§ Moved, That the Bill be now read 3a.
§ LORD STANLEY OF ALDERLEYsaid, he wished to say a few words with respect to the peculiar character and circumstances of this Bill, which partook more of the character of a public than a private measure, and ought not to be passed without due consideration by their Lordships. Being an unopposed Bill, the Chairman of the Committee to which it was referred was merely bound to see that there was nothing irregular or informal in its provisions, and had no control whatever over the policy of the measure. The Bill referred to an agreement between the Company and the Treasury; but that agreement was not recited in the Bill, as it certainly ought to have been, and their Lordships were quite ignorant of its terms up till yesterday, when certain papers relating to contracts of this description were laid before them. This agreement was a direct violation of the 1774 principle on which the noble Earl opposite had admitted that all such contracts ought to be framed. The Treasury engaged to give the Company a guarantee of 4½ per cent on a capital of £800,000, to be expended in establishing telegraphic communication between Suez and Kurrachee; and, moreover, the undertaking was to take effect even although the work should never be completed, or, if completed, should prove a failure. If the wire should be laid down and then lost, the Treasury would be bound to refund to the Company the whole of the money expended, together with the interest from the time of signing the contract. It was not even conditional on the Company, making an earnest endeavour to complete the line. Thus, any merchant who subscribed his money would be entitled to receive his interest for fifty years, irrespective of any advantage imparted to the public. The Government could borrow money at 3½ per cent, and it would be much better if they made the line themselves, than submit to such conditions. He thought the contract was of so monstrous a nature that the House ought to pause before they lent their sanction to a Bill intended to carry it into operation. Other portions of the measure were extremely objectionable. The agreement with the Treasury merely extended to the making of a line of telegraph from Suez to Kurrachee, but the Bill gave the Company the power of also laying down one or more submarine cables between Alexandria and other places in Egypt and India, viâ the Red Sea, as well as of completing the communication by connecting it, if desirable, with Great Britain. As this would probably be the main, if not the only, line of telegraph between this country and India, power ought to be reserved to the Government, if it thought fit, at the end of a certain period to take possession of the wires upon a fair valuation, and after paying a reasonable amount of compensation to the Company.
§ THE EARL OF DERBYsaid, that he should be happy to give any explanation upon the subject in his power. With regard to the measure being treated as a private Bill, he thought that was no disadvantage, for private Bills were discussed much more fully in Committee than public Acts. At any rate, if the Government had erred in treating it as a private Bill, they had erred in very good company, for the Atlantic Telegraph, which was a precisely analogous Bill, had been dealt with 1775 as a private Bill by the late Government. The establishment of a system of electric communication between this country and India was considered by Her Majesty's Government to be a matter of the highest national importance; and besides, that Company, in dealing with the Government, possessed unquestionably a considerable advantage, from the fact that they had obtained from the Turkish Government the exclusive right of laying down an electric telegraph line between Suez and Kurrachee. But the noble Lord had misrepresented the nature of the contract when he stated that the Government had given an absolute guarantee of 4½ per cent on £800,000, whether the line was constructed or not, and when he supposed that the shareholders had nothing to do but to subscribe a sum of £800,000, in order to obtain from the Government a revenue of 4½ per cent upon that sum. The Government guarantee would extend not to the amount that might be subscribed, but to the amount that should have been actually expended in laying down the line. He had further to observe, that by a clause in the contract the Government would not be bound to pay the guaranteed interest until the contractors had given up the line into the hands of the Company in efficient working order. He admitted, that the terms obtained by the Company were to some extent of an exceptional character, and were far more favourable than the terms which it was usual for Governments to sanction; but Her Majesty's Ministers thought that the peculiar circumstances of the case called for a peculiar treatment, and they had been most anxious to enter into an immediate agreement with the only Company which had the power of laying down an electric telegraph line by the Red Sea route.
§ THE EARL OF ELLENBOROUGHsaid, that no line of electric communication could be more important than that which the promoters of the present Bill proposed to effect. Those gentlemen informed him last year, when he held the office of President of the Board of Control, that they had received a firman from the Turkish Government investing them with certain powers, and binding them to certain conditions in the construction of the work. But some of those conditions were of a character to which it would not, in his opinion, be prudent for the Government of this country to agree. One of these, for instance, required that there should be a station at Jeddah. But 1776 he objected to Jeddah, and, indeed, to a number of other places named in the firman as the sites of stations, on the ground that no sufficient security would there be found for the agents of the Company and the works to be committed to their charge. The value of the line would be far less of a commercial than of a political and military character, and he thought that it should be so laid down that its working would not be liable to be interrupted by sudden attacks from pirates and marauders. He also told the representatives of the Company that they could not take a single step without the constant protection and intervention of Her Majesty's Government, and that it was therefore absolutely necessary the Government should have an overruling influence in the direction of the whole of their proceedings. Their object —the commercial object—was one of comparatively little importance; it could not matter much to the public whether or not they obtained a guaranteed interest of 4 per cent on their outlay—he believed they had at first only asked for 4 per cent; but it was extremely desirable in a political and a military point of view that an electric telegraph line should be laid down between Suez and Kurrachee. Under all the circumstances of the case he thought it better that the present Bill should be rejected altogether, and that Her Majesty's Government should have an opportunity of again considering the whole subject.
