§ Further Proceeding on Motion for In-struction to Committee resumed.
Motion made, and Question proposed,
That it be an Instruction to the Committee to consider the advisability in the public interest, of requiring the fulfilment of the provisions of Clause 199 of the Manchester Ship Canal Act of 1885, which provides for the vesting of the Undertaking in a Public Trust as a condition precedent to the sanction of any municipal guarantee for the raising of additional capital."—(Mr. Philip Stanhope.)
§ Motion, by leave, withdrawn.
§ (12.20.) MR. P. STANHOPE (Wednesbury)
In rising to move the Instruction which stands in my name, the House will see that I have varied it somewhat from the original Instruction which I placed on the Paper. I have done so in acquiescence with representations which were made to me by the Manchester Ship Canal Company and the Manchester Corporation. I wish to assure the House that in the Instruction I am now moving I am animated by no spirit of hostility towards this undertaking. On the contrary, I have the greatest sympathy with the 40,000 patriotic shareholders who have contributed their money for the completion of this great work, and with the Corporation of Manchester, who are not allowing this important undertaking to perish at the eleventh hour for want of timely and adequate financial assistance. I am also one of those who favour the municipalisation of our canal system, because I believe that it is only by that means the canal system can be effectively utilised as a means of competition with the railways for heavy traffic. I think I have said enough to convince the House that in the Instruction I am 634 about to move I am in no way actuated by a feeling of hostility to the objects of the Bill now before the House. Before proceeding further it is necessary that I should explain the present position of the Ship Canal and the reasons which have induced the Corporation of Manchester to come to the assistance of the company. In the first place, I feel bound to express my regret that neither the Board of Trade nor the Local Government Board have appeared to consider this novel departure from ordinary municipal procedure, namely, a proposal to lend £3,000,000 of money to a Limited Liability Company as worthy of notice. At any rate, neither Department offered any suggestion upon the Second Reading of the Bill. I admit the special circumstances of the case, and therefore I feel called upon to give some particulars as to the financial position of the Ship Canal Company. The company have already expended a sum of £9,250,000 up to the end of 1890, when the Corporation of Manchester were invited to come to their assistance. They appointed a Committee to inquire into the circumstances of the case, and that Committee came to the conclusion that the company were no longer in a position to exercise their borrowing powers. Their credit was unfortunately exhausted, and the Committee recommended that, owing to the exceptional character of the undertaking, its magnitude, and the fact that if it is not completed the works so far executed would be rendered useless, it was necessary that the Corporation should make the large advance of £3,000,000 in order to ensure the completion of the undertaking. There were already First Debentures to the amount of £1,800,000, and Second Debentures to the amount of £600,000. The Manchester Corporation had, therefore, to consider in what form financial assistance could be best given to the company, and they came to the conclusion that it would be unfair to the existing debenture holders to claim any priority over them. They have consequently agreed to the very startling proposal that they should become the purchasers of a third mortgage of £3,000,000, ranking after all existing mortgages. There can be no doubt that there are a large number of Corporate Bodies who 635 would be willing to co-operate with the Corporation of Manchester in forming a Public Trust, so as to secure the future success of this scheme—for instance, the Corporations of Salford, Stockport, and Warrington, the Weaver Trustees, and probably the Lancashire County Council. This is no new proposal. On the contrary, a very large number of Public Trusts already exist for the management of the estuaries of our great rivers and harbours, London forms a lamentable exception, and we have had recently, in the strikes which have taken place here, great cause to regret that this is so. In the Clyde, the Mersey, the Tyne, the Dee, and the Tees, where important public works exist, they are administered in the interests of the public under the management of a Public Body, and I think that the same system may be wisely and safely extended to the Manchester Ship Canal. The Corporation of Manchester and the Ship Canal Company have already accepted the principle I am now advocating. In the Act of 1885 the Corporation insisted on the insertion of a clause—No. 199— which indicates the future possibility of a transfer of the undertaking to a Public Trust. At that time the Corporation had only agreed to advance a small sum of money—£17,000 —for the Parliamentary expenses of the canal, and as a quid pro quo they obtained this useful and valuable clause. The position has now entirely changed. The Corporation find themselves obliged to come to the rescue of the Canal Company, and to advance the large sum of £3,000,000 in order to complete the undertaking. It is said in one of the papers