The Sun.
London, England, 1861-02-09 00:00:00

SERVICE.

Sir F. SMITH asked the Secretary of the Admiralty
whether it was intended to introduce the competitive
system of examination in the selection of cadets for the
marine service. He was opposed to limited competition,
and contended that, if there were any competition at all, it
should be open.
Mr. BASS expressed a hope that the system of open
competition would be applied to the royal navy as well as
to the marine service, and strongly objected to the system
of appointing boys in the navy merely because their fathers
had been in her Majesty's service, and without reference
to their intellectual qualifications. (Hear, hear.)
DOCKYARD MANAGEMENT.
Sir J. ELPHINSTONE asked the Secretary to the
Admiralty when the report on the commission on dock-
yard management would be presented ; and whether her
Majesty's Government intended to fill up the appointment
of surveyor of the navy, vacant by the retirement of Sir
Baldwin Walker, before the house was in possession
of the evidence taken by that commission. He
complained strongly of the mismanagement exhi •
bited by the authorities at the dockyards, and he
alluded to the failure of the floating batteries eonstnieted
during the Crimean war, which proved utterly useless,
He thought that before they proceeded further in the build.
ing of iron coated ships, they should have
sent the Warrior to sea, or tried the experi.
meat of iron coating
on come of the old vessels that
were lying in the docks. Instead of that, however, they
were building enormous vessels, some of which would cost

£500,000. The officers appointed to decide on the con-
struction of vessels for the Royal Navy were incompetent

for the duty, and he cited the case of Sir Baldw;n Walker,
who had no practical acquaintance with si ipbuilding
and no knowledge of naval architecture at th time of his
appointment, and yet for the last 10 year all the ships
that had been built in the dockyards h d been sub-
jected to his approval. It might ba said that he
was furnished with models by naval architects ; but he
exercised his own judgment, and complaints were made that
he carried out his crotchets of long masts to an injurious
extent.

Sir JOHN PAKINGTON expressed a regret that
the Government had not made experiments on a
limited scale before they adopted the principle of
iron-coated vessels, and deprecated strongly the delay in
_ _ . _

the launching of the Warrior. He asked for full informa-
tion as to when this vessel would be sent to sea, which he
hoped would be with as little delay as possible.
After a few words fromUr SCULLY against the system
of half competition and half nominatian in Ireland, parti-
cularly in the constabulary,
Lord C. PAGET said he thought the naval discussions
had been commenced very early this session. He hoped that
he should be able to lay the naval estimates upon the table
in a few days, when they might have the whole evening to
themselves, and when all these questions would meet with
a full and fair discussion ; therefore he trusted the house
would not require him to enter into all the details of these
great questions upon the motion for the adjournment of the
house to Monday: In answer to the question pltt by the
hon. baronet the member for Chatham (Sir F. Smith) with
regard to the competitive examination among the marine
cadets he had to inform him that the present First Lord had
introduced a system of limited competition among the marine
cadets. (Hear, hear.). He knew his hon. friend did not ap-
prove of that, and that ho preferred an open and unre-
stricted competition. (Hear.) There were many opinions
as to the various systems, and upon these questions the
public were very much divided. Ile might state that he
(Lord Paget) was in favour of unlimited competition; but
his noble friend the First Lord had, in the course taken with
regard to the marine cadets, acted in a very fair manner,
and it was a very great improvement upon the old system.
Under the old system it was a pure matter, he would not
say of favour, of giving these cadetships to the eons of meri-
torious officers. (Hear.) His noble friend had directed that
the nominations should be limited to old officers' sons and to
the sons of men who had not large enough means to place
their sons in other professions. The marine corps was one in
which men who could afford to go into the army or artillery
were not disposed to enter; but he wished they would do so
because it was an honourable corps to belong to, and the
position of the cadets on board ship was a high one. The
system introduced by his noble friend was this, that when a
vacancy occurred a certain number of yoang men were exa-
mined, and the successful candidate was placed in the
corps.. He thought the system was a fair one, that it worked
well, and that it gave general satisfaction. Tho hon. mem-
ber for Derby (Mr. Bass) had alluded to naval cadets, and
he found fault with the system pursued by the Admiralty,
in not appointing naval cadets by open competition. There
was a discussion last year on this question, and he then
showed that it was one of great difficulty, and that it was
impossible to say that every lad of 14 years could be said to
pass a successful competitive examination which could test
their abilities when grownup, and for that reason ho did not
think it would be right to introduce it among naval cadets.
(Hear.) His hon. friend would no doubt admit that some
improvement in the system had taken place. He would
turn now to the questions of the hon.member for Portsmouth,
which were, " when the report of the Commission on Dock-
. yard Management would be presented," and "whether her
Majesty's Government intended to fill up the appointment
of Surveyor of the Navy, vacant by the retirement of Sir
Baldwin Walker, before the house was in possession of the
evidence taken by that commission." He (Lord C. Paget)
was unable to state when the report of the commission would
be presented, because the various details which had been
entered upon would require a great deal of consideration
before the report could be made. (Hear, hear.) As to the
appointment of a successor to Sir Baldwin Walker, it was
impossible to refer to this without expressing his great
satisfaction that that gentleman had been selected for a
command worthy of his talents and reputation. (Cheers.)
He stated that much, because the right hon. baronet oppo-
site had said on former occasions that he had taken a plea-
sure in making a personal attack on Sir B. Walker. Ho
sincerely rejoiced that Sir B. Walker had been brought
back to the service of the navy, and that he had been employed
in a way he deserved, and therefore he wished to bear his tes-
timony to his great worth and abilities. Sir B. Walker had
suffered so grievously in his health, that some time ago he
begged that he might be relieved from the office he held, but
the noble First Lord said he must have his assistance in pre-
paring the estimates, and when they were ready to be laid
before the house, he would be able to retire from the comp-
trollership of the navy. The question was what was to be done

