§ Mr. CAVE
I beg to move, "That this House regrets the transactions of certain of His Majesty's Ministers in the shares of the Marconi Company of America, and the want of frankness displayed by Ministers in their communications on the subject to the House."
I rise to move the Resolution which stands in my name with a reluctance which I am sure will not be misunderstood by the House. I have to criticise the conduct of three Ministers, all of whom have been our colleagues, and our courteous colleagues, in this House, and one of whom is the titular head of my profession, who has gained front his fellow members of that profession—a tribunal not too lenient nor very easily mistaken—a reputation not only for ability but for candour and fair dealing. Therefore the duty which I have to perform is not altogether nor indeed at all a pleasant one. I am almost inclined to apologise for saying that to the House, for if it be the fact, as I believe it is, that these Ministers have permitted themselves to infringe rules which we all recognise in public life, then no personal consideration can be allowed to stand in the way, and it is the duty of the Opposition to state firmly and clearly what their view is. There is one consideration which does render my task somewhat easier, and that is that it is no part whatever of my duty to make any charge of personal corruption against any one of these Ministers. If I found evidence, evidence to satisfy me, of anything of that kind, I should say so. I should say so to-day, and I think I should say so without faltering a moment, but I find no trace of any such evidence. It is my duty to begin by saying that quite clearly, so that I cannot be misunderstood.
392 What I have to suggest to the House is that these Ministers, or rather two Ministers, and one who is no longer a Minister, have committed breaches of certain Rules and traditions of this House, and, indeed, of all public life, without which public life would be impossible. What are those rules? I think that all those to which I have to draw attention are founded upon one general principle, that no Minister ought to engage in transactions which may bring his private interest or his private sense of obligation into conflict with his public duties. That is a rule which no one disputes. It would be dangerous to attempt to limit that rule by any closer definition. Judges have said, and everybody knows, that to define a rule of that kind more closely only opens the door to breaches which may not be covered by your closer definition, but in this particular case the right hon. Gentleman the Chancellor of the Exchequer has put forward two instances of that general rule. He said, in the course of his evidence before the Committee—page 86—first of all—A Cabinet Minister should not, in choosing his investments, make use of any special and confidential information which comes to him in his capacity as Minister of the Crown.Secondly, he said:—He should not invest in companies whose profits or dividends depend directly or indirectly upon contracts entered into with the Government.There is a third instance which I think the right hon. Gentleman would probably be willing to accept, namely, that a Minister may not receive in relation to his investments or fox' any other purpose any favour or advantage, direct or indirect, from a person contracting or proposing to contract with the Crown. I am not going to suggest to-day that any breach of the first of those three rules has been established, but I do ask the House to bear in mind the second and the third, and to consider whether those two rules have been fully observed. Let me take the facts of this case, and, in doing that, I must ask for the indulgence of the House in this respect; that I have to state facts which are (as all company matters are) somewhat complicated, but ropose to mention only the really material facts, and that will enable me to make my statement shorter than I otherwise could. The whole House knows that in 1911 a special Committee on the recommendation of other bodies, including the Imperial Conference, was appointed to take the first steps towards 393 establishing a chain of wireless stations which might connect the Mother country with some of the Dominions oversea, and the Committee decided not to put the erection of those stations up to public tender, but to invite a tender from the Marconi Wireless Telegraph Company, which I will call, if I may, the British company. Of course, I am not discussing questions of policy to-day. I only state that as a fact. The British company made its tender, a tender in general terms, on the 13th of February, and it was accepted on the 7th of March. There -are many cases where a tender and an acceptance make a contract, but this is clearly not one of those cases. We have been told so more than once by the Postmaster-General, who ought to know. The right hon. Gentleman the Postmaster-General said—I insist on this, because I think the Report of the Committee rather takes the opposite view, the view that matters were concluded on the 7th March, but it is quite clear that they were not—the Postmaster-General said:—There was no agreement in March.And a few lines later on:—The Marconi Company put in a tender in general terms. A letter was written by the Post Office accepting the tender on which a contract was subsequently to be based.Later in his speech he said:—What happened after that was that a most. elaborate series of communications and conferences went on between the several Departments concerned, particularly the Admiralty, the War Office, the Colonial Office, the Treasury, and the Post Office; and solicitors were employed to work out the details of this contract. Much to my regret it was not until July that the contract was completed, although personally I pressed it forward as much as I could. The various Departments had to come to terms among themselves and with the Company on the outstanding points.I quote that statement for this reason, that it shows quite clearly that even after the acceptance of the tender in general terms there were. points of importance upon which the Government and the country were entitled to have the unfettered advice and assistance of all the Ministers concerned and, of course, of the Law Officers of the Crown. More than that, even when a formal contract was signed in July, it was subject to confirmation by this House, and, until the confirmation takes place, we were and still are entitled to the unfettered advice of every one of those Ministers. Let me go on to see what happened next. On the 9th March, two days after the acceptance of the tender, Mr. Godfrey Isaacs, who is the managing director of the British company, embarked for New York, partly no doubt in order to give assistance to the 394 American company, the Marconi Wireless Telegraph Company of America, of which he is also a director, a company which was the child of the British company, in which the British company held the majority of the shares, which was working in the United States these same Marconi patents which are held by the British company, but which so far had not succeeded and was, in fact, in litigation with another American company—the United Wireless Company. While Mr. Godfrey Isaacs was in New York he concluded on behalf of the British company three agreements of very great importance. First, came an agreement by the British company with the United Wireless Company for the purchase of all the assets of the United Wireless Company for 700,000 dollars, to be paid in shares in the American company. Secondly, came an agreement between the British company and the American company to this effect: First., the British company resold the assets of the United Wireless Company to the American company for, I think, twice the purchase price—or about twice the purchase price. Secondly, it was agreed that each of these two companies—the British and the American—should erect on its own side of the Atlantic a wireless telegraph station and that the two should be worked in unison, thus providing for the transmission of wireless messages across the Atlantic. Thirdly, it was agreed that the capital of the American company should he increased to 10,000,000 dollars, and so far as that capital was not required for the purchase price of the United Wireless assets or to satisfy the existing shareholders of the American Marconi Company, the British company should have the right for twelve months to issue that capital at par, obviously, as it turned out, an extremely valuable right. There was a third agreement by which the British and American Marconi Companies secured from the Western Union Telegraph Company and another telegraph company, a special arrangement as to transmission of messages. These were the agreements which Mr. Godfrey Isaacs made in New York, and it was understood and agreed that these agreements, obviously of great value to the American, as well as to the British company, should be kept secret—that is, should not be disclosed to the public until the American company had authorised the issue of its new shares. Mr. Godfrey Isaacs also had, or assumed to have, the 395 right himself to place 500,000 of the shares of the American company—500,000 5-dollar shares. He placed, I think, 400,000 before he left New York, and came back with the other 100,000 at his disposal, so that he was in this position: He had this large block of shares in the American Marconi Company to place, and he was possessed of confidential information as to these agreements which was withheld and was to be withheld from the public, and the effect of which was to enormously increase the value of these American Marconi shares.
Having reached this country—I think on the 8th April, he arranged an appointment on the following day with his two brothers, the right hon. and learned Gentleman opposite whom I will refer to shortly, if I may, as the Attorney-General, and Mr. Harry Isaacs, a business man. He told these two gentlemen the facts about these agreements, he told them that the effect of them would be that the American Marconi Company's shares would rise, and he offered them an opportunity of taking sonic of those shares at the parity price of 1 1/16. The Attorney-General—by a wise instinct, as I think—declined. He says he was not satisfied with the capitalisation of the American company, he thought it was too high; and besides that he was unwilling to have any busineess relations with Mr. Godfrey Isaacs as representing the British Marconi Company; again a very wise view. The other brother, as he was entitled to do, took another view. lie agreed to take a large block of the shares—56,000, I believe. In the next few days these shares increased very much in prospective value. I say prospective value because there was no market for these shares at that time; they had not been issued; they did not exist, and no broker could possibly deal in them. No doubt there were anticipatory sales of seine of these American Marconi shares within the following week, the effect of which was that they were thought. to be of the value of—well, I will express it in English money. The five-dollar shares I will treat as of the value of £1, and the value put on them by this time was £2. Time went on. Mr. Harry Isaacs mentioned these shares to the Attorney-General once or twice, and ultimately, on 17th April, he again asked him to take acme of them. Then the Attorney-General took the. fatal decision, as I think, of accepting, and he agreed to take 10,000 396 of the 56,000 which were at Mr. Harry Isaacs' disposal. It was not a clean—by that I mean an out-and-out, simple purchase of these 10,000 shares from Mr. Harry Isaacs, because it was agreed between the two that any sales of the shares should be taken pro rata on behalf of both. There was, in fact, a kind of partnership set up between the two in these 56,000 shares. The price which the Attorney-General agreed to pay was £2, a higher price than the 11–16 at which they were offered to him on a previous occasion.
The right hon. and learned Gentleman told two of his colleagues in the same week—colleagues with whom he was on terms of the closest friendship—the Chancellor of the Exchequer and the then Patronage Secretary (now Lord Murray), what he had done. He handed on to them the information which Mr. Godfrey Isaacs had given him, and he gave them an opportunity of sharing his purchase and of taking some of the shares. I had meant to say—and I do so now—that on the 9th April Mr. Godfrey Isaacs told the right. hon. and learned Gentleman that the American Company had no concern with the contract of the British company, and the Attorney-General handed that information on to his colleagues—at least they say so, and I do not doubt it for a moment. But the statement rested entirely upon Mr. Godfrey Isaacs' opinion. It was not, as far as I can ascertain, tested in any way. The two Ministers agreed to take a portion of the shares. After that matters went very quickly. That was on the evening of the 17th April. On the 18th the issue of the new shares was sanctioned by the American company. On the 19th they issued a. circular informing the public of the valuable agreements made in New York. There may have been rumours of some such agreements before, but the public had no reliable knowledge of them such as Mr. Godfrey Isaacs and those who had dealt with him had. At once the price of these Marconi shares went up. They were introduced at 31 on the 19th; they went up on the same day to 3½, and even to 4. The Attorney-General sold 7,000 of his shares on that date at an average price of 3½, a profit of 11 per share. On the following day the Chancellor of the Exchequer, who intended originally to keep one-half of his shares, changed his mind, and sold 1,000 of them at 3 5–32. There was a later sale, I think, by the Attorney-General, but all his sales had to be brought into the 397 arrangement with his brother, and the net effect of the transaction down to the 20th April was that the Attorney-General had sold 3,570 of these shares, which he had bought at 2, at an average price of 3 1–3, or £3 6s. 6d., and had made a profit on these sales of nearly £5,000, estimating the balance of the shares which he still held at the price he had given for them, and they were then worth more. The two other Ministers, the Chancellor of the Exchequer and the Patronage Secretary, had sold 1,714 of their shares at about the same price, and had made a profit on them of over £2,200, treating the remaining shares as still worth 2; or to put it in another way—the Chancellor of the Exchequer accepted this in evidence—they had made a profit of nearly £1,500, the balance of their shares being theirs for nothing. Therefore, they made a very substantial profit in these two or three days, and, if they had chosen to sell the whole of them, they could have made a very much larger profit—something between £12,500 and £15,000 among them.
halt there, and I want to see how far the rules apply to these transactions. They had made a big profit. They had made it in consequence of the information given to them by Mr. Godfrey Isaacs, representing the British company, a company which was contracting, or about to contract, with the Government. They owed that profit to him, and, if so, there was a clear breach of the rule to which I have referred—that no Minister can take any favour or advantage from a man who is contracting, or about to contract, with the Government. It is said that there is this answer—that the shares in question were taken, not from Mr. Godfrey Isaacs himself, but from Mr. Harry Isaacs. If that is put forward as an answer, as I believe it is by the majority of the Committee, they misunderstand the point altogether. What is important is not from whom you buy the shares, but from whom you get the confidential information which enables you to buy the shares. If they had bought the shares from a total stranger, that would make no difference to the rule. The point with which I am dealing now is that but for the information—information not open to the public and coming, as everybody knew, from the managing director of this company contracting with the Government, not one penny of this profit would have been made. They had also broken the second rule; they had become 398 interested in a company the profits of which undoubtedly depended upon the conclusion and confirmation of the contract that was then being negotiated. No business man will doubt that who knows the facts. The American company was closely associated with the British company. The British company, as the chairman's draft report shows, actually owed it a very large sum of money for shares which it was taking up; so the American company, at all events, had a direct interest in the solvency and position of the British company. The two companies had agreed to work in unison in connection with the wireless stations upon each side of the Atlantic. That that was a valuable asset available to the American company is shown, if proof were needed, by the report to the shareholders of the Marconi Company, published in to-day's papers. What the chairman said at the meeting was this: He had told the shareholders what profits accrued from the purchase of the United Wireless assets, and he went on to say:—Gratifying as these figures are, they are only a small thing compared with the results that must follow when direct communication is established between the United States and Great Britain"——I leave out a few words——We are assured by our engineers and contractors that the co-operating stations in New Jersey and Wales will he completed by next November.He concluded by saying that that would realise—an increase of income and profit to the shareholders, which we have every reason to believe will be substantial and gratifying.4.0 P.M.
That profit cannot be realised unless the position of the British company continues to be a good position, a position which, of course, would be enormously improved by the approval and confirmation of this contract. But more important than all these facts is this: It is clear to every man, I think, that the position and prestige of the whole Marconi system must be affected by the confirmation or non-confirmation of the contract. If the contract were thrown out, the British company must suffer. The whole Marconi system would suffer, and the American company would suffer with it. I put it to any business man, without the slightest doubt as to what his answer will be, that the American Marconi Company has an interest in the confirmation of this contract, that its profits and dividends depend upon the conclusion and confirmation of this contract with the English company. If that is true, the conclusion follows without 399 the least possibility of doubt that both these two rules which govern our life—the rule which prevents you from taking a favour from people with whom the Government are going to contract, and the rule which forbids you to take an interest in a concern which is to have an interest in a Government contract—have been broken by the Ministers concerned. We have heard one answer to this, which is hinted at in the Report of the majority of the Committee, that although that may be the fact, the Ministers concerned did not realise that it was so. Well, Sir, I am anxious to believe that. But I am afraid that. if that defence is accepted as excusing the breaches of the rule, it must be at the expense of the reputation of those gentlemen for intelligence. The facts which I have stated were open to them. They all knew that Mr. Godfrey Isaacs was at the bottom of the whole transaction. They had but to inquire into the facts and ask to see the agreements and they must have realised at once everything I have said. I notice that one hon. Gentleman opposite who volunteered an apology or defence of the Chancellor of the Exchequer, put his defence in this way. It was the hon. Member for East Denbighshire (Mr. John). He said:—The Chancellor of the Exchequer is a child in these things, artless, ingenuous, impulsive and confiding.Is that the defence which we are to hear, and is the description accepted by the Attorney-General also?
I pass on to other matters. On the 18th April the Chief Whip of the party opposite bought 2,500 of these American Marconi shares at 3¼ for the benefit of the party funds. A little later on, on 14th May, he I ought another 500 at a somewhat lower price. He paid for the whole 3,000 out of the party funds in June. I will not comment at length on that. Either it was a purchase for the rise or it was a purchase for investment. Lord Murray has the advantage, or disadvantage, of being absent, and we have yet to hear his explanation—I do not ask the House to come to any final conclusion on this matter till they have heard him. But there is this consideration which lies on the surface. If this was a purchase simply for resale, it is a matter which does not concern us so closely as hon. Gentlemen opposite. It is for them to say how far they are satisfied that party funds should be used in a Stock Exchange specu- 400 lation, and that funds to he utilised for the promoting of the political objects they have in view, such for instance as the Disendowment of the Church, should he obtained by a gamble on the Stock Exchange. If, on the other hand, it was a purchase for investment, and the intention was to retain these shares in the coffers of the party opposite, the effect was this, that the financial interests of the party opposite and the whole influence of their Chief Whip were involved in the success of the American Marconi Company, which itself depended to some extent upon the Parliamentary confirmation of the contract.. So not three Ministers only but the whole party, without their knowledge, and very much, I doubt not, to their surprise, were put in that position. They actually had an interest, a party interest, in giving a certain vote in this House. If hon. Gentlemen are satisfied with that transaction they will tell us so presently. The next thing that happened was this: On a date in May, I think the 22nd May, the Chancellor of the Exchequer was so satisfied with his acumen in making the first investment that he determined, apparently of his own accord, to make another, and on behalf of the Patronage Secretary and himself, he bought 3,000 shares at a fraction over 2. Of course, that transaction was open to the objection which I have mentioned, that it gave these Ministers a further interest in the Marconi Company. But apart from that it was a transaction—what can I say without offending anybody—of a speculative nature. It was a purchase without inquiring into dividends. The shares went down and absorbed the whole profit of the previous deal, and the purchase money has not yet been wholly paid. That clearly was not an investment. The right hon. Gentleman told the Committee with great candour that he had not got this sum to invest. He may call it what he pleases. It is either a speculation or a speculative investment or a speculation with a view to investment when the profits might be received. I am not here to preach a sermon against speculation. I would not dream of doing so. If any private Member of the House likes to speculate in one way or another, it is no concern of his colleagues. It is a weakness incident to human nature. If he likes to lose money in that way it matters to no other Member of the House. But I do not think we like the Chancellor of our Exchequer, the head of the Treasury, who has great financial operations to over- 401 look and control, who desires the respect of the City of London, to go into this kind of transaction, to buy for a rise, to watch the prices of the day, to, look for the moment when he had better sell, and, as in this case, to lose money upon the transaction. That is all I have to say upon that.
