The Sun.
London, England, 1859-03-05 00:00:00

SUBMARINE TELEGRAPHS.

Lord WODEHOUSE said he had lately seen a state-
ment in the newspapers that a company which had extended
its telegraphic communications as far as Sicily were dis-
posed to carry it to Malta, but that the authorities would
not permit them to land the cable upon that island. Now,
he knew nothing of the merits of the company which had
made this proposal, and possibly there were good reasons
for refusing it; but at first sight it certainly appeared as
if some monopoly were set up in favour of the existing
line, that line being connected with the Submarine Com-
pany, which at present enjoyed a monopoly of the commu-
nication with France, whereas the rival lino was that of
the International and Electric Telegraph Company. The
question was one of some importance as a matter of prin-
ciple, because it involved the mode in which the Govern-
ment were to deal with the whole telegraphic system in the
Mediterranean. He thought we should have done well
to have made Malta the centre of our telegraphic commu-
nications there, and obvious reasons existed in favour of
such a course. In all probability we should then have had
four lines touching at this island—one from Cagliari to
Malta, another from Ragusa to Malta, a third by Naples
and Sicily, and eventually a fourth, which would be of still
greater importance—namely, a direct line from England,
passinc, by Gibraltar—(hear, hear)—and in this case we
should have held the key, as it were, of all the telegraphs
in the Mediterranean. He feared, however, that the oppor-
tunity for making such an arrangement had been lost. In
a very able Treasury minute, dated February 22 of last
year, reasons were given for the decision which had been
arrived at in favour of the Austrian line by way of Ragusa
and Candia to Alexandria ; but still he thought it of impor-
tance that no principle should be laid down which would
prevent future independent communications front being
made. He wished now to call their attention to the ques-
tion of subsidies and guarantees. The telegraphic system,
and especially that of submarine lines, was in its infancy.
Although, owing to the failure of the Atlantic cable, such
plans were now somewhat out of favour, and although it
might at present be impossible to lay down cables of such
length with safety and at a moderate expense, yet, looking
to the progress of science, it was not to be doubted that
means would be found for overcoming all difficulties. If
this were the case, of what importance (lid it become that
the Government should not give premature guarantees, and
should not, for want of properly considering the lines laid
down, prevent the future advantageous development of
telegraphic conununication. (Hear.) If tho Government
had no distinct plan upon which they proceeded they might
find that they had not patronised the best lines, and what
was still worse, that they had prevented more advantage-
ous lines from being formed. We had already give a gua-
rantee! to the Mediterranean Extension Company, which
had laid down a telegraphic cable from Cagliari to Malta,
and from Malta to Corfu. Then, since last session, a gua-
rantee had been given to another and more important un-
dertaking, the Red Sea line. Here he might remind the
noble earl (of Donoughmore) that the answer given by him
upon this subject at the close of last session was not
altogether accurate. The noble earl stated that the Govern-
ment had under their consideration the competing lines, and
although no decision had been come to, it was possible they
might choose that by the Persian Gulf, whereas it ao hap-
pened that the very next morning the newspapers stated,
and quite accurately, that the Government had decided in
favour of the Red Sea line. He (Lord Wodehouse) did not
complain of that decision, which was probably the best
which could be arrived at under the circumstances; and,
looking to the difficulty of getting any company to under-
take the work, and to the state of the money-market at
that time, the Government were probably justified in the
guarantee they had given. It was said that the Turkish
Government would proceed with their line, and it would
then, no doubt, become a question whether some assistance
should not be given to connect it with Kurrachee. Again,
negotiations were in a forward state with a view to a gua-
rantee to the Ragusa, Corfu, and Candia line ; and another
guarantee had been given to the Atlantic Telegraph Com-
pany. He did not know precisely what was the agreement
at present existing between this company and the Govern-
ment. The original subsidy was £14,000 from the English
and one of a similar amount from the American Govern-
ment; but he understood that the company had applied for
a considerable increase, and:he should be glad to hear what
conditions had been agreed upon with regard to it. What-
ever might be the result, their lordships would observethat
those guarantees were already of considerable magnitude,
and he did think that if we were to increase them some de-
finite system should be adopted on the subject.. It might
be doubted how far it was politic to give any guarantees at
all. (Hear.) In certain exceptional cases they might be
necessary, but upon the whole he believed the Government
would act wisely if they declined to involve themselves in
any such engagements. (Hear.) He would now conclude
by asking the question of which he had given notice—whe-
ther it was true that tho proposal of a company to lay a
submarine telegraph from Naples to Malta had been refused
by her Majesty's Government ; and if so, upon what
grounds. Also, whether it was the intention of her Ma-
jesty's Government to grant assistance, either by way of
guarantee or subsidy, to other companies beyond those
which had already received such assistance ?

