§
Motion made, and Question proposed,
That a Supplementary sum, not exceeding £67,163, be granted to Her Majesty to defray the Charge which will come in course of payment during the year ending on the 31st day of March, 1890, for the Expenses connected with the Acquisition of the Submarine Telegraph Company's Property required for the Post Office Telegraph Service.
THE POSTMASTER GENERAL (Mr. RAIKES, Cambridge University)As the subject matter of this Vote has provoked a certain amount of discussion out of doors, and of question in the House, perhaps the Committee will expect, or at any rate excuse, a few observations from me by way of introduction to this Vote which has been put from the Chair. The question was touched upon in March last, when a portion of the staff was taken into the public service in consequence of the abrogation of the concession formerly enjoyed by the Submarine Telegraph Company, but the Committee then very considerately agreed to postpone further inquiry until the Government were in a position to put before them the Estimate now in our hands. The Estimate does not require a very long explanation. The Committee will see there are five subheads which go to make up the total sum now asked for in connection with the acquisition of this undertaking, and a note at the bottom of the first page shows how the sum of £28,300 is made up. Two cables have been purchased between England and Belgium, at a cost of £9,900, and four cables between England and France, together with a short land connection, for £18,400. As these purchases have been made, as the Committee are aware, in conjunction with the Governments of Belgium and France respectively, who become partners with us in the new undertaking, half of the sum will be recovered by the appropriation of the amounts in aid shown at the end of the Estimates now before the Committee, that is to say, that, of the £28,300 for the purchase of the cables, £14,150 may be expected from the Governments of France and Belgium. I should, perhaps, point out that the 670 price given for the cables was arrived at after long and very careful consideration. I take the Belgian cable first. The Belgian Government sent over here financial delegates, who in conjunction with experts from the Post Office, arrived at the conclusion that £9,900 was the fair value of the two cables as they stand. As there was no difficulty between the two Governments on the point, this matter may be dismissed from further consideration. Both Governments agreed that this sum fairly represented the value, and so there was an end of that part of the transaction. The cables of France led to a good deal more consideration, and a considerable divergence of view manifested itself between the French and the English calculation, the French calculation being at the utmost something in excess of £10,000, and the English calculation being something above £17,000. The natural outcome was, as might have been expected, that a sum representing a compromise between the two figures was adopted, a sun of something over £14,000, and to this was added 10 per cent. as representing the sum the Company might fairly expect from the termination of their business, and the compulsory expropriation of their property. But it appeared to the Government on the earnest representations of the Submarine Telegraph Company, that the estimate so arrived at really represented less than the material value of the cables, and the Chancellor of the Exchequer called in the services of an expert as a valuer to cheek the value arrived at previously by the two Governments and the experts of those Governments. The result of this further valuation by Mr. Latimer Clark was that the English calculation represented a just but a severe valuation of the cables, that is to say, that our Commissioners in fixing the selling price at something over £17,000 did not go beyond what the Company had a right to expect as the purchase price. This of course was a good deal more than in the first instance we had reason to believe the French Government would be willing to pay, and I have gone so far into details to bear tribute to the handsome, generous spirit manifested by the French Government in dealing with this part of the question; for no sooner was it communicated to them 671 that the Government here, though recognising their right to fix the price at the sum I have mentioned, £14,000 plus 10 per cent. for compulsory purchase, although the English Government recognised the right of the French Government to treat the matter from that point of view, we had satisfied ourselves that the cables were really worth £17,000 as they stand, and were agreed that that sum ought to be paid, and were prepared and come to Parliament to ask for an arrangement to be made to enable that price to be given, even though the French Government held to the bargain at the lower figure—no sooner was this communicated to the French Government, than they at once acceded to the Chancellor of the Exchequer's request, and expressed their willingness to accept the valuation at the higher figure, although it was £3,000 in excess of the amount arrived at in the communications between the two Departments. That being so, the result appears in the Estimate before the Committee £18,400, and of that sum we anticipate the receipt of one-half from the French Government. The next largest item in the Estimate is that relating to the acquisition of buildings, cable-ship, instruments, and stores, including fees to valuers, no less than £46,763, the sum being made up, as hon. Members will see by looking at the next page, of various sub-items, the most important of which is the purchase of the office in London, the stores, instruments, and furniture there amounting in all to £24,679. This may seem a large amount, but when it is remembered that it represents an enormous amount of very valuable telegraphic appointments, and also the lease of 80 years of the Company's premises in Throgmorton Avenue, capable of accommodating a staff of 300, I think it will be acknowledged we have made a good bargain. The premises are well adapted for the business, and in the very heart of the City; they were built nine years since, and they are in perfect repair. There are some small buildings at Dover and at St. Margaret's Bay that hardly require comment, but I may mention £9,542 as having been paid for the purchase of a gas engine, pneumatic tube, instruments and stores, and £19,570 672 for the cable-ship Lady Carmichael. This vessel has been for some ten or fifteen years