country; and it never was contemplated that the obligation placed on ships to carry letter-bags should embrace the regular mails of the country, for those, if forced on a shipowner, could be frustrated by delay in delivery. Then as to the threat which, it was alleged, had been used to this House, the contracting parties had a perfect right, in case the House would not ratify the agreement, to act as self-interest dictated. It was true that when they first saw the Motion placed on the Paper, the effect of which would have been to annul the contract they wrote to the Post Office to say that they felt themselves released from further obligations, and would not allow their ships to call at Queenstown. As soon, however, as they saw that the hon. Gentleman had amended the terms of his Motion—merely asking for a Committee—they wrote to state that it would not be necessary for them to act upon the previous letter. No such threat, therefore, was in existence. He presumed that what were required as essential conditions of any contract for conveying the mails between this country and America were rapidity, regularity, and safety. Cost was, no doubt, a consideration, but it was of secondary importance when compared with the other conditions, and the country would condemn any saving which was effected at their expense. Now, what were the facts of the case? In 1866 the Government of Lord Russell believed it was possible to carry on a proper service based upon a system of ocean postage and not of subsidies. They advertised for tenders, and some four were received; but the Post Office Report was that the public would practically only have two mails a week, leaving Southampton on Tuesdays and Fridays, and no foreign company volunteered to call at Queenstown. Messrs, Cunard declined to tender on the prescribed conditions, but sent in a specific proposal to convey the mails for a specific sum. That sum was considered too high, and ultimately an arrangement of a temporary nature was come to for the conveyance of the mails, at £80,000 for the year. Last year the attempt was renewed, and tenders were invited. Messrs. Cunard and Inman refused to tender, and the only parties who responded to the invitation were the North German Lloyd's, going once a week. Messrs. Cunard and Inman, however, sent in proposals of their own to carry the mails for ten years; the former for £100,000 and the latter for £50,000. The Government did not agree to this, but made a counter proposal to pay Messrs. Cunard £70,000 and Messrs. Inman £35,000 for seven years, and these terms were accepted. The gross postage received was £112,000, but the North German Lloyd's received £10,000 out of this sum, thus virtually leaving £100,000 to meet £105,000, the amount of the proposed guarantee. He did not wonder that the Treasury desired that the arrangement with the North German Lloyd's should be cancelled, seeing that their boat sailed on the same day, Tuesday, and was frequently outstripped by the Queenstown route. Contrasting this contract with two other contracts based upon subsidies, which had been virtually adopted by the House within the last two years, he did not hesitate to say that, taking efficiency and speed into consideration, there would be something inconsistent in adopting the Motion before the House. If any company deserved confidence it was the Cunard Company, which for thirty years had carried the mails, and had never failed to keep their appointed day, unless detained by the orders of the Government, and had never lost a letter or a life. When that Company commenced their career the carry- ing trade on the Atlantic was in the hands of the Americans, but now it was in the hands of Englishmen, and the Company, had, without recompense, adopted Queenstown as their port of arrival and departure, at a cost to themselves of £10,000. They had also, at a critical time, shown the value to the country of their magnificent service. He did not mention these facts to influence the opinion of the House, but to claim fair consideration for old servants. Neither was the Inman Company less entitled to consideration. For nearly twenty years they had fought their way on the Atlantic, and their vessels were as creditable to England as the Cunard's vessels. Allusion had been made by the hon. Member for Manchester (Mr. Bazley) to a penny ocean postage, as if these contracts would interfere with the accomplishment of that idea. All he could say was that, seeing that a letter to Paris now cost 8d. postage for the same weight, the adoption of a penny postage to America must lead to an entire revision of the whole postage system. If a letter could be carried to New York for 1d., people would begin to ask how it was that a letter sent merely from one part of London to another cost just as much for postage. At all events these great experiments should not be tried at the contractors' expense, but at that of the country. Whatever might be the amount of postage, these contracts would not stand in the way of arrangement on that point. With respect to subsidies, there was no doubt that the tendency of opinion in late years had been in favour of doing away with them, and he had been inclined to adopt that opinion. But new circumstances had arisen which that House must not lose sight of. France and other nations had entered on a career of competition with this country in respect to carrying letters. France was subsidizing fast lines of steamers with heavy bounties to New York, to the Antilles, and to Mexico; and what did they get?—£350,000 a year, besides a loan of 10,000,000 francs for twenty years without interest. The French nation paid 16s. a mile for their subsidies; while under this contract England would pay 2s. 6d. Was that fair competition? There was an English company with which he was connected which, ran vessels monthly between Valparaiso and Panama. The French thought that their flag should appear in the Pacific, and a proposal was made to subsidize a company. The English company to avoid competition, offered to take the French mails for nothing. But the French Government, anxious that their flag should fly in the Pacific, paid to the Trans-Atlantique Company 8s. a mile for the carrying of the mails. Unless the House was prepared to deal liberally with the English companies, it could not be expected that they would maintain the steam lines. The establishments of the English companies had greatly added to the strength and power of this country, and had formed a great nursery of seamen for times of emergency. The enlightened Ruler of France desired to possess the same advantages, and this country, therefore, must not stand idly by, and treat a fair offer to carry the English mails in the way in which it was now proposed to treat it. He objected to the Committee which had been moved for, because the object was not to inquire into the terms of the contracts, but to upset the contracts after they had been ratified by the previous Government, and after the faith of the present Government had to a certain extent been pledged to it. He looked upon the Motion for a Committee as a systematic and organized attempt to get rid of the contracts. If the question was sent up to a Committee, they would have only twenty days to consider the matter, and ten of those days would be holidays. It would not, therefore, in his opinion, be possible to obtain a Report before the contracts would by time be ratified. He thought the House was the most competent tribunal to consider the question, and as a question of principle was involved in the matter he would take the sense of the House on it, though he was willing to have the debate adjourned. He had fair grounds for so acting, because the contracts, regarded in all points of view, were such as ought to be sustained. For £105,000—the whole of which sum except about £3,000, would be covered by the postage—there would be three services a week, all starting from Queenstown, and looking to the regularity, punctuality, and speed of the service, he believed that a more fair or moderate arrangement could not be made. The country would not be satisfied with so great and serious an altera- tion as was proposed, and on these grounds he asked the House to hesitate before they refused to ratify a fair, and equitable arrangement.

