HL Deb 09 July 1889 vol 337 cc1793-812

My Lords, I rise to move— That in the opinion of this House it is absolutely necessary, in view of the fact that the Portuguese Government has without justification and against the protest of Her Majesty's Government forfeited the railway concession granted to the Delagoa Bay and East African Railway Company, that immediate action should be taken by Her Majesty's Government to obtain from the Portuguese Government adequate compensation for the debenture holders and shareholders of the company, and that such steps be adopted as may seem 'fit and effectual to protect all British interests involved. I desire to apologise to the House for having postponed this Motion; but I think I was justified in doing so, having regard to the fact that I was anxious to consult the convenience of the noble Marquess and of other Members of this House. I must apologise also, before I go further, if I happen to be somewhat lengthy in my remarks upon this important question, and also by anticipation for the necessity I may be under of reading somewhat copiously from notes. The question is so involved and so intricate that I must ask the patience of the House while I deal with it in a full and, I trust, exhaustive manner. In submitting this Motion, my intention is to put before the House as clearly as I can, and as rapidly as possible, the history of the Delagoa Bay question, as we at present have it, and then to deal with three or four salient points in the case that were connected with, and implicated in it. The history of the construction of the railway is not a very lengthy one. In 1883 a concession was granted by the Portuguese Government to Colonel E. M'Murdo for the construction of a railway from Port Laurenço Marques, in the Portuguese territory, to the Transvaal frontier; and the intention was, as soon as that railway was constructed to the frontier, to create another line which was to be worked by a Netherlands Company in Amsterdam with capital received from Dutch investors in Amsterdam, and also from the Boers, and to complete a regular line, running from Lourenço Marques, up to Pretoria in the Transvaal. Colonel M'Murdo, the concessionnaire, instead of asking for a cash subvention, which he might have been entitled to ask for, agreed to construct the line without any pecuniary assistance from the Portuguese Government; but he provided, and I think he was wise in doing so, that as a consideration he should receive from the Portuguese Government two guarantees—I would ask your Lordships' special attention to these two guarantees:—first, that the Government should allow no line of railway to be built in competition; and, secondly, that the Company to be formed to carry out the concession should have the absolute and uncontrolled right to fix tariff rates. These demands were conceded by the Portuguese Government, and a special provision, which is very noteworthy, was inserted in the concession to the following effect:— Article 20, paragraph 2.—The Government will not be empowered within the territory of the district of Lourenço Marques, and upon a strip of land of less than 100 kilometres in width, on each side of the line belonging to the Company, to build or allow any other railway which, running from the coast of the district of Lourenço Marques to the Transvaal, may compete with this line The geographical result of this clause was that no competing line could be constructed within Portuguese territory. The absolute right of fixing tariffs was conceded by the Government as a part of the statutes of the Lourenço Marques and Transvaal Railway Company, a Portuguese company, which, under the requirements of the concession, was formed to take such concession over and build the railway. This was authenticated by Statutes passed in 1881, the concession having been granted in 1883, and they were ratified again, as is proved by a letter dated May 4, 1885, from the Minister of Portugal, in answer to a letter from the company, in these words:— With regard to the second point of your letter, I am directed by the said Minister (that is, the Portuguese Minister) to inform you that there cannot be the least doubt that the Lourenço Marques and Transvaal Railway Company has the right of fixing its own tariffs as it may deem fit without the intervention of the Government, as is expressly set forth in the statutes approved by the Government on May 10, 1884. Therefore, my Lords, that makes clear the two points, that there was to be no other railway allowed to be built, and that the company should have the absolute right to fix tariff rates. After a lengthened negotiation on other points, the Delagoa Bay Lourenço Marques Company was formed, and began to construct the line in 1887, according to the specifications and authorization of the Portuguese Government. The line to the frontier was shown on the plans which were placed before the company, and the actual line was marked and signed by the engineer of the Portuguese Government. The company began to build, but in the course of construction the Portuguese Government called upon the company to build a further five miles of extension, saying that the frontier had been moved, and that the frontier to which they had already built was not the real one. The Portuguese Government sent to the company—and this was also peculiar—a plan without marking the frontier on it. After certain protests and negotiations with the Portuguese Government, the company agreed to build to the new line of frontier, leaving the question of compensation to be decided as had been arranged by the 40th article of the concession. The line was opened to the originally marked frontier, and was sanctioned by the Portuguese Government as being constructed