in the management of that great department, and were the
Government to wait until the commission had reported their
opinion to the house,-and in the meantime keep this impor-
tant office in abeyance ? All hon. members would admit
that it would be impossible to allow the office to remain
vacant, because the whole duties of the dockyards would
come to a standstill, and consequently the Government
were obliged to appoint a successor to Sir B. Walker. The
noble duke the First Lord had chosen a gentleman who had
written a book on steam machinery, and was a great autho-
rity on naval architecture, and he was also a remarkably
intelligent and distinguished officer. He thought the noble
duke could not do better than select this gentleman for the
situation. At the same time, in order that it might not be
a permanent appointment, this gentleman had been ap-
pointed for five years. (Hear.) The noble duke had under
his consideration
,the enormous duties of the department,
and he felt that there was some necessity for haying some
one to act between the comptroller and the dockyards, for
it was impossible that the comptroller could give due atten-
tion to what was going on in the dockyards, and it was ne-
cessary that some assistance should be given to him. It was
now under consideration whether some such appointment
ought not to be made. (Hoar, hear.) His hon. friend the
member for Portsmouth appeared to think that instead of
appointing a single successor to Sir B. Walker there should
be a council; but he (Lord C. Paget) thought if anything
was going out of fashion it was that of divided responsibi-
lity ; for they heard every day that the Board of Admiralty
was a divided responsibility, and that matters were shuf-
fled about from one to another until nobody knew who was
responsible for them. (Hear, hear.) As regarded ship-
building, if anything required an undivided responsibility,
it was that ; and therefore he could not favour the sugges-
tion that there ought to be a council tc manage this great
department. (Hear, hear.) His hon, friend opposite (Mr.
Baillie) found fault with the appointment of Sir B. Walker
to the office of surveyor, and complained that the surveyors
were not scientific men. He thought it would be admitted
that the present officer stood very high for his skill; and
that the noble duke had done well in appointing him to the
office. The right hon. baronet opposite (Sir J. Pakington)
had found fault with the Government for ordering the con-
struction of more iron-eased ships.
Sir J. PAK INGTON said he had found no such fault.
The noble lord had entirely misapprehended him. The
question he asked was whether the Government intended to
test the sea-going qualities of the Warrior, she being a ship
of a peculiar construction, before they gave orders for the
construction of other ships of the same kind.
Lord C. PAGET admitted that the contractors were to
blame for the great delay in completing the Warrior, but
there were various reasons for the delay, some being the
peculiar construction of the ship. He hoped that the ship
would be completed this summer and be ready for sea.

- -
TIIR GRANT OF £520,000 TO THE MYSORE
FAMILY.

Mr. VANSITTART asked the Secretary of State for
India whether it was true, as set forth in the fourth para-
graph of a petition numerously signed' by the inhabitants
of Calcutta, at a meeting held in that city on the 20th of
December last, that the grant to the Mysore family had
been made by him against the protest of the Indian Govern-
ment, against the recot ded decision of the late Governor-
General of India, the Marquis of Dalhouse, in Council,
and against the representations of the financial Minister
appointed by the Crown, the late Right Hon. James Wil-
son, and of the Viceroy and Governor-General the Earl.
Canning; and whether he had any objection to produce
copies of all papers connected with the aforesaid grant, and of
all despatches of the Secretary of State for India to Earl
Canning, ordering the payment of £520,000, to and for the
Mysore families, and copies of the minutes of the members
of the Indian Council thereon.
Sir C. WOOD stated briefly the circumstances under
which the Indian Government had recently directed the
payment of above half a million sterling to the Mysore
family. The princes of that house who had been dispos-
sessed of their territories by the British Government had
made a claim to an adequate provision being made for their
support, which had been fully investigated by the Home
Government, and the result was that the sum of £520,000
had been invested to form a permanent fund, the interest of
which would in future be applied to the maintenance and
support of the family.
CHURCH RATES.