employed as the cable-ship of the Submarine Telegraph Company, but she has been entirely re fitted, provided with new boilers, and made as good as new, and is now, I understand, classed A 1 at Lloyd's. As an illustration of the large sum that has formerly been paid for a cable-ship, I may mention that at the present time the Post Office cable-ship, a larger ship, employed in the distant and stormy seas of Ireland, and laying cables to Orkney and Shetland—this vessel, three times as large as the Lady Carmichael, cost when purchased by the Government £40,000, so the price of £9,570 for the Lady Carmichael is not excessive. I may say that these matters were arrived at after careful valuation. The next item relates to the bonuses to be given to the officers of the Company who are not taken into the service of the State, £5,500. The Committee, of course, are familiar with the fact that when upon the termination of an undertaking by the action of the Government certain persons are not considered suitable for various reasons for the service of the Government, a claim for a certain amount is allowed as compensation for the summary dispensation with their services. The number of gentlemen in this position is not large, and the sum is not large, and I do not think anybody will be disposed to quarrel with this part of the Estimate. The interest on the purchase money I need only refer to as accruing through the delay in completing the transaction. So far in explanation of the Estimate itself. I do not wish to delay the Committee at length in dealing with the general question, but I think I may say a word or two with regard to the reasons that led the Government to acquire this property, and the result the Government believe they are justified in anticipating from the acquisition. There has been a steady pressure brought to bear during the last few years by the mercantile community in this country on the Government, urging that as soon as opportunity offered the Government should terminate the intermediary position occupied by the Submarine Telegraph Company. I do not think there have been any exceptions to that opinion. All the numerous bodies which represent commerce and the mer- 673 cantile community, have continually memorialized the Post Office and the Treasury with a view to the Telegraphs becoming the property of the State, in conjunction with the other States with whose territory the cables communicate, so that a more direct and efficient service might be established. I am happy to believe that this result has now been arrived at. Hon. Members who have seen the proceedings at the Liverpool Chamber of Commerce, which has been foremost in pressing the question of acquisition on the Government, will see that immense satisfaction has already been expressed by the merchants of Liverpool at the result of the transfer. One of these in his speech in the Chamber of Commerce mentioned, that, whereas until a month or two ago, it took four hours to get a telegram transmitted to Hamburg, it is now received, allowing for the difference in time, a quarter of an hour before the date of despatch, that is to say, if you allow three quarters of an hour for the difference of time, the transmission of a telegram between London and Hamburg, is almost instantaneous. There have been earnestly pressed on the Government the advantages of a direct communication between Liverpool and Havre, and I hope this will be in operation within three months from the present time, and no doubt this will be a great advantage to both places, and especially to those engaged in commerce between the two ports. I dare say some Members of the Committee will be aware that the French Government at the time when the concession to the Submarine Telegraph Company was running out, in the latter part of last year, were not unfavourably disposed towards a renewal of that concession, and I believe, though I am not able to speak with certainty, that the Submarine Company were able to offer substantial inducements for a renewal of the concession. We, on this side of the water were anxious that the concession should terminate, and we had to bring to bear all the friendly pressure in our power to induce the French Government to adopt our views. I refer to this in order to show how in this instance also the French Government have shown themselves extremely willing and anxious to act in co-operation with Her Majesty's Government, and were prepared to make what to them appeared con- 674 siderable sacrifices towards that end, and to put this business on a satisfactory basis for the future. So much for that part of the subject. But I am in a position to make a statement in reference to that part of the subject upon which I briefly touched some months ago. It was on the 4th of March this year that I announced to the House the main results of the arrangements at that time nearly completed with Germany, Holland, Belgium, and France, as to the rate at which words should be charged in each telegram for the future. On March 4th I made a statement as to the probable result in answer to the hon. Member for the City of London. No special discussion or comment in the House or in the Press appeared to follow that announcement, but still, I believe that at the time we were right in supposing there was something like a unanimous approbation of the main outlines of our plan. I believed, and I still believe, the public will be very glad to see the conclusion of an arrangement so long the object of desire by those principally concerned, and recommending itself on grounds of efficiency and economy. I do not think that any disposition is likely to be shown to cavil at the price paid for the objects I have enumerated. I confess myself that, if there is one part of the scheme that will be more attractive than another, I believe it will be the substantial reduction which the Government have been able to effect in the word rate for telegrams to foreign countries. So long as the Submarine Company had its intermediary rights, the price per word to Germany and Holland was threepence, to Belgium twopence, and to France twopence halfpenny. We have succeeded after a great deal of negotiation in bringing down the price per word in each case to twopence, that is to say, there is no reduction in the price to Belgium, in the cases of Germany and Holland there has been a reduction of 33 per cent, and to France of 20 per cent. I think, if the Committee will bear with me, I can show how very substantial that reduction is with regard to these particular services. Take the