HC Deb 21 July 1876 vol 230 cc1728-61

, in rising to call the attention of the House to the circumstances under which the Turkish Loan of 1854 was subscribed for; and to move— That an humble Address be presented to Her Majesty, praying that Her Majesty will direct that a, communication may be made to the President of the French Republic in order to ascertain whether the French Government will unite with the Government of Her Majesty in pressing upon the Government of Turkey the complete fulfilment of the conditions upon which the Turkish Loan of 1854 was subscribed for, said, that the circumstances involved in his Motion occurred upwards of 20 years ago. It was perfectly well known now great was the anxiety that prevailed in this country at the time as to what was called then, as now, the "Eastern Question," although it was at this moment presented to them in a different form. Twenty years ago it was not a contest between Turkey and any of her provinces, but a struggle between Turkey and Russia as to whether the latter should have any such domination over the internal government of Turkey as might lead to the dismemberment of the country, and the substitution of the rule of Russia for that of Turkey over, at any rate, some of her provinces. That anxiety continued for a considerable part of 1853, whilst negotiations were going on at Constantinople; and it was in the summer of July, 1853, that the first act of hostility was committed by the crossing of Russian troops into, and the occupation of, Turkish territory. That was spoken of as not being intended as an act of war, but simply in order to obtain material guarantees for the claim made by Russia against Turkey. Turkey, however, protested against that act of aggression, and having protested in vain, war was declared in October, 1854, and from that time hostilities proceeded. During this time negotiations were continued between the European Powers, great attempts being made to put an end to hostilities. These negotiations, however, failed, and in the spring of 1854 it became clear that warlike measures were about to be taken. A Convention was then framed by which England and France undertook to afford support to Turkey, and in April war was declared against Russia. The resistance which had previously been offered to the Russian troops after they had crossed the Pruth was one for which the European Powers were scarcely prepared in the face of such overwhelming odds, especially when it was remembered that Turkey at the time experienced one want—the want of money to supply her soldiers with arms, she being at the time amply supplied with men. It was not to be expected that any nation engaged in a war of that description should be able to provide the funds for carrying it on out of the ordinary revenues of the year, and France herself had to raise a loan of £10,000,000. Tur- key attempted to raise a loan of £6,000,000, and the matter was placed in the hands of the Messrs. Rothschild, a house which very seldom failed in carrying such transactions to a successful issue. Something, however, was rumoured of a loan which Turkey had endeavoured to raise before, and of a supposed repudiation on her part, and it became impossible to obtain the money which she wanted in the English market, and the proposal for a loan in the instance of which he was speaking was withdrawn by the Messrs. Rothschild. Still it was felt to be absolutely necessary that money should be obtained, and negotiations on the subjectwent on, though what was the exact form of those negotiations he had not been able to ascertain from the Papers which had been laid before the House. The results, however, were perfectly clear, for shortly afterwards it was announced that a Turkish Loan had been placed in the English and French markets, and which was so placed under what could not be otherwise described as the "auspices" of England and France. It appeared, too, from the prospectus which had been issued in connection with it, that it was not only charged on the general revenue of Turkey, but was specially secured, principal and interest, by the assignment of 30,000,000 piastres (£282,000 sterling), tribute payable by the Pasha of Egypt to His Majesty the Sultan, by virtue of the Treaty of 1841, contracted under the sanction of the great Powers of Europe. "This tribute," it was added, "is to be remitted half-yearly direct from the Pasha in Egypt to the Agents in London." Then came the following paragraph:— The undersigned have the satisfaction to acquaint the public that they are authorized by the Earl of Clarendon, Her Majesty's Principal Secretary of State for Foreign Affairs, to state that this Loan is negotiated with the knowledge of the English Government; that Her Majesty's Government is satisfied that the Loan and the appropriation of the above-mentioned 30,000,000 piastres (£282,000 sterling) per annum of the Egyptian Tribute are duly authorized by His Majesty the Sultan; and further, that the representatives of the Sublime Porte at Paris and London are empowered by virtue of the Imperial Firmans, to ratify the contract for the Loan in the name of His Majesty the Sultan, and Lord Clarendon relies with confidence upon the Turkish Government fulfilling with good faith the engagements they have entered into. The undersigned are assured that a similar declaration will be made by M. Drouyn de L'huys, the French Secretary of State for Foreign Affairs. Isaac L. GoLdsmid. J. Horsley Palmer. London, Aug. 16. There was also a letter signed by Lord Clarendon, which was as follows:— Messrs. Black and Durand are duly authorized by the Sublime Porte to negotiate a loan of £5,000,000 sterling, all expenses included, and to offer as a special guarantee 30,000,000 piastres of the annual tribute of Egypt. The representatives of the Sublime Porto at London and Paris are authorized, in virtue of Imperial Firmans, to ratify the contract of the Loan in the name of the Sultan. The contract between Messrs. Black and Durand and Messrs. Goldsmid and Palmer has been concluded with the knowledge of Lord Clarendon, who has confidence in the good faith with which the Turkish Government will fulfil the engagements they have entered into. Foreign Office, Aug. 15, 1854. That appeared from the bond and firman deposited in the Bank of England and the Bank of Paris. A letter also was published precisely in the same words, signed by M. Drouyn de L'huys, the Foreign Minister of France. It was important to see what the engagements were, the fulfilment of which was thus vouched for by the Foreign Ministers of England and France. They stated— On the security of the mortgage of the tribute which the Sultan had reserved out of the revenues of Egypt, in re-appointing, in 1841, Mehemet Ali Pasha of that province, and rendering its Pashalic hereditary in his family, and on the encouragement given to the Loan by the allied Governments, the money sought by the Sultan was furnished by English subscribers, and the Loan constituted part of the history of the war. Subjoined to and made part of the prospectus was the following notification:—'The undersigned have the satisfaction to inform the public that they are authorized by the Earl of Clarendon, Her Majesty's Principal Secretary of State for Foreign Affairs, to state that this Loan is negotiated with the knowledge of the English Government; that Her Majesty's Government is satisfied that the Loan and the appropriation of the above-mentioned 30,000,000 piastres (£282,000 sterling) are duly authorized by the Sultan; and further, that the representatives of the Sublime Porte at Paris and London are empowered by virtue of the Imperial Firmans to ratify the contract for the Loan in the name of His Majesty the Sultan; and Lord Clarendon relics with confidence upon the Turkish Government fulfilling with good faith the engagements they entered into. The undersigned are assured that a similar declaration will be made by M. Drouyn de L'huys, the French Secretary of State for Foreign Affairs, Isaac L. Goldsmid, and J. Horsley Palmer.—London. 