according to their wishes and plans. But then came the question of the extension. On this question delays occurred and negotiations supervened, and great difficulty was experienced by the company, because they could get no definite point marked to which they were to go. Those negotiations were protracted until October 4, 1888, when suddenly the Portuguese Government indicated a fixed point to which the extension was to go, although they did not say "this is the frontier," saying at the same time that the line had to be constructed by June 24, 1889. Now, my Lords, to do this was actually impossible within the eight months allotted, because during six of those months the season was such that it was absolutely impossible to build in that country owing to the rains, which are at that time abnormally heavy, and on account of the great sacrifice of human life which would result from any railway construction during that period, fever being then especially rife. But the company were determined to do their utmost to meet the views of the, Portuguese Government, and they proceeded to carry out their wishes as rapidly and as far as they could. Rails and other materials were sent, and bridges were put in hand, and a second engineer was specially engaged. The extension was actually begun on May 21, and a telegram dated June 12 said that great progress had been made. A telegram was sent to the engineer to know when he would finish the extension, and he replied about the end of September. But part of the original line had been carried away owing to the heavy rains; and, in order to avoid the floods, a relocation of a portion of the line had been rendered necessary, and it was pushed on as rapidly as possible to meet the views of the Portuguese Government. On June 24th, however, notwithstanding protests from Her Majesty's Government and the Government of the United States, the line was seized and the concession cancelled; the company's employés were threatened, and damage was done by the line being torn up. My Lords, that is, roughly, the actual history of the case up to the present time. There are now four salient points to which I wish to draw your Lordships attention—the tramway, the tariffs, the frontier, and force majeure. The first point is one of supreme importance. It seems that there was a secret arrangement between the Portuguese Government and. the Transvaal to make a tramway which, was intended to compete with the Delagoa Railway. On this point I must, I am afraid, say, though I do not like to use strong language in a matter of this kind, a great deal is owing to the improper action, to use no more vigorous words, of certain members of the Portuguese Government. In order to vindicate that statement, I must beg your Lordships' patience for a short time, while I put you in possession of certain further dates and facts. There had arisen doubts in the course of the negotiations to which I have referred whether any other concession existed, and the Portuguese Government bad been asked whether any other concession existed for the making of a railway or tramway which might compete with the Delagoa Railway to the frontier. This question, was continually asked, not only by the concessionnaire, but by the company, and it was continually answered in the negative by the Portuguese Government. There did exist, however, a secret undertaking, of which the company were not put in possession. On July 15, 1886, the Portuguese Government stated— That no other concession exists for the construction and working of any sort of means of communication whatever across the Lourenço Marques district. Nothing could be plainer than that; yet on May 17, 1884, two years previously, a Memorandum of Concession had been given to the Tranvaal Representative at the Hague, which was not published. The actual official document was as follows — Lisbon, May 17, 1884. The Portuguese Government agrees to concede the construction of a tramway which shall join Lourenço Marques to the frontier of the Transvaal for the conveyance of material for the railway from the Transvaal frontier to Pretoria, should the concessionary company of the railway denominated Lourenço Marques fail to finish its line with the rapidity necessary for insuring the commencement of the works of the Transvaal Railway. The Portuguese Government equally engages that the tramway may be used for the transport of goods and passengers in case the two concessionary companies do not come to settlement in respect to general rates for international traffic. It is distinctly stipulated that the two Governments are at liberty to propose and offer reasonable terms which may serve as a basis for any agreement, and that the mutual consent of the two Governments upon the question of international rates is necessary. It is also laid down that in all matters connected with the concessions, and in the organization of the companies, respect shall be had unto the dispositions of the Portuguese law relating to such matters, as also to the terms of the contract of December 14th, 1883. Then, my Lords, we again find that confirmed by a letter of May 4th, 1885; but notwithstanding that, we have the statement on July 15th, 1886, that no such concession exists. My Lords, in face of those facts, I do not think the language I have used in this case is too strong. The terms of the letter of May 4th, 1885, from the Ministry of Portugal are very plain. I ask your Lordships' leave to call attention to the very words of it:— In all the negotiations with the Transvaal on this subject, the rights established in the contract of 14th December, 1883, have always been respected, and in no case could the concession of the Tramway referred to prejudice the Concessionaire. And also