HC Deb 27 March 1907 vol 171 cc1830-53

Motion made, and Question proposed, "That the Contract, dated the 2nd day of February, 1907, with the Canadian Pacific Railway Company for the conveyance of the mails between Liverpool and Hong Kong, for the period from the 7th day of April, 1906, to the 6th day of April, 1908, printed in House of Commons Paper, No. 76, of Session 1907, be approved."—(Mr. Runciman.)

MR. HAROLD COX (Preston)

said the reason why this Motion had come before the House was because of the important Standing Order, No. 72, which required that all contracts for conveyance of mails by sea should be approved of by the House of Commons. It was important to go back to the origin of the contract. It began in 1889 in rather a curious manner. A petition in its favour was in that year circulated among Members of the House by the Canadian Pacific Railway Company. The contract was defended on the general ground that it was advantageous to us from a military and naval point of view. The petition was largely signed, and he contended that it was a bad thing that the agents of a railway company should be allowed to frequent the lobbies of the House asking for signatures in favour of a contract which would put money into the pocket of a company. At that time the country and the House of Commons were filled with the idea of an "all British route," and they went to great expense to establish a British cable. The contract was never regarded as a Post Office contract; it was a naval and military contract, and conditions were inserted for the carrying of troops and gun platforms, etc. In 1889 the Treasury became exceedingly suspicious of the whole scheme. Their Minute said— The scheme is not justifiable upon postal reasons alone. Despite that, the Post Office was charged with the bulk of the subsidy. The total subsidy amounted to £60,000, of which Canada contributed £15,000 and the Admiralty £7,312, the Post Office paying the difference. The whole essence of the question was that a rapid through service from this country to the Far East should be assured, and if they were not satisfied upon that point the whole scheme was worthless. As he had said, the Treasury were not certain of the matter. In 1889 they said— Some difficulty was felt with regard to the Atlantic portion of the line, the control of which is entirely in the hands of the Dominion Government. Satisfactory assurances were, however, given by that Government that the necessary acceleration of the service should be secured. Twelve years later, in 1901, when the contract expired, the Treasury again reported— At the time when the contract of 1889 was made it was anticipated that the Canadian Government would before long secure a considerable acceleration of the Atlantic service. That expectation has not been realised. The contract had been running for twelve years and the expectation of a fast service had not been realised. Despite that, however, the contract was renewed for another five years, viz., to April, 1906— To allow further time for the attainment of the object in view. During all that time also, the object was not realised, and the fast service did not begin until July last. The position was that the Canadian Pacific Railway had received £60,000 a year on the understanding that a fast service would be established, and it had not been established. They had received £60,000 a year for seventeen years and that, if hon. Members cared to work it out, amounted to over£1,000,000. £1,000,000 had been paid to the shareholders on a specific understanding which was never carried out, and he submitted that that £1,000,000 was virtually obtained on false pretences. In 1902 they had very similar arguments in favour of the contract to those used in support of the original contract. It was again pressed upon the House because of political considerations, and the Admiralty were again a party to the contract. It was, however, strongly opposed by several members of the Radical Party in 1902. They had changed their geographical position in the House, and he would be interested to know whether they had also changed their opinions. They were asked to renew the contract for another two years. It expired on 7th April last. Had the company been receiving any money in the interval; if so, by what authority? Had they been performing services in the interval; if so, who paid for them? Because the words of the contract of 1901 were precise. It absolutely expired on 7th April, 1906, and it provided that if a journey undertaken on 7th April was not completed, the company were to be under the obligation to complete the journey and not receive any payment. If any money had been spent in the interval, he would suggest that, it had been illegally paid; and he might point out that if it had not been paid, he could not see what was the urgency for pressing this Motion now upon the House. If they could wait eleven months before renewing the contract, why not wait thirteen or fourteen months? He submitted that if an illegality had been committed, it could not be wiped out merely by a new contract between the Postmaster-General and a railway company. At any rate it was a slipshod system of finance against, which the House ought to protest. They had no right to let a contract lapse, and come twelve months later and try to wipe out past laches by voting money in this way. Tin House had one important function above all others. They were the guardians of the public purse, and if they did not stop financial irregularities when brought under their notice, there was no limit to the burdens which might be put upon the taxpayers. He submitted that the contract could not be any longer defended on military or naval grounds. The Admiralty refused to pay another penny towards the system. They had been paying £7,000 a year; they refused to pay any more; they would have nothing whatever to do with the contract; they did not want the ships; they did not want the guns; they wanted to go out of the business altogether. The War Office were equally contemptuous of the whole business. According to a Treasury Minute no recommendation had been received from the War Office. They might be told that the Canadian Government wanted the contract. He thought that was very likely. But could they in this matter separate the Canadian Government from the Canadian and Pacific Railway Company? They had to remember that the Canadian and Pacific Railway Company was a very powerful corporation, employing large numbers of voters, controlling large areas of land, and able to advance or