HC Deb 31 July 1873 vol 217 cc1358-85

Order for Second Heading read.


said, he was sorry to stand between the House and the Appropriation Bill, the more so as he agreed with the First Lord of the Treasury that such a course should be reserved for occasions of importance. He conceived, however, that he had ample justification both by reports of recent Committees and by observations which had fallen from hon. Members in debate during the last few weeks, in drawing attention to the unsatisfactory relations at present existing between the Treasury and the other Departments of the State. If he required further justification it might be found in the fact that when the present Board of Treasury was first constituted it assumed a new and unprecedented shape, because a third Lord was added in the person of the right hon. Member for Halifax (Mr. Stansfeld), and a fourth in the person of a noble Marquess from "another place" (the Marquess of Lansdowne), who was kind enough to serve his apprenticeship in public business without salary. At the commencement of the Session of 1860, he drew the attention of the Chancellor of the Exchequer to these changes, and asked for an explanation, which was then given; but he still thought those changes were made in the wrong direction. What was required, in his opinion, was to strengthen not the political representation, but the permanent element of the Treasury. It would seem that the Government on reflection agreed in the justice of those criticisms, for when the then Secretary of the Treasury (Mr. Ayrton) was removed to the Office of Works, the Third Lord took his place, and the vacancy thus created was not filled up. In process of time the right hon. Gentleman opposite (Mr. Baxter) succeeded to the Secretaryship of the Treasury, who, although he had left his mark at the Admiralty, had not, if he might be permitted to say so, taken that part in his present office to which by his talents and previous exertions he was entitled. With regard to matters arising out of the Committee of Public Accounts, that Committee made a Report in March suggesting that an inquiry should be made by the Treasury into the irregularities then existing in certain Departments. An inquiry was instituted, and the result had since been laid before the House; but it appeared that the inquiry took three mouths to report. He should have thought three weeks instead of three months would have sufficed for such a work. What had been the consequence? The debate on the subject was hurried over in four hours, while if it had taken place at an earlier period of the Session, it might advantageously have occupied two nights. It seemed that the regulations for the due disposal of the Savings Banks money had been set aside so long ago as 1868, and that fact must have been well known to the Treasury officials; and yet up to the present hour those regulations had never been insisted upon. When the Treasury Minute was produced, in consequence of the Commissioners' Report, he observed that this flagrant omission to comply with the terms of the Act of Parliament was not even alluded to. The Treasury Minute did indeed contain a clause to the effect that the Treasury would determine, after communication with the Post Office authorities, the form in which the different statements of accounts were to be rendered, and that it might be necessary to appoint a Committee on the subject; but this seemed to him a perfunctory way of dealing with what might easily have been dealt with on the spot. The other day the Chancellor of the Exchequer and his private Secretary, in their dealings with Mr. Scudamore, and in relation to the national business of the Post Office, really assumed functions which the Treasury Department ought, in his opinion, to undertake; and the Report of the Select Committee on the Cape of Good Hope and Zanzibar Contract confirmed the same view. In that case the transactions were sometimes conducted by the proper officers of the Treasury and the Postmaster General; but very frequently by the Chancellor of the Exchequer and his private Secretary behind the back of the Postmaster General. It was probable that if the Zanzibar Contract had gone through the usual process the case would have presented itself more clearly to the mind of the right hon. Gentleman. During the whole of the Summer of 1872 the Secretary to the Treasury took no part in the arrangement of the contracts, although he was an official who ought to have been consulted, because he had been the exponent of the policy of the present Government in those matters. Over and over again in the last Parliament that right hon. Gentleman brought forward the cases of the Cunard, the Peninsular and Oriental, and this very African contract, and he was supported in his views by the present President of the Poor Law Board and other Members now on the ministerial benches. The first thing the present Government did was to instruct the noble Marquess then at the head of the Post Office (the Marquess of Hartington) to lay on the Table a Motion altering the Standing Orders, and laying down the rule that no contract should be valid until it was approved by the vote of that House. The Chancellor of the Exchequer appeared the other day to complain of this rule; but as he was a Member of the Government who proposed it, he must be taken to have approved of it. He agreed with the right hon. Gentleman that the rule was sometimes inconvenient, although from what had occurred it was probable that postal con- tracts would not be so numerous in future as they had been in past times. This was, however, only another instance of the want of accord between the right hon. Gentleman and the other Members of the Government. It appeared that the Secretary to the Treasury signed some of these papers without having read them and without knowing what they contained. Being asked a question on this point by the Committee, he said that he had initialled these papers ministerially; whereas the Chancellor of the Exchequer said there was no such thing as initialling papers ministerially. The Chancellor of the Exchequer flatly contradicted the Secretary to the Treasury, and said that the latter was responsible, and that he (the Chancellor of the Exchequer) was not. He thought the House had cause to complain that the Treasury, as a Department, was not allowed to have its full share in making arrangements, before the Chancellor of the Exchequer came in to approve of or to alter them, and that they had no record in the Treasury of the detailed operations in connection with the subject, which he thought ought to have preceded the action of the right hon. Gentleman. The inquiries before the Civil Service Expenditure Committee disclosed a like unsatisfactory state of things. Their Report dealt mainly with the clerical establishment of the Departments, and with the question whether the Treasury exercised proper control in fixing these establishments and regulating the public expenditure. This Committee also regretted to find that more harmonious action did not prevail between the Treasury and the Departments. They especially referred to the controversy which had prevailed for a long time between the Treasury and the Board of Trade as to the establishment of the latter Department, and pointed out the absurd result of that controversy, which ended in the fixing of an establishment which was disapproved as excessive both by the Treasury and by the permanent head of the Board of Trade itself. With regard to the mode in which compensation was granted on the abolition of certain offices, the Act of Parliament required that under special circumstances a full salary should be granted; but it did not appear that the proper officers of the Treasury had ever made the