The Earl of DERBY—I think I shall be able to give a
very short and conclusive answer to the question of the
noble lord. Three applications have been made to her Ma-
jesty's Government by different parties for establishing sub-
marine telegraphic communication with Malta. Two of these
applications were made to, and were refused by her Majesty's
late Government. They have been repeated to her Ma-
jesty'S present Government, and are now under considera-
tion. The third application has been made by what is called
the Mediterranean Company, who propose to carry out a
small line from Malta to Cape Passaro, a distance of about
70 miles, and her Majesty's Government have stated that
if that company can make an arrangement with foreign
Governments they will not offer any opposition to flick
establishing telegraphic lines, but that, on the other hand,
they are not prepared to afford any aid or assistance to the
company. I think the noble lord seemed to labour under
some misapprehension in speaking of what would have
been the case if Malta had been made the great centre
'of telegraphic communication in the Mediterranean, and
in expressing his belief that the accomplishment of
that object had been prevented partly by the refusal
of her Majesty's Government to sanction a lino of
telegraph between Naples and Malta, and partly by
the establishment by the Austrian Government of the com-
munication by way of Trieste. So far as Malta is'concerned
I donpt hesitate to say that I think it ought to be, and that
it is, the central point of communication for the various
submarine telegraphic lines of the Mediterranean ; but I
do not think, therefore, that we should avoid availing our-
selves of other means of communication which may be
established. We are, consequently in a forward state of
negotiation with the Austrian Government, with the object
of establishing a telegraphic communication by way of
Ragusa. With regard to the noble lord's question as to
the Atlantic Telegraph Company, I shall bo glad to have
an opportunity of stating generally the principles by which
her Majesty's Government think they ought to be guided
in dealing with these various telegraphic companies which
aro rising in every direction. The noble lord stated that,
under a former arrangement, her Majesty's Government had
agreed to give the Atlantic Telegraph Company a subsidy
of £14,000 a year, and that the Government of the United
States were prepared, under certain conditions, to contri-
bute the same amount ; and he stated that he understood
that negotiations were at present in progress between the
Atlantic Telegraph Company, and her Majesty's Govern •
ment with the view of arranging that a much !larger sub-
sidy shall be given to the company. Now, in making that
statement, the noble lord has confounded two things which
are entirely and absolutely different—namely, a subsidy
and a guarantee. The Atlantic Telegraph Company, after
very praiseworthy efforts to establish telegraphic communi-
cation with America, most unfortunately sunk the whole of
their subscribed capital, and were consequently unable to
prosecute the undertaking, and it became necessary, for
them, 'if they wished to continue their attempt, to enter
into an entirely new arrangement. This being the ease,
the agreement entered into with regard to a subsidy of
£14,600 a year on the part of her Majesty's Government
and of the United States, to be continued so long only as
the company was in process of working, naturally and en-
tirely fell to the ground. The company then requested
that her Majesty's grant
Government would either tlie m
an additional subsidy for the purpose of raising newcapital
or give a guarantee upon such capital as should be raised.
Now there are two kinds of guarantees, and there is also
the system of subsidies, and these three modes of assisting
telegraph companies are entirely and absolutely distinct.
Propositions have been made at various times, and by various
companies, and among others by the Atlantic Telegraph
Company, for what I will call unconditional guarantees;
that is, supposing a company undertook to expend a cer-
tain sum in the prbsecution of particular work, it was sug-
gested. that her Majesty's Government should guarantee
them the receipt of a certain amount of interest upon the
amount so expended. Now, although in one case such a
proposal was agreed to, I hold it to be in principle an inde-
fensible arrangement—(hear)--because it is quite clear that
if you, guarantee a company 41 per cent. for 25 or 50 years
you have no security, or next to none, that the work
will be properly carried on, and you run considerable
risk of being compelled to pay for a long period a large sum
of money for a service which, after all, is not completed. If
the money be expended, and the expenditure prove a loss, it
matters not to the company, so long as for 50 years they are
to receive their 41 per cent.—(hear, hear)—while in the
event iof failure the Government have all the loss, and in
the event of success they gain no portion of the profit or
advantage. I think it would be much better—though I
don't mean to say it is a plan I recommend—that the Go-
vernment should take the construction of works into their
own hands—(hear, hear)—because in that case, instead of
paying 41 percent. upon capital, they would probably get
-
the requisite capital at 3 or 3/ per cent., and if the scheme
were unsuccessful they would not lose more than they
would do under an absolute guarantee, while,.l filleCCSB•