I pass to perhaps a more serious matter, I mean the manner in which Ministers have dealt with the House of Commons in this matter. In July, the Prime Minister was told, only, I think, of the first purchase, the purchase of the 17th A April. On the 7th August, the Postmaster-General moved in this House the confirmation of the contract. He made a speech of very great interest in its favour. Nothing was said about these investments—perhaps than, Was not the time—and the Debate was adjourned. A little later, I think in the middle of August, Lord Murray retired and went into business, and was rewarded with a peerage. During the months of August and September rumours began to circulate—rumours connected with the names of the Chancellor of the Exchequer and the Attorney-General and, I believe without any cause whatever, also with that of the Postmaster-General—rumours of speculation in Marconi shares. It was very natural. Some people knew of those purchases, and it was quite to be expected that the actual facts being known to a few, rumours which were not justified would grow. It was quite easy to see why this should happen. On the 11th October, there being two Motions on the Paper for the appointment of a Committee to consider this matter, the Government acceded to the Motion and moved for the appointment of a Committee, and then there was a Debate on the question. These charges against Ministers were mentioned. Every speaker upon this side of the House repudiated them, and said that he had no belief in them whatever. One hon. Member who is no longer in the House, Mr. Lansbury, referred to them, and said:—The statement has been spread broadcast publicly, that considerable; sums of money have been made out of the sale of these shares, and that they have been made by people who had information in connection with this matter not known to others.The rumour referred to in that statement was untrue if it referred to British Marconi shares; it was true as applying to American Marconi shares. What did Ministers do? The Chancellor of the Exchequer made a somewhat passionate protest, but made no statement. The 402 Attorney-General made a careful statement in which he denied, categorically, these rumours with regard to British shares. He said there was no vestige of. foundation for that statement. He made, no reference at all to the purchases of American Marconi shares. I feel bound to, say that I do not think that in that respect he dealt fairly with the House. I cannot help thinking that he thinks so himself today. He told the Committee that he did not tell the House because he did not think the matter relevant to that Debate, but he intended to tell the Committee when it sat. The Committee began to sit at once. The right hon. Gentleman offered himself as a witness, but he gave the Committee no information as regards these purchases and nothing which would lead. them to take him as an early witness. The matter went on. At the end of the year, or at the beginning of 1913, Lord Murray went abroad. He did not tell any of his colleagues of the purchase for the party funds. He did not even tell successor. He left the shares, I think, with his brother, saying that he intended to keep them until the Marconi business: was cleaned up—a somewhat significant expression. The two Ministers who are still here did not know of this purchase for the party funds, but they did know that in relation to the other two investments Lord Murrav's evidence would be of great value to the Committee, and they let him go abroad without saying a word to the Chairman of the Committee as to, one or the other of these investments. More than that, nothing whatever was said until March, when there were proceedings by the Attorney-General and the Postmaster-General against a paper called "Le Matin." In that case they were represented by counsel, who took the course which experienced counsel always advise, t) make an immediate disclosure of any facts which may be deemed relevant, to the case, and in opening counsel for the learned Attorney-General stated for the first time this purchase of shares.
§ The ATTORNEY-GENERAL (Sir Rufus. Isaacs)
The hon. and learned Gentleman says that it was stated for the first time at that trial about the purchase of these shares, and he says that that statement was made upon the advice of counsel, who always advises that a full disclosure should be made. I should like to know upon whose authority the hon. and learned' Gentleman makes that statement. I have stated before, and if he reads the evidence 403 he will see, that I insisted upon making that statement. I was never advised to make the statement. The only advice that was given was that I could not bring into that statement the transaction with the Chancellor of the Exchequer, with which I had no concern whatever.
§ Mr. CAVE
I accept the correction of the Attorney-General. If I stated what was incorrect, I am exceedingly sorry, but it does not affect the point I was going to make, and, indeed, I think it rather strengthens it. What I was going to say was that these proceedings, like the Debate on 11th October, related only to rumours and charges connected with the shares of the British company. If the purchase of the American Marconi shares was relevant at the trial in March, it was equally relevant in the Debate in October. Of course, I accept the statement that the disclosure in March was made at the desire of the learned Attorney-General, but that makes it even more difficult to understand why in the Debate in October he did not make the same disclosure. Then things began to come out. A few days later the purchase by the Chancellor of the Exchequer was disclosed. It was not until the month of June, owing I believe to the failure of a broker, that the purchase by Lord Murray out of party funds came to the knowledge of the Committee. I do say that this reticence, this withholding from the House and from the country of information which so soon as it came out we all felt to be very material, was not fair to the House or to the country, and I do not think that the words of my Motion relating to that matter are a bit too strong. Now I come to the last phase, and that is the proceedings of the Select Committee. I am not going into the earlier proceedings. Some of them I think were neither judicial nor judicious. I may mention that before that Committee both of the right hon. Gentlemen apposite upheld their action as being perfectly proper, and expressed no regret whatever down to the last moment for what they had done.
Now I want to come to the Report. The Committee had before them two draft Reports—one by the Chairman, who, if he will forgive me for saying so, seems to have discharged a very difficult and very disagreeable duty with perfect good faith and loyalty to the House. He proposed to state the facts, as he understood them, in 404 detail, and to pass a censure—I agree a somewhat mild censure—upon Ministers on the very grounds which I have stated to the House. The second draft Report was introduced by my Noble Friend the Member for the Hitchin Division (Lord Robert Cecil). It would be an impertinence for me to say what I think of the ability of his conduct of the proceedings before the Committee, but I think I am entitled to say that from beginning to end he dealt with his colleagues and with the witnesses with all possible consideration, and with an obvious desire to withhold his final judgment until all the facts were before him. He proposed to state the facts as he viewed them, and I am not sure that his view of the facts differed very much from the view of the Chairman of the Committee. He proposed to censure, in somewhat more severe terms I agree, the action of the Ministers impugned, also upon the grounds which I have put before the House. What did the Committee do? The majority rejected both of those Reports. They threw over entirely the draft Report of my Noble Friend. They nominally took the draft Report of the Chairman of the Committee. They struck out of it the bulk of the facts—twenty-six paragraphs went at one blow in one Amendment. The other paragraphs were mutilated beyond recognition, and in the result, without finding the facts, they put before the House their conclusions. They brought in an acquittal—an acquittal in, I think, somewhat fulsome terms—of the Ministers concerned on the charges of corruption which had been made by some persons against them—an acquittal which was perfectly just, and which appears in both of the draft Reports. But as regards the other matters to which evidence given before the Committee had been directed—the matters to which I have referred, the questions of the purchase of the American Marconi shares—they not only omitted to find the facts, but they thrust the charges aside with the flimsiest possible excuses—excuses which will not bear a moment's investigation, and they concluded by using a very liberal supply of that pigment of which we have heard a good deal in the last few days, a pigment which does indeed produce a white surface, but does it not by cleaning up, but by covering up that which is undesirable. I say that in taking that course the majority of the Committee did not perform their duty to the House. They rendered the worst 405 possible service to their colleagues in the Cabinet, and they are directly responsible for the Motion which I am bringing forward.
I ask hon. Gentlemen opposite what course they propose to take. Are they going to adopt the report of the majority of the Committee? No Motion for that purpose is on the Paper. Every organ of public opinion, almost every organ of public opinion, has condemned that Report as inadequate. The Liberal papers, the Labour papers, the "Chronicle" as much as the "Citizen," paper after paper, have shown that that Report does not fairly reproduce the facts or represent the opinion of the country. Are you prepared to adopt it, or are you going to vote for the Amendment which stands in the name of the hon. Member for Merthyr Tydvil (Mr. Edgar Jones) which is very much on the lines of the Majority Report. Are you going to say that the Ministers are without blame? Are you going to say that in their place you would have taken the same course, and that, if the opportunity arises, you will take the same course in the future? If so, I think you will strike a blow not only at the position and influence of this House, but at all the rules which ought to regulate public life. Our course is perfectly clear. This Motion is framed, it has been said, and I think it is true, in moderate terms, but its meaning, I think, cannot be mistaken. What we want to do is to place upon the Journals of this House a Resolution which shall show clearly that, in the opinion of the House, as a whole, the course taken by the Ministers concerned is a breach of the best of our traditions, that our Rules have been infringed, and that they shall never with impunity be violated again.
§ Viscount HELMSLEY
I rise to second the Resolution which has just been moved by the hon. Member, and in doing so I also should like to begin, as I think he began, by expressing my regret, a regret which I feel anybody who rises to take part in this Debate must feel, that public duty demands that we should be called upon to make criticisms on the personal conduct of Ministers. That cannot in any circumstances be a pleasant operation, but I think sufficient has already been said in the course of this Debate to show that it is necessary, if corruption is to be prevented in the future, if all taint of the public service is to be prevented 406 entering the public service, and if the high standard of public service is to be maintained, these criticisms should be made on this occasion. It would be, I think, a disastrous thing if an idea got about that Ministers and persons in high places might do that which subordinates might not do. I should like to say at once that I, and I am sure every Member on this side of the House, feel the utmost satisfaction that the more gross and serious charges, made perhaps, I think I may say, by the less serious people, were disproved, and that we can start this Debate being, I think, unanimously agreed that no Minister was influenced in the discharge of his public duty by reason of any interest he had in the Marconi undertaking, or utilised the information coming to him from official sources for the purpose of investment or speculation. I do submit that there is a necessity in this House that we should distinguish very carefully between the charges which have been made outside this House and which have been disproved, and the charges which are now made here in the light of evidence, and I think that it will be equally the opinion of Members in all parts of the House that we disclaim responsibility for those grosser charges which have been made and with which we have nothing to do——
§ Viscount HELMSLEY:
speak sincerely—and which have to the satisfaction of the House been disproved. The fact that some journalists chose to make unfounded and irresponsible charges is not to be laid to the door of those who sit on this side of the House, more especially, I think, when we remember that in one instance at all events, those charges were made by a journalist who has not and never has had any connection whatever with this party If we are to examine this question fairly, we must blow away the smoke which has arisen to see what was the extent of the fire beneath, and when we have expressed satisfaction at the acquittal of the Government of the more serious charges of corruption, which I wish to say emphatically I will not impute in any way, there T think mu- satisfaction ends, and there remain matters to which I think we are in duty bound to call the attention of the House and of the country. I hope to state them temperately and without partiality. They arc under two headings, 407 which are the headings expressed in the Motion of my hon. Friend: in the first place, that Ministers acted improperly in buying shares in the American Marconi Company on the advice of a gentleman who was engaged in a Government contract, and, in the second place, that they showed a lamentable lack of candour in their dealings not only with this House, but with the public. One word about the Report. I do think it lamentable that a Select Committee appointed by this House to inquire into a thing of this kind should be so influenced by what are obviously party considerations, as to bring into the Report conclusions which obviously are not in accordance with the. evidence, and I cannot help reflecting that it is a pity that some of the vigorous denunciations which the Committee used against those who had spread unfounded rumours were not also applied to some of the transactions which came under their review. I have said that some portions of the Report are not borne out in the evidence. I would like to call attention in particular to two paragraphs. One is paragraph 3, of Part II.:—That the American company is a company formed and registered in New York; that its organisation and operations are confined to the United States of America; that it has no interest. direct or indirect, in the proposed agreement with the British Government, and no interest, direct or indirect, in any profits which might be derived therefrom.I shall have occasion later on to refer more particularly to the relations between the American company and the English company, but I think that the hon. Member who preceded me has already done a great deal to show that there certainly were indirect relations between the American and the English companies. Part II. of the Report of the Committee appears to be more remarkable for what it omits than for what it says. And if it is urged that those omissions are on the ground of irrelevancy, surely it may also be urged that it was irrelevant to mention them at all. The fact is that if they were mentioned at all, if it was relevant to go into the question of the dealings of Ministers with American Marconi shares, they ought to have been dealt with with completeness, and the comments which obviously were in the mind of the chairman and of the minority of the members of the Committee should also have found a place in the Report which stands as the Report of the Committee. Ministers have on to the present said that their action is entirely without blame. We have not heard a 408 single word from any one of the Ministers, concerned to show that they think that they in the slightest degree departed from the highest standard of what is required of a Minister of the Crown. The Attorney-General is asked by the Noble Lord the Member for Hitchin:—Looking back again, and seeing the matter now, do you think that that was a wise transaction in your position?The answer is—I would make the same observation I have made- before. I think there was nothing wrong in the transaction and nothing improper in the transaction. I think that they were absolutely clear, distinct, and eparate companies in every way.He goes on to say that if he had again to do it, in the light of subsequent events he might have considered that is was not a wise thing to do. That is the sole comment which the Attorney-General has made, and the same applies to the observations of the Chancellor of the Exchequer.
§ Viscount HELMSLEY
The Attorney-General went out of his way to say that he thought it was a proper transaction, and I could give several other quotations to show that it has not occurred to the right hon. Gentlemen that they have done anything which calls for comment or criticism, or which is to be deprecated by this House. The Chancellor of the Exchequer said:——I am willing to he judged by those rules"——the rules quoted by my hon. Friend——in the action which I then took. I considered that it was not merely constitutional, and in accordance with precedents, but it was a perfectly proper investment which I then made.Then he said:——I therefore considered and I still consider that I had a perfect right to purchase those shares, and that the transaction was a perfectly clean and straightforward one.In no part of the evidence that I have been able to discover does he show any symptoms that there was anything which might be the ground of complaints. If this is the case, if Ministers all along have been so confident that there is no basis for any sort of complaint in any of the charges which have been brought against them, why has the policy of concealment been so persistently followed by those who have been connected with these transactions. I should like to begin with the Postmaster-General. In this connection I must say that again I find it impossible, looking at 409 it quite impartially, to agree with the -Report of the Committee, which says:——It has also been suggested that the Postmaster-General unduly pressed for the approval of the agreement before the rising of the House of 'Commons on the 7th August, 1912. The Committee cannot adopt this view. The construction of the Imperial chain of wireless telegraphy was declared by the Imperial Defence Committee to be a matter of extreme urgency, and this was also the view of the Admiralty and the War Office.The Report of the Noble Lord the Member for Hitchin says this:——We think that the action of the Postmaster-Genera in trying to obtain the ratification of the agreement by the House of Commons, without inquiry, after he knew of the share transactions of the Attorney-General and the Chancellor of the Exchequer, was regrettable.I must say that that regret I think will be very widely shared, because it looks to me, judging also by the evidence of the Postmaster-General, as if that right hon. Gentleman was desirous, while all this was going on, of keeping the matter concealed. I pass from the Committee to the evidence of the Postmaster-General. On the 2nd April, when he was being cross-examined by the Noble Lord the Member for Hitchin, he said this:——I had raised the point on one or two occasions with my colleagues, immediately after the contract had been signed, and pressed again and again that there should be an opportunity for discussion. I rather wished not to have a Committee of Inquiry—not in the smallest degree because I thought that there was anything to be concealed, but because I thought these rumours about shares were utterly unfounded, and that it was my business, as Postmaster-General, to get the stations as soon as I could.He thought that these rumours about shares were utterly unfounded. When the Postmaster-General was giving that evidence he was actually aware of the transactions which Ministers had in Marconi shares!
§ Viscount HELMSLEY
Was it quite candid for the Postmaster-General, when giving evidence, to say that he thought the rumours about shares were utterly unfounded?
§ Viscount HELMSLEY
That the rumours about shares in the English Marconi Company were utterly unfounded; but without defining that, he gave the impression, which will be given to all who read the evidence, that all rumours about shares in reference to this -whole question were utterly unfounded; 410 and I submit that it is a mere quibble to say that he did not mention them because there were no particular rumours about these particular American Marconi shares. It turns out, from the evidence of the Attorney-General, that he had told the Postmaster-General before this date, when the Postmaster-General gave evidence, 'because he had told him at the end of July. At Questions 755, 756, 757, the Attorney-General was asked:——Did you tell the Postmaster-General?—Yes, immediately.Did you tell him personally yourself?—immediately. What do you mean by immediately?—Immediately I heard the rumours in July.Therefore, the Postmaster-General knew all about it in July, and with this knowledge and, I think, a very justifiable intuition that if this knowledge came out unpleasant things might he said, the Postmaster-General used every effort to get the contract brought through and the Debate brought on before the adjournment of this House in August, and he continued that even after the Prime Minister had announced that the Debate would be postponed, because I find that on 6th August the Prime Minister announced that the Debate would be postponed, and not only during the whole of that day, but during a great part of that night, the Postmaster-General was making great efforts, as is shown by the evidence of the hon. Member for Finsbury, in spite of what the Prime Minister had said, to bring on the Debate. Although I quite sympathise with all that the Postmaster-General has said about public business, and the necessity of pushing on the contract, yet I find it difficult, especially when the Prime Minister had decided that it could with safety be postponed, to believe that there was not some idea in the Postmaster-General's mind that it would be to the advantage of his colleagues in the Ministry who had made, to say the least of it, these injudicious investments if the Debate did not take place at all.
§ Viscount HELMSLEY
Then there was the Debate of the 11th October. I would like the House to notice that in the Debate of 11th October, and before any specific charges had been formulated by anybody in this House—nobody knew what had happened—there were all these rumours in the country, and I think hardly any of us believed them to be true. They came out in Debate, I think, but they were no[...] 411 believed to be true. There was, however, a sort of general uneasiness that Ministers had committed some indiscretion, and the Chancellor of the Exchequer, in the course of the Debate, said he wanted above all things, a frank discussion upon it. Here are his words. An hon. Member had said something about the Government, and was talking about rumours, and the right hon. Gentleman, who was not making a speech but was interrupting the hon. Member for Bow and Bromley, said:——I want to know what those rumours are. If the hon. Gentleman has any charge to make against the Government as a whole or against individual Members of it, I think it ought to be stated openly.The reason why the Government wanted a frank discussion before going into Committee was because they wished to hear these sinister rumours which had passed from one party to another. Is it the Chancellor of the Exchequer's idea of frankness to withhold from the House this information which, when it does transpire, at all events interests the House and interests the country to no small extent. Is it the Chancellor's idea of frankness to withhold important matters of that kind, which if they had been revealed on that day, would have settled once for all, the other rumours which were going about, and would have concentrated attention and criticsm upon those points which were facts, and not those other points which had to be sought for in a mass of irrelevancies. The Attorney-General also in the same Debate showed a lack of tact and frankness, but I think the passage has also been quoted by my hon. and learned Friend and I will not quote it again. But throughout the whole Debate, whether you look at the speech of the Attorney-General, of the Chancellor of the Exchequer, or the Postmaster-General, it becomes obvious that there was an effort, and it looks to me almost like a resolute effort not to disclose anything to the House or to the Committee which they did not know already, and not in any way to admit that there were any indiscretions of any kind, of one sort or another. I do not think I need trouble the House with the quotations, because the matter is one of common knowledge to the House; but the more the speeches are read, the more they show that the Debate was a debate which might have been used as an opportunity for Ministers to reveal what they had done, and it was not so used. I think the House has legitimate cause of complaint that it should have 412 been treated in that way by Ministers. The result of it, of course, was that the whole House and the country, as shown in the Press, came to the conclusion that there was nothing whatever at all in the whole business, and that what was called the "Marconi Scandal" only existed in the mind and imagination of certain gentlemen. The "Westminster Gazette" said on the following day:—We have the declaration, as defined and categorical as any statement could be. that not a single Minister used his knowledge to enrich himself by as much as a penny piece.
