§ THE EARL OF PORTSMOUTH
, who had given notice "To ask His Majesty's Government whether Crown Agents for the Colonies receive fixed salaries for their services in connection with the Colonies and Protectorates they represent; (2) what those salaries are; (3) whether the Crown Agents are permitted to levy a percentage on expenditure or on any operation undertaken by them as Crown Agents; (4) what is the amount of this percentage; (5) are annual returns made by the Crown Agents to the Colonial Office showing exactly what sums they have received by the levying of this percentage; (6) is it not the case that in addition to the aforesaid percentage, and to any salary that may be paid out of the Imperial Exchequer, the Crown Agents receive additional salaries or allowances from all or any of the Colonies or Protectorates for which they act," said: My Lords, before I put this Question to the Government I desire to preface it with a few remarks as to what has happened since I placed the Question on the Paper. I put the Question down a fortnight or more ago, and since then I have received a very large number of private communications from responsible persons who have had experience in this matter. Although it would not be proper for one to disclose private communication, there certainly does appear to be a very general and widespread complaint as to the manner in which the Crown Agents have performed some of their duties, or, rather, the manner in which the Office has performed them. I have been told, not by people who do not know, but by those who speak with authority, but who do not impute any charge of peculation, that there does obtain the very bad practice of giving Crown Agents commissions on the expenditure which has passed through their hands and through their Office.
Very little appears in the public papers respecting the work or the duties of the Crown Agents, but as long ago as 1881 the matter did excite some interest and Sir Penrose Julyan wrote an official memorandum explaining the functions of the Crown Agents. In 1858 Lord Stanley had reconstructed the Crown Agents' Office, but Sir Penrose 947 Julyan, writing in 1878, thus describes the functions of the Crown Agents—Railway undertakings of considerable magnitude are also carried out by the Crown Agents. From time to time they are called upon to find responsible contractors for the construction of railways in distant Colonies; on other occasions they have to negotiate for the purchase of railways already in existence, which the Colonial Government may find it desirable to acquire. In both cases all the requisites for keeping these lines of railway in good order are supplied by them. At the present moment—(he is, of course, speaking of nearly thirty years ago)—about 1,000 miles of railway are being provided by the Crown Agents with engines, rolling-stock, permanent way materials, workshop machinery, coal, and everything else necessary for their equipment and maintenance. In addition to these commodities, iron structures of all kinds, such as bridges and market-houses and other works, are carried out through the Office of the Crown Agents.I merely quote that to show that the expenditure which passes through the hands of the Crown Agents is a very large one. The Crown Agents undertook the building of the Ashanti Railway. The estimated cost of that railway was £8,000 a mile, but the actual cost was £13,000 a mile. The distance of the railway is, for practical purposes, about 100 miles, and the difference between the estimate and the cost approximates to £500,000. Mr. Pauling, a well-known South African contractor, has built railways in tropical portions of Portuguese South East Africa where the climatic and physical conditions are of the same character as obtained in the case of the Ashanti Railway—he built the railway from Beira to Mashonaland, as well as railways in Rhodesia, and the average cost of the railways he constructed has been £5,000 per mile. Not only has this Ashanti railway been expensively constructed, but I am informed by those who are thoroughly acquainted with the circumstances of the case that it is badly constructed, and that it can barely keep up a speed of ten miles an hour. I should like to quote an extract from a letter addressed by Mr. Kenrick Murray, the Secretary of the West African Section of the London Chamber of Commerce, to the Colonial Secretary, dated 19th January last, and which will be found in the African Review of the 6th inst. Now, what 948 does Mr. Kenrick Murray say in regard to this matter? He says—The members of the West African section of this chamber have had under their consideration Mr. Antrobus's letter of 6th November relative to the rates for the carriage of goods on the Gold Coast Government Railway, and are extremely disappointed that you have not seen your way to reconsider the scale of charges. They are at a loss to understand how it can be contended that the rates are unlikely to hinder the development of the mines, when in the chamber's letter of 24th July last, the estimated cost of transporting a 50-stamp mill for a distance of 125 miles on the railway, was shown to be equivalent to from 40 to 60 per cent. of the invoice price f.o.b. London. Not only are the rates exorbitant, but apparently the local manager has power to issue schedules of charges which differ from those published by your office.and he goes on to say, speaking of this particular railway—The section is aware that the cost of the railway has very far exceeded the original estimate, and in their opinion, had the work been put to tender and given to a contractor it would have cost very much less, been built more quickly, and generally have given greater satisfaction.It is not my wish, nor is it the desire of anyone in this House, to introduce into this question any feeling of Party animus. It is obvious that the Office of the Crown Agents is a necessary one. It is also obvious that the Crown Agents ought to be paid fair salaries so as to get the best men and men of integrity. But it is also of the greatest importance that the work which is carried on through this office should be efficiently done.
