HC Deb 05 May 1876 vol 229 cc172-81
SIR H. DRUMMOND WOLFF

rose to call attention to the proposed arrangement with regard to the future management of the Suez Canal. He was encouraged to that course by the language used by the right hon. Gentleman the Prime Minister on the occasion of the third reading of the Bill authorizing the issue of Exchequer Bonds to pay for the purchase of the Suez Canal Shares. On that occasion, the right hon. Gentleman stated that the negotiations then being carried on could not be decided by either of the negotiators, Colonel Stokes or M. de Lesseps, and that when Colonel Stokes returned to this country he would afford the Government an explanation of the nature of those negotiations. Within three or four days after that statement, Colonel Stokes returned to England, but the information the House was led to expect had never been given. He did not for one moment accuse the First Minister of the Crown or the Chancellor of the Exchequer of want of courtesy or breach of faith in the matter, but he could not but say that when the latter right hon. Gentleman addressed the House in reference to the Suez Canal he seemed not to be altogether his own master. A hidden influence seemed to actuate his actions. It appeared that— He sees a hand we cannot see, which, beckons him away; He hears a voice we cannot hear, which bids him not to stay. When the Suez Canal Shares were purchased the whole country approved the conduct of the Government, and although the step so taken was criticized, no serious opposition to the purchase was offered. On the contrary, it was regarded by the country as a great political act. He hoped that that great political act would not from the course which had been adopted lead to a great financial complication. Since then nothing had been done in fulfilment of the scheme originally sketched out to Parliament. Nothing had been done to place the Canal upon an international footing, nothing to increase the influence of this country in its administration, and to secure for it the two essential requirements; first, a good financial administration, and, at the same time, a safeguard against political complications. Government had gone as a suppliant to M. de Lesseps, and obtained the appointment of three directors on the Board to represent the interests of this country. They might be gentlemen every way equal to the work, but whose duties would be unnecessary and even in some cases dangerous. They must on all questions which were hostile to British interests be in a minority of 3 to 21; yet taking part in the deliberations of the Board, they would have to concur in all measures which might have that unfriendly character. It was the interests of the French shareholders that the Canal should earn the greatest possible amount of profits, whereas it was the object of this country to reduce the tolls in the interests of trade generally; and whenever a motion to that effect came to be considered, the three directors representing this country would be sure to be in a minority. And who, he would ask, was to pay those directors?

THE CHANCELLOR OF THE EXCHEQUER

The statutes of the Company provide for a percentage to be paid to the directors.