retard the prosperity of whole districts in Canada. Could the Canadian Government afford to quarrel with such a company? He thought not. And he confessed that he thought the subtle interests of the railway company extended even beyond Canada. Hon. Members might have noticed during the past few months paragraphs circulated in the Press about the possibility of running a fast service of steamers from an Irish harbour in Galway to Canada. Anybody who knew anything about the west coast of Ireland knew perfectly well that the idea of getting a fast service of steamers from Galway to Canada was highly improbable. So far it would appear that the Canadian and Pacific Railway Company desired to give the impression that a service was to be created from Ireland. He was told that they were having a survey made for a railway across county Mayo. He hoped his Irish friends were not deluded by this enterprise of the Canadian and Pacific Railway Company. The enterprise might cost a few thousands of pounds, but a very large sum was at stake. He believed that in this instance the company asked for a renewal of the contract for ten years—that was to say, a sum of £600,000 was at stake. The survey for a railway in county Mayo would not cost £600,000, even if it cost £6,000. He sincerely hoped that Irish Members would not be led away by the tactical suggestion that a fast steamboat service was to be started from Galway. At any rate, they would find that it was an absolute delusion. Nor could this contract be defended on any general principle of supplying a new shipping route. The whole question of shipping subsidies had been inquired into by a Select Committee, which had strongly reported against, any general system of subsidies other than for services rendered, as costly and inexpedient. If they accepted that doctrine, let them apply it to this particular case. There were many steamship routes which might plausibly be subsidised which would be of convenience to this country, but this particular route as wanted for mail purposes was absolutely useless to us. No British manufacturers would ever dream of sending goods across Canada by rail; it would be absolutely out of the question; Canada no doubt might use such a route for her commerce with the Far East; but, what was more important, America might utilise it; at any rate, the existence of this subsidised route, from Vancouver to Japan and China, must have the effect of lowering the freights for steamships conveying American goods across the Pacific. In other words, we were to-day using our money to subsidise a steamship route which gave our competitors, the Americans, an easier entry into the China market. That was rather a serious thing, considering that so large a portion of our goods went to the China market, and that the China market was so important to our cotton manufacturers. This question came before the House solely as a Post Office contract and nothing else. Unless it was used by the Post Office it was absolutely of no use at all. He ventured to challenge the Postmaster-General to rise and tell them frankly that if he were a free agent he would pay £45,000 a year for this service. At any rate it was the view of the Treasury that it was an unjustifiable claim. In answer to a Question which he put to the Postmaster-General the other day, the right hon. Gentleman told him that the total receipts from this route for letters other than mail matter, including receipts from foreign countries, amounted to £11,400. For that he had to pay £45,000 a year—four times as much as he received. That hardly seemed good business. What did they get in return? They were told that they got an alternative route to the Far East. Yes; but it was a route over which the steamboats travelled only once a month, whereas by the Suez Canal the service was six times a month. Even if the actual time taken for the journey were less, that route would always be relatively neglected, because anybody posting a letter would select the mails by the Suez Canal which would go at once, rather than wait until the Canadian route mail started, unless it; was just about to leave. He might point out that they had one alternative route to the Far East, and that was by the Siberian Railway. Our letters would certainly get more quickly to the Far East by that route. But that was not all. The Postmaster-General was now paying £7,000 more a year for this service than before because the Admiralty had ceased to pay anything. What did he get for the additional £7,000? He would say that he got additional speed; but that would be inaccurate, because additional speed was stipulated for in the contract. For seventeen years they had been paying money for additional speed, and they had never got it. It was no defence to say that they were now getting the additional speed; that was included in the original bargain, which was never fulfilled. He admitted that the Postmaster-General was getting the carriage of mails from Liverpool to Canada. That cost about £650 a year; so that he was getting £650 a year, and he paid £7,312 in order to get it. That certainly was a brilliant bargain for the Pot Office and the Treasury to make. He contended that the contract involved a scandalous waste of the taxpayers' money. Only last week, the Chief Secretary for Ireland had explained to the House what difficulty he had in persuading the Treasury to give him £40,000 a year for building schools in Ireland. They all knew how seriously money was wanted for many purposes. They knew how many schools were under-staffed for want of money; they knew how teachers were badly paid; yet while they had that difficulty in getting £40,000 for Irish schools, they were pouring £45,000 a year into the pockets of the shareholders of the Canadian and Pacific Railway Company, whose shares were up to 170 or 180. The company, therefore, was not doing so badly, yet they were subsidising this booming property, while schools were under-staffed, while money was wanted for all sorts of purposes, and while the country was still under the burden of taxes imposed for the purposes of the war. Might he remind the House that many taxpayers were extremely poor people; yet they were taking their money from them in order further to swell the already swollen profits of a wealthy corporation? Might he venture also to remind Members on his side of the House that they were all returned pledged to economy? If those pledges were not mere idle phrases, he appealed to every Liberal Member present to follow him into the lobby in condemnation of this contract.


