Lords Sitting of 10 June 1904

The Lord Oxenfoord (E. Stair)—Sat first in Parliament after the death of his father.

PRIVATE BILL BUSINESS.
The LORD CHANCELLOR The LORD CHANCELLOR aquainted the House, That the Clerk of the Parliaments had laid upon the Table the Certificate from the Examiners that the further Standing Orders applicable to the following Bill have been complied with:—London and India Docks Company. The same was ordered to lie on the Table.
Manchester Ship Canal Bill [H.L.]. The King's consent signified; and Bill reported from the Select Committee, with Amendments.
Stretford Urban District Council Bill [H.L.]. Reported from the Select Committee, with Amendments.
King's College Hospital Bill [H.L.]; Wolverhampton Corporation Bill. Reported from the Select Committee, with Amendments.
Great Northern Railway Bill; Midland Railway Bill. Reported, with Amendments.
London and North-Western Railway Bill. Report from the Select Committee, That the Committee had not proceeded with the consideration of the Bill, no parties having appeared in opposition thereto; read, and ordered to lie on the Table. The orders made on the 28th of April and 17th of May last discharged, and Bill committed.
Lothians Electric Power Bill [H.L.]. Read 3a, and passed, and sent to the Commons.
Littlestone-on-Sea and District Water Bill; Brixham Gas Bill; Acton Improvement Bill Read 3a, with the Amendments, and passed, and returned to the Commons.
Torquay Tramways Bill; Charing Cross, Euston, and Hampstead Railway Bill; Baker Street and Waterloo Railway Bill; Soothill Nether Urban District Tramways Bill; Tramways Orders Confirmation (No. 2) Bill [H.L.]. Report from the Committee of Selection, That the Lord Seaton be proposed to the House as a member of the Select Committee on the said Bills in the place of the Lord Deramore; read, and agreed to.
Oakengates, Dawley, and District Joint Water Board Bill [H.L.]; Humber Commercial Railway and Dock Bill; Great Central Railway Bill; Canal Rates and Charges (Regents Canal) Order Confirmation Bill [H.L.]; Gas Orders Confirmation (No. 1) Bill [H.L.]. Report from the Committee of Selection, That the Lord Monson be proposed to the House as a member of the Select Committee on the said Bills in the place of the Marquess of Exeter; read, and agreed to.
North-Western Electricity and Power Gas Bill; Skipton Water and Improvement Bill. Brought from the Commons; read 1a; and referred to the Examiners.
Gas Orders Confirmation (No. 2) Bill [H.L.]; Electric Lighting Provisional Orders (No. 4) Bill [H.L.]; Electric Lighting Provisional Orders (No. 5) Bill [H.L.]; Tramways Orders Confirmation (No. 1) Bill [H.L.]. Read 2a (according to order).
Local Government Provisional Orders (No. 1) Bill; Local Government Provisional Orders (No. 2) Bill; Local Government Provisional Order (Poor Law) Bill; Local Government Provisional Orders (No. 3) Bill. Read 3a (according to order), and passed.
Electric Lighting Provisional Orders (No. 1) Bill. Amendment reported (according to order), and Bill to be read 3a on Monday next.

RETURNS, REPORTS, ETC.

  TRADE REPORTS—I. ANNUAL SERIES.
  No. 3180. Denmark.
  No 3181. France (Cochin China).
  No. 3182. Persia (the Persian Gulf).

  II. MISCELLANEOUS SERIES.
  No. 612. Customs Tariff of Belgium.
  ELECTRIC LIGHTING ACTS, 1882 AND 1888.
  Special reports by the Board of Trade under Section 1 of the Electric Lighting Act, 1888.

  DUBLIN HOSPITALS.
  Forty-sixth Report of the Board of Superintendence, with appendices, for the year 1903–1904.
  Presented (by Command), and ordered to lie on the Table.

  MERCHANT SEAMEN'S FUND.
  Account of the receipts and expenditure under the Seamen's Fund Winding-up Act, from 1st January to 31st December, 1903.

  SUPERANNUATION.
  Treasury minute, dated 26th May, 1904, declaring that Thomas Tootell, letter carrier, Post Office, was appointed without a Civil Service certificate through inadvertence on the part of the head of his Department.
  Laid before the House (pursuant to Act), and ordered to lie on the Table.

NEW BILLS.
  RESERVE FORCES BILL [H.L.] (NO. 95.).
  A Bill to amend the law relating to the Reserve Forces. And
  NAVAL AND MILITARY MEDALS BILL [H.L.] (No. 96).
  A Bill to regulate and restrict the wearing of Naval and Military Medals and Decorations—Were presented by the Viscount Hutchinson (E. Donoughmore); read 1supe; to be printed; and to be read 2supe on Tuesday next.
  MERCHANT SHIPPING ACT, 1894, AMENDMENT BILL [H.L.]
  A Bill to amend the Merchant Shipping Act, 1894—Was presented by the Lord Muskerry; read 1supe; and to be printed. (No. 97.)

  CROWN AGENTS OF THE COLONIES.
  *THE EARL OF PORTSMOUTH,who had given notice to move—
  "That a Select Committee be appointed to inquire into the system by which the Crown Agents of the Colonies are paid, and their methods of transacting the duties attaching to their office,"
  said: My Lords, since I brought this question before your Lordships' House in February last, I have received an enormous mass of communications from the Colonies and from merchants and various organisations interested in the matter. I hope that if I give but few figures and details you will not on that account imagine that I am not prepared to substantiate every statement I make; but I feel that I should be unduly trespassing on your Lordships' indulgence if I were to go into details. I shall, therefore, confine myself to certain leading facts which I think will justify the Motion I have placed on the Paper. At the same time I wish it to be clearly understood that I admit that under certain condition and for certain purposes Crown Agents are necessary. The point upon which I desire to criticise their conduct is in having, as it were, set up a sort of Government trade department instead of adopting the system in force, in private and commercial concerns, of open tenders.
  I think it will be for the convenience of your Lordships if I state, as clearly and as concisely as I can, various incidents that have occurred in different Crown colonies which have caused the colonists to be very dissatisfied with the conduct of the Crown Agents. If there are any of your Lordships who do not understand exactly the position of the Crown Agents Office, I might explain that the Crown Agents do all the work of the Government, in buying stores and in constructing railways and public improvements for the Crown Colonies, which in our self-governing colonies is done by the colonies themselves, and which in India and Egypt is put up to open tender.
  The first colony to which I shall allude is British Honduras. The attitude of the Crown Agents in regard to that colony has been one of delay and obstruction. The colonists of British Honduras have for a long time desired to have a railway from the Port of Belize

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  into the hinterland, and from thence a little distance into the territory of Guatemala, the object, of course, being to enable them to bring down to the coast the various timbers which are the main industry of that colony. A line was surveyed by a Mr. Shelford, of the firm who act as consulting engineers to the Crown Agents and the Colonial Office. In his report of the projected line Mr. Shelford spoke of the country as an "easy country," and yet the expenditure which they estimated it would be needful to incur in making the railway was put at £734,000. That seems to me, on the face of it, to be rather a preposterous estimate. The colonists themselves objected to the cost, and agreed to pay a reasonable sum to any private contractor for constructing a substantial and less expensive line. A London engineering firm undertook to build and equip a short line, which would have satisfied the requirements of the colony, for a sum under £80,000. The Crown Agents, however, raised objection, and so far no line has been made. That is an instance in that colony of the obstructive attitude of the Crown Agents.
  Now let us go to another colony, perhaps the most important of all our Crown Colonies—Ceylon. In Ceylon not only is all the material purchased through the Crown Agents, but the Crown Agents even have their own workshops. As showing the feeling of the colony with regard to this matter, I would read to your Lordships an extract from an article in the Ceylon Observer, which is, perhaps, the leading newspaper in the colony—
  "What is found to answer so well in India, the Straits, and Natal, not to mention other colonies, cannot be disadvantageous in the case of Ceylon. The large amount of capital invested in engineering and ironwork establishments throughout the colony, and the keen competition in this direction, as well as in mercantile and industrial enterprise, afford a quite sufficient guarantee for the execution of work and orders by contract, to the satisfaction of the Government and the public."
  In Ceylon what I think is a very doubtful and objectionable system prevails—the Government have their own workshops and carry out the work themselves. They do not put it up to public contract at all. The Ceylon Public Works Department carries out all the public works in the colony. All material which is imported for such
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  works is obtained through the Crown Agents. There are in Ceylon Government engineering workshops, known as the Government factory. I am puzzled to discover why this condition of things should exist in Ceylon when there is no such establishment in Singapore, in Hong-Kong, or in any other Crown colony.
  We may be told that the work carried on in these Government workshops is less costly and of a higher class. Well, I have specific cases to show that that is not so. Let us take the case of the contract for the Post Office in Ceylon. Specifications and drawings were made in the office of the Public Works Department, and the work was put out to tender. Tenders were received from private contractors for the building, to be erected in accordance with these plans and specifications, but they were rejected on the ground that they were above the estimate of the Public Works Department. Now what happened? The Public Works Department had greatly under-estimated the cost, and therefore had to ask the colony to make up the difference, amounting to a large sum. Of course, if this had been put out to open tender, subject to proper inspection and control, the contractors would have had to bear the loss, but as it was the colony had to bear it. Besides the increased expenditure in money, the Public Works Department took twelve months longer to complete the work than was estimated as the time they would require by the contractors. Not only was this the case, but the specification to which the contractors had to tender as regards the quality of the material and so forth was not adhered to by the Public Works Department.
  Let me give one more instance which happened in Ceylon. In the case of the Haputale Hospital, a firm of engineers were asked to tender for its erection. Their estimate was Rs.87,000. The Director of the Public Works Department said this estimate was too high, the Department's estimate being only Rs.75,000. Accordingly the Crown Agents did the work, but the condition of things which obtained in the case of the Post Office was repeated. The Crown Agents required two Supplementary Votes from the Legislative Council in order to carry out