issued by the promoters of the present Bill that the adoption of my Instruction would defeat the measure, because no reference was made to it in the Parliamentary notices of the promoters, but I am not aware that any Member of this House is not fully within his rights in moving an Instruction to a Committee upon a Private Bill. Both the Corporation and the Canal Company say that the adoption of the Instruction will delay the completion of the under taking, and will defeat the object of the Bill. This I entirely deny. All I ask is that within a stated time the provisions of Clause 199 of the original 636 Act, which provide for the vesting of the undertaking in a Public Trust as a condition of the sanction of any municipal guarantee for the raising of additional capital, shall be fulfilled. Let me suppose that within two years the Manchester Corporation shall find that the original estimate of £3,000,000 is insufficient to complete the undertaking. Having advanced £3,000,000 they would be obliged to give more. Once embarked in the undertaking the Corporation will find themselves compelled to proceed with it, and to provide all the money that may be necessary to carry it through. The Corporation would in that case be obliged to take possession of the undertaking upon which they have advanced the money of the ratepayers, and that would be almost as bad as if the undertaking were still remaining in the hands of a private company. It ought to pass into the hands of a Public Trust representing not only the interests of Manchester, but of all the localities concerned. Upon these grounds I think the House ought to instruct its Committee to provide a suitable guarantee that the undertaking shall, within a stated period, be transferred to a Public Trust, which will have the widest possible interest in its successful completion and future management. Therefore, without the least desire to retard the progress of the Bill, I beg to move the Instruction which stands in my name on the Paper.
Motion made, and Question proposed,
That it be an Instruction to the Committee to consider the advisability, in the public interest, of requiring the fulfilment within a stated period of the provisions of Clause 199 of the Manchester Ship Canal Act of 1885, which provides for the vesting of the Undertaking in a Public Trust as a condition of the sanction of any municipal guarantee for the raising of additional capital." —(Mr. Philip Stanhope.)
§ (12.40.) SIR J. PEASE (Durham, Barnard Castle)
The Bill to which my hon. Friend has called attention is one of the most extraordinary measures which have ever been presented to the House. I am aware that there have been occasions when Corporations have been allowed to subscribe to some extent in return for 637 the advantages which the Bill is supposed to confer upon the public. The Corporation of Manchester, in this instance, seek to subscribe towards the making of the Ship Canal a sum of £3,000,000, and they propose to do so at a time when it is quite plain that it is impossible to raise that amount of money on any security the Canal Company can have to offer in the open markets. It is only a few years ago that I went into the Lobby to divide against a proposal in regard to the alteration of the Standing Order by which it was proposed to allow the payment of interest out of capital during the construction of works. The proposed alteration was adopted, and what has been the result? This company obtained power to raise money by shares, and were enabled to promise the unfortunate shareholders the payment of interest on the capital. Yet, the very first thing the Corporation of Manchester now ask is that it shall be made a condition precedent to their loan that the power of paying interest out of capital shall be no longer exercised. Then, again, there is another point. If the London and North Western, or the Great Western, or any other solvent company possessing railways and perhaps canals were to come to Parliament for further powers they would have to comply with the rules which Parliament has laid down for cases of this kind, and obey all the Standing Orders; but it would appear that as soon as a company gets into difficulties the Standing Orders are to be thrown on one side in order that the company may be helped through their difficulties. In the next place, Parliament has laid down the excellent principle that a certain proportion of share capital shall be subscribed before borrowing powers are exercised, but it would seem that as soon as a company gets into difficulties the rules are to be broken down which are enforced upon a solvent company. In this instance, for the advance of this £3,000,000, the Corporation of Manchester are to appoint three Directors of the company, so that the Corporation, which in extreme stress of weather are to find a crew to man the 638 ship, are to be in a large minority upon the directorate. The canal itself may be described as simply an attempt to bring the sea a little nearer to Manchester, but all such works ought to he in the hands of a Harbour Trust, as is the case in Scotland and the North of England. In every one of these cases the old Navigation Company, which formerly had control of the sea way, was bought out and a Public Trust created for the benefit of the whole neighbourhood. The Bill is a novel one involving a great precedent, and I therefore beg to second the Instruction which has been moved by my hon. Friend.
