HC Deb 10 June 1870 vol 201 cc1869-84

, who had given Notice to call the attention of the House to the statement made by Mr. Chancellor of the Exchequer with regard to intended operations at the Mint; and to move, That Government manufactories are injurious to the commercial classes and a burden on the taxpayers; and that it would be unseemly that Her Majesty's Government should compete with commercial firms for contracts with foreign Powers, said, he was quite aware of the peculiar position in which he was placed in consequence of the Division which had just been taken; but the subject he wished to bring before the House was of great importance, and could no longer be deferred. He had not intended to call attention to the subject of Government factories this Session; but the statement of the right hon. Gentleman rendered it necessary that the public should know something of the views of the Government on the matter. In the earlier part of the Session a Question had been put by his Colleague (Mr. Dixon) to the right hon. Gentleman with reference to certain recommendations in the supplementary part of the Report of Messrs. Fremantle and Rivers Wilson on the Mint. He would assume the accuracy of the report of the right hon. Gentleman's reply, which he took from The Times, and which, in effect, was this—"We are prepared to contract with foreign countries, and to undertake the execution of coinage for them." The Report on the Mint to which he had referred was presented to the House on the 11th of February, 1870, and it bore on the back the name of his right hon. Friend the Member for Halifax (Mr. Stansfeld); but he was sure his right hon. Friend had never read it, or it would not have received the sanction of his name. It was to the Supplementary Report that he wished to call particular attention. That document contained this passage— One other point remains to be noticed, namely, that there would appear to be no reason why the Mint should, as has hitherto been the case, refuse to undertake the execution of coinages for foreign Governments. Many contracts for foreign coinages have of late years been executed at Birmingham, with large profits to the contractor; and it is obvious that the Mint, with the appliances at its command, and the risk to which it may at any time be exposed of being left unemployed, could with advantage undertake such contracts, It then went on to say— Coinages for foreign Governments are undertaken by some of the Mints in other countries. A coinage for Roumania and another for Egypt have recently been struck at the Paris Mint. And it thus concluded— We would recommend that for the future, should any offer be made to the Mint to undertake a coinage for a foreign Government, the Master of the Mint should report the circumstances to the Treasury, and should be empowered to make the necessary arrangements for executing the work, Now, he should like to know how the gentlemen who signed that Report had ascertained that private contractors had made large profits of late years by executing coinage contracts for foreign Governments at Birmingham. He was assured by one large house at Birmingham that no clerk or other person in their employment did or could know what their profits from coinage had been—that they themselves had made the estimates and could alone tell that: that the statement in this respect was probably based on Returns derived from the officers of income tax; but that even in that case the information thus obtained was delusive, because coinage work was only a small part of their business, and the Income Tax Returns could not by any possibility give any real clue to the amount of their profits upon that particular branch of their operations. He, however, did not think that the Government would sanction any such system of spying out the profits of manufacturers from these Returns. [Mr. GLADSTONE: Hear, hear!] Therefore, that assertion contained in a document presented to Parliament had not the slightest foundation. Moreover, there were great fluctuations in the price of the raw material of coinage, and he had known copper in particular—which formed a very large proportion of our coinage—to vary in a comparatively short period from £70 to £140 per ton. Therefore, it was quite a commercial speculation—and a very dangerous speculation too—to enter into large coinage contracts, running over a considerable length of time, without the possibility of knowing beforehand whether the cost of the raw material might not undergo a very serious advance, entailing upon them an enormous loss. Yet that was the hazardous kind of commercial speculation in which the Chancellor of the Exchequer was about to embark. Then, with regard to the appliances at the command of the Mint, it might be thought by some that they were very great; but he could tell the House, having himself inspected that establishment, that the Mint was 50 years behind the times, and that one firm alone could turn out as much coinage in a single day as the Mint could do in a week. He had not been there for some years, to be sure, and it might have improved since; but at the time he was much amused at the backward state of the appliances there. As to the risk to which the Mint might be exposed of being left at any time unemployed, it was true that the amount of work to be done varied enormously