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  the work, bringing the total cost to over Rs.100,000—a sum considerably in excess of that for which an estimate had been given by a first-class firm of engineers. In the specification sent out to the contractors it was required that teak wood should be used throughout, and the contractors provided for this in their estimate of Rs.87,000; but the Public Works Department not only expended over Rs.13,000 more, but used jungle timber very largely.
  I have before me a quite recent case. I am not justified in mentioning the name of the merchant, but it is a perfectly bona-fide case. I have it on the authority, personally given, of one of the leading merchants in Ceylon. This is his statement. An engineering firm in one of our Crown colonies lately received an order to import some machinery required in connection with a certain work the Government of the colony had in hand. In due course the London agents of this firm placed the order with the makers of the machinery. When the invoice for the same was received, it was found that 15 per cent. discount was allowed off the list price. On being asked if these were the exact terms the furnishers would have quoted had they received the order from the Crown Agents, the reply was that they were not, as they did not allow the Crown Agents any discount owing to the number of restrictions and conditions which they (the Crown Agents) attached to all orders, and which gave the manufacturers a considerable amount of extra trouble.
  I now come to a case in another colony—the Gold Coast Government Railway. That railway was constructed by Mr. Shelford, the consulting engineer to the Crown Agents. Mr. Shelford stated, in the paper which he read recently before the Royal Colonial Institute, that the average cost of what he was pleased to call this "light railway" was £10,300 per mile—a ridiculously exorbitant price. Messrs. Pauling and Co., who are, perhaps, more experienced in the construction of railways in South Africa than any other firm, offered to construct the Gold Coast line, for which the Crown Agents charged £10,300 a mile, for £6,500 a mile, and I wish to know why
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  their offer was not accepted? The offer, however, was not accepted, and the Crown Agents constructed the line. And what sort of a line did they make? They made one of the most notoriously bad lines that has ever been made. I will read to your Lordships a letter on this subject from a gentleman of great experience, Mr. N. G. Lowe, who, writing from Sekondi, says—
  "We have had terrible work with the railway since it has been taken over. It certainly did not start well, and owing to the breakdown of a bridge, on which occasion a white driver and four natives were killed, traffic was stopped for ten days even though this was thirty-two and three-quarter miles beyond Tarkwa, and the restrictions placed on us now with the new regulations entail considerably more work than previously. We are unable to load and dispatch trucks with anything like the same rapidity with which we were able to do it when working under the construction. No trains are now allowed to run after dark."
  And why are they not allowed to run after dark? This regulation was enforced because the construction of the railway was so bad that the drivers refused to take the risk of driving after dark. Mr. Lowe continued —
  "I went up to Dunkwa last Tuesday, but owing to derailments it took me just on twenty-nine hours to go a distance of ninety-nine miles. We were also derailed upon our return journey yesterday. A very great deal of work will have to be done to put the line in anything like working order, and, unfortunately, the open lines-men are all new, and therefore without the benefit of past experience on the line."
  That is an example of one of the lines constructed by the Crown Agents as against the open tender. But there is another point in regard to this precious line. I hold in my hand a return which I have had made out with a great deal of care, showing the various rates per ton per mile that the different railways charge. It is of great public importance in the development of these countries that the railway rates should be as cheap and as reasonable as possible. I have compared the rates upon the British Gold Coast line with those on many other lines in South Africa, and I find that the rate per ton per mile is 2s. 6d., as compared with 6d. on the Cape Colony line, and 1s. 11d. 1s. 3d., and 3¾d. respectively on the lines made by the French in French territory. These facts, it seems to me, ought to be carefully investigated by an impartial Committee.

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  Now that we are upon this subject, I feel bound to make some reference to the very remarkable character of the personnel of the Crown Agents' Office and the Colonial Office. I am perfectly well aware that both my right hon. friend the Secretary of State and the noble Duke opposite are anxious in every way I to serve the public interest, but what I do complain of is that the Colonial Office in its permanent departments is not a check upon the Crown Agents. In other words, there exists in a most curious and; remarkable degree a sort of family party in the Crown Agents' Department and the Colonial Office. The Permanent Under-Secretary for the Colonies is Sir Montague Ommanney. Mr. Ommanney, a nephew of Sir Montague Ommanney, is a member of a firm of solicitors who are solicitors to the Crown Agents. Mr. Shelford, who constructed the precious and costly line to which I have referred, is son-in-law to Sir Montague Ommanney, and is himself a member of the firm of Messrs. Shelford, who are also the con-suiting engineers to the Crown Agents.! If I may say so, that is rather like a condition of things borrowed from the comic operas of Gilbert and Sullivan. First of all, the work of the Crown Agents is handed over to delegated constructors selected by them, and then they are paid besides for the duty of reporting on their own work. That seems to me to be a condition of things which in the public interest is quite indefensible, and I think it certainly should be carefully and fully inquired into.
  Now I come to the case of the Transvaal, and I shall ask your Lordships' attention to the strong feeling which was expressed and the strong resolutions unanimously passed at the Johannesburg Chamber or Commerce in April last. I have no desire to quote to your Lordships the somewhat full-flavoured language used on that occasion, but the meeting consisted of the most prominent members of different firms throughout the Transvaal, and one or two very remarkable statements were made at that meeting and publicly reported. The meeting unanimously protested against the action of the Colonial Office in insisting upon all materials and articles being purchased through the Crown Agents. A Mr. Mitchell, of the firm of Gordon, Mitchell,
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  and Co., stated that orders sent through Crown Agents had taken as long as twelve months to execute, whereas local traders were bound down by a restricted period of three or four months. Mr. Park said—and this is a most extraordinary statement—that Government officials had actually come to ask him to get out goods already ordered from the Crown Agents, but which the officials knew would not arrive in time. This protest of the Johannesburg Chamber of Commerce is supported by all the other chambers of commerce in the colony and in Orangia. The colonists feel particularly aggrieved, and, I think, naturally, that they should be compelled to submit to this state of things after the language used by Mr. Chamberlain, who promised the Transvaal that, to all intents and purposes, they should be treated as a self-governing colony. My right hon. friend the present Secretary of State for the Colonies as recently as January last stated that—
  "The only safe way of dealing with our self-governing colonies is never to interfere with their wishes, unless Imperial interests are vitally concerned. This is true even of our Crown colonies. We ought never to forget that each of these great States has its own life, its own policy, and its own methods. So long as this fact is kept in view, the Empire will possess the surest foundations and ideal aspirations."
  Surely it is not an unreasonable contention on the part of the Transvaal that they should enjoy the same opportunities as the Cape and Natal enjoy of being master of their own improvements, and not be tied down to an office in London.
  The people in the Transvaal have a very lively recollection of the objectionable system of the Crown Agents which now prevails in our other African Crown colonies. In our West African colonies a certain brand of cement is the only one allowed to be shipped by them. There may be climatic conditions why this particular brand is the only one that ought to be used; but the most extraordinary proceeding, from a business point of view, is this, that the Crown Agents do not buy direct from the supplier, but from a steamship owner, delivered at the port at which they want it. What is the effect of this? The shipowner gets the supplier to give him a monopoly of that particular brand for the West Coast, and consequently is not put into competition either in regard to freight or first