case of France, where hitherto the word rate between the two countries has been twopence halfpenny. I may take that as equivalent to 25 centimes. Of those 25 centimes the French Government were entitled to receive 11, 675 and 14 were divided between England and the Submarine Company, and the division was made upon a principle which practically amounted to something like an equal distribution, that is to say, the Submarine Company received about 7 centimes and the English Government about the same amount. The arrangements for the future, and fixed for five years, leave France 11 centimes, but France at the same time is called upon to undertake all the expenses on that side of the water, which hitherto have been borne by the Submarine Company, and I believe also France gives up a sum of something like 60,000 francs annually which the Company paid the Government for the use of offices. France then has accepted certainly a not inconsiderable addition to the working expenses, and may fairly &aim the same amount of payment per word. Whereas England and the Submarine Company used to receive 14 centimes per word, England in future will receive 9 centimes, that is to say, the 7 centimes per word, which went to make up the large dividends of the Submarine Company, is transferred to the English Government, and there remain two centimes, with which the English Government carry on the work which hitherto has cost 7 centimes. So far as the position of the Submarine Company is concerned, and with this alone we have to do, the Government undertake to do for 2 centimes what the Company did for 7 centimes, and the public get the benefit of the bargain by the saving of 5 centimes on every word transmitted, and I venture to think the public could hardly expect a better bargain. But it has been made the subject of question and attack, because some very ignorant or very captious persons say, "Why do you charge twopence between England and France when you only charge a halfpenny a word from any part of England to the most distant parts of Scotland or Ireland or to the Channel Island?" Well, I should have thought the answer is sufficiently obvious. Messages are sent to Scotland, Ireland or Jersey, as part of the system that obtains for the whole of the country, and the cost of sending a message a long distance is balanced by the much less cost of short messages sent from one point to another 676 in all our great towns, these last making up for the loss on the longer distances. But even so, it will be remembered that for years back the telegraphic business has been carried on at an annual loss. This year, for the first time for about ten years, the work of the telegraphic system of the British Isles will show a balance on the right side, and that presumably a very small one. I believe that the profits we may anticipate from the acquisition of the submarine telegraphs may be put down at between —15,000 and —20,000 a year. The Times about a month ago thought proper to make a violent attack on me with reference to this question. It wound up an article which, I am sorry to say, was very little more than a tissue of misrepresentations, by asking whether the Postmaster-General would justify the bargain which he had made on international, postal, or financial grounds. My answer is very plain. I justify it expressly on all three. I justify it on international grounds, because this arrangement will secure the greatest possible advantage for international communication. It is a great blessing, not only to our own mercantile community, but also to the mercantile communities abroad, and it is of enormous benefit generally, that an efficient service should be conducted. I justify it upon postal grounds, because I have already explained that the argument derived from the existing tariffs in the British Isles is really no argument at all. I justify it on financial grounds, because it is an arrangement which, while of enormous advantage to the public who send telegrams, by largely reducing the cost of telegraphic communication, it also shows a modest balance in favour of the British taxpayer. It is not an arrangement in which Her Majesty's Government have been absolutely able to fix their own terms. They have had to come to an understanding with foreign Powers, and I think as far as they have gone, foreign Powers have met the Government in a liberal and free spirit. It is said, however, that this arrangement has been made for ten years. But every arrangement made with a foreign Power has to be made for a certain term; and there is, this advantage in this arrangement, that eventually England and France will become partners on fair and equal 677 terms. But it is always open to the Government to review their position, and if it should happen in the course of those ten years that the French Government should modify their view, it will be open to my successors to negotiate with France, and see whether this Convention can be amended in any way acceptable to both countries. The subject has created a good deal of interest, but I believe the Committee will approve of the arrangement generally, and that it will accept it even in detail. I am confident we have made an arrangement which is extremely beneficial to the country, from an international, a postal, and a financial point of view, that it will largely extend the present facilities of commerce, and will do so upon a basis which at all events should be the basis of all sound finance.
§ SIR G. CAMPBELL (Kirkcaldy, &c)I think we shall all join in congratulating the right hon. Gentleman the Postmaster General on having made an arrangement which has put a stop to the monopoly that formerly existed, and has established a Government tariff for foreign telegrams. The question divides itself into two entirely separate branches, the first being the sum we have to pay for the acquisition of the rights of the Submarine Company, and the second the rate charged by the Government to the public for foreign telegrams. As regards the sum proposed to be paid, I admit that the Postmaster General seems to have made out a pretty good case. I cannot assent, however, to the doctrine of the Chancellor of the Exchequer with reference to compulsory expropriation of the company. There was no compulsory expropriation at all, because the monopoly came to an end by effluxion of time. The right hon. Gentleman has not told the Committee how the valuations were arrived at. We all know that in these valuations the Post Office is very apt to be "done," and the valuations are apt to be excessive.