Mr. BUXTON having, at the suggestion of the Speaker,
withdrawn the first part of the notice which he had placed
on the paper, viz., "To call the attention of the house to
the present position of the question of church rates," asked
whether it was the intention of the Government to intro-
duce any bill on the subject this session!?

THE SUN,' 'LONDONI SATURDAY PTV ENING, FEBRUARY 9, 1861.

would be done till there was a general system of rating, and
the existing areas of management and charge broken up.
Mr. DEEDES suggested that the scope of inquiry by the
committee should be enlarged, so as to include an investi-
gation into the operation of the law itself.
Sir G. C. LEWIS then moved the addition to the motion
of the words, " And into the operation of the law for the
relief of the poor."
Mr. LOCKE said that the inquiry should be whether or
not the present Law of Settlement should be continued, and
if abolished, then, how they would adjust the rating
throughout the country.
The motion, with the amendment, was then agreed to.

BANK OF ENGL•AND (CONSOLIDATED FUND).
Mr. MASSEY brought up the resolutions of the com-
mittee, which were agreed to. Leave was then given to
bring in a bill founded thereon.
RED SEA AND INDIA TELEGRAPH COMPANY.
The CHANCELLOR of the EXCHEQUER moved
that the house go into committee.
Sir H. WILLOUGHBY complained that the committee
were about to discuss a resolution, of the terms of which
they were wholly ignorant. Why should not a preliminary
notice be given, as in other cases, of the precise nature of
the resolution abcut to be proposed ?
The CHANCELLOR of the EXCHEQUER said that he

was in the hands of the house. The resolution was pre-
pared, and he for one fully expected to see it on the votes

that morning. The resolution was in close conformity with
the notice given on the votes.