thought the hon. Member based his views on several important misconceptions, one being that this contract was the renewal of an old contract. It ought to be clear from the Treasury Minute that this was not a renewal of the old contract but a new one altogether. The conditions of the new contract were wholly different. It was not fair to describe this as an old contract. The Government had made a better bargain than their predecessors. It was in effect a new contract. The conditions were different, and it was made for a shorter period in order that it might be treated as experimental. The old contract provided for the carriage of mails from Halifax to Hong-Kong and Chinese ports. Now the mails were to be carried from Liverpool. The period under the old contract was ten days longer than under the new, the period of the journey having been reduced from forty days to something under thirty days in summer and thirty and a half days in winter; so that very substantial advantages had been secured. His hon. friend had pointed out that the Admiralty had dropped out of the contract altogether. It was because the old contract was indefensible that the Admiralty decided last year that they would have no part in this except in so far as they could secure advantages for seamen and officers who might wish to travel by this route. So far as the present contract was concerned, the Government were getting exactly what they paid for. They were getting vessels from Liverpool to Halifax or Quebec, they were getting a service across the Canadian continent, and steamers to Hong-Kong and Chinese ports, so that it was scarcely fair to say that the present was a renewal of the old contract. The acceleration of the service was one advantage, and a larger range of ports was another. In China there had been added a large number of new ports which were all mentioned in the Treasury Minute. It had also been secured that in the case of general average the mails which were carried aboard these vessels should not come into calculations made for general average purposes. In case of damage no lien could be exercised on the mails. There were also a large number of clauses all of which provided for the extension of the service if the General Post Office required it. Then it would be noticed that the schedule which provided for the purchase of the vessels run by the Canadian Pacific Company was altogether done away with. The Admiralty had entirely changed their views with regard to merchant cruisers, and they were now more likely to purchase vessels in the open market than to make contracts far ahead, as they did some years ago in the case of the Cunard Company. The changes made had in fact turned this into a new contract. No payment in respect of it had to be made during the coming financial year. So recently as January this year the Treasury wrote to the Post Office to the effect that they desired that before any payment was made the approval of the House of Commons should be obtained, and it was for that approval that they were now asking.


Is the provision for this money taken under the Appropriation Act?


said he understood that this payment would be provided very largely out of the savings and would be covered by the Appropriation Act.

MR. MYER (Lambeth, N.)

Is the payment retrospective?


said if the hon. Member would allow him he would explain the exact position. The payments which might be made if this Resolution was agreed to would be made very largely out of savings. The service had been going on since July of last year. Up to July the vessels were running on the old contract, which did not fully expire until then. One quarter had to be paid for under the old contract, and for that provision was made in the Estimates for 1906–7 by the allocation of £17,000, and that amount had been paid over. But the amount in respect of the new contract had not yet been paid, although the contractors had been pressing for payment. The payment would, of course, be retrospective, as the service secured since July last year must be paid for. His hon. friend had asked why any payment should be made in respect of this contract seeing that it was not a profitable contract. At the present time it was not a profitable postal contract; but the improvements which had taken place since July of last year led to the belief that the statistics under the old contract were not a very reliable guide to the possibilities under the new. So far as could be ascertained, the improvement during the first quarter of 1907, in comparison with 1906 under the old contract, amounted to something like 300 per cent., and that increase might, of course, go on throughout the present year. He was sure the House would realise that the Treasury were quite prepared to admit that in dealing with this contract there was no immediate profit to be got out of it; but, having secured a very largely accelerated service and a larger range of ports, and having made arrangements for the mails to be taken from Liverpool and taken immediately on delivery in Canada across, the Canadian continent by train, they felt that they had been able to do something which might advantageously affect the whole of the mail service to China and the Far East. Therefore, he thought the question of the postal advantage might very well be deferred until they had had twelve months experience of the new contract. The hon. Member for Preston had asked why they did not exercise the same generosity in regard to Irish education as they had done in regard to this contract. In regard to the Irish question, which was disposed of on Saturday last, the hon. Member was under a misapprehension. It was true the Government then announced a grant of £40,000 for new elementary schools in Ireland during the next year, but the Treasury was not squeezed into doing that, but they did it of their own free will. In February a question on that point was put to him by the hon. Member for East Mayo and early in March an arrangement was made that £40,000 should be devoted to that service. The contract was entered into on a temporary basis for two reasons. The first was that the Treasury were prepared to give the new terms of the contract a chance; and the second was that it was impossible to carry on the discussion of the matter purely between the General Post Office here, the Postmaster-General in Canada, and the representatives of the Canadian Pacific Railway. The Canadian Government considered that their interests were largely involved, and had strongly pressed the Government to accede to their request that the contract should be made and given a full trial, and that, if necessary, the matter could be discussed at the Colonial Conference. The Government felt that they could not refuse that request. As they were to have the whole matter threshed out at the Colonial Conference, and as they ventured to think that there would be increased traffic, they were justified in having a two years contract, which would afford a means of testing the new service. The Treasury had been perfectly frank in the matter from the beginning. The Government still held the view that to pay anything in the shape of subsidies for which they did not get a quid pro quo was entirely inconsistent with their policy.