SIR H. DRUMMOND WOLFF

said, it was true there was such a provision, but it applied to the directors who represented the Company in general, and not to those representing the holders of the shares of the Khedive—shares not bringing any dividends to their owners—who had only 10 votes, and who could not have elected or influenced the election of directors himself. Therefore he maintained that this country had been placed in a position of great danger and humiliation. The difficulty of the situation, moreover, was increased by the apparent determination of the Government to withold all information on the subject from the House. Nothing was more unbusinesslike. Instead of allowing the subject to be fully discussed, they apparently intended that the House, by means of what had been called a mechanical majority, perhaps, should do simply what Colonel Stokes might chose to dictate. The House and the country had regarded the purchase of these shares as a great political act which was to have two results. One was the diminution of the enormous tax now imposed on ships going through the Canal, and the other was to secure the free passage of the Canal at all times and keep our communication free with India. The question of the surtax was not one of very great importance; but when, according to the present arrangement, the minimum had been reached, the tax upon shipping would still be exceedingly heavy; and it must be plain to the Government that when the novelty of the Canal was worn off commerce would not suffer this very heavy charge on navigation to continue. Then what was to be done? It appeared to him, and in fact the noble Earl the Secretary of State for Foreign Affairs (the Earl of Derby) had made the proposal, that some arrangement might be come to between different Governments to buy out the Company and apply the profits to the reduction of the tolls on the same principles as the Sound dues. He wished to know whether any foreign Governments had been sounded on that point? An arrangement of the kind suggested had always been a favourite object, he understood, with the Italian Government, and he had no doubt other Governments would willingly come into the arrange- ment; but if not, there were other arrangements, financial and political, by which the tolls might be reduced, and by which the nations that chose to join in the arrangement might have some special advantage. There was a graver question which might crop up any day. When the matter was first discussed, the noble Lord the Leader of the Opposition asked what would be the position of the Canal in case of a war? Omitting the case in which England herself was a belligerent, let him suppose that any foreign Power, Italy for instance, went to war with Turkey or with Egypt, and blockaded the Canal either at Port Saïd or at Suez, how would the navigation of England or of the world traverse the Canal? Would England insist on breaking the blockade? That would be a casus belli; and it would be equally one if she were to insist that either of the belligerents—if Turkey and Egypt were at war with some third Power—should yield to the other. Something should be done to secure the neutralization of the Canal. M. de Lesseps had stated in a book recently published that before the completion of the Canal Prince Metternich had made a suggestion to him for its neutralization, founded on the precedents of the Treaty of Adrianople in 1829 in reference to the Bosphorus, and the Clayton-Bulwer Treaty respecting the Nicaragua Canal. With a little pluck and energy the Suez Canal might be taken out of the hands of the shareholders and made the common highway of the nations of the world. Sir Andrew Buchanan proposed a plan for the purpose some years ago, which seemed to be very much approved by the Austrian authorities. It was that the Viceroy should hold the Canal for the benefit of all parties. He could not understand why the House of Commons should be kept in the dark on the subject in the manner it was. He would suggest that, as in the cases of the Stade dues and of the Sound dues, a Committee of the House of Commons should be appointed to consider the subject. Complications might at any moment arise, and the country should not be kept in the dark. He therefore asked the Government to give the explanations he asked for as to the position in which the matter stood.