16th August.' As usual in loans, a general bond, dated August 24th, 1854, was deposited in the Bank of England. This general bond contained the following irrevocable pledge:—'Be it therefore known that the undersigned, deeming it most for the interest and advantage of His Imperial Majesty's Government to raise the said Loan on the terms and conditions hereinafter contained, do, in pursuance of the powers and authorities vested in them for that purpose, hereby bind and oblige the Government of His Imperial Majesty and the revenues of the Ottoman Empire and Government to the payment of the said Loan, principal and interest, as hereafter stipulated, and in particular do specially and irrevocably charge forthwith as the additional guarantee 30,000,000 of piastres or £282,000, part of the tribute payable to His Imperial Majesty by His Highness the Pacha of Egypt, and in order that the said 30,000,000 of piastres, or £282,000 sterling, may be more effectually and irrevocably pledged and appropriated to the payment of the interest and redemption of the said Loan, the undersigned engage that the necessary Firmans and authorities shall be issued without delay for the due and punctual remittance to the Bank of England or the Bank of France, so that the same may be at the disposal of the Agents of the Loan for that purpose.' This general bond bore the signatures of J. N. Black; the Ambassador of the Sublime Porte at Paris, Vely; P. Durand; the Minister of the Sublime Porte in London, C. Musurus. From that it appeared that this sum of £282,000 was to be perpetually charged with the interest upon the Loan, and that one-half of the interest was to be paid on the 10th of April and the other on the 10th of October in each year. And then followed a rather curious provision, which might be a small matter, but what appeared to him not unimportant, as showing how complete was the concert between the three Governments, for in October, 1854, the Sultan issued a solemn decree in which he stated— That the suitable partition of this sum of sixty thousand purses between the two Banks shall be discussed and settled on the spot between the two Allied Governments and my Imperial Ambassadors in London and Paris. He could not conceive anything showing more plainly that it was under an arrangement between Turkey, England, and France that this money was to be obtained in the English market. The money was at once obtained; but had it been merely on the assurance of Turkey that these engagements were proposed, the Loan would have fallen as flat as the Loan of Baron Rothschild had fallen a few months before. It was subscribed for because the name of Lord Clarendon was security for England, and that of M. Drouyn de L'huys for France, and all parties looked to the engagement being fulfilled on that account. He must, however, go a little further on in the financial history of this matter, and look at what occurred in the following year. The money, obtained as he had described, was employed in all that was necessary for the carrying on of the war. Lord Palmerston declared that great as were the efforts of England and France, it was in vain that these efforts should be made unless they were seconded by the efficient support of the country most materially interested. His declaration showed how strong were the feelings which the Ministers entertained of the importance of the money being obtained in order that the Turkish Army might be brought into an efficient state. Still the war continued, and it was necessary in the following year that more money should be raised. The money was raised in this way. It was very much discussed in the House of Commons, and Lord Clarendon distinctly stated what was the security on which the money was advanced, in order to show how perfectly safe the English and French Governments were in joining in that decree. The first security was this—The tribute money at that time was £282,000, and all that was required for the Loan of 1854 was £210,000, leaving £70,000 surplus still open to any lien that might be laid upon it. Accordingly, the first security offered for the Loan of 1855 was this £70,000. For the remainder they looked to other revenues of Turkey, which would more than pay the interest and provide a sinking fund. From that time the payments had continued to be made every half-year in April and in October upon the order of the Turkish Ambassador upon the Bank of England and the Bank of France. For 20 years this went on, without a question being raised, and the pledges of Turkey were fulfilled. But now came a time when a difficulty first arose. In the Autumn of last year the Turkish Government came to the conclusion—and it was a correct one—that they could not pay the whole of the interest upon the various loans and the immense floating debt which existed, and it was proposed at once to reduce the interest one-half, the rest to remain for five years upon the security of certain stock. This was understood to apply to the whole of the Turkish Debt unsecured, for which no part of the revenue was pledged, and for which 18 or 20 per cent had been asked and given on account of there being no security. It was supposed that the pledge with regard to the Egyptian tribute was irrevocable. For the first time, however, a few days before the 10th March, application was made to the Turkish Ambassador in the usual way for an order upon the money pledged to the bondholders, and which was lying in the Bank of England. The Ambassador refused, unless they would agree to take the half offered to the other creditors and which they had been obliged to take. It was thus proposed that a very large sum—about £100,000—of the surplus should be left at the disposal of the Turkish Government. For what purpose? In order that the Guaranteed Loan might be paid in full out of the very money pledged to the bondholders of 1854. It was utterly impossible for the Government to take a single sixpence of the stolen money—it would be stolen money and nothing else; and it could not be supposed that an English Chancellor of the Exchequer would countenance it; indeed, it was an insult to the Government to suppose that they would be in any way parties to the reception of money under those terms. It might be asked what was the course he thought the Government ought to take. Application had been made to the Foreign Minister for assistance, and while he expressed considerable sympathy for the bondholders, he declared that anything he could do must be done, not in his official, but in his unofficial character. That was making a distinction which ought not to be made. The pledges were made not by Lord Clarendon, but by the Foreign Minister, together with the English and French Governments; they were not unofficial, but official, and he could not understand on what conceivable ground it could be said that the support to be given must be unofficial, when all that had been done by the Government previously was in their official capacity. They had been referred to the South American loans. But this case was different, and it could not be said of this as it might of some Spanish or South American debt, you must take your chance upon the credit of the country you deal with. At the request of Turkey, the Foreign Ministers of England and France had given these pledges and had stated their confidence in the good faith of the Ottoman Government to fulfil the various pledges contained in the firman. Our Government had a right therefore to call on the Turkish Government, at any rate to make good the pledges that that Government had asked them to give. But for this money the Turkish Army would have been an unarmed multitude, but being thus supplied with the sinews of war their forces were enabled to offer a stout resistance to the enemy. It was therefore for the interests of England and France to give this guarantee, but apart from that we had a right to call upon Turkey to observe her promises. He did not ask Her Majesty's Government to send the Meet to Besika Bay; but he thought that Sir Henry Elliot, as the Ambassador of Great Britain at the Porte, might very well be instructed to remind the Turkish Government of the assistance they had received from Great Britain and France, and to call upon them to fulfil their pledges. Without anything like a declaration of war, a moral support might be given by our Ambassador to the claims of the bondholders. He was sure the present Government would not repudiate the action of their Predecessors, and so he would not say a word as to their responsibility in the matter. One word he wished to say on the form of the Motion with which he intended to conclude. He might state that his original intention was to pray Her Majesty to direct Her Ambassador at the Porte to use his just influence in order to secure the fulfilment of the conditions on which the Loan was raised; but it had been suggested to him, very properly, that it would scarcely be respectful to France for England to take action alone, and therefore he had adopted the form of words which appeared on the Paper. He had said nothing of the miseries inflicted upon those who, trusting to the declaration of our Foreign Minister, had advanced their money to the Turkish Government. He felt strongly upon the matter, but there was one thing which, as a Member of the House of Commons, he felt more strongly, and that was regard for the national honour and deep regret that any British subject should be suffering the calamities now experienced by the subscribers to the Loan of 1854, in consequence of the faith they had placed in the declaration of Her Majesty's Government. The right hon. and learned Gentleman concluded by moving the Resolution.