SIR FRANCIS CROSSLEY

said, that as one who had a large connection with America, he was of opinion that we should be better served by free competition than by subsidies and engagements for eight years to come, especially as regarded the communication with a country our relations with which were increasing week by week, so that eight years hence we did not know how many steamers might be running, and how much better terms we might be able to make. He had no objection at all to a little foreign competition; on the contrary, when he found that anything was manufactured abroad better than it was in this country, he bought samples in order to display them here. He had no objection to the Cunard Company having a portion of our traffic, or the whole of it if they could work it as well or better than others; but do not let us give them a monopoly for eight years. The hon. Member for Liverpool (Mr. Graves) had endeavoured to make it appear that this was a question of faith as between one Government and another; it was no such thing. The House was quite competent to deal with it, and, indeed, why should there have been an alteration of the law, giving the House a month to consider contracts, if they were to have no control over them?

MR. EUSTACE SMITH

said, the contract with the Cunard Company did not come before the House now for the first time. Some years ago it had the exclusive conveyance of the mails of the English Government, and the subsidy was justified upon the ground that no other company could be found to perform the service with such speed and punctuality. Experience had shown that a company without a subsidy—namely, the Inman Company—had attained such a position that the Cunard Company had been obliged to treat it as a partner. If we were free and offered no subsidy at all, the result would probably be that in a few years we should have a daily line of steamers to America, equal either to the Cunard or to the Inman line. In no way could this House be accused of a breach of faith, either positively or constructively, if it refused to ratify a provisional contract; because any man who entered into a provisional contract with the Government for the conveyance of mails did so with the knowledge that it was within the province of the House to treat the contract as the contract with Mr. Churchward was treated.