§ MR. RAIKESThe valuations were by experienced and competent valuers.
§ SIR G. CAMPBELLExperienced and competent valuers, as we know too much to our cost in regard to the acquisition of the telegraphs in this country, are very apt to make Reports which are very unfavourable to the general public. I take it, however, on the authority of the Postmaster General, 678 that he has gone thoroughly into the question. I do not see, however, why we should pay for the winding up of a company which came to an end by effluxion of time, which made an enormous profit, and which did not do its work as well as it is being done now. It was owing to the French concession that the company was able to make enormous profits, and one would have thought that it was the French Government, and not the British taxpayer, who should pay the compensation, if any was given at all. I was very glad, indeed, to hear the Postmaster General say that the French Government has dealt with the matter in such an excellent spirit, but I find that that Government has taken advantage of its position to get a very unreasonable share of the telegraph rates for the next five years to come. I do think that in this respect the French Government have driven a somewhat unreasonably hard bargain. That brings me to the question of the rates charged to the public. I believe that the rates are based upon the statement that the cost of telegraphing does not exceed ½ a word. If so, why do you charge 2d. in regard to telegrams to Belgium? It may not be so important to Belgium, which is a small country, but what is the case as regards countries beyond? What is the arrangement as to Italy and Germany, and Switzerland, and further off countries? The Postmaster General has made out a case only with regard to France, and has not explained why there is to be so heavy a charge in regard to other countries immediately adjoining or those of the third degree.
§ MR. HENNIKER HEATON (Canterbury)I have to join in the complaint that this Vote has been sprung upon the Committee, and that the first intimation of its coming on was given by the Votes distributed this morning. Inquiries have been repeatedly made during the past four years whether the Government have entered into arrangements to complete the purchase of these cables so as to give us direct communication with France independently of the Submarine Company, and the House has been repeatedly told that the matter was in progress. Now, it is known that the bargain which has been made with the French Government is not of a 679 character to commend it to the people of this country. In the first place, we say that the amount to be paid to the Submarine Company is altogether too high. Then we say there is no reason why we should give bonuses to the servants of that company; and we say that the Government are going to pay far too much for old buildings which need not necessarily be included in the purchase. First, as to the rates between the two countries, I may point out in a few simple words the nature of the transaction. Hitherto, throughout France the telegraphic charge has been at the rate of ½d. a word, and that has also been the charge throughout England and across the Irish Channel to the extreme part of Ireland. It would, therefore, be natural to suppose that in any arrangement between France and England the charge for the transmission of messages would be 1d. a word—that is adding the ½d. charged in England to the ½d. charged in France—and I may add that the maintenance cost of the cable between Dover and Calais is infinitesimal—little more than that of a land line. The Postmaster General endeavoured to raise a false issue by saying it was ridiculous to contend that it should be a ½d. word rate, as we were losing on that rate in England; but in the next breath he said that this year he would be able to announce that the ½d. rate was paying throughout the country.
§ MR. RAIKESI said I anticipated that we should be on the right side in the working of the telegraphs, but that there would still be a deficit on the capital originally invested.
§ MR. HENNIKER HEATONI listened to what the right hon. Gentleman said, and gathered from him that this year there will be a profit on the ½d. telegrams. He now refers to the bad bargain we made years ago by paying more than we ought to have done for the telegraphs. But that, I say, has no more right than the Crimean War Fund to be charged to the general expenses of the country. At the rate between England and France that is proposed, the Government will be enabled to provide profits double those which have enabled the company to declare dividends of from 12 to 19 per cent. The Postmaster General is jubilant because the Liverpool Chamber of Com- 680 merce has endorsed his action; but it has been condemned by the more directly interested Paris Chamber of Commerce; and, as to the constitution of the Liverpool Chamber of Commerce, a leading Liverpool merchant, who has been for nearly 20 years a member of the Liverpool Exchange, has written me a letter questioning the competence of the Liverpool Chamber to speak with authority on the question. In 1862 the charge for telegraphic messages between England and France was 1½d. a word, and now there is to be a reduction of only ½d. a word on 2½d. Then, investigation proves that the bargain is a bad one for this country, because France is to get 11e., while this country gets only 9c. The only explanation the Postmaster General can give of this is that France has taken over some of the old offices of the Submarine Telegraph Company. But when the history of this company comes to be written it will be seen that a more glorious monopoly has never been heard of. This monopoly, which for 30 years has been dividing between 12 and 22 per cent, having sold old ships and stores at a good price, and obtained 10 per cent over the value, has the consummate impudence to ask for £5,500 as a bonus for those servants who are not taken over by the State. I trust the Committee will not tolerate for an instant the bad bargain that has been made for it, and to enable it to express its opinion I move the reduction of the Vote by the sum of £28,300, the amount of the two items for the cables.