seconded the Motion.

Amendment proposed, To leave out from the word "That" to the end of the Question, in order to add the words "an humble Address be presented to Her Majesty, praying that Her Majesty will direct that a communication may be made to the President of the French Republic, in order to ascertain whether the French Government will unite with the Government of Her Majesty in pressing upon the Government of Turkey the complete fulfilment of the conditions upon which the Turkish Loan of 1854 was subscribed for,"—(Mr. Russell Gurney,) —instead thereof.

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


, in supporting the Resolution, said, he coincided in the reasons assigned by his right hon. and learned Friend for bringing forward the Motion. His right hon. and learned Friend had conclusively shown that the Loan of 1854 was raised on principles less speculative and less sordid than was usual in such cases; that, in fact, patriotism had something to do with it. The Loan of 1854 was a loan raised upon a special security at a time when Turkey was not in debt; it was made with the knowledge and sanction of two European Governments, in the interests of Europe, not less than of Turkey, and it was perfectly successful, the security being the annual tribute of Egypt, which amounted to £282,000. But that was not all; for the Government, following up and endorsing the policy of 1854, sanctioned a second loan on the security of the Egyptian tribute, or rather of the £70,000 of it which remained unmortgaged. There could be no doubt that the Government were well acquainted with all the circumstances of those loans, and he thought it was clear that the bondholders had a right to appeal to Her Majesty's Government to use their best efforts to secure the due payment of the interest that was promised. The security was still in existence—namely, £210,000 of the Egyptian tribute, which was set apart for the payment of 4 per cent interest. Up to the last two years that interest had been duly paid by the remission of the tribute to the Bank of England, and its payment by the order of the Turkish Ambassador to the trustees appointed under the contract as representatives of the bondholders. After the lapse of 20 years the Turkish Government now found itself in some difficulties, and it had suggested that all the loans contracted, including the Loan of 1854, should be paid into a new general loan upon the hotch-potch principle, the special appropriations in particular cases being forgotten or ignored, the interest on one-half of the amount being deferred for five years, all past engagements being forgotten. But Turkey had no right to take away or appropriate to other purposes the money which had been appropriated to the payment of the interest on the Loan of 1854;and, looking at the position taken up by Lord Clarendon and the Foreign Minister of France at the time, there could be no doubt that Her Majesty's Government were entitled to interfere for the purpose of making the Turkish Government keep faith with respect to this particular loan. But for that loan, none of the subsequent loans which had been placed upon the Exchanges of England and the Continent could have succeeded. The contract was so clear, the conditions so distinct, and the security by which the payment of interest was guaranteed so complete, that he thought his right hon. and learned Friend might very easily have made his Motion a great deal stronger than that to which he gave his earnest support. On going through the printed Papers he had been much struck by a telegram from the Turkish Government to the Turkish Ambassador in London, dated the 16th of October, 1875. It was in the following terms:— The late financial measure will not be applied to the Loan of 1855, guaranteed by England and by France; and the service of the interest will continue to be made as heretofore. He looked upon that communication from the Turkish Government as in effect suggesting to the two powerful Governments of England and France—"We are not going to cheat you, or to take away either the interest or principal of the Loan of 1855, we are only going to defraud your helpless and hopeless subjects; we have got their money, and we mean to misappropriate their security." He said that that communication made it imperative on our Government to give it an answer, protesting that they would not have their interest or their principal paid at the expense of the helpless bondholders, but that Turkey must honourably fulfil her engagements towards the subjects of Great Britain and France.


said, he was sorry the Motion had been brought forward, as he had hitherto believed it was the characteristic of Englishmen always to have forbearance towards a foe when he was sorely pressed. He regretted to hear the hon. Member who had just sat down (Mr. Freshfield) attribute fraud to the Turkish Government. The Iradé of the 6th of October last was not in the least intended as a repudiation, or as an amalgamation, or as a throwing into hotch-potch of the entire Debt of Turkey, but it merely meant that the payment of half the interest and sinking fund was to be suspended for five years, hoping that at the end of that time Turkey would be able to resume payment in full and go on as she had done previously, the interest of her Debt and her sinking fund being far too heavy for her to bear. That was not attempting to defraud, nor was it holding out to the Governments of England and France that Turkey would pay them in full, but would rob their subjects of half their due. The loan guaranteed by England and France had only £42,000 of the Egyptian tribute appropriated in payment of its interest, the remainder being secured to the Customs of Smyrna. Neither had there been a proposal made by Turkey to the Foreign Office that they would appropriate a greater sum than £42,000 from the Egyptian tribute, as they were entitled to the surplus from the £280,000 hypothecated to pay the Loan of 1854. He doubted very much the propriety of pressing a country like Turkey, under present circumstances, to pay any loan, or interest on a loan, which she had contracted, seeing she was now struggling against a rebellion fomented and encouraged by those who were called her allies, and also fighting for her very existence as a European Power. That was not a time for the British House of Commons to tell Turkey, in her hour of dire necessity—"Pay what you owe me, pay what you owe your foreign creditors—to the last fraction of a pound." Let them be fair to that much-maligned country. The 1854 Loan was the first foreign loan Turkey ever contracted. She then had a large revenue, and her expenditure never exceeded her income. True it might be that in the throes of her then struggle for her independence, assisted by England and France, the Ministers of those countries went rather out of the way—he allowed this for the sake of argument—and encouraged their respective peoples to lend Turkey their money. But when men entered into a contract the terms of that contract must be looked to. He held in his hand one of the bonds of the 1854 Loan, and in it he saw no engagement on the part of the English or the French Government to pay interest or guarantee either the interest or the redemption money; but the Porte made a contract with the bondholders to hypothecate £282,000 of the then Egyptian Tribute, to be remitted to England to pay the interest and sinking fund. The Porte had done so; and even while he was speaking he believed that condition was being honestly fulfilled by the Khedive, who made the arrangement with his Sovereign and with the assent of Turkey. He did not think that the bondholders of 1854 had a right to call for the special interference of the Government of this country or of France to help them out of their difficulty, because while they had the advantage of the Egyptian Tribute being remitted direct by the Khedive to the Bank of England, the Porte held the sole control over that remittance; and it was only released from being the property of the Porte by the order of the Turkish Ambassador, who directed the Bank of England from time to time to pay the interest and the sinking fund. If there was any Turkish Loan which had a claim on our Government it was that of 1858, which was the first loan contracted after the war; and the Governments of England and France, which had shed their blood and spent their treasure for the independence of the Ottoman Empire, encouraged that loan. Both Lord Clarendon and Lord Russell, he believed, interfered and took active steps to impress on the Turkish Government the necessity of fulfilling their engagements in respect to the Loan of 1858. Moreover, by a distinct hypothecation the Customs of Constantinople were irrevocably pledged for that Loan, and could be received by the contractor of the Loan to pay the dividends. There was no withholding of them, until an order came from the Turkish. Ambassador, as in the case of the Loan of 1854. The loans contracted by Turkey subsequently to 1858 stand upon the same footing as the loan of that date, because certain taxes had been hypothecated irrevocably for their payment. But, he asked, was this the time at which to press the Turkish Government? He had every reason to believe that this insurrection or rebellion, if it could be dignified by the name of rebellion—being what he himself would call a disturbance of a few of the provinces of Turkey—had been instigated and encouraged by one who professed goodwill towards her and to be her honourable ally. He believed when this question came to be discussed, that it would be found beyond a shadow of a doubt this disturbance had been brought about, not because the subjects of Turkey were dissatisfied and disaffected, but by a universal system of foreign intrigue, which had been carried on persistently for the last nine or 12 months with the view of ruining Turkey financially as well as politically. When the Papers were laid before the House he believed that would most certainly be its opinion. He, therefore, earnestly asked the right hon. and learned Gentleman not to press the Government upon this matter at the present juncture of affairs. He was in constant communication with the Porte—humble individual as he was—and he had every reason to believe that in a short time, as this political question was settled, a proposal would be made by the Turkish Government—that, in fact, the Turkish Government were entertaining now proposals of a very important character, which within a month must culminate in some point or other, and that that culmination would be a fair and honourable proposal on the part of the Ottoman Government, which would, he believed, place everything fairly and honestly before its foreign creditors, without any reserve or secret whatever, in regard to the financial position of the country. There could be no advantage derived from pressing her at the present moment. What was her position? Unable to borrow a single penny, her credit utterly gone, her interest upon her foreign Debt unpaid, her provinces in rebellion—was it right, under such circumstances, for Englishmen to press her? He trusted that it would not go forth from the House of Commons that the Iradé of the 6th of October was put forward by Turkey merely with the view of defrauding her foreign creditors. In the Circular of the 16th of October Turkey repeated the terms of the Iradé of the 6th in the most solemn manner, and expressed her willingness to appoint a syndicate of foreign bondholders, and to hand over to them the revenues hypothecated under the different loans, which would be sufficient to pay the interest and the sinking fund under the Iradé. Did that look like an attempted fraud? If a person could not for the moment pay 20s. in the pound, what more could they do than say—"That is my all—take it?" He earnestly asked the right hon. and learned Gentleman, after the observations he had made in reference to the Loan of 1854, not to press this matter to a division unless he included in his Motion all the loans, but that we should wait quietly and patiently, and we should soon have an opportunity of judging Turkey. If she was able to stem the present torrent—and he had not the least doubt that she would—then he believed that she would make every possible arrangement consistent with reason to satisfy her creditors to the best of her ability, and prove to the world that she had no desire or intention to defraud them.