with reference to the tariff the Minister uses these words— I am directed by the Minister to inform you that there cannot be the least doubt that the Lourenço Marques and Transvaal Railway Company has the right of fixing its own tariffs, as it may deem fit without the intervention of: the Government as is expressly set forth in the Statutes approved by the Government on May 10th, 1884. Now, my Lords, to my mind it is perfectly clear that this concession of the tramway was kept in reserve. It is very singular that recently we have had clear evidence of what the object of this agreement with the Transvaal was from a recent speech in the Cortes in Lisbon. Actually at the time the decree was signed by the King of Portugal, at the instance of his responsible Ministers, stating that no other concession existed, that memorandum was in existence, and ready to be utilized when the time arrived. The intention of this secret agreement is made quite clear when we read the speech I refer to, and which was uttered in the Cortes on May 1, 1889, by Senor Fuschini, who summarised the declarations of the Government as follows:— (1) The term for the construction of the Lourenço Marques Railway as far as the Transvaal frontier will expire on June 24th next, and the Government are firmly determined not to extend it; (2) that a promise has been made to the Transvaal of the concession of a tramway from the Transvaal frontier to Lourenço Marques, in the event of the Portuguese and Dutch companies not coming to an agreement with respect to the railway tariff rates. In the course of his speech, Senor Fuschini said:— His Excellency the Minister of Marine said that the Government were bound, on account of the declarations made by their predecessors, to acknowledge the right of the company to fix the railway tariff rates independently of the Government, but he felt no apprehension on the subject, because he was in a position to coerce the company in two ways —i.e., by means of the rescission of the contract and by the tramway. That is to say, he (the Minister of Marine) was in a position at any moment to spring upon the Company the concession of the tramway or to rescind the contract. Now, my Lords, I come to the next salient point, and that is, the question of fixing the tariffs. The letter from the Ministry of Marine and the other documents which I have referred to, prove clearly that the right of fixing tariffs lies with the Company. But we may be told that as the Company did not come to terms with the other company as rapidly as they ought to have done, the Portuguese Government were right in coercing the Delagoa Bay Company. That company has, however, done all they could to come to an agreement with the Netherlands Company in reference to the tariff, but their Board would not agree even to the tariff which has been formulated by the Portuguese Government. Every effort has been made by the Delagoa Bay Company to come to an agreement for fixing 'the tariffs, but no agreement was arrived at, and we have been pressed into the position which we now occupy. The importance of this question of fixing the tariffs I desire especially to point out to your Lordships, because it is really the salient point of the whole question. In point of fact, when it was discovered that the Delagoa Bay Company were determined to exercise their power of fixing the tariffs, and it was discovered that it would be difficult to coerce the company, or drive them from their position, it was resolved to take that power from them. It should be remembered that that very power and right of fixing tariffs was in all probability the inducement for sending British capital into that country for the purpose of making the railway; a right and power which would in the near future in all probability make this a very advantageous enterprise. My Lords, there can be no doubt that that right to fix tariffs was believed in by all those who invested their money in this railway. That right was certified by Ministerial decrees and solemn pledges. All the pledges which were given have been broken, and broken not by the company which entered into them, but by means of the action of the Netherlands Company, who refused to agree to anything that was proposed, and who eventually contrived to land the Delagoa Railway Company in the position in which they have been placed. My Lords, I would like to quote for one moment from a letter of Lord Derby, dated February 7th, 1884, dealing with questions affecting South Africa. At the end of that letter he uses the significant words that "the Delagoa Railway will absorb all the traffic which the Transvaal can bring upon it." That traffic will undoubtedly pass along it in the future, and will prove how valuable an asset this right of fixing tariffs really was. It is quite clear that the enormous traffic which is now passing over Natal, and which is growing every year in volume, will eventually pass over the Delagoa Railway from the goldfields of the Transvaal, and from the at present almost unexplored land to the North and North-East, and that the line this Company has constructed will, in the near future, be a most valuable property. Now, the question of frontier is one to which the Portuguese Government attach very great importance, and they say the fact that the Delagoa Bay Company has not carried the railway to the frontier has more or less invalidated its contract with the Government. My Lords, I hardly think that is the case. In the first instance the company was instructed under the concession to build up to a point where the word "frontier" was marked on a plan which was official, and which was signed by Engineer Machado, the Portuguese engineer. When the line was built or in process of building, the company