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  cost of the material. I see my noble friend Lord Londonderry opposite, and I should like to call his attention to the position as regards coal. The Crown Agents do not buy direct from the colliery owners and then see what they can do in the way of getting a cheap freight; they buy direct from the shipowner. As regards timber, there is this extraordinary state of things. Pensacolan pitch-pine, Swedish spruce, American pine—in fact, all timbers from all parts of the world—are bought for the West Coast of Africa viâ Liverpool, and are not delivered at the ports where required direct from the supplier.
  The volume of trade which passes through the hands of the Crown Agents is enormous. Sir Henry Fowler obtained a statement from the Secretary of State that in the case of the Transvaal and Orange River Colony alone, for 1903, nearly £2,000,000 worth of goods were purchased by the Crown Agents. I contend that the Crown Agents ought to be strong enough and capable enough to make their own contracts with the suppliers and be independent of particular steamship companies. This question of freights is a very anxious and serious one in the development of South Africa. I do not know whether your Lordships are aware of the ingenious condition of things which has been created by a certain ring of shipowners in Liverpool. What they do is this. They say to the merchants, We will give you a rebate upon your freights of 10 per cent., but this rebate is not a discount; you are not to receive it at once, but it is to be held in suspense—in some cases for as long as a year and a half—and if during that time you ship any goods by any other line than ours you lose the rebate. That seems to me to be a scandalous condition of things, and I say that this policy on the part of the Crown Agents is only playing into the hands of the ring. It is true that the Crown Agents affected to offer Government freights to firms outside the ring, but they rendered that offer nugatory by the ridiculous proviso which they attached to it, the proviso being that in tendering the firms were to be prepared to ship goods from any port in the United Kingdom, How could you expect a merchant, say, in London, Southampton, or Liverpool suddenly, at
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  a moment's notice, to ship freight from Middlesbrough, Bristol, or Aberdeen? Why were not tenders invited for the specific shipping of goods at named ports?
  I have mentioned the case of colonies which have suffered under the present system, and I have in each case given leading facts and figures. I should like, however, before I sit down to make some reference to the statements made by the noble Duke the Under-Secretary of State for the Colonies in the debate which took place when I last brought this subject forward. The noble Duke then said—
  "I would point out to the noble Earl that the Crown Agents do not receive money from the Imperial Exchequer."
  Well, my Lords, even if they do not, I do not think that is much of an argument against vigilance on our part, for we are trustees for the colonies which do not possess self-government. But I entirely take issue with the noble Duke on that statement. First of all, it was computed by the Foreign Office, and they allowed Sir H. Johnston to publish the information in a Blue-book and also in his work on the Uganda Protectorate, that the Uganda Railway might have been constructed for about £750,000 cheaper than the actual cost of construction. Of course, that loss came out of our pockets. We grant large sums of money to certain protectorates. Northern Nigeria receives some £300,000 or more annually from the Imperial Exchequer, and the supplies for this protectorate are entirely obtained through the Crown Agents. Therefore if the price paid is high, and the system wasteful, there is an annual loss to the taxpayers of this country.
  I should like to again press the question of commission. The noble Duke spoke of the Crown Agents being entitled to a commission of 1 per cent. I want to know what that 1 per cent. commission includes. The Crown Agents Office does not possess any great technical knowledge. It has to buy goods and materials of all kinds, and must employ expert buyers. Are they allowed no commission? I am informed, on high authority, that the Crown Agents' charges are, as the noble Duke said, 1 per cent. for anything they do., ½ per cent. on loans issued, ½ per cent. on repayment of loans, 1 per cent. on all orders executed by their Office, and, if this is for railway construction, then

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  another 5 per cent. on all material ordered for such railway construction, and 2½ per Cent. for inspection of any such railway material charged by the consulting engineers, making at least 10½ per cent., besides solicitors' fees, which are charged on any railway construction carried out under the Crown Agents' Office.
  In purchasing goods on a large scale you have two very important elements to consider, not merely the question of price but the question of trade discount and also cash discount. I happen to buy largely for my different estates, and I know that on some material I get a trade discount, buying in a large way, of as much as 75 per cent. trade discount and 2½ per cent. cash discount, in all 77½. The Crown Agents, buying on a much larger scale, ought to get this trade discount. What I want to ask is, Do the Crown Agents get these trade and cash discounts, and, if they do, do the Colonies obtain the full benefit of them? As I have said, I do not wish for a Committee for the purpose of abolishing the Office of Crown Agents. I desire the Committee to bring to light the manner in which that Office is conducted, and especially to consider whether it would not be better to have a more rational and commercial system. The Crown Agents' Office has not got any special technical knowledge, and you can only get the best -of that technical knowledge checked and controlled by putting things up to public contract. Nothing can be worse than having these Government workshops and this close list of firms who alone are allowed to tender. One of the most successful Administrations which has existed has been probably the Administration of Lord Cromer in Egypt. Lord Cromer is allowed to buy whatever is required in the cheapest market. What is the view of the Indian Government? Lord Curzon said, in a speech delivered in January, 1903, on the occasion of visiting the collieries at Katrasgarh—
  "I do hope that India will become much mote of a self-providing country than she now is, manufacturing out of her own materials and with her own workmen a great deal that she now imports from abroad."
  That would be impossible under the Crown Agents' system. The Madras Government last September issued an order to the effect that tenders for all Government works of importance re-
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  quiring engineering plant would be, in future, publicly advertised for, and other things being equal, preference would be given to local firms, provided the interests of the Government were not sacrificed thereby.
  I have now, my Lords, told my tale. I am afraid it has been rather a long one, but I have had to deal with a great many facts and figures. What I want to impress upon your Lordships is that in supporting the Motion which I now move you are only supporting the appointment of an impartial Committee. I hope that the Committee, if appointed, will not be guided by any political or Party bias, but will impartially examine into the facts of the case. It seems to me that, from the facts I have mentioned, and which I can prove, there are strong grounds to justify such an inquiry, and time is, moreover, a very acute feeling of irritation throughout our Colonial Empire. On these grounds I hope the Government will agree to the appointment of this Committee. I have every confidence that my right hon. friend the Secretary of State is anxious to act most fairly in the matter, and I cannot imagine that he would desire to shelve inquiry or give any but the fullest information on the subject.
  Moved, "That a Select Committee be appointed to inquire into the system by which the Crown Agents of the Colonies are paid, and their methods of transacting the duties attaching to their office."—(The Earl of Portsmouth.)
  *EARL GREY: My Lords, I regret that the noble Earl towards the end of his speech made use of language which I cannot help thinking will convey an impression to some that the Crown Agents have a pecuniary interest in: raising the cost of works for which they are responsible. I do not think that can have been his intention, because we have been informed by the noble Duke the Under-Secretary for the Colonies—and the regulations which have been distributed leave no doubt upon the subject—that the remuneration of the Crown Agents is fixed by the Secretary of State, and that the commissions which are very properly charged to he various