§ Viscount HELMSLEY
Before I answer that question I must ask myself what exactly the "Westminster Gazette" meant by those words. I do say that the Attorney-General had some knowledge not available to everybody else, and I think that this must be ample justification for the paragraph of the Noble Lord's report, which concludes:—And we are of opinion that the persistence of the rumours and suspicions has been largely due to the reticence of Ministers, particularly in the Debate of 11th October.The Attorney-General has given an explanation which I must say the House will regard as perfectly satisfactory, as to the reason why, at the "Matin" trial he did not make a complete revelation of the whole thing, and therefore I will not press that point. But I would like to point out to him that if it had been his wish to make a complete revelation of everything that had occurred after the "Matin" trial, and put the public in possession of certain facts, it would not have been difficult for him and for the Chancellor of the Exchequer to have addressed a letter to the newspapers which would have put the position in a perfectly clear light. If you look at the Attorney-General's evidence given before the Committee, it cannot be denied that the information which eventually transpired, came out very slowly, and by degrees. The impression we got on the first day of the examination was that he had dealt with the whole transaction, and it was not until the second day that, in answer to a question, it transpired that there had even been a second deal by the Chancellor of the Exchequer at all.
§ Sir RUFUS ISAACS
I said it was perfectly right what I had stated. I said that I did the whole deal, and that the Chancellor of the Exchequer and the Master 413 of Elibank had nothing to do with the substance of the transaction.
§ Viscount HELMSLEY
I think the Attorney-General has not quite apprehended my point. The learned Attorney-General on the 25th March, said:——I told them"——That is the Master of Elibank and the Chancellor of the Exchequer——what I was proposing to do, and what my idea was, that if the shares went up, certainly above three, I should sell some of them in order to reduce the price of the balance which I intended to keep, and in what I was doing I quite understood it was left to me to do the same for them. I really was doing the whole transaction.How could the Committee have known, if it had not been for the fact of the Attorney-General's casual reference to it, that there had been a second deal at all, when the Chancellor of the Exchequer had sold 1,000 shares in his own name. Perhaps I had better read the question No. 1,002:—A nd that that may have been the whole origin of all the rumours?And the answer to that question was:—I understand that view, but may I point out to you that, as I have said before, in my view that is impossible, any person who knew I had sold 8,000 shares in my name, or that Mr. Lloyd George had sold 1,000 shares in his name, which lie did, any person who knew those things, and who relied upon them in any way as basing these rumours, was undoubtedly guilty of as wicked an act as possible.That is the way in which the Committee first heard of the matter of this other transaction in addition to the transaction mentioned by the Attorney-General on the first day of his evidence. I do not think that was candid to the Committee, and I think it would have been more in conformity with what one would have expected from the learned Attorney-General if, in the first place, he had mentioned the whole of these transactions. I must point out, in addition, that every transaction or purchase had not transpired until three days after the mention of the first transaction by the Attorney-General. I do not know whether the Prime Minister is satiafied; but I can imagine that greater candour might have been shown to the Prime Minister himself than was shown by those Ministers. He was only informed of what I call the first deal at the end of July or the beginning of August, as can be seen by the question put by the Member for Finsbury. The Prime Minister said:—At a later date in August, the Attorney-General repeated the statement to me, and I believe added that they had sold some of the shares, but retained the bulk of them.414 As a matter of fact, that was not strictly true as regards this transaction, for they had sold the bulk and retained some of them. However it was, the Prime Minister knew nothing whatever about that transaction until the end of July or the beginning of August.
§ The PRIME MINISTER (Mr. Asquith)
I knew about the transaction in no shape or form except what I have stated in the answer there.
§ Viscount HELMSLEY
But it is rather important that the Prime Minister did not know of the second transaction until the end of December or the beginning of January, and of that also he was informed by the hon. Member for Chippenham. I might almost say that the dealings of Lord Murray were not known at all, and would never have been known except by chance. Therefore the Prime Minister even was riot aware of all the facts until the October debate. The Leader of the House, one might imagine, would have known all the facts, or would have been put in a position to know whether there were any facts which should have been revealed to the House actually himself. Although head of the Government, he did not know all those facts. The policy of concealment was persisted in after the appointment of the Committee. It came out in the evidence at the Chesterton trial, that the Attorney-General had given information to two members of the Committee. The question put was:—Did you privately tell any member of the Committee before you were examined?—Yes.Who?—I told Mr. Falconer, who I knew was going to examine journalists.And Mr. Booth?—Yes, on the same day or the day after.Did you tell them about Mr. Lloyd George?—Yes I did not go into full details.In the Committee there had been an endeavour to elicit information as to whether 'or not certain of the members had been told facts which they had not revealed to the chairman—and to other members of the Committee, and I do not think it was in conformity with the best traditions of Members of this House that one of those members who had been given information should have gone out of his way to object to a question which would have revealed it, and should have done his utmost to 415 prevent the Attorney-General, who had no objection to giving the information, from doing so. What I want to ask is: Why did those Ministers, and why did those members of the Committee, pursue this policy of concealment'? Why did they prevent facts from leaking out, and why, when they did come out, did they let them dribble out gradually? Why was the policy of concealment carried on if it was not for the fact that they felt that there was something, to say the least of it, in-discreet in the transaction, and something which it would be better in their interests if it were concealed from the public. I do not like to use any strong words of my own upon that point, but perhaps I might quote the words of the hon. Member the brother of Lord Murray, who said:—I think we should wait until the Marconi muddle is cleared up.5.0 P.M.
Possibly that also animated those gentlemen who took part in the various processes of concealment, that the Marconi muddle should be cleared up without. any publicity. The hon. Member who preceded me has said a good deal about the English and American Marconi companies. It must be apparent to everybody that the Marconi business must be world-wide, and that, as a matter of fact, their policy is to organise Marconi companies in different countries, and get control over those companies. I do not think anybody can be found who will deny if the Marconi system was affected at its source by the rejection of a 'Government contract, and if it was suggested that there were other patents—[slight interruption]—I am sorry if I am delaying the House too long. It is rather difficult. When I am making certain charges and accusations against His Majesty's Ministers, I feel bound to continue until I substantiate what I have to say. I do not think it can be denied that if any patents had been proved to be better than the Marconi patent, or if anything had occurred to lower the prestige of the Marconi Company in this country, that it must have adversely affected all the subsidiary companies, including the American company. I think that that view is very much endorsed, and the hon. Member for Blackburn (Sir II. Norman) I notice, speaking in the Debate on the 11th October, said that—All who follow the development of wireless know that the granting to a company of such a vast and lucrative concession as this chain of wireless stations 416 would confer upon that company so great a prestige that other companies and inventors would regard further rivalry as impossible.That was said at. a time before there had been any ulterior motives ever suggested. I think it became quite evident, if anybody reads the evidence of the Radio Telegraph Select Committee in 1907, that the Marconi Company and the subsidiary companies were all very closely related one to the other, and that what affected the parent company affected also the subsidiary company. It is not denied either, I think, and this is an important fact, that when Ministers engaged in these transactions, the contract was not complete. The Postmaster-General said on the 31st March in giving evidence:—But suppose with regard to one of the matters that were left open we had not been able to come to terms with regard to the specification, for instance, the contract might perhaps have broken down and neither party have been entitled to proceed for damages against the other.Therefore, at that time the Postmaster-General admitted in his evidence that the contract was still not complete, and it actually was not completed until the end of July. I consider, so far, I have made it quite clear to the House that there was concealment, and that the American company was not clear of the English company, but on the contrary, the two were closely bound up one with the other. Hence, I think it must be recognised by the Government that it was, at all events, undesirable for them to have shares in it, or purchase shares in it, while a contract was pending, and it might be held, if people were inclined to be very strict in these matters, that it was an undesirable investment for them at any tune. It would have been an undesirable investment if it had been one of long standing, but I think it adds to the gravity of the case that that investment is made afresh, and that shares are actually purchased while the contract is still pending. I do not know, I am sure, what the Chancellor of the Exchequer will say, or whether he will say in his view the American and English companies were not connected, or whether he will say that the contract was not pending, but it appears to me that both those matters have been substanti1 ated, and if they are the case, then distinctly the indiscretion of purchasing those shares comes within the rule mentioned by my hon. Friend.
As I have said, we are making no imputation of corruption upon right hon. Gentlemen, but it is difficult to deal with 417 these matters without what one says bearing that interpretation. I wish expressly to guard myself against that. I make no imputation of corruption. Besides what we have shown it is also evident from what the hon. Member said, and I need not go over all the details, that the Attorney-General took through the agency of his brother, Mr. Harry Isaacs, information and preferential treatment through his other brother, Mr. Godfrey Isaacs. I do not see that it makes the least difference whether that information came direct from Mr. Godfrey Isaacs, or whether came through the intermediary relationship of his brother, nor did it make any difference to the Chancellor of the Exchequer or Lord Murray whether it came direct or through the agency of the Attorney-General. I say they took valuable consideration, and the valuable consideration was the prior information, and the preferential treatment in that they were enabled to buy those shares at 2 when other people could not get them except at 3¼. There is rather an interesting feature in these tables to which I would like to call the attention of hon. Members, and that is, that the very same day that the Chancellor of the Exchequer and the Master of Elibank, as he then was, bought these shares, the 1,000 shares from the Attorney-General at 2, the Master of Elibank, in his position as trustee of the Radical party funds, bought -other shares to the extent of 2,500 at 3¼. Therefore, even the Master of Elibank himself was not able as regards other funds, of which he was only the trustee, to get the same price as he got in his private capacity, owing to his indirect relationship with the Attorney-General and the brother of the Attorney-General. Therefore that fact remains that on the same day, on the 18th April, the Master of Elibank bought 2,500 shares at 3¼.
Sir RUFUS ISSACS
I am not quite sure whether I correctly understood what the Noble Lord said. Suppose, he said the Master of Elibank bought 2,500 shares at 3¼ on the same day on which I purchased the shares at 2.
§ Sir RUFUS ISAACS
That, of course, was not the fact. I did hear myself the Noble Lord say, whether he did or did not mean to say it, that when I bought the shares at 2, at the same time the real price was 3¼. That is absolutely contrary to the fact.
§ Viscount HELMSLEY
The two things are different. I said, in the first place, the Chancellor of the Exchequer and the Master of Elibank bought shares from the Attorney-General on the 18th April.
§ Sir RUFUS ISAACS
We do not want to get at issue on facts which are really not in dispute. That is the mistake the Noble Lord has made before, and he is repeating it. The Chancellor of the Exchequer and the Master of Elibank bought shares from me on the same night, the night of 17th April, and the evidence is that the shares rose considerably that evening and during the whole of the next day. Therefore, it was not on the same day that the Master of Elibank bought the shares at 3¼ That is the point on which I want to correct him.
§ Viscount HELMSLEY
I am sorry I was led into a misapprehension. A day intervened between the transference of the shares from the Attorney-General to the Master of Elibank, and he let him have them at the same price that he paid for them. It was the same night, and I accept the correction of the Attorney-General, and I am sorry if I led the House to think the contrary. But, at all events, the Master of Elibank on the very next day bought 2,500 shares at 3¼. I say that he got the shares on preferential terms, and it appears to me that is borne out by the evidence. It only requires the evidence of Mr. Campbell, I think, who was asked could he have bought 10,000 shares on the 17th April at 2, and he replied no; he would have had even in America to have given £2 18s. 4d. for them. I made a mistake; it was Mr. Robertson's evidence. He said that 10,000 shares could not be got on the 17th April at a less price than £2 18s. 4d., if he could have got them at all. The whole evidence goes to show that, as a matter of fact, that nobody who was' not in the know in England with the brokers who dealt with America could get those shares at all, and, when they got them, they would have to pay 3¼ for them. So, I think, it. becomes apparent that the Attorney-General and the Chancellor of the Exchequer and the Master of Elibank got in, like a good many other brokers, on the ground floor, or, if not quite on the ground floor, at all events they got in on better terms than the general public. Mr.. Heybourn explained how he was in the habit of giving preferential treatment to brokers with whom he frequently had deals: I do not think that can, be a disputed 419 point. I want to draw the attention of hon. Members to a provision which is to be found in the Indian Penal Code.
I began by saying I did not impute corruption, but I want to show how dangerous this action of the Government was in the way of opening the door to corruption and of possibly leading to it in the public service. I do not think anything shows more clearly than this in what light a person is regarded by the Indian Penal Code if they accept valuable consideration from a person, and if, quite apart from any question of motive, if they accept valuable consideration from any person who is engaged with the Government in any contractual arrangement. I will read the whole Section, 165:—Whoever being a public servant, accepts or obtains, or agrees to accept or attempts to obtain, for himself or for any other person, any valuable thing, without consideration, or for a consideration which he knows to be inadequate, from any person whom he knows to have been, or to be, or to be likely to be concerned in any proceeding or business transaction, or about to he transacted by such public servant, or having any connection with the official functions of himself or of any public servant to whom he is subordinate., or from any person whom he knows to be interested in or related to the person so concerned, shall he punished with simple imprisonment for a term which may extend to two years, or with fine, or with both.That is a very severe paragraph, and does not make it necessary to prove motive, but merely makes it necessary to prove the facts. As I have been careful to explain all through, I am making no charge; I am merely stating the facts. I am making no charge. The Attorney-General's character, of course, as all hon. Members know, is so well known that nobody questions his motives, and it is to be hoped for long that people who are Cabinet and British Ministers will not he accused of motives and corruption. But that does not prevent things being done which of themselves are indiscreet and which open the door to corruption. That is the point which I am making, and the only point I am making. I am showing that if a subordinate in the Indian service, for which this Government is responsible, did the very same thing which the Attorney-General has done, that in that case no motive would he entered at all, and he would he held guilty of corruption. I do not think I need further elaborate this question. The House will see that valuable consideration was received, Ministers being public servants. They will see that it was received from the managing director of a company which was in contractual relations with the Government. If hon. Members take up the defence that it did 420 not matter because it was not from the contractor himself, but from the brother of the contractor, that is also covered by this provision, which says, "a person related to the person so concerned." I think that that shows that the indiscretion of the Attorney-General, the Chancellor of the Exchequer, and the Master of Elibank, in making these, which they call investments, was a very grave indiscretion, and one which ought not lightly to-be overlooked by this House. It must become apparent that if Ministers in high places do that, it is impossible for them to enforce throughout the whole Civil Service the high standard which ought to be enforced if public life and the Civil Service are to remain as pure and uncorrupted as it is the wish of this country that they should. Therefore. in my view, it is absolutely essential that this House to-day should, once and for all, close the door which has so unfortunately been opened by the indiscretion of the Attorney-General and the Chancellor of the Exchequer. The Resolution which has been moved by my hon. Friend, and which I now second, should be recorded upon the Journals of the House, so that once for all it may be known in future that this House does disapprove of conduct such as that which, though not corrupt in itself, lends itself to misinterpretation, and might easily open the door to corruption.
§ Sir RUFUS ISAACS
Mr. Speaker, before I proceed to address the House I should like to understand quite clearly, as I think I do, that, according to your view and following precedent, the practice would be that the Chancellor of the Exchequer and I, who arc the two Ministers attacked under this Resolution, should retire from the House after we have made our statements. That, I understand, is Mr. Speaker's ruling, and that is his view of what should take place, and it is, as those will know who have consulted the precedents, in accordance with precedent in this House. Consequently I am entitled, as is my right hon. Friend the Chancellor of the Exchequer, to assume that all that can be said and all that will be said in accusation against either my right hon. Friend or myself in support. of this Resolution has been said by the hon. and learned Member who moved it, and by the Noble Lord who seconded it.
§ Sir RUFUS ISAACS
I desire to say at once to the House that my object in rising at this, the earliest moment which is open 421 to me, and the first opportunity which has presented itself to me since the Select Committee was appointed in October of last year, is not to argue the case in detail, or to deal with all the various points that have been raised and put, if I may say so,, with great moderation and complete fairness by the hon. and learned Member who moved the Resolution. I do not propose to travel into the details; I shall have something to say upon the broad aspects of the case which has been presented to the House. If it is desired to deal with those details, they must be dealt with by others. I do not intend, on a Motion of this character in which I am attacked, to obscure the vision of any of those who are good enough to follow what am about to say by diving into the mass of detail in the evidence taken before the Committee. Nevertheless I shall not for one moment avoid dealing with the salient features of the case made by the hon. and learned Gentleman. I rise first because in historical order I am the first in this transaction. It is I who introduced this transaction to the Chancellor of the Exchequer and the Master of Elibank. I have had the opportunity of saying before on more than one occasion, and I repeat it now in the House, that whatever criticism is to be made upon these transactions should in the main be directed to my action, and whatever blame is to be attached should fall upon me and not upon my right hon. Friend the Chancellor of the Exchequer and the Master of Elibank. Let me also say at the outset, and before I. discuss the American Marconi share purchases, that with much that fell front the hon. and learned Member for Kingston with reference to 11th October I am in accord. As I followed him, and I did so very carefully in all that he said, he made no imputation—he will correct me if I am wrong—of intentional concealment. What I understood him to say and the complaint which he made was that we had not stated ail these facts on the occasion of the 11th October. I agree with him, and I want to state it quite plainly and clearly to the House so that there may be no mistake about it. Looking back at all that has happened, reviewing the circumstances as we now know them, bearing in mind the lapse of time from the appointment of the Committee to the date of our being called to give evidence, I think that the course that we took on 11th October was a mistaken course. I think the House is 422 entitled—and when I say the House I am not referring to any party or to any section of a party—I think that all Members of the House are entitled to get from each other—not only from Ministers, but from each other as Members of the House of Commons—a frank statement in answer to any question that may be raised in the House; and I say to the House as a whole, dealing with this matter, that the course which we pursued, and which I will explain in a moment in a little more detail, was a course which I think now and by the light of all that has happened was a mistaken one. I hope at any rate that no one can misunderstand what I have said. Having come to the conclusion that it was a mistaken course, I certainly would not attempt to shelter myself behind any evasion. I have stated it quite frankly, so that everyone in the House knows the view that I now take. But that is not really the matter which is before the House. Although the hon. and learned Member for Kingston never suggested for one moment intentional concealment, the words of the Resolution are wide enough, if placed on the Journals of the House, to imply that there was intentional concealment. In case there should be any doubt in the minds of any as to the meaning intended, at least by some hon. Members, to be attached to the words, the Noble Lord has made it perfectly plain so that no one can have any doubt. As I followed what he said—and again I say he will correct me if I am wrong—he did say, as I thought very deliberately, that there was intentional concealment.