necessary inquiry into special circumstances. He thought that the natural authority and responsibility of the officers of the Treasury should have been allowed to have full sway. It was the absence of that method of proceeding which seemed to him to demoralize the action of the Treasury, and to render its relations with the other public Departments far from satisfactory. With regard to the examination of clerks for the different Departments, the Orders in Council provided that the head of each Department should regulate the mode of examination for his Department in consultation with the Civil Service Commissioners; but the new system which had been introduced by the Chancellor of the Exchequer superseded the Orders in Council, and if it was intended to pervade the whole service, the public ought to be informed of the change. Another Report from a Select Committee, laid on the Table to-day, related to writers in the Civil Service. After repeated efforts by the hon. Member for Chatham (Mr. Otway), this Committee was appointed in order to "let down" the Government easily from the position they had taken up, and he believed the decision of the Committee upset the policy of the Government on this subject. It was a most extraordinary and unprecedented thing to see the House of Commons night after night and week after week taking up the cause of the servants of the Crown against the Treasury; but he feared the Government were in the habit of resisting the claims of public servants too long, and then they were obliged to yield to pressure in the House of Commons, perhaps twitting the House in the next Session for forcing expenditure upon the Government. Many instances of this kind must be in the recollection of the House of Commons, and he need not dwell upon them. The Supplementary Estimates also exhibited, in his opinion, an unsatisfactory state of things, showing that the Treasury did not make up its mind in due time upon the proposals which it desired to submit to Parliament. The greater part of these Supplementary Estimates might have been decided upon before the meeting of Parliament, or, if not, they might well have been left over till Parliament met again. He would not allude to the controversy respecting the embankment of land adjoining the Houses of Parlia- ment; but everyone must see here a want of harmonious action between the Treasury and the Department of Works as between the Treasury and the Board of Trade, which was much to be regretted, and which would, he hoped, be remedied before the next meeting of Parliament. The position of the Treasury, as the great controlling Department, quite irrespective of the Chancellor of the Exchequer for the time being, should be maintained and strengthened by every means this House could command. There was no security for public economy so great as the security afforded by the traditional habits and policy of the Treasury. The great abilities of the Chancellor of the Exchequer, however, should be reserved for great occasions, instead of being spent in doing the work of subordinate officers in his own Department. He thought it would be well if notice were given to the other Departments that the authority of the Treasury would be more strictly maintained than it formerly was. The subject was worth attention, for the public must feel that the existing state of things was unsatisfactory.


expressed his acknowledgments to the hon. Gentleman opposite for the very fair and temperate manner in which he had touched on topics which, no doubt, in other hands might have admitted of very different treatment. He also thanked the hon. Gentleman for the opportunity thus afforded him of giving explanations which it was desirable the House should receive and which he was very anxious to make. With his permission he would first touch on the last point noticed by the hon. Gentleman—namely, that relative to the embanking a portion of the Thames to the South of the House. He was not going into the controversy on this question, but wished to offer a personal explanation. He read this morning that there was one thing he could not deny—namely, that the Treasury had altered an Estimate of another Department, not only in its amount, but in its destination—by which, no doubt, was meant the purpose for which it was intended—without consulting the other Department. This statement was an entire mistake. He held in his hand a letter from the Board of Works, enclosing an Estimate which was divided into three parts—A, B, and C. A was for £1,000 to be employed in completing the purchase of land; B was for £7,500 for embanking; and C for erecting public buildings, no amount being stated for that object. Then there was a memorandum entering into details, setting forth that the £7,500 was part of £35,000 which would be ultimately required for the purpose of the Embankment, and as to C, the memorandum added—"The nature and extent of the public buildings not having been determined upon, no Estimate has yet been presented." The Treasury drew its pen through the part of the Estimate relating to the public buildings, with reference to which no amount was mentioned. That was all that was done, and no difference whatever was made in the amount or the purpose of the Estimate. In taking the course they had adopted the Treasury were not interfering in the business of another Department. They did no more than, as the Department responsible for submitting the Estimate to the House, they had a perfect right to do. The hon. Gentleman had spoken in terms not at all higher than they deserved of the gentlemen who joined the permanent department of the Treasury, and expressed an opinion that they were overworked and overtaxed. He (the Chancellor of the Exchequer) could not, certainly, say that they were under worked; but, while he should be most ready to recommend to Parliament an increase in their emoluments, should the occasion arise, he could not say that at present there was any case for such an increase. If new duties were imposed upon them a considerable increase should be given; but so long as matters remained as they now were, there was, as he had said, no case for such a proceeding. He was bound to say, too, that an honourable feeling prevailed among the gentlemen in question, that, as it was their duty to interfere with the expenditure of other Departments, they were bound to set an example of economy in their own. The hon. Gentleman spoke of the delay that existed in the furnishing of the Treasury Minute; but it was a matter in which, from its nature, greater promptitude could hardly be expected. There was not merely the ordinary writing of the Report, but it was a subject which involved much technical detail. The duty was a delicate and difficult one. The Treasury was a party implicated more or less, and therefore it required the utmost care to avoid appearing, in exculpating themselves, to inculpate any other Department. One cause of the delay was repeated requisitions from the Post Office—particularly from Mr. Scudamore—for more time to offer explanations. It would have been matter of grave animadversion if the Treasury had declined to give him ample time for that purpose. The transactions were exceedingly complicated, Mr. Scudamore had enormous difficulty in getting the facts together, and it would have been intolerable if the Treasury had not given him the full time he required for his defence. He could not therefore think—when it was remembered that the ordinary business of the Department had to be attended to as well—that the delay was greater than was justified by the circumstances of the case. Then with respect to the question of the regulations that were set aside by the Post Office, the hon. Gentleman assumed that the Treasury were aware of that