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  Colonies for work executed in them goes to a fund regulated, as I understand, by the Secretary of State. I associate myself with the noble Earl in regard to the rest of his speech, which I cannot help thinking has made a powerful impression upon the House. I make no imputation whatever against the personal honour of the Crown Agents. I believe they are as honourable a body of men as any in His Majesty's Service. But when we remember that the work of the Crown Agents' Department has increased very largely of late years, and that the Office is not paid for by British taxpayers—although I admit that work done in too costly a manner may involve heavy taxation which the British taxpayer has to pay—but the cost of the work is debited to the Crown colonies concerned, it will be recognised that we have a special duty to our colonial subjects to convince them that the methods employed by the Crown Agents1 Office are up-to-date business methods and that the work is done as efficiently and economically as possible. I have no reason to suppose that the Crown Agents would not themselves welcome an inquiry which could not fail to strengthen their hands and inspire an increased confidence in their methods.
  I am glad that the noble Earl abstained from suggesting that the policy of placing orders for stores and material in London through the Crown Agents is injurious to the public service. In that part of the Empire with which I am chiefly concerned a reduction in the cost of living is the first essential; and I think it is quite possible that in parts of South Africa the interests of the local merchant may be strongly opposed to the interests of the consumer, and that the Crown Agents, by placing their orders in London, may be able to safeguard the interests of the consumer more efficiently than if those orders were placed in South Africa itself. It is in other departments of the Crown Agents' Office that I think an impartial inquiry is really required. The noble Earl has pointed out in some detail—and I could supplement what he said if I chose to weary your Lordships—that departmental construction by the Crown Agents is as a rule costly. If the principle adopted with success by the Government of India were adopted in Ceylon and in our other Crown colonies, it
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  is my firm belief that the work would be done better and cheaper than it is to-day. I am not going to refer to the subject of railway construction—it is a big subject,, and one which I think on some afternoon might well occupy the attention of the House—but I cannot refrain, having made some investigation into this question, from giving expression to my belief that whether you look to West Africa, East Africa, the Federated States, or the West Indies, you will find that railway and other works that have been departmentally constructed under the Crown Agents have cost more than they were estimated to cost; and if the Crown Agents were responsible for excess over the original estimates, as a firm of contractors would be, they would have to meet very large sums of money which now have to be found by the taxpayers of this country and of the Crown Colonies. I suggest that on another afternoon I may be permitted to move for a Return giving for the last ten or fifteen years the various works carried out by the Crown Agents in the different colonies, together with the original estimate of their cost and the actual amount expended.
  But I wish to confine my remarks to-day to that part of the Crown Agents' Department which is concerned in the placing of freight contracts. I believe that the Crown Agents,' owing to excess of caution and want of boldness, are responsible for keeping up the system at present obtaining, which operates as a direct restraint on trade, diverts trade which properly belongs to the United Kingdom to America, raises rates for transportation services by artificial methods, and is indirectly instrumental in increasing the cost of living in South Africa. The noble Earl has explained what the system, of the Conference Lines is. In addition to their fixed rate they add a further 10 per cent., and then, after the lapse of six months, and, in some cases, as long, a period as twelve and eighteen months, that extra 10 per cent. is given back to the shipper on condition that he has not sent one ton of cargo in the interval by a competing line. The shipper is further penalised by an intimation that if he sends any cargo by a competing line the Conference Lines will not convey goods

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  for him except at a prohibitive price. The result of this system is that freights from the port of New York are one-half or one-third the amount of freights from ports in the United Kingdom. I will read to your Lordships a letter from the secretary of the Prince Line, Ltd., a firm of British steamship owners. It is dated 6th May this year, and addressed to the secretary of the Chamber of Commerce of Leeds—
  "Referring to my conversation with you recently with regard to the difficult position in which the British manufacturers seeking to do business in South Africa are placed in consequence of the much lower rates of freight ruling in New York for South Africa, you will be pleased to know that, with a view to helping our manufacturers as far as possible, we have decided to take goods for delivery in South Africa by our 'Saxon Prince,' which vessel will load in Manchester in the early days of June for South Africa, viâ New York. We may further state that it is our intention that the 'Saxon prince' shall be followed by other steamers taking cargo from the United Kingdom to South Africa, viâ New York."
  This system of penalising shippers who use competing lines in the way I have described under the rebate system is directly driving to America trade which belongs to this country.
  The only argument that I have seen against placing freight contracts, as the Indian Government does, in the open market is the statement of Mr. Chamberlain, who pointed out that the acceptance of a casual tender would place the Crown Agents or any other shipper absolutely at the mercy of the Conference Lines. I believe that fear to be absolutely unwarranted. I can speak from personal experience of Rhodesia, where, although we have only 12,000 white population, we were able, by fighting the Conference Lines, to obtain a rate £2 below that which the Conference Lines had previously charged; and if you can save £2, or even £1 per ton, on the tonnage going into a young country you aid considerably the development of that country. I would, therefore, strongly urge your Lordships to support this Motion, which asks that an inquiry should be made into the way in which the Crown Agents carry on the business entrusted to that Department. It is their practice in placing freight contracts to go to a selected list of shipowners, with the result which I have explained. Why do they not follow the example of the
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  Indian Government, who advertise their requirements every Friday? They post up their requirements, stating exactly the nature of the consignments and the ports from which they are to be shipped. The tenders come in on the following Tuesday, and the answers are sent next day. Why cannot that practice be adopted by the Crown Agents in doing business for our Crown colonies?
  As I told your Lordships last year, one firm of shipowners is Continually carrying freights for the Indian Government to Calcutta, but has never had a chance of quoting for a freight contract for Colombo because Colombo is under the Crown Agents. It is the invariable custom of the Crown Agents to place their contracts with the Conference Lines. Last year the noble Duke the Under-Secretary offered to meet the demand which I then pressed upon your Lordships, and he stated that the Crown Agents were going to invite all shipowners to tender to carry goods to South Africa. But none of the independent shipowners responded. The reason is to be found in the fact that the form of contract made it impossible for any business man to look at it. Under the form of contract issued the contractor had to undertake to carry 60,000 tons to South African ports, with the condition that the Crown Agents should have the option of- forcing him to carry an additional 60,000 tons, but reserving to themselves the right to ship outside. It was a "Heads I win, tails you lose" arrangement. Another condition was that the rate should be uniform on all packages. As your lordships are aware, there are profitable freights and unprofitable freights, and to ask business men to expose themselves to the liability of being compelled by the Crown Agents to carry all unremunerative freights whilst the remunerative freights could be placed outside, was most unreasonable. It was an arrangement which no business firm would for a moment consider.
  Under the contract the person tendering was liable, at three weeks' notice, to be required to call at any harbour where the Government had collected 500 tons—that is to say, he might be compelled to call at four different ports and take up 2,000 tons. The harbour dues would reach £300, roughly,

  1343
  in each case, or £1,200 for the 2,000 tons; and then he would have to sail to South Africa without any more cargo, for the contract provided that the shipowner should not call at any ports after snipping the Crown Agents' goods. In their anxiety to safeguard His Majesty's Government and to obtain the best terms! possible, the Crown Agents invented a form of contract which was really beside the mark, and was at once placed in the rubbish basket. The Agent-General of Cape Colony gave an exactly similar offer, but as no responses came he has now withdrawn it and substituted a reasonable form of contract and one more closely resembling that adopted by the Government of India. If in placing their freight contracts the Crown Agents had adopted the practice which has been successfully carried on for years by the Government of India, they would have secured for British manufacturers the cheap rate of 10s. per ton to South African ports -which the Houston and Prince Lines gave to New York shippers for nine or ten months with this result, that a large amount of trade which ought to have been kept in England was made a present of to New York.
  Mr. Birchenough, in a capable Report which is known to your Lordships, stated that—
  "After careful inquiry I am convinced that no single circumstance has done so much to promote the growth of American trade during the last twelve months as these low freight charges between America and South African ports. It is pleasant to reflect that they are the result of the action of British and not of foreign steamship companies."
  I would add that even less pleasant is it to reflect that this action of the British steamship companies was absolutely necessitated by the ultra prudence, I might almost call it cowardice, of the Crown Agents. When we reflect that the Crown Agents are not responsible to Parliament we ought to be most jealous in this matter. If they were controlled by the Colonies I believe this scandal would not have occurred. I am glad to see that the inhabitants of South Africa are now organising a hostile movement against the shipping of Government freights by lines which practice this system of rebate. The House of Assembly at Pietermaritzburg actually marked their disapprobation of the freight
  1344
  arrangements by passing a Motion for the reduction of the Agent-General's salary. That Motion was rescinded the following day, but it was adopted with a view of calling attention to what was rightly considered to be a vicious practice in the hope that the authorities would see their way to remove it.
  The Associated Chambers of Commerce in South Africa have convened a meeting for next week at Johannesburg, and a resolution will be moved urging legislative action against the rebate system. The Johannesburg Chamber of Commerce and Trade passed a resolution praying the Government to introduce a clause in all trade contracts requiring the contractor to carry public freights at the same rate as Government freights. I omitted to state that when we saved £2 a ton in Rhodesia we stipulated in the contract that the shipowner should carry freight for the public at the reduced rate. I need not trouble your Lordships with the other resolutions in favour of getting rid of the rebate system. It is well known that the German Government, in return for subsidies, are able to make what regulations they please as to the rates charged to the ordinary public; and I maintain that His Majesty's Government, acting in co-operation with the Governments of Natal and Cape Colony, should have no difficulty whatever in bringing pressure to bear on the Conference Lines in such a way as to satisfy them that if they are to carry in the future any portion of the tonnage which the Government have under their control, they will have to abandon the present 10 per cent. rebate system, and carry for the public at the same rates as they are prepared to carry for His Majesty's Government.
  I believe that it was owing to the action of the Crown Agents that one independent line of steamers was driven to America, to compete against British traders and manufacturers, by the cheap rate of 10s. per ton from New York to Cape pores, and that if His Majesty's Government, through the Crown Agents, had supported that independent line, the rates to South African ports would have been reduced, to the great advantage of British trade and our fellow-subjects in South Africa. I do not believe