said he had listened to the statement made by the Financial Secretary with intense interest. He had been perfectly frank in the matter, but he wished to ask whether, in making this contract, there was no consideration of a possible military service.


None whatever.


thought that if the contract was based solely on the service rendered at the present time by the Canadian Pacific Railway it ought not to have been made. He did not think the basis was purely economical. His hon. friend had pointed out that the cost of this service represented £3,461 for every journey from Liverpool to Hong Kong. That was an enormous sum, and whilst he was in favour of a proper payment for services rendered he thought that was an undue payment. If he went into the lobby in favour of the resolution he would do so in the full belief that other considerations had entered into it. [An Hon. Member: In spite of the statement to the contrary.] He was speaking now of the pressure put upon the Home Government by the Canadian Government. Of course he saw the position with which the hon. Gentleman would have to deal if the contract were put on any other basis. It would raise the whole question of subsidies for Imperial reasons. He still believed that originally this contract was to some extent a subsidy. [Cries of "Oh!"] There was nothing unfair to the hon. Gentleman in that statement; he had presented the case for the Treasury very clearly. No one could have presented it better, but there were other things to be said. The question of subsidies was an important one. He believed that this was a subsidy as well as a payment for postal services. He believed that if they were going to have subsidies at all, they should be entended to the steamships trading with West, East, and South Africa, and all other steamship services which gave advantages to the people of this country and the Colonies. He supported that kind of thing. He would like to associate himself with the Treasury Bench in such a policy. He submitted that it was just such a policy which the hon. Gentleman had presented to the House that day. If this payment was not intended alone for services rendered to the Postal Department, it was for military and strategic reasons, and also for Imperial reasons. He thought those Imperial and strategic reasons were perfectly sound, and therefore he would support the contract. He hoped his hon. friends on that side of the House would support it also. He supported it on the general principle that these subsidies were very good things. If there were reasonable subsidies now on the East coast of Africa our commercial position there would be better than it was at present. The same thing was true of West Africa. He fancied that they had also more or less incorporated the principle in the contracts made for the services with the West Indies, and somewhat in those with West Africa. In spite of everything which had been said, this Government was more or less committed to subsidies, at any rate, in respect of payments in excess of the value of the services rendered for carrying mails to the different portions of the Empire. He suggested that hon. Members interested in the question should press the Government for a clear statement of policy, in order that they might fully understand everything behind the contract and be able to judge of it.

*MR. RIDSDALE (Brighton)

said the hon. Member for Gravesend had informed the House that he intended to support this contract, and he had been good enough also to state that he did not do so in consequence of any reason given from the Treasury Bench, but on account of some unknown and imaginary reasons which he thought might be at the back of the proposition. In other words, he said that the contract was so foolish on the face of it that he would not have supported the question before the House but for the fact that there seemed to be something at the back of it beyond what had been stated by the Government. He (Mr. Ridsdale) thought that, if the House of Commons was going to pass it, it should have reasons apparent on the face of the contract. They were asked to pay away £45,000 annually of the taxpayer's money to a corporation, a Colonial corporation which he would wish to see supported and successful, but one which already was successful, rich, and powerful probably beyond any other Colonial railway company. The Canadian Government, no doubt, gave £15,000 a year towards it, but it might have its own reasons for doing so. One thing was clear—we were going to lose over it. Why should the Admiralty deliberately discontinue their contribution to the company, if there were any strategic advantages to be derived from the contract? They would not give any longer £7,000 towards it.


I said "for military reasons."


said that that was even more hypothetical than the other reasons for which the hon. Gentleman supported the contract. He could not stretch his imagination to think what they might be. The Post Office, they were told, was now entering upon a new contract and was getting a better bargain—was qua post office, paying £7,000 a year more for the advantages which we were getting! The House had had read out to it what the advantages were. There was the acceleration of the service, but it was small.


