HC Deb 08 August 1876 vol 231 cc831-56

Order for Committee read.


said, that before they went to that stage he thought the House would like to have some little information as to the state of the undertaking. He thought the thing might be said to have settled down, so far as the outside public were concerned, and to have assumed its normal condition. Most of the things had happened which they had expected. The money and the interest on the money at the exorbitant rate agreed on had been paid—all that was done with. Then they had obtained three votes on the Council of the Board of Directors. The Council had been increased to 24 from 21, and three of these places had been given to gentlemen who represented the Government. They had not obtained, so far as he was aware, the recognition of any votes at all in the General Assembly of the Company. He should be glad to know if that was correct? He should also like very much to know whether their Directors would be admitted to the General Assembly of the Company as well as to the Council? All these things it was very desirable should be known. The Khedive had pledged himself for the interest on the large sum advanced; but in this matter they had to rely on a Power which had declared itself unable to fulfil its pecuniary engagements, and he should, therefore, like to know whether there was any special agreement that we should be paid, at all events, or whether we should have to take our chance with the rest of his creditors; and whether in that case we should exercise any influence with the Khedive that we should be paid in full, when so many were not paid in full, or not paid at all? It would be very interesting to know all these things. He should further like to know, whether the Chancellor of the Exchequer contemplated doing, what was often done in bankruptcy—namely, capitalizing the whole matter, and taking a dividend upon that? He hoped the right hon. Gentleman would not take any particular amount of credit to himself or the Government for the fact that he had obtained three directorships in the Company; because, as was shown on the former debate when the Papers were laid on the Table, M. de Lesseps had been always ready—as early as 1871—to admit three Directors into the Council. M. de Lesseps was extremely frank upon the subject, because he said that would be the very way to preserve the Company under French influence. It would give the appearance but not the reality of power. Therefore, he did not expect much to be made of it. Then there was another point—the settlement of the question of the surtax—and he did not think that we could claim any great diplomatic victory in that matter either, because it had been shown by M. Lesseps that we did not gain by it anything more than he chose to give us. He trusted that the Chancellor of the Exchequer, in giving an account of the state of this undertaking, would steer clear of vague generalities, and that we should be paid no more with wind for our money. On former occasions when they asked what they had gained by this purchase, they had been told that it had strengthened the position of the Empire; and, if that statement were to be repeated, he should desire that the logical connection between the purchase and that result should be stated. They had been told that they had interests in the Mediterranean which they must and would preserve at all hazards; but how would the purchase of these shares enable us to preserve them? They were told that the great highway of India must be kept open. That was perfectly right; but how would the flinging of £4,000,000 into the lap of the Khedive, on which we should probably receive no interest for 19 years, help us to keep that highway open? Now that the first blush of the thing was over, and the glory had got rather stale, the Government might reasonably be asked to state how the matter really stood, and what real advantage we had gained by the purchase of these shares which we should not have had if we had not purchased these shares at all. He thought the House ought not to separate before hearing from the Government what good we were to get out of the enormous expenditure which we had made in this matter.


was anxious to know precisely the meaning and object of the purchase of these shares. At the time when the purchase was made the right hon. Gentleman the Chancellor of the Exchequer, in a speech at Manchester, said there were considerations in the present case which took the transaction out of the region of our financial policy, and that it was not to be drawn into a precedent. He should like to know from the Chancellor of the Exchequer what those considerations were? So far as he was himself able to judge, the purchase of a portion of the Canal would leave this country in a much worse position than if we had not possessed any shares at all; because, in the event of any complications with foreign Governments, those Governments would naturally seek to have the right to navigate the Canal by vessels of war equally with ourselves, and we should not be able to prevent them, except by keeping a fleet of ships on the spot for the purpose, which might prove very inconvenient. He believed that Her Majesty's Government entered into this transaction without really knowing what the object was. What we ought to have done, if anything at all, was to have purchased the whole Canal, so as to obtain entire control over it, and in that event the Government would have received the support of the country. As it was, we were only in the position of ordinary shareholders. It was to be hoped we should some day acquire the whole property.


said, we had reserved the right to interfere whenever the interests of the Canal were at stake, inasmuch as we were proprietors of half the Canal, and that should be the first step towards redeeming the whole by a process similar to that by which the Sound Dues were redeemed. It was necessary to do something to enable us to lower the charges, which were very high, and often amounted to one-third of a ship's freight. He asked the Chancellor of the Exchequer seriously to consider the Treasury Minute, which was published on the 17th of July, with regard to the three directors by whom this country was to be represented on the Canal Company's Board, because that Minute was likely to raise very serious legal questions in France. Even although its terms were accepted by the Council of the Company, he did not think that it would hold good against third parties. The statutes of the Company laid down that each director must be the actual proprietor of 100 shares. Consequently, the Government said in that Minute that it had become necessary to provide each of those gentlemen with that number of shares; but he believed that the way in which that had been done would not give them the requisite qualification. If those shares had the coupons detached, they were clearly not qualfying shares; and although our directors were registered holders of shares, they were bound to give the profits to the Government, which gave them a fixed stipend, to include both their profits and their pay as directors. Therefore, they had no interest in promoting the future success of the Company. The Minute also directed an instrument to be executed by their nominees to the Council, binding them to return their shares to the Treasury in the event of their bankruptcy. But if these gentlemen were proprietors of shares, and yet returned a portion of their assets in case of bankruptcy, that bankruptcy would assume a very remarkable character. But in such a contingency which, of course, he did not anticipate, the French law would sequestrate these shares. It seemed to him that the arrangement was one which would lower the dignity of our representatives on the Board of Directors, and he trusted that the right hon. Gentleman would re-consider the Minute in question.