ful, they would -derive all the advantage. In the ease of
au unconditional guarantee, ,however, the Government
run all the risk, and suffer the loss if the scheme fail,
while, if it should prove successful, the company, who have
been protected against risk, derive all the profit. (Hear.)
But a conditional guarantee is a very different thing, and I
take it to be perfectly legitimate in cases where there is a
great proposal of success. but at the same time considerable
risk of failure. It is, I think, in such cases, perfectly legi-
timate' to guarantee a' high rate of profit upon the outlay in
the event of success, in .consideration of the great amount
of risk originally ran by the company. In such a case,
therefore, I do not think it at . all beyond the provision of
the Government to-give a guarantee it there is a great un-
dertaking for which, in the event of failure, the Govern-
ment are not in any way responsible, but which, if it suc-
ceeds, is likely to produce advantages to the public and
great pecuniary results to the company. We are at this
time in negotiation with that company, who have asked
that a limited 'sum of money may be expended under the
supervision of the Government, and that they may have
the Government guarantee of S per cent. upon
the outlay for a certain number of years so long
as the telegraph shall be in working order and
capable of performing its duties. Now, I think,
if telegraphic communication is established by a sub-
marine cable between this country and America, it is a very
reasonable calculation that the profit may be expected to
amount to 8 or 10 per cent., if not more. Supposing, there-
fore, that the terms to which I have referred were acceded
to by the Government, which is not the case at this mo-
ment, if the profits reaehed 8 per cent. the Government
would not be liable to any payment. If -the profits reached
C per cent. the Government would then, for the attainment
of every important national object, pay 2 per cont., and no
more upon the outlay of capital. I think, therefore, that
in cases in which the risk of failure is very considerable,
but when the prospect of pecuniary advantage in case of
success is very great, the Government exercises a wise and
judicious course in guaranteeing a certain amount of inte-
rest in the event of success, but in that event only. There
is a third class of cases, which includes not only subnnuine
telegraphs, but post. office and packet communication, in
which subsidies are asked for. I think no subsidy ought to
be given except in cases where an object of great political or
commercial imporfsnce is to be secured, and where it is clear
that, as a mercantile speculation, unaccompanied by some
subsidy the project must inevitably fail of success. In such
a case I think it is perfectly legitimate on the part of the Go-
vernment, for great political and commercial objects, to
grant a payment or subsidy, wholly irrespective of the profit
or loss which might otherwise be experienced. It seems to
me, then, that whether with regard to electric telegraphs
submarine cable, or the post-office packet communication,
absolute and unconditional guarantees should hardly in any
case be consented to by the Government ; that conditional
guarantees are legitimate when the risk of failure is very
great, and when the prospects of profit in case of success
are very considerable; but that subsidies ought only to be
granted in cases when the prospects of remuneration would
rot induce persons to undertake the work as a mercantile
speculation, and when the attainment of important political
or commercial objects justified the payment of such sub-
sidies from the public funds. In every proposition that may
be submitted to the Government, I think when projects are
in other respects equal the Government ought to give a pre-
ference to those schemes which provide that the whole line
of telegraphic communication shall be, if not upon British
territory, at least exclusively and absolutely under British
control. (Cheers.) Having stated the rules upon which these
propositions ought to be considered, viz., the solvency
.of the
company, the magnitude of the abject to be attained, the pro-
spect of better offers, the risk to be run, and the interests to be
served—the terms must always be a matter of calculation in
each separate case. (Hear, hear.) It is impossible to lay
down any rule as to the proportionate assistance which her
Majesty's Government ought to give, but I hope I have stated
distinctly the principles by which, in dealing with the sub-
ject, I think her Majesty's Government ought to be guided.
(Hear, hear.)
Earl GREY said he had heard with great satisfaction
the statement of the noble earl. He thought the principle
adopted were both sound and right, and above all the prin-
ciple of giving a preference to those lines which would be
entirely under British contra (Hear, hear.) It appeared
to him that it was the greatest possible mistake to allow the
American Government to be connected with a line of tele-
graph from one part of the British dominions to another.,
and he was glad to infer from what the noble earl had
stated that it was an error which was not likely to be re-
peated. (Hear, hear.) He concurred in what the noble earl
had said as to conditional guarantees, but he thought that
if the Government secured to a company a certain profit on
their capital, it was absolutely necessary that the Government
should have control over their working expenses, to pre-
vent jobbery and extravagance. (Hear, hear.) He also
concurred with his noble friend who had commenced the
conversation,. that it was of very great importance there
should be, as soon as possible, an independent sea line from
the Land's End to Gibraltar and from Gibraltar to Malta.
Lord STANLEY of ALDERLEY approved the state-
ment of the noble earl, and asked whether her Majesty's
Government intended to make it a condition with the At-
lantic Telegraph Company•that they should abandon their
exclusive privilege, and whether the guarantee to the Red
Sea and India Telegraph Company was absolute or condi-
tional. 'The noble lord added that he much regretted that
the whole system of electric telegraph communication of
this country had not been made part of the postal arrange-
ments, under the direction of a branch of the Executive.