§ (12.45.) SIR W. HOULDSWORTH (Manchester, N.W.)
I at once accept without any misgiving the statement of the hon. Gentleman who moved this Instruction, that he entertains no hostility to the Manchester Ship Canal, and that he has no wish to retard the progress of the Bill although I am not sure that the hon. Baronet who seconded the Motion did not make a speech which was more pertinent to the Second Reading of the Bill than to the Instruction. I do not think it is necessary to traverse the general proposition which has been laid down by the hon. Member for Wednesbury (Mr. P. Stanhope)—that it is desirable, as a general principle, where Municipalities come forward to assist private undertakings that Public Trusts should be constituted. I admit that in some cases it is an important principle, but it must be in the knowledge of the House that there have been many exceptions to the rule. I oppose the Instruction, because I look upon it as unnecessary and as inopportune. It is unnecessary because, under the Ship Canal Act, an application may be made at any time for the constitution of a Public Trust, and the hon. Member himself can introduce a Bill on the subject, either now or at any future time. That provision of the Act is by no means favourable to the Ship Canal Company as a private enterprise, because it expressly excludes the company from opposing such an application. Therefore, 639 we already possess all that the hon. Member requires. Certainly there is no time stated in the Companies' Act; but I think it would not only be inconvenient, but dangerous, to convert the present company into a Public Trust, unless the time and circumstances justified such a change. Personally, I do not look upon private enterprise with any feeling of dismay; on the contrary, I think this House ought not to discourage private enterprise. I need only remind the House that most of our great national works have been the result of private enterprise. Many of them would never have been advanced as far as they have been if it had not been for such enterprise. There seems to me to be nothing in this Bill to justify an Instruction such as this. The Bill is a very simple one. No doubt the promoters have been disappointed, and have found that the amount of capital originally proposed has been altogether inadequate to carry out the undertaking. It is not necessary that I should enter into the circumstances of the case The Corporation of Manchester, on behalf of the ratepayers, and with their full sanction, have now come forward to say," We will not have this enterprise dropped; but we are prepared to advance £3,000,000 in order that the canal may be finished." I should have thought that the time to consider the propriety of constituting a Public Trust would arise when a scheme for the purpose was fully developed and all the details could be gone into. At such a time a Committee would be capable of considering the whole question, and saying whether the circumstances were such as to justify and demand the undertaking being converted into a Public Trust. The hon. Gentleman does not propose that a Public Trust shall be constituted now, but at some future time. Such a provision would, in my opinion, be a most dangerous one, seeing that it would amount to the compulsory constitution of a Public Trust at some fixed date, no matter what the circumstances might be. At the present moment it would be an instance of swopping horses while crossing a stream. As I think the existing Act of Parliament is quite sufficient to enable the hon. Member 640 at any time to accomplish all he desires, I trust the House will reject the Instruction he has moved.
§ (12.55.) MR. JACOB BRIGHT (Manchester, S.W.)
I think my hon. Friend opposite (Sir W. Houldsworth) has conclusively shown that the people of Lancashire already possess the option under the Act of 1885 of applying for the conversion of this undertaking into a Public Trust, if they desire to exercise it. The only object that could be gained by adopting this Instruction would be to delay the progress of the Bill, and delay might be fatal to the object the promoters have in view. By the middle of July the Canal Company will require the support which the Corporation of Manchester has with so much public spirit agreed to give them. There are a very large number of persons now employed upon the works, and it would be a very serious thing if a collapse were now to occur. About two-thirds of the works are finished, but one-third is only partially finished. If there were a general stoppage, with nobody to take charge of the works and protect them, a great deal of damage would necessarily be done, and the entire undertaking would become deteriorated. Hon. Members on both sides of the House have always taken a great interest in this project; there are upwards of 1,000,000 persons concerned in its welfare; and no voice has been raised in favour of the proposition of my hon. Friend.