said, that most of the disadvantages attending the purchase has resulted from Parliamentary and public discussion. However much we might injure our own position, we could not lose the advantage we had acquired by the purchase. It was not to be expected that Ministers should say in so many words what a private Member like himself might say; but there was no reason why he should not say that, in certain contingencies, the property must be taken possession of by the fleets of this country, and no one could doubt that part ownership would strengthen our position in holding it. That purchase had given us the statusand a moral justification to interfere which we did not before possess. Great questions frequently arose upon which it was necessary to take public action, but in regard to which the Government could not discuss all the causes and all the "ins and outs" of the subject. That was the case at present; but what the Government had done would enable us with more justice, reason, and authority to assume a practical control over the Suez Canal when the emergency arose.


said, he could not regard the possession of the Suez Canal shares as necessary or advantageous. The holding of the shares would not alone keep open our route to our Indian Empire. The share certificates would not prevent a hostile fleet from closing the passage of the Canal in the event of an European complication; in one way only could that route be kept open, and that was by having a more powerful fleet than any that could be brought against us. Our fleet being swept away, what power was there in these £4,000,000 of worthless paper? Surely his hon. Friend the Member for Pembroke (Mr. E. J. Reed) did not suppose that the destinies of European nations could be determined by means of scraps of paper? No justification for the action which Government had taken could be based upon ground such as that. Then what security did the shares offer for the route to India, seeing that with or without the possession of the shares still the only safeguard was a powerful fleet? Looking at the transaction from a business point of view he would like to ask the Government whether they had conducted the purchase in a businesslike manner. In the first place, why was the transaction entered into at all? That was a question the importance of which demanded a fuller discussion than it had received, and the opportunity for that discussion should have been provided at an earlier part of the Session. The Bill before the House was first mentioned some months ago, and it was brought in by the right hon. Gentleman the Chancellor of the Exchequer some time back, and now when the House was weary, when there was but a thin attendance of Members, and those anxious to get away, they were called upon to discuss this Bill. The right hon. Gentleman the Member for the University of London (Mr. Lowe) had challenged the Government to lay before the House the reasons which induced such a large expenditure of public money; he (Mr. Rylands) would not venture to attempt to add force to that appeal, for he felt sure that it would receive the attention of the right hon. Gentleman the Chancellor of the Exchequer. He would content himself with taking lower ground, and looking at it merely as a business transaction he asked why did the Government purchase an article for £4,000,000 with a guarantee of 5 per cent when that same article could have been bought in Paris for £3,800,000, with a guarantee of 10 or 12 per cent? Unless in the reports which had reached him the truth was grossly misrepresented, £1,500,000 had been considered the full market value of the shares. Such was the statement which appeared in The Timesnewspaper, and he had seen no contradiction. But it was asked what guarantee was there that the Khedive would pay the 10 or 12 per cent when it was known that he was actually borrowing money for which he was paying 20 and 25 per cent, and people were not disposed to lend the Khedive money at any price. But that consideration applied equally to the guarantee of 5 per cent, and there was no reason why Government should buy the shares upon higher terms than they were offered at. Her Majesty's Government, however, met the Khedive with most unusual generosity; they thought they ought to deal with him handsomely, that it was a great international undertaking, and that the Khedive could not be treated in an ordinary business manner. There was an elevation of sentiment about this; but, still, he (Mr. Rylands) failed to see in it a justification for giving for the shares a price beyond what any other capitalist would have offered. The Government were led to suppose that other parties were negotiating for the purchase of the shares; but he was inclined to believe that the English Government were imposed upon in these operations. Then after paying £4,000,000 we were absolutely unable to qualify our directors upon the company, and to get out of this absurd position when three directors were appointed we were obliged to purchase shares for £8,000 more. And so it came to this—that our commercial interest upon the Board was represented by £8,000 worth of shares, and upon the power of that sum our representatives depended! Whether we were right in the question of the qualification or whether we were wrong he was not prepared to say. One question he would like to put, and that was, whether steps had been taken to secure compensation to Sir Daniel Lange, who lost the position he held with the Company owing to the action of the Government in publishing a private letter sent by him. That gentleman was closely connected with the progress of that great work, and he endeavoured to serve his country. Some satisfaction was due to him from the Government of this country, whose inconsiderate conduct had led to his dismissal. Turning to another matter he expressed his strong disapprobation of the way in which the salary of Mr. Rivers Wilson had been increased in consequence of his having been made a director. If the duties of his office were not sufficient to occupy his attention then let other work be provided for him; but he objected to his holding two positions with two salaries. The action taken by Her Majesty's Government in effecting the purchase of the Suez Canal shares had led to serious pecuniary losses being suffered by many persons owing to the state into which the market for Egyptian securities was thrown by the transaction, and much distress and privation had followed. A week before the Suez Canal purchase, Egyptian Stock stood at 54, and it gradually went up to 60, then a large purchase was made at 61—the price next day was 64, and the day after the announcement appeared in The Times of the Suez purchase, and the Stock went up to 74. Some parties, who were in the secret, had made large amounts by their transactions. After a time a reaction occurred, and the Stock fell. What did the Government do then? They commissioned a most important member of their own body to proceed to Egypt under circumstances which led people to believe that the fact foreshadowed a great policy—namely, the taking of Egypt by the hand by the Government of England. Then, again, Egyptian Stocks went up, and people held the bonds with some confidence. What happened then? The right hon. Gentleman the Member for Shoreham (Mr. Stephen Cave) sent in a Report, and Egyptian Stock was very firm and rising; but the right hon. Gentleman at the head of the Government stated that the Report must not be published; and then what happened? Down went Egyptian Stock; and so it remained for some time. But on a certain Friday morning there were large orders for the purchase of the Stock from France. No one understood what it meant. The day passed. All the Stock that could be procured was purchased, and the Stock Exchange closed; but in the House of Commons, about half-past 1 o'clock on Saturday morning, the Chancellor of the Exchequer got up in his place and said that they had received intelligence by telegraph that the Khedive assented to the Report of the right hon. Gentleman. What happened then? Why, the following morning up went the Stock. So that there were people who on Friday knew about the telegram, and that the announcement would be made, and the result was that those people in France or Egypt operated in the Stock, and they again made a large plunder; but when the Report came out and was found not to justify the expectations it had given rise to, down went the Stock again. In the same way, Mr. Rivers Wilson was allowed to proceed to Egypt, and that fact enabled the Stock-jobbers to operate, and the Stock again went up and down. The right hon. Gentleman the Member for the University of London said that the Egyptian policy of the Government was a drama in four acts; but it differed from all other dramas in this—that the grand letting off of fireworks and the transformation scene came first, and now it was ending in a good deal of gloom and disappointment. He did not know how the Government could justify what had been done in the matter. Their policy was, he believed, in any case an unfortunate policy, and might lead to an involvment of this country in Egyptian affairs in a very serious manner. He believed that finally the purchase would not be of importance to this country, while the way in which the negotiations were carried on was a source of great loss to our countrymen. He felt sure that it would come to be looked upon as one of the greatest mistakes the Government had made.


