SECOND READING. (Hansard, 2 July 1857)

§ THE EARL OF CLARENDON

My Lords, in moving that your Lordships give a second reading to a Bill for carrying into effect a convention between Her Majesty's Government and the Government of Denmark, with regard to the Sound Dues, it will not be necessary for me to detain your Lordships at any length; but I think some observations are necessary for the information of your Lordships, in order to explain the circumstances which have led to the negotiations terminating in that convention. The Sound Dues, as your Lordships are aware, arose, and the right to collect them has been exercised, from that inherent right winch every Sovereign Power possesses to impose taxes within its own territory and jurisdiction, and to impose duties on the commerce carried on within its dominions; a right which has been at all times acknowledged by all maritime nations, and has been recognised as a principle of international law for upwards of 300 years. The first treaty between England and Denmark on the subject 766 of these dues was entered into in 1491. At that time the imposition of these dues was a matter of small moment; but as commerce increased the inconvenience of the tax became more and more felt, and therefore for many years past attempts have been made to get rid of it by means of a compromise. At the beginning of last year the Government of the United States gave notice to the Danish Government that they would not pay the tax any longer. In consequence of the announcement communications took place with the Governments of other countries interested in the question, and a conference was held at Copenhagen, when the Danish Government proposed to abolish the tax for a consideration of £3,890,000, to be apportioned among the different maritime States according to the average annual amount of tax they had paid. This led to a treaty, which was signed last March, by which it was agreed that the proportion of the British Government should be £1,125,000, in consideration of which British commerce was for the future to be exempt from the Sound Dues. The Danish Government also agreed that the transit duties over the Holstein Railway should be reduced by four-fifths. That was a matter of considerable discussion, because the Danish Government denied the right of other States to interfere with the management of the Holstein railways, which they considered to be simply a matter of internal regulation. The other States, however, contended that they were entitled to insist on a reduction of these dues, inasmuch as they had been imposed for the purpose of compelling goods to be carried by way of the Baltic, instead of by the railways, and so protecting the collection of the Sound Dues. The result was that the Danish Government consented to the reduction of the transit dues by four-fifths. The amount that English commerce paid annually for these Sound Dues was £75,000, but that was by no means the most serious part of the inconvenience and loss. A Committee of the House of Commons sat last year, and examined a great number of witnesses, amongst them Her Majesty's Minister at Copenhagen, who stated that between the desertion of crews, the delays caused to the shipping, and the necessary payment of heavy local charges, added to the dues themselves, the loss incurred by England was not compensated for by less than £200,000 a year. I intend to trouble your Lordships with a very short extract 767 from the Report of the Committee of the House of Commons. The Report states:— The Sound Dues, as they are levied at present, combine in them what is most objectionable in taxes that fall upon trade; they are unequal in their operation, and they occasion great loss of time, and much needless expenditure in the collection of a comparatively small revenue, and, as far as the cargoes are concerned, without professing to be raised for any service rendered in return, tend to impede and burden an important branch of trade. Under these circumstances your Committee have no hesitation in declaring that these dues are the cause of annoyance and injury to British commerce, and that they deem it highly desirable that they should be abolished. Your Committee think that the proposals made by the Danish Government to the Governments of the different States interested in the navigation and trade of the Baltic, among which Great Britain holds the first place, should receive immediate consideration, and become the foundation of a final and satisfactory settlement of the question. I ought to add, that the proposals of the Danish Government are those that have been accepted, and accepted by twelve or thirteen States, all having a direct interest in the matter. There is every reason to believe, therefore, that the proposals of the Danish Government were fair and reasonable, and also the apportionment of the indemnity amongst the Powers upon whose commerce those charges fall. At all events, I believe the arrangement will be most beneficial to British shipping, which is more concerned in the trade of the Baltic than that of any other nation. It is right to mention that the United States Government, which first took the lead in opposing the payment of these dues, and gave notice that, after a certain time, they should pay them no longer, entered into a treaty in April last with the Government of Denmark, agreeing to the arrangement entered into, and to the apportionment of the indemnity which the other States agreed to pay; and nothing can be more honourable and straightforward than the conduct of that Government in the negotiations. The Sound Dues ceased and determined from the first day of April last, although, owing to the necessary delay which had taken place—for, of course, no money could be paid without the sanction of Parliament—the matter could not be considered as finally adjusted. The Danish Government, however, acting in a generous spirit, have levied no tolls and offered no impediment whatever to our commerce since the 1st of April in the present year. I have only one other fact of any importance to communicate to your Lordships. My right hon. 768 Friend the Chancellor of the Exchequer has been in communication with the Danish chargé d'affaires, and from him received a statement that it is not the intention of the Danish Government to have any portion of the money remitted to Denmark, but that for purposes of their own the whole of it will be invested in this country.