THE CHANCELLOR OF THE EXCHEQUER

said, he was not altogether clear as to the object his hon. Friend had in view. He had now, as on former occasions, mixed up matters which required diverse treatment. The Government had on all occasions endeavoured to treat his hon. Friend with courtesy, because they knew he had studied the subject for years; but he appeared to have brought forward two or three questions of a very different character, and deserving of wholly different treatment. His hon. Friend had spoken of the representation of this country in the Suez Canal Company, but he went on to mix up with that a subject of a much wider character—the neutralization of the Canal. They had nothing to do with the neutralization of the Canal—that was a question which stood wholly apart. While the Government still held, themselves open to consider that question, however, they had not considered it, and it was not at present under consideration. If it should be found hereafter that it was desirable to do so, we should be then in a much better position to carry it out than before the purchase was made: but as yet they had not thought it desirable to raise the question from the difficulty surrounding it, and the embarrassment that might arise in dealing with the Porte and the Viceroy of Egypt, and if his hon. Friend thought there was anything behind in respect to that matter he spoke entirely from conjecture, but at present Her Majesty's Government had not considered the question. His hon. Friend wanted to know what arrangement was proposed with regard to the representation of this country in the Suez Canal Company. That Company was constituted under its own statutes, and Her Majesty's Government knew by means of those statutes exactly what was the position of the Company, and what was the position of the Viceroy of Egypt with regard to the shares. They found that at a certain time the Viceroy of Egypt wanted money, which he proposed to obtain by the sale of these shares, and they thought the British Government should come forward to purchase these shares. When the shares were purchased Her Majesty's Government knew they were purchasing shares of a certain nominal amount which would not pay dividends for 19 or 20 years, and that as to the number of votes they carried, if they carried any, such right would, after all, pos- sibly have to be decided by a French Court of Law; but whichever way it might be decided, Her Majesty's Government considered they were doing their duty to the country in saying that they should not fall into the hands of persons who might make use of them disadvantageously to the country. There were also other questions as to the rights which the purchase would confer. Upon these questions they obtained the opinions of able gentlemen. Having become the possessors of these shares, they were subject to the statutes of the Company. They might have rested without asking for any other representation than the moral power that attached to its being known that this country was largely interested in the Canal. Colonel Stokes was the agent of the British Government on matters connected with the Canal, and he put himself in communication with M. de Lesseps. M. de Lesseps and Colonel Stokes arrived at certain conditional arrangements, which were submitted to Her Majesty's Government. The hon. Gentleman wanted to know what these arrangements were. The provisional arrangements proposed by Colonel Stokes and M. de Lesseps were that the British Government should be entitled to nominate three members of the Committee of Management, and that one of those members, if so arranged, should be a member of the Committee of Direction, which consisted of four or five members, and which exercised the chief control over the affairs of the Company. Connected with that was another arrangement—a provisional, but at the same time a very important, arrangement—between Colonel Stokes and M. de Lesseps as to the surtax which was charged upon vessels passing through the Canal. It had been sent home for the consideration of Her Majesty's Government. The surtax affected the interests of the shipping passing through the Canal, and also of the Company; and it had for a long time been a matter of dispute between the Company and the Maritime Powers. His hon. Friend knew that there was a Conference on the subject at Constantinople some time ago, and certain arrangements were come to against which M. de Lesseps protested, and that they were carried into effect in spite of that protest on behalf of the Company. There were other points open to question, and all these had been under the consideration of Her Majesty's Government, and the subject of communications with the other Powers, and the cause of a great deal of inquiry. These proposals having been submitted to Her Majesty's Government, what was the first thing to do? The first was to consider whether they appeared to be satisfactory to the British Government. They were submitted to the Foreign Office, and it consulted other Departments of the Government which were interested in the matter. A good deal of consideration had been given by those Departments to the proposals, and it was only, he thought, within the last few days that a final answer had been received from those Departments by the Foreign Office. It was necessary to formulate the proposals, and to submit them to foreign Governments. Questions like these could not be decided off-hand. They must be carefully considered and agreed to by other Maritime Powers, and even then the consent of the Company would be necessary. The Company had its own rights, and it was under the protection of the Porte and the Viceroy of Egypt. His hon. Friend must therefore admit that it would be extremely inconvenient to discuss such arrangements in that House while they were still in progress, or before they were submitted to other nations. That was, after all, a great international question, and his hon. Friend, who knew the matter so thoroughly, was in the position of a man who was rather a-head of his audience in many respects. He knew a great deal of those things which others did not know; and it was quite impossible to explain them to Parliament without the Correspondence which it was necessary they should have with foreign Powers. They could not come forward, for instance, with a proposal relating to the surtax, before it had been brought before the Porte and the Viceroy of Egypt. The question of the surtax could not be decided in a hurry, but he could inform his hon. Friend generally that certain proposals had been made, with explanations as to the expenditure of money which, in the opinion of the Government, would be advantageous both to the parties using the Canal, and to the Canal itself; and they hoped that they would be accepted both by the Powers who were interested and by the Canal Company. Then, with regard to the Commissioners, his hon. Friend appeared to entertain the idea that by appointing three we should be placed at a disadvantage. He (the Chancellor of the Exchequer) thought otherwise; but he must repeat that it was extremely undesirable to discuss in that House particular details of the arrangement. His hon. Friend talked of their being suppliants to the Company. That was an invidious way of putting the matter. They had purchased the shares of a Company having a certain constitution, and which had a perfect right to refuse to alter that constitution. They proposed to avail themselves of a proposal which had been made to them by the Company, and if Parliament should be of opinion that it was one which ought not to be accepted, it would always be in the power of Parliament to say that it objected to their entering into such an arrangement. But it was not in the power of Parliament to negotiate and say—"We will have this, we want that, and we wish the other," because the Company had its constitutional rights to stand upon, and Parliament could not go into these details. Then his hon. Friend wanted to know how these Commissioners were to be paid; but he knew very well that, by the constitution of the Company, there was a certain percentage of the profits set apart for those engaged in its administration. It must also be remembered that after the Company had made any alteration in its statutes, it was necessary for it to obtain the consent of the Viceroy of Egypt to such alteration. The Government were anxious to give the House every information; but they could not at present go further than, he had done. He had endeavoured to state what the position of the Government was. He believed that a meeting of the Company would be held very shortly. Whether an arrangement would then be come to, or whether notice would be given for another meeting to make final arrangements, was a question on which he could not express any opinion; but he hoped they would be able to arrive at some conclusion which would give us proper representation on the Board of the Company. As to making the Canal an international affair, undoubtedly what his hon. Friend had said in regard to the Sound and Stade dues afforded a precedent which, ought to be followed if such an arrangement was made. But he presumed that before a Committee on those dues was appointed, the Government of the day had come to the conclusion that it was desirable so to deal with them. If such a proposal as the purchase of the whole of the interests of the Canal, in order to make it an international passage, should be entertained, of course in so important a matter as that it might be well to have a Committee to consider it. But there was no such proposal at present before them, and he did not think this was the most favourable moment for the consideration of the question. As far as they could judge, it was not favourably entertained either by the Porte or the several Maritime Powers. Certainly the Government had no intimation of a desire to entertain it. While, however, they in no way closed their ears to such a proposal, they would wait until it was made, and if it should be made, the first duty of the Government would be to consult Parliament upon it. He did not know that he could now say any more upon the subject; but as to the important question of surtax, as soon as they were in a position to do so, the Government would be ready to lay all the Correspondence relating to it on the Table.