in the course of the year and from one year to another. It had been as low as £49,200 in one year, and as high as £11,800,000 in another. The Chancellor of the Exchequer would not like the Mint to be standing still. But how did the private manufacturers manage matters? He (Mr. Muntz) had gone through the accounts of one eminent firm engaged in coining—the firm of Messrs. Boulton and Watts—and he found that the average period during which their coining appliances had stood still for the last 10 years, was 10 months in the year. And how was that met? Why they had other large operations to carry on besides coinage, and when they had no coinage orders to execute the machinery and men were transferred to the other manufactures carried on by their firm. But Her Majesty's Mint was intended for coinage and for nothing else. But suppose our Mint, entering into a rivalry with the Birmingham trade, were to undertake large contracts for the Brazilian, the Italian, or any other foreign Government, and were to be subject to heavy penalties for any delay in their execution, and suppose, also, that a demand suddenly sprung up for coinage at home—the demand in 1857 rose very suddenly, and the Bank was at that time in great fear that the Mint could not coin fast enough for their necessities—in what a dilemma would the Chancellor of the Exchequer be placed! He would have to seek for more men and to increase his machinery. The Mint at Paris did not belong to the Government. The whole of the coinage for the French Government was done by contract; and if the Chancellor of the Exchequer would let the Mint in London to a contractor, taking proper security, he should have no objection to contracts being made with foreign Governments. The Belgian Government had their coin made on the same system. In both cases the contractors were bound in heavy penalties to supply the Government with all the coin they required. The contractors were at liberty to make coins for foreign Governments; but they had themselves to find security for the due fulfilment of their contracts, as had the private manufacturers in this country. The penalties were very considerable. In the case of the last coinage for Italy, the penalty for non-fulfilment of the contract was 500,000f., or £20,000; in that of the last coinage for Brazil it was £30,000; and in the case of a small coinage for Calcutta—the making of which was given by Her Majesty's Government to a private manufacturer—it was £8,000. Now, if Her Majesty's Government took to competing with private manufacturers, he supposed the latter would not receive any compensation in the shape of a drawback of income tax; but, putting that consideration aside, where were the penalties to come from, should any be incurred by the Government as manufacturers of coin for foreign States? He supposed there would appear in the Miscellaneous Estimates Votes "for loss on copper" and "loss on penalties." Then, when the Government had to ship coin there would be insurance and other charges. Was it seemly on the part of the Government to enter into such matters—to become commercial speculators? He ventured to think it would be derogatory to the dignity of the Government. The proposition of the Chancellor of the Exchequer was a species of financial seduction. All these Government manufacturing establishments began in this way, by small degrees. They began by false pretences; they were worked by fictitious means; and they ended with breach of faith. In 1806 the Government established a manufactory for guns, which was almost immediately abandoned. In 1808 they formed another gun factory, at Lewisham, which was kept up until 1815, when, after costing the country £430,000 for buildings and plant, it was also abandoned. During the Crimean War the Government factory did not turn out a single weapon, and 25,000 were obtained from America, but were not delivered. The Government had also to go to Liége, but received no guns until after the war was over. The Enfield factory was originally established in 1854 as a mere experiment. If the gun trade that now existed in the centre of the kingdom were destroyed, what should we do in time of need when we required a large number of guns to be produced at short notice? He maintained that the Enfield establishment was the result of a breach of faith. Lord Panmure, in reply to Mr. Scholefield's complaint of the injury that was being done to the Birmingham trade, had repudiated the idea that the establishment at Enfield was intended to manufacture the weapons required by the Army, and stated that the intention was only to try experiments there and make a few guns as a check on the private manufacturers; whereas now an enormous number of guns were made there, and the cost was charged in the Army Estimates. The result had been that we were now paying large taxes for the purpose of destroying a very important branch of the trade of this country. With respect to Woolwich, there was a Vote in 1849 of £141,000 for all wages, but now that charge was quadrupled. In fact, there seemed to be no end of experiments, the cost of which was saddled upon the taxpayers of the country. The Pimlico establishment had become a vast tailoring undertaking, and he would point out that that manufactory might with equal justice enter into a contract to supply foreign Governments with