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It was on July 7, 1859, that, upon motion of the chancellor of Packet
the exchequer, a select committee was appointed to enquire into and anc * ?? le "
report on the manner in which contracts, extending over periods of Contracts
years, have, from time to time, been formed or modified by her Corn-
Majesty's government with various steam- packet companies for the m i ttee -
conveyance of the mails by sea ; and likewise into any agreements,
actual or prospective, which have been adopted at the public charge
for the purposes of telegraphic communications beyond sea ; together

>' By Act 28 & 29 Viet. c. 51 . And 170, p. 540.
see flans, D. v. 177, p. 1161. Ib. v. * Ib. v. 177, p. 1921.



772 THE ROYAL PREROGATIVE.

Church- with any recommendations as to rules to be observed hereafter by
ward case. t ne government in making contracts for services which have not yet
been sanctioned by Parliament, or which extend over a series of
years. Owing to the late period of the session at which they com-
menced their labours, it was impossible for the committee to
complete their enquiry before the prorogation. They accordingly
confined their attention and devoted their first report to the
circumstances under which the contract between the executive
government and Messrs. Churchward and Jenkings for conveying the
mails between Dover and the French coast had been renewed.* The
extension had twice taken place, the last time on April 26, 1859,
when the contract (which would expire in 1863) was further ex-
tended until 1870. This was done upon the recommendation of the
Board of Admiralty, and in opposition to the views of the post-
master-general.

It appeared in evidence before the committee, that on the eve of
the last general election, when the extension of his contract was
under consideration at the Treasury, Mr. Churchward volunteered
his support, as an influential elector for Dover, to Captain Carnegie,
one of the lords of the Admiralty, if he should become a candidate
for that borough. He did this on the expectation that his contract
was to be renewed. The committee, however, fully exonerated all
the officers, both of the Admiralty and of the Treasury, with whom
the decision in regard to this contract rested, from being influenced
by any corrupt or political motive in granting the same. They did,
indeed, consider that the conduct of Mr. Murray, the private secre-
tary to the first lord of the Admiralty, was open to grave censure ;
but they had not sufficient evidence to show that any member of the
government was cognisant of the communications between Mr.
Murray, Mr. Churchward, and Captain Carnegie.

While declaring themselves most anxious for the fulfilment of all
engagements entered into in good faith between the government and
private individuals, the committee, nevertheless, submitted to the
House ' whether Mr. Churchward, in having resorted to corrupt ex-
pedients affecting injuriously the character of the representation
of the people in Parliament, has not rendered it impossible for
the House of Commons, with due regard to its honour and
dignity, to vote the sums of money necessary to fulfil the agreement,
to extend his contract from June 20, 1863, to April 26, 1870.'

A change of ministry having taken place since the last renewal
of this contract, the incoming administration, in deference to the
foregoing report, and to the general opinion of the House, tacitly



Report on Post Office and Telegraphic Contracts, Coin. Pap. 1855.
Sees. ii. v. 6, p. ] .



CONTROL OF PARLIAMENT OVER SUPPLIES. 773

concurring therein, refused to recognise the amended contract, which Church-
entitled Mr. Churchward to a fixed sum per annum, but permitted ward
him to continue to conduct his postal service under the former con-
tract, under which he was ordinarily allowed a smaller amount, but
was authorised to make extra charges for certain special services.
This contract would remain in force until June 1863, and was free
from objection of any kind, it not having been included in the cen-
sure of the committee. 1 "

The friends of Mr. Churchward, however, were not willing that
his last contract should be thus set aside without a struggle. Ac-
cordingly, on March 27, 1860, Captain L. Vernon, who had been a
member of the afore-mentioned committee, moved to resolve that
this House, having considered the report and evidence presented by
the committee on packet contracts, is of opinion that the contract
entered into on April 26, 1859, between the lords of the Admiralty
and J. G. Churchward ought to be fulfilled. The chancellor of the
exchequer (Mr. Gladstone) opposed this motion, declaring that the
impartial finding of the committee was entitled to respect ; that
independently of their report it was clear from the evidence that
corrupt expedients, affecting injuriously the dignity of Parliament,
had been resorted to to obtain a renewal of this contract. Under
these circumstances, he added, the present ministry were under
no obligation to carry out the new contract, and the House were
not bound to vote the money, for ' the executive has no constitu-
tional authority to make a contract binding on the House of
-Commons.' Whereupon the motion was negatived on division.