§ (1.0.) THE PRESIDENT OF THE LOCAL GOVERNMENT BOARD (Mr. RITCHIE,) Tower Hamlets, St. George's
The hon. Member for Wednesbury has stated that neither the Board of Trade nor the Local Government Board have taken any interest in this matter. I am sorry that my right hon. Friend the President of the Board of Trade is not able to be present to-day, and it is impossible for me to state what action has been taken by my right hon. Friend. I have no doubt, however, that the Board of Trade has gone carefully into the ques- 641 tion. So far as my own Department and myself are concerned, the hon. Gentleman is much mistaken in supposing that we have taken no interest and no action in the matter. The Local Government Board have had several interviews with those concerned in the question in Manchester, and the result has been that various modifications have been introduced into the Bill. In the original proposal no provision was made for a Sinking Fund for the repayment of the advance. The Local Government Board strongly insisted upon such a provision being made, and the company, in compliance with our proposal, have included in the Bill a provision for repayment, and for a Sinking Fund. The question whether it is to be five or 10 years before this provision is to come in, or whether it is to come in at once, is, I think, a question that can be safely left to the consideration of a Committee. With regard to the general question, I am bound to say that I do not regard the step which is being taken by the Corporation of Manchester with much satisfaction. There is no doubt it ought to be conclusively shown that there is a strong and exceptional case before any Corporation is justified in mortgaging its funds for purposes other than the purposes which come under its jurisdiction, and the House will see how very prejudicial it would be to the general interests of the community if the rates were to be burdened by responsibilities in regard to matters not within their jurisdiction, which might prevent the Corporation from carrying out the duties which are imposed upon them. Under these circumstances, I cannot say, therefore, that I regard this proposal altogether with satisfaction. It can only be justified by an exceptional state of things. The question is whether an exceptional case has been made out. There can be no doubt that Manchester, as a whole, is deeply interested in this particular enterprise, and that feeling is not confined to any particular section of the community, but is shared in by every class, high and low. The Corporation have come unanimously 642 to the conclusion that assistance should be given, and at a public meeting no objection was taken to the proposal and no poll demanded. I therefore think that an exceptional condition of things has been made out sufficiently to justify the Local Government Board in not offering opposition to the Bill going before a Committee and being thoroughly considered. The hon. Member proposes that the undertaking should be converted into a public trust. I am not disposed to deny that there would he advantages in the constitution of a public trust, but there can be no question that if the Instruction of the hon. Member were accepted, it would necessitate such delay that the present proposal could not be carried out. I do not think it would be right by an Instruction of this kind to destroy the Bill, and I think such a Course would be more unjustifiable, seeing that there is a provision in the company's original Bill, by which the views of the hon. Member may ultimately be carried out. I would recommend the House to allow the Bill to go before a Select Committee without this Instruction, and it will then be the duty of the Local Government Board to put the views they hold before the Committee.
§ (1.7.) MR. SCHWANN (Manchester, N.)
This is no doubt a question of very great importance to the people of Manchester, and I trust that the House will not imperil the Bill by agreeing to the proposal of the hon. Member for Wednesbury. The sum of £3,000,000, which is proposed to be lent by the Corporation of Manchester, is considered by their own specialists to be at least £1,000,000 in excess of the absolute requirements of the case, but they wish to be on the right side, and take powers to raise more than may be wanted, in order to cover any further unforeseen expenditure, without having to come to this House again, and there is, consequently, little doubt that if this Bill be passed the Canal will be proceeded with, and will be finished, and oceangoing steamers will be navigating it 643 within a couple of years. So far as the constitution of a public trust is concerned, that is a subject which may well be left for future consideration; but, as a matter of precedent, I would point out that in the case of the Mersey Docks, which were originally constructed by the Corporation of Liverpool, but when it was found to be in the interests of the community, there was no difficulty in acquiring the undertakings and vesting them in a public trust, and the same thing would undoubtedly take place with regard to the Manchester Ship Canal, especially as powers have been reserved to the Corporation of Manchester to take this step, which the Canal Company binds itself to facilitate when applied for.