confessed himself at a loss to comprehend or to reduce to any tolerable consistency the several parts of the speech of the hon. Gentleman who had just sat down (Mr. Hamond). The larger part of the hon. Gentleman's speech recalled that age of chivalry which Mr. Burke told us long ago had altogether vanished, and appealed in touching and pathetic tones to the lofty and high-minded sentiments and to the warm-hearted feeling of Englishmen, and entreated them not to press Turkey in her hour of difficulty. But how did the hon. Member close his speech? The right hon. and learned Gentleman the Recorder for the City of London had made a special appeal to the Government to press upon the Porte, upon grounds which he would presently consider, the necessity of discharging its obligations with regard to £2,000,000 of its Debt, and the hon. Member who had just sat down said "how cruel to press Turkey at the present moment to pay the interest upon those £2,000,000 of Debt," and he re- quested the right hon. and learned Gentleman to withdraw his Motion unless he would consent to include in its terms the whole of the other Debt. In that case the hon. Member was content to forget that he was an Englishman, and put aside all his high-flown principles, and was willing to go into the Lobby with the right hon. and learned Gentleman, if he would only not insist upon getting these two payments. [Mr. HAMOND: Permit me to explain that I never said so.] He believed that he had stated accurately the relative positions of the hon. Member's speech, and if he were in error the hon. Member would have an opportunity at the proper time of correcting him. He himself, on the other hand, wished to take a course exactly opposite to that of the hon. Member. The purpose of the hon. Member's speech was to mix together the whole of this immense question and to justify the course pursued by Turkey with regard to her Debt of £200,000,000. He, on the contrary, treading in the path of the right hon. and learned Mover and of the hon. and learned Seconder of the Motion, wished to separate absolutely and completely the case of the Debt of £2,000,000 from that of the Debt of £198,000,000. The Debt of the £2,000,000 was entirely isolated from that of the larger Debt. In itself the smaller Debt was a very insignificant matter, because it only involved a sum of some £50,000 or £60,000 per annum, and therefore the whole amount at issue was very trifling, and in a financial sense, perhaps, trumpery compared with the larger sum at issue. And it was a still more trifling affair, because the sum which the right hon. and learned Gentleman the Recorder for the City of London asked to have paid over to the bondholders was not at present under the command of Turkey. It might, perhaps, in a negative sense be at the command of Turkey, because nobody else could get at it without her consent. That was what the hon. Member called being under the sole control of Turkey. If £10,000 was in a bank, and a man had power to prevent the bank paying it over to a third party, but was unable to get it himself, it could not be said that he had the sole control over it. Turkey herself could not touch a single shilling of it. The Bank of England did not understand this Iradé as the hon. Member had understood it. He said it was a proposal to the bondholders, on the part of Turkey, to forego half their dividends. It was a proposal of much the same sort as the executioner made to a criminal to be hanged, after his sentence had been pronounced. There was no choice of any kind whatever left to the bondholders. But this money was laid up in a particular coffer, and although it was perfectly true the Turkish Ambassador held one of the keys on behalf of his Government, the coffer could not be opened except for the benefit of the bondholders. And as this matter was isolated with regard to the Turkish main Debt, so also was it isolated as regarded the general policy of Her Majesty's Government. It was clear, from the quarter from which the Motion under discussion proceeded, and from the speech of the right hon. and learned Mover, that Party feeling had no relation to the question, and he was therefore sorry and surprised that the matter had not presented itself in what he took to be its true view to the eyes of Her Majesty's Government. At the same time, he felt it would be his absolute duty to avoid saying a word which could, in the slightest degree, make it difficult for the Government to listen to an unprejudiced view of the case. The right hon. and learned Gentleman the Recorder of the City of London had given to the bondholders the valuable aid of his high character, long experience, and judicial mind, and it was on the part of the right hon. and learned Gentleman a perfectly gratuitous service. He (Mr. Gladstone), on the other hand, stood in a wholly different position. He bore an obligation which he could not but discharge, for he was the sole Representative in that House of those Ministers who were responsible for the transactions connected with the Crimean War. He did not know that either he or Lord Granville had any personal share in the particular transaction under discussion; but regarding the question in the concrete he admitted to the full, and absolutely, the responsibility of the Government of which he was a Member, and was prepared to defend it to the utmost on its merits. To him it seemed that this was neither more nor less than a question of honour, and that it was impossible for them to remain as they were, silent and inert on the subject of this loan, without dishonour to this country. Of course, he did not wish to say that those who hitherto had not adopted so strong a view as that which had been forced upon himself were less sensible of the importance of maintaining the honour of the country than he was; but he felt convinced that, on repeating the true character of the facts, that would be the general feeling and opinion of the country. This being so, the first proposition he wished to place strongly before the House was that the money was obtained from the bondholders of this country and elsewhere entirely and exclusively in consequence of the letters written by Lord Clarendon and M. Drouyn de L'huys. Until they were written the money was refused, and when they were written it was given with promptitude. His next proposition was that it was a mistake to suppose that the effect of the letters was to induce the purchasers of bonds to place reliance on the general credit and revenues of Turkey, although it might be perfectly true, as had been stated by the hon. Member for Newcastle-on-Tyne, that that case might have happened, for Turkey at the time had no foreign Debt and a revenue considerably above her expenditure. But, as a fact, the security upon which these gentleman trusted their money was not worse now than it was then, for if every shilling of the general revenue of Turkey dwindled away and disappeared, their security would remain the same. The Egyptian tribute was their security, and it was irrevocably and absolutely devoted to the purpose up to a certain sum until the loan was liquidated. Nothing could be clearer than the evidence on the point, for it was stated in the contract, which was quite sufficient to fix it upon the British Government, and was likewise in the firman of the Sultan, in different words, but the effect was exactly the same. The Sultan desired that the liquidation should continue till the liquidation of the loan, both principal and interest, was complete. The only question that could arise was, what might happen if the Pacha were to fail in his duty; and taking the circumstances as they stood, the impression made on his own mind was that the Khedive, in the midst of his great difficulties, had a very great anxiety to discharge his obligations. Nothing could be more improbable than that he would make himself a party to that which was regarded as an act of repudiation, and had all the aspects of repudiation, whether so intended, by Turkey or not. The power of Turkey to pay was complete. It was not as if it were money she had power to apply to other purposes, for she had not that power. Every shilling requisite for the fulfilment of those obligations was ready, although it was in the power of Turkey to prevent its being employed for its legitimate ends. It was, therefore, wide of the question to suppose that Egypt would assist Turkey in any scheme of repudiation. These letters of Lord Clarendon and M. Drouyn de L'huys were so strong and firm, and even solemn in their character, that even if they thought these letters ought not to have been written, they could not say that they were sorry their prestige had suffered, but they could not help it, without being guilty of an act of dishonour. He did not enter into the question whether Turkey issued that Iradé with the intention finally of liquidating everything, but the question was, whether England was to use her influence with Turkey to allow this fund to go to its proper purposes. He had seen it stated and imputed to Lord Derby that these letters were very much to be regretted, and were not to be considered as binding. If they were part of the most foolish measure ever passed, they must be fully and absolutely supported, for he maintained that the only principle on which Government could be carried on was to accept fully the consequences of all official acts. But he maintained that these letters were no discredit to the prudence of the Governments which caused them to be issued. At that time England and France were about to enter on enormous expenditure to prevent an invasion of Turkey by Russia, and they accordingly made it clear to the Turkish Government that they could not undertake the whole responsibility of defending Turkey against Russian conquest. The Turkish Government replied that, although they had endeavoured to do it, they had found it impossible to provide for the expenses of a war such as that which was impending out of the ordinary revenues of the country. They did attempt to raise the money, and the effort having failed, it was impossible for England and France to stand by and leave Turkey in a condition in which she would neither have revenue to support a war nor credit to borrow money. England might certainly have allowed Turkey to borrow £3,000,000 under a letter of recommendation; or was she to have guaranteed the loan? [The Chancellor of the Exchequer: No, no.] Well, he would not enter into that question. He did not think it would have been wise, because it might have become the duty of the Chancellor of the Exchequer to come to Parliament and ask for the means of discharging that guarantee. The remaining course was that England might have given Turkey the money. Well, he did not agree with the system of guaranteeing the loans; and if he did not mistake, his right hon. Friend had in 1855 joined in a protest against that system. That, however, had gone by. What he said was this—that what Lord Clarendon and M. Drouyn de L'huys did was the least they could do. The question was not whether what they had done was the right thing to do, but whether it was not the least and the best thing they could do. If they had not done that, they must either have paid the money or guaranteed it, and either of those things would have been a great deal more stringent. They engaged this country to the minimum that they thought it necessary to go, and under these circumstances it would indeed be strange of they were to object to what Lord Clarendon and M. Drouyn de L'huys did because it was of an insufficient character, and said that they ought to have paid the money outright or guaranteed it. Well, in 1854 the obligation of our Government to these bondholders became complete, and it was even strengthened by what took place in 1855. The Convention of that year was an absolute Treaty between Turkey on the one side, and England and France on the other; and in that Treaty they found embodied the very words that a certain sum of money was to be available for the interest of the guaranteed loans after a sufficient sum had been appropriated for the payment in full of the loan of 1854. It was no extravagant construction of that Treaty to say that Turkey was bound to this country and to France by the words of that Treaty to the full discharge of those obligations. Everyone would have observed the very peculiar form of the proceedings of the Ottoman Porte on the subject. In 1854 the English and French Governments pledged their honour to a loan; they gave an honourable assurance that the Porte could and would fulfil its obligations. In 1855 they pledged the credit of the nation, and made the money receivable at the Bank of England. What was the language of the Ottoman Porte? The hon. Gentleman who spoke last (Mr. Hamond) treated it as if it had been complimentary to us. He (Mr. Gladstone) must confess that it appeared to him, on the contrary, to be disparaging in the highest degree, for what the Ottoman Porte said was—"We will not cheat you; we will only dishonour you. The loss of money, we know, you could not stand; the loss of credit and reputation is a matter which in these times of modern philosophy you are much better able to bear with." Let them remember that when the loan of 1855 was made there was a distinct recognition of it under the Treaty. What were the declarations of those who dealt with the subject as it passed through Parliament? Lord St. Leonards used the remarkable expression that by this transaction we had become assignees of the Egyptian tribute for the benefit of the creditors. Lord Clarendon and Lord Palmerston, in the most express and clearest manner, spoke of the loan as coming behind the previous charge upon the Egyptian tribute—were these empty words? On the contrary, they acted at once upon the Money Market, for the security was not a speculative one. It had, on the one hand, the full support of the English and French Governments, and, on the other hand, they had prudently arranged for keeping the money out of the Turkish Treasury altogether, and took care that it should be brought direct from Egypt to this country. The result was the loan went to 94½, whereas he believed that the people, if they wanted to sell their securities, could hardly get £30 per £100. He really could not say what constituted s strong case if that was not a strong case He was not prepared to say that there was any limit to the rights of the British Government as against Turkey with regard to this matter. He only said that it was not for them to enter into the question whether it was desirable for the Government to push those rights to an extreme point. The Motion of the right hon. and learned Recorder was drawn with great moderation and great judgment. It simply stated that it was the duty of Her Majesty's Government to press upon the Government of Turkey the complete fulfilment of the conditions upon which the loan was subscribed for. Was not that a very moderate statement? Was it possible to deny the leading proposition that the loan was subscribed for in consequence of the letters of recommendation, and could they now proceed as if those letters never existed? Everybody knew that that if it were a far larger question it was in the power of the English and French Governments to insist, and that by a very moderate exercise of their just influence, that Turkey had no right to make them sharers in dishonour. She had no right to parade them before the world as people who deluded the innocent holders of capital in their own countries, and induced them to go into bad security by representing to them with solemnity that it was a good one, for that was what they had done. If it was a bad security, it was one with the joint assurance of the two Governments that it was not. For his part, he thought it necessary to wash his hands of all part in such a transaction, and therefore of the responsibility of being a party to opposing the Motion. He had never known a clearer case submitted to Parliament, considering the manner in which it had been received and the quarter from which the Motion came, and deeply should he be disappointed if, in the judgment of Her Majesty's Government, or by the decision of the House, it should appear that those much injured parties were to remain without redress.