was ordered to proceed to build an extension to an undenominated point. This they refused to do so until they received clear instructions where they were to go to and until they knew where the frontier was to be. They might otherwise have been asked to build into the desert. After most tedious negotiations they were informed that such and such a point was to be the limit, but that it was not the frontier. The frontier is not yet fixed, and though the company have built according to their concession to one frontier point, and even under protest have built and are building a further extension to another point, yet, after all, their line has been confiscated, one of the reasons given being that they have not built to the frontier—the frontier which is not yet fixed. Surely a weaker or more childish pretext was never utilized wherewith to do an act of extreme injustice! Having done all they could to meet the views of the Portuguese Government, on the 24th of June, the result is that their line was seized. Now, my Lords, I come to the next question, and then I shall finish—that is the question of force majeure. The Portuguese Government said there was no case for urging what was called force majeure. Now, what are the facts? The company was told to build the line between the 8th October, 1888, and July 24th, 1889. They gave the company a limited and impossible time within which to make this extension. They knew that six months of the eight were in the rainy season, when no work could be done. As it happened these were exceptionally rainy months, and they have always naturally been very feverish months. I will call to your Lordships' attention a Report of the Portuguese Engineer himself. He was on the coast surveying for this very railway in the months of November, December and January, during, I think, 1882, and this is what he writes to his own Government, which now tells us in so many words that the time fixed was quite sufficient, and that there was no pretext for not completing the line within the time stipulated. Major Machado said: — I had no choice as to working in the field at a season quite unfit for the sort of survey that was requisite. And again— The incessant rain of the months of November and December caused us considerable suffering and prevented the works from proceeding at a rate at all proportionate to the expenses of the staff engaged on it. That, my Lords, was merely with reference to the work of surveying, and I will leave it to your Lordships to say what the work would be of turning over new soil in a fever-stricken district. The sacrifice of life would have been enormous, and owing to the rains the task would have been impossible. In January and February much of the line was damaged by abnormally severe floods, and the Portuguese Government knew it would take time to repair those breakages. The company's engineer reported the flood as having risen 17 ft. over the line in places. To make it safe in the future he had had to relocate it. This had been done, and the extension works were in full progress and would have been complete by September. Yet, with all this in view, the Portuguese Government informed the company that they had no other course but to confiscate, notwithstanding what I maintain is a clear case of force majeure. I have given your Lordships a straightforward and common-sense view of the matter, and have avoided, I hope, saying one harsh or unjust word. But it is not only a question of common sense. The Delagoa Bay Company is undoubtedly in the position of having legal right on their side. They have taken the opinion of some of the most eminent English counsel—Sir Horace Davey, Sir Henry James, Sir Charles Russell, Mr. Under-down, and Mr. Kirby, and those gentlemen are unanimously of opinion that All the terms of the concession having been complied with, the Portuguese Government has not the power of forfeiture which it claims to exercise; and even if the company is liable to construct the extension, the question of their liability would be a matter for arbitration within the arbitration clauses in the concession; that the period fixed for the work of extension is unreasonable, and the rainy season and the storms above referred to constitute a case of force majeure." My Lords, I will not at this hour and after so lengthy a speech dilate on the larger issues involved in this matter, but I venture to suggest that English capital will cease to flow to foreign countries where it has been enormously invested in numberless companies, if it is to be exposed to the danger of being forfeited as it has been in this case, when the contract under which that capital has been invested has been carried out. My Lords, I do not want to use harsh language in regard to the action of Portugal in this matter, but I would ask your Lordships to remember that England has made enormous sacrifices of life and money for the sake of Portugal. Portugal still owes us a very heavy debt, but whenever we have had dealings, commercial or international, with that country there has been a captiousness shown by Portugal which is most unbecoming. We in England have stuck to our undertakings with Portugal, but the Portuguese have on the other hand very often dealt with English subjects in a discourteous, harsh, and sometimes unjust manner. I will ask your Lordships, ought there not to be some limit to the forbearance of England with a Power which does not carry out fairly their engagements between man and man? If I have brought my case home to your Lordships, I trust I am not too sanguine in hoping that your Lordships will recognize the justice of the cause I am advocating, and will give your assent to the Motion which I have placed on the Paper, and which I now beg to move.