Ten days out of a journey of thirty days.


said that at rate it was not quicker as regarded Hong-Kong than the Brindisi route, and the Brindisi route offered six services in the month of four weeks whereas this only offered one.


I am sure my hon. friend does not wish to speak under a misapprehension. It does offer very special advantages for all Chinese ports except Hong-Kong, and there it takes about the same time.


said he understood that people who wrote letters did not much value these advantages since the great bulk of the correspondence travelled by the Brindisi route and not by the Canadian-Pacific. He imagined that, if the advantages were so great, the bulk of the correspondents would be only too anxious to send all their letters by the Canadian-Pacific route; but the figures given showed that they sent their letters by the Brindisi route. He admitted that it was a better bargain in one respect. It was to be made for a shorter period—for only two years instead of twelve. If they were going to make a bad bargain they had better make it for as short a period as possible. The contract had cost the country over £1,000,000, and it was high time they made an end of it. They were returned—he spoke as a Liberal—to endeavour to supervise some of the extravagances of the last Government, and he was not going to vote for any single form of extravagance which he might have clearly pointed out to him, even if it was pro posed by the Treasury Bench. He thought this was a case in which the Government followers might intimate to their leaders that strict supervision must be exercised over the Estimates, and that they did not intend to pass any items which would not bear the closest scrutiny.

MR. AUSTIN TAYLOR (Liverpool, East Toxteth)

said the Secretary to the Treasury had used a somewhat remarkable argument. He had said that if they passed this Motion to-day it would tide them over the Colonial Conference. He would have thought it one of the most profitable subjects of disussion there.


I think that is what I said.


asked whether it would not have been better, then, to wait for the discussion at the Colonial Conference, instead of passing this Resolution to-day. It would have been better not to have anticipated the decision of the Colonial Conference by a vote of that House, but to have waited until they had the whole of the particulars before them and then brought it to an issue. In the matter of steamship subsidies to Colonial mail lines it was important that the House should regularise its ideas of policy. To that extent he entirely agreed with hon. Gentlemen opposite. They had a precedent in the action of hon. Gentlemen opposite when the right hon. Gentleman the Member for West Birmingham was Secretary for the Colonies. The right hon. Gentleman had to consider the question of continuing the subsidy of £70,000 a year paid to the Royal Mail Company in connection with the West Indian mails, and he found himself so embarrassed by the number of competitors that he ultimately came to the conclusion that the best thing was not to pay the subsidy at all, and so the Treasury benefited to the extent of £70,000 a year. His hon. friend, in bringing forward this Motion, was in a difficult situation. What was really the position? Here they had a rich and prosperous railway; he supposed it was one of the most prosperous in the world. It had an expansive power which had already been amply demonstrated, and it was able by the leasing of the fertile territory through which it passed to add enormously to its profits. The railway happened to be in Canada, and they were by this contract subsidising a prosperous railway company to enable it to carry on a joint steamship and railway enterprise in different parts of the British Empire. There were parallels to that sort of thing in other countries. Germany had adopted a policy of the kind, as to which an able article had appeared in the Commercial Supplement of The Times. The German Government owned the railways, but, not content with that, it had used its power as owner of the railways to initiate steamship enterprises, in which the railways and the steamship companies were so mixed up that no one could tell which was which. The result was that through railway and steamship rates were quoted by Germany to ports in the Levant and to different parts of the world so low that great complaint was made in England of the severe competition that British exporters had to meet. It would be interesting to know whether the accounts of the Canadian Pacific Railway steamers were kept separate from those of the railway. Were they separate enterprises? The Government were admitting the principle adopted by the German Government without exercising the control which the German Government exercised over the railway. Again, if the policy was right in Canada, why should it not be right in England? Why should they not give a subsidy to the English railway which performed the useful function of initiating a steamship service to Ireland? As a business man, he thought money spent in subsidies to particular lines of steamers might be more profitably employed in improving harbour accommodation and terminal facilities, and putting our ports on a basis to compete with the heavily-subsidised and well-equipped ports of the Continent.

MR. HERBERT (Buckinghamshire, Wycombe)

said that the hon. Member for Gravesend had admitted that this contract could not be supported on economic grounds, but on grounds only known to himself, which, however, were repudiated by the Secretary to the Treasury. It was really immaterial whether this was a new contract or a continuation of an old contract; but it was obvious that we were not getting value for our money. The Secretary to the Treasury had just taken the figures out of the old contract and put them in the new contract in the hope that in the future we might get value for our money. He protested that that was not the way in which any contract should be made. The price should be fixed according to the business at present being done, and not according to the amount of business that might possibly be done in the future. He was glad that the Prime Minister had come in, for he was sure they would receive his support in regard to the matter.