  1345
  that the competing line which fought the Conference ring ever received any support from His Majesty's Government. It was, consequently, forced into the ring. You now have left one solitary independent line of steamers on the East Coast of Africa—the British India Steamship Company. The Mombasa trade, which averages 200 tons per month, is so small that in order to avoid the transit dues through the Suez Canal this company goes right round by the Cape. The first port it touches at is Delagoa Bay. The company have made frequent requests to be allowed to share in the Government freights to Delagoa Bay, but, so far as I know, they have never received an invitation to tender. A recommendation was made that the East Coast line of steamers should receive a subsidy from the State in order to enable it to carry on Imperial work. It is admitted, I believe, on both sides of the House that such a subsidy would be justified. The Chancellor of the Exchequer, however, pointed out the other day that, in view of the present state of national finance, it was impossible for the Treasury to consider the suggestion. If you are going to pay no subsidy to a line which is wanted for Imperial purposes, what are you going to do for it? I believe the British India Steamship Company would much prefer to have a fair chance of a portion of the 'Government freights to Delagoa Bay than receive a subsidy. Are the Crown Agents going to give this company a portion of their freight contracts? If that is not done, I warn your Lordships that through the action of the Crown Agents the only independent British line of steamers to Delagoa Bay and the East Coast will be driven to join the Conference ring.
  There is another point to which I wish to draw the attention of your Lordships. I happened to be in Germany the other day, and I elicited information as to the practice which exists for bringing the German manufacturer into closer touch with the South African consumer. As your Lordships will admit, it is most desirable, in the interests of all concerned, that the British manufacturer and the South African consumer should be brought in close connection with each other. The Germans and Americans
  1346
  have established a system of through bookings, but through bookings are impossible in this country so long as the 10 per cent. rebate system is kept up. It is absolutely certain that unless we organise our transportation service with the same care that the Germans and Americans are organising theirs, we shall lose in the race of commerce to South Africa. The total value of exports (domestic and foreign) from New York to British South Africa was, for the year ended 30th June, 1901, £2,498,397; for the year ended 30th June, 1902, £3,044,648; and for the year ended 30th June, 1903, £4,732,517. It has practically doubled in two years. The largest increases have taken place in foodstuffs and manufactured articles in which Great Britain could successfully compete were it not for the excessive freight charges prevailing from this country. I conclude with a most earnest appeal that the Government will appoint an impartial Committee to make inquiry into the subjects which have been referred to, or, if for any reason that should be considered inadvisable, that they will at any rate follow the practice which has been adopted so successfully by the Indian Government, and place their freight contracts out to public tender.
  *THE UNDER-SECRETARY OF STATE FOR THE COLONIES (The Duke of MARLBOROUGH): My Lords, your Lord-sips have before you the Parliamentary Papers relating to the commercial business of the Crown Agents for the Colonies, but perhaps I may be allowed to supplement a few remarks on those Papers. As your Lordships are aware, there are some forty-four colonies and protectorates that buy their stores through the Crown Agents, and it requires no effort of imagination to see that if each had its own agent to buy in the London market they would in all probability bid against one another and thus raise the price of stores to the detriment of the colonies. Moreover, it is very doubtful whether, if each had its own agent, the colonies would have the advantage of the services of such men of experience, trained in commercial pursuits, which they now possess in the Crown Agency. We believe that the cost to the colonies would not only be increased, but the system would be altogether unworkable. The noble Earl who moved

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  the Motion now before your Lordships admitted that the theory and principles of the Crown Agents' Office were sound. He admits that the system has to exist, and he did not suggest to your Lordships any other system which should be adopted in its place.
  *THE EARL OF PORTSMOUTH*THE EARL OF PORTSMOUTH: I said that as regards this issue of loans and all other such purposes it might be advisable to retain them, but I was opposed to their acting as Government buyers. I object to monopoly of any kind.
  *THE DUKE OF MARLBOROUGH: The view of the Government is that with so large a number of colonies, varying in size, in geographical, racial, and industrial conditions, it is essential to have an Agency with a general and uniform practice in commercial dealings, and with one set of rules and principles to guide it. Obstacles to anything like concerted action by the Colonies in the matter exists in their varying interest, and consequently we feel it is not unimportant, on Imperial grounds, that they should have a common business centre in London in the form of an Agency, just as they have for political and administrative questions a common central ground in the Colonial Office.
  I would remind your Lordships what are the advantages of centralising the business of the Crown Colonies in the hands of the Crown Agents. In the first place, there is the advantage of concentrating the large and long experience derived from business of many colonies in one body of men. This body of men—this Agency—we believe can buy in the cheapest market. They possess a power of control over manufacturers which one single agent could not possibly exercise. If a manufacturer does not supply the proper quality of goods or otherwise fails in his contract, the Crown Agents possess authority and power over him which one single agent could not possess. There is also an advantage in connection with loans and the management of sinking funds, and we believe the Crown Agents to be a much better body of men to deal with the many financial matters involved. The noble Earl will notice, on page 8 of the Parliamentary Paper, that the Crown Agents give advice and assistance, pay the salaries of officers
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  on leave, and carry out many minor matters which are of great assistance to the Colonies, and which they would have difficulty in getting done if a body like the Crown Agents did not exist.
  These are, in rough outline, the functions of the Crown Agents. Let us consider for a moment the remuneration they receive. In the first place, they get 1 per cent. on all stores for railways and stores of a commercial character. The noble Earl who spoke first asked whether this 1 per cent. covered everything. My information is that the 1 per cent. is the sole and only charge in connection with any orders which the Crown Agents transact on behalf of the Colonies. The noble Earl was anxious to know whether there were also cash discounts and trade discounts. I am happy to inform him that both these considerations are laid down in the instructions of the Secretary of State to the Crown Agents. The noble Earl also asked whether the Crown Agents invited tenders for every order which was over £100 in value. I have a Parliamentary Paper here which has just been published in response to an inquiry in the House of Commons, which gives a list of the articles which the Crown Agents have invited tenders for, and the names of the different firms who have supplied the articles. In addition to this 1 per cent., the Crown Agents charge ½ per cent. on all loans, and ¼ per cent. on the payment of the interest on loans. From these receipts I are defrayed the salaries of the three Crown Agents and the cost of the administration of the office; and if there is any money over at the end of the year it is transferred to the reserve fund, the income of which is employed for the purpose of granting pensions to the Crown Agents. The salaries are fixed by the Secretary of State. There can be no inducement, therefore, as the noble Earl inferred on the occasion of the last debate, for the Crown Agents to make their orders as large as possible with a view to increasing their percentage. The noble Earl certainly made that statement on the last occasion, and; I understand from his remarks to-day that he does not in any way withdraw it Let me, as carefully as I can, explain this system of percentage.
  *THE EARL OF PORTSMOUTH: I did not deal with the question of percentages at all. I asked the noble Duke about the question of commission, and whether the 1 per cent. included everything.
  *THE DUKE OF MARLBOROUGH: The percentage which the Crown Agents get cannot in any way affect them, because their salaries are fixed and can only be altered by the sanction of the Secretary of State. Therefore, there cannot be any inducement for them to make their orders as large as possible so as to gain a greater percentage. As I have already stated, if there is any money over at the end of the year it is transferred to the reserve fund, the interest on which may be utilised, in addition to granting pensions, for the purpose of making good any loss that may occur in any year on the working of the office. Obviously, if the profits made by the Crown Agents were so considerable that the reserve fund increased to an unduly large degree, the Secretary of State would consider it his duty to reduce the scale of charges so as to make the profit and loss account balance as nearly as possible. The Colonies, in giving an order, state the price they wish to pay, and the Crown Agents are obliged to buy at that price, and are only permitted a small margin. It is, therefore, quite clear that the contention of the noble Earl that the Crown Agents, by the system of percentage, are deliberately encouraged to make large orders and buy in the dearest market is unjustified by the facts of the case. I confess it is very distasteful to me to have to allude to a subject of this sort at all, for, after all, we are dealing with a body of men of high character and long experience in the public service. It is only with the desire to show clearly to your Lordships that there can be no possible inducement for the Crown Agents to make their orders as large as possible with a view to increasing their remuneration that I have ventured to dwell on this matter at such length. I do not think I need say any more with regard to the position of the Crown Agents and the form of their remuneration. It is a system which those who are experienced in these matters consider the best that can be devised. But since the
  1350
  noble Earl seems to regard it with some disfavour and to think that the system is not quite perfect, I can assure him that if he can suggest any improvement on the present scheme, any point where he sees an improvement can be effected, the Secretary of State will bear the suggestion in mind. I do not think I need dwell on the personal reflections that the noble Earl made with regard to the Permanent Under-Secretary at the Colonial Office.
  *THE EARL OF PORTSMOUTH: Will the noble Duke prove that my facts are wrong?
  *THE DUKE OF MARLBOROUGH: I do not propose to go into that discussion to-night, beyond saying that I do not think the noble Earl's reflections upon the Permanent Under-Secretary are altogether according to the best traditions of your Lordships' House. As to the question whether the system of the Crown Agents is sound or successful, I would point out that the late Colonial Secretary held an exhaustive inquiry into the subject. He wrote a dispatch to all the Governors inquiring their views on the system, and also inviting them to state any complaints they might have. I would impress upon your Lordships that this inquiry was not a perfunctory inquiry where only a pious expression of opinion was asked, but a searching and exhaustive inquiry, organised with the deliberate aim in view of ascertaining whether there was any cause of complaint against the Crown Agents' system. I think your Lordships will admit that this was a pretty severe trial for any administrative office to be subjected to. In this matter, as in all others, the late Colonial Secretary was most businesslike, and the inquiry instituted by him was carried out in the most searching and business-like manner.
  Replies from the Governors were duly received. A minority of them replied that they were perfectly satisfied with the system, and had no cause of complaint whatever. A majority of the Governors did say they had cause of complaint. At the same time, they said, in the most definite terms, that they were perfectly satisfied with the quality of the goods supplied by the Crown Agents, and also with the prices charged. Their