Moved, That in the opinion of this House it is absolutely necessary, in view of the fact that the Portuguese Government has without justification and against the protest of Her Majesty's Government forfeited the railway concession granted to the Delagoa Bay and East African Railway Company, that immediate action should be taken by Her Majesty's Government to obtain from the Portuguese Government adequate compensation for the debenture holders and shareholders of the company, and that-such steps be adopted as may seem fit and effectual to protect all British interests involved, (The Lord Castletown.)


My Lords, at this late hour I am unwilling to detain your Lordships at any length after the speech in which my noble Friend has so fully gone into, and so thoroughly made clear a subject which otherwise might have appeared complicated. In fact, he has gone into the subject in the completest manner, and has dealt exhaustively with the details of the case. It is a subject of which I have no special knowledge, and I should not have risen to address your Lordships if I had not felt that the honour and the interests of England and the protection of its commerce, and of Her Majesty's subjects are involved in the question now before the House. The question does not relate merely to the money—the £500,000—which the English company has advanced, but it has an interest far beyond. Last week, as your Lordships may have seen, the Times published the decree, which I will call for the present a decree of confiscation, with the reasons which were given for it. But it was not founded on realities. If the right of the Portuguese Government to pronounce this confiscation is not clear, and legal, and just, it becomes an act of spoliation. That decree was signed at the earliest moment at which it could be signed. Even if it had been legal and just, the elaborate reasons given for it by the Portuguese Government must have been prepared long beforehand, because they are so lengthy. Whilst the Portuguese Government complain of delay, they do not for one moment offer a contradiction to the case (amply made out by my noble Friend) that there has been on the part of the Portuguese Government a deliberate violation of some of the main features of the concession granted in 1883, to which this company has succeeded. They do complain of delays, but there was no delay on the part of the English Company, that they could complain of at all. They make a long parade of the benevolence of the Government of Portugal to the original concessionnaire, and to the company which was formed, but which failed to make the railway; but there is no allegation of anything which shows that blame is attributable to the English company, which was not formed unti 1887. On the contrary, one of the statements made is that the Chairman had declared categorically to the Government that the railway should be completed upon the terms, and within the time fixed by the contract, and from that time the works have been continued and there is no complaint. The formation of this railway sprang out of the Treaty of 1875, to which England was to some extent a party. That treaty was made between the Government of the South African Republic, now the Transvaal State, and the Portuguese Government, and it contained stipulations for the construction of a railway connecting the district of Lourenço Marques with the Transvaal State. As the Portuguese Government now complain of the delay which has occurred, one is surprised to find that nine years elapsed from the making of that treaty before any step was really made to carry it out. One portion of the treaty was that the Government was to furnish a subvention equal to one half the amount necessary to construct the railway. From the time when the English Company took up the original concession there has been, as I read the documents, no delay which could fairly be complained of. My noble Friend has called attention to the fact, upon which the question of legality depends, that the contract and concession had been carried out to the point marked out as the limit to which it was to be carried upon the plans accompanying the concession., Upon them there was a line drawn showing what was supposed to be the frontier. On the documents now before us I find that the English Company made the line up to the frontier, and completed it within the enlarged limit beyond the time originally fixed. If this be well founded, I must say I agree with the English lawyers who have expressed an opinion on this subject, that the Portuguese Government in declaring the concession to be forfeited, have acted illegally and unjustly. The foundation of my noble Friend's case is that as the terms of the concession have been complied with, it could not be withdrawn from the Company by imposing the further obligation of carrying the line five or six miles further to a point then undefined. The concession itself, with the documents affixed to it, show why it was granted in this form to Colonel M'Murdo. A document from the Ministry of Marine and the Colonies under the signature of the King, dated the 14th of December, 1883, sets forth that by the treaty of December 11, 1875, and approved by the law of April 20, 1876, the Portuguese Government were authorized to assist the construction of the railway by means of a subvention to the extent of one half the cost of the works, in addition to other concessions in the said treaty contained. Further, it set forth that the Government had received a proposal for the construction of a railway from the port of Lourenço Marques to the Portuguese frontier, which