fact; but they were not, and, indeed, did not know it until the investigation was made. They acted, he thought, discreetly, in not making any change until the entire matter was brought to a close. The Treasury were acting partly judicially, but they were also called upon to stand in the dock with the other persons accused. The Post Office was in fault; but if the Treasury had said so, they would have left themselves open to the observation that they were throwing dirt upon another Department in order to screen themselves. The thing had gone on so long that it was thought better to wait until the final decision of the matter had been arrived at, and then to adopt remedial measures. It was true that the Report was accompanied by recommendations; but it was thought better to keep back those recommendations until the tribunal which was ultimately to judge of the entire matter—the Committee of Public Accounts—had made its investigation. The Treasury were of opinion that when the Committee had come to a conclusion as to the relative amount of blame to be ascribed to the different parties it would be time enough to come forward with their recommendations. Had they done otherwise they would, probably, have left themselves open to the suggestion that they were endeavouring to shift blame from their own shoulders. It was quite true, as the hon. Gentleman said, that it was most desirable that order and regularity in the conduct of the business of the Treasury should be observed. No one was more sensible of that than he was. No one would more regret to see order or regularity put aside. The Treasury was a Department which could not always be managed in the same way. Sometimes business went solely through the hands of the Secretary to the Treasury. Sometimes a great portion of it went through the hands of the Chancellor of the Exchequer. Sometimes it was equally divided between them. No rule could be laid down which would apply to all cases. He quite admitted it was desirable that at the Treasury all matters should go regularly through that Department, passing from the hands of the clerks up to the hands of the Financial Secretary, and from him, if it were of sufficient importance, to the Chancellor of the Exchequer. He could only give this assurance to the hon. Gentleman and the House—that both as regarded the internal administration of the Treasury and its relation to the other Departments of the State, the utmost care should be taken to maintain the relative position and rights of individual functionaries and public Departments. With respect to the Zanzibar Contract, the hon. Gentleman commented on the fact that a large portion of that business had been transacted by the Chancellor of the Exchequer. The House would form their own opinion; but he did not think the course he had taken was wrong. It was unfortunate that the Report of a Committee was necessarily laid upon the Table a long time before the evidence taken before them. People were apt to make up their minds upon the Report and the subject had lost its interest before the evidence was before them. That was unfortunate for the defeated side. As a question of character and motives was involved in the case he hoped that hon. Members would do him the honour of reading the evidence he had given before the Committee before they formed a final judgment on the matter. The Government had been a party to the appointment of that Committee—the Committee had decided against the Government, and they had undertaken and would, with the utmost good faith, give effect to its recommendations. If they did not come to the conclusion that he was right, they would at least see that what had been done was done honestly with a view to the good of the public service and without the least wish to conceal anything from the House. He would explain how he thought that he was justified in keeping the matter in his own hands. From November, 1871, until August 1872, they did not seriously entertain the question of a contract. They were engaged in inquiries and in obtaining information in a variety of ways. No doubt mistakes were made, and there ought to have been a regular letter written from the Treasury to the Colonial Office, on which to found their letter to the Cape. But at that time he had the misfortune to lose the services of the gentleman who had for several years been his private Secretary, who was succeeded by a gentleman who, though well qualified for his duties, had not the same amount of knowledge and experience, and some matters wore omitted which ought not to have been omitted. Up to the 13th of August, 1872, they were not in a position to take any decision; but at that time the Government did come to a decision to go on with the contract, and from that moment everything had gone on with the most perfect regularity. It was only during the preliminary investigation that any mistake or omission had occurred. He certainly did not want to establish any new principle of action in the Treasury, or alter any general working of the Department. He repeated from the moment they did make up their minds to act they acted with the most perfect regularity. On the 13th of August, when this piece of business was taken up, they wrote to all the Departments concerned with the business, and regular action was taken till the whole matter was carried through in December, when the contract was signed. The hon. Gentleman referred to the case of the Secretary of the Treasury. As soon as the matter had assumed the form of action by the direction of the Cabinet the Secretary to the Treasury was a person to take part in it; but he happened to be out of town, and for some reason he had not discovered, the papers did not reach him. That certainly was owing to no direction on his part—nothing could be further from his intention than to give such a direction. It was said, Why did he not consult the Secretary to the Treasury? As regarded the Western contract—the proposal of the 29th of January—the Secretary to the Treasury had made a Minute on the Papers to the effect that he disapproved these proceedings altogether. After he had given so decided an opinion on the matter, he did not see any propriety in worrying him. So long as the matter was under deliberation in the Cabinet, he was not therefore consulted. He was not aware that there was anything further to notice with regard to the Zanzibar Contract. Then, with regard to the Report of the Committee on the question of the Civil Service expenses, the hon. Gentleman alluded to the dispute between the Treasury and the Board of Trade, and he seemed to be of opinion that there was some miscarriage in the matter on the part of the Treasury. The evidence before that Committee was not before the House; but those who would do him the favour to read his evidence would see what his opinion was. The Treasury was charged with the duty of bringing into effect the system of competition for clerkships. In order to do that it was necessary to regulate the system on which the office was to be organized. There was a long controversy with the Board of Trade, which insisted that the clerks ought to be paid according to the higher class, while the Treasury thought they should be on the second class. The Board of Trade also made demands for an increase of salaries to higher officers which the Treasury did not feel themselves at liberty to grant. The Board of Trade was an independent Department, and he had no power to coerce them. The Treasury were therefore driven to this dilemma—either the Board of Trade must be left without the proper complement of officers, or else a concession must be made which did not appear to be economical. Having exhausted all the means at their disposal, they had therefore thought it right to