Mr. Churchward strenuously remonstrated against the repudia-
tion of his last contract, and applied for leave to have the case
between himself and the Admiralty argued before the Court of
Queen's Bench ; but the Admiralty refused their consent to this
plan, declaring that they would do nothing that would admit the
validity of his claims or prejudice the decision of the House of
Commons. The government also informed Mr. Churchward that
they would only undertake to propose and support in Parliament
votes for his services up to June 1863.

As a final effort, Mr. Churchward notified the postmaster-
general, in February 1863, that he had submitted his case to
eminent counsel, who had advised him that his last contract was
good and valid ; and that, in the event of the department persisting
in refusing to recognise it, he was at liberty to proceed, by petition
of right, to recover compensation for damages thereby sustained. In
making this communication, he expressed his desire to avoid being
placed in antagonism with the government, and expressed his
willingness either to leave his case to a court of law or to the decision



Hans. D. v. 157, pp. 1370, 1408. e Ib. p. 14lL> ; v. 196, p. 1628.



774 THE ROYAL PREROGATIVE.

Church- of arbitrators. The department took no notice of this offer, but in-
ward case, formed Mr. Churchward that his contract would terminate on June
20, 1863, and that tenders for the future conduct of the services in
question had been accepted, subject, however, to a provision that, if
Parliament should still vote the moneys which would be required to
pay Mr. Churchward, under the proposed extension of his contract
to April 26, 1870, the new arrangements were not to take effect. In
reply, Mr. Churchward reiterated his remonstrances against the
conduct of the government in treating his last contract as non-
existent, and repeated his assurances of his readiness and ability to
perform the same with efficiency up to its final termination. d

In order to bring this controversy to a definite conclusion, the
government took the unusual course of appending to a vote on
account of the packet service, proposed in Committee of Supply on
May 18, 1863, a statement that the same included provision for pay-
ments to Mr. Churchward for postal services to June 20, 1863, and
a proviso that no part of the vote should be applied towards any
further payment to him by virtue of his last contract with the Ad-
miralty, in respect to the period subsequent to that date. This con-
dition gave rise to a very animated debate, not only in committee,
but also on the reception of the report by the House on May 28. e
It was objected that it was quite unprecedented and foreign to the
proper functions of the Committee of Supply to submit to it any
motion other than one to agree to, reject, or reduce, a proposed grant ;
and that any such innovation in practice would be likely to lead to
very serious consequences, affecting the constitutional relations of
the House with the crown and with the Lords in the matter of
supply. On the other hand, it was urged that this proceeding, if
new, was not necessarily irregular ; that it was one which the ad-
ministration had chosen as being the most fitting method of carrying
out the recorded opinion of the committee of 1859, and of the House
in 1860, on Mr. Church ward's contract ; that it was impossible the
form of motion used on this occasion could be drawn into precedent
to justify a departure, under different circumstances, from the recog-
nised usage of Parliament in supply votes, inasmuch as the proviso
in question was proposed by the government itself as a condition
under which it asked for the money, and could not warrant a private
member in attempting to limit or change the application of a pro-
posed grant for a particular service ' It does not follow,' said the
chancellor of the exchequer, ' because a proposal of this kind may be
made by the crown, therefore a similar proposal may be made by an



d Papers on Packet Service (Dover Gen. Com. Pap. 1862, v. 27, p.
and Calais, &c.), Com. Pap. 1803, 411.
v. .'50, p. 007. Hep. of Postmaster- And see Harm. D. v, 172, p. 1020.