dispensed without any subvention or guaranteed interest, "a point of unquestionable advantage." This was the foundation on which this concession was based, that the railway should be constructed without calling upon the Government for any assistance in money. And then it proceeded to decree approval of the contract made between the Government and John Burney, as the representative of Edward MacMurdo, for the construction of a railway to run from the port of Lourenço Marques to the frontier separating the Portuguese territory from that of the Transvaal Mate. This contract liberated the Portuguese Government from the obligation to grant a subvention of one-half of the whole estimated cost. As to any non-completion of the five or six miles, it could have had no effect if the company had failed by reason of natural difficulties. by reason of the force majeure, by reason of time being necessarily required to arrange for additional capital, and by reason of the other circumstances to which my noble Friend has adverted, to complete that additional portion within the period fixed. Whatever right the Portuguese Government might have had to deal with that five or six miles of line, that in no way affected the validity of what had been done before, and could in no way justify them in seizing the whole of this line. But, in truth, my Lords, it is perfectly plain to me from the character of these documents that there were third parties here who were putting pressure on the Portuguese Government. It is not necessary for me to say, but I can guess who the confederates may be. Documents have been read by my noble Friend which throw considerable light on the matter. So late as June 1888, the Minister for Foreign Affairs sent the following telegram to the Portuguese Legation at the Hague:— Transmit Blokland following Resolution: —Portuguese Government is prepared to exact from the company—(I.) Immediate presentation of surveys and construction last section line to frontier. (II.) And simultaneously agreement tariffs requested by Transvaal, if Transvaal Government on its side undertakes (1) to fix frontier, according proposal and convention already formulated; (2) to establish terms second part memorandum, May 17, 1884, previous agreement with Portuguese Government as to Table International Tariffs which must be adopted by Portuguese company. If latter refuses adoption proposal, Government will then concede tramway, and by preference canal to Transvaal Cocessionaire Company.' Referring to the proposals of this telegram, the representative of the Transvaal, Blokland, in a despatch of July 14, 1888, said that his Government was disposed to assist in the delimitation of the frontier proposed by the engineer Machado, if the Portuguese Government undertook to concede as speedily as possible, and not later than the 1st of December next, either the railway at present conceded to the Portuguese Company, or a steam tramway from the Bay of Lourenço Marques to Komatipoort, if before that time the Portuguese line should not be finished to the frontier, or the agreement should not be made between the two companies as to the junction of their lines and as to the tariffs under the auspices of the two Governments, in conformity with the Memorandum of May 17, 1884. So that if the English company did not agree to regulate its tariffs according to the will of the Transvaal Government, it was to be squeezed out, and the line was to be transferred to the Transvaal; and if this was not done the Transvaal was to be at liberty to make another line. The statement of my noble Friend relieves me from the necessity of making any further statement of the facts of the case. It is impressed upon my mind that there is a combination behind all this, and a desire to squeeze out the English Company, which would seriously affect the interest of the English commercial world. This is a very grave question, far exceeding anything that is at stake in the Delagoa country or in South Africa. My Lords, I never wish to use an expression which would interfere with negociations which maybe going on, but I am satisfied, speaking for myself, that there is a combination behind, and that Portugal herself does not see the dangers which lie before her. The Transvaal wants a port and a railway; and if the Boers get to Delagoa Bay and to Lourenço Marques, and get possession of the line, Portugal will soon be squeezed out of the whole. But, my Lords, that is not the present question. I, for one, am quite satisfied as a general rule to leave the protection of the interests of financiers in their own hands. But there has been a suggestion coming from Lisbon that Portugal means to stick to her rights as claimed by her. What, in these circumstances, I protest against, is the statement that this is a case for arbitration. It is not a case for arbitration or for correspondence; it is a case in which the power of our Government should be put in action. If the Company is wrong, if Portugal is right in law, if it has the right to disturb this Company's possession, to seize its railway and rolling stock, to declare the forfeiture of that upon which the Company has spent half-a-million of money, be it so, notwithstanding the disastrous effect on Portuguese credit, and generally upon foreign securities. But if the English Company has completed the railway in the terms of the concession, and was not bound to carry out the additional line, then there should be complete restitution made, or if that is not to be obtained, there should be ample compensation given, and I trust the Government will do their best to obtain it.


