HL Deb 25 November 1867 vol 190 cc157-61
LORD STANLEY OF ALDERLEY

rose to ask a Question of the noble Duke the Postmaster General with reference to the Contract between the Post Office and the Peninsular and Oriental Steam Company. As the correspondence on the subject had not been placed on the table, his remarks would be brief. He noticed, however, that the expense of the service to and from India had been largely increased, and he feared the Government had not given everybody likely to be interested in such a contract full and timely notice to enable them to make tenders. The 20th of September was hardly early enough to publish particulars of such a contract as the postal service to India to be carried out on the 1st of February. He wished to raise two points with respect to the new contract made with the Peninsular and Oriental Company—first, the duration of the contract; and secondly, the absence of any preparations for conducting the service by the Brindisi route. Was not twelve years a very much longer period than had ever yet been contracted for, without a break, and was not it an objectionable period? During those twelve years the hands of the Post Office authorities would be tied; and the arrangement was doubly objectionable when, as he understood it, the Company had contracted to carry the mails between Marseilles and Alexandria, and by no other route, while it was well known that the Brindisi route was thirty-six hours shorter than the Marseilles. He wished to know, first, whether any arrangement had been made with regard to the service, in conformity with the declaration made to Parliament; and secondly, whether the contract was to be made for the whole term of twelve years, and with a practical guarantee of 6 per cent for the whole of that period?

THE DUKE OF MONTROSE

said, that although the Papers on the subject had not been laid on the table of their Lordships' House, they had been presented to the other House of Parliament, and that they contained a copy of the contract and of the correspondence between the Post Office and the Treasury. The noble Lord had said that sufficient time had not been given in the notices issued by the Government. It was possible that it might have been better had more time been given; but he was not aware that any objection had been offered on that account by any of those who were likely to have tendered for the performance of the service. Sufficient time had been given to allow the notices being sent to India, to allow of tenders being sent by any Companies who might have been de- sirous of doing so. At one time it was even thought that it would be better to postpone the matter; but it was found that the Peninsular and Oriental Company demanded so high a price for the extension of their contract for six months, that it was thought better to issue the notices for tenders as they stood. The history of the private negotiation referred to by the noble Lord was this:—Although notice was given that tenders would be received for the performance of any portion or portions of the service, not a single Company tendered for such performance; and the Peninsular and Oriental Company, though they offered to do the whole, stated that they would not undertake any individual portion of the service apart from the remainder. The noble Lord regarded the sum which it was proposed to pay as immensely high, and he (the Duke of Montrose) therefore felt bound to allude to a few of the peculiarities from which that circumstance arose. In the first place, he might state—what was well known—that if the Government had not determined the contract, notice of its determination would have been given on the part of the Peninsular and Oriental Company, and therefore the Government thought fit to give that notice themselves, thinking the terms asked to be such that they could not continue the contract. The first tender of the Company—and at the same time no other tender was made—was for six years, at the rate of £500,000 per annum. He (the Duke of Montrose) thereon told the Directors that the offer was so high that he could not take it upon himself to recommend it to the Treasury, and it was very probable that the Treasury would not recommend its adoption to the House of Commons. He advised them, therefore, to re-consider their offer, and see if they could not make some reduction. He suggested also that possibly an extension of time might be an inducement; because there could be no doubt that if they were to have an extended service, and to increase the number of their vessels, they would naturally be anxious to have sufficient time to regain their extra expense. It resulted in this, that the Directors said that if the contract were given them for twelve years instead of six, they would undertake the service for £400,000 instead of £500,000. He thought their Lordships would see that this arrangement was, in reality, a very advantageous one. £500,000 for six years would amount to £3,000,000 of money, and if the contract were entered into for that period it was very doubtful whether, at the end of that time, the Peninsular and Oriental Company would renew their contract at a lower rate; but £400,000 for twelve years was £4,800,000. By contracting for the longer term they would effect a saving in the twelve years of £1,200,000. Of course, it would remain for the House of Commons to say whether they preferred to pay a very large sum for a short contract, or whether they would pay a smaller sum and extend the time; but he could not himself see the probability of meeting at the end of six years with any more advantageous offer. The Peninsular and Oriental Company would not undertake the service again at anything like the rate at which it had hitherto been performed. The Company had to incur a largely increased expenditure for coals, which they stated had of late been £70,000 a year, and they had not only been deprived to a great extent of one source of revenue arising from the carriage of specie, but had lost a great deal through competition with the French boats. So much, indeed, had they been affected by these and other causes that they had not been able to declare a dividend during the last year. With great fairness they stated that their books were open to inspection, and he (the Duke of Montrose) had accordingly requested Mr. Scudamore, the Assistant Secretary of the Post Office, to examine them. The result of the inspection showed that the Company could not continue the service at the rate hitherto paid. The service, as it would in future be performed, was a greatly improved one. For instance, instead of a service to Calcutta four times a month the service would be in future every week, so that there would be fifty-two instead of forty-eight services yearly. The Bombay fortnightly service would be converted into a weekly one, so that the increase would be from twenty-four to fifty-two. They would also have an additional service to China. Moreover, by having the weekly service to Bombay they would obtain an accelerated service to Calcutta, for the railway though not available for passenger traffic might be made use of for the carriage of letters. The merchants and the public of this country had always expressed a strong desire for additional postal service to India; but still, if these improvements were not desired the Peninsular and Oriental Company had engaged to make a proportionate reduction in the rate at which they would perform the service. The next point to which the noble Lord had adverted was the Brindisi route. He (the Duke of Montrose) did not take the same favourable view of that route as Colonel Tyler. The Brindisi route was attended with many disadvantages, though the completion of the tunnel would at some future time be a great argument in favour of its adoption. The harbour required great improvement; for passengers there was insufficient hotel accommodation, while the railway was only a single line for 500 miles, and every one connected with railway arrangements could testify that it was impossible to manage a large traffic on a single line with anything like regularity and punctuality. The noble Lord said that a saving of thirty-six hours would be effected by the adoption of the Brindisi route. By the arrangement, however, as now proposed—the vessels not calling at Malta, and going the direct route viâ Messina—there would be a saving of twenty-four hours. There was, moreover, a clause in the contract providing that in case the Government thought it desirable to change the Marseilles for the Brindisi route before the expiration of the twelve years, and any question arose between the Company and the Government, the matter should be referred to arbitration. Consequently, they had the power, if they thought it advisable to use it, of changing the route before the expiration of the contract. On the whole, he believed that the proposed arrangement with the Company might be regarded as satisfactory. He might say that it had never been the intention of the Post Office to throw the whole of this service into the hands of any foreign company. It was only intended, in the event of the service being cut up into different parts, to permit one portion of it to be taken up by a foreign company. There would be one additional service in the year to Australia.

House adjourned at a quarter before Six o'clock, till To-morrow, a quarter before Five o'clock.