  1351
  chief complaint was directed to the delay in carrying out their orders. This delay was accounted for by the fact that orders to the Crown Agents had formerly to be referred to the Colonial Office for sanction. If your Lordships will turn to page 4 of the Parliamentary Paper, you will see that by Sections 5 and 7 this difficulty has been now removed. When once the Secretary of State has passed the Budget of a colony for the year, the colony is entitled to ask the Crown Agents to supply all the items specified without further reference to the Colonial Office. Another reason for the delay was the fact that manufacturers failed to carry out their bargains. I am sure your Lordships must have had personal experience of how difficult it is to induce manufacturers to carry out their bargains to time; and in the case of the Crown Agents, who had an enormous number of contracts to make, it is not surprising that there were many instances when they could not force the manufacturers to deliver goods at the exact date agreed upon. The penalty clause may be enforced, but the only result is that the manufacturer, the next time he tenders, includes in his tender the amount of the penalty he is likely to incur. The result of the replies of the Colonial Governors is well summed up in the second paragraph of the Secretary of State's dispatch contained in the Parliamentary Paper now before your Lordships. What does the Secretary of State say? He states that—
  "After a most careful consideration of the answers to his dispatch, my predecessor placed on record his opinion that the number of complaints was small in proportion to the number of the Colonies which had sent replies; that few of the complaints were serious; that, allowing for the percentage of mistakes for which allowance in all businesses must be made, and taking into consideration the very small charge for agency which the Colonies have to pay, the existing system had, beyond question, worked well for the Colonies; and that Crown Agents had deserved the confidence alike of the Governments of the Crown Colonies and of successive Secretaries of State."
  It is very easy to make complaints, but very often when inquired into there is frequently forthcoming a complete answer to show that the complaint is not in any way justified. On the lust occasion that we debated this subject the noble Earl who has moved the Resolution now before the House complained of the cost of the Gold Coast
  1352
  Railway, and he has alluded to that railway again this afternoon. He said on the last occasion—
  "The Crown Agents undertook the building of the Ashantee Railway. The estimated cost of that railway was £8,000 a mile, but the actual cost was £13,000 a mile."
  *THE EARL OF PORTSMOUTH: I stated in the course of my speech to-day that the cost was £10,300 a mile.
  *THE DUKE OF MARLBOROUGH: I am alluding to the figures which the noble Earl gave on the last occasion. I am quite aware that he has come down in his figures to-day.
  *THE EARL OF PORTSMOUTH: I am not aware of having stated the higher figure.
  *THE DUKE OF MARLBOROUGH: I am quoting from the report of the noble Earl's speech which appears in The Parliamentary Debates. The exact cost of the construction of the Gold Coast Railway was £10,300 per mile.
  *THE EARL OF PORTSMOUTH: That is what I stated.
  *THE DUKE OF MARLBOROUGH: The noble Earl went on to say that this railway was very extravagantly built, and compared very unfavourably with other railways in Africa. Now the Congo Railway—with a 2ft. 6in. gauge—co to £10,400 a mile; the Cape Government Railway—which has the same gauge as the Gold Coast Railway, 3ft. 6in.—cost £10,524 a mile; the Natal Railway, with the same gauge as the Gold Coast, cost £13,771 a mile. The cost of these Railways was higher than that of the Gold Coast Railway. The noble Earl, in the course of his speech on the last occasion, said that—
  "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 Ashantee 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 a mile."
  Well, my Lords, I have been at pains to find out the exact cost of the Beira-Mashonaland Railway, and it works out

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  at £10,250 a mile, within £50 of the cost of the Gold Coast Railway. Yet the noble Earl who spoke last said the Gold Coast Railway was the most glaring instance of extravagant railway construction he knew of.
  *EARL GREY: A railway built with the credit of the Imperial Government and a railway built with the money found by a commercial company are two very different things. The Beira-Mashonaland Railway Company had to construct the line from hand to mouth and borrow money on extravagant terms.
  *THE DUKE OF MARLBOROUGH: I am not concerned to know how the money was raised. There is a still more remarkable instance of the inaccuracy of the statements noble Lords make with regard to the practice of the Crown Agents. Your Lordships will remember that on the last occasion that this subject was discussed the noble Earl (Earl Grey) strongly condemned the present system, and quoted the case of the purchase of a steamer for Lake Nyassa by Sir Harry Johnston. The noble Earl said—
  "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 the 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 £8,000."
  Now, what are the real facts of this case? Sir Harry Johnston sent home a specification and plans of the steamer, suggesting that they—
  "Might be placed in the hands of the Crown Agents so that tenders might he invited."
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  That is what the noble Earl described as the Crown Agents insisting on supplying the steamer themselves. The specification was sent to the Crown Agents, who informed the Foreign Office that the ship would cost £12,500. The Foreign Office replied that the Superintendent of Marine of the protectorate had been authorised to negotiate privately with shipbuilding firms to see whether a lower estimate could be obtained. The superintendent at once departed from the original specification which he had himself drawn up. The speed was reduced from 13 to 11 knots; the double bottom on cellular system was omitted, together with an expensive system for pumping out the various departments; the thickness of the plating was reduced by 33 per cent; the limit of weight of packages was increased from 200 to 300 lbs. with the effect of greatly reducing the amount of riveting, planing, and other work. The limit of 200 lbs. was originally fixed by Sir Harry Johnston on the ground that, as the vessel had to be erected locally, she should be sent out in pieces suitable for transport on men's heads. Innumerable other alterations were made, such as a large reduction in accommodation, wooden masts instead of steel, and two boats were ordered instead of four. In fact, it was a totally different vessel from the one originally requisitioned, and there is not the slightest ground for supposing that the Crown Agents could not, if they had had the opportunity, have obtained tenders for the construction of this vessel as low as that obtained by the superintendent.
  I do not for a moment impute to my noble friend a desire to be other than perfectly accurate, but I have no doubt he has fallen into error by believing a statement made to him. It may be that Sir Harry Johnston himself gave him the information, but in these matters Sir Harry Johnston—I wish to use a Parliamentary term—is not quite to be relied upon. Speaking on 22nd March this year, at a meeting of the Society of Arts, Sir Harry Johnston enlarged upon tie iniquities of the Crown Agents in a somewhat similar strain to that of the noble Earl. He said—
  "People were sent out, not because they were absolutely suited for the work and would be chosen by a hard-headed business firm, but