I do not think that sufficient weight is given, from time to time, to the fact that we are obliged by our Imperial position to be expending these large sums of money in the development of our colonial Empire. But if this expenditure is so badly and extravagantly administered and we have to impose heavy rates, naturally the result is that industrial development is most seriously checked. I have heard it said, but I do not know how far it is true, that the development of Africa is seriously affected by a shipping trust, by high railway rates, and by other commercial facts which ought not to exist, but which do have the result of enormously increasing the cost of living to the white man, and of seriously interfering with industrial development. I think this question of the Ashanti Railway is one which, in itself, would justify 949 an independent inquiry into the Crown Agents' Office. I should also like to ask the noble Duke what the Colonial Office has done with regard to the serious complaints that were made to it by Sir William McGregor in 1903? Sir William McGregor is the Governor of the Colony of Lagos, and he made very serious complaints to the Colonial Office as to the inefficiency in the construction of the railway, managed by the Office of the Crown Agents, which was made in the interior of Lagos near the delta of the Niger. I wish it to be clearly understood that I am not desirous of making any loose, unfair, or unjustifiable charges against the Crown Agents. What I say is this, that I have been told by gentlemen of experience, and gentlemen who know what they are speaking about, that there does prevail at the present moment a most unsatisfactory system of remunerating our Crown Agents. On the other hand, we have, in the construction of the Ashanti Railway and other railways, evidence to show that, from whatever cause, the work has been extravagantly and not satisfactorily done. I do wish to press on His Majesty's Government the serious importance of this question. I am sure the noble Duke will agree that it is desirable that every penny of the taxpayers' money should be properly spent. Having regard to the very unsatisfactory facts that I have stated, and which are public property, and also to the statements that are made privately regarding the unsatisfactory way in which the Crown Agents are paid, I do hope the Colonial Office will consider most seriously whether it would not be very much to the public advantage to have an absolutely impartial inquiry into the Office of Crown Agents.
§ * THE UNDER-SECRETARY OF STATE FOR THE COLONIES (The Duke of MARLBOROUGH)
My Lords, I quite agree with the noble Earl who has just sat down that it is our desire, in supervising the Office of the Crown Agents, to secure that the British taxpayer is not paying too high a price for the commodities and implements of every sort and kind that the Crown Agents supply to our Crown Colonies. I think 950 that the noble Earl would prefer that I should, in replying to the remarks he has addressed to your Lordships, answer more or less categorically those Questions which he has put down on the Paper, and on which he is anxious to receive information. I hope that when I have answered them, I shall have disabused his mind of the idea that the Crown Agents do not do everything in their power to carry out in the best and cheapest possible manner the different contracts for which they are responsible. As your Lordships are aware, there are three Crown Agents, and the respective salaries are £2,300, £1,450, and £1,200 a year. These are fixed salaries settled by the Secretary of State, and they cannot be altered or changed unless the Secretary of State so desires. The noble Earl asked whether the Crown Agents are permitted to levy a percentage on expenditure or on any operation undertaken by them as Crown Agents. This, I think, requires a slight explanation. The Crown Agents are allowed to levy a percentage on works undertaken by them for the Crown Colonies. The scale of charges for the different classes of business transacted by them is fixed by the Secretary of State. In commercial matters, railways, and general business, the Crown Agents are allowed to levy a uniform commission of 1 per cent. on all stores obtained through them.
§ THE EARL OF PORTSMOUTH
Do I understand from the noble Duke that the Crown Agents are actually permitted by the Colonial Office regulations to charge a commission of 1 per cent. on the gross expenditure on any work undertaken by them? If so, then the greater the expenditure the greater the commission.