concede the wishes of the Board of Trade, instead of bringing the office to a dead lock. The Committee had reported that they were not satisfied with the grounds of action taken by the Treasury, and he was not prepared to say that the Committee were wrong. It was a very difficult matter to decide. He only hoped their Report would strengthen the hands of the Treasury, and that in any future organization they should not concede to the head of the Department more than was consistent with their own opinion of what was right. With regard to the case of the Bankruptcy pensions commented on by the Committee, the answer he had to give was very simple. The Treasury were not to blame. They deferred entirely to the views of the Lord Chancellor. He had the power of fixing the pensions by the Act, and the Treasury were required to assent to them. The matter came before the Government in a collective capacity. The Lord Chancellor stated that he was very much hampered by a promise which he had made in the House, and the Government came to their decision with regret, but felt that they had no alternative, having no power to coerce the Lord Chancellor. Though he (the Chancellor of the Exchequer) was no doubt responsible for what was done in that matter, he was responsible only in the same way as the other Members of the Government. He had now, as fairly and frankly as he could, answered the questions put to him by the hon. Gentleman. It was far from his intention to interfere beyond the strict letter of duty with any other Department, or to alter or diminish the position of any person within his own Department. All the Government Departments presided over by a Cabinet Minister were equal. As far as regarded salaries, the Treasury had power to object to their increase; they could not proprio vigore without the consent of the Government force Departments to reduce offices or salaries. The effect of that was this—they could not expect from the Treasury more than they could do. The danger was they might demand more from the Department than they were able to accomplish. All the Members of the Government being equal, if they attempted by an arbitrary regulation to raise one as a sort of ruler or judge over the other, re-action would probably leave the Department shorn of its legitimate powers. With these observations he had only to say that he should be exceedingly happy to find that they were received by the House in the same spirit in which they were submitted to them.


said, he thought his hon. Friend (Mr. Sclater-Booth) had done quite right in bringing the matter forward at this stage. Until two Sessions ago private Members had opportunities of raising discussions on the Motion for going into Committee of Supply; but the rule as to Mondays now left them little opportunity unless the Government chose to give them a day. This ought not to be the case when the conduct of the Government was in question, and it would have been well had questions which had recently excited attention been brought forward under the old plan. He himself wished to speak on the Post Office question; but the limited time available for the discussion disabled him from doing so, except by postponing the Division till the evening sitting, which would have been inconvenient to many Members. He rejoiced at the spirit in which the Chancellor of the Exchequer had met his hon. Friend, and especially at his assurance that the administration of the Treasury would be conducted on the old lines. He believed that the whole of the mistakes, misapprehensions, and bad feeling which had occurred, had arisen from the departure from the old practices. Almost all matters of importance came before the Treasury, and the wisdom of former generations had divided Treasury business between different Departments, each having an experienced permanent officer. Communications were distributed after registration among the Departments, and then brought before the Permanent Secretary and the Financial Secretary, being passed on, if necessary, to the Chancellor of the Exchequer, and occasionally to the First Lord of the Treasury. He regretted that the highly competent Secretary to the Treasury had not shown himself more conversant with the financial business of the Government, and was surprised that in discussion on the Budget the Chancellor of the Exchequer had not invited him to take part. The Chancellor of the Exchequer, as he (Mr. Hunt) remarked two years ago, seemed to be Chancellor of the Exchequer and Secretary to the Treasury rolled into one. He feared that the Chancellor of the Exchequer's zeal and passion for work had led him to take things out of the hands of the permanent officers of the Treasury. The late Sir George Lewis, when asked whether he found time to work his Department, said, his duty was not to work his Department, but to see that his Department was worked. There was much sense in this, for heads of Departments should not do all the work, but should control their Departments, deciding all the more important matters themselves, but not taking everything out of the hands of the permanent officers. The right hon. Gentleman's great ability and quickness of apprehension and temperament had, perhaps, made him impatient of the delays involved in matters going through the Treasury mill. The Zanzibar Contract was evidently arranged in the right hon. Gentleman's room in Downing Street; for had it gone through the proper Department the offer of Mr. Monteith's company would have been duly registered and would not have been lost sight of. In the Post Office case, also, letters of the greatest consequence were mislaid. Delay might be caused by the regular routine of matters going through the Department; but the shortest cut was not always the best road, and he welcomed the Chancellor of the Exchequer's assurance that in future he would give all the functionaries of the Treasury their proper duties, and would make no short cuts to decisions on important matters. As to the Board of Trade, when at the Treasury he and his right hon. Friend (Mr. Cave), then Vice President, wore appointed a committee to inquire into the question of the staff and salaries, and they made a representation which was accepted by the heads of the Treasury and carried out. Had the same course been taken in the matter mentioned by the right hon. Gentleman there would have been harmonious action between the two Departments, and strife would have been avoided. [The CHANCELLOR of the EXCHEQUER said, substantially the same course had been taken.] Then he could not understand how the question had been pending for three years. He also made a Report on the Poor Law Board, after personally obtaining sufficient information, and the President of that Board having also the opportunity of making a representation a decision was then arrived at. He regretted that the Chancellor of the Exchequer did not take a sufficiently high view of the power of the Treasury as to other Departments. The Office of Works and the Post Office were ex- pressly subordinate to the Treasury, and as to other Departments, the Treasury, through the First Lord and the Chancellor of the Exchequer, could urge on the Cabinet an opinion that the staff was too numerous or the expense too large, in which case the Government would order an inquiry through the agency of the Treasury. He could not conceive any inability on the part of the Treasury to carry out their views, if they were sound and recommended themselves to the Government of the day. The observations and assurances of the right hon. Gentleman must give the House great satisfaction, and it was to be hoped that we should not in any future Sessions have Report after Report of Committees commenting on the action of the Treasury in these matters.