§ Viscount HELMSLEY
I do not know what the learned Attorney-General means by the word "intentional." I presume that it must have been discussed whether it should be mentioned or not, and it was decided not to mention it.
§ Sir RUFUS ISAACS
The Noble Lord, I am sure, does not wish to shelter himself behind any quibble. It is the last thing he would want to do. There can be no difficulty in understanding what I am saying. I tried to make it clear. To come to a conclusion that a thing need not be, stated may be, of course, a perfectly honest and a perfectly moral transaction, and at the same time it may be one which you may regret hereafter. But to come to a conclusion that you will make a statement for the purpose of covering up a transaction so as to deceive those who 423 are listening is a very immoral transaction. I quite see what the Noble Lord means, but again I would ask him to tell me, so that I need not deal with it unnecessarily. If he means the first, I quite follow him. Does he mean that in the statement that was made, and in the course that we took, we intended to deceive?
§ Viscount HELMSLEY
What I mean by "intentional" is this: Presumably the alternative courses were discussed by the Attorney-General with other people whether or not to mention it, and he decided not to mention it. In that case his decision was intentional. I also think that he thought it was wiser that the House should not have that information on that date.
§ Sir RUFUS ISAACS
I will not pursue the matter, but I am still rather at a loss to understand the Noble Lord. I see all the difference in the world between the statement which the Noble Lord made—which I agree is a statement I must deal with, and I am not going to attempt to run away from it; but it is a very different matter from saying that the statement put before the House was meant to deceive the House. If any hon. Member puts the question to himself with regard to himself he will understand the difference. Let me follow what has been said by the Noble Lord and the explanation he has given, and state what actually took place. In order that the House may understand the position let us go back to 11th October. On the 7th August, I think it was, this House adjourned for the Recess. At that time it was announced by the Master of Elibank, with the authority of the Prime Minister, that a Select Committee, to inquire into the circumstances of the negotiations in connection with the Marconi Company, would be appointed if it was desired. A letter to that effect appeared in the "Times" on 8th August, so that we made the thing perfectly plain. During the Recess, as the House will remember, a series of articles, containing undoubtedly the gravest calumnies, and the most serious insinuations and suggestions against Ministers, appeared. Rumours undoubtedly were current. I do not know whether they were current in the Lobbies or not, because very often the person about whom rumours are current is the last one to hear of them. I do know that at the end of July or the beginning of August attacks were being 424 made. I did know, as my colleagues did, that it was being stated that we had purchased English Marconi shares. There was no doubt whatever as to the meaning of this—that we had purchased English Marconi shares before the acceptance of the tender on 7th March, taking advantage of the rise, consequent upon the announcement of the acceptance of that tender, to make huge profits. That was the accusation.
The further accusation was that I had used my influence—whatever it may be in the Government—to obtain a very valuable contract for the British Marconi COmpany, of which my brother happened to be managing director. I pass over two other statements which are of minor importance, which have disappeared altogether, and which everybody now agrees were wholly without foundation. These were two very serious statements. When we met again the Government had then itself determined that it would appoint a Select Committee in order to inquire into these very circumstances. So far from attempting to conceal what had happened, the Government had put down a Motion which was to be moved on that Friday, 11th October, by the Postmaster-General, for the appointment of this very Committee to make the inquiry in which these facts have been disclosed. It was upon that Motion that the references were made which have been quoted. Let me just remind the House of one thing further. During that Debate, certainly the early part of it, the discussion was with reference to the contract. At the later part of the afternoon some reference was made to me in my absence. I had been sitting in the House during the whole time waiting for an opportunity to present itself of dealing with those charges. Whilst I was absent a charge—not a charge perhaps, but a reference—was made to me. I came into the House, and then at the earliest moment, I rose. I formulated to the House four charges which I gathered from the various articles had been circulated during the recess. Many hon. Members are in the House now who were present in the House on that occasion, and I think I am perfectly justified in saying that when I formulated the charges I had the universal assent of Members in the view that I had correctly formulated what everybody had understood up to that moment.
§ Sir RUFUS ISAACS
If anybody who was present doubts it it is at least suspicious that he did not get up and contradict me. I am quite content to leave that to the House. I did not intend then to go into the matter of the American transaction, because in my view it had no direct relevance to the charge which was made. I do not mean by that it was not necessary to state it to the Select Committee. That is totally different. But it had no direct relevance to any one of the four charges with which we were dealing. We were appointing that very Committee. If we had been discussing a Motion for ratification, and if we had allowed that contract to be ratified on the statements which were then made on that date without saying anything about the American transaction then I could understand the serious complaint of Members of this House, but as all that we were discussing then was whether or not a Select Committee was to be appointed to make an inquiry, it did seem to me—I do not shrink from it at all—that what I had to deal with, what I was entitled to deal with, were the charges which were the very specific and very grave charges which had been made; and that I was entitled to wait for the period which at that time everybody thought would be a very short period to state all the facts before the Select Committee with reference to the American transaction. I put one question to hon. Members who were here present: Did anyone at that date, 11th October, ever imagine that weeks would elapse before Ministers would be called to give their evidence? I am saying at this moment "weeks" before Ministers were called to give their evidence in reference to particular dates; and certainly I am sure nobody ever imagined that many months would elapse before that took place. There was no question about our presenting ourselves to the Select Committee for examination. I remember quite well in the Debate that the Noble Lord the Member for Hitchin (Lord Robert. Cecil) said that Ministers must present themselves—I do not remember the exact words—but I think what he said was Ministers must not shrink from presenting themselves to the Committee and insisting upon examination and cross-examination. Although it does not annear in the OFFICIAL REPORT, I think I shall be within his recollection when I say that both the Chancellor of the Exchequer and I vocally assented to that view of his.
§ Lord ROBERT CECIL
As the right hon. Gentleman appeals to me, I think it is only fair to say that I say here what I said in Committee upstairs that that was so.
§ Sir RUFUS ISAACS
I only refer to that for the purpose of making quite plain that on that date, 11th October, it was abundantly clear that there could be no other possible course then that Ministers should present themselves for examination and cross-examination before the Select Committee. I am glad that there is no controversy between us; no division of opinion upon that. The moment you Lave got that fact, I submit to the House that any question of intentional concealment in the sense of deceiving the House, absolutely disappears. There is no charge which to my mind is so odious as that which imputes to men who stand in the relationship which we do to each other as Members of this House than that one Member has attempted in a statement or explanation given at the Table to deceive. I am sure that there is no Member of it/his House who would not resent, and resent most bitterly, even the faintest suggestion of any such intention. I assure the House that no such intention was ever present in our minds—that all that we meant. was that this was not the opportunity; that the proper opportunity was at the Select Committee. I think also that in all probability, looking back upon it, our minds—certainly my mind—was a little too full of the indignity of the charges of corruption which were then being circulated. Striving, as I have, to put myself in the same mental attitude as on 11th October, I do think that that with me played a great part. When I returned from abroad I found that these charges were being made—whispered from House to House, spoken in the Lobbies, stated in cowardly fashion in magazines to the extent that as I walked across the Lobbies or in the street, or to the Courts, I could feel the pointing of the finger as I passed, "That is the man who it is said has made a huge fortune out of information obtained as a Minister, and he has made that fortune by a disgraceful transaction."
I did not intend to go into that matter to-day, and I do not intend to travel further in regard to it. I only mention it so that the House may understand the state of mind in which I was when I dealt with this transaction. I trust that there is not a Member of this House, 427 to whatever party he may belong, to whatever section he may belong, who would for one moment hesitate to accept the statement that I have made—that there never was the faintest intention to deceive any Member of the House in regard to these transactions. If I pause for one moment to deal with some observations which were made with reference to the "Matin" case, it shall only be for the moment. I cannot let them pass, because nobody else is in such a position as I am to deal with them. I only want to say that from first to last the attitude that I have adopted was, having at last, and after many months, found the person who made a specific statement which could be challenged in a Court of Law, who stated a fact with regard to a particular Minister so that he could be brought to the Bar of Justice, and that I should have the opportunity of going into the witness box with my right hon. Friend the Postmaster-General, who was attacked with me—that the moment that occurred, we took that opportunity, the first opportunity, and I also took that first opportunity of stating the fact in regard to the American shares. I would only remind the House of this, that so far as I know, and I have sought very hard to ascertain whether I can possibly be wrong, there is no one, except the persons to whom I had given the information. who apparently knew of the American transactions. No article had referred to them. No article had accused us of purchasing American shares. Why? The moment you get the dates, the charges which had been made would have been disproved. It would at once have been said that we had purchased American shares, and everybody would have known that that could only have taken place in the month of April, some five or six weeks after the announcement had been made of the acceptance of the tender for the contract for the British Government, and, of course, that the shares were not in existence until this period of the month of April. At that moment I chose the opportunity, and I insisted upon telling, not only the Court, but the House—and, of course, the country—of these transactions, and of stating them in the witness box. I will not deal further with that, because I cannot help thinking that it is not very material in view of what has taken place, and in view of the explanation that I have given.
428 Let me now proceed to deal with the purchase of the American shares, which I shall do quite briefly. I am able to do that in view of the opinion of all the members of the Select Committee—I am not now drawing any distinction between those who are parties to the Official Report, and the Noble Lord who proposed the draft Report and those who voted with him—are all agreed upon this, that whatever may be said with reference to the wisdom or the judgment of those who entered into the transaction, no suggestion is made that they acted in any way dishonestly or in bad faith. The Noble Lord says in terms, in his Report with reference to myself, who played the chief part, that I never allowed nor intended to allow the discharge of my public duty to be affected by those purchases of the American shares. I am using his exact words. The other members of the Committee, those who are responsible for the Official Report—and I think they are adopting the language of my right hon. Friend the Chairman of the Committee—came to the conclusion that I was sincerely convinced that the American company had no interest in the agreement, that T believed that the American company had no interest, direct or indirect, in any profits that might be derived from the agreement, and that I was honestly and sincerely of opinion that there was no ground upon which purchase of shares in the American company would be open to objection. These are findings of fact, and of course very important findings of fact upon which there is really no controversy. By reason of these findings, I think it becomes unnecessary for me to travel at any length into detail; but in order to determine now the question which has presented itself as to whether—I will not say it was a wise transaction, because that may be putting it in a little too favourable language to myself—but I will say whether it was a discreet transaction—I think the words used by the hon. and learned Gentleman (Mr. Cave)—I think the strongest expression he used was that it was indiscreet, and of course I propose to deal with it upon that footing; but in order to determine that question, let me state the position so far as it is material in reference to the American shares transaction.
§ Sir RUFUS ISAACS
Then I think it was the word used by the Noble Lord who spoke after the hon. and learned Member.
§ Sir RUFUS ISAACS
I quite appreciate what the hon. and learned Member (Mr. Cave) said. I want the House to look at the transaction in reference to the facts as they were known to me at the time. The only complaint which I will make of the statement of the hon. and learned Member, is that I do not think in the recital of the facts with reference to the American company and the English company, he dealt quite fairly, either with the Chancellor of the Exchequer or with me. I am perpectly sure that he had no intention of dealing otherwise than fairly, but I think he will see himself that it was not quite the way in which the case ought to have been put against us, if those who listen are to deal quite impartially with the merits. I say that because the hon. and learned Gentleman proceeded to deal in detail with the agreement, and with what has transpired during the evidence, and in the latter part of the evidence before the Select Committee. No part of that information which he gave to the House in the very forefront of the attack he made upon us was known to me at the time I purchased those shares. I am not now stating any facts in controversy; I am dealing with the evidence as it stands. I am not sure whether it is in the findings of the Noble Lord, but I am perfectly certain he will not challenge what I say. I want to call attention to what facts were known to me. I agree the hon. and learned Gentleman may say, "You ought to have inquired further," but it is not a question of what we ought to have inquired into. You have to come to a conclusion upon the facts as known to the person who entered into the transaction, and not by reason of facts that came to his knowledge afterwards. For that reason I want to state the facts. I do not mean I am stating them all, that would take a long time, but I have tried to summarise them in a few sentences.
I never had any interest of any kind, direct or indirect, in any Marconi Company or any wireless telegraphy enterprise before the purchase of the American shares. On the 9th of April, when the offer was made to me by my brother Godfrey, the managing director, I knew nothing whatever of the American company; I had 430 never even heard of it. On that date he sent for my other brother and me, and I think it is not unimportant to observe that my brother Harry had no connection whatever either with the Government or with the Marconi company. The only object of sending for him was because he was a brother, and the only object of sending for me was because I was a brother. I think that the Noble Lord has not done justice to my brother Godfrey when he says at the end of one paragraph, in the absence of any evidence to that effect, that it is not quite certain that my brother Godfrey, when he made the offer to me of shares on the 9th April, was not actuated by some motives or partly by motives other than fraternal affection, although he agrees and says in terms that he knows that that was all that actuated me. I do not think that that was a fair observation or a judicial observation, and I cannot think that the Noble Lord on reflection would think it right to insist, on the materials before him, on so grave a suggestion. If I have digressed for a moment, I hope the House will forgive me. My brother is not represented in this House and has no opportunity of dealing with this matter, and therefore I take this opportunity of stating my view with regard to it. He offered me the shares at the same price as to everybody else. He had half a million shares to deal with, and he had dealt with 400,000, but had another 100,000 to place. There was no favour or advantage of any description on that date. Other persons who had the shares—some in New York, bankers, stockbrokers, and stock jobbers—had bought these shares at the very same price at which they were offered to me, and at which they were subsequently placed with other persons after I refused them. It is an absolute error to suggest that in the offer he made to me he was conferring any favour or advantage upon me, but I declined to purchase the shares. It is very difficult to say, of course, at a date long after what actually affected one's mind at that time. I have stated the reason which most materially helped me to a conclusion was that I had, as the hon. and learned Gentleman quite correctly stated, an instinct that it was better not, that it was better I should not have any dealing with this company or with my brother, who was the managing director.
Now let me tell the House what I knew of his relations to the Government at that 431 time. I am not going to discuss minor points of law with the hon. and learned Gentleman or anybody else—the last thing in the world that I should desire is to deal with a question of this character in a legal fashion—I neither want to secure the judgment of my fellow Members in this House by any legal technicality nor do I think the hon. and learned Gentleman would desire to charge me under that head. Therefore I am only dealing with the broad aspects. As I understood it, on the 7th March there had been an acceptance of the tender, and I say to this House if any man had been asked on the 7th March whether he thought a business agreement had been come to, when the announcement was made that the tender in very extended terms had been accepted, would he have had any doubt that a business agreement had been concluded, although the legal document might still have to be drawn up? It was the view I took, and the view a great many persons took for what it is worth. I do not say it is very conclusive, but it is the view the Stock Exchange took. It is the view railway directors generally take. Would a railway director, for example, if he has got a tender accepted, hesitate to tell his shareholders that he had got this, and to treat it as an agreement—always, of course, saying it was subject to the formal document being drawn up? That was the position. At that time I never heard the faintest murmur against the Marconi Company or Mr. Marconi. All I ever heard was this was a great enterprise, that Mr. Marconi was an inventor who had done great services for the world at large, that he really was the representative of wireless telegraphy. I knew of no other system. I had never heard of any other system except the Lodge Muirhead, because I knew of a patent action which took place a year or eighteen months before in regard to that company, but as a practical system, as a working system, the only one I ever heard of was the Marconi system; and I would like to ask hon. Members—there are a good many present, apart from some experts like the hon. Member for Blackburn (Sir Henry Norman), and one or two others—how many of them are there in this House who had ever heard of any other wireless telegraphy system than the Marconi previous to that date in April, 1913?
Again, at this moment, no question was raised, and no suggestion had ever been 432 made, that this contract should not be ratified. I do not mean by that, that ratification was a mere matter of form, but I am at least justified in saying that my mind naturally was not directed to what would take place in Parliament in reference to it, nor did I imagine there could be any vote upon the contract. I treated it, as I think all Members would have, that it only required ratification because it related to the conveyance of mails and telegraphic communication, which come under the words of our Standing Order. That was the only reason that I thought it required ratification, and if it had not been for that technical rule, the contract would have gone through without any ratification. I think I did know it required to be ratified, not because I had in mind that there was a Standing Order, but I read it at some period when the contract and the acceptance of the tender was announced. That was what I knew at that stage. I satisfied myself by inquiry, and was told that the American company was in no way interested in the contract with the British Government; that it did not make a halfpenny difference to the American company whether there was or was not a contract with the British Government; that the American company was not interested in the profits or the dividends that might be derived from that contract; and that the American company was not interested in the profits or dividends of the English company, although I was told that the English company was. interested in the American company. Those were the salient facts to which I directed my mind. I was told by a gentleman in the best position to know, what the state of things was, and, of course, I accepted the statement he made.
It might be that if I had been dealing with a perfect stranger to me, or one whom I had reason to suspect, I would not have accepted the state—ment he made, and I should have gone further into the matter and made other inquiries. I was dealing with my brother, whose only object could be to tell me the plain and simple truth. There is no greater danger than for hon. Members to strive to arrive at a conclusion upon this matter by looking at the facts which have been ascertained so long since and after many many months of inquiry, and to strive to impute either to me or my right hon. Friend the Chancellor of the Exchequer information which nobody had until a 433 very late date in the inquiry. All I ask of the House, and I know I do not ask in vain, is that the House should judge fairly and impartially, and in order to arrive at a fair and impartial judgment, it must look to the facts as known to me at the material date. That being the state of the case, on the 17th, as I stated, I bought the 10,000 shares. I bought them at the price stated to me as the market price. I bought them from a person who had the same knowledge as I had, who sold them to me at the price which he said was the right price as between a willing seller and a willing buyer. I did not fix the price. I knew nothing except what he told me. Here again I am dealing with absolutely uncontradicted facts, and no one in this House will dispute those facts. I bought them at this price. What is the suggestion made in regard to it? Here I come to a further point made by the hon. and learned Gentleman. He says that when I bought those shares I was accepting valuable consideration, and that I was accepting a favour from my brother Godfrey. I do ask the House how can that be made out? I did not buy the shares from my brother Godfrey on the 9th, but I bought them eight days afterwards in a totally different state of the market, from one who had no connection at all with the Marconi company, and who had no connection whatever with the Government, and all that can be alleged and the whole basis of this structure which has been raised by the hon. and learned Gentleman of a breach of these rules is that the information, or part of the information, upon which I may have been induced to purchase the shares on 17th April was given to me by my brother on 9th April, when he, offered me the shares and wanted me to take them. If you destroy that, the whole foundation of the charge as built up by the hon. and learned Gentleman disappears.