Motion made, and Question proposed,
"That a sum, not exceeding £38,863 be granted for the said Service:"—(Mr. Henniker Heaton.)
§ * MR. SHAW LEFEVRE (Bradford, Central)I join with the hon. Gentleman behind me in congratulating the Postmaster General on the conclusion of the negotiations with the company and the termination of its monopoly, but I am bound to say there are some points of detail which are not satisfactory. I agree with the hon. Gentleman who has just spoken and cannot understand why 10 per cent should be given to the company over and above the value of its cables. The Postmaster General spoke of this as compensation given for compulsory pur- 681 chase, but I do not understand that there has been anything in the nature of compulsion in the arrangement between the Government and the Company. The Government was under no specific or actual obligation to take over the cables at all, but might have allowed them to remain where they were. There was no Act of Parliament which gave the Company a vested right, or which gave Parliament power to take over the property by compulsion. As to the compensation to be given to the officers in the service of the Company, I cannot understand why, if this compensation is to be given, it should not be given by the Company which has had the benefit of their services. I am glad to hear that, on the whole, the French Government have entered into the negotiations in a good spirit. We all know that they were not anxious to bring about the new arrangement, and could have obtained a considerable sum for the continuance of the concession. I can, therefore, well understand the great difficulty the right hon. Gentleman has had in the negotiation. I can only express the hope that, now the concession has come to an end, and it is a matter of arrangement between the two countries in the future, it will not be impossible, at some distant day, to effect a further reduction of the charge for messages between the two countries. Considering that ½d. per word is the charge in this country, and something less than ½d. in France, 2d., as between the two countries, does seem to me to be a very heavy charge. I am glad to hear, at all events, that at the end of five years the rate will be divided between the two Governments. That appears to me to be a very wise arrangement, and I cannot but hope that it will facilitate ultimately a further reduction. I should like to ask the Postmaster General when he spoke of a profit of £15,000 a year, he meant only in respect of the two centimes, which I understand will be the difference to this Government between the present and future charge. I understood him to say that the proportion paid to the English Government was seven centimes, whereas in the future it will be nine; and I wish to know whether he is taking that difference of two centimes, or he is considering the whole payment of the English 682 Government? At any rate, I hope the time will not be far distant when negotiations may be opened with the French Government for a further reduction; I think this service should be kept separate, and not mixed up with the whole of our telegraph services, so that we may know the whole of the circumstances and learn when it has turned the corner and is likely to make a profit. I think that the prospects of the coming year are, on the whole, extremely satisfactory. They are very much more satisfactory than I anticipated four or five years ago, when the reduction was made, and I think a very considerable profit will be derived from the telegraph services at no distant date. But looking at the present service between England and France alone, I cannot but regard the present charge as high. The discussion of this Vote, I may add, has come upon us as a surprise. It was only this morning I saw the announcement of it in the Papers, and we have heard for the first time a full explanation of it, and I do not think I should be quite prepared to enter so fully into the matter as I might have otherwise done. The right hon. Gentleman must not be surprised if there is some renewed discussion on this most important matter.
§ * SIR JULIAN GOLDSMID (St. Pancras)I am sorry the right hon. Gentleman has thought it right to refer to the former proprietors of the Submarine Telegraph Company and that he considers they have received too favourable terms in the six months' purchase of the cables. The proprietors hold that they are paid too little, and as far as concerns the rest of the property the Government are buying value. They are buying a valuable house and a steamer and other property, and altogether I think the shareholders in the Submarine Telegraph Company have some reason for saying that they have not been very handsomely treated, and the right hon. Gentleman was not justified in the observations he made.
§ MR. LABOUCHERE (Northampton)I do think we ought to have a little further notice, and that these Votes should not be sprung upon us. I was not aware until this morning that this Vote was going to he taken. Now, I certainly do think that the hon. Gentleman opposite has moved too 683 large a reduction, though I think there are one or two items in this Return which we ought to look upon with suspicion. One is the 10 per cent upon the value of the cables, and I gather from the Postmaster General that it is in excess of the price that has been paid. Am I to understand that the cables are worthless at the present time, and that new cables could not be laid for a less amount than this 10 per cent? I should have thought they could be laid for considerably less. The cables are very thin; they are not like the Atlantic cables. Then, as regards compensation. Is this £5,000 to be given to the officials of the company? This was an exceedingly wealthy company; it has paid enormous dividends upon its capital. It has had the concession for 30 years, and it must have known that at the end of that period it would come to an end. I suppose they have put by a reserve fund; I should like to know the amount of it. And out of that reserve fund they could certainly give a bonus to their servants. I cannot understand for a moment why we are called upon to pay it. I should like to ask my hon. Friend the Chairman of the Company whether it will be divided among the Directors? [SIR JULIAN GOLDSMID: "No."] Is it to be entirely given to the officers, or to aged officers, or to any officers, or what? We are giving them this £5,000, and we are also giving them what I imagine is a very large and full sum for these buildings in the City. I should think if the hon. Gentleman opposite moved a reduction of, say this £10 per cent and the £5,000, he would get a Vote.