said, that nothing could be more fair than the manner in which this subject had been introduced by the hon. Gentleman (Mr. Sclater-Booth), or than the remarks which had been made by the right hon. Gentleman who had just spoken. He quite understood the observations with which the right hon. Gentleman commenced with respect to the new Rules of Supply; but he did not understand the connection which the right hon. Gentleman supposed to exist between those Rules and the somewhat rapid course of the debate of yesterday. He suspected that the evil lay deep in the overwork of the House of Commons, and not either in the Rules of the House or the disposition of the Government to make suitable arrangements for the Prorogation. The House felt, and must necessarily feel, fatigued at the termination of such a Session; but certainly the remarks of the right hon. Gentleman would have been most just if the Government had not given facilities for debate on serious matters connected with their own policy whore the subject was supposed to awaken a certain degree of public interest. In his opinion the regulations of Supply, although they were not free from inconvenience, were yet almost the only means by which the legislative business of the House could be prosecuted under the circumstances in which they now stood with anything like effect. He was very desirous of questioning in a certain degree what had been said by the right hon. Gentleman as to the power of the Treasury over other Departments. The matter, in his opinion, was stated with perfect precision by his right hon. Friend the Chancellor of the Exchequer. In the first place, it was not accurate to say that the Office of Works and the Post Office were two Departments entirely subordinate to the Treasury. They were undoubtedly subordinate to the Treasury in their expenditure, and expenditure formed so large a portion of the business of those offices that they were brought into a position in which control could in most matters be largely exercised over them by the Treasury. But it would not be correct to state that in other respects the Treasury had a general power of interference with those particular Departments. With regard to the Revenue Departments, strictly so-called—namely, the Inland Revenue and the Customs—over these the Treasury was superior, and they must follow its directions. Of course, it was perfectly true that the Chancellor of the Exchequer could, in a case of necessity, call in the assistance of the First Lord of the Treasury. He recollected very well a case when first he was Chancellor of the Exchequer, in which a very serious difference arose between the Foreign Secretary of the day and himself as to the establishment of the Foreign Office, and the Foreign Secretary having, as he had himself, great confidence in the First Lord of the Treasury, Lord Aberdeen, they agreed to refer the matter to him, and Lord Aberdeen decided it in his (Mr. Gladstone's) favour. He remembered, too, feeling exceedingly grateful to the Foreign Secretary for acceding to the request that the matter should be referred to the First Lord of the Treasury. It was undoubtedly true that the Chancellor of the Exchequer could carry—as other Ministers could—any difference between himself and his Colleagues to the Cabinet for decision. He himself as Chancellor of the Exchequer had very frequently been defeated in the Cabinet, and he had seen other Chancellors of the Exchequer defeated too with regard to questions of expenditure. He heartily wished the right hon. Gentleman opposite good fortune in such cases, and that he might be able in every instance when on the part of the Treasury he raised the question of expenditure and carried it to the Cabinet to have his own way. He had no doubt it would be much better for the public that it should be so; but, nevertheless, the Treasury had to fight its battles in the Cabinet, and like other Departments take its chance, and though occasionally it might achieve victory it must sometimes resign itself to defeat. He wished to confirm in the strongest manner what had been said by the Chancellor of the Exchequer on the Bankruptcy Compensations. Much censure had for some time past been bestowed on him on account of those compensations, and it was only lately he had been able to refresh his memory as to the cause of the actual transactions, so as to be able to say that of special responsibility in that matter his right hon. Friend had none. He admitted that he did not think those compensations reasonable; and if asked why, then, was he a party to them, he could only justify himself by a reference to what occurred in the matter. They knew very well that on former occasions the compensation awarded to the profession in measures relating to what was called "Law Reform" had been perhaps almost scandalous, but certainly excessive and highly burdensome to the public. They also knew—and everyone who heard him knew—that the weight of the legal profession in the House upon questions of that kind was ordinarily irresistible. He did not mean to say that was the case when the public matters involved were of such interest and of so high an elevation that the entire House attended, and its deliberate judgment could be obtained. Then there was something like fair play for the public. But one of the difficulties inseparable from the constitution of the House was this—that the House consisted, as to its personal composition, not so much of one House as of a succession of Houses. For instance, when they were discussing questions of philanthropy affecting some distant island in the Pacific the benches were filled with philanthropists. On questions relating to Ireland, when that country was supposed to be injuriously affected, the benches were filled by Irish Members. And so it was all round. Well, when the House was discussing an Act like the Bankruptcy Act it was vain for the Government to try to assert itself against the authority of the legal profession in matters connected with the structure of the Courts. Under these circumstances, his right hon. Friend and himself—for he was quite as much concerned in it—were thankful to get what they could into the Act in the way of control for the purpose of mitigating the burden of those compensations. But they were not able to place the compensations in Bankruptcy under the Treasury in the same way as other compensations, and that the best arrangement they could come to was that they should be placed in the hands of the Lord Chancellor under the Treasury. Every Lord Chancellor was a faithful and loyal Member of the Government to which he belonged; but the associations of his profession were strong upon him. He was head of the Law first, and a Cabinet Minister afterwards. But whether that was so or not, when any question arose, the Lord Chancellor always alleged—and alleged truly—that the Government could never have got those provisions at all with regard to compensations if the Gentlemen of the legal profession had not agreed to the provisions of the Act, because of the power given to the Lord Chancellor by the terms of the Act. Therefore, though the Government could not justify the amount of the compensations, they had no other course than to accept them. He entirely agreed with his right hon. Friend near him as to the conduct of business; and he admitted that both the hon. Gentleman and the right hon. Gentleman opposite were quite justified in the very temperate remarks they had made on the subject.


