§ MR. GEORGE FABER (York)
By the kind permission and generous indulgence of the House it has become my unpleasant duty to have to make a personal explanation. In the course of last Thursday after I noon I made a speech on the Second Reading of the Licensing Bill. In a part of that speech I made some remarks upon Dutton's Blackburn Brewery, and in pursuing its unfortunately somewhat decadent fortunes I had occasion to refer at the conclusion of my remarks in these terms to the right hon. Gentleman the Patronage Secretary. I asked—and The Times reports me correctly—Who was the fortunate vendor? His name was Mr. George Whiteley, M.P.I went on to say that I did not blame the Patronage Secretary, but that, considering the high canons of morality which had been set up by the Prime Minister and by other prominent speakers on the Radical side of the House with regard to brewery companies, the right hon. Member might find it a somewhat difficult task when Monday evening came to drive the immaculate Radical sheep into the Radical fold. The right hon. Gentleman was not present when I made these observations. I regret that I did not give him notice. If he had been present I believe that neither in manner nor in matter would he have taken umbrage at anything I said. The right hon. Gentleman saw me personally, later, and wrote to me—I need not disclose the details either of the conversation or of the letters which passed between us; but in effect the right hon. Gentleman asked me to withdraw, and in effect I replied that I should wait to hear his statement, and then, if that statement convinced me that I had been wrong, of course I should at once get up in my place and express my regret. I understand, however, that according to the practise of the House that course is not open to me. If the right hon. Gentleman did make his statement, it would not be open to me to make a 1671 reply; and, therefore, this alternative presents itself to me, that either the right hon. Gentleman should make his speech, and I should be forced to remain silent, or that I should make the first statement. I say now deliberately in the face of the House that what I said in the House is in fact substantially the case, and that I cannot in any way with draw from the position I took up, and if the House will grant me its kind indulgence I will explain why.
§ *MR. SPEAKER
I understood the right hon. Gentleman was rising to make an explanation. It appears that he has only risen to repeat what he said. If he is prepared to withdraw anything from the statement which he made on the previous occasion, I am sure the House would listen; but if he is not prepared to do so, he has no status whatever.
§ *MR. GEORGE FABER
The moment you rise and tell rue that, Sir, I have done. [An HON. MEMBER: What did you begin for?] I showed no ill-feeling towards the right hon. Gentleman. I say again in face of the House that I adhere to what I said.
§ *MR. SPEAKER
The hon. Member has really taken a course he had no business to have taken. I may say he entirely misled me. I understood that he was prepared to make some explanation as to how he fell into error, if there was an error. If he is not prepared to admit that there was any error, I am afraid the House will not give him any further opportunity.
THE PATRONAGE SECRETARY TO THE TREASURY (Mr. GEORGE WHITE LEY,) Yorkshire, W.R., Pudsey
With the permission of the House, I desire to make a personal explanation; and I regret that my hon. friend has not seen fit to withdraw from the position he took up, I because I have given to him as fully as I possibly could all the details of the matter; and the hon. Member knows exactly what I am going to tell the House. He came down here on Thursday in my absence, and without the courtesy of giving me notice that he was going to attack me he made a distinct and categorical statement to the House. He described the position of a brewery in Blackburn that had been floated first for 1672 £500,000 and re-floated for £750,000, and said that the profits of the re-flotation went into the pockets of the vendor. He said—No doubt hon. Members opposite were burning to know who was the fortunate vendor. His name was Mr. George Whiteley, M.P. He did not blame the Patronage Secretary; but how was he going to answer to the high canon of morality that had been set up on the other side of the House? What answer could he make to the Prime Minister, who was so strong against inflated breweries?And then he continued with a rhetorical display which had nothing about it to commend it except the fact that it was destitute of one element of truth. I was not the vendor of that brewery; I never owned or possessed that brewery; and I had no hand whatever in the re-flotation of that brewery to the public. And, singular to say, the hon. Member had in his hand when he made that statement—because he showed it to me within an hour and a half afterwards—a prospectus in which it is distinctly said that another gentleman of the name of Mr. John Fraser, acting on behalf of a London syndicate, was the vendor of that brewery. The hon. Member shakes his head. I have not seen that prospectus for eleven years, except in the hands of the hon. Member. I am prepared to pay £1,000 to any charity the hon. Member is willing to name provided I am wrong. On the other hand, if he is wrong, I ask him to do the same. I leave the whole question in the hands of the right hon. Member for Dublin University, who has got the prospectus in his hand.
§ MR. GEORGE WHITELEY
A leading Tory paper in Yorkshire with which the hon. Member for York was indirectly connected made a similar statement a few years ago, and was communicated with by my solicitors, and withdrew and apologised. I do not know whether the House will bear with me for two minutes while I give the history of the re-flotation of the brewery, which will be found to be absolutely justifiable. The brewery was part of the estate of a gentleman who died in Blackburn towards the end of 1896. Four trustees were appointed, of whom I was one. For convenience sake and for the benefit of the estate the trustees immediately converted that 1673 brewery into a sort of private limited liability company and issued debentures to the public, keeping the whole of the share capital in their hands. And because they kept the whole of the shares, they issued only a very small nominal amount of share capital. Just at that time—the beginning of 1897—there was a boom in breweries. Breweries were being bought up and floated by syndicates all over the country; and the trustees, who were perfectly contented with the position of the brewery as a privately managed concern, were pestered and worried to such a degree by over a hundred applications coming day by day that in the end they were obliged, in the interests of the trust, to consider an offer made to them by a London syndicate to purchase the brewery. The trustees were pressed time after time to permit them to float the brewery on their behalf. I was then a Member of the House. I knew the difficulties and dangers of flotation and re-flotation; and I said that under no circumstances would I have had anything to do with the flotation of a public company. The trustees, in the interests of the estate, met the syndicate. They were persuaded to put a price on the brewery. The whole transaction was completed in five minutes, and the brewery was bought and sold to the syndicate; and, as evidence of the good faith and substantial position of the purchasing syndicate, they were required to pay over£25,000 to the trustees before the trustees put their hands to paper in the matter. The syndicate then floated the brewery at a considerably enhanced price; and naturally the profits went into their pockets minus the cost of flotation. In justice to them I must say that the circumstances of the brewing trade then were of such a character, an the position of the brewery was such—the increasing profits shown year by year were so substantial—that the issue to the public was made at nothing but a reasonable figure by the capitalists I have mentioned; and at the present moment, even after the great "slump" in brewing profits—after that great reduction—that concern in Blackburn is now making a profit which would pay a full rate of interest on the sum of money the trustees received from the purchasing syndicate.
§ MR. GEORGE WHITELEY
There, again, the hon. Member is discovering a new mare's nest, which he is wonderfully clever in unearthing. The ordinary shares have been obliterated. The hon. Member did not tell the House the circumstances of that wiping out of the ordinary shares. He did not tell the House that two people who were interested in that brewery and had preference shares voluntarily surrendered a certain number of preference shares, which were given in exchange for the ordinary shares, and so the preference shareholders wiped them out.
§ MR. GEORGE WHITELEY
It does not matter how much. It was sufficient, in the minds of the ordinary shareholders to make them accept the exchange. The trustees did their duty to the state; and if the whole transaction were to be done over again they would act in exactly the same way.