§ * SIR JULIAN GOLDSMIDPerhaps, Sir, you will allow me to answer the very interesting question of the hon. Gentleman on the subject of the cables. The cables, as you are aware, are laid in the Channel. They have constantly been broken by the fishing boats, and they have to be re-spliced, and new portions have sometimes to be substituted for that which was damaged. In any case, I can tell him the valuation of the company was made by the most competent authorities, and their valuation was far above what the Government have paid us, even with the 10 per cent in addition. Under the circumstances, we had to accept the Govern- 684 ment proposal, but I repeat the observation I have made that it is not more than about six months' purchase of the net income of the cables. The hon. Gentleman has been good enough to say that he could put down new cables for the money. If that is so, the Government should be in a hurry to contract with him; but under ordinary circumstances, I know that new cables could not be put down for four times the amount. With regard to the payment of officers, perhaps the hon. Member may not be aware that Lord John Manners made an agreement with the Submarine Telegraph Company to extend their contract with the Post Office for ten years longer, and in consequence of that we applied to the French for a renewal of the concession, and at that time the French Government declined to give it; but since then they offered to renew it for 15 years. Then the English Government intervened and prevented the concession being signed. Under the circumstances, I do not think six months' purchase of the net income of the cables is an excessive price. As I have stated the Government have bought a house and a steamer, and they have paid their value. All I can say is that the Government have looked to the interests of the taxpayers, and they will obtain an ample return, notwithstanding the reduction in the charge for messages, and a very considerable profit, in fact—something like 20 per cent, or perhaps 30 per cent.. Consequently, I think the hon. Member opposite need not complain of this small payment.
§ MR. RAIKESI gratefully recognize the general feeling of the Committee as to the desirability of the arrangement which has been arrived at by the Government. But there are one or two points which I ought to notice. The hon. Member for Kirkcaldy and other speakers have alluded to the 10 per cent, and the term "compulsory expropriation" has been commented upon. That is not an exact term, but it appeared to me that it was the best I could use to represent the argument I wished to impress upon the House. It is quite true that the company were not obliged to sell their cables and establishments to the Government. They were, however, practically obliged to sell them to the Government because they would 685 have got nothing for them if they had sold them to anyone else, as the Government could, by using its influence with the French Government, prevent the company or anyone else from carrying on the business. Although the company could not be said to have a legal claim upon the Government similar to a claim which a person would have whose business was compulsorily taken under the Lands Clauses Act, or any Act of that description, yet the Government, having by its own action terminated their business and made their property absolutely valueless unless they took it over, the company had a right, morally, to a fair and equitable consideration. The hon. Baronet the chairman of the company (Sir J. Goldsmid) has stated that the price given only represents six months' earnings, therefore I do not think it can be said that the Government have erred too much on the side of generosity. The 10 per cent was given in consequence of the compulsory expropriation. As to the bonus, to which objection has been taken, that bonus was given to the English employés of the company. We pay nothing to the French employés, and I ask would it have been creditable to the Government of this country if, after taking possession of the business of the company and having made a selection from among the employés, those whose services were not required were turned out into the world without any consideration? We might, of course, have declined to accept any of the employés of the company, and if we had done so I think the case for compensation would have been weaker than it now is. We deprived the servants of the company of their livelihood by terminating the business of the company, and then by discarding their personal services; and I think that a great country like this would have been inclined to find fault with the Government if they had not made the moderate provision they have with regard to the employés. The Government had to make the best terms they could with France, and the French Government has met them on several points in a liberal and handsome manner. Having arrived at an arrangement, which we believe is a good one for the country and a satisfactory arrangement for all parties concerned, no doubt Her 686 Majesty's Government have been obliged in their turn to make some concessions to France. I am glad to see that the right hon. Gentleman opposite took notice of the provision that after a period of five years the rates are to be equal. In this matter we have, I think, established a principle which may be capable of considerable development. I do not say that it may not bear fruit even before the period of five years is reached. With regard to the Belgian rate of 2d. a word, Belgium would take no less. That country will get half the rate. We have succeeded in getting a penny off the rate hitherto payable for Germany and Holland; and substantial as I believe the reduction in the case of France to be, the reduction in the case of Germany and Holland is even more. The Government will of course be glad if France can at any time be persuaded to reduce her rates; but that is a matter within the competence of France and not of this country. The proposition of the hon. Member for Canterbury that we should leave out of consideration the interest on the purchase money for the telegraphs when dealing with telegraph revenue is an extraordinary one. The hon. Gentleman says the interest of £325,000, a year, which is interest on capital, has, no more to do with the question of telegraph revenue than all sorts of things which he mentioned.