MR. HUNT

said, they were discussing the question under considerable disadvantages. There were upon the table of the House the contracts in question, and a Treasury Minute would throw no light upon them; but there were other Papers of the greatest importance without which the House could not come to a fair conclusion on the subject. Why were these Papers not produced? These contracts were concluded by the late Government some time before they went out of Office; there had been abundant time for the Papers to be printed, and if the usual practice had been followed they would have been placed in the hands of Members at the same time as the contracts themselves. The non-production of them was, no doubt, an oversight; possibly it was due to the confusion that might have arisen from the new distribution of business at the Treasury. It used to be the business of the Financial Secretary to the Treasury to lay these Papers on the Table; it was possible the Financial Secretary might have thought it was now the business of the Third Lord; and the Third Lord might have thought it was the duty of the Financial Secretary. At any rate, it was the duty of the Government to have produced them, and they had not done so; and he said it was the duty of the Government because the time allowed to the House to consider the contracts was so short, If the House was to pass contracts in review, a month was the shortest time that could be allowed, because there were often voluminous documents, and other business of great importance must have its place. In a Session like this, when men's minds were occupied with one great question, the time seemed particularly short. We had arrived at the 13th of the month; and the contracts having been placed on the table on the second of the month, more than half the time given for their consideration had passed before the necessary information was communicated. The Mover of the Amendment had had access to Papers at the Post Office, which, by the courtesy of the Postmaster General, he had also seen; but even if he had not seen them he should have had an advantage over other hon. Members, because his recollection would serve him as to what occurred when he was in Office. But this was not a position a Member of the House ought to be in; he ought not to stand in a position of exceptional advantage. He much preferred that the House should be in possession of all information, and then he thought hon. Members would conclude that the course which was taken by the late Government was one which ought to be endorsed by the acceptance of the contracts. The Mover of the Motion appeared to know more about the contracts made for the last year than about those for the next eight years; he dwelt largely upon the false estimate made by himself (Mr. Hunt) with regard to the postal service of 1868, and very little upon the estimate on which the Government undertook to enter into these contracts. The estimate he gave when Secretary of the Treasury of the amount that would be lost by the exceptional contract with the Cunard Company for one year was varied considerably by the non-realization of expectations as to the amount of postage from America, a large part of which the American Government preferred to send another way. Again, after the arrangements were made, they were discussed in the House, and, on the suggestion of the right hon. Gentleman now the President of the Poor Law Board, a contract was made with the Hamburg Company, whose earnings were deducted from the amount which otherwise would have been earned by the Cunard Company. To that extent the estimate of what we should lose by the Cunard Company was considerably enhanced. The contract was discussed fully at the time; and he stated that the Government did not consider the arrangement a good one, but it was made under difficult circumstances, and only for a year. It had been attempted to be shown, and had been insinuated by a question put upon the Paper, that there had been a breach of an implied promise on the part of the late Government; but there had been no breach of a promise at all, express or implied. On that occasion he expressed the opinion that the American service should be a self-supporting one; and he said now it was. He stated that he did not believe we could expect the service to he performed properly, except an arrangement were made for a term of years; and, he also stated that he thought it was wrong there should be different arrangements with different companies. A question had been raised as to the inequality of terms between the Inman and Cunard Companies; but in the present contract the terms given to both were precisely identical. In all particulars the arrangements which were made by the late Government had been fulfilled to the letter. What he laid down was the principle on which they ought to proceed. He objected to being tied down by a Resolution not to give a subsidy by a fixed payment, and he referred to the Report of the Committee on the subject which resolved that it was inexpedient to lay down precise rules. He said it would be utterly impossible for the Government to do its best for the country if it were bound hand and foot; and the Motion asking the House to bind the Government was withdrawn. It had been said that there should not be any fixed term of years appointed, but that the service should be open to any person or any company who would undertake it for the sea postage. But the Government offered to receive tenders exactly in those terms, and