§ (1.9.) MR. COURTNEY (Cornwall, Bodmin)
I have very little to add to the remarks which have been made by the President of the Local Government Board. The Instruction moved by my hon. Friend the Member for Wednesbury would give very large powers to a Committee of this House. No doubt a Committee can do many things, but there are some things beyond its competence. We shall hear more of the Canal in future years, and I have no doubt that as time passes the feeling will grow in favour of placing the undertaking under a public trust; but before Parliament can undertake the consideration of such a conversion there must be a large measure of agreement in the locality itself. In regard to the question of the Sinking Fund, I believe the Corporation of Manchester, reflecting the feeling of the people of the city, are determined to back up the Canal and see the work through. It is, however, the function of the House to protect both the present and the future generation in a matter of this kind; and I agree with the hon. Gentleman the President of the Local Government Board in thinking that the Corporation of Manchester are deferring till too late a date, the time when they will begin to feel their responsibility. I should prefer a much 644 earlier date than ten years for the beginning of the period of redemption. I am not quite sure whether or not the Bill will be opposed. If it is not, it will fall to me to determine whether or not the redemption should begin at an earlier period. I rather feel that will be a considerable task to throw upon me, and I may have again to come to the House and suggest that the Bill should be treated as an opposed measure, and that a Committee should be set up to consider this matter, which ought to be dealt with by a strong Committee of the House.
§ (1.15.) THE POSTMASTER GENERAL(Mr. RAIKES,) Cambridge University
Speaking for myself alone, I wish to say one or two words on this matter. And I wish to recognise the value of the suggestion which has been made by the hon. Member for Wednesbury. I think if it had not been for his Motion this most important measure might have slipped through the House of Commons, so to speak, per curiam as an unopposed Bill. I cannot attempt to go back to a question which might have been more properly raised upon the Second Reading of the Bill, and, I think, the hon. Member for Wednesbury and my hon. Friend the Member for Durham have stated so very forcibly all the considerations in favour of the proposal which is made by them that it would be simply wasting the time of the House to cover that ground again. But, in my opinion, justice has scarcely been done to the alteration introduced by the hon. Gentleman opposite in the form of the Instruction, for the Chairman of Ways and Means and other speakers have dealt with this matter as if the Instruction was before the House in its original form. The hon. Gentleman has introduced into the Instruction the words "within a stated period," that is to say, he contemplates the creation of a public trust, not at this instant, not in the course of the present year, but at some time which may be 645 fixed by the Committee, and placed in the Bill as a condition of this money being lent. The passing of the Instruction as it now stands need not interrupt the progress of the works. The works need not be suspended for one day if the Committee come to the conclusion that on the completion of the works, or when the last portion of the money has been advanced, a time should be named at which the company should give way to a public trust. With regard to the Sinking Fund, the disposition on the part of Public Bodies to spread such a fund over an indefinite period should be carefully watched by the House. A scheme for a Sinking Fund which is not to be complete till 110 years have elapsed, is pretty nearly a proposal to repay by instalments through the whole of eternity, and can hardly be treated as a Sinking Fund at all. The greatest authority upon questions of this sort, the late Lord Redesdale, always held that 60 years should be the maximum of time allowed for a Sinking Fund, even in the case of works which are the property of a Corporation. And I cannot but think that even greater strictness should be observed in dealing with a measure which, whatever may be its public utility, constitutes a most dangerous and revolutionary innovation in municipal finance as administered by Parliament. I hope, therefore, the Committee will require that the Sinking Fund should not extend over a period of more than 50 years.
§ (1.20.) MR. P. STANHOPE
I am glad the Postmaster General has pointed out the important difference between the first Instruction which was placed on the Paper and the Instruction in its present form. As I stated in my earlier observations, I am extremely desirous not to do anything that may prove to be prejudicial to the Manchester Ship Canal Company. I will not press my Instruction on the present occasion, but I reserve to myself the right to move, on the Report stage of the Bill, the insertion of a clause embodying my principle.
§ Motion, by leave, withdrawn.