LORD WODEHOUSEsaid, it would appear from the terms of the contract that even if the Company should fail to lay down a line to Aden, Her Majesty's Government should repay them a certain sum for the outlay they might have incurred. It appeared to him, however, that the Government could hardly have meant to give them such an unconditional guarantee, and that that permission must have been inserted in the agreement through some misapprehension of its real meaning. It was no doubt extremely desirable that we should as soon as possible have an electric communication with India; but it should be remembered that even if that Bill were not then passed its further progress need not be postponed for any considerable time, because it could be taken up in the next Session of Parliament at the stage which it had then reached. The dissolution of Parliament would afford an opportunity of reconsidering the measure and reconciling its provisions with the requirements of the Government.
THE EARL OF DONOUGHMOREsaid, that the Company could not by any means act wholly independently of the Government, for there was a clause in the agreement which provided that the Lords of the Treasury should be empowered to nominate two persons, who would have the right of controlling all the proceedings of the directors. He hoped their Lordships would not then refuse to give their assent to the Bill. He had been informed by the Secretary of the Company that two ships had been sent out by them with 1,800 miles of the cable; that the line would probably be laid down between Suez and Aden by the end of the present month, and that they hoped it would be laid down between Aden and Kurrachee by the end of this year. Under these circumstances he trusted that their Lordships would give effect to the agreement by passing the Bill.
§ THE DUKE OF SOMERSETwished to know why this Bill could not, like all the other private Bills be suspended until the meeting of the next Parliament. He should be sorry to interfere with the formation of so important a line of communication as that projected by the promoters of this Bill, but considering the objections stated by the noble Earl opposite (the Earl of Ellenborough), who understood this subject thoroughly, he thought that this Bill might very fairly be made to follow the course of the other private Bills which had been suspended.
§ THE EARL OF ELLENBOROUGHsaid, he had looked at the clause to which the noble Earl had adverted, and he found that no provision was made with reference to the military and political part of the question. He also found that it was provided, in cage of a dispute as to the management of the undertaking between the Commissioners appointed by the Treasury and the Company, that one of the Superior Courts of common law at Westminster might ultimately be appealed to, and thus a court of common law would have the power of deciding upon a purely military and political question on which the Government ought to form its own opinion.
§ EARL GRANVILLEsaid, that the House was placed in some difficulty. A contract had been entered into, and if it were not fulfilled, there would, to a certain extent, be a breach of faith. But the objections which had been raised to the Bill on both sides of the House, as well as the observations of the noble Earl himself, the First Lord of the Treasury, showed the desirableness of 1778 their Lordships adopting the course suggested by the noble Duke. The effect would be simply to postpone the Bill for some two months, and no hardship would accrue either to the Company or the public by that delay.
§ LORD STANLEY OF ALDERLEYsaid, he could not concur in the opinion of the noble Earl opposite that it was a matter of necessity and duty that Parliament should confirm an agreement made by the Treasury. The guarantee given to the Company was merely provisional. He concurred with his noble Friends as to the desirableness of postponing the further consideration of the Bill, many of the provisions of which were objectionable, till the meeting of the next Parliament.
§ THE EARL OF DERBYsaid, there could be no doubt that the postponement of a Bill of that importance would be a serious matter, not only as regarded the Company, but also as regarded the public interests involved in the speedy completion of the undertaking. But after the objections which had been urged to the immediate passing of the measure he did not wish to take upon himself the responsibility of pressing the Motion for the third reading to a division, and thereby running the risk of bringing about the complete defeat of a Bill which he was sure none of their Lordships were anxious wholly to reject. He would, therefore, consent that the Motion should be withdrawn for the present, so that on the assembling of the new Parliament the measure could be proceeded with at the stage at which it then stood.
§ Motion (by leave of the House) withdrawn.
§ Consideration of Standing Order No. 179 sec. 6 discharged.