said, that before he proceeded to make any remarks upon the Motion, he wished to set himself right in reference to an interruption of his during the speech of his right hon. Friend opposite the Member for Greenwich (Mr. Gladstone). His right hon. Friend was speaking of the course taken by Lord Clarendon and M. Drouyn de L'huys in 1854, and stated that in recommending the loan then about to be recommended on behalf of Turkey, they adopted upon the whole the best course that could be taken in the circumstances. His right hon. Friend compared that course with the alternative of guaranteeing the loan, and asked the House in defence of the policy acted upon, whether it was not a better mode of proceeding than guaranteeing the loan. He interrupted his right hon. Friend by saying, "No," while following the argument in his own mind that the letters of Lord Clarendon and M. Drouyn de L'huys involved us in some obligation equivalent to a guarantee. His right hon. Friend reminded him of the part he (the Chancellor of the Exchequer) took in 1855;but in that year he voted against guaranteeing the loan, and he had no doubt that had the question been discussed in 1854 he should have given a similar vote. The reason for his interruption was this—it struck him that, if instead of encouraging the loan of 1854, we had acted as we did in the following year, then, instead of finding ourselves in 1876 under some kind of obligation, unexplained and indefinite in its character, we should be absolutely clear of any obligation whatever. His right hon. Friend said that the Chancellor of the Exchequer might have had to ask Parliament for money to pay the sum so guaranteed, but on that point he took issue with his right hon. Friend. He begged to call attention to this rather simple calculation. The nominal capital of the Turkish Loan of 1854 amounted to £3,000,000; but it was issued at 80, and therefore the lenders paid only £2,400,000. In January, 1876, there remained unpaid a sum of about £890,000, representing £1,117,000 nominally. Now if the lender had perfect security, he would not have received more than 4 per cent, because in the following year the loan was raised at 4 per cent. In point of fact, the amount which the lender received in 1854 was £6 on £80, or 7½ per cent. If that 7½ per cent were to be divided between the 4 per cent which the lender would receive on the guaranteed loan, and the 3½ per cent which remained over, and if that 3½ per cent were applied by way of sinking fund, he would in 21 years have got back his capital and something more. In that case, therefore, the whole of the loan would have been paid off. It was because he had that calculation in his mind, that he was induced to say that something better could have been done; that Turkey would have received more efficient help, and we should have been free from responsibility. He now wished to ask for a few minutes the candid and unbiassed attention of the House to that position in which we stood. Nobody could doubt that the position was a very serious one; and deserved very earnest consideration. No one could doubt that on any question which could by any construction be represented as touching the honour of England, we ought to be very jealous of that honour, and very careful of the course that we might take. But he was quite certain he was speaking the sentiments of his noble Friend, Lord Derby, and of the Government, when he said that the importance of watching jealously over the honourable obligations of England in this matter was as much present to their minds as it was to the mind of his right hon. Friend, or any hon. Member of this House. His right hon. Friend spoke very naturally with some personal feeling in this matter, because he represented in this House the Government by whom that obligation had been incurred. Well, he entirely accepted the proposition laid down by his right hon. Friend that the Government of England was not the Administration in power at any particular time, and that where the Government of one day pledged the national faith in any particular, succeeding Governments were bound in honour to take up the engagement and redeem it. But let them not attempt to say that the present Government, as their Successors, had any greater obligation than they would have had. When his right hon. Friend asked, were not Her Majesty's Government to consider the letters of Lord Clarendon and M. Drouyn de L'huys binding? his answer was that they did as far as they would be binding on Lord Clarendon and M. Drouyn de L'huys, but Her Majesty's Government did not say that the Successors of Lord Clarendon and M. Drouyn de L'huys incurred any greater obligation. Now, what was the nature of that obligation, for by the answer to that question, the position of Her Majesty's Government was to be measured. And here he would call the attention of the House to the very great delicacy of dealing with matters of this sort. We must not allow hard cases to lead us to the adoption of false general principles. We must bear in mind the proper principles upon which to proceed in relation to the debts owing to British subjects by foreign Powers, and that there was nothing that would be more dangerous to the interests of this country, or to those whom he might call the leading classes, than that the Government should give a fictitious support to their transactions by holding out to them a sort of indefinite hope that in some way or another the money that they might lend to foreign Governments would be looked after for them by the British Government. If there were cases in which British subjects had advanced money to foreign Powers on the full conviction that those Powers were offering good security and fair interest, they must take the risk. But if we led the lender to think that in case the Power to which he lent money made default, he would get the aid of his own Government to recover his money, we should be encouraging him to believe that he had got a security which he had not. It was all very well to say that we were not to be driven to the use of force in these matters. It was all very well for his right hon. and learned Friend the Recorder for the City of London to say—"I do not ask you to send your ships to Besika Bay;" but, in point of fact, if they did begin to acknowledge an obligation, and undertook to press it on a foreign Power and that power treated us with contempt what was the ultimate resort? Were we to go as far as we could, but when the moment for action came were we to say we did not intend to go quite so far? If we acted in that way we should place ourselves in an unworthy and ludicrous position. A half support was a very awkward thing to give, and that remark he would apply to the letters of Lord Clarendon and M. Drouyn de L'huys, because those letters, falling short of an actual guarantee, did encourage the belief that a considerable amount of support was given by the two Governments, and we were now disputing what was the amount of obligation incurred by those letters. It would have been far better if we were going to do anything at the time, to have come forward frankly and said that we would give a guarantee. But what we did fell far short of that. Instead of the loan having been raised on the favourable terms on which the loan in the following year was raised when we gave the guarantee, it was raised on unfavourable terms; Turkey did not get what she expected, and it was suggested that we were in some shape or other to assist the bondholders. His right hon. Friend the Member for Greenwich, in conjunction with the right hon. and learned Recorder, stated that the loan was obtained entirely and exclusively in consequence of the letters of Lord Clarendon and M. Drouyn de L'huys, and the former right hon. Gentleman justified the statement in this way, that when Turkey first began to make efforts to raise a loan, not having that support she failed; but when the support of Lord Clarendon and M. Drouyn de L'huys was given she obtained the money. Now he (the Chancellor of the Exchequer) did not know precisely all that occurred before the loan, but this he did know—before the proceedings which terminated in a loan, an attempt was made by Turkey to raise a loan through the agency of Baron Rothschild, and in March, 1854, Baron Rothschild put himself into communication with the Foreign Office with respect to it. Baron Rothschild had an interview with Lord Clarendon, and the result was that he wrote to the Foreign Office and he received from the Foreign Office a letter informing him that— The best exertions of