MR. HARWOOD (Bolton)

said that the hon. Member for East Toxteth had asked why the Government did not wait until after the Colonial Conference, and then decide to come forward with a definite proposal. But he would remind the hon. Gentleman that this was a continuance of a policy which had been carried on for twelve years.


said that the old contract came to an end in April last year, and it had been pending ever since.


said that the contract had not been pending since last April. The Government made the new contract in April last year, and the new service started in July last.


said he was not talking at present about the contract but about the policy of the Government. It was not a new policy. At the end of twelve years the Government might have said, "We will stop this business altogether," or "We will make a new contract for a short time, and then we will see what terms we can make." The Secretary to the Treasury had said that the Government had actually got better terms. The hon. Member for East Toxteth had argued that it would have been better to wait until after the Colonial Conference had met, but it should be remembered that the Conference would not meet until after the end of the financial year. His own belief was that the Government had taken the course which any business man would have taken in the matter. There were many considerations to be taken into account in connection with this alternative mail route. It was capable of great development, and he thought it was more than possible that it would give a better and shorter mail service to certain ports in the Far East than at present. The Secretary to the Treasury had given the House grounds which justified them in expecting that things would improve in the immediate future, and he hoped that the friends of economy would not push their theories beyond the limits of common sense and ordinary business prudence.

THE PRIME MINISTER AND FIRST LORD OF THE TREASURY (Sir H. Campbell-Bannerman,) Stirling Burghs

pointed out that this was only a temporary contract to last over a certain period, when it could be discussed and a new arrangement, possibly, shadowed forth by the Colonial Conference. The Government were no advocates of subsidised services of this kind, where an absolute equivalent for the money spent was not received. In this case, whether the contract was regarded as advantageous or as disadvantageous, it was undoubtedly a better contract than that which it superseded, because the conditions were better in several respects. So that something had been gained. The object with which the contract was entered into was simply to have a provisional arrangement in the expectation that some new arrangement of the whole question would be made when the opportunity arrived this spring to discuss the matter fully with the Canadian authorities. The contract had been in operation since last July, and the Government were bound to continue it. But the Colonial Conference would take place soon, and then there would be an opportunity of arriving at an arrangement more to the mind of hon. Gentlemen. Considering that it was only to tide over the time till a thorough and lasting arrangement could be made, there should be no hesitation in assenting to the Resolution, which must be passed before the end of the month.

MR. LYTTELTON (St. George's, Hanover Square)

said that he was in favour of the contract for Imperial reasons, because Canada desired it. It was worth while entering into the contract for those reasons, even at considerable pecuniary sacrifice. But it was desirable that the country should know why Gentlemen on the Opposition side of the House supported the Resolution. It was not for any of the reasons given by the Secretary to the Treasury. As a commercial transaction it was certain that this country did not get the best of it; but the matter was perfectly simple. We were rightly paying a considerable sum without getting commercial value for it for Imperial considerations. The reasons for the contract ought to be frankly stated; and the Government had not frankly given the true reasons. They were sound, but the Government had not the courage to state them.

MR. EVELYN CECIL (Aston Manor)

said that the postal services rendered under this contract probably did not account for the amount of the subsidy, but there was the other side of the question to be considered. The first question was whether the services rendered were adequate for the amount of money paid. As the Financial Secretary to the Treasury had said, there had been great acceleration of the service, the time having been reduced from forty to thirty days. There was also the question of trade routes. This line was the only line running from Canada to the other side of the Pacific, and the Canadian Pacific Railway Company could in consequence to some extent command their own terms. He was not at all certain that the amount of the service did sufficiently account for the large-amount of the subsidy, and he confessed that he had some doubts as to whether the services were sufficient to account for the sum of £45,000. But there were further considerations. There were cases in which Imperial considerations came to the front, and the Report of the Steamship Subsidies Committee, of which he was Chairman, set out that in rare cases, in view of special Imperial considerations, subsidies were necessary for establishing fast direct British communication; and, at the moment, they reported that such a subsidy should be favourably considered for a line to East Africa, where there was no direct British service, and where British trade was handicapped by the subsidies given by foreign Governments to foreign lines. As to whether the circumstances here justified the making of a contract on these lines he did not pronounce an opinion; before he did so he would like to hear a little more about trade in the Pacific; but the fact remained that some contracts, in rare cases, had to be made by the Post Office. He thought the particular case of East Africa was still as important as it was at the time of that Report. The circumstances did demonstrate the necessity of having a fast steamship communication to the Colonies of the British Empire which were situated there. Attention had been called to the fact that Chili was being served by German lines. That was done by the lowering of rates, and as soon as the British lines were starved out the Germans raised their rates.