§ * THE DUKE OF MARLBOROUGH
I am afraid I have not explained myself clearly to the noble Earl. They are entitled to receive 1 per cent. on all stores supplied by them to the Crown Colonies; that is not the same thing as on all work carried out by them.
§ * THE DUKE OF MARLBOROUGH
That is so, but their one desire is to supply the stores at the cheapest possible price.
§ * THE DUKE OF MARLBOROUGH
Yes. Now, with regard to loans. On loans raised by the Crown Colonies the Crown Agents are entitled to charge ½ per cent. on the issue and on the repayment, and ¼per cent. on the payment of interest. The noble Earl has referred to the question of railways and has alluded to the difference of price between the Ashanti Railway and the railways that have been constructed by Messrs. Pauling. I am not in a position to explain to-night why that railway has cost so much more than other African railways. I can inform the noble Earl that it has been the custom, in the case of railways constructed in the Colonies, for the Crown Agents to supply the material. They are obviously able, by their long experience, to purchase material in this country at a much cheaper rate than it could be obtained by other means. They have had dealings for many years with the best firms and are able to advise the Colonies which firms to go to; and, as they pay ready money they are able to purchase the goods supplied to the Colonies at a much cheaper rate than would otherwise be the case. I would point out to the noble Earl that the Ashanti Railway was constructed at the time when a state of war existed, and the consequent diversion of labour may have accounted for the increased expenditure. The noble Earl has asked why tenders have not been obtained for the building of this railway. The Colonial Office believe that the present method—the purchase of material in this country by the Crown Agents at what we believe to be the cheapest price possible, and the utilisation by the Colonies of the labour on the spot—is the best and most economical course of procedure. The noble Earl has asserted that the rates on the Ashanti Railway are more or less prohibitive. I would point out that before the construction of the railway the people had to pay something like £50 a ton for the conveyance of their goods to the gold-fields. To-day, owing to the facilities 952 offered by the railway, they do not pay more than £10 a ton, so that I do not think it can be complained that the construction of this railway has been in any way a hindrance to industrial prospects in that country.
Then the noble Earl asked whether annual returns were made by the Crown Agents to the Colonial Office showing exactly what sums they had received by the levying of this percentage. I can assure the noble Earl that an abstract of the total receipts of the Crown Agents is sent half-yearly to the Colonial Office. The sums received upon the different charges, including the percentage to which I have already alluded, are separately shown, and these accounts are audited by the Comptroller and Auditor-General. The noble Earl referred to the question of shipping trusts. I will not go into that question beyond observing that of late the freight between this country and South Africa has been at a very reasonable rate—I think I am right in saying it has not been more than 16s. a ton. I believe that is a very favourable rate, and one which few people would complain of. Whether or not the rate will remain at that figure I would not like to predict. It is possible it may be raised; but that may be due to many and various causes of which the noble Earl is perfectly aware. If there is a shipping trust which controls the rates it is obvious that they will be high; if, on the other hand, there is an outsider prepared to compete with the shipping trust the rates will fall. It will depend very much whether there are outsiders to compete, and in proportion as there are the rate will go down and in proportion as there are not the rate will go up. It is impossible for us to exercise control over that to any great degree. If combines are created we have to recognise them; if, on the other hand, there are no combines and people compete one against the other for the carrying trade to South Africa it is obvious that the public benefit.
The noble Earl was anxious to know whether, in addition to the aforesaid percentage, there was any other salary paid out of the Imperial Exchequer to the 953 Crown Agents. The Crown Agents themselves do not receive any further percentage. Their salaries are fixed, and are not altered except by the desire and wish of the Secretary of State. It is true that the Crown Colonies and Protectorates make contributions to the Crown Agents' Office for the general services of the agents, in return for which they attend to the payment of salaries to officers on leave or pensions or family remittances—in fact, all matters which are not covered by the general charge. These contributions from the different Colonies and Protectorates vary in amount, and depend largely upon the extent of the work required. I will give the noble Earl an instance. In the case of Lagos they only contribute £50, but the contribution of Ceylon is £250 a year. Those amounts, as I have said, vary in proportion to the work of this character which is done for the different Colonies. I would point out to the noble Earl that the Crown Agents do not receive money from the Imperial Exchequer. The receipts of the Crown Agents' Office are made up of the percentages on loans and materials, and the fixed annual payments from the Colonies for the work which is not covered by the special charge. The payments out of that fund are as follows:—The fixed salaries of the Crown Agents to which I have alluded, the salaries of the staff and minor officials, and the general cost of J the maintenance of the office itself. If there is any surplus at the end of the year it is paid into a fund for the granting of pensions to Crown Agents, and the pensions are settled on a basis similar to those of all other civil servants in this country; so the noble Earl will see that the Crown Agents are not paid in any way out of the Imperial Exchequer. They are responsible to the colonial Governments, but the Secretary of State excercises a general control.