§ MR. HENNIKER HEATONI said we paid an exorbitant rate for the property 19 years ago, and spent five millions more than we ought to have expended, and that in consequence we have to pay this large interest of over £300,000 per annum which we have no right to be called upon to pay.
§ MR. RAIKESThat is exactly what I wished to convey to the Committee—namely, that the hon. Gentleman is of opinion that we have no right to take into consideration one of the most expensive items in the whole telegraph system. As I have before said there is so much improvement in the working of the telegraphs that there is, I trust, a prospect of a fair excess of revenue over expenditure during the year. But in spite of that, the whole position of the telegraph revenue is one of a very large loss, representing nearly the whole of the interest on the original purchase. The hon. Member for Canterbury has 687 referred to a statement made by the Times on the subject of the Submarine Telegraph arrangement. The Times went out of its way to state that the profits which the Government were going to make out of the new arrangement would be twice the amount made by the Submarine Company. But the Times omitted to point out that one country received 11 centimes and the other 7 centimes.
§ MR. HENNIKER HEATONThe right hon. Gentleman says the Times omitted to state that one country received 11 centimes and the other 7 centimes. I say that that statement is distinctly made in the Times.
§ MR. RAIKESI do not know how far the hon. Gentleman is responsible for what has appeared in the Times, but I am alluding to a point in his statement in which he referred to this matter. The fact is that the service hitherto paid for at the rate of 7 centimes for England will hereafter be conducted for 9 centimes, and I am at a loss to see how, at that rate, the Government is going to make double the profit which has been made by the company. With regard to the speech of the right hon. Gentleman opposite (Mr. Shaw Lefevre), I do not understand that the right hon. Gentleman has seriously impugned any part of the arrangement, but he asks a question which certainly deserves an answer as to whether the profit which I have ventured to show is the result of the 7c. or the outcome of the 9c. My answer is that it is the outcome of the 9c. On that point I may refer to some figures which will be interesting to the Committee. The annual earnings of the Post Office during the tenure of the Submarine Company out of the 7c. were during the last year £154,800.
§ MR. SHAW LEFEVREFor one year?
§ MR. RAIKESYes, for one year. The receipts from out of the new arrangement, assuming that the increase of service recoups the Department for the loss we are making by the reduction of the charge—that is to say, if the income is the same although the rate is diminished—will be —222,100; and the difference between those two figures—namely, £67,300—represents the increase of profit minus 688 the working expenses entailed upon the Department by the new arrangement. The working expenses may be put at something exceeding £50,000, and from that I arrived at the figure of £15,000 profit which I have given. The hon. Member for Northampton thinks the Government could have got new cables cheaper. I wish we could do so; but I am assured by those most competent to deal with the matter that new cables could not be got for less than £115,000 to £120,000. I thank the Committee for the way in which the proposals of the Government have been received. I hope hon. Members will believe that the Department will not lose sight of the points raised in the discussion, and that as regards the future we shall be very glad to make a still further reduction in the rates which we now feel it our duty to exact.
§ SIR G. CAMPBELLThe hon. Baronet the Member for St. Pancras (Sir J. Goldsmid) has taken up a somewhat peculiar position. He argues that, as the Government are taking over cables which will require a good deal of patching up, therefore it is necessary to pay a high price for them. I should have thought that it ought to have been the other way. I entirely deny that that company, which has for so long enjoyed a monopoly, has any moral right to anything more than the actual value of the business. As regards the servants of the company, I wish my hon. Friend had told the Committee where the large sum for compensation is to go to, because I remember a case in which the Government of India were induced to buy up a very unpaying concern, and to give £50,000 as compensation to its servants, and it was aferwards discovered that of that sum £40,000 had been appropriated by the secretary of the company, the gentleman who had written the polemical letters which induced the Indian Government to buy out the company. While the Submarine Company had a monopoly, the rates were very high to some countries, and I hope there will be a general reduction. I had occasion some years ago to send a telegram to Switzerland, and I was certainly startled at the large amount of the charge. Have we any reason to expect a difference between 689 the charge of the monopolist company and the new charge?
§ * MR. SHAW LEFEVREI do not quite understand the proposal of the Postmaster General. As I understand, the receipts of last year amounted to £154,800, and the right hon. Gentleman estimates that the receipts next year will amount to £222,100. Then he says that the Government are also taking over an expenditure of £67,000 a year.
§ MR. RAIKESNo, £67,000 is the difference between £154,800 and £222,100.
§ * MR. SHAW LEFEVREThen what is the profit that is now made? I take it to be rather more than £16,000. Does the hon. Gentleman expect to make that amount of profit in future? If there are larger receipts, I presume there are larger receipts, I presume there will also be a larger expenditure, and the question is not altogether an unimportant one.