The house then resolved itself into committee; Mr.
MassEy in the chair.
The CHANCELLOR of the EXCHEQUER—I will not
trouble the house with any lengthened statement, because,
although a great deal may be said upon it, the point before
us, although important, is a narrow one. I will not say
anything as to the merits, the wisdom, or otherwise of the
agreement that is under consideration, nor will I enter
upon two other matters—one a contest between the Red
Sea Telegraph Company and the contractors ; and, secondly,
the course that may have been taken by this unfortunate
line. All this is excluded from our present view, and we
are now not to consider any matter of policy, but simply a
question of good faith, to which I shall accordingly limit
myself. An agreement was made between the Treasury
and the Red Sea Company in the year 1859, and a bill was
brought into Parliament in the Session of the same year
to give effect to that agreement. The nature of the agree-
ment was understood by the public in a particular sense,
and about that sense there can be no doubt. It was under-
stood that by that agreement the Government guaranteed
to the company a minimum dividend, sinking fund included,
of £4los. upon a certain maximum amount of capital during
50 years ; and although it was stated in the House of Lords
by the noble earl then at the head of the Government that
this was a conditional guarantee, yet the sense in which he
used the term was that this was a guarantee conditional
and contingent on the execution of the work, and on its
being brought into working order. But now I come to
speak, not of what was said in the House of Lords, which
passed without record, but of what was understood by
the public and those who subscribed their money. In
the first place, then, what was this understanding.? and,
secondly, were they justified in entertaining it? The un-
derstanding was that the contract was unconditional in one
respect, and that, according to the intent and meaning of
the agreement, all that the company had to do was to raise
the capital and lay down their line, and then they were not
liable to be prejudiced in respect to this guarantee by any
subsequent failure of the line to perform its functions. At
that time it was thought that the main difficulty consisted
in the laying down of the line, and it was conceived that
after a submarine telegraph wire had once been laid down
any failure was not to be apprehended. The case, therefore,
which has occurred was not distinctly in the contemplation
of the parties ; and if this were a question bbtween private
individuals I do not know that it might not be made the
subject of argument and contest. But any gentleman who
will examine the course of the transaction between the
Government and the company will, I think, come to the
conclusion that any subsequent failure of the line to per-
form its functions, although it was not in the contemplation
of either party as a risk to be seriously guarded against,
was intended to be borne by the Government ; that is to say
although not distinctly and expressly, yet the nature of the
bargain was this—that the company, having laid down the
line in a proper state, were thereafter to be free from risk.
The general facts connected with this case are pretty well
known. It is, I believe, unquestionable that on that under-
standing alone money was raised ; and the responsibility of
the Government in the case was a very peculiar responsi-
bility, because two gentlemen were appointed official
directors; their names were announced, they took part in
the proceedings of the company, and theywere considered
a conclusive guarantee on the part of the Government to
the public of the security of the undertaking. When I
speak of the Government I speak of them in the discharge
of their natural and proper functions. They con-
cluded a contract subject to the assent of Parliament, and
the assent of Parliament was regularly obtained for that
purpose. The bill passed the Commons in 1859 ;it did not
contain the contract, although it sanctioned it. In the House
of Lords attention was drawn to this fact, and the bill was
amended by having the contract set out in it. When the
bill came down to this house as amended, and the motion
was made to agree with the Lords' amendments, my right
hon. friend the member for Carlisle observed that these
amendments brought for the first time under our view a
very important instrument of which we had no cognizance,
and he moved that the consideration of the Lords' amend-
ments should be delayed for a fortnight, in order that the
house might become acquainted with the terms and charac-
ter of the contract to which we were about to give a final
assent. Most unfortunately, as I think, and as I thought
at the time, the house, on a division, rejected by a consi-
derable majority the motion of my right hon. friend. They
were careful lest the slightest suspicion should be raised as
to the maintenance of the public faith. (Hear, hear.)
Nothing could be more honourable than the motive; the
effect was most unfortunate; for I don't at all doubt that
if that contract had been subjected to the view and con-
sideration of the members of the house, by allowing a fort-
night to elapse before the Lords' amendments were con-
sidered, the blot in its formation would have been hit, and,
to the great advantage of all parties, it would have been
removed. The amendments of the Lords, however, were
accepted and the bill became law. Under that law there
were provisions for the payment of dividends during the
submergence of the line, and these were paid. In the latter
part of last year it occurred that in consequence of diffe-
rences of opinion between the directors, the company, and
the contractors, a reference was made to the Government,
and the due construction of the contract was brought under
the consideration of the law officers of the Crown. They
reported, in very unhesitating terms, that under the con-
tract the Government were not bound to pay, and had no
power to pay anything in the present circumstances and
condition of the line. The first question, then, we had to
consider was, whether we were to avail ourselves of that
state of the contract, or whether we should ask Parliament
to amend the error in its construction, and pass a bill
which should give effect to the original understanding.
Upon an examination of the evidence as to the original
construction put upon the contract and the assurance given
to the parties, and which they were originally justified in
entertaining, we thought our duty was to apply to Parlia-
ment, and that announcement was made to the directors of
the company in an official letter, signed by my right hon.
friend the member for Bury (Ali% F. Peel), on the 28th of
January. There was another question, of a more delicate
alsoand morecauie dteiffiacudelt character,
eieienaeta ontheir wduhticyh,
atnh ern
de
tGhaotvwaamtehnet
question
nne
at hr
ye re wt
steeps
sp
e hnoeuelede
saatrtyh efeTrr etahseu ry
ve
rai sfiseeantt t cer-
tain i
eno
of
ahalf .year's accounts, the consequence of which would be
to give authority for the issuing of half a year's dividends.
The money necessary for these dividends was voted by
Parliament ; but for the purpose of enabling us to fulfil
what was thus believed to be a contract, the deliberate
opinion of the legal advisers of the Crown, in cutting away
from under our feet the contract itself, appeared to us, on
the just understanding of our constitutional functions,
likewise to cut away from under our feet all title to pay
this dividend. We might, in a case where a great prac-
tical evil was to be apprehended if any lengthened
course of time elapsed, have undertaken the responsibility
of issuing the money; but difficulties might have
been interposed by the Controller of the Exchequer.
Whether that was so or not, we certainly came to the con-
clusion that inasmuchjas we should have the opportunity
within the course of a few days of bringing the matter
under the judgment of Parliament, and inasmuch as we
should be compelled to do so as regarded the general validity
of the contract, it would be but due to Parliament and the
respect we were bound to pay to its authority, that we
should refer to it the whole subject in its entirety, and
that we should not reduce to an idle form the consideration
of the bill by proceeding at once to anticipate its judgment,
and pay the dividends coming due; for they are not yet
due, and it is even possible this measure may become law
before that time has actually arrived. A bill has been
drawn for the purpose I have described, and re-establishing
what we take to be tae original contract. For ascertaining
that understanding we have, on one hand, various docu-
ments that. passed at an early period of the negotiations,
and the evidence of various declarations in Parliament on
record, both that of the late Secretary of the Treasury, and
the still more authoritative declaration of the right hon.
gentleman the member for Buckinghamshire, who ex-
pressed his view of the nature of the contract in 1859, when
the motion to which I have referred was made by my right
hon. friend the member for Carlisle. The course we pro-
pose to take is this :—lt is a matter of some nicety to deter-
mine the precise form in which an Act of this nature should
be passed, because, although it is our duty to give effect to
the original intention, it is certainly not our duty to do
more. Our desire, therefore, is that the form of the bill we
propose should be narrowly canvassed by the house. I now
submit a resolution on the terms of which, if adopted, I
propose to introduce a bill. I will take the second reading
of it on the earliest convenient day, and then I pro •
pose to refer the bill itself to the consideration of a
select committee for the examination of its provisions—not
to go into the merits of the arrangements made, or into the
rquestiona oft
to w
thhaita coursepipty mnaayi d be e
neaxwp eadui ehnt
nt
etrog
et
da
,k e with
nwdi tet.
which five out of six links are perfectly useless for all prac-
tical purposes; these may be proper sutjects for inquiry,
but not in connexion with this bill. Tho committee will
agree with me that the simple question of public faith
should be kept distinct; the other questions will be more
conveniently handled in a different form. With these
explanations I beg to put into your hands the resolution
that it is expedient to guarantee to the Red Sea and India
dividendthe purpose up oefn
theth e
asTaneld7mg nr tit(ihf capitalcompany's
u ndertaking.
Companyboneminimum
s called
r of
Mr. DIVETT did not blame the Government for the
rate
arrangement which had been made in this case. The
guarantee was in a manner forced upon them by circum-
stances. There was an extraordinary clamour for this tele-
graph at the time. There was great anxiety in reference to
affairs in tho East, and the press took a strong view on the
subject, but the difficulties of the case had not been duly
ctroansstieddetnee d.guAarlalndteeee of
psetahitaelseagrrtaNmild be entered into bypvbs were failures, and he
the Government in future without the fullest investigation.
He admitted, however, that good faith required the present
bill should be passed as speedily as possible.