MR. BOWLES (Lambeth, Norwood),

on a point of order, asked whether if would be competent for an hon. Member pecuniarily interested in the Canadian Pacific Railway to take part in a division on this question.


The rule of the House is that any Member who has a direct, personal pecuniary interest of a private and particular and not of a public and general nature, makes himself liable, if he votes in such a way as to advantage his interest, to have his vote disallowed. Whether the vote should be disallowed or not is a matter for the House, at a subsequent stage, to determine.


If an hon. Member holds ordinary shares in the Canadian Pacific Railway, is he precluded from voting?


That would be a matter for the House to decide.


asked what was the date of this agreement. Was it not the fact that there had been no agreement since last April, and that the present agreement, made in February, was only ante-dated?


No, Sir. There was a provisional agreement, equally binding, before this contract was drawn.

LORD R. CECIL (Marylebone, E.)

Suppose the House were to withhold its approval?


It would simply be dishonouring the cheque of this country. We are in honour bound to make the payment to the Canadian Pacific Railway for the services under the contract.


asked why a Supplementary Estimate could not be introduced to pay the company for the services rendered.

MR. SEAVERNS (Lambeth, Brixton)

said that although he proposed to support the Government in this matter he would do so with feelings of considerable dissatisfaction. As he understood the position, this was a contract entered into on commercial grounds only. It had been preceded by two other contracts which had existed for ten and five years respectively, both of which had been most unsatisfactory in their result. As a business man he held that it would have been in accordance with business principles, if the Government desired to make a subsequent contract with the Canadian Pacific Railway, for them to have insisted that it should be made for a sum that would result in a benefit accruing to this country.


in order to avoid a division, asked whether he might understand that if any further contract was to be entered into with the Canadian Pacific Railway the House would have an opportunity of considering it in advance, and that the contract would be placed on a business footing.


No, Sir, I cannot give such a pledge. It has never been customary for any contract to be discussed in advance. The Government are quite well aware of the feeling of the House and will endeavour to meet it.


Then, might I put it this way—


The hon. Member has already spoken four times.


I only desired to ask a question, Mr. Speaker.


Perhaps the hon. Member will get another hon. Gentleman to ask it for him.

MR. GUEST (Cardiff District)

said that, as he understood, the Prime Minister had in fact said that when this contract, which was of a provisional character, terminated, the Government, having heard the debate, would be prepared to make a very different contract. [Cries of "No."] Yes. This was one of those inexplicable muddles into which every Department occasionally seemed to lapse. What the explanation was he could not say, but he thought the Secretary to the Treasury would be very careful how he came down in the future with an appeal for economy, at the same time putting forward such a

contract as that to which the House was now asked to assent.

Question put.

The House divided:—Ayes, 161; Noes, 22. (Division List No. 99.)