what was the result? They asked for tenders to start from Queens-town. In 1868, which they might regard as a trial year, they had had two services weekly from Queenstown and two from Southampton, and the proportion carried from Queenstown was 75 per cent and from Southampton only 25 per cent. The advantage in point of time by the adoption of Queenstown as the port of departure might be set down as forty-eight hours in the case of Ireland, thirty-six hours in the case of Scotland, and eighteen to twenty-four hours in the case of the English manufacturing districts; while the adoption of Southampton, even in the case of London, presented no advantage. The Government therefore advertised for open service from Queenstown, on terms of sea postage, terminable at six months' notice. It was an old proverb that you might take a horse to the water but could not make him drink, and the House might be surprised to learn that their invitation for this particular form of tender did not meet with a single response. One tender was received from the National Steamship Company. They, however, require us to make a stipulation in regard to half-ounce letters which it was impossible for us to comply with in consequence of our arrangements with the United States. The North German Lloyd proposed to take letters at 1d. per ounce, but also proposed that Southampton should be substituted for Queenstown, thus losing all the advantages in point of time which were to be gained by the adoption of the latter port. The Hamburg Steampacket Company also tendered, but required 288 days to perform the voyage during the summer months, instead of 264, and 312 during the winter months, instead of 288, and to start from Southampton instead of Queenstown. There were also two other tenders, one from Messrs. Cunard for £100,000 a year for two services, and one from Mr. Inman for one service for £50,000. The average length of the voyages of the respective lines for the first three months of the year was as follows:—Cunard, 11 days 8 hours; Inman, 11 days 22 hours; North German Lloyd, 11 days 12 hours; Hamburgh-American line, 12 days 2 hours. In the months of April, May, and June the average length of the voyage was as follows:—Cunard, 9 days 20 hours; Inman, 10 days 13 hours; North German Lloyd, 11 days 10 hours; Hamburgh-American, 11 days 23 hours. Now, it had been objected against the Cunard line that the contractors got as much out of the contract as their possibly could, and in return laid themselves under no obligations, inasmuch as they did not in any way tie themselves down as to time. But the answer that the contractors made was a very reasonable one. They said they were unwilling to hold out any inducement to the captains of their vessels to risk the lives of the passengers and crew and the safety of the vessels by endeavouring at all hazards and in all weathers to avoid the infliction of penalties. They reasonably enough pointed to what they had done in the past and, taking that as their guide, he thought they might trust them in the future, especially when they remembered that without penalties their vessels had kept better time than the vessels of others who were liable to penalties in case of their being overdue. The late Government had honestly and loyally tried the experiment which the hon. Member for Montrose (Mr. Baxter) had said they ought to have tried. For the decisions then made he himself was chiefly responsible, and that responsibility he was perfectly willing to bear. What were the Government to do? Those two Companies offered to conduct the service from Queenstown for a subsidy of £150,000, and for a term of ten years. He was satisfied that it was but reasonable to stipulate that the contract should be continued for a term of years, because it was evident that it would be impossible for persons to build suitable ships and conduct such a service unless such a condition were agreed to. They had in contemplation the reduction of the postage as soon as they could, and they believed that it might be possible to make that reduction at an earlier period. They were, therefore, unwilling to agree to the adoption of so long a term as ten years. They, therefore, insisted upon the term being reduced to seven years. The sea postage of the outward mails of the last year carried amounted to £101,700. According to calculation and according to the increase which had been going on of late years, the Department estimated that £111,870 would be the sea postage to be earned. They decided that the principle upon which they would act should be that the service should be self-supporting. Allowing a certain margin, they fixed, the amount to be earned at £105,000, and allotted the dividend to each service to be performed—that was to say, £70,000 to Messrs. Cunard for the two services, and £35,000 to Mr. Inman for one. The Post Office authorities regarded the terms as preposterous, but the Government were firm, and the result was that, though with great difficulty, those terms were obtained. The hon. Gentleman the Member for Lincoln (Mr. Seely), said that there ought to be no subsidy, but that the line should be self-supporting. But the hon. Gentleman should remember that, even if the money was given in the form of sea-postage, it was till a subsidy and nothing else. He claimed also for their proposal the merit of being self-supporting. In answer to a memorial signed by some very influential gentlemen in the City, although the Government did not concur in the views of the