CONTROL OF PARLIAMENT OVER SUPPLIES. 775

independent member.' Moreover, ' the proposal of the crown refers Church-
to the exclusion of a particular individual from the performance of war< i case -
a stipulated service. It has no bearing on the service itself. It does
not limit or alter the service, and, consequently, it is no precedent
for any vote which might limit or alter that service.' f After much
debate, the ministerial proposition was agreed to upon a division. It
was afterwards inserted in the Appropriation Bill, and received the
full sanction of law. As a further security to government against
any claims that Mr. Churchward might continue to urge, similar
clauses were inserted in the Appropriation Acts of 1864 to 1870,
when the contract expired, and even subsequently to 1875, inclusive
(after which it was omitted from the Act), in deference to the
opinion of the law officers of the crown ; on account of an action,
commenced by Mr. Churchward, which was pending in the Exchequer
Chamber. 8 Nevertheless, Mr. Churchward commenced proceedings
in the Court of Queen's Bench against the Board of Admiralty by a
petition of right, claiming damages to the extent of 126,000. for in-
juries sustained by the cancelling of his contract. The case was
ably argued on behalf of the plaintiff, but the court (in November
1865) decided against him, on the ground that it would be unjust and
unwarrantable that the Admiralty should be obliged to carry out a
contract after Parliament had refused to make provision for the same. h
In the session of 1867, the proceedings against Mr. Churchward
became again the subject of a contest in the House of Commons, he
having, since the close of the previous session, been appointed a
-magistrate for the borough of Dover. His appointment was brought
under the notice of the House on March 1 5 ; * and on March 1 9 it
was moved to resolve that an address should be presented to the
Queen for his removal from the commission of the peace. This
motion was justified on the ground that Mr. Churchward had been
charged by a select committee of the House, in 1853, with bribery,
in promising to use his influence to obtain a situation for an elector,
in consideration of his vote at the election for Plymouth in 1852.
And also by the select committee in 1859, of resorting ' to corrupt
expedients affecting injuriously the character of the representation
of the people in Parliament.' In consequence of the last named
report it was alleged that the House had refused to sanction the re-
newal of his postal contract, and had renewed, year after year, its
votes of censure against him. An amendment to the proposed address
was moved by the friends of Mr. Churchward to substitute, for his



' Hans. D. v. 170, p. 2036. 192 ; v. 216. pp. 1500, 1706 ; v. 218,

26 & 27 Viet. c. 99, 15 ; 27 p. 207.

& 28 Viet. c. 73. 17, &c.; 38 & h L. T. Rep. N.S. v. 14, p. 57;

39 Viet. c. 78, Sched. B. 13. Hans, and Best & Smith Rep. p. 807.

D. v. 207, pp. 310, 385 ; v. 212. p. Hans. D. v. 185, p. 1914.



776 THE ROYAL PREROGATIVE.

Church- particular name, a general address that ' all persons in the commis-
ward case. s i on o f t ne peace,' who have been found guilty, either by a select
committee, or by a royal commission, of corrupt practices at parlia-
mentary elections or of being privy, or assenting thereto should be
removed from the magistracy. The main motion, as against Mr.
Churchward, was opposed by the government on the ground that he
had been unjustly treated, and that the decision of the committee of
1859 could not be accepted as conclusive against him. But they
were unable to induce the House to reject or postpone the amend-
ment, which was agreed to, on division, notwithstanding that the
chancellor of the exchequer expressed a hope that the House would
4 pause before assenting to a general proposition of the nature with-
out any examination into it.' k On March 25, her Majesty's answer
to the address was reported in these words, ' Concurring with you
in the propriety of discountenancing all such corrupt practices, I
will take into my serious consideration how that object may best be
accomplished.' ' The House was afterwards informed that the lord
chancellor was engaged in considering all the cases that came within
the scope of this address.

To return to the proceedings of the Committee on Packet and
Telegraphic Contracts. Having been unable to complete their en-
quiry in 1859, the committee was reappointed in the following
session, and made three reports.

Control of In their first report, the defects in the existing practice in regard
nentTover to contracts f r postal services entered into by the executive de-
postal partments were pointed out, and the necessity for a more efficient
contracts, control over the same by Parliament was strongly insisted upon. The
practice, introduced by the Derby administration, of inserting words
in postal contracts declaring the subsidies to be payable ' out of
moneys to be voted by Parliament,' although it introduced no new
principle in regard to the funds applicable to this service, distinctly
recognised that all such contracts were subject to the approval of
the House of Commons."