MR. DODSON

said, that the right hon. Gentleman the Chancellor of the Exchequer had that evening proved himself an adept in the art of making a long speech, and leaving the House as wise when he sat down as it was before he rose. The explanation of the right hon. Gentleman was not an explanation in the proper sense of the terms. At all events, it was not an explanation which could be long accepted as satisfactory to the House. It was all very well to criticize the words of the hon. Member for Christchurch, but it was a fact that we could only hope to obtain representation on the Board, as a matter of favour, not of right. He (Mr. Dodson) trusted that either the right hon. Gentleman or some Member of the Government would, before the close of the Session, give some information to the House as to what settlement was arrived at, or what prospect there was of arriving at any, and at such a period that the House would have full and fair opportunity of discussing the subject.

MR. SANDFORD

said, what his hon. Friend the Member for Christchurch (Sir H. Drummond Wolff) wished was that when some arrangement had been made with the Maritime Powers, the points thus settled should be submitted to Parliament before they were submitted to the Company, so that Parliament might have some power of modifying them, instead of rejecting or receiving them en bloc. He therefore agreed that it was desirable that the House should have an opportunity of discussion before the determination that might be arrived at was submitted to the Company. He could not agree with his hon. Friend that this should be made an international concern, because he feared, if it were, it lead to international squabbles. As to the purchase of the shares, the Foreign Secretary had repudiated any political object, but the opinion of the country was decidedly adverse to the noble Lord on this point, and had only ratified the purchase because it wished Europe to understand that we took an interest in the East, and that, however poor an investment the purchase might prove, England was determined to hold the highway to India.

THE CHANCELLOR OF THE EXCHEQUER

said, there was to be a provision in the statute that out of the receipts of the Company a certain percentage should be set aside for the payment of the dividends.

MR. RYLANDS

said, the discussion would have one useful result; it would make people more alive to the fact that the country was deceived in its expectations that the purchase of these Shares would give England any political influence in the East, or any controlling influence over the Canal. What influence could we derive from 10 votes? And what influence could three English directors give us? It would be better to have no directors at all, than directors without power, who would only be a delusion and a snare. It seemed to him that they gained nothing by the possession of these shares; and he hoped that the right hon. Gentleman the Chancellor of the Exchequer would, when the Bill was brought in, give the House a full opportunity to discuss it.

Motion, by leave, withdrawn.

Committee deferred till Monday next.