memorialists, who thought that a gain in time and convenience would result from the arrangement they proposed, they assented to try the other services as a temporary matter. Now, if the contract held good, what would be their position in a few years? In 1871 the excess, as estimated, would amount to over £30,000, which would allow the postage to be reduced by 1d. By 1873 the excess on the postage to be earned—supposing the letters to go on increasing as they hitherto had done—would amount to £58,000 and would enable them to take off a second 1d., and by the year 1876 the postage would amount to £218,000, and permit of their reducing it to 3d. Therefore the object the hon. Gentleman so much desired would be arrived at under the very arrangement which the Government had made. He had not the smallest objection to all these matters being referred to a Select Committee. Indeed, if he were to select one act of his official conduct which he would like more than another to be thoroughly inquired into, it was this one, because he believed it had been the means of giving the public the maximum advantage at the most economical price possible. What the people would be inclined most strongly to insist upon was efficiency and regularity, and they must remember that they could not get all the advantages of cheapness without losing some of the advantages of regularity. He wanted to know, if these contracts were not to be carried out, why the Inman Company were to be asked to change their days for sailing? But since the Inman Company had been led to believe that the contracts were to be carried out, the hon. Member for Lincoln had put his Motion upon the Paper. And what was that Motion intended to effect? He had heard of the evils of a weak Government—and unfortunately for himself he had been a Member of a weak Government—[Laughter]—that was to say, a Government which was not supported by a Parliamentary majority, and he had experienced much humiliation in consequence. But they were told that they had now a strong Government—a Government that could command a majority of upwards of 100; and what was the conduct of that strong Government? It came down to that House and said, "We wish to abdicate our functions in this matter—here are the contracts made by our predecessors—deal with them as you will, we decline to say whether they are good or bad, or to express any opinion whatever concerning them." Was that the part that a Government should take? He called it a poor, mean course for them to adopt. What would have been said had the late Government adopted such a course? But he denied that the late Government would have adopted such a course—they would have, at all events, avowed their opinions upon the subject. They might not always have been sufficiently strong to carry their opinions out, but they would, at all events, have avowed them, and would not have asked for a Committee in order to shelter themselves from the responsibility which justly attached to them. The Government had declared that they were neutral in the matter, but he wished to know whether the Government really were neutral respecting it? The hon. Member for Lincoln said he wished to refer the contract to a Committee; but what did he wish the Committee to do? The noble Marquess opposite (the Marquess of Hartington) had stated that, although it was not the view of the contractors, it was the view of the legal authorities that if the Motion of the hon. Member was carried as it originally stood, ipso facto, the contracts would be cancelled. He was, therefore, not surprised that the Government should have thought the original Motion of the hon. Member rather awkward, because in that case the public might have complained with just cause that at a few hours' notice the whole of the Atlantic postal system was put an end to. Under these circumstances, the Government had found it convenient that the latter portion of the hon. Gentleman's original Motion should be struck out; but although the terms of the Motion were altered, the original intention of its Mover to cancel the contract remained unaltered, and yet the Government, while professing complete neutrality upon the subject, supported the Motion. If there was to be a division upon this Motion he should not divide with the hon. Member for Liverpool (Mr. Graves) because he did not wish it to be supposed that he shunned investigation into the matter. Had he the wish to afford a complete triumph to the late Government, he should be perfectly willing that the contracts should be rescinded, because the state of things that would result to the public from the postal arrangements being suddenly upset would be intolerable, the present Government would be turned out, and a clamour raised for the return of the late Government to Office. He should, however, be sorry to secure any advantage to himself or to his party at the expense and inconvenience of the country; hut what he wished to say was Do not let it be supposed that the Government was neutral in this matter. If they were indeed neutral and there was to be a division, let the Government walk out of the House, as he intended to do himself. He was not going to oppose the appointment of the Committee, because, for his own part, he should be glad to let it be seen that the statements he had made were correct. The late Government had acted with the best of motives, and with an anxious desire for the public service; and the appointment of a Committee would make that fully apparent to the public.