The Earl of DERBY was quite ready to admit, that the
terms obtained by the Red Sea Company were of a very
favourable character. In one sense the guarantee might be
considered absolute on a certain amount, but, on the-other
hand, the company contracted to the Government to have
the line laid and placed in working order, so that it was not
until the line was in that state that the guarantee of the
Government arose. As to the Atlantic Telegraph Company,
he was glad to say the Government had insisted as a first
condition in the negotiations now pendieg, that the mono-
poly of the company should be abolished, and that the Go-
vernment should be at liberty to sanction and assist any
company which might be disposed to undertake to lay down
other lines. If the Government guaranteed a particular
company, it Was not the interest of the Government to
diminish the profits of that company by encouraging a
number of competing lines. But the principle adopted was
to repudiate any monopoly, and to hold the Government
free to agree with any other company they should think it
desirable to do so. (Hear, hear.)
Tbe conversation then terminated.

DEBTOR AND CREDITOR BILL,

Their lordships then wont into committee on this bill.

On clause 1,

Lord WENSLEYDALE objected to the abolition of ar-
rest in execution, as being against the reports of all the
committees and commissions since 1832, but after a short
conversation withdrew his objection, and the clause was
agreed to.
Clause 2.

Lord WYNFORD protested against the power of arrest
given to creditors without the intervention of the court.
The LORD CHANCELLOR did not think that the noble
lord completely understood the clause. By it arrest in ex-
ecution was abolished, except on a judgment obtained in an
action of tort, where the debt had been incurred under false
pretences, or in case of an absconding creditor.
The clause and clause 3 were then agreed to.