said, he wished to render his tribute of thanks to his hon. Friend near him (Mr. Sclater-Booth), and also to the Prime Minister, for the admirable tone and temper which had marked the conduct of the discussion. His only desire was to make a few remarks upon the general topics which had been discussed. He had no intention to say more in reference to the irregularities in the Post Office, than that he regretted the House had not expressed itself much more strongly with regard to the question than it had seen fit to do. The House was mainly concerned in taking precautions in order to prevent the recurrence of similar irregularities. A great portion of the mischief had arisen from what the Postmaster General had described as the vortex of his own balances; but which, to use a more homely phrase, might he described as hodge-podge. He did not mean to say that a rigid adherence to the Treasury Minute of June 28th last, which provided for the more rapid handing over the balances to the National Debt Commissioners, would not succeed to a large extent in effecting the necessary reform, but he had a still more important recommendation to make. For instance, with regard to the Post Office, which was a large Revenue Department, at the present time the balances were paid into the Bank of England in such a way that it was utterly impossible to fix the Department to which they belonged, and he was convinced that no system of check could be perfect until means had been taken to ascertain the heads of service to which the balances belonged. While it was important that new regulations should be framed, it was of equal importance that they should be framed in the best possible manner; and this end would not be attained as long as the framing was left to each of the Departments affected. There was abundance of evidence now at the disposal of the Treasury to enable them to form, proprio motu, their own regulations, and he thought they should not be left to a departmental Committee, but that the head of the Department should be responsible for them. There was another point on which he wished to make a few remarks, in his individual character as a Member of the Committee which had inquired into the matter. No other Member of the Committee had alluded to the question, and therefore what he was about to say must be taken quantum valeat, as the expression of his own view. He alluded to the separation of the office of Receiver in the Post Office from that of Accountant General. In any case, the receiving and accounting department of a Government office ought, in his opinion, to be separated; but in the peculiar case of the Post Office, seen by the light of the Treasury Minute of last year, he thought this was of oven greater importance. The constitution of the Parliamentary officer at the head of the Department—the accounting officer of the Department—was an official fiction and a sham which ought at once to be put an end too. With regard to the office of Auditor General, too, he thought an alteration might be made with advantage. The Auditor General was not a Treasury officer, but an official responsible solely to Parliament; and there- fore he ought to be allowed to select his own subordinate officers, instead of being dependent upon the Treasury for them. An enormous amount and variety of extra work had of late years been thrown upon this Department, and no one could possibly be more competent than the Auditor General to select the persons best qualified, by special aptitude, to discharge the duties devolving upon the office. He wished to urge, in concluding, the importance of adopting the suggestion of the hon. Member (Mr. Sclater-Booth), that in future all loans contracted for departmental purposes should pass through the Exchequer, in accordance with the Controller and Auditor General's able memorandum upon the subject, appended to the Report of the Committee, and that they should be surrounded with all those constitutional safe-guards of which previous loans had been divested by a laxity of practice on the part of the House which it was not too late even now to amend.


said, he thought some expression of gratitude was due to the hon. Member for South Hants (Mr. Sclater-Booth) for having brought forward this question, and thus afforded an opportunity to the House for pronouncing an opinion upon what he must call a grave public scandal. He never recollected—and he doubted if even the oldest Member of that House recollected—such an event as four Select Committees, simultaneously sitting, having reported condemning the management of the Treasury by its ostensibly effective head, the Chancellor of the Exchequer. He had no desire to be unduly critical respecting the manner in which the subject had been treated by the hon. Member for South Hants—an ex-Secretary of the Treasury—although he could not help feeling that between those who were in office and those who had been in office there always existed that feeling which was said to make men wondrous kind. What was of more importance was that the independent Members should declare their opinion, and be hoped that they would now do so unreservedly. True, the Chancellor of the Exchequer had just read from the Table a profession of repentance for what was passed, and had promised good behaviour for the future, and had he done no more than made his recantation he (Mr. White) would have been satisfied. But when he proceeded to justify the course he had adopted with respect to the Cape and Zanzibar Mail Contracts, that was more than the most kindly intentioned man could put up with. He (Mr. White) bad read the evidence given by the Chancellor of the Exchequer before that Committee, and his opinion was that, judged by that evidence, the Report of the Committee was altogether too mild in its character and was not sufficiently strong in its condemnation. The right hon. Gentleman still contended that he was right and the Select Committee, the House of Commons—indeed, everybody else—were wrong, because he had such absolute confidence in his own superior wisdom, and such a cynical contempt for the crass ignorance of any person who did not see things exactly in his own light. He (Mr. White) believed that if the matter had been put to the test it would have been found that not only a majority of the House, but a large majority of his own Colleagues condemned the course taken by the right hon. Gentleman. The right hon. Gentleman had been a Member of the House even longer than