  1355
  because they were people whom somebody wanted to provide for."
  That was what Sir Harry Johnston said a few months ago. I will now read to your Lordships an extract from a letter which he wrote to the Crown Agents from Nakuro, Uganda Protectorate, dated 18th February, 1901, when he held a very different view. Quite gratuitously, and without being asked, Sir Harry Johnston wrote the following letter to the Crown Agents—
  "I should like in connection with this matter to thank you for the trouble you have taken during the last year in selecting those employees of the Administration with whose appointments you are more especially charged. No one whom you have sent out to fill the post of engineer, blacksmith, printer, dispenser, or unqualified hospital assistant has proved other than satisfactory. This care in selection has so materially assisted my work, and has made my relations with these men so agreeable, that I feel it is only due to you to make this communication."
  I would not have ventured to remind your Lordships of these facts at such great length except as a form of protest against the line of reasoning so commonly adopted. The form of reasoning employed is to find an isolated case where the Crown Agents are supposed to be at fault, and, without waiting to see whether the case can be explained, base upon it a sweeping indictment against the whole system and a declaration that the Crown Agents do not deserve the confidence of your Lordships, and that there is widespread dissatisfaction with the manner in which they conduct their business.
  With regard to the suggestion that the people of the Transvaal should be allowed to tender for Government requirements, it is obviously much cheaper to buy under the system which the Government have adopted. Assume that a Johannesburg order for machinery is placed with a merchant in England. The merchant purchases the machinery from the manufacturer, and pays the manufacturer when the machinery is shipped from England. He himself does not receive payment until the machinery is erected at Johannesburg. He thus stands out of the use of the capital involved in the order and of the amount of the freight from England to Johannesburg for the period between the date on which the machinery leaves England and the date on which it is erected at Johannesburg. He must, therefore, obviously include in the cost of the
  1356
  order, not only a charge to cover his office expenses, but also a charge to cover the loss of interest on the cost of the order and the cost of freight for the period named. The rate of such interest will be, say, 4 per cent. Now, suppose the same order were given to a merchant in Johannesburg. He would similarly buy from the manufacturer in England and pay when the machinery was shipped from England, but would have to stand out of the money so paid and the amount of the freight for the period of the machinery's journey from England to Johannesburg. But in his case the rate of interest on the capital which he would have to cover in the price would be at South African rates, that is, about 8 per cent., instead of 4 per cent., and his office expenses, owing to the high rates and the high cost of living in South Africa, would be at least two or three times those of a merchant living in England. It is clear, therefore, that the Johannesburg merchant would either have to charge a higher price for the same machinery, or, charging the same price, supply an inferior article.
  The noble Earl who spoke last referred to the subject of freights. My noble friend the Earl of Onslow will deal with that question later. I believe the Crown Agents have, on behalf of the Colonial Office, made as good terms for the shipment of freight from this country to South Africa as any other body of agents could have done. It is the view of the Secretary of State that there are no sufficient grounds for granting a Committee of Inquiry into the system adopted by the Crown Agents. The view of His Majesty's Government is that the Crown Agents' system is a good one, no better system having been devised; that they do their work in an efficient manner; that the system of remuneration is a reasonable system; and that the criticism of the method of payment is unwarranted. Moreover, a searching and exhaustive inquiry has been made into the administration of the Crown Agents' Office; the complaints that were brought forward were thoroughly dealt with, and the Crown Agents vindicated. Consequently, it is the view of His Majesty's Government that there are not sufficient reasons to justify a further inquiry into their administration. But the Secretary of

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  State has desired me to say that he is willing to meet any specific charge that can be brought forward against the efficiency of the Crown Agents' administration either in your Lordships' House or by communication to the Colonial Office, and he will be most willing to publish the result of the inquiry. If, however, the complaints are similar in character to those brought forward in your Lordships' House, there will be no difficulty in disposing of them. In conclusion, I would beg your Lordships to remember, as you can see from the Papers before you, that both Mr. Chamberlain, who had the closest and most intimate knowledge of the work of the Crown Agents' Office during a period of eight or more years, and Mr. Lyttelton, the present Secretary of State, bear testimony to the successful manner in which the Crown Agents have conducted their business; and it is our view that they deserve the confidence, not only of the colonies whose business they transact, but we hope also of the majority of the Members of your Lordships' House.
  *THE MARQUESS OF RIPON: My Lords, I am sorry to learn from the speech of the noble Duke that it is the intention of His Majesty's Government to refuse the Appointment of this Committee. I am especially sorry to learn it in the interests of the Crown Agents themselves. I was for some years associated with them at the Colonial Office, and I desire to speak of them and their administration with confidence and respect. I agree with the view expressed in the dispatch from Mr. Lyttelton as to the administration of these public officers, and I can assure your Lordships that nothing is further from my intention, in supporting the appointment of this Committee of Inquiry, than to do it in a spirit which would be calculated to cast the slightest reflection upon the methods pursued by the Crown Agents. I heard with regret the insinuations which seemed to be directed against Sir Montague Ommanney. I have known Sir Montague for some years. He was at the head of the Crown Agents at the time I was at the Colonial Office. I had for him a perfect respect. I believe him to be a capable public officer and a very honourable man, and I should not be doing my duty to him or to the public if I did not, having
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  served with him so long, give expression to that opinion. It is clear that that view was also entertained by the late Colonial Secretary, for Mr. Chamberlain promoted Sir Montague Ommanney from the position of First Crown Agent to the important position of Permanent Under-Secretary; and I understand from the speech of the noble Duke that Sir Montague has in no way forfeited the good opinion which I and my successor entertained of him.
  But, my Lords, when I consider the nature of the criticism which has been made of the conduct of the Crown Agents, both by my noble friend Lord Portsmouth and by the noble Earl below the Gangway, I do think that it is very desirable indeed that there should be an impartial inquiry such as could be conducted by a Committee of this House. It is desirable for the purpose of affording to the Crown Agents the fullest opportunity of meeting any criticisms that may be made against them. What have we seen to-night? The noble Duke's speech was really mainly directed, not to answering the speeches which have been made this evening, but to answering speeches which were made some months ago. I do not in the least complain of the noble Duke in that matter. He could not, of course, tell what were the points likely to be brought forward, and in a complicated matter of this kind no one could be surprised that he was not able to give a detailed answer to the charges. He made what I think was a powerful reply to the charges which were brought forward earlier in the session. But we cannot go on in that way. My noble friend behind me will probably in about a fortnight reply to the noble Duke's speech to-day, and then the noble Duke after a month will reply to the speech of my noble friend; but that is not the way to deal with a matter of this kind. These criticisms are grave; there is no shirking the matter; they are grave, and are intended by those who bring them forward to be grave, and I venture to submit that it is only just to the Crown Agents that they should have the fullest opportunity of stating their views and of explaining their conduct before an impartial body.
  From what I have seen of the administration of the Crown Agents I should