said, he should gladly have waited until any other hon. Members who desired to address the House had done so, but the statement just made by the hon. Member for Burnley (Mr. Rylands) was of so very serious a character, if he understood it rightly, that he was bound at once to ask an explanation of it, and at the same time to complain, as he did most seriously, that the hon. Member, if he had anything of the sort to say, had not mentioned it long ago, or given him notice of his intention to say what he had said. What he understood the hon. Gentleman to say was this—that upon the morning of a certain day, on the evening of which he (the Chancellor of the Exchequer) read a telegram to the House stating that the Khedive had authorized the publication of the Report of his right hon. Friend the Member for Shoreham (Mr. Cave), orders were sent for the purchase of Egyptian Stock from parties abroad with the knowledge that he was in receipt of that telegram, and was going to communicate it to the House.


Oh, I beg your pardon.


I certainly so understood the hon. Member.


I am quite sure the right hon. Gentleman will believe me when I say I meant to cast no personal imputation whatever upon him. It was the last thing that would come into my mind. I believe fully in the high honour of the right hon. Gentleman. What I stated was that some people knew that the telegram was going to be sent, and allowed it to be known, and on their own knowledge took means of operating on the market. They must have known in Cairo, or France, or elsewhere in the morning that it was to be sent in the evening.


was anxious that the matter should be made perfectly clear, because in the way the words of the hon. Member were used they involved a serious charge against himself. [Mr. RYLANDS: "Oh, no, no!" Several hon. MEMBERS: "Hear, hear!"] He accepted, of course, the disclaimer of the hon. Gentleman, and he felt sure that every one would feel that it was impossible that such a thing could have occurred. He at once and frankly acknowledged that it was to him and his Colleagues matter of most serious anxiety, and had occasioned them the greatest regret, that, in consequence of the transactions that had been going on, there had been from time to time speculations on the Stock Exchange, and that, as they were informed, considerable sums of money had been won and lost on this matter. He hardly knew what one could say on such a matter. This, however, he confidently said, on the part of the Government—that no private information had ever been given or made use of, to the best of their belief, on the subject; and he earnestly entreated that, if there was any suspicion of that kind in any quarter, full inquiry might be made, so that, even at this late period of the Session, steps might be taken to ascertain that there was no foundation whatever for any imputation of that kind. He could believe that among all those different transactions some persons might have obtained some information, and there might have been reason to suppose this, that, or the other, and that some speculations that were very good and some that were very bad might have been made; but he wished to state the facts exactly as they occurred with respect to the publication or non-publication of his right hon. Friend's Report. When that Report was handed to them by his right hon. Friend, they communicated with the Khedive and informed him that they proposed to publish it. Well, the Khedive objected, in the telegram which would be found among the Papers. His right hon. Friend at the head of the Government, in answer to a Question put soon after the receipt of the telegram, gave the answer that had been commented upon, and that answer, unfortunately, was misunderstood. His right hon. Friend intended to have said that the Khedive objected to the publication of the Report, not permanently, but in consequence of the then unsettled question of the financial relations of Egypt. His right hon. Friend adverted to what was in his mind at the time the communications were going on between this Government and the Khedive as to the appointment of a Commissioner from England, but it was understood by the public in another sense, and, unfortunately, that misunderstanding gave a blow to Egyptian credit which they very much regretted for the sake of the Khedive. The consequence was that his noble Friend (the Earl of Derby) sent a telegram to the Khedive informing him that the non-publication of the Report was injurious to his credit. The Khedive thereupon sent a telegram to say that be was ready to agree to the Report being published. That telegram was received at the Foreign Office late at night, not earlier than between 11 or 12 o'clock. His right hon. Friend at the head of the Government was absent, the business was going on, and he thought he could not do better than, at the earliest moment he could, read the telegram to the House. What was done was done in the regular course of official business, and it had been matter of extreme pain and regret to the Government that any person should have been injuriously affected. As to what communication might have been going on between the Khedive and persons at Cairo or elsewhere he knew nothing; but of this he could entirely assure the House—that if the shadow of a doubt existed in the mind of any hon. Member, or if any hon. Member was aware that among any class in the country any impression or suspicion existed that there was anything in the matter, so far as Her Majesty's Government was concerned, that ought to be inquired into, he implored them, he adjured them in the name of the honour of the Government and of the House, not to allow the matter to rest, but to bring it at once into a condition in which it could be fully inquired into. He would now endeavour to answer the different points which had been mooted in the course of the debate. The right hon. Gentleman the Member for the University of London (Mr. Lowe) asked what was their precise position with regard to this undertaking? Well, they had waited until the general meeting of the Company, which was to have been held in June, but was not held till July, in order to ascertain the arrangements the Company were prepared to recommend. The managing body recommended—M. de Lesseps especially—the increase of the number of directors to 24, and agreed that the new directors should be nominated by the British Government. The understanding was that they must be duly qualified and elected in the manner described by the statutes of the Company. M. de Lesseps gave the Government to understand that it was presumed they would not nominate persons who would be offensive on any grounds to the shareholders, but that if any such person was nominated it should, on the fact becoming known, be in the power of the English Government to name his successor. It was the impression of Her Majesty's Government that their duty was to nominate persons who should represent the interest, amounting to the value of 176,000 shares, which the Government had in the Canal; but M. de Lesseps pointed out that there still was a question, which had never been decided, as