ready-made clothing as that the Chancellor of the Exchequer should enter into contracts to supply them with coin. If the State were to become a dealer in guns and coin, why should it not enter into the copper trade, and seek to supply foreign countries with copper sheathing. Why should it not enter into the cotton and other branches of trade, and become a general merchant? Of course, if there were a profit upon these transactions it was immediately said—"See how clever we are;" whereas if there were a loss upon them the country paid it, and was none the wiser. It was impossible to ascertain from the Government accounts whether a profit or a loss accrued from these establishments; because deterioration of stock, breakage, and other matters of great importance were not taken into consideration in them. If the whole country were turned into one vast Government workshop there would be nobody left to pay the rates and taxes. It had been the fashion of late to condemn contracts entered into with private firms; but all he could say was that the conditions of contracts that had been offered by the Government were such as no respectable firm would have looked at. The matter was of such importance that he had not thought himself justified in withdrawing it, though he would not go to a Division upon it. He was desirous to elicit some expression of opinion upon the subject from the Chancellor of the Exchequer. He was told that a Commission, composed of some of those gentlemen who had nothing to do, was about to make a tour on the Continent to visit the foreign Mints. No doubt they would have a pleasant time of it—possibly in company with their wives and families; but he could assure the Chancellor of the Exchequer that he could get all the information he desired within 100 miles of the Mint. Thanking the House for the patient hearing afforded him, he must conclude by once more protesting against the whole system of Government manufactures as being alike injurious to employers and workmen, and giving endless occasion for complaint on the part of the taxpayers; and he particularly objected to the Government making use of their plant and offices and the public money to enter into competition with private manufacturers, insuring great loss if not ruin to those manufacturers, at the same time that no one was benefited but the public officials.


said, that one matter had been forgotten by the hon. Member for Birmingham (Mr. Muntz). He could recollect something about the Maria Teresa dollar which was coined at or about the time of the Abyssinian War; and, in his judgment, it was very desirable that the circumstances connected with that transaction should not be forgotten. He wished to direct the attention of the House to that which he might denominate the corpus rather than to the Preamble of the present Motion. Government manufactures, he believed, except on an extremely restricted scale, must always be and were injurious to the commercial classes, because they inflicted a burden on the taxpayers. Consequently, it was unseemly, to use the mildest expression, for Her Majesty's Government to compete with private manufactures in regard to foreign Powers. The present discussion had been almost entirely confined to the Preamble of the Motion, the question of coinage, and the interests of Birmingham; but, in point of fact, a much larger subject was involved. If the principle to which he had adverted were established, not only Birmingham, but Manchester, Leeds, and every other large trading community in the country, would suffer greatly in consequence of the factories and the dealings of the Government. By that means, and to that extent, he considered the Government entered into the speculations of trade, with this difference, that for the purpose of carrying on such operations, public money must be used in derogation of the interests of those who contributed it. That such a state of things would be injurious to all our commercial relations and prospects was as clear as the sun at noon. With regard to arms, there might be a question as to how far the institution at Enfield was necessary as a check upon trade transactions elsewhere. He felt, convinced, however, that the effect of the operations at Enfield had been very largely exaggerated, and even in experimentalizing, it was necessary that the Government should not come into adverse competition with the private trade of the country. It would be a grievous error for the Government to apply the rates and taxes to the creation of a fund to enable them to enter into competition with the private firms which paid those rates and taxes. Such a principle, if carried out, would result in the annihilation of some private trades, especially as the Government were placed at a great advantage over individuals, because they could obtain the earliest and most reliable intelligence on commercial subjects. The House ought to feel itself extremely indebted to the hon. Member for Birmingham for his having brought forward this question, and, for his own part, he regretted there was no opportunity of going to a Division on the general principle it involved. As the representative of a very large commercial community, he had heard but one feeling expressed on the subject of Government competition, and he was prepared to give the Motion his most cordial support.