Sir Stafford Northcote informed the House that he had intro-
duced these words when he was financial secretary of the Treasury
in 1859, for the first time, into the Gal way postal contract, in order
' to save the members of the government personally from actions
which might otherwise be brought against them, in the event of
Parliament, for any reason, declining to sanction the contract.'
From the want, however, of early information as to the terms of ex-
isting contracts, and the fact that, until called upon, in Committee
of Supply, to vote money on behalf of the same, the House was



" Hans. D. v. 186, pp. 167-207. n Ib v. 157, pp. 1397, 1400.

1 lh. pp. 4<!6, 471, Ib. v. 160, p. 1001 ; and sue Ib.

n Ib. p. 730. v. 163, p. 1103.



CONTROL OP PARLIAMENT OVER SUPPLIES. 777

ignorant of the nature and extent of agreements entered into by the
executive government, it was obviously impossible for the House to
exercise its right of control with that freedom which is absolutely
essential for the right performance of its high functions. In the
interval between the execution of a contract and the application to
Parliament for a vote in supply on account thereof, heavy expenses
and liabilities are necessarily incurred by the contractors, so as to
render it a matter of peculiar hardship and difficulty for the House,
in the absence of any charge of fraud, misrepresentation, or corrupt
proceedings, to interpose and refuse to vote the moneys required to
carry out a contract which has been entered into by government
within the limits of its own authority.? Parliamentary control is
thereby practically excluded in regard to an important branch of
public expenditure. While it seems repugnant to the principles of
our constitution that the executive government should be free to
enter into contracts binding the country for prolonged periods, and
by anticipation, to the payment of vast sums, without the possibility
of any effective parliamentary check beyond the disapproval after
the evil had been accomplished, and when perhaps the ministers by
whom the contract was made were no longer in office, nevertheless
the committee were fully sensible of the difficulties attending any
change of system, which might result in a parliamentary canvass on
behalf of competing candidates for a public contract. They accord- Postal
ingly recommended that these transactions should remain altogether an< ^ ^el
in the hands of the executive, who should be free to execute any con- Contra
tract according to their own discretion and responsibility, 'but that
a clause should be inserted in all new contracts extending over a
period of years and creating a public charge for the conveyance of
mails by sea, or for the purpose of telegraphic communications
beyond sea, requiring that they shall not be binding until [they have
lain on the table of the House of Commons for one month, without
disapproval unless sooner] approved of by a resolution of the House.**
On July 13, 1869, this resolution was amended, by omitting the
words between brackets, and, together with the two following reso-
lutions, made standing orders of the House. 1 "

On June 19, 1873, the chancellor of the exchequer moved a
resolution that the Cape of Good Hope and Zanzibar Mail Contract s
be approved ; to which an amendment was proposed and carried for
the appointment of a select committee to enquire into the circum-



p See Hans. D. v. 157, p. 1864. proval of contracts by the House of

y First Report of Sel. Com 6 , on Commons, see ante, p. 492.

Packet and Telegraphic Contracts, r Hans. D. v. 197, p. 1818.

1860, pp. xiii.-xv. (in Com. Pap. 1860, ' Ib. v. 214, p. 1101; v. 216, p.

v. 14). For precedents of proceed- 686.

ings had in the approval or disap-



778



THE ROYAL PEEROGATIVE.



stances under which the contract was made. The committee was
nominated on June 26 ; and reported on July 23, condemning the
contract and also another contract connected with it.* On August
1, two fresh contracts, framed in accordance with the recommenda-
tions of the committee, were laid on the table, and on August 4
were approved of by the House.

Finally, in view of the adoption of these standing orders, the con-
trol of the House of Commons over mail contracts must not be con-
sidered as a dormant power, to be evoked only in case of urgency,
but as an important element in the agreement between the govern-
ment and the contractors, which should be recognised by the parties
concerned."