to the precise amount of right which these shares during the time their coupons were detached from them gave to the shareholders. It was competent for the British Government to have brought that question before a French Law Court for decision; but they thought that, looking to the whole spirit of the arrangement, and their desire to enter into this matter on the fullest terms of confidence and goodwill with the Company, it was not desirable to raise contentious questions, and that it would be better that they should see that the directors were qualified in accordance with the statutes of the Company. They did not abandon their claim to vote on account of their own shares, but they thought that the simplest way would be to purchase a certain number of qualifying shares, and place them in the hands of the gentlemen who might be the representatives of Her Majesty's Government on. the Council. This view was communicated to M. de Lesseps, and was considered by the legal advisers engaged on both sides of the question, the result being, as far as Her Majesty's Government was concerned, a conviction that the course taken opened no legal difficulties as far as the final settlement of the question was concerned. If, however, it should appear hereafter that legal difficulties really existed, the step taken was one that could be retraced when occasion arose. These gentlemen did not go there to represent their own interests, they went there to represent the interests of the country which nominated them; and the Government were convinced, from their knowledge of the character and ability of these gentlemen, that they would represent effectively the interests of this country. It had been suggested that the mode in which they were appointed, or nominated, was one which implied humiliation as far as they were personally concerned; and the hon. Member for Burnley (Mr. Rylands) had gone the length of saying that one of them (Mr. Rivers Wilson) ought not, if appointed at all, to receive any payment for the duty additional to that which he at present received as a servant of the Government. The duties which Mr. Wilson at present discharged were highly important, but they did not occupy the whole of his time, nor was his salary by any means extravagant, and it was believed that he might very well give one day in a month to the Suez Canal business, with a small additional payment to recompense him for the work, and pay the expenses which he would have to incur. The question of the right of voting in meetings of the Company by the directors appointed by the English Government had been raised, and upon that question he could pronounce no authoritative decision; but in any case he thought the question was one of infinitesimal importance. The advantage which they had gained in respect of this matter was really that which was stated by the hon. Member for Pembroke (Mr. E. J. Reed)—namely, the moral position which they had acquired in dealing with these questions. The surtax arrangement was just one of the questions in point. Though the question was settled, at Constantinople, yet it was settled subject to certain pro- tests, and in a manner that always left you with the apprehension that the question might be re-opened, and re-opened in a very awkward manner. The Government should have insisted upon the matters that had been agreed to; but their object was to avoid the necessity of having to invoke the armed interference of the Khedive, or of the Turkish Government, or of our own Power. When hon. Gentlemen talked about keeping open the Canal by the power of our Fleet, of course we might; but the object was to avoid using force, and to put ourselves in a position where we would be able to deal with all these questions in a much more satisfactory manner. These were the general considerations which induced the Government to make the purchase, and nothing had occurred since to cause them to doubt their soundness. Colonel Stokes and Mr. Rivers Wilson had been in Paris, and had attended one of the meetings of the Council, and in their Report to him they stated, that they had been received in the most amicable manner; that they had been treated with the fullest confidence and in a spirit which promised that the best possible relations would exist between us and the managers of this great Company; and that they had been very much struck with what they saw of the administration and the general management of the undertaking. Every person who had read the Company's last Report would have seen that, as far as prosperity was concerned, the undertaking was in a very flourishing condition, for at the present time, when commercial affairs were not particularly bright, it showed that the receipts of the Canal were going on in a most satisfactory manner, inasmuch as last year the excess of receipts over expenditure had increased by about 17 per cent over that of the previous year, while at the same time the expenses had scarcely been increased at all. The question of surtax was still in this position—that it was impossible for Her Majesty's Government to adopt M. de Lesseps' proposals merely as for this country, as it was necessary to obtain the concurrence of other countries which were interested in the matter. Communications had been going on with the different Governments which would shortly be laid before Parliament, and they were, so far as they had gone, ge- nerally in favour of the arrangement which had been come to, which showed to the shipping interest with certainty what the duties would be that they would have to pay year by year. The right hon. Gentleman had asked questions with reference to the probability of the Khedive continuing to pay the £200,000 per annum; but he thought that those were questions which the right hon. Gentleman, to a certain extent at least, was as qualified to answer as he was himself. It was a very hard matter to say whether or not at some time or another a difficulty might occur in the payment of the money, but his own belief was that the money would be paid. It was paid on the last occasion, and he saw no reason why it should not be paid in future. In conclusion, he could only acknowledge and regret the lateness of the period when this matter had been brought forward—it certainly ought to have been discussed at a much earlier period of the Session. Her Majesty's Government, however, were waiting for the action of the Company and for the meeting to which he had referred and which had explained to the House the manner in which the undertaking was being carried on. In consequence of the mode in which the Business of the House had been transacted it was impossible to get time earlier in the Session for the discussion of the subject. All he could say was that so far as the Government were concerned, the reasons which induced them to make this purchase stood good, that his faith had not been shaken by anything that had taken place, and though there might have been some exaggeration in the minds of the people at the time when the purchase was announced, his own belief was that in making that purchase they had arrived at a good and sound conclusion.