said, he wished to warn the House against this Resolution, which was one of the most insidious which had been presented to Parliament for a long time past, for it commenced with an attack on what had been proposed by the Chancellor of the Exchequer, and next endeavoured to make hon. Members parties to a general proposition in which he for one trusted they would never acquiesce. Commercial communities, like all other persons, always desired to promote their own interests. That, indeed, was the weakness of all of us. We lived in a world where every man wished to serve his individual, his trading, or his professional interests; and endeavoured, when they clashed with the interests of the Government, to make out what the lawyers called a "case." His hon. and learned Friend (Mr. Wheelhouse) said—using an expression to which equity lawyers were much attached—he liked the corpus of the Motion, but that was merely a peg on which to hang a very strong Resolution. The first part of the Motion was "to call the attention of the House to the statement made by Mr. Chancellor of the Exchequer with regard to intended operations at the Mint." This, of course, was quite legitimate; but now he came to his hon. Friend's insidiousness. The Resolution was an attack upon a system which he (Mr. M. Chambers) hoped would last for many years, because Great Britain itself would not last unless that system were maintained. When he looked at the Resolution he found it one of the most serious ever presented to the House of Commons, and when he observed the small number of Members present at that moment he was struck with its occasional indifference, laziness, and negligence upon matters of the greatest interest and importance. The insidious-ness of the Resolution lay in the declarathat "Government manufactories are injurious to the commercial classes and a burden on the taxpayers." He asserted, on the contrary, that Government manufactories were not injurious to the commercial classes, but that they were exceedingly useful to the honest commercial classes, and a saving to the taxpayers. His hon. Friend (Mr. Muntz) told the House that honest firms would not contract with the Government on account of the stringent conditions put into their contracts. But what a fearful censure it was upon the whole commercial community to say that they had not attained the confidence of the Government. He (Mr. M. Chambers) went further, and said that commercial firms had not attained the confidence of the country, and that, whether they entered into private or public contracts, it was found necessary to insert the same rigorous conditions and exercise the same watchful supervision. He had always been a friend to the commercial community, and he wished to elevate them and give them self-respect—but commercial men were in error when they asked that Government manufactures might be abolished, under the idea that thereby their own interests would be promoted. The competition upon which the Government entered was not a competition for the manufacture of articles of general and domestic use, but of those necessary in a state of war; and where could his hon. Friend find any nation, ancient or modern, destitute of Government manufactories for equipping and setting forth an army or navy in time of war? The hon. Member for Birmingham said little about the Mint, but maintained that the House ought to abolish all Government manufactories. Now, he should like to take the House back to the last great war, when our military forces were armed with "Brown Bess" from Birmingham. If the hon. Member would consult with some yet living who were engaged in the Peninsular War and at Waterloo, he would find that the muskets sent from Birmingham under the pressure of war were most disreputable and destructive weapons—destructive, not to the enemy, but occasionally to those who had to fire them. It was upon record that the men's shoulders were so bruised by the recoil that they refused to fire these muskets. The consequence of their unfitness for use was much loss of life and very great suffering. When the Government were driven to the necessity of going to private manufacturers they raised their prices, and too often produced an inferior commodity. That was trade. When, also, the Government had relied upon private manufacturers it was found that they failed them. It was fortunate that before the Crimean War the Long Armoury in the Tower was burnt down with 20,000 stand of arms, for everyone said they were useless weapons, and that there was after the fire a probability that the Government would get good ones in their places. When the war broke out we could not get served with what we wanted in Birmingham, and we were obliged to go to Liége and endeavour to obtain a quantity of arms there. [Mr. MUNTZ: You never got any.] Well, we tried to get them; and it was, at all events, quite clear that Birmingham could not supply us at the time. Did his hon. Friend forget how the Enfield manufactory was established? It was established at the time of the Crimean War; and most admirable arms, he must say, had been manufactured there. Asimprovements were made from time to time the Government had shown itself ready to adopt them, although he could never entirely approve of the mode of management of our public establishments. But to destroy all those establishments, in the expectation that private manufacturers would give us all that we required, was a proposition which was not to be seriously entertained. Through the accidents of political life he had happened to be connected with various dockyard communities, and, confining his observations to those who really performed the duties in those dockyards, he must speak of them in the highest terms. He believed that the work which they produced was the best of its class that could be obtained. The outcry that had been raised against the dockyards had originated in their having been carelessly, negligently, and improperly managed, and not in there being anything inherently wrong in their organization. But he now came to something which he durst say would give a great deal of offence. It was necessary that he should speak plainly of private establishments, but he hoped he would not touch them to the quick. If so, let "the galled jade wince." His hon. Friend said that the services of respectable contractors could not be secured because of the stringency of the rules with regard to contracts. He (Mr. M. Chambers) had some experience, however, of the way in which contracts with respect to buildings were carried out, and much the same thing happened in the case of ships. In the case of the Crimean War, what occurred with reference to contracts was just as bad as that which happened with regard to American contracts in the war between the Northern and Southern States, and it was a matter of frequent occurrence that when private establishments professed to have executed a contract satisfactorily, the Government workmen were obliged to finish the articles supplied. There was no doubt that we had been exceedingly faulty in the manner in which the accounts of our public establishments had been kept, and thoughtless or interested persons had come to the conclusion that the whole thing ought to be destroyed, because extravagance had been manifested. But the commercial community ought, in his opinion, to look upon the public establishments as institutions upon the prosperity of which their own prosperity depended, and not to promote a destruction which would only tend to their own ultimate loss.