§ THE EARL OF PORTSMOUTH
Does the noble Duke say that this commission is not paid out of the Imperial Exchequer? Who pays the commission on materials?
§ * THE DUKE OF MARLBOROUGH
I am afraid I must have explained myself very badly. It is paid by the Crown 954 Colonies themselves. The British taxpayer is not called upon to make any contribution; the expenditure comes out of the funds of the Colonies themselves. I understood the noble Earl to say, in the course of his remarks, that there had been widespread complaints with regard to the inefficient administration of the Crown Agents. The noble Earl may be better informed than I am, but I certainly cannot admit that there have been widespread complaints in this direction. Only last year the late Secre-of State for the Colonies wrote round to the different Protectorates and Crown Colonies inquiring whether they had any complaints to make. It is true that in the replies there were instances in which complaints were made—the instance of Sir William McGregor at Lagos was one—but, in each case, when the matter was carefully gone into it was shown that there was not sufficient cause for the complaint. I do not think that the Colonies in the least suffer from the system under which the Crown Agents work, and it is important to the Colonies that their business should have a recognised centre in this country. I hope that the noble Earl, after considering the answers which I have given to his Questions, will not go away with the impression that the Crown Agents do not do their best to supply the Crown Colonies and Protectorates with the cheapest and best commodities and to transmit them from this country as rapidly as possible.
§ EARL GREY
My Lords, the information which the noble Duke has given to your Lordships that the expenses of the office of the Crown Agents is debited to the various Crown Colonies affected, I think supplies us with an additional reason for being most jealous as to the way in which that Office performs its duties. I understand that the Crown Colony is affected and not the British taxpayer if the administration of that office is lax and expensive. I wish to associate myself on this occasion with the speech of the noble Earl. The noble Earl asked one Question to which the noble Duke has given no reply, but from the tenor of his speech I do not think the House can be in any doubt as to what that reply would be. The noble Earl 955 suggested that, considering the importance of the duties transacted by the Crown Agents' Office, it was desirable that there should be an impartial inquiry into their methods of administering the business, and, in spite of the eulogy which the noble Duke has passed upon that Office, I hope I may be able to persuade your Lordships, and even the noble Duke himself, that there are reasons why it is desirable that that inquiry should be held.
The noble Duke is satisfied that the Crown Agents are the best buyers that can be found in this country of the material required in the Crown Colonies. I venture to differ from the noble Duke. I would adduce one instance to your Lordships which is illustrative of the general case. Some years ago Sir Harry-Johnston, when he was Commissioner of the British Central African Protectorate, requisitioned for a steamer for Lake Nyassa. He drew out the specification, and obtained a private tender from a firm of contractors. The office of the Crown Agents thought that in obtaining this tender Sir Harry Johnston was encroaching upon their province. They made representations to the Colonial Office that the business of supplying this steamer belonged to their Department, and they insisted on supplying the steamer themselves. Sir Harry Johnston, by acting individually, was able to obtain a tender to supply that steamer at £8,000. The steamer offered by the Crown Agents was to have cost £13,000. The noble Duke is acquainted with the character of Sir Harry Johnston. He was most indignant at his Administration being asked to spend £5,000 more than he thought necessary. He went straight to the Prime Minister, and Lord Salisbury decided that in this case there was a reason for departing from the usual custom of the Government; he took the ordering of the steamer out of the hands of the Crown Agents and handed it over to Sir Harry Johnston. The steamer was built for the £8,000; it was called "Lady Gwendolen" out of compliment to Lord Salisbury, and is now plying daily on Lake Nyassa. That is one instance which has come within my own personal knowledge which gives me the impression that the Crown Agents are not, as the noble Duke considers 956 them, the best buyers to be found in this country. The noble Duke has referred to railway enterprise. I have had occasion to watch closely the price given for rails on the 2,000 miles of railway in Rhodesia. I have compared the price we have given with that given in Uganda, and the comparison in every case has been in favour of the price given in Rhodesia. In November, 1896, the contractors for the Rhodesian railways paid £4 5s. per ton for rails, while the Crown Agents for the Uganda Railway paid £4 12s. 6d. Again, in May, 1898,"where I was able to compare the price in the same month, the contractors for the Rhodesian railways paid £4 10s. whilst the Crown Agents paid £4 17s. 6d. In every single case I find that the Crown Agents paid a higher price than that given by private firms.