disclaimed all intention of throwing imputations upon Her Majesty's Government in reference to this subject.


thought that there was some ambiguity in the expressions which had been used by the hon. Member that rendered it imperative upon him to offer the explanations he had done of the conduct of the Government in the matter.


heartily concurred in the remarks of the hon. Member for Pembroke (Mr. E. J. Reed). At first people were thoroughly pleased with what the Government had so well and boldly done. No doubt expectations were raised too high, but this was no fault of Her Majesty's Ministers. In the calm judgment of the mercantile constituency which he (Mr. Mac Iver) had the honour to represent the transaction was still approved, and in the port of Liverpool no sympathy was entertained for the carping objections that had been raised to this purchase by hon. Members opposite. The large trading communities took a broad view of the matter and did not regard it as a mere question of 5 per cent interest.


said, he did not think that portion of the speech of the Chancellor of the Exchequer which referred to the moral advantages to be derived from the purchase was quite satisfactory, nor did he agree with the remarks of the hon. Member for Pembroke. The fact was simply this—that in case of a war it might be necessary and justifiable for England by force of arms to secure so important a channel of communication with the East as the Suez Canal; but he failed to see how the purchase of the shares gave the slightest additional power to the Government to adopt that course. As regarded the commercial aspect of the transaction, the shares having no coupons attached, we had no direct pecuniary interest in the good or bad management of the Canal at the present time, and any proposal on our part to reduce the rates or dues would be met by the obvious objection from the other shareholders, that while it would not affect the English Government, which had its five per cent guaranteed, it would seriously diminish their dividend. In his opinion, as far as our mercantile interests were concerned, we were in a better position before the purchase, as mere customers of the Canal, than we were when we acquired a number of shares which did not rank on an equality with the others. He hoped that the forebodings expressed in connection with the transaction would not be realized, but the action of our representatives on the Board of Directors would have to be watched very carefully. They might rely upon it that applications for money to keep the Canal in a proper state would soon be made, and the probability was that that money would have to be furnished by England. He sincerely trusted that the Government would instruct their representatives not to compromise the mercantile interests of the country by any premature action on their part.


in support of England's investment in the Suez Canal, considered it a sound one, politically and commercially considered. He could not admit that there was anything derogatory in the position of the English directors. Those gentlemen were placed on the direction to represent the Government, and a more honourable position he could not conceive. They were trustees of the English Government for the shares and acted on behalf of the Government in the management of this undertaking. They had declared themselves to be trustees in the same manner as was frequently done when family interests had to be represented in commercial undertakings; but they were present in the Direction, not as trustees, but as individuals perfectly free to act in the Direction, independent of any declaration of trust they had made. At the same time they represented a very powerful interest in this great partnership, and must exercise a preponderating influence over it. The possession of these shares to England was of great importance; and seeing that they might have got into adverse hands, he considered the arrangement made by Her Majesty's Government was one of great advantage to the country.