I submit to the House that, after all, we do not require to be lawyers or trained men to judge a plain question like that. What advantage, what favour, or what consideration was I getting from my brother Godfrey when I bought those shares on 171:h April at the market price? I bought them from my other brother, who had nothing whatever to do with the Marconi Company. I know what will be said, what can be said, and what has been said. It can be said, "It is true you had 434 no communication with your brother Godfrey in reference to those shares; it is true he did not sell them to you, and was not in direct communication with you; it is true that you had no transactions with the Marconi Company, but still part of the, information you had was information which your brother had given you on 9th April." I do not dissent, and I hone no. one will think I am dissenting from the principles which were laid clown by the. hon. and learned Gentleman. I do not dissent, from the principles which were. laid down by the Noble Lord the Member. for Hitchin in the draft Report which he presented. Where I dissent is in the application of the principle to the facts of this case. Where I join issue with the hon. and learned Gentleman is in the statement of facts which he made, and. which I must contradict. I do not want to be drawn into greater detail. I are afraid I have already travelled further. into detail than I intended, but it is dire to the hon. and learned Gentleman's argument—which I admit was temperate in form—and I must say something about it, although I had not intended to do so. What I ask the House to accent is that I was receiving no favour from my brother Godfrey, that. I accented no favour, that the offer he made me I refused, and therefore from that moment all relations between him and me came to an end.
Let me add one word further, that the offer was never made to me by him as a Government contractor. It was made by him as a brother to me and to my other brother. Let me ask Would the rule, as stated by the hon. and learned Gentleman and by the Noble Lord, apply to my brother, who chose, for example, on my silver wedding day, to send me a present on which he may have spent a couple of hundred pounds? It would apply to a Government contractor in the ordinary way It makes all the difference. If you are examining whether it is a favour or consideration or not, you cannot leave out the fraternal relations. Moreover, let me remind the House that the offer was never made to me as a Minister. It was made to me out of fraternal affection. Whatever may be the right view it certainly was not made to me as a Member of the Government. I leave this part of the matter, contenting myself with this observation, that t do not ask the House, or any Member of it., to judge this transaction of mine by any lower standard than has been applied by the House of Commons at any 435 time—aye, and I go further, and say that I do not ask this House to judge my conduct by any lower standard that has been imposed by the Liberal party as applicable to Ministers, and that is the higher test. LA. RIGHT HON. MEMBER: "I do not think so."] The right hon. Gentleman says that he does not think so. I think I am justified in saying that it is a higher test. If he accepts this test, well and good. All I mean, and I do not wish to be controversial in regard to it, is that I want. the House to judge the transaction by the highest standard that has ever been imposed as applicable to the conduct of any Minister by any party in this House.
Let me not formulate rules, because nothing is more dangerous in cases of this character. Let me state the rule which I think is the one which I have been most in danger of breaking in reference to this matter. I should not state it as the hon. and learned Gentleman stated it. I should not state it in those terms. I think, as I shall state it, that I shall command the assent of all Members of this House, and I think it imposes as high a test as you can impose. I certainly would say, first, not by any means intending that these rules are exhaustive, that no Minister should use any information which he obtains as a Minister for the purpose of making private profit or of furthering his private interests. Of that there can be no doubt. A Minister should be guided solely by the public interests and not use his influence as a Minister to obtain a contract for a relative or a friend with a Government Department. Of that also there can be no doubt. It is both of those rules that I was charged with breaking in the articles that have been referred to. The third rule is one which it is more difficult to put into precise language. A Minister should never be concerned in his administrative capacity either with a contract or with negotiations for a contract in which he has any financial interests, or with a contracting company in which he may have any financial interests, at least without a full disclosure of his financial interests. I do not dwell further upon that because I think it is immaterial to this Debate. I put forward this which I think is a rule which is closest to this case. A Minister should not place himself in a position which might reasonably expose him, in the opinion of fair-minded men to the suspicion of corruption, even though his own conscience is clear that in taking up that position he is 436 acting honestly and without a corrupt motive. I have formulated that rule so that I might place it as the highest test that a Minister could impose upon himself.
In my view no one can protect himself against the suspicions of prejudiced persons. No one can guard against the suspicions of the evilly disposed. The precaution which I think has to be taken is against exposing oneself to the reasonable suspicion of a fair-minded man. It never occurred to me during the whole course of these transactions that any human being could suspect me of corruption because I purchased American Marconi shares some six weeks after the announcement was made of the acceptance of the tender of the British Marconi Company by the British Government. It never crossed my mind that any one would ever think that. If the House requires any proof—I do not for one moment think it would—I would point to this, that in the transactions which I had and which my right hon. Friend had we acted perfectly openly, without the faintest attempt at concealment, in such a way that, at any rate, a number of clerks and brokers must have become aware of the fact that we had engaged in these transactions, and, whatever may be said with regard to my right hon. Friend the Chancellor of the Exchequer, at least no one will suggest that from my experience I was not aware of the possibilities of dealing in the name of nominees. I never have dealt in the name of a nominee, for the simple reason, in my view, as applicable to myself, that. if I could not do a transaction in my own name I would not do it at all. In such a transaction as I have described there could have been by no possibility any conflict of interest in me as a purchaser of these American shares, and in my public duty to the country as a Member of the Government. The moment you get the fact—that, according to the representations made to me and according to my belief, I thought this was an independent company, the sole connection, if you can call it a connection, being that its operations limited to the territory of the United States, were the working of the inventions of Mr. Marconi—as I have said, I cannot understand how it can be suggested or thought that this transaction lent itself to suspicion. The Chancellor of the Exchequer and the Master of Elibank only knew what I told them, and what applies to me certainly would apply 437 with far greater force to them, and any defence which I have put forward of my action is a defence which certainly is a stronger defence for them.
Let me tell the House that although I thought those transactions quite unobjectionable—I thought they were correct, and that there could be no question raised with regard to them—I say now that if I had had all the facts present to my mind at the time I entered into that transaction, if I had known then all that I know now, if all had been disclosed to me which subsequent events have revealed, if I had realised that men could be so suspicious of any action of mine, if I had thought that such misrepresentation could possibly exist, I state quite plainly that I would not have entered into the transaction. I need scarcely tell the House that I have given this matter very careful consideration before I made this statement, and I say solemnly and sincerely that it was a mistake to purchase those shares. The mistake arose from the fact that, as I say, it never occurred to me that I could be suspected, and I did not know all that I have subsequently learnt. In applying the test of the rule. which I have laid down, I think it would be better to err on the side of caution, and although I have the gravest doubt at this moment whether that rule which I formulated can be said to apply to this case—I have the gravest doubt whether it could be said that any fair-minded man could have come to the conclusion or could have suspected that I had been guilty of corruption if he knew that I had bought American Marconi shares—I will not balance it on too fine a point; I will state that I should not have gone into the transaction. And I want the House to understand when I say this that I do it not merely because of the trouble which may have been caused to colleagues and to political friends and even to political opponents, of which I am deeply conscious, but because it was possible that it might give rise to misconception, that the transaction might be made in suspicious minds to assume an atmosphere of suspicion, the colour and complexion of which never occurred to me at the time. I should not stand at this Table speaking as a Minister, making the statement you have just heard from me, if that statement was not in my own deliberate judgment and in my innermost conscience a full, fair, and frank statement of my feelings and opinions with regard to the whole matter in controversy. 438 I beg the House to believe that no personal consideration would have induced me to come to this conclusion. I have tried to banish all personal considerations from my mind in forming my judgment. I am guided in the course I have now taken solely by my desire to preserve the best traditions of public life, to say no word and to do no act which could by any possibility be construed as relaxing the rigidity of the rules of conduct properly applicable to Ministers of the Crown. This House may lay down rules, but in the end it is not rules but the high principle and the public honour of our public men, to whatever party they may belong, which are the best safeguards for the purity of our public life.
§ The CHANCELLOR of the EXCHEQUER (Mr. Lloyd George)
I rise not so much to take part in a debate as to make a personal statement following that made by my right hon. Friend the Attorney-General. I should have liked to have referred to things which fell from the hon. and learned Gentleman (Mr. Cave) and from the Noble Lord (Viscount Helmsley). I should have liked to have followed him into an examination of the traditions of the past with reference to contracts. I should have liked to have examined the rule which he laid down that Ministers of the Crown ought not to have shares in companies which contract with the Government in the light of precedents, but I refrain from doing so for the reason that I do not want to make it appear that. I wish to escape from any responsibility which I have in this transaction by recriminating upon my political opponents. I associate myself entirely with my right hon. Friend in reference to what he said about. what transpired on the 11th October, and also in reference to what he said about our transactions. I say frankly now, having regard to the course of events, having regard especially to the time that elapsed between the 11th October and the opportunity we had of explaining the matter to a Committee of the House, that it would have been infinitely better if the whole of the facts had been placed before the House on 11th October. But I must also emphasise what he said, that if we came to the conclusion that we would prefer the opportunity which the Committee afforded it was not from any desire, I can assure the House, or intention on our part to conceal any of the facts. I have been 439 a Member of this House for twenty-three years. I have spent most of my active life in the service of the House, and I should be deeply grieved indeed if the House of Commons thought that I had been lacking in any respect to it or to its great institutions, and, above all, should I regret it if they thought that I had been lacking in frankness and openness in my dealings.
The decision we came to was not a decision, such as the Noble Lord rather suggested, not to reveal the facts. The decision we had to come to was between the 11th October and the Committee, and we came to the conclusion that the Committee afforded the better opportunity for presenting the whole of the facts. We might have been wrong; we were, I think, undoubtedly wrong as events have turned out, but it was a mistake in judgment, and not a mistake in candour to the House of Commons. The only other point of that kind I should like to make is in reference to the "Matin" action. It has been suggested, not so much in the course of the discussion here as outside, that there was an attempt to conceal in that hearing my share and the Master of Elibank's share in the second transaction. I stated before the Committee, and I state now, that so far from that being the case I have made every effort to get the whole of the facts stated in that action. I interviewed counsel myself, and they stated to me what every lawyer in this House knows, and what even the three legal Gentlemen who signed the Minority Report know perfectly well, that it could not have been stated in the "Matin" case, because the libel which was the subject matter of the trial, did not even mention his name or mine, and, therefore, it was impossible to mention the transaction. The Noble Lord then said, "Why not have written to the papers?" The reason why I did not do that was because I knew perfectly well that I should appear before the Committee in a very few days, and so I did, and I thought it was more respectful to the Committee to present the facts there before the Committee rather than write a letter to the Press. I only want to say that much on the point of revealing these transactions, as it has been said, piecemeal. We never had any intention from the start of withholding a full disclosure of the facts from the House of Commons. We had already intimated to the Prime Minister that we had American 440 transactions. My right hon. Friend the Postmaster-General and certain other colleagues of ours knew it. Therefore, we fully intended when the opportuity came for us to appear before the Committee to state the, whole of the facts on that occasion. Having disposed of that part of the case, I should like now to come to the transactions themselves, and here again I associate myself with my right hon. Friend, and I say frankly that, having regard to the facts which have come to my knowledge, not merely since the transaction, but which have come to my knowledge, a good many of them, since I appeared before the Committee, if these facts had been known to me at the time of the transaction, I certainly would not have touched it; not because it would have been wrong in itself, but because it would have undoubtedly lent itself to misconstruction, and perhaps to genuine misconception. But let me point out what are the three charges which have been brought against us. The three charges brought against us were, first, corruption. That was the only charge——
§ Mr. LLOYD GEORGE
Yes, charges of corruption were brought against us, and I, really cannot ignore charges of that kind. The Noble Lord must remember that this is the first opportunity we have had of discussing the whole of this business. The Noble Lord wants to discuss that part—I do not say this with any offence—which is particularly suitable to his Motion. But I am entitled to discuss the whole of it, and I am not going to shirk the two-charges ho brought. I am going to take them in the order in which they were brought. The first charge brought against us was the charge of wholesale corruption. These were charges which were circulated for months. It is all very well for the Noble Lord to say that it was by irresponsible persons. They were circulated in a journal owned by a Member of this House, and may I say this too, that the Committee would never have been appointed but for those charges. Still more, although they have been disposed of now, we are discussing this question in the atmosphere created by them. We can feel it in every article written on the subject and in every speech made on the subject, and although there is a gulf, no doubt, between corruption and indiscretion, still there is an attempt to bridge it, so that you can glide easily from one to the other. 441 Therefore, I cannot treat charges of corruption brought against us as if they are to be dismissed merely in a sentence. These were the charges that nattered. If the Noble Lord and his Friends doubt that, will they read the evidence of the editor of the newspaper, who first started the whole of this business. He said it was these charges that made him start the campaign against the contract [HoN. MEMBERS: "No, no."] He said so. What did he say 7 He said in his evidence before the Committee, that there was absolute silence on the subject of the contract, and then, in answer to the question of my hon. Friend the Member for Wisbech (Mr. Neil Primrose):—You thought the contract was a subject of public interest?he says:—Yes, especially from the fact that there was no criticism of it at the time.That was three or four months after the contract had been signed, and weeks after we entered into this American Marconi transaction. At that time there was no criticism. The witness goes on to explain that what called his attention to it was not the merits of the contract, but the rumours in the clubs about the corruption amongst Ministers. I cannot treat this, therefore, as if it were not an essential part of the matter. What I should like to call the attention of the House to is this: The absolute recklessness with which charges of this kind were brought. I should have thought that that would have been dwelt upon a little more by the Noble Lord. My hon. Friend asked the editor who started the whole campaign—the editor of a newspaper owned by a Member of this House—Can you tell us from whom you heard these rumours?—No, I cannot.Or any of the rumours?—No.You cannot mention a single name?—No.Can yon, without breach of confidence, give us any authority?—No.And then the Noble Lord asked:—Have you any authority you can give, even if you break confidence?—No, I do not think I have.That is how these grave charges were brought. against us.
§ Mr. WALTER GUINNESS
The right hon. Gentleman has made reference to a paper the policy of which I control. He stated that it was owing to the rumours referred to in that paper that the Committee was appointed. May I ask him to deal with this fact, which I can show from the extracts I have here, that there is not 442 a single mention of rumours in that paper until the issue of the 12th October, the day after the Debate here.
§ Mr. LLOYD GEORGE
What I stated I adhere to. What I stated was this: That it was the rumours which the editor of the "Outlook," a paper owned and controlled, I understand now, by the hon. Gentleman opposite, said called his attention to the fact and induced him to start these articles criticising the contract.
§ Mr. LLOYD GEORGE
Yes, the rumours, and in a few minutes, before I sit down, I will get the actual evidence and I will read it out. Let me tell the hon. Gentleman a little more about the editor for whose policy he is responsible. Dealing with this matter—[Interruption]—I hope I may get a fair hearing, because I am dealing with charges of corruption against myself. The editor was asked:—I would like you to explain a little more fully what you mean.This had to do with the public rumours before referred to, and this is his answer:—I have been very much impressed, listening here, by the standard of reticence which appears to be demanded of political journalists. My own view is that would make political journalism impassible if we draw that very tight line.Then the question was asked:—What very tight line?—That one must not reflect on the conduct of a Minister, one must not suggest that he is personally influenced Or has shown favouritism or anything of the sort, and that if one makes a statement one must prove the fact,And he goes on to say:—That simply makes political comment impossible. Ts not that so? If I say that the. Home Rule Bill is a corrupt bargain, am I to prove it?That is the policy for which the hon. Gentleman is responsible.
§ Mr. WALTER GUINNESS
Does the right hon. Gentleman profess to be reading that from anything which appeared in the paper? Does he say that I am responsible. [HoN. MEMBERS: "You are for the editor."]
§ Mr. LLOYD GEORGE
I am reading not from the paper. I am reading it from the statement made on oath by the editor. This is a copy of his sworn testimony, and if he says this on oath, what he would put in the "Outlook" I do not know? Here is a question that was put I think 443 to the hon. Gentleman himself when examined as to the publication of rumours—If Mr. Lawson had written an article attacking Mr. Boner Law, would it have been printed equally?—Certainly not.And this is the paper, this is the editor, this is the policy which started the whole of this examination. [HoN. MEMBERS: "No."] Yes. It was the very first paper that ever published a line upon it, and if anybody doubts that he had better see what the confederates of the hon. Gentleman say about it—Mr. Maxse, Mr. Chesterton, Mr. Loe Strachey, the three gentlemen who have been working this together. They said that a debt of gratitude was due for these articles, because they were the articles which started these revelations. This is the way in which these charges were started. What happened? I could give a quotation from another editor who said that it would be impossible to publish a paper on the terms of having to prove charges which were inserted. When he was asked he loftily declared that it was a point of honour with him never to prove anything that appeared in his paper at all, and instead of taking a declaration of that kind at its value, he was hailed as the lineal successor of John Wilkes in his battles for the liberty of the Press. That is the way these charges began; that is the way in which they were continued, and it was all that that led to the formation of this Committee, and has created the atmosphere in which we are now discussing this question. When these witnesses came before the Committee, when they were examined—and no one can say, at any rate, that the Committee did not examine them most exhaustively—there was not a bit of tittle-tattle—I am not complaining—that they did not follow from its source right to the end—and they were quite right—absolutely right—the moment they came to be examined, it was discovered that not merely was there no evidence but there was nothing that could justify any man in suspecting charges of corruption. [HoN. MEMBERS:" Oh, oh!"] Does any hon. Gentleman say that there was ground for suspecting corruption? [Interruption.] Is not that exactly what I said I Although it is indiscretion on paper and impropriety on paper, in the background it is corruption, which you will hear for months when it cannot be refuted. The charge has been exploded, but the deadly after-damp remains, and the noxious, 444 fumes of these slanders are at this very moment poisoning the blood of people who are considering even minor charges which are brought against us. That is why mention it.