§ * THE DUKE OF MARLBOROUGH
Did my noble friend also satisfy himself that the quality of the rails was precisely similar, because that is just as important as the price? It may be that the rails bought, at the price the noble Earl quotes, by the contractors were not so cheap, at the price, as the rails used on the Uganda Railway.
§ EARL GREY
I do not think there will be any difficulty in satisfying the noble Duke on that point. I have also made myself acquainted with the facts about the Ashanti Railway, and I find that it is the most glaring instance of extravagant railway construction. It shows how closely we should watch departmentally constructed railways. It took the Crown Agents three-and-half years to build forty miles, at an average cost of £15,000 a mile. The people interested in the development of West Africa were so distressed at the slow rate of construction that they approached an outside contractor. They went to Messrs. Pauling, and this firm undertook to build the balance of the railway at £6,650 a mile. I should like to ask the noble Duke how much that railway has coat. Messrs. Pauling agreed to build 140 miles to Kumasi at that rate per mile, and that it should be finished a year ago. I should like to know how much that railway has cost per mile, and 957 how far it is built? The Government refused the offer made by this responsible firm of contractors—who were prepared to give His Majesty's Government any guarantee they wanted, and who have built over 2,000 miles of railway in South Africa—with the melancholy result, as stated by the noble Earl, that the average cost of construction per mile amounted to £13,000.
There was an offer also to construct the Uganda. Railway for £3,400 per mile in four years. It was decided, however, to construct it departmentally, and instead of being built in four years the railway was not built for eight or nine years, and at a cost of £9,500 a mile. That is another instance of what the loss has been to Uganda and the Empire by the Government attempting to do departmentally what I believe could be much better done if it had been entrusted to efficient contractors. The noble Duke has referred to freights, and has pointed out that shipping freights vary according to competition. My point is this, that the action of His Majesty's Government has not encouraged competition. It is well known that the Chartered Company—although, as my noble friend Lord Car-rington said, they are only a handful of white men in a savage country, and although they only have a little traffic to play with—have been able to reduce the rates from 33s. to 16s. The result of this action was to cause the Conference rates to go down. The noble Duke stated, and I was glad to hear it, that those rates stand to-day at 16s.
§ * THE DUKE OF MARLBOROUGH
I said that I believe the rate, until recently, stood at about 16s. I was speaking from memory. I stated that I could not say whether they would remain at that figure in the future.
§ EARL GREY
I would impress upon His Majesty's Government that every single person in South Africa is greatly interested in the way in which the shipping business is managed, and it is advisable that it should be managed in such a way as to secure the lowest possible freights. Some shipowners in Newcastle informed me the other day that the fear which the Colonial Office had of placing their 958 freight contracts with tramp steamers—the fear that they might be penalised by the Conference lines at a future time—showed that they did not understand I their business. There are a large number of tramp steamers outside the Conference, and there is no danger whatever in His Majesty's Government throwing the whole of their freight contracts open to tender in the same way that the Government of India does.
§ * THE DUKE OF MARLBOROUGH
I promised the noble Earl at the end of last session that His Majesty's Government would put up an open tender to South Africa. They did so; they invited tenders for 50,009 tons, but there was no acceptable response whatever. Therefore I I think the noble Earl's objection is removed.