said, that sharing the general impression at the time of the purchase, he looked upon it as a bold stroke of policy which would place us in a better position in case of the occurrence of unforeseen difficulties. He had read the charter, and if the Company were to become bankrupt, the property in the Canal must fall into the hands of the French. This country had the guarantee of the Khedive, and, what was of far superior consideration, they had the guarantee of the Sultan; but, unfortunately, Turkey was in such a state at that moment that it was impossible to say how it would end. Looking at the matter from a commercial point of view, he agreed with the hon. Member for Hull (Mr. Norwood). First of all, we were told by the Government that it was not a commercial matter; then we were told by Lord Derby at Edinburgh that it was; next the Prime Minister spoke of it as a political transaction; and now, again, the Chancellor of the Exchequer said it was a commercial one. If it were a commercial transaction, what he had done would be like coming to the rescue of a firm in difficulties and engaging to renew its bills without any guarantee, for amore insolvent State than Egypt did not exist; and if we got back our money it would be through our claim having an admitted priority. We had no greater control that we had before, but the capital we had invested in the undertaking must give a corresponding weight to our influence. He was afraid that considerable expenditure would be requred to keep the Canal in such order that it would be available for our own shipping, and that we should be called upon to find capital for the purpose. It would be better if the Government acknowledged the truth at once, and owned that the purchase of the shares was a political transaction, entered into with the view of keeping open our ocean highway to the East.


said, it was natural the Opposition should criticize a transaction of this kind, but it was refreshing to see the hon. Member for Pembroke (Mr. E. J. Reed) cast aside the trammels of Party and treat this as a great national question. As such he believed it would be viewed by the constituencies, who, if appealed to, would throw the carping criticism of the Opposition to the winds, and give their verdict that politically the purchase was a bold and a wise act. Had the Government not availed themselves of their opportunity, and not purchased those shares, he had no doubt the Opposition would then have criticized their omission to secure for England the interest she was entitled to possess in so great an undertaking. England possessed the largest number of shares in the Canal, and her interests, politically and commercially, in it would no doubt be well represented by the three directors whom she had appointed to watch over and represent them. Government had, in fact, recovered the position for England which Lord Palmerston had lost.