My Lords, I rise to deprecate the precipitation of the Motion of the noble Lord, and, I might say, its peremptoriness. It is only a week since a state- ment of the Portuguese Government was given to the public. This is not an International affair, but one for the Law Courts of Lisbon, and for Consular rather than diplomatic action. With what has been said about the construction of this line of tramway, it does not appear to me that it was intended to be made with any other intention than that of being an assistance to the railway. It ought not to be forgotten in dealing with this matter that we were the first to discourage Portugal from co-operating with us in South Africa, by deserting her in the matter of the "Charles et George," when Portugal had carried out her treaty obligations with regard to the capture of vessels engaged in the slave trade. I think the noble Lord is crying out before he is hurt, and I cannot vote for this Motion because there are no Papers before the House, and I do not think the time has come for expressing a judgment on these transactions.


My Lords, I think the speech which the noble Lord opposite has delivered is a very interesting and useful statement of the case of the company, and of the view which is taken by a large number of people of this country as to the action of the Portuguese Government. I admire the noble Lord's speech much more than I admire his Motion, which is certainly premature at the present stage of our action, and as to which I hope he will not insist upon taking the opinion of the House. The noble Lord speaks in his Motion of insisting upon compensation to the debenture holders and shareholders of the company, but sufficient time has not elapsed to enable us to know to what extent the proprietors of the line have been damnified. I am fully sensible of the ability and clearness of the statement made by the noble Lord, and I do not wish to appear here as controverting anything which he has said. But I am not able to go with as much fulness and frankness into the affair as he has done, because we have not yet full materials for the determination of all the points which it is necessary should be determined before our opinion can be definitely expressed. As the noble Lord states it, the Portuguese Government imported into the contract a condition which practically did not exist there, a condition which, from the nature of the country, it was impossible to perform, and because it was not performed they have forfeited the railway which has been constructed under their concession. Stated in those terms the act was as indefensible as any act of a Government can be. It is fair, however, to state that I have seen a despatch representing that the Portuguese Government does not at all admit the justice of that representation. They deny, as I understand, the assertions which are made with respect both to the position of the frontier and the difficulty of completing the line. They deny the existence of any force majeure, and they attribute the failure to complete the line entirely to the neglect of the company. I think it fair to state that allegation on their part. I must not be supposed to express the slightest opinion in support of that contention. As far as the facts at present go, they all point, in my judgment, to a different conclusion. I rather bring that forward with a view of impressing upon the noble Lord that the time has hardly yet come when we can adopt so peremptory a Resolution as that which he has placed upon the Paper. There is one circumstance which I think it right also to recommend to the consideration of the House, and which I thought rather disappeared from the speech of the noble and learned Lord opposite. All the agreements of the Portuguese Government were with a Portuguese company, and they have no direct connection or privity with any English company, and the agreements under which this English company have acted were made with this Portuguese company. No doubt it may be true that great injury by the wrongful Act of Portugal had arisen to the Portuguese company, and through them to their English creditors. Still, it is not exactly the same thing as a deprivation by the Act of Portugal of the lawful claims of an English company and of rights conferred upon that English company. There is a distinction to be made between the two cases. I quite accept the doctrine that if British capitalists have been injured in this matter compensation must be exacted, and we have already expressed that view in no ambiguous language to the Government of Portugal. But we must wait to know whether and how far they have been damnified. I have seen it suggested that it is not the business of the English. Government to defend British capitalists who have imprudently risked their money, or to recover British debts in all parts of the world. I quite admit that we cannot do so in all cases. There is always some difficulty in determining whether the claims which British capitalists are constantly raising against Governments by whom they say they have been injured are such as this Government ought to sustain or not. There is a celebrated Circular of Lord Palmerston's on the subject, wherein he lays down very distinctly that while this country will not be bound to recover for British creditors the debts which they may have owing to them, we yet reserve to ourselves the right to judge of the merits of each case and to determine whether it is one in which the power of the Government ought to interfere on, behalf of the subjects of the Queen. The consideration which it seems to me should weigh in that determination is whether the pecuniary injury which has been done to British subjects is the result merely of failure, or mistake, or misfortune, on the part of the foreign Government, or whether it is the result of deliberate wrong. Wherever it is the result of deliberate wrong there is a strong case for the interference of the Government. Certainly in this case, if the representations of the noble Lord are sustained on further examination, there can be no doubt that the injury done to British capitalists has been done by a very wrongful act. I think it is not desirable that I should go farther now than to express again what I have expressed before in this House—that the question before us, the only question with which we can deal, is whether and how far British capitalists have been damnified by this action of the Portuguese Government, and whether the action of the Portuguese Government is as unjust as it has been represented and as the circumstances, so far as we know them, seem to show. If that is the case, undoubtedly we shall hold Portugal responsible for the damage which has been inflicted. The noble and learned Lord alluded to questions of a deeper character—questions of a political and diplomatic kind. They do not arise, as far as I know, on the surface of the case. They may come up hereafter, and if they do we shall have to deal with them. At present we have to deal only with a case of alleged wrong, in which, if the allegations turn out to be correct, British subjects have a right to claim protection from the British Government.