§ EARL GREY
That is another interesting point which would make an excellent subject for inquiry. I am informed that although the Colonial Office invited open tenders for 50,000 tons, a condition was imposed which nobody but those in the Conference lines could accept, for those who tendered for the 50,000 tons had to make themselves liable to the Government, should the Government wish to exercise an option, to carry an additional 100,000 tons later on; and no shipowner outside the Conference ring could possibly accept a contract of that character. I hope the noble Duke will give his best attention to that question. I hope I have said enough to justify me in expressing the hope that the Government will really seriously consider the desirability of appointing a Committee of Inquiry into the whole subject. I have looked into this question, not only in South Africa, but in other parts of the world. The same thing occurred in the Malay Peninsula, in Ceylon, and elsewhere, and the excess in the cost of works owing to their being undertaken by the Crown Agents has caused the greatest indignation. I am sorry to hear it said that in addition to their salaries the Crown Agents are paid an additional percentage on the outlay. When a Crown Agent is acting for the taxpayers of this country and for our Colonists, to remunerate him by a system which makes it to his direct pecuniary 959 advantage that the bill should be a high one cannot possibly be right. I would prefer that they were paid a higher fixed salary, if necessary, and that this most improper form of remuneration should be abolished. I hope the noble Marquess the Leader of the House will be able to see his way to institute an inquiry into the administration of the Crown Agents' Office, which inquiry I regard as absolutely necessary in the public service.
§ EARL CARRINGTON
Before the noble Marquess replies, I should like to ask him if he can inform the House what has been the amount of the commission paid to Crown Agents year by year during the past five years.
§ * THE SECRETARY OF STATE FOR FOREIGN AFFAIRS (The Marquess of LANSDOWNE)
My Lords, I have no doubt that if the noble Earl will place his Question on the Paper, it will be answered by my noble friend beside me. With regard to the speech delivered by the noble Earl below the Gangway, I cannot help thinking that he has followed a course not very convenient to your Lordships, and hardly calculated to advance the cause which he has at heart. The noble Lord, in almost impassioned terms, appealed to the representatives of the Colonial Office to grant him what he calls an impartial inquiry into the manner in which the Crown Agents have performed their duties. I do not find in the notice which is on your Lordships' Paper a word about a Committee or an impartia inquiry. The noble Earl who introduced this subject placed upon the Paper a series of categorical Questions, which he had a perfect right to ask, and those Questions were answered in great detail and with much clearness by my noble friend the noble Duke. The noble Earl below the Gangway has gone into a host of details to which the notice on the Paper does not in any way point. He has asked for information with regard to the conditions under which a steamer was provided, under which more than one line of railway was constructed, and he has animadverted in unmeasured terms on the conduct of the Crown Agents in dealing with these different enterprises. 960 We have not come here armed with information as to the affair of the steamer, or of the railway; but I am bound to say that if we are to judge of the noble Earl's case with regard to other railways, from what he has said on the subject of the Uganda Railway, I should be inclined to anticipate that a great many of his allegations will be found incapable of serious proof. The noble Earl has told us that it was within his knowledge that the Uganda Railway might have been constructed within four years, at a cost of about £3,000 per mile.
§ * THE MARQUESS OF LANSDOWNE
That is a very different thing. It is perfectly true that the offer was made, and it is also perfectly true that it was not accepted. But I think the Government have some cause of complaint of the noble Earl's action with respect to the Uganda Railway. During many weeks of last session a notice in reference to the Uganda Railway stood on the Paper in the name of the noble Earl. Some of us took the trouble to inform ourselves as to the case, and were ready to come down to the House to reply upon it; but the noble Earl never brought it on; and now he springs it upon us, and supports his argument by statements which appear to me reckless. If the noble Earl will put a Question on the Paper with regard to the Uganda Railway, the Government will be prepared to meet him. The whole of the speech of the noble Earl was an indictment of the system of Crown Agents. I do not say that the system is not capable of improvement, but I ask the House to consider whether the suggested alternative is likely to work as well. There are no fewer than forty- four of these colonies and protectorates which are concerned in business of this kind. If there was not a central office in the hands of Crown Agents, all those colonies and protectorates would go into the markets simultaneously buying the same thing and bidding against each other. Of course, Crown Agents make mistakes; but I do not believe the insinuations made against them this evening are well founded; and 961 I regret that if it were intended to formulate an indictment against them the form of the notice which has been given did not made it clear that such an indictment was in contemplation.
§ Adjourned at five minutes before Six o'clock, till Tomorrow, half past Ten o'clock.