I would venture, Sir, to suggest to the hon. Member for Birmingham (Mr. Muntz) that, before framing his next Motion, he should study the art of giving Notices; because, although a Notice should not contain a précis or an outline of the speech which is to be made, it is, nevertheless, of some advantage that it should convey a slight idea of the subject to which the speech will be directed. The hon. Member has dwelt at great length upon two subjects—neither of which are referred to in his Notice. There was nothing in his Motion which could give one the impression that he was going to deal with the subject of the Enfield manufactory or with the Report of two Gentlemen on the Mint which has been laid upon the Table; and the consequence is that those Gentlemen, who would have been here, and could have given him the information he seeks, are not present. But my part in the matter is a very small and humble one. I have only to answer what the hon. Gentleman says with regard to the management of the Mint. Now, I am so much at one with the hon. Member for Birmingham that when that distinguished man the late Master of the Mint died, I instituted a very strict investigation, with a view to seeing if it was possible to achieve what the hon. Gentleman desires—namely, to make the coinage of this country a matter of contract, and do away with the Government establishment altogether. And if I could have seen my way to doing this without injury to the public, I should have done what the hon. Gentleman so much desires. I took a great deal of trouble about the matter, and I found that it was impossible to do it without committing the public to a much greater expense than that which is incurred under the present system; for, although we might get the work executed by contract, we should be obliged to keep the dies in our own hands, to employ persons to test, to assay, and to superintend the work in all its stages; and when I estimated the expense which would be incurred by the employment of the persons necessary to check the process of coining by contract, I found that there was no margin left for profit to the contractor—in other words, that the process would be more expensive than it is at present. I was, therefore, compelled, though unwillingly, to give up the idea as impracticable. Then the next thing we had to consider was, what we could do towards amending the way of working the Mint. Upon that point the hon. Gentleman has indulged in some severe criticisms. We found a very defective system in existence. We found that the workmen were employed at high wages when there was any work to be done, and that at other times they received what was known as subsistence wages. Thus, they would at one time be in a state of utter poverty, at another in a state of comparative opulence, and, as the House is aware, nothing can be more demoralizing. We have now, however, altered this system, by giving uniform and fair payment to the workmen, whether they are employed or not. The duty of the Mint, as the hon. Gentleman and the House are aware, is to be ready at all times to execute coinage when called upon. It cannot, like private manufacturers, say when it will work and when it will not. The business of the Mint is to sell sovereigns for a certain quantity of fine gold, and whenever there is a serious demand it must be prepared to manufacture. The consequence is, that we are obliged to keep a considerable number of men always ready, because we never know when the demand upon us will come. That being the state of the case, the simple question remains whether it is right or not that the Mint under such circumstances should execute orders for other countries that have no Mints of their own? Now, is there anything contrary to sound principle, or unjust towards any trade in our earning, when we should otherwise be standing idle, some of the money required to defray the expenses of the Government establishment? Nothing appears to me to be clearer than that this course is a proper one to adopt. The hon. Gentleman says that we shall involve ourselves in great expense and difficulty, and he speaks of the heavy penalties we shall have to pay. That, however, is easily met by our refusing to enter into any contract to which a penalty is attached; and I am happy to say that the character of this country is such that we shall meet with no difficulty in making reasonable contracts unattended by a single shilling of penalty. Then the hon. Gentleman says that we shall incur great expense in the speculative nature of the raw material; but that is obviated by our requiring those who come to us to bring the metal they wish to have coined. We have no wish to force a trade or to enter into large transactions. All that we wish to do is to fill up some idle time, and to keep our men at work, and our machinery in gear, so that we may be able to lighten the burdens of the taxation which would otherwise be required to defray the expenses of the establish- ment. The hon. Gentleman speaks of our entering into competition with the trade of Birmingham, and refers to the superiority of resources possessed by the manufacturers of Birmingham over ourselves. But if the establishments to which the hon. Gentleman refers are so vast and our own so small, the mere fact that we earn a few