Abraham, William (Cork, N.E.) Gibbs, G. A. (Bristol, West) Nicholson, Charles N. (Doncast'r
Abraham, William (Rhondda) Gladstone, Rt. Hn. Herbert Jn. Nicholson, Wm. G. (Petersfield)
Acland, Francis Dyke Grant, Corrie Nolan, Joseph
Arkwright, John Stanhope Greenwood, G. (Peterborough) Norton, Capt. Cecil William
Arnold-Forster, Rt. Hn. Hugh O Grey, Rt. Hon. Sir Edward O'Brien, Patrick (Kilkenny)
Ashton, Thomas Gair Guest, Hon. Ivor Churchill O'Connor, John (Kildare, N.)
Asquith, Rt. Hn. HerbertHenry Hall, Frederick O'Connor, T. P. (Liverpool)
Baker, Joseph A. (Finsbury, E. Hambro, Charles Eric O'Kelly, Conor (Mayo, N.)
Banbury, Sir Frederick George Harcourt, Rt. Hon. Lewis Pease, Herbert Pike(Darlington
Baring, Godfrey (Isle of Wight) Hardy, George A. (Suffolk) Philipps, Owen C. (Pembroke)
Barnard, E. B. Hardy, Laurence(Kent, Ashford Priestley, W.E.B.(Bradford, E)
Barry, Redmond J. (Tyrone, N. Harvey, A. G. C. (Rochdale) Radford, G. H.
Bell, Richard Harwood, George Raphael, Herbert H.
Benn, W. (T'w'rHarnlets, S. Geo. Haslam, Lewis (Monmouth) Rea, Russell (Gloucester)
Bethell, T. R. (Essex, Maldon) Hedges, A. Paget Rea, Walter Russell (Scarboro'
Boland, John Hemmerde, Edward George Redmond, John E. (Waterford)
Boulton, A. C. F. Herbert, Colonel Ivor (Mon., S.) Redmond, William (Clare)
Branch, James Herbert, T. Arnold (Wycombe) Rees, J. D.
Bridgeman, W. Clive Higham, John Sharp Richards, Thomas (W. Monm'th
Brigg, John Hobhouse, Charles E. H. Roberts, John H. (Denbighs.)
Brooke, Stopford Howard, Hon. Geoffrey Robertson, J. M. (Tyneside)
Bull, Sir William James Hunt, Rowland Robson, Sir William Snowdon
Burns, Rt. Hon. John Illingworth, Percy H. Runciman, Walter
Buxton, Rt. Hn. Sydney Charles Jackson, R. S. Samuel, Herbert L. (Cleveland)
Campbell-Bannerman, Sir H. Jones, Sir D. Brynmor (Swansea Seaverns, J. H.
Carlile, E. Hildred Jones, William (Carnarvonshre Shipman, Dr. John G.
Cavendish, Rt. Hn. Victor C. W. Kekewich, Sir George Silcock, Thomas Ball
Cecil, Evelyn (Aston Manor) Kenyon-Slaney, Rt. Hn. Col. W. Sinclair, Rt. Hon. John
Channing, Sir Francis Allston Kincaid-Smith, Captain Smeaton, Donald Mackenzie
Clarke, C. Goddard Laidlaw, Robert Spicer, Sir Albert
Cleland, J. W. Lamb, Ernest H. (Rochester) Stanley, Hn. A. Lyulph(Chesh.)
Coats, Sir T. Glen (Renfrew, W.) Lambert, George Strachey, Sir Edward
Collings, Rt. Hn. J.(Birmingham Lewis, John Herbert Straus, B. S. (Mile End)
Collins, Stephen (Lambeth) Liddell, Henry Strauss, E. A. (Abingdon)
Corbett, A. Cameron (Glasgow) Long, Rt. Hn. Walter (Dublin S Talbot, Lord E. (Chichester)
Corbett. C. H. (Sussex, E. Grinst'd Lough, Thomas Taylor, Theodore C. (Radcliffe)
Corbett. T. L. (Down, North) Lyell, Charles Henry Thomas, DavidAlfred (Merthyr
Cornwall, Sir Edwin A. Lynch, H. B. Torrance, Sir A. M.
Craig, Herbert J. (Tynemouth) Macnamara, Dr. Thomas J. Ure, Alexander
Cremer, William Randal MacVeagh, Jeremiah (Down, S. Verney, F. W.
Davies, David (Montgomery Co. M'Hugh, Patrick A. Wadsworth, J.
Davies, Timothy (Fulham) M'Kenna, Rt. Hon. Reginald Walton, Sir John L. (Leeds, S.)
Davies, W. Howell (Bristol, S.) M'Killop, W. Walton, Joseph (Barnsley)
Douglas, Rt. Hon. A. Akers- Magnus, Sir Philip Waring, Walter
Dunne, Major E Martin(Walsall Marnham, F. J. Waterlow, D. S.
Edwards, Enoch (Hanley) Mason, A. E. W. (Coventry) Wedgwood, Josiah C.
Elibank, Master of Masterman, C. F. G. Weir, James Galloway
Erskine, David C. Menzies, Walter Wiles, Thomas
Essex, R. W. Micklem, Nathaniel Williams, Llewelyn (Carmarthn)
Everett, R. Lacey Money, L. G. Chiozza Wilson, P. W. (St. Pancras, S.)
Fell, Arthur Montagu, E. S. Yoxall, James Henry
Fletcher, J. S. Mooney, J. J.
Forster, Henry William Morgan, G. Hay (Cornwall) Tellers for the Ayes—
Fuller, John Michael F. Murphy, John Mr. Whiteley and Mr. J. A. Pease.
Gardner, Ernest (Berks, East) Myer, Horatio
Bowerman, C. W. Cooper, G. J. Dunn, A. Edward (Camborne)
Clynes, J. R. Dilke, Rt. Hon. Sir Charles Hardie, J. Keir(Merthyr Tydvil)
Collins, Sir Wm. J.(S. Pancras, W. Duncan, C. (Barrow-in-Furness Hudson, Walter
Jenkins, J. Richards, T. F. (Wolverh'mpt' Wilkie, Alexander
Johnson, John (Gateshead) Rutherford, V. H. (Brentford)
Jowett, F. W. Snowden, P. Tellers for the Noes—
Lea, Hugh Cecil(St. Pancras, E. Steadman, W. C. Mr. Hodge and Mr. George Roberts.
O'Grady, J. Thorne, William
Parker, James (Halifax) Ward, John (Stoke upon Trent

Motion made, and Question, "That this House do now adjourn,"—(Mr. Chancellor of the Exchequer,)—put, and agreed to.