I should like the House of Commons to consider, and I appeal to them—I appeal to all my fellow Members, because I am a Member of this House as well as the Chancellor of the Exchequer, and I am entitled to fair play and justice from every Member here—I am asking that the other charges should be considered fairly and as remotely as possible from that atmosphere. I am not going to qualify any statement I will make as to whether it was judicious. I do not mind whether you use the word "judicious," or "wise," or "discreet." I say that looking at all the circumstances it was neither. I do not want to palter about words. I do not care which of the three words is used. I accept any of them. It was not. I would certainly not have gone through it again. I am not asking any of my Friends or any hon. Member when he gives his vote to sanction anything I have done from the point of view of wisdom or discretion. I certainly ought not to have done it. But there is a vast difference between indiscretion which may be acknowledged and which may be rebuked, and an indiscretion in a private investment which warrants a solemn Vote of Censure from the House of Commons. What I did, I did bonâ fide. I did it in my own name. I did it frankly. Take every transaction of sale or purchase which I made, it was all in my own name. I telephoned in my own name; I wire I in my own name; I wrote in my own name, and it is all entered in the ledgers in my own name. There are hundreds of clerks who have seen it. At any rate, if I did wrong, and it was a mistake, I had not a notion at the time, and I will give the reason why, that I was transgressing any rule, implicit or otherwise. It was done quite openly. After what I have stated I want the House to listen to me while I tell them why I entered into that transaction at 'that time. There was no controversy about the agreement. There was only one question put about it by the hon. Member for Central Finsbury (Major Archer-Shee), that and nothing else. Everybody treated that contract as an accomplished fact. For four months there was not a murmur about it, after it had been blazoned forth and the market had been operating. What happened? I therefore thought the contract was definite. I 445 should like to say this to the House, not so much as affecting the rules laid down by the hon. and learned Gentleman, but as something that undoubtedly affects the bona fides of my transaction. I had absolutely nothing whatever to do with the negotiations. The papers never came before me, and those who had seen the papers know that perfectly well. At the time when they might have come before me I was engaged upon the coal strike, and I could not give a moment's attention to them. I took no part in. the negotiations at all. That accounts for the fact that I perhaps overlooked the question of ratification and the formal contract.
Let me give the House, very briefly, because I see it is not a case for overwhelming the House with detail, the three cardinal factors that entered into my mind when I entered into the transaction. The company in which I was investing had no contractual relations of any sort or kind with the Government—none, not one penny. Those are the facts which were presented to me at the time. The American company would not profit by a single sixpence, however profitable the contract mig[...] be. Supposing the British Marconi Company made a profit of £50,000 out of building these stations, or £2,000 or £3,000 a year out of the royalties, not one penny of that royalty would go to the account of the American company, and not one penny of that £50,000 would go to their credit. Therefore the American company would not profit in its receipts or in its dividends by a single sixpence by these transactions. The second factor was this—I remember the impression—it was a purely and absolutely separate company. The third was, that I was assured that we were purchasing at the market price on that date. Those are the three factors that entered into my mind at that moment. I did not know all the details. I did not examine the charters of incorporation. I did not examine these lengthy agreements. Perhaps I ought to have done sc.; I am not challenging that for a moment, but I did not, as a matter of fact. The utmost that the hon. and learned Gentleman can say, is that I ought to have scrutinised all these documents before I entered upon this transaction. I realise frankly all the misconstruction that can be placed upon it—the same name, Marconi, an honoured name and still will be when all this is forgotten. Had I foreseen that the whole contract was going to be made a matter of fierce controversy between the parties; had I 446 foreseen that the very name Marconi would rouse the most fierce political passions; had I foreseen that charges of corruption would be brought against Ministers, it would have been crass folly to have entered into that transaction at all.
There is only one other point with which I should like to deal, if I may crave the indulgence of the House. The hon. and learned Gentleman said something about investments. I agree with him. You may argue around that and no two men will ever come to the same conclusion. All I can say is, and here I have testimony which is contemporaneous, that my idea was that it was an investment. The Noble Lord and his Friends have thought it worth while to quote a conversation which took place at the time between me and my broker. I was not making a political speech to my broker; I was not trying to convince him of the difference between speculation and investment; I was doing business with him. The Noble Lord and his Friends have quoted his answer to me. They have not quoted the statement which I made to him. I think that rather unfair. What took place? This was on the 19th April, before I had any suspicion that this would be a matter of controversy, because on 22nd May, weeks after this, I was buying shares in my own name; therefore I had no suspicion at the moment that there was any political question in it. This is what I said to the broker then. This is his evidence.
§ Mr. LLOYD GEORGE
Page 150, Question 2261.What was Mr. Lloyd George's reply?That is the question put by the Chairman to the broker:—His reply to Mr. Rice was that he would not sell the shares, although Mr. Rice advised it. lie said 'No, I will not sell them; they are an investment.'That is the view I took at the time. I think that if the conversation was worth reporting at all, it was worth giving the whole of it. I am not making a charge of lack of candour or frankness, but I think it would have been better. Not only that, but when Mr. Rice himself came later on,. he said—this is Question 3515—that he came to see me in reference to the second investment, and he said he tried to persuade me to sell them, and my answer was:—No; I bought them for investment and intend to. keep them.447 Statements made at the time between me and my broker may not be relevant as to the character of the transaction, but I say they are relevant when you consider what the intention was when I bought them. I. had got it into my mind—I was evidently wrong—that these were a good investment at 2. The second transaction I -entered into when the Stock Exchange boom was over and the excitement had gone, therefore, when I bought them then I bought them for investment. I do not suppose there will be very much controversy about that. The hon. Gentleman advanced very fairly—he did not overelaborate it—something which has been worked very hard outside, that is the idea that I was just operating on borrowed money for a rise in the market. Let me say this at once. I think it would be an improper transaction for Ministers, I think it is an improper transaction for any man of small means—I am not going to express an opinion about anybody else—to go on speculating on the turn of the market at all, and I never in my life—leaving aside the interpretation you put upon this transaction for the moment—never in my life operated on the Stock Exchange, never. Differences, contangoes, and the rise in the market I never dealt in. Let me remind the House that my books have been examined for three months. I wonder how many would care to go through that. As for borrowed money, it was a joint account, and the only unfairness I complain of in the hon. and learned Gentleman's speech, and it was an unfairness I complain of also in. the Noble Lord's, is that they lumped the Master of Elibank's profits with mine. If they had only halved them, they would know exactly what I made out of them, and that would not be quite so impressive as the figure they gave. Therefore, let us get on to this part of the subject. Operating with borrowed money on the Stock Exchange has one meaning—that is, that a man has no means, and that he is operating on borrowed money. I showed all my investments to the Committee, all of them, and they know perfectly well that that is not the case. I was not bound to borrow from my brokers at those figures. I was in a position then to pay, and I can only say it was carelessness on my part. Let me nut the case to any man who has given his life to politics. I nut it to the Noble Lord (Lord Robert Cecil), who has had a very strenuous time, at any rate for 448 the last nine or ten months. I do not want to pry into his private affairs, least of all do I want to examine his pass-books
§ 7.0 P.M.
§ Mr. LLOYD GEORGE
I do not suppose he has very much time to attend to his private affairs—and no man who leads a strenuous public life really can do it—and the only thing I. can plead is that at that time I could have disposed of it without the slightest difficulty there and then. There, again, anyone who looks at the in vestments which I submitted to the Committee, and my accounts, knows, amongst ether things, that there was money coming in which I could have used within a few weeks, and I could have done it there and then. The only misfortune is that I did not really look into it at that time, and did not until the thing came before me. There was no need at. all to do that. I was perfectly frank with the Committee. I gave them all the information I could. I want to be equally frank with the House of Commons. Every man who looks back on his life frankly mast see mistakes and mis-deeds. My observation is that the mistakes are those which are most grievously requited. I do not think any Member of the House would care much to go through the ordeal my right hon. Friend and I have gone through in the last few months, some of it deserved, most of it, and the worst of it, undeserved—calumnies, slanders, insults. I am not complaining about it. Every man who goes into public life knows that he must face poisoned shafts and endure their fester. I have. been accustomed to it all through my life, and, there ore, perhaps it does not. hurt me as deeply as it might do. Let me say this to the House. That is not what has given me most pain. What has given me most pain has been the anxiety which a heedless action of mine has given to thousands, inside and outside the House, of those who have been comrades of mine in great struggles. Nothing—I ask the indulgence cif the House while I make this personal statement—has grieved me more deeply than the apprehension lest some thoughtless act should have put in jeopardy, even for an hour, causes in which I have been brought up to believe as a religious faith. I am conscious of having done nothing which brings a stain upon the honour of a Minister of the Crown. If you will, I acted thoughtlessly, I acted carelessly, I acted mistakenly, but I acted innocently, I acted openly, and I 449 acted honestly. That is why I, with confidence, place myself in the hands, not merely of my political Friends, but of Members in all parts of this great Assembly.
§ [The ATTORNEY-GENERAL and The CHANCELLOR OF THE EXCHEQUER then withdrew.]
§ Lord ROBERT CECIL
We have heard from the two right hon. Gentlemen who have addressed the House speeches of great eloquence, and in many respects speeches which are thoroughly worthy of the occasion on which they are delivered. I do not propose, if I can possibly avoid it, to say anything which will exacerbate the situation, which must necessarily be one of considerable bitterness, however it is treated. [HoN. MEMBERS: "Why?"] I think the House has had experience quite recently of some observations of the Chancellor of the Exchequer which. show why. I wish to make one criticism on both the speeches which seem to me to apply to the whole of them. In both cases the matter before the House has, perhaps unavoidably, been treated by the two Ministers as if it were essentially and chiefly a personal question as to the morality and the motives of those right hon. Gentleman. I do not so regard it. I do not think it would have been worth the attention of a Select Committee of the House. I do not think it would be worth the attention of the House itself, and I am quite sure the House itself would be a very bad judge if it were merely a question of ethics and morality. Under these circumstances—I am only speaking for myself—I heard with some disappointment the substance of the speeches which have been made. There was an avowal of a mistake—there was an avowal that if all the facts had been before the right Ion. Gentlemen they would not have acted as they did. The important thing for this House to consider is whether the facts as known to the public, apart from all personal motives and personal considerations, establish a precedent which we can safely allow to stand. I cannot agree that the statement that Ministers regret what they have done because they now see that it is open to misconception is really such a statement as this House can safely accept as disposing of the matter before them. The Chancellor of the Exchequer began his speech by saying that he had no desire to indulge in party recrimination and so avoid a fair dis- 450 cussion of the question before the House. I regret rather that that resolution did not last more than a few seconds. He indulged in a very strong and bitter attack against my hon. Friend (Mr. Walter Guinness) and his paper, and I am quite content to leave the hon. Member to take care of himself, as I am sure he is able to do, but I wish to say this with absolute conviction, that it is an entire misapprehension of the right hon. Gentleman if he thinks that the rumours respecting Ministers' transactions had their origin in the pages of the "Outlook" or the "National Review" or the "Eye Witness "or any such paper. [HON. MEMBERS: "He did not say so."] The rumours existed months before those papers published them. [HON. MEMBERS: "He said so."] Hon. Members who have followed the attitude I took up on that Committee will know that I never defended the journalists at all. I did not think it was any part of my duty. I do not think it is right to suggest that they were responsible for the rumours or that those rumours were brought into existence by them. They were brought into existence by a large number of persons and we were never able to ascertain whom. They existed for months all over the City of London. They were the common talk of the City of London. I must say I think it was a serious error of judgment on the part of the Ministers that they failed to put a stop to those rumours by taking action against the "Eye Witness" or any other paper at the very earliest possible opportunity.
I want to say a word or two about the proceedings of the Select Committee, of which I have been so long a member. My most poignant impression is that a more unsatisfactory tribunal for the discussion of these charges could not possibly be imagined. We did our best and, as far as I am concerned, I wish to have this opportunity of saying, in view of statements which have been made outside, that in arriving at the conclusions at which I arrived I did my utmost to be guided by nothing at all except the evidence which I heard before that Committee. I observed all sorts of statements that. the draft Report for which I am responsible, and in which I had the assistance of other members of the Committee, is a partisan document. It is not so. I believe that every statement in that Report can be fully justified, and I believe fully that the more the evidence is examined by the country, 451 the more they will be convinced that the conclusions at which that Report arrived are the conclusions which ought to be adopted by every honest man. What I conceived to be our duty was this: We had to take all the charges which had been made in connection with this branch of our subject, we had to weigh the evidence and we had to decide which of them were proved and which were not. We wished the Committee to decide that the charges that the Ministers had allowed their conduct to be influenced by share dealings on the Stock Exchange or that the charge that they had used official information for those dealings was not true. We arrived at certain conclusions with reference to the Postmaster-General's action. I still think that had he seen his way to correct the false impression produced by the publication of the Marconi circular of 7th March, it would have been better. I still think it is regrettable that he did not do so. I still think it is regrettable that, knowing the transactions of his colleagues, he tried to obtain the assent of this House to the contract without disclosing these transactions.
Though it is relatively a small matter, I wish to say a word about the charge of speculation, if it was a charge. I wish to direct the attention of the House to what the Chancellor of the Exchequer did. He made a complaint that we quoted part of the conversation between him and his broker and did not quote his reply. But he did not tell the House that we quoted that part of the conversation, not to show that the transaction was a speculation, but to show that he was advised by his broker to sell, and to show the reason why he was advised by his broker to sell. Later on we did say that in our view the transaction was mainly a speculation and not an investment, but it was quite immaterial, in my opinion, what view the Chancellor of the Exchequer took of that transaction. That is the characteristic mistake that seems to me to run through the defence of Ministers. It does not matter a bit what was the private intention of the Chancellor of the Exchequer or the Attorney-General. The question is—was that judged by the ordinary man, a speculation or not. I agree most fully with what my hon. and learned Friend said, namely, that we have no concern with the morality of gambling as an abstract question. I do not propose for a moment to sit in judgment as to the morality of the actions of the Chancellor 452 of the Exchequer or the Attorney-General. What I do say is that anyone hearing of this transaction and knowing the facts would conclude inevitably that it was a gambling transaction and not an investment, and as to that, I appeal to the common sense of every Member of the House.
After all, what are the facts? The right hon. Gentleman buys shares. He has no money to invest at that moment. He told us so. It is not a question of investing a surplus or savings. He had no savings to invest at the moment. He buys these shares without any money in his hands. He buys them on the terms that he need not pay for them immediately. He sells next day 500 shares, half his holding, and takes the profit. The Attorney-General sells for him three-fourths of the remainder of his holding and he takes the profit on that. I am not going into the question of what was in his mind as to what he intended. Is it reasonable to ask us to regard that as an investment? But it does not rest there. These shares were bought, 10,000 of them, by the Attorney-General with the purpose of reselling a certain portion. Up to one-half, he told everybody, he intended to resell, if the prices of these shares went up. Of course, that is a speculation. He bought the shares intending to sell them if they rose, and that is true of half of the shares bought by the Chancellor of the Exchequer. I do not say that speculation is a very wicked thing, but I say that, in my own humble judgment as a Member of the House, it is utterly wrong that the Chancellor of the Exchequer should engage in it. I believe that is a proposition that would not be contested by any Chancellor of the Exchequer or Prime Minister in any Government which has preceded the present Administration. I have always understood, so far as I have understood politics, that it is one of the elementary conventions of political life that probably no Minister, and certainly no Chancellor of the Exchequer, ought. to engage in speculative transactions on the Stock Exchange. After all, that is relatively a small matter, though I think it is important.
Both my hon. Friend (Mr. Cave) and the Noble Lord (Viscount Helmsley) have disclaimed, as I have in my printed Report, any charge of corruption. I wish to disclaim it now. If there was corruption, it would be before a Criminal Court that the Minister had to answer. We are not 453 dealing with corruption at all. I understand corruption to be this: the acceptance of money in order to divert your official action from public duty. No such charge is made by any member of the Committee against Ministers; but I do say that the charge of impropriety which we do make, and to which I adhere, is a very serious one indeed. A good deal was said by the Attorney-General as to the tests of impropriety. He asked, Was the transaction such as to arouse the suspicion of a reasonable man? I do not believe in that as a test of impropriety at all. I always thought that it is most ridiculous. Suspicions might be raised, however untruly, about anyone, and who shall decide who is a reasonable tan? I do not propose to lay down, or attempt to lay down, what. is an act of impropriety in this sense, but I venture to suggest, for the consideration of the House, whether these two tests are not tests which are useful to apply. Ask these two questions about any of the transactions: If this is treated as a precedent, will it lead to corruption? That is the first question. The other test is, Are the facts of the financial transaction such that, if known to the general public, they are equally consistent—apart, that is, from any knowledge of the individual's character, which the public can never know intimately—with purity and corruption? I say that if any transaction fails to pass these two tests, it is a gravely improper transaction, and one which the House ought not to sanction.
Several instances have been given of improper transactions, There was one brought before the Committee—the transaction of Mr. Taylor, an engineer in the Post Office. May I remind the House of the facts about that? He bought shares in the English Marconi Company. The Postmaster-General is here, and he will correct me if I make a mistake. Mr. Taylor bought the shares after attending one meeting of the Wireless Committee. He resold them again at a profit. That was the whole thing. The Postmaster-General, in his official letter to him, expressly exonerated him—I have the words here. but I will not read them unless I am asked—from allowing his official action to be moved by his dealing in the shares. As a matter of fact, Mr. Taylor was attracted to the Poulsen system rather than the Marconi system. I remember what he did exactly. He made a profit oat of dealing in the English Marconi shares. He did it without the slightest 454 trace of corruption, and without allowing his action to influence his public duty.
§ Mr. HERBERT SAMUEL
He had official knowledge of the negotiations that were going on which was not known to the public at large.
§ Lord ROBERT CECIL
I agree. I said that he had attended one meeting of the Committee, and I intended to say that he had official knowledge of the negotiations. As a matter of fact, he told us—I do not know whether it was accepted by his official superior or not—that such knowledge as he had of any probable contract with the Marconi people would not be great. I am quoting from memory, but he used some words to that effect. That was the whole question. There was no corruption or anything like it. It was a gravely improper act, I agree, but it was improper not because it was corrupt, but because, if allowed to be drawn into a precedent, it would probably lead to corruption in the future. What happened? He expressed regret. He said he was deeply sorry that he had ever done so. Nothing could be fuller than his expression of regret. Nevertheless he was degraded from his rank in his profession and forced into a lower position than he had previously occupied. There is another form of improper action. There is the acceptance of any favour from a contractor. Sir Alexander King, who came before us, happened to be examined on that point by myself. There had been an article reflecting upon him in one of the papers. I think it was the "Spectator," and I questioned him about the matter. I will read what he stated to the Committee:—This applies to trustees equally with Government officials. Suppose a trustee is engaged in selling a house for his cestui que trusts, and that a particular purchaser has a special reason for buying. It is known that lie would give a large price rather than go without the property. But he comes to the trustee and says, 'You arc taking advantage of my very peculiar position. Cannot we agree on a fair price and I will arrange to put something in your pocket?' Was any suggestion of that kind made to you by anybody?—No suggestion whatever of that kind was ever made to me by anyone.Directly or indirectly?—Directly or indirectly.In asking you that, I am asking you not only as to direct passing of money, but any indirect advantage?—Certainly I think it is well understood by the Post Office contractors that if any attempt of that sort is made all our dealings with them stop at once; they are struck off our lists. We have had cases. We have had cases where a contractor has offered money to our men. We have bad more than one. We have at once struck that man from our list, and I think it is very well known that that will happen if ever money is offered, or a consideration.The rule is perfectly well understood that not the slightest favour must be 455 accepted by any official from any person in the position of a contractor to the Government. I quite agree that it is not possible to lay down an exhaustive definition of what is impropriety. I do not propose to attempt it, but I think there are two tests which may often be usefully applied. Do you put yourself in such a position that your public duty may easily conflict with your private interest? And, is your transaction perfectly open and disclosed, not only to your official superior, but to the public at large 7 I cannot help feeling myself that if you apply these tests to the transactions of some Members of the present Government, it is impossible to avoid the conclusion that they were gravely improper. Did the Attorney-General and the Chancellor of the Exchequer get an advantage from Mr. Godfrey Isaacs 7 I do not think there can be any doubt about that. The Attorney-General said with great warmth that he received no favour, but really when you come to look at the evidence, is he warranted in making that statement 7. I should like to quote one passage from the evidence of Mr. Harry Isaacs.