THE CHANCELLOR OF THE EXCHEQUER

said, he did not exactly Under-stand the position taken by the right hon. Gentleman opposite (Mr. Hunt), who said that those who supported this Committee were in favour of abrogating the contracts altogether, while at the same time he declared that he himself was also in favour of the appointment of the Committee. [Mr. HUNT: No.] At all events the right hon. Gentleman said he wished and desired that the Committee should be appointed, while at the same time he attacked the motives of those who supported the Motion. It was very easy to explain that which the right hon. Gentleman seemed to think so difficult—namely, the conduct of the present Government in this matter. Had the right hon. Gentleman thought fit he might easily have thrown the whole responsibility on the present Government by abstaining from executing the contract at the time when the late Government had made up their minds to quit Office. These contracts were not executed until after the present Government had formally accepted the Seals of Office from Her Majesty. He did not attribute blame to anyone; but the late Government chose to take upon themselves the responsibility of making the arrangement—as they were legally entitled to do—being still the Board of the Treasury till their successors received the Seals of Office. They exercised the power which was in their hands of binding the country to this most important engagement, and their successors had then to consider what they would do under the circumstances.

MR. HUNT

said, he must ask leave to correct the right hon. Gentleman. It was either in September or October that the engagement was actually entered into. He could not give the date upon which the contract was finally signed, but he knew that everything had been settled by the Treasury long before there was any thought of resigning.

THE CHANCELLOR OF THE EXCHEQUER

said, the Treasury Minute authorizing this contract was signed on the 9th of December; the present Government accepted Office and went to Windsor on the 10th; and on the 11th the contract itself was signed. The late Government had done what they were legally entitled to do, and, having acted upon their responsibility, the present Government considered themselves bound by the acts of their predecessors in Office. They considered themselves bound by a sort of official etiquette and necessity to carry out the acts of the late Government, and they accordingly felt themselves precluded from taking any part for or against these measures, and had not made any appeal to the House. As far as any statements of their own were concerned, they had observed a strictly neutral position, for they did not think it consistent with the dignity of a Government to be at the same moment carrying out an engagement entered into by others and taking part in the overthrow of that very engagement. That, no doubt, seemed very incomprehensible to the right hon. Gentleman. But he repeated and maintained that it would present a very regrettable, and even contemptible, appearance in the eyes of foreign countries if—having adopted the measures of the previous Government in good faith and honour—the present Government were to take part in getting rid of those very measures. That was the explanation of the conduct of the Government, and he hoped it was satisfactory to the House. He was very sorry that there had been any slowness in producing the Papers; they were in the printer's hands, and he could assure the right hon. Gentleman that they were not withheld with a view to prejudice his case. And he was glad to perceive that the right hon. Gentleman had been able to provide himself with such documents as were necessary. He had adopted the policy of the right hon. Gentleman and endeavoured to carry it out. But an hon. Gentleman (Mr. Seely) having—without any prompting from him or his Department or from the Government as a whole—moved that the subject be referred to a Select Committee, and the right hon. Gentleman opposite having acquiesced in that proposal, he should not be prevented by any taunts which might be thrown out from taking the course which he considered best under the circumstances. Investigation was challenged, and he thought it ought to be made. He offered no personal opinion upon the measure itself—that they had inherited from their predecessors; he was quite ready to go into Committee upon it; he had no wish to hide anything, and he was prepared to abide by whatever the wisdom of the House might decide.

MR. HUNT

said, the right hon. Gentleman opposite seemed to think that he had mentioned the dates inaccurately. He was now in a position to quote them from official documents. The offer was made by the Secretary to the Post Office to Messrs. Burns, M'Ivor & Co.—on the 1st of October; to Mr. Ingram on the 2nd of October; and accepted on the part of both those firms on the 7th of October.

MR. PIM

thought the Committee should be appointed or the debate adjourned for the production of Papers.

MR. CROSS moved that the debate be adjourned.

Ms. GLADSTONE

said, he hoped the hon. Member would not persevere in the Motion for adjournment which would cause the evasion of the inquiry. The case for the Committee was very strong, and the House could not otherwise perform an important duty which it had reserved for itself. The Committee would be appointed with no foregone conclusion. The sense in which it would be appointed would be to afford free scope for the exercise of a jurisdiction which in this particular case it had specially reserved, for itself.

MR. SCLATER-BOOTH

said, he could not see how it was possible that an impartial Committee could be constituted in this case. It was quite clear the Mover could not be a Member of it, and his right hon. Friend (Mr. Hunt) had no intention of taking any part in it.

MR. GRAHAM

said, as the representative of a great mercantile community, he would support the Motion of the hon. Member for Liverpool. The Committee was only a means in order to get rid of the contract.

MR. MACFIE

declared he must do the same, unless he got a satisfactory explanation.

Motion made, and Question, "That the Debate be now adjourned,"—(Mr. Cross,)—put, and negatived.

Question put, "That the words proposed to be left out stand part of the Question."

The House divided:—Ayes 86; Noes 115: Majority 29.

Words added.

Main Question, as amended, put, and agreed to.

Ordered, That the Contracts entered into by the Postmaster General with Messrs. Cunard and Co. and Mr. William Inman for the conveyance of Mails from this Country to the United States be referred to a Select Committee of this House.

Select Committee to consist of Seven Members, five to be nominated by the Committee of Selection, and two to be added by the House.

And, on March 16, Mr. SEELY and Mr. GRAVES added. Power to send for persons, papers, and records; Five to be the quorum.