I do not rise to criticize or comment upon what has been said by noble Lords in this Debate, but to express the hope that we may not go to a Division upon this Motion. The speech of my noble Friend was eminently one of an instructive and useful character, and it has given us much information which we had not before, or, at any rate, it has given us, in a connected form, information which we could only have found scattered over many papers. This House and the public ought to feel indebted to my noble Friend for having brought the matter before us as he has done. But I think it would be wise for the interests to which my noble Friend has alluded that we should not come to a Vote on this subject. I say so on two grounds. In the first place, if your Lordships were to come to a Vote it is clear that the decision of the House would not be unanimous, inasmuch as the Government will not support the Motion. As to the facts, we are probably all of one mind. But the effect of going to a Division would be rather to prejudice the case by presenting an appearance of disunion which does not really exist. Then there is another consideration. I confess, even where our own country is on one side and a foreign country on the other, I like to hear both sides of the question. I do not dispute the facts contained in my noble Friend's speech. But, at the same time, we all know that facts may look very different when you hear them stated by counsel on the other side. Therefore, before we come to what, if it be anything at all, is a solemn opinion upon the subject, I think, in common fairness and reason, and following the usual practice, we ought to hear what the other party concerned has to say. My noble and learned Friend who seconded the Motion said it was not at all a case for arbitration. I do not pretend to lay down any general rule, or to determine the precise mode of arbitration which we ought to adopt. But I think a case of alleged injustice affecting individuals is eminently one to be determined by the impartial judgment of some third party, who may be relied upon to hear the whole case and determine upon the merits. I will not go into questions of general policy, or of the Portuguese position in Africa. As to the question how far we ought to intervene for the protection of British capital in foreign countries, the general rule has been undoubtedly not to interfere. Your Lordships will remember cases where foreign loans have been repudiated in a manner not at all consistent with justice, and in fact fraudulent, but there was no interference by Government in those cases. At the same time, I am not at all prepared to say that the general rule laid down by Lord Palmerston does not admit of exceptions. We might find cases of flagrant injustice where Englishmen and English capital were concerned, on a scale so large as that we might be compelled to go beyond our usual practice and take up officially the cause of those injured. But, at all events, we cannot undertake to decide until we have the full facts before us, and until we know what is to be said by the other party, and that in this case we do not know. I hope the noble Marquess will shortly be in a position to lay Papers on the Table; but until then I think we had better postpone coming to a decision.


My Lords, under the circumstances, after having received the satisfactory answer of the noble Marquess, I think I should be very ill-advised indeed if I were to press the Motion to a Division now. At the same time I was most anxious to bring the matter before your Lordships' House seeing the important interests involved in it, and I hope your Lordships will excuse my using what might be called strong language, though I think the able speech of the noble and learned Lord to whom I am deeply indebted, has shown it was not unjustified. I venture to ask your Lordships' leave under these circumstances to withdraw my Motion.

Motion, by leave of the House, withdrawn.

House adjourned at Six o'clock, to Thursday next, a quarter past Ten o'clock.