Until my noble Friend addressed the House I was under the impression that Members of the Opposition had criticized the measure submitted to the House by the Government. The noble Lord appears to be of opinion that the discussion which has occurred is not criticism, but carping. I do not think it much matters whether he calls it criticism or carping. We criticize the measures of the Government in the best way we are able, and I can assure him we shall not be deterred from that duty by the epithet he chooses to apply to that humble criticism. Although it is to be regretted in one sense that this debate should have been brought on so late in the Session, it is not altogether unfortunate, because of the instructive comparison that might be drawn with respect to the treatment of this subject between the opening of the Session and its close. At the opening of the Session the transaction was almost in the first blush of its prosperity and popularity. And the minimizing explanation, although it had, I believe, to a certain extent set in already, had not attained the full vigour and strength that it has now at the close of the Session arrived at. It would be extremely instructive, if we had time to make a comparison between some of the speeches delivered at the commencement of the Session and the speech of the right hon. Gentleman the Chancellor of the Exchequer to-night. All traces of high policy have now vanished from the speeches of the Government; their high policy remains, in a feeble and diluted form, in the speeches of the noble Lord the Member for Haddingtonshire and my hon. Friend the Member for Pembroke (Mr. E. J. Reed). Nothing is now said about the high road to India and the chain of fortresses in which the Suez Canal was to form a link. This line has altogether vanished from the speeches of the Government, and we are told to look for the advantage of this transaction to the improved tone of M. de Lesseps. We are told that nothing can be more friendly than the communications betwen Colonel Stokes and M. de Lesseps. That is easy to be understood; but it may be doubted whether the improved tone of our correspondence is worth £4,000,000 of public money. The right hon. Gentleman can no doubt point to two results. He can point to the appointment of three directors on the Board, and he can point to the satisfactory and amicable arrangements come to between Colonel Stokes and M. de Lessepson the surtax. He says M. de Lesseps made a great concession in the matter of the appointment of directors. But that is the very thing M. de Lesseps wanted us to do five years ago. In the negotiations in 1871 it was stated that M. de Lesseps "recoiled with horror" from the idea of the management of the Canal passing into the hands of a foreign Power. He declared he never would be a party for the placing of the management of the Canal in other than French hands, but he trusted to see the introduction of English directors on a French Board. At the same time, this was only to "give an appearance of importance without its actual possession." These being M. de Lesseps' views in 1871, no doubt M. de Lesseps did not see any reason to change them; but these being M. de Lesseps' views, I do not think it was necessary to spend £4,000,000 to get M. de Lesseps to agree to what he desired in 1871. The negotiations on the surtax are said to have gone on smoothly; and they may have ended in a satisfactory result; but that result has been brought about not by concessions on the part of M. de Lesseps, but on the part of Colonel Stokes and the English Government. The surtax was to have terminated at an earlier date than that now fixed upon, and it is not wonderful that M. de Lesseps and the French Direction should show a conciliatory spirit, when all the concessions were made, not on the other side, but on ours. It is quite unnecessary to say what will be the effect in time of war. I doubt whether it will have any effect in time of war. I cannot agree with the hon. Member for Pembroke that by the influence we have acquired through these shares in the Canal we should have acquired the right in time of war to seize upon the whole, and to disregard not only our own rights, but those of our co-partners. It may be my own fault, but I am unable to follow that argument of my hon. Friend. It would be the same as if we should acquire an interest in the railways of a neighbouring State, with which we at some time might beat war, in order that we might have a moral right to take possession of those railways in case of an invasion of the country. I do not believe that this purchase will have any effect upon the possession of the Canal in time of war. What must happen in time of war must be decided by contin- gencies. It is impossible to foresee what can only be decided upon at the moment. What the House wants to know is what will be the effect on certain ordinary creditors in the Canal in time of peace. Many Members of this House who are competent to give an opinion think our position is not improved by anything that has taken place, and that our interests are not so simple and well-defined as before. Up to the present year the Government was the representative of a nation which made use of the Canal to a vastly greater extent than any other European nation. It had certain rights secured to it under the concessions, and at all events occupied a definite and well-defined position as the representative of the greatest trading nation of the world. Now the Government is not merely the representative of the customers of the Canal—it has become a co-partner in managing the Canal, and a co-partner under very different circumstances from the other shareholders. In that way it seems to me that the position of the Government is particularly complicated, and I fail to see that it is in any way strengthened. It appears to me, on the contrary, that the Government will be somewhat shy in future in embarking in these commercial enterprizes, or in interfering in the pecuniary affairs of other nations. It was impossible for hon. Members not to sympathize with the Chancellor of the Exchequer when he spoke of the deep regret with which he had learnt of the Stock Exchange gambling transactions which had resulted from the action of the Government. The House was not surprised that the right hon. Gentleman should have so warmly as he did repudiated the suspicion that the Government was in any way a party to transactions of this character; but it showed how extremely inconvenient, and how much to be deprecated, it is that the Government should have taken any part whatever in transactions such as those to which I have referred, and that they should have to trust to the right hon. Gentleman to rise and repudiate any idea of such a thing. There is no doubt that clever and unscrupulous persons, apparently acting in Egypt or in other parts of the world, have made use of the knowledge they acquired of the intention of the Government in this country to act on the Stock Exchange in London, Paris, and other places in a manner not creditable to the British Government. I do not think we can be proud of the part which the Government of England played on the Stock Exchange in Europe; but I do think it will be a lesson to the Government to avoid for the future being mixed up in such transactions.


Sir, there seems to be one fallacy that pervades all the remarks of hon. Members on the opposite side of the House on this subject, and that is the assumption on their part that our interest in an institution cannot be at the same time political and commercial. Take, for example, the National Debt. That is a political institution. It is so in a special degree, and never could have existed had it not been founded upon the most delicate of all political considerations—national credit. It depends upon political considerations. Its prosperity and its influence in the world depend upon political considerations. Yet I suppose hon. Gentlemen will hardly agree that it must not be considered a commercial institution, or the declaration of our dividends would not be met in due time with the same regularity and promptness as they are at present. For my own part, I never deviated—nor am I aware that my Colleagues ever deviated—from the declarations we made when we announced the purchase of these shares. We purchased them from high political considerations; and had it not been for those considerations we should never have entered into those negotiations. But having bought those shares, it became our duty to make every arrangement and take every precaution that the country should not be financially and commercially a loser. While, therefore, we thought we had accomplished a great political object, we were at the same time anxious to prevent the country from experiencing any loss. It seems to me the position is so clear that there cannot be any misapprehension that political and commercial principles can exist in the same institution, notwithstanding the unauthorized remarks of the noble Lord and others who preceded him. Nor do I think the noble Lord was particularly fortunate in his argument that M. de Lesseps, when he offered to consent to the appointment of three English directors some time ago, said that they would exercise no influence except as directors, if they were introduced into the Board on the part of the English proprietors. It is very true that in 1871 M. de Lesseps did make that remark, and insisted upon it. He said that the three English directors would be nothing more than three individuals who would exercise that influence which by their qualifications under the charter of the Company they might possess. But in 1871, when M. de Lesseps made that observation, England had not purchased half the shares in the Company. Therefore, all the arguments of the noble Lord based upon the remarks made by M. de Lesseps at that time go for nothing at all, and do not apply to the circumstances with which we have to deal at present. Nor is there anyone who can doubt the contrast between the two cases. Suppose that in 1871 English directors had been appointed in the manner referred to, and suppose that in the present case the English directors were appointed after the purchase of the Canal, is there any body of men either in this country or on any of those Stock Exchanges of Europe with which the noble Lord seems so familiar, who would hesitate to say which three individuals would exercise the greatest influence? Every man of sense must know that the three English directors now to be appointed would occupy a totally different position from the three individuals whose appointment in 1871 was suggested by M. de Lesseps. Then the noble Lord says my right hon. Friend the Chancellor of the Exchequer entirely disregarded all political considerations, and founded his observations on commercial considerations. My right hon. Friend very properly, on a Bill of this kind, made observations which he argued out completely, so far as financial and commercial considerations can go. To-night my right hon. Friend, as I listened to his arguments, never for a moment deviated from the political position which the Government assumed with regard to this question. He argued in this way. He said one of the great advantages of this is that we obtain our object in an amicable manner, which otherwise might be obtained only by painful controversy, and probably by force. What is that but a political consideration, and of the high- est kind. What does that prove? That we obtain this object, not for financial and commercial considerations, though it is our duty not to neglect these financial and commercial considerations, but for our political considerations. Now, with regard to what the noble Lord says about the influence of the conduct of Her Majesty's Government on the Stock Exchanges of Europe, all I can say is I am innocent in the matter. I have never allowed considerations of what would happen on the Stock Exchanges of Europe to prevent me from doing that in public which I think would be for the advancement of the welfare of this country. If we were to be arrested in our conduct of the high matters which are involved in the government of a great country like England merely, by considerations of what the effect of our words would be upon the Stock Exchanges of Europe, I think we should be in a position which, as a public man, I should feel to be utterly disgraceful. Sir, I hope this Bill will pass without any opposition. I feel sure myself that the feeling of the country is not changed as to this great enterprize. I cannot doubt that the hon. Member for Birkenhead (Mr. Mac Iver) spoke with justice when he expressed the opinion of the powerful community in which he lives. I believe that the people of the country have not changed one iota the sentiments which influenced them at the commencement of the Session; that they look upon this act on the part of Her Majesty's Government as a political and patriotic act; and as such, if ever the matter is made a subject of controversy, and I am before my countrymen, I shall be ready to appeal to them with the utmost confidence.