On July 24, the foregoing recommendation was em-
bodied in a resolution, which was agreed to by the House
of Commons, together with two other resolutions, pro-
viding (1) for the early transmission to the House of any
such contracts, accompanied by a Treasury minute,
setting forth the grounds on which the same have been
executed, and declaring (2) that, when any such con-
tracts require to be confirmed by Act of Parliament,
they should not be dealt with as private Bills, and that
power to the government to enter into agreements by
which obligations at the public charge shall be under-
taken should not be given in any private Act/ Such
minutes ' ought to be verified by some responsible min-
ister acquainted with those grounds before presentation
to the House of Commons.' w The accidental omission
of a formal Treasury minute would prevent the House
from proceeding to consider the contract, until the de-
fect was supplied/ So far as Bills relating to govern-
ment contracts are concerned, these resolutions would
appear to have been superseded by a new standing
order, adopted by the House on March 4, 1861, and
which, without taking such measures out of the cate-



* Hans. B. v. 217, p. 1366. w Com. Pap. 1873, v. P, pp. 241,
u See Rep. Cora 8 . Zanzibar Con- 339, 369.

tract, Com. Pap. 1873, v. 9, pp. 242, Ib. p. 285 ; Hans. D. v. 216, p.

365. 1001.

Com. Jour. 1860, p. 413.



CONTROL OP PARLIAMENT OVER SUPPLIES. 779

gory of private Bills, ensures that due attention shall be Control of
directed to them by requiring that the chairman of the m^t^ver
Committee oi Ways and Means shall make a special contracts -
report to the House previously to the second reading
of any private Bill by which it is intended to authorise,
confirm, or alter, any contract, with any department of
the government, whereby a public charge has been or
may be created, and providing for the due consideration
of such report by the House/

The recommendations of the Packet and Telegraphic
Contract Committee of 1860, in their first report, were
principally founded upon the proceedings of govern-
ment in reference to the Galway contract ; and as a brief
narrative of this case will contribute to elucidate the
subject of parliamentary control over transactions of this
description, it is here subjoined.

In 1858, a private company, of which Mr. Lever was the Galway
managing director, established a line of steamers for commercial pur- contract,
poses, to ply between the ports of Galway, in Ireland, and New
York, in the United States. This scheme excited considerable
interest, especially in Ireland, and several deputations waited upon
the ministry, in the course of that year, urging the importance of
its being encouraged by government. After much negotiation
between the parties, it was at length agreed upon to allow this com-
pany a subsidy of 78,OOOZ. per annum for seven years, on condition
of its efficient performance of postal services between Ireland and
America. The proposed contract was disapproved of by the post-
master-general for several reasons. But it was formally authorised
by the Treasury for ' important considerations of commercial and
social advantage, in relation chiefly to Ireland.' There appeared to
be a general impression abroad, that political advantages to the party
then in power had been a chief inducement in the grant of these
privileges. Moreover, the contract was open to serious objection on
other grounds. Accordingly, when a change of ministry occurred in
the following year, one of the first acts of the new administration
was to procure the appointment of the Committee on Packet and
Telegraphic Contracts. As we have already seen, the committee
were unable to enter into any enquiry respecting the Galway Com-
pany during that session ; but upon their reappointment, in 1860,

y Stand. Ord. 1862, No. 78; case of the Edinburgh Improvement Bill,
Hans. D. v. 200, p. 241.



780 THE ROYAL PREROGATIVE.

Galway the subject of this contract immediately engaged their attention.

contract. Meanwhile the contract had gone into operation, but as it contained

a clause expressly declaring that the subsidy was only payable ' out

of moneys to be voted by Parliament,' there was still opportunity for

its being set aside, if it were disapproved of by the House of Commons.

After careful investigation into the facts of the case, the com-
mittee, on May 22, reported their opinion that this contract had
been unwisely entered into ; that it had been given without
sufficient regard to the interests of Canada, whose line of ocean
steamers would have readily undertaken the new service on more
favourable terms, and that it was altogether an impolitic and
improvident arrangement. Nevertheless, as it was still open to the
House, in its own discretion, to decline to vote the necessary funds
to carry the contract into effect, the committee refrained from
making any recommendation on the subject. 2

On June 26, the committee presented a second report, stating
that they had been compelled to resume their enquiries into the
matter of the Galway subsidy, in consequence of the receipt of in-
formation pointing to the probability of a corrupt agreement having
been made between certain parties, in order to procure the postal
subsidy to the Galway line of steam-packets. They had accordingly
instituted a searching enquiry into these transactions, but had been
unable to convict the present contractors of any share therein.



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