At page 328 of the evidence the House will see that it is not open to doubt that unquestionably Ministers were offered an advantage.He asked him (Mr. Godfrey Isaacs) how he came to be able to dispose of those shares; how it was that he had this quantity of shares that he could offer to us without doing any harm or taking advantage; why he did not give them to somebody. else; how it was he could deal with them in this way; and how it was he was free to offer them to us?I do not understand what you mean by without doing any harm or taking advantage'? Whether someone else had any right, and he wanted to know how it was he could offer them to us in this way, and give its the preference.Is it really in dispute with that evidence, that both the Attorney-General and his brother knew perfectly well that the offer of Mr. Godfrey Isaacs was not an offer the same as was made to anybody else, but was a preferential offer.
§ Lord ROBERT CECIL
The hon. Member is perfectly right. He did not accept that offer, but he had the information. He was told of the contract with the Western Union, the Cable Company, a contract to which Mr. Godfrey Isaacs himself attached the most importance of any of these transactions. Furthermore, he was told that it was not public property. He 456 was told that it would be made public property, but at the time it was not. He did not accept it, but his brother, Mr. Harry Isaacs, saw him several times, and pressed him over and over again, three or four times, to take this offer, and at last, on the 17th, he bought the shares, not it is true, at 1 1–16, but at a price which in the then condition of affairs was perfectly certain to yield a profit. There is no dispute about it. The Attorney-General himself said that he proposed to sell half of them if the shares should rise, and he did so. He got the shares from Mr. Harry Isaacs. He got them in consequence of the advice and information given him by Mr. Godfrey Isaacs. He got that advantage from a gentleman who was a contractor for the Government, and he got it at a time when the contract was not signed. It has been put by the Chancellor of the Exchequer that as far as business matters were concerned, the contract was completed on the 7th or 8th of March, but I would remind the House of the evidence which was given very strongly to us by Mr. Godfrey Isaacs on that point. He said that the moment he came back from America he was told over and over again—he could not tell us who told him, because so many people were telling him: everybody who came into his office was telling him—that a very strong attack was going to be made upon that contract by a very influential syndicate in which Members of Parliament were concerned. I do not care whether the story is true or not. It was the state of mind of Mr. Godfrey Isaacs.
It is quite true that Mr. Godfrey Isaacs told us that he did not believe it at the time; but it is also true that it showed that it was perfectly possible, to the knowledge of Mr. Godfrey Isaacs at that time, to, stop the contract, that he believed, at any rate, that such an attempt might have been made then, and therefore it was an entire misapprehension to regard the contract as safe in the sense that it could no longer run any danger. I quite accept anything that the right hon. Gentleman said about it, but he asked me rather pointedly how I could justify an observation in that report about Mr. Godfrey Isaacs, in which I suggested that it was impossible to be certain that Mr. Godfrey Isaacs, in making the offer, which he was making to his brother, was only moved by fraternal affection. I have not the honour of the acquaintance of Mr. Godfrey Isaacs. The Attorney-General knows him. He is 457 able to make a psychological deduction, which I cannot make without knowing the gentleman. I only know what the facts were that were proved before us: that a very large offer indeed was made to the Attorney-General, any amount up to 100,000 shares, and that, as far as I understood, if that offer had been accepted it was contemplated by the parties at that time that it would produce a profit of about 50 per cent. The House knows that it would have produced a very much larger profit, but I take the facts as told us at that time. We were told further that there were rumours of great opposition; that Mr. Godfrey Isaacs, at any rate, knew that the contract was not safe.
We were told further that he had the other 250,000 shares which he had given to Messrs. Heybourn and Croft, and agreed with them that a considerable amount of those shares—I am not at liberty to tell the House bow many—were to be given to the stockbrokers on ground for return in order to secure a free market. Those were offered on ground for return to a man who was both the brother of Mr. Godfrey Isaacs and the Attorney-General. I cannot myself, looking at the facts as they now appear to me, see that it was an uncharitable or improper deduction to say that you cannot be certain that Mr. Godfrey Isaacs was only moved by fraternal affection. It may be asked what is the materiality of this? It is this—that whether my deduction about Mr. Godfrey Isaacs is true or not, obviously if you are to sanction a transaction of this kind, you are sanctioning a precedent which may give rise to transactions with a complexion as bad as any you can imagine they have on the facts which I have told. If it is right to say that a contractor may offer to a Member of the Government—and I think that the House must disregard the relationship from this point of view—anything up to 100,000 shares, making some £20,000 or £30,000 profit, and if he is allowed to take them, then there is no limit to the corruption which may be introduced.
I do not wish to say much as to the identity of the American and the English companies. I do not say that that amounted to a grave impropriety. I do say that it is hardly for a Member of the Government to have taken shares in the American company, in view of the very close relationship which existed between that company and the English company.
458 I do not want to go into elaborate detail of the connection between the two companies, but no one who reads the reports of the two companies will doubt that the whole system was the parent company in this country, and a number of subsidiary companies all over the world working the same system, and no one doubts that the identical patents used here were being used in America, and that if you had any great injury done to the reputation of the patents here, it would react on the value of the patents in America. We receive almost by every post circulars from enterprising tradesmen who tell us that such and such goods have been ordered by this or that distinguished person or body, and I suppose they find that the patronage of distinguished persons or bodies is valuable to them in their trade. What more can you ask in this line than the patronage of the British Government in a matter like wireless telegraphy? And if the American company is able to say that this system, as it exists in America, and as it exists also in great Britain, has been selected by the British Government for the establishment of the great Imperial chain of immense strategical Imperial importance, does anyone doubt that that would be, if I put it no higher, an advertisement of the utmost value to the American company No one who gives his mind to it with any impartiality can doubt that the contract by the British company was of very great value to the American company also, and in those circumstances it was undesirable for Ministers to have shares in that company. What is the answer? We did not know anything about those things.
Mr. MacCALLUM SCOTT
Is the fact that an advertisement is given to the Marconi patent the only reason for stating that the American company was interested in this company?
§ Lord ROBERT CECIL
I would not like to say that that was the only reason. There was great identity of management between the two. The whole credit of the British company was employed to carry through the reconstruction of the American company. There were three directors common to the two boards. The English company had a large number of shares in the American company. They were constantly referred to in the circulars as belonging to one another, as subsidiary companies, and, in addition, there was this important factor, that any great 459 increase of wireless traffic which was brought to this country and carried from this country by wireless across the Atlantic to America would inure to the benefit and advantage of the American company. I do not want to deal with it too elaborately, but I am very glad to satisfy the hon. Member as far as I can—I am not sure that I have satisfied him—by answering any of these questions. But that was the situation. What is the defence by both Ministers It was that both the Attorney-General and the Chancellor of the Exchequer entered into these transactions without appreciating what they were. If you deal on the Stock Exchange, and if a Minister selects for dealing the shares of a company of a notoriously speculative character, as it was at that time, which bears the same name as a company with which the Government is contracting, I think you do it at your peril. You are bound to inform yourself of the facts of the case. But here, again, I quarrel with the whole line of the defence, which goes to the question of whether the Ministers were personally wicked. That is not the point. The question is whether the precedent which they set up is a bad one. We cannot look into their minds, but I say that if you are to sanction this precedent, and say that transactions between Ministers and companies in those circumstances are harmless and unobjectionable, you are setting up a precedent which may lead to grave financial irregularity and possibly corruption.
The Attorney-General asked my Noble Friend what he meant exactly when he charged the Government with concealment. There, again, I do not want to enter into the ethical aspect of the question, but I want to say that right from the date when they made those transactions in August, and in October, and right through the months up to the time when Lord Murray left this country, and right on until the "Matin" case, the Ministers never made a disclosure of this transaction. It is no use saying that they offered to come before the Committee. The Committee issued, as every Member of it remembers, and as the Chairman recites in his Report, an invitation to all those who had information dealing with the transactions of Ministers, to bring it before the Committee without delay. There was no objection and no difficulty whatever in the Ministers writing a précis 460 of the evidence they were prepared to give to us and sending it to the Chairman in any of those months. I do not want to go into questions of suspicion, but I am forced to add that I cannot accept the view put forward by Ministers as to what actually took place in the "Matin" case. I accept the statement that they were advised by their counsel that the evidence of the Chancellor of the Exchequer's transactions was not relevant to the "Matin" action. I should have thought, if the matter had come before me professionally, that a good deal of the evidence in that case was irrelevant. But the point is that even the evidence which they did give was not as full and as frank as it ought to have been. The Attorney-General did not tell the Court from whom he bought the shares. I do not charge him, and I do not wish to charge him, with a desire to deceive the Court or the public, but I say that it is impossible to resist the conclusion that there was, from whatever motive, a shrinking from full disclosure of those transactions.
I quite agree that part of the secrecy has not been due to the Ministers. I think they have been badly served by hon. Members who formed the majority of the Committee. I think it was very unfortunate that there was any appearance of concealing or attempt at concealing or limiting the evidence put before the Committee. I do not know how it strikes other hon. Members, but I cannot help thinking that if a person for whom I have great respect and admiration were accused before a. Select Committee, and any Member of that Committee, much less any considerable section of it, considered some particular evidence was desirable, even though I should not accord it strictly relevant, 1 should say, "Call it, and let us hear everything." Certain charges were made against two hon. Friends of mine. We immediately said, "We must know whom you charge, and what is your evidence; you must call every man who suggests any charge," and we were not satisfied until it was proved up to the hilt that there was not a word of truth in the suggestions that were made. Finally, there is Lord Murray. My hon. Friend has pointed out that he is away, but I do not think, considering all the circumstances, he is entitled to a very great deal of consideration on that account. He is away, and I do not wish to say anything here, but the House will remember, of course, 461 that he elaborately concealed the American Marconi transaction which he had on behalf of the Liberal party's fund. He went so far as to take it in his own name, and to treat as his own for the time being shares which he had bought on behalf of the Liberal party. He did not even tell the Patronage Secretary of the transaction into which he had entered. I do not want in this particular Debate to make a charge against Lord Murray in that connection, but surely it does throw a light on what Lord Murray thought about the nature of these transactions. That he was ready to take—let me use a very useful word—so unusual an action as he did with regard to these shares must have been because he was convinced that they were not the kind of shares into which the Liberal party, or any Minister a fortiori, ought to have put money. That is all I have to say on that question.
I have been told that in the Report which appears in my name I have endeavoured to make the worst of the charges against Ministers. I have no doubt that is what hon. and right hon. Gentlemen think. I do not complain of it. It is very natural that they should think in that way of a political opponent. But it is not true. I can assure hon. Members that if I had really wished to make a flaming Report against them I could have said a great many things which I did not say, because I thought it would not be fair to put in the Report what I considered was not supported by evidence. I am quite willing to tell any hon. Member frankly some of the things which I did not put in the Report, and in regard to which I do not think there is sufficient evidence on which to put them before this House and the country.
§ Lord ROBERT CECIL
I shall be very glad to tell the hon. Member privately, but I do not think it is fair to state in public what I do not think there is sufficient evidence to justify my putting into the Report.
§ Mr. SPEAKER
The hon. Member will have an opportunity to reply. He is not entitled to interrupt because he does not agree with -what the Noble Lord has said.
§ Lord ROBERT CECIL
I cannot satisfy every hon. Member, but if I satisfy some of my opponents I must rest content with that. I did state in the Report quite plainly and as clearly as I could what I thought was proved by the evidence. There has been certain criticism of what I have said, but I have not yet seen any statement that what I have said is not supported by evidence given before the Committee. I believe the danger the Committee had to guard against was a very great and a very real one. It is not that we charge Ministers with corruption. Good heavens! we have not got to this point, that because we cannot charge Ministers of Great Britain with corruption, therefore we are told that we are raking up mere trivialities in order to make out a case, or a particular charge of financial impropriety, which is a very grave one. It means that there is in the transactions that we arraign the danger that pollution will creep in. Hon. Members know perfectly well that when the question of a water supply is being considered for a great town, if there is any evidence of organic impurity in the water the supply is rejected. I ask that the same principle should be applied to our public life as is applied to the water supplies of our great cities. I wish, finally, to put this before the House. Anyone who really considers the condition of politics in which we are now, must feel that the danger of corruption in public life is likely to be greater rather than smaller in the near future. I speak quite frankly, and I hope I will not be misunderstood in anything I say. I do not think it matters which party comes into power, in any case the character of the legislation in the near future is likely to lead to the danger of corruption. If hon. Members opposite still remain in power, whether the Liberal or the Labour party, it means what they call social reform or Socialism; it means constant interference with individuals by the State. If right hon. Gentlemen on this side come into power it means the change of our fiscal system, which, by the admission of every fair-minded man involves a certain danger of corruption. [HON. MEMBERS: "Oh, oh!"] I am quite sure that my right hon. Friend who leads the party will agree with me. I am quite sure that everybody who knows anything about it will agree with me.
I do not think myself it is the greatest danger of corruption we have to face; I 463 think the policy of hon. and right hon. Gentlemen opposite is more dangerous than anything ever suggested by my hon. Friends. What I wish to say is that whatever party it may be, and whether it means a change of fiscal system or social reform, it means greater interference with the individual by the State. Everyone will agree that that is the tendency of modern policy. Everyone who knows the history of corruption in the United States knows where the corruption began there. Everyone knows that it was not until the Legislature attempted to interfere with private interests that private interests replied by making attempts to corrupt Ministers. That is the danger you are in. Let us be quite frank. Poorer men are likely to be in Parliament in the future than in the past. I rejoice at that. But, of course, it adds to the danger of personal corruption. [An HON. MEMBER: "Why? "] It is not an accusation against anybody. You cannot corrupt millionaires. [HON. MEMBERS: "Oh, oh, oh!"] I do not believe there is a man in the House who does not know that what I am saying is true. Why is it that we pay large salaries to our judges 1 Why is it we have secured for our judges an impartiality and freedom from corruption which is an example to the whole world? One of the reasons of that is that we have always given so large a salary to the judge that the temptation to corruption is slight. Everyone who deals with himself fairly and truthfully knows what I say is true. Hon. Members who decline to believe its truth are merely playing with their consciences and common sense. Let us look things fairly in the face. The danger of corruption is not less but greater than before. Let this House of Commons think twice and thrice before it establishes a rule or sanctions a precedent which, however innocent it may seem to hon. Members at the present moment, will yet afford a precedent for corruption in the future.
§ Mr. BUCKMASTER
I beg to move an Amendment, of which notice has been given, to leave out from the words "This House," and to add instead thereof the words,after hearing the statements of Mr. Attorney-General and Mr. Chancellor of the Exchequer in reference to their purchase of Shares in the Marconi Company 464 of America, accepts those statements, and deems it right to put on record its reprobation of the false charges, of the gravest description, brought against Ministers, which have proved to be wholly devoid of foundation.
§ 8.0 P.M.
§ Mr. BUCKMASTER
: I would suggest to the hon. Gentleman to wait until I begin. I cannot help hoping, notwithstanding the interruption of the hon. Member, that, this Motion which I desire to move will express the feeling of the majority of this House. I cannot help thinking that it is in accordance with the spirit expressed in the speech, both of the hon. Member who moved and the Noble Lord who seconded the Motion, and indeed that spirit animated the more emphatic speech of the Noble Lord who has just sat down, because, after all, in these matters the real essence is not a question of party opinion. The essential question that we have to decide is one that no party formula can satisfy. It is a matter which party principles will fail to solve; it is a question upon which we, on this side of the House, are no less anxious and eager than hon. Gentlemen opposite. It is to see that the standard of honour and dignity of Ministers of the Crown is asserted and pre-served. Although in this principle there may be little between us when you come to consider the facts which bear on this matter, there is no doubt they are viewed on one side of the House, and on the other, quite unconsciously I dare say, entirely viewed through party glasses, and the result is that you look at your object exactly as you would look through a prism, in whichever side you look, you will see your object clothed in different colours, and formed in different shapes, and from neither side will the vision be true. It is my desire in the few remarks in which I shall recommend this Amendment, to attempt to restate as impartially as I can what are the real facts which were originally in controversy here, and why it is that I trust the House will think that the full and frank expressions that have been made by Ministers, both Ministers concerned, satisfy all that is desired and leave the House free to express what must be its unanimous opinion, although up to the moment the opinion has received but little voice from the other side of the 465 House of the complete repudiation of the charges which have been made against Ministers, and satisfaction that they have been found to fail.
In order that those facts may be regarded in their just perspective, it is necessary that you should look at them as they presented themselves to the Ministers at the time of the transaction. I do not accept for a moment the statement of the Noble Lord that by subsequent facts coming to light, which was utterly unknown at the time when the transaction was entered into, you have to judge the conduct of the man who made the transaction by the facts he never knew. You should look at them at a time when the transaction was in fact made, but there possibly even another way in which they may be more justly regarded. Look at them as they will appear when a few years, and it may be even only a few months, have passed away, when the swollen slanders will have shrivelled into their true insignificance, when the spite and the passion will have passed away, and when people will begin to wonder why it was that in by-elections this question occupied such a large part of the time of public controversy when surely greater issues should be pleaded and higher causes won. Looking back then, as these facts would be regarded, they are very small. There is the fact that on the 17th April, 1912, the Attorney-General bought from his brother 10,000 shares in the company known as the American Marconi Company. There is the transaction, and up to this time no one on the opposite benches has ventured to criticise that transaction excepting through the relationship of the American company to the English company. Is not that so? [An HON. MEMBER: "No, no."] What is the other criticism?