he (Mr. White) had been, and he could not forget that there had been animated discussions, and many divisions in it, with reference to mail contracts, and he also knew that in times past Postal subsidies and contracts were used as the means of Parliamentary corruption, and that, in consequence thereof, the House very wisely determined that no contract for a mail service and no subsidy should be given without first being submitted to the House. That policy was recommended and further strengthened by the existing Liberal Government, and wholly accorded with the avowed principles of the present Prime Minister. By the old Standing Order, all mail contracts were submitted to the House, and if not approved of within one month became binding. The present Government, soon after its accession to office, on the Motion of the late Postmaster General (the Marquess of Hartington) passed without opposition the new Standing Order which enforced the absolute approval of the House before any such contract could take legal effect. The right hon. Gentleman (the Chancellor of the Exchequer) then, as now, held his important office in the Government which passed that Standing Order. And yet he still obstinately persisted in condemning such a wholesome proviso. The Chancellor of the Exchequer could not but know what a fertile source of Parliamentary corruption several subsidized mail contracts had often proved. It was notorious that by such corrupt influences the representation of some of our out-ports had been perniciously affected. Indeed, it was alleged, and he (Mr. White) believed truly, that at the last General Election the opportune grant—by the then Conservative Government—of the Cunard and Inman Mail Contracts secured a scat at Liverpool for one of its friends. He (Mr. White) could not refrain from expressing his deep regret that the Chancellor of the Exchequer had not that evening admitted that he had acted wrongly with regard to the Cape and Zanzibar Mail Contract; and if a Vote of Censure were moved on the right hon. Gentleman with reference to that transaction, he certainly would vote for it. At the same time, he believed that the right hon. Gentleman was thoroughly honest in conducting that arrangement. As long as the right hon. Gentleman acted the part of an obstinate impenitent heretic with reference to sound orthodox Parliamentary principles, one could not be surprised that, notwithstanding his distinguished talents and ability, he was so deservedly unpopular. Mr. Burke, when addressing the Speaker of the House of Commons on one occasion, said— The House, like other collections of men, had a marked love of virtue and an abhorrence of vice, but that among vices there is none which the House of Commons abhors in the same degree as obstinacy." "Obstinacy," continued Burke, "is certainly a great vice and, in the changeful state of political affairs, is frequently, the cause of great mischief. He (Mr. White) would strongly commend those remarks of that illustrious statesman—Burke—to the serious consideration of the Chancellor of the Exchequer. Special reference had been made to the Select Committee, on which he (Mr. White) had the honour to serve, with regard to the Expenditure of the Civil Service which had just reported. He would have been better pleased if his hon. Colleague on that Committee (Mr. Sclater-Booth), instead of bringing forward this Motion, had voted for the Amendment which he (Mr. White) moved to the Report of that Committee, because that would have brought the question of the present mal-administration of the Treasury Department formally before the House. That Amendment was to the effect that the Committee regretted that, owing to the limited powers exercised by the Treasury, its ostensibly effective head, the Chancellor of the Exchequer, should confess his inability to adequately control the Expenditure of the different branches of the public service, the details of which were annually submitted for his revision when the Estimates for the respective Departments were framed. For when examined before the Civil Services Expenditure Committee, the Chancellor of the Exchequer told them that it was a "delusion" to believe that the Treasury did now exercise a direct and effectual control over the expenditure of the country. He, moreover, added that as to Law Reform "no improvement could be effected without paying smart money for it." And that no re-organization of any Civil Department could be attempted without the heads of those departments "sticking in" a great many demands to which the Treasury had to accede rather than lot the public service stand still. The right hon. Gentleman cited the preliminary demand of Mr. Farrer (the permanent Secretary) of the Board of Trade, for an increase of £500 per annum, and also adduced the fact that both the Home and Foreign Departments had persistently refused compliance with the Orders in Council and Treasury Regulations for introducing open competition into the public service. Had his (Mr. White's) Amendment been agreed to, the Committee would have recommended that Parliament should devise an early and efficacious remedy for this glaring defect in the Executive Department of the State. That Amendment was negatived, although it had the support of hon. Gentlemen who did not agree with him in politics. He also moved another Amendment which was lost by the casting vote of the Chairman (Mr. Childers) to the effect that, having regard to the unanticipated magnitude of payments on the abolition of offices, and notably to the excessive compensations granted under the Bankruptcy Act of 1869, full salaries for life—namely, from £1,800 to £2,000 a-year having been awarded to everyone—young or old—of the ten Commissioners whose offices were then abolished, the Committee recommended that no Bill involving any public charge should be introduced into Parliament unless accompanied with an estimate or statement, signed by the Chancellor of the Exchequer or the Secretary to the Treasury, of the probable expense thereby entailed upon the country, and with the proviso that no disbursement in excess of such estimate or statement should be legal without the previous approval of Parliament. It was the duty of that House to strengthen and uphold the continuous supervision of the Comptroller of the Exchequer and of the Audit Department; besides it was owing to their sagacity and scrutiny that the misappropriations by the Post Office were originally brought to light.