111 r. JAMES said that some of his constituents were in-
terested in this question, and had subscribed their money
upon the security of the public faith, and on considerations
which he thought would influence any gentlemen of ordi-
nary prudence. There could be no doubt that the public
faith was pledged to the undertaking, and he could not see
that the late Government should be taxed with any impro-
vident proceeding. It was easy to find fault after a failure
which no human sagacity could contemplate, but at the time
'this line was proposed it was extremely desirable to have
telegraphic communication with India. He agreed with the
hon member for Evesham that this proceeding might operate
as warning against the house voting hastily in such matters,
but they had now to deal with parties out of doors, who
had subscribed their money on the faith of the Government
guarantee. He, however, did not see the necessity for the
appointment of a committee on the subject.
The CHANCELLOR of the EXCHEQUER was glad
that the house had had so clear a declaration from the
right hon. member for Buckinghamshire of the intention
and understanding of the late Government with regard to
the contract. He quite agreed with what had fallen from
1 the hon. baronet the member lin. Evesham as to the dan-
gerous practice of inserting money clauses, which made a
charge on the Consolidated Fund, in private bills; and,
without presuming to pronounce an absolute opinion on the
point, it nevertheless appeared to him well worth the con-
sideration of the House of Commons whether it would not
be proper to provide that no such charge should be im-
posed, except through the medium of a public bill. The
hon. membet. for Cambridge had asked what would be the
functions of the select committee. He did not think, as he
had already stated, that the functions of the committee
would be to enter into the policy or providence of the ar-
rangement made; but the contract was an instrument some-
what complex and very peculiar in its form, and it had been
a matter of doubt what was the understanding. on
which the contract was adopted and the act passed. These
wet e matters which Government had examined for them-
selves, but the house did not act upon what the Govern-
ment had done, and it was desirable that it should by an
organ of its own—a select committee—try these questions
and verify the facts on which the bill was founded. A com-
mittee could, on the part of the house, very easily satisfy
itself by the inspection of documents, and by the examina-
tion perhaps of a single witness, what was the understanding
on which the contract was founded, and whether or not the
terms of the Act carried out that understanding.
As to the question whether, in the event of the working
expenses of the company not being defrayed by its receipts,
the public of this country and the Indian Government
jointly would be liable to be called upon to make good the
deficit, the most consolatory answer he could give was that
the working expenses were brought within the discretion
of the Government, and would be reduced within very nar •
row limits. According to the wording of the contract itself,
he was afraid of the working expenses, as well as the pay-
ment of the necessary advances, would have to be borne by
this country in the event of the failure of certain resources
mentioned in the instrument as originally drawn up.
Mr. KINNAIRD expressed his regret that the public
credit seemed to have been somewhat tampered with by the
course with respectto the question which had been adopted.
The motion was then agreed to.
POST-OFFICE SAVINGS-BANKS.