said, he thought it only due to the Government to say that he, in common with many Members on that side of the House, did not concur with the noble Lord the Leader of the Opposition in condemning the action of the Government in reference to the purchase of the Suez Canal shares, but he agreed with him in the regret he expressed that the purchase of the shares had led to so much speculation on the Stock Exchange. On that matter he, however, entirely acquitted Her Majesty's Government. He differed entirely from the hon. Mem- ber for Burnley (Mr. Rylands) in looking upon this transaction as a commercial one. It was undoubtedly a bold step for the Government to take. Unfortunately this country had been placed in a false position in respect to the Canal during the Ministry of Lord Palmerston. The country had never approved of that policy; and when the opportunity presented itself to the Government to acquire a permanent interest in that great work, he, for one, considered that they were perfectly justified in doing so. The country had accepted the purchase as evidence of a far-seeing policy on the part of the Government, and he believed it would meet the approval of a large majority of the House. He hoped they would give a unanimous vote in favour of this Bill.


admitting that the Government were not to be influenced in their decision of important matters of State policy by consideration as to the effect that policy would have upon the Stock Exchanges of Europe, regretted that when the arrangement as to the purchase of the shares had been completed it had not been at once made known. It was admitted that immense speculation occurred in different Egyptian Stocks, not in consequence of knowledge acquired at this side, but of telegraphic communications from Alexandria, and these might have been prevented by immediate publication. It was, however, an unusual transaction, and the Government had no precedent to guide them; but, at the same time, he was strongly of opinion that operations of this kind ought to be at once made publicly known.


said, that as a matter of fact the transaction was made known when it was completed.


in reference to the supposition that this country was opposed originally to the construction of the Suez Canal, observed that that was altogether a mistaken idea. Had the opinion of the commercial community been taken on the subject, they would by a large majority have declared in favour of the enterprize as a great political and patriotic transaction, to use the words of the Premier. Unfortunately, the Prime Minister of the day did not take that view, but the preponderance of opinion in the country was the other way.

Bill considered in Committee.

(In the Committee.)

On Question, "That the Preamble be postponed,"


in reference to the observations of the hon. Member for Maidstone (Sir John Lubbock), to the effect that Her Majesty's Government ought to have made the purchase of the shares known the moment the transaction was completed, said that what occurred was this —On first receiving an intimation that the Khedive was willing to offer the shares on certain terms, Her Majesty's Government made an offer in return by telegram, and it was not until that offer was finally accepted that they were in a position to publish anything. But when they received notice that the Khedive accepted the offer, they made the fact known that same evening. As to Mr. Stanton, the third of the three directors whom they had a right to nominate, he had been selected by the Government as their representative upon the interior Committee of Management, which only consisted of five members, and would reside in Paris, because the business was carried on there, and not in Egypt.

Preamble postponed.

Clause 1 (Treasury to hold and use shares).

In reply to Sir H. DRUMMOND WOLFF,


said, the Bill would give power to the Treasury to act in such manner as might seem to be necessary for the interest of the public. He thought it unadvisable either to raise or discuss at the present time difficulties that might never arise.

Clause agreed to.

Remaining clauses agreed to.

Bill reported, without Amendment; to be read the third time To-morrow.