said, he was unable to say whether unanimity existed among the heads of the various Departments; but it was, at all events, agreeable to witness the amiable feeling that existed between those who sat on the two front benches. It was doubtful whether much good would result to the country from this most unsatisfactory debate on a serious and great question. The Chancellor of the Exchequer had been a little hard on Committees and their Reports, seeing that it was only through the painful interest which had been taken by the House in some of the transactions in his Department that formal Votes of Censure had been voted on two or three occasions this Session in the mild and indulgent form of referring the subjects brought under the notice of the House to Select Committees, whose labours should therefore have been alluded to by the right hon. Gentleman with gratitude if not with admiration. There was not much use in his going through all the points which had been raised in the course of this discussion; but he had risen with the object of obtaining from the Government an expression of opinion upon the question whether the conduct of the business in these great Departments should not be more in accordance with the ancient usage which prevailed before the present Government came into power, especially with respect to the manner in which communications were made between the different Departments. It was of the first importance that such communications should be made through the proper channels, and not by means of private secretaries behind the backs of the chiefs of Departments mostly interested. The other night when the Post Office scandal was under discussion, the Postmaster General, in the course of his defence, informed the House that the Correspondence on the subject, which was of such great importance, and which had led to such disastrous results, was carried on for months, not between the head of the Treasury and himself, but behind his back, and that it was altogether unknown to him that the letters were passing. To-night the Chancellor of the Exchequer had informed the House that, with regard to the very important subject of the Thames Embankment, the alteration made by the Treasury in the Estimate was a very nominal one. If that were so, how did he account for the manner in which it had been resented by the First Commissioner of Works? He should like to know if the alteration was made in a proper manner; and also he should like to receive some assurance from the Government that in future communications between Departments would be made in a proper manner. After reading this debate, the public would be of opinion that the time had arrived when not only the present Session, but the present Parliament should come to an end.


said, that as a Member of the Select Committee upon Exchequer Expenditure, he wished to say a few words upon a point which had not been brought very clearly before the House. He had carefully attended to the evidence given before the Committee, and believed he fully understood the questions which had been raised; and he had listened to the explanation given by the Prime Minister respecting the allowance of full salaries for life to the Judges of the Court of Bankruptcy; and he thought that the right hon. Gentleman's explanation was not at all satisfactory. The charge which was made implied a censure upon the Government. The 131st clause of the Bankruptcy Bill provided that there should be two co-ordinate powers to deal with the question of the retiring allowances of the judges; one being the Lord Chancellor and the other the Treasury. The Act provided that the Lord Chancellor, under special circumstances, might recommend the full pay to be given to the Judges, but that he should do it with the consent of the Treasury. The Prime Minister, however, seemed to consider this to be a judicial discretion of the Lord Chancellor, controlled the Treasury, and deprived it of any independent judgment. He apprehended that that was quite a misconception of the intention of the Act of Parliament. The Treasury had a right to negative the proposition of the Lord Chancellor if they thought his proposition an unfit one. There was another point upon which he wished to say a word. The right hon. Gentleman the Chancellor of the Exchequer had defended the delay in the appointment of the Commission to inquire into the Post Office accounts, by alleging the necessity of giving time to prepare the balances. He believed that no such time could be possibly required by any honest system of making out accounts, either for the Post Office or any other business in the world. If the Post Office accounts had been kept clearly and without intentional mystification, it was impossible that three months could be required for making things plain. In the largest businesses in the world, whether mercantile or banking, the books were kept in such a state, that instead of three months being required to ascertain how the balances stood, three days would not be necessary for making out a complete and exhaustive statement. The defence was really no defence at all, and it was impossible to condemn the Post Office officials in language too strong.


, referring to the alterations which had been introduced into the Estimate which had been submitted to the Treasury by the First Commissioner of Works with respect to the proposed embankment near the Victoria Tower, commented somewhat severely on the fact that those alterations had been made without consulting the right hon. Gentleman on the subject. He also dwelt on the want of united action between the Chancellor of the Exchequer and the Secretary to the Treasury in the case of the Zanzibar Contract, observing that the opinions of the latter had been passed over because the former choose to think that he was prejudiced in the matter, and contending that, if there were any good grounds for such an insinuation, the proper course would have been to get rid of an officer who could not be trusted.


What I said before the Committee was that my right hon. Friend had given a decided opinion on the matter, and that there was no use in troubling him.


thought it was most undesirable that any officer in the Treasury, particularly one occupying the high position of the Parliamentary Secretary, should be considered incapable of carrying out the views of his superior, and he thought such a statement as that of the Chancellor of the Exchequer ought to be repudiated in the strongest terms. The right hon. Gentleman had no right to employ his private secretary in the business in the manner which he had done. The permanent secretaries, whether in Parliament or not, were those whose services should have been called into requisition. He did not mean, in making these observations, to impute the slightest shadow of wrong intention to the Chancellor of the Exchequer; but he must maintain, at the same time, that it was dangerous to any public office, to allow business to be transacted as he appeared to have done. Again, as to the case of the Postmaster General, he doubted very much whether the Secretary for War or the First Lord of the Admiralty would allow any such interference as had been shown to have existed in this Department. It was distinctly proved that the Chancellor of the Exchequer had been in close and frequent communication with officers subordinate to the Postmaster General, and any practice better calculated to destroy responsibility, could not have been taken. Perhaps the worst part of the case was that the Chancellor of the Exchequer had given no assurance that he would abstain from pursuing such a course in future. He made those remarks because he loved good administration, and because he thought such a line of conduct as that adopted by the right hon. Gentleman ought to be condemned by the House. The accounting officer and the receiving officer of the money receipts and expenses of the Post Office and Telegraph Departments ought to be distinct, and he would only strongly advise that the old practice of the War Office of "even and quits," should be introduced, and the balances ought to be delivered up at certain times. By that means the country would be freed from those scandals which resulted from the system on which the Chancellor of the Exchequer had acted. He (Sir George Balfour) added that he would now call attention to the sound suggestions of the hon. Member for Northumberland.


thought the expressions used by the last speaker more severe than was warranted by anything which the Chancellor of the Exchequer had done in reference to more than one of the matters to which he had adverted. He (Sir Edward Colebrooke) was old enough to remember much more serious charges being brought against Government than unwillingness on the part of the Heads of Departments to take responsibility upon themselves. This charge was one which ought not to have the serious attention of the House.

On Question, "That the Bill be read a second time,"