The house having gone into committee for the purpose
of taking into coLsideration a resolution with respect to
the establishment of Post-office savings banks which the
Government had given notice of their intention to propose.
The CHANCELLOR of the EXCHEQUER took occa-
sion to state that, in submitting the resolution to the notice
of the committee, he did not seek to pledge hon. members
to an approval of the bill which it was his intention to found
upon it. The object which he had in view in dealing with
the question was.to afford greater facilities for the deposit
of savings of small amount than under the present system
existed. The establishment of savings banks had un
doubtedly been of immense service to the humbler classes
throughout the country; but, whilst it was the wish of
the Government so to improve their constitution as to
render them still more advantageous, the mode of doing so
was a problem which they found extremely difficult to
solve. Under those circumstances, they proposed to avail
themselves of another description of machinery already in
existence, simple in form, and recommended by its
incomparable convenience, for the purpose of carrying
out more effectually the objects for which savings banks had
been set on foot. Of those institutions there were only
about 600 scattered throughout the country, and of that
number but a small proportion wore open for a sufficient
,number of hours in the week. Looking, however, to the
Post •office Department, he found that it comprised between
2,000 and 3,000 money-order offices; that the number of
postmasters was perfectly adequate to the transaction of in-
creased money business • that they held their situations
under pecuniary responsibility, and that every one of their
offices was open six days in the week for not less than eight
or ten hours each day. Now, there was a machinery ready
to hand, and admirably adapted for extending the usefulness
of the savings-bank system. The experience, ho might add,
of the present winter must have demonstrated to anybody
who thought upon the subject that the resources of the
labouring population of the country had not of late years in-
creased in proportion to the increase in the rate of their
wages and the improvement in their standard of living ; nor
did think be was indnlging in too sanguine an expecta-
tion in supposing that if readier Means of }lying I).y tkir
small savings were afforded them than thy now posSossed,
those savings would become much larger in amount and
their ability to cope with periods of distress consequently
greater. He did not, of course, intend to propose that the
machinery of the Post-office should be applied at once and
wholesale to the pvpose of affordiny: to th worlting classes
the facilities of which he spoke. The scheme to which he

. _
Sir H. WILLOUGHBY said that some notion of the im-
portance of the question under discussion might be in-`

P ferred from the fact that it involved a sum of something like
£1,500,000. The matter originally came before Parliament
in the shape of a priVate and unopposed bill, which attracted
no attention, and was passed without discussion or even
observation, though it. saddled the country with an enor-
mous contingent burden. He much doubted whether it
was ever intended to give an unconditional guarantee; but,
however that might be, what he wished to point out was
that under the existing system of legislation it was possible
to saddle the public purse with an annuity of £36,000 for
50 years without advantage to the country, and even almost
without the knowledge of the House of Commons. The
money would, no doubt, have to be paid ; but, at least, a
useful lesson might be learnt from the present case. Let
all such bargains be shifted to the bottom, and narrowly
watched through all the stages of their progress ; and,
above all, let the house adopt the recommendation of the
Contract Committee which sat last year, and insist that a
resolution should be placed upon the table at least one month
before any action was taken up(in it.
Mr. A ywroN thought that the resolution submitted by
the Chancellor of the Exchequer was not in accordance with
the original understanding as stated by the company itself.
The resolution set forth that the Government should pay
the sum necessary to make up a dividend of 41 per cent. ;
but the real engagement, as appeared from the prospectus
of the company, was that the Government should take over
the telegraph, and pay back the capital, £BOO,OOO. He
wished to know what the Chancellor of the Exchequer un-
derstood to be the annual sum which would have to be paid
under his resolution ?
Mr. WALPOLE did not see what good could result from
referring the Bill to a select committee. The safer course
would be to treat the Bill in the usual way, submitting it
to a committee of the whole house.
Sir S. NORTHCOTE stated, in reply to the hon. and
learned member for the Tower Hainlets, that the obligation
upon the Government to take the telegraph into their own
hands was not compulsory, but optional. The recommenda-
tions of the Contract Committee of last session would
render it impossible in future for any such bargain as that
under consideration to be completed without the full know-
ledge and sanction of Parliament. It should not be for-
gotten, at the same time, that the course pursued with re-
gard to the Red Sea Telegraph Bill, though inconvenient
enough, was not unusual, but that, on the contrary, it was
the precise course which up to that time had been followed
in all similar cases. Nor, he was sure, was there the small-
est idea of deliberate concealment. Those who introduced
the bill had every reason to suppose that the terms of the
contract would be made the subject of a rigid inquiry, and
he was satisfied that there was no intention in any way to
elude the vigilance of the house. If, as had been stated, the
law officers of the Crown had advised the Government that
the contract was not binding upon them, there was obvi-
ously no other course open to the Chancellor of the Exche-
quer than that which he had taken. Some surprise had
been expressed that the Government had agreed to secure
to the telegraph company a dividend of 4t per cent. whether
the line was kept in working order or not. It should be re..
collected that the Government gave an unconstitutional
guarantee, because the opening of the line was a matter of
great political interest and even emergency. We were than
suffering under the double affliction o the mutiny in India
and of a monetary crisis in this country. The necessity,
therefore, was great, and the Government thought they
were justified, under the peculiar circumstances of the case,
in departing from their usual policy.
Sir G. C. LEWIS was not disposed to charge the late
Government with any concealment upon the subject of this
contract. The house, however, was not called upon now to
go into a discussion of the prudence of the terms upon which
the contract was arranged. What the house had to con-
sider was what was the understanding which existed
between the parties and which was ratified by Pal liarnent ?
It would, undoubtedly, be the wish of the house to give
effect to that understanding. Now, he confessed, having
looked inro the matter with some care, that he felt consider-
able doubt as to what the real understanding was with re-
spect to the contingency which had arisen—viz., the entire
failure of the line. It seemed to him that when the nego-
tiations took place with the late Government both parties
assumed as a matter of course that the line once laid down,
it would remain in working order, subject only to tempo-
rary interruptions. They accordingly entered into a gua-
rantee that during any partial disturbance of the line or any
temporary want of funds on the part of the company a cer-
tain dividend should be paid to the subscribers ; but he did
not see any evidence in the papers that either party ever
contemplated the contingency which had actually occurred.
That was the contingency which had occurred, and the
question the house had to consider was whether they were
to pay .11. per cent. on these £BOO,OOO for 50 years without
the most remote prospect of any advantage to the public.
As it was the desire of every member that the strictest good
faith should be observed towards the shareholders, it would
be satisfactory before the question was decided in commit-
tee, or at any other stago of the bill, that those persons con-
nected with the late Government who were the principal
parties in conducting this negotiation should give their as-
surance to the house that theyunderstood that the contract
as passed by Parliament did bind the country to the pay-
ment of that dividend on that sum in the contingency which
hail actually occurred. If such an assurance were distinctly
given the house would feel, however disadvantageous the
contract might be to the nation, the utmost willingness to
retain faith with the shareholders. (Hear, hear.)
Mr. DISRAELI observed that there were two kinds of
guarantees in respect to these lines—the conditional gua-
rantee and the unconditional guarantee. The conditional
guarantee meant that a certain rate of interest for a certain
amount of capital was secured to the telegraph company on
the condition, first, that the line was laid, and next, that it
was kept in working order. By the unconditional guaran-
tee, however, the Government guaranteed a certain rate of
interest on a certain capital, provided the line were laid,
and when laid, placed at once in welkin.. order, though not
kept in working order. The only unconditional guarantee
which was sanctioned by the late Government was this one
of the Red Sea Telegraph. The line was laid, and it was
proposed that the guarantee should commence when the
line had been 10 days in complete working order after being
laid down. The Government did not think that a sufficiently
long time, and they inserted 30 days in the contract. The
line having been completed and in working order for 30
days, the Government felt themselves engaged under the
unconditional guarantee. What happened was certainly
not contemplated. It was not supposed that on the 31st or
32d day the machinery would fail ; but it was perfectly
clear that if the line was in successful operation for 30 days
the Government was entirely bound by the contract. He
agreed that the present was not the occasion on which to
enter into the policy of these undertakings, though he was
prepared to do so were it necessary. He would only remark
in reference to an observation made by an hon. member,
who seemed to argue that, after the failure of the Atlantic
cable, the Government should not have sanctioned such an
operation as this, that the Government entered into the
engagement before the failure of the Atlantic cable.