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  expect that they would clear away a great deal of what has been said against them. There may be points in which they have committed errors, but my own expectation would be that they would come, on the whole, broadly speaking, scathless out of such an inquiry. But an inquiry I hold is due to them, and it is due to the public. It is not right that charges of this kind should be made against public officers and should not be fully inquired into. The noble Duke's invitation to noble Lords who have brought forward this matter to send him letters and ask him to inquire into specific charges is of no use in a case in which charges have been publicly made. If my noble friend had thought fit to bring this matter before the Colonial Office before calling attention to it here that would be another matter. If the statements are true, they show an urgent necessity for a change in the administration of the Crown Agents' Office; if they are founded on misrepresentations, then the sooner those misrepresentations are cleared away the better. Therefore, I do very earnestly hope that the Government will reconsider their determination not to allow this inquiry.
  No inquiry within the Office itself will satisfy the public mind. No doubt there are a great many people in the country accustomed to deal with these questions who do criticise and always have criticised certain proceedings of the Crown Agents. Well, let those matters be brought to the test of an impartial inquiry such as your Lordships will give them, and then the reputation and the administrative character of the Crown Agents will be cleared and the matter put on a satisfactory footing. I myself, I confess, rather regret that my noble friend Lord Portsmouth did not make his Motion somewhat wider. I am sorry that it is so closely confined to the action of the Crown Agents as individuals. I am bound to confess that nine years ago when I left the Colonial Office I had no intention of revising the system; but in these days, when methods of conducting commercial and industrial business change so rapidly, when new methods are being introduced in one way and another so frequently, I can quite believe that there might be improvements made in the general system of this portion of colonial administration. I therefore think it would be desirable if
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  the Committee were enabled to go fully into the whole question of the constitution of the Office and the duties entrusted to the Crown Agents. As your Lordships know, the Crown Agents deal only with Crown colonies. I think the noble Duke was rather knocking down something which had not been set up when he said it would never do to have a system by which every one of the forty Crown Colonies was represented by a separate agent in London. I do not think that was suggested at all, but I agree with the noble Duke that it would be a very absurd system. The Crown Agents have nothing to do with self-governing colonies.
  I confess there was one portion of the speech of the noble Duke which made me smile, and that was the part which related to the Transvaal. We have been told, over and over again that it is intended to treat that Crown colony as a self-governing colony, and it is rather surprising to find that while upon questions involving great matters of Imperial importance the Government are prepared to leave the decision in the hands of the Government of the Transvaal, yet when it comes to a question of how the stores for the Transvaal are to be bought they will not listen for a moment to the suggestion to treat the Transvaal as a self-governing colony. On the contrary, in spite of the protests of those in the Transvaal to whom upon all other matters they are inclined to bow, they determine upon this point—and if ever there was a matter which should be left to the decision of a local Legislature it is one of this kind—that they will adhere to the system of purchasing the stores through the Crown Agents. That seems to be an exceedingly unintelligible and inconsistent proceeding. If you mean to regard the Transvaal as a self-governing colony and to treat the nominated Legislature of the Transvaal as a representative Legislature, surely if there is one thing more than another which you might leave to be judged by them it is this question of the purchase of stores. I know how utterly impossible it is to maintain in practice the absurd theory which it seems to me His Majesty's Government have adopted of treating a Crown colony in any respect as if it were a self-governing colony. I feel bound to record my vote for the Motion before the House,

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  but I shall do it more particularly because I desire the utmost vindication of the character of the Crown Agents, and because I believe that before such a Committee as we are asking for that object would be achieved.
  *THE PRESIDENT OF THE BOARD OF AGRICULTURE AND FISHERIES (The Earl of ONSLOW): My Lords, I shall not detain your Lordships for more than a few minutes, but I must express the satisfaction with which I heard the remarks that have just fallen from the noble Marquess in regard to Sir Montague Ommanney. We are proud of our Civil Service. We believe it to be above suspicion, and it is not often in this House that we hear any suggestion that it is otherwise. I am prepared to agree with the noble Marquess that if there were any grounds for this inquiry it would be in the interests of the Crown Agents that it should take place. I do not think the Crown Agents have any reason to fear any inquiry into their system or their methods of business, but they have not asked the Secretary of State to allow this inquiry to take place. If they had, I do not know that he could have refused it; but your Lordships must remember that business of this kind is of a somewhat ticklish character. There is such a thing as trade jealousy, and I am not at all sure that it would be in the interests of the State that the exact manner in which the business of the Crown Agents is done should be made pubic, and that they should be subjected to cross-examination by those who are, after all, in competition with them.
  Have the charges that have been made been against the Crown Agents? The noble Earl who moved the Motion now before the House talked at great length about the action of the Government of Ceylon, but that action was taken by the Colonial Government, and had nothing whatever to do with the Crown Agents. The noble Marquess said he thought that when these charges are brought they ought to be thoroughly sifted by an impartial Committee, but we have had some experience of the nature of these charges. If the complaints are as flimsy and as easily dispelled as those that have been previously brought forward, I say that
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  much the cheapest, safest, and easiest way is for noble Lords to bring those charges individually before the attention of the Colonial Office. We have the assurance that the Secretary of State will give them every consideration. There was one point that the noble Earl opposite did not quite comprehend. He asked, Do you not pay commissions, and, if you do, who do you pay them to, and who pays them? Commissions are paid, but the whole of those commissions cost the Colonies no more than the 1 per cent on the price of the stores. The 1 per cent. covers everything. The noble Marquess said that if we were going to treat the Transvaal as if it were a colony with a responsible Government in every way, surely this was one of the things in regard to which we could so treat it. We have had no representation yet from the Government of the Transvaal. We should like them to consider whether or not, if they order from a firm in the Transvaal, who, of course, would have to buy in England, they would have to pay an increased price, and if they are satisfied that it would be better for them to pay a heavier commission than they pay under the present system; that is a matter which the Secretary of State would take into consideration.
  I now come to what fell from the noble Earl below the Gangway (Earl Grey) on the question of freights. The noble Earl has always been a great champion of public tender. The noble Earl's view prevailed with the late Secretary of State for the Colonies, and tenders were invited for 60,000 tons of freights in the year 1904, but only one tender was received, and that tender was not in accordance with the terms of contract.
  *EARL GREY: I am not surprised, considering the conditions attached to the contract.
  *THE EARL OF ONSLOW: I am not going to weary your Lordships at this late hour with the conditions contained in the contract.
  *EARL GREY: That is the essence of the matter.
  *THE EARL OF ONSLOW: The real reason they did not tender was that the Government refused to give the whole of their business either to the Conference Lines or to their rival. What then happened

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  was that the seventh line was taken into the Conference by the other six, and the consequence is that we have no one carrying to South Africa to whom we can go for competition in the freight market. We should be only too glad to put our freights up to tender, but we know these is no company who will tender for those freights outside the Conference. A business arrangement exists between the British India Steamship Company and the Conference Lines. We have offered to give the British India Company an opportunity of tendering for Government freights if they will undertake to carry them to any of the South African ports They pass Capetown, Natal, and Durban, but by an arrangement they have with the Conference Lines they are precluded from landing freight at any other place than Delagoa Bay. We cannot in consequence employ them. His Majesty's Government have the greatest desire to get the lowest possible freight to South Africa, and, short of bringing in a Bill, which I do not think the noble Earl has suggested, to prevent combination among shipowners—a practice which is adopted by every steamship line—I do not see what the Government can do more than they have done in the matter.
  *EARL GREY: Simply follow the example of the Government of India.
  *THE EARL OF ONSLOW: The Government of India have a number of steamships companies to whom to offer their contracts who are not in the Conference ring, and we have not. I hope your Lordships will not insist on the Motion which the noble Earl has submitted but be satisfied with the fact that the late Secretary of State asked the Governors of every colony which deals with the Crown Agents whether they had any complaints to make, and went fully into the complaints received. He satisfied himself that the cases merely showed that there was sometimes delay, and those mistakes common to human nature, and he recorded his opinion, which has been endorsed by the present Secretary of State, that on the whole the Colonies were satisfied with the Crown Agents, and that it would be unwise in the interests of the Empire to depart from a system which had prevailed for so many years.
  On Question, resolved in the negative.

  THE YEOMANRY.
  THE MARQUESS OF WINCHESTERasked the Under-Secretary for War for a Return of the number of Yeomanry regiments which assembled for their annual training between 18th May and 4th June inclusive, and the number of officers and men receiving the £5 horse allowance.
  THE UNDER-SECRETARY OF STATE FOR WAR (The Earl of DONOUGHMORE): Our Returns are not yet complete, but, I can inform the noble Marquess that the number of regiments out for training between the dates he mentions was twenty in all; seven commenced and finished their training within the dates mentioned, and thirteen assembled within those dates but did not complete before 4th June. As to the number of men and officers receiving the £5 horse allowance, I am afraid I cannot at present give any answer, but I shall be glad to do so the moment we get our Returns in. There were 11,381 horses returned last year as being the personal property either of the Yeomen themselves or of some members of their families; 562 were Government horses, leaving 10,666 which were classified as hired, but a great many of which would be individual horses, owing to the fact that a number of the regiments trained at the same time.
  House adjourned at ten minutes past Seven o'clock, to Monday next, a quarter before Eleven o'clock.