§ MR. RAIKESI am not in a position to answer that question. What I want to point out is, that the acquisition of the property will put us in a position to make a profit of about £15,000. That is the amount of the difference between the Revenue under the old system and under the new, after deducting the working expenses. In reply to the hon. Member for Kirkcaldy, I may point out that the International Convention allows neighbouring countries, such as France and England, to make special arrangements between the time of one Convention and the meeting of the next, but that other countries are bound by the regulations made at the last International Convention until they next meet.
§ * MR. SHAW LEFEVREI quite understand that there will be a profit of £16,000 or £17,000 a year, but it appears to me that there must be a much larger profit at present.
§ MR. RAIKESI quite understand what the right hon. Gentleman means, but I should not like to commit myself as to what amount of profit, if any, there may be more than at present.
§ SIR G. CAMPBELLAre we to have the whole of the enormous profit which my hon. Friend the Member for St. Pancras has told us is reaped by the Submarine Company?
§ MR. RAIKESThe whole profit that will be made out of the transaction is included in the figures I have given. The reduction in the rate will, of course, very largely reduce the profit.
§ MR. HENNIKER HEATONI do not think that a sufficiently satisfactory explanation has been given as to the amount of the bonus—£5,500—given to the Submarine Company. The monopoly has lasted for 30 years, and there is a reserve fund of £20,000. I, therefore, think the company should provide for the pensioning of their servants out of the high dividends they have for many years been receiving. In reply to the observations of the Postmaster General upon the article in the Times newspaper, I wish to point out that in that article it is distinctly stated that though the charge for a telegram was at that time 25c, the company only received 7c, the remainder going to the Post Offices of both countries. How then could the Postmaster General make the statement with regard to the Times which we just heard? I still think the right hon. Gentleman has not given any explanation why, in the division of profits, France should have 11c and England only 9c.
Motion, by leave, withdrawn.
Original Question again proposed.
§ MR. HENNIKER HEATONmoved to reduce the Vote by £5,500, being the amount of the bonus to be paid for those officers of the Company who have not been taken into the service of the State.
Motion made, and Question proposed, "That a sum, not exceeding £61,663, be granted for the said Service"—(Mr. Henniker Heaton.)
§ * SIR J. GOLDSMIDI would appeal to the hon. Member not to press this Amendment. As far as I am aware, we had a staff as capable of doing its work as any that could be found; but the Post Office, having regard to their own staff and for various other reasons, have decided not to employ a certain number. These have a right to compensation for loss of office. A renewal of the concession for 15 years had been obtained from the French Government, but the English Government, stopped all arrangements. I hope the hon. Member 691 for Canterbury, who is usually of a generous turn of mind, will not be so mean as to deny to the men the compensation to which they are justly entitled.
§ MR. LABOUCHEREI am sure that my hon. Friend himself would not be so mean as to deprive these men of their bonus. The question, however, is not whether the officials should be deprived of compensation, but whether the shareholders of the company or the Government shall pay it. My hon. Friend the Chairman of the company -says that the French Government would have renewed the concession for a further term of years.
§ * SIR J. GOLDSMIDThere was a promise to that effect.
§ MR. LABOUCHEREWhether the French Government agreed to make a further concession or not, what has that to do with the bonus? The company has assets worth £66,000; they have enjoyed a monopoly for 30 years. During the whole of that period they have paid a dividend of 9 per cent.
§ * SIR GOLDSMIDNo, it has averaged 6 per cent.
§ MR. LABOUCHEREMy hon Friend says their dividend has averaged 6 per cent, an uncommonly good thing. They have further put by a sum of £120,000 as a reserve fund, which, with their assets, makes a total of £186,000. I cannot believe that a company, of which my hon. Friend is Chairman, would be so mean while they are so rich as not to indemnify the officials, who are represented as being the best and noblest of mankind. It appears that the officials of the company are both French and English, and the Postmaster General has declared in a "Rule Britannia" sort of spirit, that the French officials would receive no compensation from the English Government. "We do not give to Frenchmen, but to Englishmen." Why make such a distinction? If justice entitles the English officials to compensation, their French colleagues have an equally just claim. Justice is justice. It is not a question of particular men, but whether a present is to be made to the fortunate share- 692 holders of the company of £5,500. A short time ago I had a dispute with my water company. I generally have one of the company's servants to wait on me, and he said that he would have to pay the money if I did not. I told him that I believed he was specially kept by the company for an emergency of that kind, and that I did not believe a word he said. In point of fact he was kept on by the company merely to go round and endeavour to get money illegally out of their customers. In the same way my hon. Friend is pleading the cause of his company. The fact is that the hon. Baronet is not pleading for the unfortunate officials, but for himself as a shareholder. I certainly think that we ought to vote against this £5,500, because I look upon the principle as utterly unsound, and believe that we are simply making a present of the money to the shareholders.
The Committee divided:—Ayes 128; Noes, 221.—(Div. List No. 122.)
Original Question put, and agreed to.