was about to invite the assent of the committee would, it
was true, be worked through the agency of the Postmaster-
General and not that of the National Debt Commissioners,
whose duty it would be simply to receive and hold the funds
handed over to them by the Post-office for investment ; but
then the new arrangements would in no way interfere
with the primary objects, for the attainment of which that
important branch of the public service was established.
He proposed that the Post-office should receive and re-
turn deposits with interest in the same way as money-
orders were now dealt with, charging merely a fair re-
munerative price for the work thus performed. He might
further observe that the principle upon which his
scheme was founded differed in some respects from
that on which savings banks were based. Those institu-
tions had been established with the notion that the State
might very fairly offer to the labouring classes a certain pre-
mium by way of inducing them to make deposits ; but, while
he was far from desiring to cast any censure upon that prin-
ciple, he did not deem it right in the present case to hold
out to depositors the expectation of receiving any high rate
of interest. All, then, he meant to do was to give a fair and
moderate premium to the depositors of small savings, and
that premium he hoped to be able to pay them without im-
posing any additional burden on the State, by turning to
account the very extensive and extremely economical ma-
chinery of the Post-office. The rate of interest which was
now paid on deposits in savings-banks stood at the some-
what high. rate of £3 .ss. per cent., and he proposed that
under the operation of the scheme to which he was asking
the assent of the committee it should be fixed at £2 10s.,
with power to increase that amount within cer, ain limits.
Inasmuch as there were great difficulties in the way of deal-
ing with the finances of savings-banks and of attempting to
alter their form of constitution, the Government proposed
for the moment to pass over those difficulties, and to ask the
assent of Parliament to a plan which, avoiding any compe-
tition with the existing savings-banks, would greatly en-
large the facilities of making small deposits. The main
difficulty in the present savings-bank system was its im-
perfect organisation in regard to the responsibility of the
State. The State could only be responsible for the acts of
its own officers, and as no plan had yet been devised by
which the State could participate in all the proceedings of
the savings-banks, it was impossible to carry out the prin-
ciple of a perfect Government guarantee. The State now
only became responsible for the money of the depositors at
the moment it received it from the savings-banks' autho-
rities. But as in this case the money would be received
by the officers of the Government it would be inexcusable
not to give a Government guarantee—(hear, hear)—and
he proposed, therefore, to give a Government gua-
rantee in the only effective technical form, by providing
that if any difficulty arose in the means of meeting
the demands of any lawful depositor, it should be
charged upon the Consolidated Fund. He hoped the notion
of a Government guarantee would not cause any alarm in
the minds of hon. gentlemen, for he had expressly stated
the basis of this new arrangement was that it should be
self-supporting. The right hon. gentleman concluded by
moving a formal resolution to the effect, that in the event
of savings-banks being established under this bill any defi-
ciency which might arise in the means of meeting the de-
mands of depositors should become a charge on the Conso-
lidated Fund.