Her Majesty's Government would always be used to secure on the part of the Turkish Government the strict fulfilment of the conditions on which, the loan was made. He (the Chancellor of the Exchequer) took the position of the right hon. Gentleman the Member for Greenwich to be as nearly as possible defined by those words. [Mr. Gladstone: No, no!] Then he did not know what his right hon. Friend meant. His right hon. Friend did not ask the Government to come forward and say— Inasmuch as we misled you, we are ready to give you a Vote out of the national Exchequer; but he said— You ought to come forward, and use your best exertions in order to secure on the part of the Turkish Government the strict fulfilment of the conditions on which the loan was contracted. That he took to be the position of his right hon. Friends the Recorder and the Member for Greenwich. That was precisely what the Foreign Office told Baron Rothschild—that the moral support of the Government would be given, and yet he failed to raise the loan, but subsequently the object was attained— and how? Not by giving any greater pledge, but by something rather short of that—by the hypothecation of the Egyptian tribute as a special security. It was when that arrangement, conducted under the auspices of the French and English Governments, was completed, and the Government were enabled to announce the fact to the public that the loan was issued. It was not upon any moral obligation, but on a material arrangement, by which so much money was to be paid into the Bank of England in the shape of Egyptian tribute—it was on that basis, when they changed from the moral support to the material guarantee, that the loan was actively carried into effect. That led them to examine the position of this Egyptian tribute. His right hon. Friend said this money which Turkey was called on to apply to the payment of her debts was not under her control; she could not make any other use of it than pay it to her creditors. To a certain extent that was true; but not without certain limitations. She must pay the Egyptian tribute into the Bank of England, and the Bank would not allow her to apply it to any other purpose. That was true; but if Turkey only authorized the Bank of England to appropriate one-half in payment of the loan in February, there would remain the other half standing over, and that might be used by Turkey in the next half-year. At the present moment there was lying in the Bank of England a considerable sum of money paid as Egyptian tribute in February, which was held subject to the orders of the Turkish Government. The Bank of England would not allow it to be appropriated to any other purpose, but it would be available for the interest. He thought these things ought to be known, because it ought to be understood exactly what our position was. But while he said these things, qualifying as they did some of the propositions rather hastily and rashly taken up on that subject by some hon. Member and still more by persons outside, he was very far indeed from desiring to deny or depreciate the amount of responsibility which rested on the English Government to see justice done as far as they could in this matter. He was very sensible of the moral obligation laid upon them in consequence of the assurances given by Lord Clarendon and M. Drouyn de L'huys. The Government, indeed, were very far from denying the fact that these assurances thus given did raise to some extent an obligation in respect to those loans which would not exist in the case of other loans. At the same time they must be cautious—they must take care how far the language used by Government in respect to any particular loan was to be considered as involving an obligation to act with regard to the recovery of other loans. His right hon. Friend rather reproached the Member for Newcastle (Mr. Hamond) for venturing to introduce the case of other loans, and he said those other loans had nothing to do with this discussion. They ought not to complicate matters by bringing into the discussion other loans. Now, that was a very easy position for his right hon. Friend to take. Care must be exercised that in what we might do, or in what we might allege, we did not affect our obligations in respect of other loans. But he (the Chancellor of the Exchequer) would remind the House that the loan of 1862 was materially assisted by the insertion in the prospectus of a very gushing letter from Earl Russell, who was then Secretary for Foreign Affairs, as to the condition of Turkey and its ability to meet its obligations. [Mr. Gladstone: Will you read that letter, please?] He had not the letter at hand at the moment; but his hon. Friend the Under Secretary of State for the Foreign Office (Mr. Bourke) would find it, and it should be read before the termination of the debate. He was not contending for a moment that the letter of Earl Russell in that case amounted to as much as the letter of Lord Clarendon and M. Drouyn de L'huys in this; but he was saying that we must take care how far we acknowledged any action on the part of the British Government, as involving an obligation on the part of the British Government, going further than it professed to go. Undoubtedly, these letters by acknowledgment did not go the length of a pure guarantee; but it was a question how far they actually did go. If they only went so far as to involve the statement of the belief of the Government of the two countries that Turkey could and would meet her engagements, it might possibly be felt there was difficulty with regard to other loans that were issued with the same kind of acknowledgment. But this was not to be treated quite in the way his right hon. Friend proposed. It must be remembered that when we were calling upon the Government of Turkey to make any particular arrangement with regard to any portion of its Debt, this arrangement to a certain extent, it might be a limited extent, did affect the position of the other creditors; and it was not unreasonable that we should at least consider in what we did, whether it affected the interests of other creditors. He was far from saying that the interests of other creditors had an equal claim upon us with the interests of those connected with the Loan of 1854. He was far from saying that anything like the same obligation rested upon us; but we must be careful we did not treat these matters as if we could shut out or put on one side every other consideration except this particular case of the Loan of 1854. With regard to that, after all the bondholders had some advantages over the other creditors, because they had at least a material guarantee that the Egyptian tribute, as at present arranged, must come into the Bank of England, and was there held for their ultimate, if not for their immediate benefit. Therefore, they were not so wholly left without security as some other creditors might possibly be, and he was quite prepared to admit, in the interests of these creditors, that there was a special obligation to consider and have regard to. His right hon. Friend, he would admit, might fairly say it was a matter in which we were not alone; it was a matter in which the position of the French Government as well as of our own had to be considered, and he thought it would be unfortunate if by any vote or hasty action of the House we were apparently to take any step without placing ourselves in communication with the French Government on the matter. Negotiations had been going on with a view to effecting arrangements, and at one time he was in hope they might lead to a more satisfactory result than they had. He did not know how far they were to accept the consoling assurances of the hon. Member for Newcastle, which he had heard with great pleasure, though for the first time, to-night; but he was prepared to say, on behalf of the Government, that they were not insensible to the case that had been brought forward, that it was one which had engaged their attention for a considerable time, and they were prepared to place themselves in communication afresh with the Government of France on the subject. He did not feel justified in saying more than that at present; but he wished to remind the House of the extreme delicacy of their position, and to express an earnest hope that his right hon. and learned Friend the Recorder would be satisfied with having called attention to the subject and eliciting the expression of opinions he had done, and would trust to the effect the expression of those opinions might have, rather than to a formal vote of the House upon the subject.