Clauses 4 to 92, with some verbal alterations, were agreed

On clauso 93,

,
Lord CRANWORTH said that this clause introduced an
important alteration in the law, for it trenched upon the
official control over the estates of insolvents. Under the old
law before 1831 there was no official assignee, and it was
found that more than £2,000,000 money was standing in
the names of neglectful assignees. In the face of that ex-
perience the clause enabled creditors to dispense with the
official assignee. And it was the majority in value who
were enabled to dispense with that officer ; thus the smaller
creditors would be easily swahiped. He quite admitted that
in many cases creditors would readily dispense with official
assignees. That was because they eould easily appreciate
the expense of the official assignee, while they could not ap-
preciate the expense of reckless and careless management.
The LORD CHANCELLOR said the great difficulty
which the Government had had to determine was to fix on
the course which, under many conflicting representations,
they should follow. Petitions had been presented to their
lordships' house, asking urgently, that to creditors alone
should the right of administering the bankrupt's affairs be
given. The Government considered that, under the conflict-
ing circumstance of the case, the best course to be taken was
to give the creditors the power, if they chose, of dispensing
with the assignee. A noble lord in the other house had
produced a bankruptcy bill, and that noble lord, who was
supposed to represent particularly the commercial classes,
had introduced in his bill a clause going very much further
than the present. With reference to the statement of Lord
Cranworth that smaller creditors would be overborne, he
(the Lord Chancellor) must say, from his experience, that
the commercial community was not slow in looking after
their own affairs.
The clause was then agreed to.
Clauses 94 Jo 110 were agreed to.

On clause 111,
Lord CRAN WORTH said this clause appeared to him
monstrously unjust. Under the present law an insolvent
could not get protection without giving up all his property;
but under this clause it was provided that if an insolvent
had a reversion in seal property the creditor should not have
power to sell till the reversioner had come into possession.
His noble and learned friend said his object was to protect
the insolvent against a vindictive creditor, who might wish
to sell when the property would realise comparatively little.
Why, delay might be the creditor's ruin, and in that case
it would be no consolation to tell him that more would be
obtained when the debtor's father was dead. Here was a
new law for the protection of non-traders whowere interested
in real property, and the public would conclude that the
object was to favour the landed aristocracy.
Lord 'WENSLEYDALE concurred in the objection.
The LORD CHANCELLOR said his noble and learned
t
friends ought to bear in mind that this was the first time it
had been enacted that a person interested in real PreY
should be compelled to part with his property for the benefit
hen
of his creditors, and he thought it was only
such persons became insolvent they shouldnbeghp
and learned
they were bythis clause. Moreover, as his noblethousand times
friends were well aware, it was not once in !I
of a settled
that a trader was a tenant in tail in remainder trottected, as
estate. (Hear, hear.)
R Lord CANWORTII—He may be.
Tho LORD CHANCELLOR said they were not to pro-
videinst cases of common oc-
againstpossitilities, but a
dbt wainst a
the insolvent e or ar,
that his object was to protect
when its value would be very
oc-
currence. He had not the slightestga hesitation in saying
II said he entirely approved of the
Lord CRANWORT
saamlealol.f his interest at a time
ipnri
psornisulenwtafsoar
debt, because putting the body
andlearned • dshould
his noble len
relic of barbarism ; but
proposal substantially todoawa,_)fy
awith debtor ill
remember that the
possession of the estate, might
not happen for fifty y
coming into
Ile looked upon this clause with
deep regret, and repeated evenitn which he contemplated, namely,
o
the insolvent'
that it would be regarded by the
country as
a clause passed
to protect the sons of the aria-
c
tocracy and the landed gentry against their creditors.
The Earl of DERBY said that compelling men to sell
reversions was, in fact, compelling them to raise money by
pot-obits—a practice which had always been considered
highly objectionable. (Hear, hear.)
The clause was then agreed to.
The remaining, clauses of the bill with some verbal
amendments, were then agreed to, and the house resumed.

EATON AND WALTON EXCHANGE BILL.
This bill passed through committee.
BURIAL PLACES BILL.
This bill was read a second time.
MARRIAGE LAW AMENDMENT BILL.
Viscount DUNGANNON gave notice thaton the second
reading of this bill he would move that it be read a second
time that day six mouths. (Hear.)
Their lordships then adjourned at a quarter-past nine.

HOUSE OF COMMONS—(YESTERDAY.
The SPEAKER took the chair at four o'clock.

NEW MEMBER.
Mr. HARDY took the oaths and his seat for Midhuret•

PRIVATE BUSINESS.
Mr. FORSTER moved that -the order, 'that the him,