Mr. CROSSLEY thought it impossible to over-esiimate
the advantage which the working classes would derive from
the proposition of the right hon. gentleman. There were
no less than 15 counties in England without such a thing
as a savings bank, and there were also many important
towns with from 10,000 to 20,000 inhabitants where there
was no such institution. The State provided beershops in
every street for working men to spend their money in as
fast as they earned it ; but hitherto it had not been suffici-
ently forward in giving them facilities for saving their
money. 'Working men were often afraid to let their masters
know that they were saving money from a notion that it
would lead to a reduction of their wages, and under the
present system the masters were very often concerned in
the management of these banks and could know exactly
how each man's account stood. By this new arrangement
each account would be a secret between the depositor and
the postmaster. He felt very much indebted to the atten-
tion which the right hon. gentleman had given to the re-
presentations addressed to him on the subject by Mr. Sykes
of Huddersfield. He did not think the Government ought
to make a profit on the business, nor ought they to lose by
it, for the working classes of this country did not want
charity. If at any time it was found that more than 21 per
cent. could be afforded he hoped it would be paid.
Colonel SYKES said that no praise could be too high for
anything which tended to induce the working classes to lay
by against a bad time. He was afraid that the note of hand
system would entail considerable labour on the postmasters,
most of whom had some occupation of their own to attend
to, and suggested that each man's account should be kept
in a book, as under the present system.
Mr. KINN AIRD thought that the plan was exactly
what was wanted. It was simple and practical, and would
save the labouring classes from incalculable loss, entailed
by their advancing money on all sorts of schemes because
they had no place for depositing their savings with secu-
rity. He heartily congratulated the Chancellor of the Ex-
chequer on having at last succeeded in one of the fondest
hopes of his heart, that of creating a 21 per cent. stock.
Mr. AYRTON asked whether further facilities would be
given to the existing savings-banks in using the Post-office
for small remittances F

The CHANCELLOR of the EXCHEQUER said that
no proposal or suggestion in a practical shape had been
made to him on the subject, but he should be very glad to
see the machinery of the Post-office applied. on behalf of
existing savings-banks, to any extent short of entailing
additional charge. They were indebted to Mr. Sykes,
whose name had been mentioned, as one who had laboured
much in the cause, and who had been ofgreat public use with
respect to it. The plan adopted was not precisely a plan of
interest notes, but that was a matter of detail on which he
would not enter now, as the bill would be on the table in
two or three days.
The motion was then agreed to, and the house resumed.
The Red Sea Telegraph Bill, the Highways Bill, and the
Parochial Assessment Bill were severally read a first time.
The house adjourned at five minutes to 11 o'clock.

FROM THE GAZETTE OF LAST NIGHT.

WAR-OFFICE, FEB. 6.

The Queen has been graciously pleased to give orders for
the appointment of Charles Pressly, Esq., Chairman of the
Board of Inland Revenue, to be an Ordinary Member of
the Civil Division of the Third Class, or Companions, of
the Most Honourable Order of the Bath.
WHITEHALL, FEB. 4.
The Queen has been pleased to approve of the appoint-
ment of the Right:Hon. Edward George Fitzalan Howard
(commonly called Lord Edward George Fitzalan Howard),
to be Deputy Earl Marshal of England.
FOREIGN-OFFICE, FEB. 5.
The Queen has been pleased to approve of Mr. Augustus
Charles Gumpert as Consul at Bombay for his Majesty the
Emperor of Austria.

THE PRINCE OF WALES'S COUNCIL CHAMBER,
BUCKINGHAM GATE, FEB. 5.
John Francis Basset of Tehidy, in the county of Corn-
wall, Esq., has been appointed Sheriff of the county of
Cornwall.

CROWN-OFFICE, FEE. 8.