admitted that that was a delicate subject to discuss, and said that its importance arose from the expressions of opinion in favour of the Loan of 1854 that were given by Lord Clarendon and M. Drouyn de L'huys, although other loans seemed to have derived some support from the letter of Lord Russell that had been referred to. The Loan of 1854 was a large and important one, and that of 1862 partook much of the same quality. The letter of Lord Russell, alluded to by the right hon. Gentleman the Chancellor of the Exchequer, dated March 15, 1862, stated that if the Sultan's Commissioners succeeded in obtaining the loan, Her Majesty's Government, anxious for the well-being and prosperity of Turkey, would be prepared to send one or two gentlemen in whom they had confidence to assist the Turkish Minister in the due application of the proceeds of the loan to the extinction of the paper money, and the funding of the floating Debt. He stated that Her Majesty's Government would take an interest in the operation from feelings of friendship towards Turkey, and the contractors for the loan might see in such a mission further security against the misapplication of the loan and the loss of credit that would ensue. The effect of the letter was that the loan, which up till that time was in disfavour, was not only accepted by the public at large, but it was subscribed for five times over in consequence.


said, the guarantee by Lord Russell, in 1862, was entirely different from the recommendations of the Government as to the 1854 loan. That was a promise to send delegates to Turkey to see to the extinc- tion of paper money. That measure was carried out, and thereby the obligation of the English Government was entirely discharged. It was far otherwise in the case of the 1854 Loan. In 1854 it was impossible for Turkey to raise money unless she was backed up by England and France. The right hon. Gentleman the Chancellor of the Exchequer argued that it would have been much better if the English Government in 1854 had actually guaranteed the loan. He wished, however, to remind him that when in 1855 they did guarantee a Turkish loan, the proposal was only carried in that House by a majority of 2. This Loan of 1854 stood upon an entirely different footing from any of those to which the Chancellor of the Exchequer had referred, and in which the credulity of the English public might be said to have been manifested. It was not a loan brought forward by some semi-bankrupt State, with a prospectus to induce the public to lend money in the hopes of receiving an extravagant interest, but it was raised in a time of war, in which England and France were the allies of the borrowing Power; and the English public paid for the bonds a far higher price than they would have brought if the loan had been brought out without the recommendation of the English and French Ministers. He was sure that the Chancellor of the Exchequer must be fully alive to the necessity of the Government intervening in the matter, and it was his firm belief and hope that he would persuade his Colleagues to listen to what he conceived to be the unanswerable speech of the right hon. Gentleman the Member for Greenwich; so that they might recognize the duty of the Government in not leaving in the lurch those who had subscribed to this Loan upon the faith of the promises, explanations, and assurances given by Lord Clarendon.