thousand pounds towards making this establishment self-supporting, must be a matter of mere insignificance to the manufacturers he refers to; so that while he calls upon the House to despise us for our smallness and insignificance, he seeks to interfere with what we are doing on the ground of the injury which we are causing to private manufacturers. The whole question of the employment of the men is one of comparatively small importance; but it appears to me that it is manifestly for the interests of the country that tills establishment should be kept employed rather than that it should be allowed to remain idle. I do not pretend to vie with the hon. Member in the varied and interesting information he gave the House, which I heard with much pleasure, and should have heard with more pleasure if it had been more relevant to the main subject; but I am informed that it has not been the practice to manufacture gold and silver coin at Birmingham, and the main business of the Mint, if it were employed, would be to manufacture gold and silver coin. Therefore, what the hon. Member asks me to do is this—to increase the burdens of the taxpayers by some thousands a year, which might be saved, for the sake of Birmingham, to which, in all probability, this manufacture would not go. It is just probably a question whether the coin would be manufactured at one mint or another on the Continent, or whether it would be manufactured here; but even putting the matter as strongly as the hon. Member would wish to do, it is really better that some little employment should be withdrawn from the manufactories at Birmingham if by that means you can relieve the Exchequer of this country and make the Mint self-supporting. Under the circumstances I have described, and with the limitations I have mentioned, I do avow that it is right and proper, if we choose, to employ this machinery in making the establishment self-supporting rather than let it remain idle; and farther than that I do not wish to push, the matter. I am certainly prepared to stand by the proposition that as we must have a Government establishment, as we have no choice, as it is not possible to do without it, we had better make it as far as we can self-supporting, always guarding ourselves against such engagements as would form an impediment to the discharge of what is the principal duty of the Mint, the coining, whenever it is called upon, of the required quantity of gold. I hope this explanation will be considered satisfactory. This question of the Mint has nothing to do with the larger question of Government factories, because we must have a Mint under Government care and superintendence; and, that being so, the only question is whether we shall, as far possible, use it for the purpose of repaying the outlay of the Government; or whether we shall keep a large establishment of skilled men and machinery wilfully idle in order, possibly, to increase the profit of some manufacturer?


was not surprised at the alarm occasioned by the principle involved in the decision of the Chancellor of the Exchequer, for the trade at Birmingham had suffered severely by the extension of the Government factory at Enfield. No doubt, the Chancellor of the Exchequer deserved credit for any small saving he could effect; but he did not believe that the saving was worth the change in the administration of the Mint, and the few thousands a year saved by avoiding idleness might be more than balanced by the inconvenience that would follow from the further adoption of the principle of the Government becoming a manufacturer. He was a member of the Committee which recommended that £20,000 should be spent in enlarging the manufactory at Enfield; but the Government spent £450,000, and so little with the consent of the House that money voted for commissariat purposes was applied to the Enfield extension. Up to 1815 the Government had no manufactory, and the Duke of Wellington said we derived superiority from the weight of our fire, obtained from arms manufactured chiefly in Birmingham and London. The evidence given before the Committee of 1854 was that the trade of the country could not be relied upon for 40,000 stand of small arms in a year. The House literally compelled the Government to give orders to Birmingham and London, and in two years and three months the private manufacturers turned out 272,000 stand of arms. Warned by what had occurred at Enfield, and also at Weedon, where an establishment was broken up on the Report of the Contracts Committee, and doubtful of the propriety of allowing the Government to compete with manufacturers, not for the supply of the Government, but, in this instance, for the supply of foreign countries, he trusted the House would not consider that the hon. Member had wasted time in drawing attention to a proposal which, although now of a limited character, might in future assume much larger proportions. He hoped that the House would not, in order to effect a saving of a few thousands a year, violate the principle that the Government should not become manufacturers and ought not to employ public funds in any commercial transaction or speculation. If the House once allowed that rule to be set aside all control would be lost, and there might, in the end, be a most extravagant expenditure.