§ MR. ASHMEAD-BARTLETTasked Mr. Attorney General, On what clause or statement in the Suez Canal Concession or Statutes the Government rely, in support of their opinion that the loan of £8,000,000, proposed now to be made to the Suez Canal Company, will rank pari passu with the other and prior obligations of the Company?
§ THE ATTORNEY GENERAL (Sir HENRY JAMES)Sir, if the hon. Gentleman will refer to the Statutes of the Suez Canal Company, which, as he knows, are dated January 5, 1856, he will find that by Article 62, paragraph 2, all loans of the Company rank for payment next after the working expenses of the Company; and I presume that the proposed loan will rank with all other loans.
§ MR. ASHMEAD-BARTLETTasked Mr. Chancellor of the Exchequer, Whether the £4,000,000 expended in 1875 by Lord Beaconsfield in buying the Khedive's shares receive five per cent. from the Egyptian Government, as against the three and a quarter per cent. at which the £4,000,000 was obtained by the British Government; whether the shares thus purchased are now worth more than double the £4,000,000 given for them; whether, in 1894, the shares thus bought by Lord Beaconsfield will participate equally with the other shares in the full profits of the Company, and whether, in 37 years from the date of purchase, the whole principal sum of £4,000,000 will be recouped by the difference between the three and a quarter per cent. paid and the five per cent. received; whether, under the new proposal, the £8,000,000 to be advanced by the British Government is to receive any share in the profits of the Canal; and, whether it is proposed to increase the number of English Directors on the Suez Canal Board?
§ THE CHANCELLOR OF THE EXCHEQUER (Mr. CHILDERS)Sir, the Questions of the hon. Gentleman are really an argument; but I will, out of courtesy to him, reply to them as to matters of fact. The Answer to the first Question is that the shares carry 5 per cent. paid by the Egyptian Government, until 1894, and that the money required to 1900 purchase them was raised at 3½ percent. The Answer to the second Question is, that no shares with the coupons cut off are quoted, and the hon. Member has the same facilities that I have for estimating what their value would be were they in the market. The Answer to the third Question is, that the difference between 5 and 3½ per cent interest will recoup the principal in 36 years—that is, in 29 years from the present time. The Answer to the fourth Question is, that by lending £8,000,000 at 3¼ per cent interest instead of leaving that amount to be borrowed by the Company in the market, we shall improve the dividend on the share capital, and, as we hold four-ninths of that capital, carrying dividends from 1894, we shall in this respect be gainers. Our commerce will also gain by the more rapid reduction of the transit dues, following the improved dividend. In reply to the last Question, I have to say that it is not part of the provisional agreement that the number of the English Directors should be increased.
§ BARON HENRY DE WORMSasked Mr. Chancellor of the Exchequer, in view of the fact that the English Directors of the Suez Canal Company will, by the new agreement, continue to be in a minority on the Board of that Company, what provision, if any, has been made for preventing the finances of the Company being so manipulated as to keep the profits below twenty-one per cent., and thereby avoid the remission, provided for in paragraph 3 of the agreement, of half the pilotage dues, which press so heavily on British trade, such trade being about eighty per cent. of the whole of the trade passing through the Canal?
§ THE CHANCELLOR OF THE EXCHEQUER (Mr. CHILDERS)Sir, in reply to the hon. Member, I have to say that inasmuch as the shareholders, the founders, the holders of the 15 per cent profits purchased from the Egyptian Government, the Directors, and the employés are all interested in the dividends being as high as possible; and inasmuch as the accounts are yearly audited by auditors appointed by the shareholders, and are from day to day under the eye of the resident English Director in Paris, I am satisfied that there is ample security against the fraud which the hon. Member anticipates.
BARON HENRYDE WORMSMight I be allowed to explain that I did not intend to attribute fraud. What I wished to convey was, that as the English are mainly interested in the reduction of the pilotage, and the French are mainly interested in the profits, I wish to know what safeguards there are in the agreement to prevent putting, for instance, to the capital account expenses incurred on machinery, so as to enable the Company to keep the profits just below the 21 per cent required for the reduction of the pilotage dues?
§ THE CHANCELLOR OF THE EXCHEQUER (Mr. CHILDERS)Sir, my Answer really met that inquiry. I said that everybody concerned was interested in as high a dividend being paid as possible, and there were other safeguards which I mentioned. On the other point raised by the hon. Member, I would remind him that there was a famous case a good many years ago in which a Scotch Company declared dividends below what were earned, and that was proved, and the Directors were convicted of fraud, and very severely punished.
§ BARON HENRY DE WORMSMay I ask the Chancellor of the Exchequer whether there is any clause in this agreement by which the pilotage, having been once reduced, can be again augmented?
§ THE CHANCELLOR OF THE EXCHEQUER (Mr. CHILDERS)No, Sir; the clause as to increases of rate refers to the transit charge.
§ MR. GIBSONasked Mr. Chancellor of the Exchequer, What was the date of the opinion of the Law Officers with reference to the alleged exclusive rights of M. de Lesseps and the Suez Canal Company, or either of them, by virtue of the concessions under which the Canal was made?
§ THE CHANCELLOR OF THE EXCHEQUER (Mr. CHILDERS)In answer to the right hon. and learned Gentleman, I have to say that I understand it to be a general rule, and one which, for many reasons, must be acted upon, not to make public any information respecting the advice given by the Law Officers of the Crown to the Government. If once the door is opened so as to admit inquiry as to the Law Officers' opinion, even to the extent of giving the date now sought for, I think that oftentimes such great inconvenience would arise 1902 that I must ask to be excused from answering the Question.
§ MR. GIBSONI am well aware of the rules respecting the opinions of the Law Officers of the Crown. I have not asked for that opinion, though the Prime Minister rested his case upon it to a large extent; but I have a right to ask—and I shall ask again to-morrow—whether the date of the opinion was antecedent to the instructions given by the Secretary of State to the British Directors of the Suez Canal, or after they had entered on the inquiries, or after they had closed them?