said, that the position of this Loan of 1854 was complicated by what afterwards occurred in 1855.Turkey obtained a new loan with an English and French Government guarantee in 1855, the security for which was the margin of the Egyptian tribute which had been already pledged to cover the Loan of 1854; but the proceeds of the tribute were not now applied to pay the first charge upon it, whilst nevertheless Turkey was at pre- esent making good her obligations to England and France by the payment of the interest and instalments of the latter loan; and he would therefore appeal to the Chancellor of the Exchequer whether the matter was not further complicated by the neglect of Turkey to fulfil her obligations in regard to the prior loan of 1854?


said, that the Chancellor of the Exchequer had rather overlaid his speech with reservations and qualifications. The matter was, indeed, so clear, and the honour of this country was so unmistakably involved, that he should have liked to hear a little plainer language from the Treasury Bench. The right hon. Gentleman had led the House away from the real question by an elaborate argument of what would have happened if there had been an absolute guarantee of the Loan of 1854. But we did not guarantee that loan, and it was, therefore, of no use to calculate what would have happened if we had done so. We did guarantee the Loan of 1855, and it was the duty of the Government to take care that the Egyptian tribute money, which was partly a security for the Loan of 1855, and partly a security for the Loan of 1854, was punctually paid. The two questions were very much mixed up together, and the English taxpayer had a deep interest in knowing that Government were preparing to insist upon Turkey's fulfilling her obligations. They had nothing to do with other loans. He regretted that the hon. Member for Newcastle (Mr. Hamond) should have gone into other loans that had no connection with that under discussion. The hon. Gentleman had, in fact, tried to start a new hare.

Notice taken, that 40 Members were not present; House counted, and 40 Members being found present—


said, that he would not detain the House further than to say that he hoped that the attention of the Government would be directed to the matter, especially when it was seen what were the words which had been used by the Minister of the day when the loan was raised. They all knew the Egyptian tribute was specially appropriated for the payment of the interest of that particular loan, and if that was not secured, all promises of the kind would be as worthless as the paper on which they were written.


said, it was a curious feature of the question, that whereas those who were interested in the particular result of the Motion only held the position of creditors to the extent of between £1,000,000 and £2,000,000, there were other creditors to the extent of £196,000,000 who were wholly uninterested in it. What was the position of the creditors of the Loan of 1854, which entitled them so largely to the sympathy of the House? He believed from the first that those gentlemen had made a very good bargain, and that so far from their being in a position to lose anything they had in the 22 years during which the loan had been running, received both their capital and interest, if that interest had been calculated at the reasonable rate of 3½ or 4 per cent. He did not believe that they entered into the loan in consequence of the words used by Lord Clarendon, but from sympathy with Turkey when she became our ally. Lord Clarendon did no more than express his entire confidence in the good faith of the Turks; though it must be admitted that subsequently their conduct was inconsistent with honesty. The Turks therefore were not entitled to the confidence that had been expressed. Lord Clarendon's words could not in any sense be construed as a guarantee; and the rate at which the loan was raised plainly showed that they had not been so understood.


said, his mind had been exercised as to how he should vote; but after listening to the debate he had come to the conclusion that the weight of argument seemed to be rather in favour of accepting the Motion of the the right hon. and learned Gentleman (Mr. Russell Gurney). With regard to the question of interference on the part of the Government, if it were simply to be determined on general principles, he should say that it was not their duty to interfere for the protection of those subjects who had chosen to enter into incautious contracts with foreign creditors. The present, however, was an exceptional case, and if he might give advice to those who lent money to impecunious States, he should tell them to use their own discretion and to observe some plain rules for their guidance. One of these was never, under any circumstances, to lend their money to a borrowing State unless the subjects of that Power were willing to lend their money to their own Government also. It should be remembered that in the case of this loan to the Turkish Government the hypothecation of territory for the payment of the interest was not an ordinary one. The Khedive became a party to the arrangement and the British Government approved of it. The sum of £280,000 a-year produced by the hypothecation did not form a part of the general resources of Turkey; it was to be applied to the payment of the interest on the Loan of 1854, and the Chancellor of the Exchequer could not look to that tribute to pay the Loan of 1855—that was to relieve the Government of their guarantee—and ignore the rights of the bondholders of 1854, who were in the position of first mortgagees. Assuming that Lord Clarendon pledged his word in this matter, we must keep that pledge, and it was not now a question of policy, but a question of honour; and all that the Government could be asked to do, was to use its moral influence in urging on the Turkish Government to keep the promise which they made, and which Her Majesty's Government ratified.


approved the caution with which the right hon. Gentleman the Chancellor of the Exchequer had spoken on the subject, and expressed a hope that the right hon. and learned Recorder would rest satisfied with the discussion which he had elicited, and would not think it necessary to bring his Motion to a division.


said, he had been in considerable doubt during the right hon. Gentleman's (the Chancellor of the Exchequer's) speech what course he should take; but just at the close of his observations, he understood the right hon. Gentleman to say that the Government recognized their responsibility, that they were willing to communicate with the French Government, in order to consider what course should be taken, and to make use of their moral influence with the Turkish Government to make it fulfil its engagements. On that understanding he should withdraw the Motion.


said, he had not given utterance to all his right hon. and learned Friend had represented, and in order to prevent any misunderstanding on the subject, he would repeat the observation he had made, which was that Her Majesty's Government were not insensible to the gravity of the responsibility that rested upon them in the matter, and that they would place themselves in communication with the French Government in reference to the course which should be pursued.

Amendment and Motion, by leave, withdrawn.

Committee deferred till Monday next.