§ Lord ROBERT CECIL
The main criticism has always the complaint of private information received from the managing director of the English company.
§ Mr. BUCKMASTER
That I intended—the relationship of the English company and the Marconi Company, and the relationship of the managing director of the English Marconi Company in connection with the transaction. What I mean is this: If a transaction of exactly the same character had been in a company with which the English company had no concern and with which Mr. Godfrey Isaacs was not connected, is there any man then who is prepared to challenge the propriety of the transaction?
§ Mr. BUCKMASTER
Of course there is not for this reason: It would be sheer affectation on the part of hon. Members who sit opposite or on these benches to, affect to be horrified because a man purchased shares in a speculative undertaking. The only hon. Members from whom such a taunt would with justice lie would be hon. Members such as those who sit below me who belong to a party that sincerely attacks the whole system of society in connection with which such transactions may arise. Apart, then, from the character of the connection and the relationship of the managing director to the Attorney-General, there is no one who would find fault with the purchase of those 10,000 shares.
§ Mr. SPEAKER
The hon. Member is not entitled to interrupt; it is not necessary to answer every rhetorical question.
§ Mr. SPEAKER
I have already said these rhetorical questions are not necessary to be answered. The hon. Member will have an opportunity later on of answering.
§ Mr. BUCKMASTER
I shall look forward with interest to the exposition of faith of the hon. Member if he is going to inform the House——
§ Mr. BUCKMASTER
I shall look forward with interest to the statment of the hon. Member if he is going to assure the House that he regards the purchase of shares in an undertaking where the shares have a speculative value as an act of impropriety. Then the real question is the relationship between the two companies and the relationship between the Attorney-General and the managing director. Let me deal with the last question first. My disagreement with some of the conclusions of the Noble Lord (Lord R. Cecil) in his 467 draft Report does not prevent me realising the diligence with which he performed what was a difficult and, I am quite satisfied, a painful duty. But in this respect I think the Noble Lord has come to a conclusion which is an excellent illustration of the fact that I stated, that these facts cannot be fairly regarded if they are looked at with party bias. The Noble Lord's view of the transaction is that Mr. Godfrey Isaacs, having come over from America on the 8th April, ascertains at once there is a conspiracy on foot to attack the Marconi Contract, and consequently conceives this plan that he will use influence with his brother, the Attorney-General, to secure that the contract with the English Government shall be preserved. I can only say a more unfounded statement on the evidence, as I read it, it would be impossible to conceive, because, whatever the reports may mean, the evidence of Mr. Godfrey Isaacs himself is perfectly clear that he paid no attention whatever to them. Yet the Noble Lord suggests that while he paid no attention to those reports, lie considered that his brother was so mean and so despicable that he would be able, by asking him to lunch and offering him some shares at a future profit, to enlist his sympathies and his support in the Government on behalf of a contract that was in jeopardy I can only say such a conclusion ought not, in my judgment, to be reached except on the strongest and most cogent evidence.
In truth, the Attorney-General never bought those shares from his brother Godfrey Isaacs at all, and he declined to have anything to do with them at the price at which he offered them. When he bought them later on from his brother Harry, he did so at a price which the evidence, which I have carefully looked at, shows was the fair market price of those shares, so far as there was any market for them at the time. It is perfectly true to say that at that time the market was not open. It is perfectly true to say that you could not get a quotation for those shares on the Stock Exchange, but it is true to say also that the shares were the subject of dealing, and the price at which the Attorney-General bought those shares was the fair price at which they were being dealt with the day he bought them. The evidence is quite clear on that. If that is so, it is suggested that the Attorney-General should then have considered what was the intimate 468 relationship between the two companies. In point of fact, he said he was satisfied there was none. We are told that it was a mistake, and that he should have gone further and satisfied himself by the examination of documents and consideration of the deeds of the transaction that that statement was true. Why should he? The Attorney-General's statement, is unchallenged, that he regarded the acceptance of the tender as the completion of the transaction between the Marconi Company and the Government. That may be right or wrong, but that was his view. He was told there was no connection between the two companies. He did not make further inquiry, and I submit that it is straining political propriety to a point that will destroy the very thing you desire to preserve if you say under circumstances such as these, when subsequent events have shown there was a connection which he did not know, he is to be charged with having bought shares in a company which was associated with the company that contracted with the Government, and through the instrumentality of a person who was interested in carrying that Contract through. As far as the Attorney-General is concerned, there is the beginning and the end of what he did with regard to that purchase. He has told the House in the plainest language, if he saw the thing then as it is seen now, he would never have undertaken it. He has, I trust, satisfied the House, there is no reason whatever as the Noble Lord has suggested, that people should imitate this transaction, and that there should be further dealings of this kind which might give rise to scandal or suspicion. He has, I ask the House to say, offered a full and sufficient explanation of what he did, and a full and sufficient expression of regret that the occurrence ever happened. If that, be, true of the Attorney-General, the statement of the Chancellor of the Exchequer was equally ample. The Chancellor of the Exchequer's conduct in this matter is, I submit, unaffected by any of those questions of the relationship of the managing director. The Noble Lord does not agree. The Chancellor of the Exchequer did not buy even indirectly through the instrumentality of Mr. Godfrey Isaacs. He bought directly from the Attorney-General, who had bought from his brother, Mr. Harry Isaacs. There is nothing to suggest that the Chancellor of the Exchequer was influenced in any way 469 in what he did by information obtained from Mr. Godfrey Isaacs. The head and front of the offending of the Chancellor of the Exchequer, as suggested by the Noble Lord, is that he purchased securities of a speculative character. The Noble Lord went further, and said that he engaged in speculation. It depends entirely on how you use your words. The Chancellor of the Exchequer certainly did not speculate in the sense in which the Noble Lord desires the House to receive the term. He did not speculate by buying shares which he had not the money to take up. He did not speculate in the sense that he bought shares which he did not intend to hold. He may be said to have speculated, if you regard the whole of these shares and their movements as being of an uncertain and speculative nature, if you think this an investment of money in a concern in which the element of speculative price is involved. In that sense, and in that sense only, was there a speculation. There are the transactions, and there has been from both 1V1inisters, I submit, as ample and full a statement as I should have thought the House would have been glad to receive.
There remains only one thing more. It is suggested that neither of the Ministers treated the House with frankness in October last. In order to consider what led to their conduct then it is necessary to reconstruct the circumstances. Neither the Noble Lord opposite, nor any other hon. Member who has spoken from that side. has made any reference to the character and the extent of the rumours that were then afoot. We know that the contract was the subject of critical examination on expert and business grounds. Apart from that, these were the charges, as may be found in the evidence: That two Ministers of the Crown had made a million of money between them; that they had bought shares in the Marconi Company at 2, and sold them at 28; that the whole of the contract between the Post Office and the Marconi Company was a fraud; that the people who were engaged in the contract were thieves; that the transaction was in part an arrangement between people of the Jewish faith, who were desiring to support one another and to place their hands in the public till. These were the rumours that were not only being passed from mouth to mouth, but were being written in the pubic Press, and sold on the bookstalls. In October, I think it is right to say, these rumours were merely in the air. They had not got into the form of 470 written documents. I have not all the papers before me to enable me to judge that point, but I think my statement is correct. But the rumours had begun, as, I think, the Noble Lord finds in his Report, not after 7th April, when the Attorney-General bought the shares, but in January of the same year. This is in the Noble Lord's Report, I believe.
§ Mr. BUCKMASTER
This is the statement to which T was referring:—The Attorney-General asked our assistance to trace these rumours, and we did our hest to do so But we found great difficulties. Even the date on which the rumours became prevalent is doubtful. Some witnesses told us that they had existed as early as January or February.
§ Lord ROBERT CECIL
We who agreed to that Report rejected that evidence, and said:On the whole we are of opinion that the rumours did not come into existence to any considerable extent, at any rate, until after the dealings of the Attorney-General and the Chancellor of the Exchequer in American Marconi shares, and we believe that a distorted account of these transactions really set the rumours going.
§ Mr. BUCKMASTER
I was quite right in what I said. I said that it was stated that these rumours had come into existence as early as January or February, and that I thought the statement had found its way into the Noble Lord's Report. I shall be glad to know on what ground the Noble Lord disbelieved the witnesses.
§ Mr. BUCKMASTER
The Noble Lord said "witnesses." The Noble Lord's subsequent doubt as to the accuracy of 471 these witnesses may be well founded, but there was evidence to show that these rumours had begun and were being circulated before ever any of these transactions had been entered into at all. When the matter came before the House on 11th October, if the Noble Lord will refresh his memory by looking at the report of the Debate, lie will find that two charges, and two charges alone, were made against Ministers. One was in effect that they had sold their knowledge or used it for the purpose of making private profit out of shares in the English Marconi Company; the other was that they had been corruptly influenced to give the contract to the Marconi Company. There was nothing else. Surely the House is not being asked to strain its generosity too far, when it is asked to accept the statement of the Attorney-General that his mind was full of those two rumours, that his desire then was to meet them and nothing else, and that he hoped and expected that he would soon have an opportunity of placing all the facts before the Committee. After all, that is all the House is asked to do, because if that explanation be accurate, there is no lack of candour, and there is certainly no slight intended to the House of Commons at all. What is true of the Attorney-General is true of the Chancellor of the Exchequer. I could not help hearing with regret the criticism of the Noble Lord of what subsequently took place in the "Matin" case, because the Noble Lord suggested that there was a policy of concealment carried throughout that case, and that even at that trial there was a deliberate withholding of information which the public had a right to know. I cannot help thinking that one of the most regrettable circumstances in connection with the whole of this trouble is that anyone should have been found to justify rumours of the character I have described by references to the American Marconi transaction. It does appear to me to be a pity that in public life a public man may be accused of the grossest possible crime and that it may long afterwards be said by somebody in justification of a rumour: "Oh, there was something else you did which was of a suspicious character or which lent itself to suspicion"—innocently though it may be—"and consequently you have no reason to complain when you are slandered; you are to blame because if you had only told the slanderer the truth at the earliest 472 possible moment he would not have gone on telling lies."
The Amendment which I have proposed is one which does what the Resolution does not; it expresses reprobation at the charges which have been made and states that they have been proved to be wholly without foundation. That, at least, is a form of Resolution to which no hon. Member opposite can possibly refuse agreement. There is no difference in substance between the Amendment and the Motion except only this: that if the Motion is passed it will be recorded upon the books of the House, and it will carry with it—as it is intended to carry—grave censure upon two great public servants. It is that feeling that has made me speak with a sense of grave responsibility. Most Debates in this House, however bitter they may be, always lack the bitterness of personal feeling. However grave may be the issue no personal character is involved, and no personal attack is made. This Motion differs from those in that an attack is made on the character and position of two of the Ministers of the Crown. They are both of them members of the different branches of the great profession to which I belong. One of them stands in a special and peculiar relationship to myself. He is by his official position the head of our profession. It is a profession where competition is pitiless and fierce, a profession where few men win and many fail, a profession where the success of no man can be attained without the closest and most searching investigation of character and honour, and yet no one will dispute that the Attorney-General in gaining the position that he has gained has won not merely admiration, but esteem, honour, and affection from the men that he has outstripped and outdistanced in the race. I would beg hon. Members in this House who are anxious to maintain a high standard of public honour, and, at the same time, to avoid straining it so as to make their desire to maintain that honour a cloak for the gratification of party advantage, to see whether this Amendment does not meet all that they really desire to achieve.! I would ask of them not to persist in their Motion, which, if it succeeds, cannot fail to mar great public careers and cast upon the men's future a shadow which no length of succeeding years can ever take away.
§ Mr. WALTER GUINNESS
I do not rise to deal with the Amendment which has been put before the House: I only rise to make what is in the nature of a personal explanation on account of something which fell from the Chancellor of the Exchequer. The right hon. Gentleman brought against me a charge which I consider extremely serious. He said that the journal with which I was connected had made charges of corruption, without any substantiation, against Cabinet Ministers. I think that the House will bear with me if for a moment or two I explain my position in the matter, and remind hon. Members what really was published in the columns of the "Outlook." That journal, it is true, was the first periodical to call attention to the conditions of this contract. They began, in June, with an isolated article, and in July they started what was a long series of articles. Those articles dealt with the merits of the agreement: there was no accusation in these articles, arid no suggestion whatever of corruption. I have the articles here. We certainly dealt with the action, or inaction, of the Postmaster-General. We did not deal with his motives. We could not distinguish between those motives or say whether his inaction was due to inefficiency or favouritism. There was no sort of suggestion of corruption; and favouritism, after all, is a very different charge to that of corruption. Who is to say that he knows to the full the motives of any of his actions? If a man is friendly with any person, can that man say frankly that he is certain that his friendship did not sway his actions? A ground of our criticism was that the Postmaster-General was silent from the date of the tender on 7th March until 19th July. It is true that he spoke in May, but in that speech, as he himself admitted in October, he did not deal with the period of that royalty, or conditions of its termination. The company issued a statement on 7th March, saying that all the stations for the next few years required for the Imperial wireless scheme would be erected by the Marconi 'Company. They suppressed the fact that Australia and New Zealand were standing out. One of our grounds of criticism was the failure of the right hon. Gentleman the Postmaster-General to correct these omissions, and to that extent he was responsible for encouraging the boom. Anyone who looks at these articles will see that they looked at the matter from a City point of view, and 474 were in criticism of gambling. [An HON. MEMBER: "Oh !"] I do not know whether the hon. Member has read the articles: I do not think he has. [HON. MEMBERS: "Oh! "]
§ Mr. DEPUTY-SPEAKER (Mr. Whitley)
I would point out to hon. Members that the hon. Member for Bury St. Edmunds is making a personal statement in reply to matters which have been said, and I think that he should be allowed to proceed in quiet. Hon. Members can comment later on.
§ Mr. W. GUINNESS
I admit frankly that these articles did bring charges of inefficiency. I admit the charge of favouritism, but charges of corruption I do not admit. These articles of Mr. Lawson, who, I think, erroneously by the Chancellor of the Exchequer, was described as the editor of the "Outlook," did not specify the English company. The strongest writings of Mr. Lawson were in the "National Review," where he spoke of the American company and compared the gamble in its shares to the South Sea Bubble. He said that Ministers ought to be impeached, not for corruption, but for inefficiency. That is all I have to say in regard to the right hon. Gentleman's statements that the "Outlook" brought charges of corruption. Then the right hon. Gentleman said that the Committee was appointed owing to what the "Outlook" had printed about the rumours. I think I am in the memory of the House, though I was not able to take down the right hon. Gentleman's exact words. The Committee was promised before 11th October. I have carefully searched the files of the "Outlook" and I have had the assistance of another gentleman who is fully conversant with the matter, and we cannot find the slightest reference to those rumours before 12th October, after the Debate had taken place in this House on the 11th, and long after the Committee had been promised. That reference to the rumours was in the ninth article of the series and the eleventh that had been published, and that article, I will be quite frank with the House, did allude to the rumours. It stated that:—In Throgmorton Street, four names have of late been associated with the Marconi shares,and it talks about the rumours.
§ Mr. W. GUINNESS
I did not want to waste the time of the House. It said:—Three of them have already appeared prominently in these disclosures, and need not be repeated.And it goes on:—The fourth—the man behind the scenes——But I do not think that is really relevant. The next week the "Outlook" says as follows:—The deplorable personalities which gave a dramatic finish to the debate do not call for much notice here. Very little reference has been made to them in the `Outlook,' which dealt mainly with the merits of the agreement and the antecedents of the Marconi Company. But it is obviously due to the Attorney-General and the Postmaster-General that every journal which alluded to the gambling rumours should give equal publicity to their denials.That was the first reference and the second reference to the rumours. It, is therefore impossible to support the view put forward by the right hon. Gentleman that the "Outlook" started these rumours, because the Majority Report says they began long before these references, namely, in December, 1911, and January, 1912.
§ Mr. W. GUINNESS
I am dealing only with the personal charge that we were responsible for the rumours. The Minority Report shows that the rumours had no existence to any considerable extent until after tha dealings of Ministers. But they were mentioned long before the "Outlook" had mentioned the rumours. I think the Government must have lived in a vacuum not to have been aware of these rumours. It is impossible to overlook the fact that Ministers had been buying Marconi shares, and that that was known on the Stock Exchange, and it is easy to see how any Stock Exchange clerk might have occasion to know that Ministers were buying Marconi shares. All Marconi companies are closely related, and it is quite easy to see how the confusion arose. My point, and the only point I make, is in answer to the right hon. Gentleman's speech that we started the rumours. We thought, and I still think it was public policy to get these rumours contradicted. It would be disastrous to allow the idea to gain credence for one moment that official information could be used for private ends, and I think the appointment of the Marconi Committee was justified by this alone, that it has altogether dissipated that idea in the public mind—I am glad to admit it—and it has clearly shown 476 that private use was not made of information which came from official sources. I admit that frankly. The "Outlook" dealt with the matter, because one feels that any looseness of the rules which govern Ministerial and official restraint in the matter of investments is a matter of very great public importance. There are many people in possession of official information who are greatly tempted to use it. They often feel that they could use it without any effect to their employer or without in any way jeopardising the interests of their employer and without anybody knowing what they had done. They might well feel justified in doing that if such rumours were allowed to go about for six months absolutely unchallenged and without any prospect of contradiction. I thank the House for having allowed one to make this personal explanation which I think is due after the charge of having accused Ministers of corruption, and if it is true that the "Outlook" did something to close the door in time against that form of corruption, it is a matter of which at least am not ashamed.
§ Mr. JAMES PARKER
I re-echo the statement made early this afternoon by the Mover of the Resolution on the opposite side of the House by saying that it is not with any particular pleasure that I rise to take part in this discussion. After sitting on a Committee appointed to deal with the consideration of the circumstances leading to the agreement and to the fixing up of the tender between the English Marconi Company and the Government for something like seven or eight months and listening from my point of view day after day to matters which had nothing whatever to do with the points which were referred to us—I do not, of course, question the honour or the right of the Chairman to admit what evidence he thought fit; he has the power to do it—I say that the larger half of our time was occupied in listening to witnesses whose evidence had no bearing whatever upon the question we were appointed to inquire into. I agree with the Noble Lord the Member for Hitchin when he said that a Select Committee to go into business of this kind is about the last kind of body that should be appointed to investigate such questions. Of course T include myself with other Members. This House sets up Committees which represent various parties in this House in proportion to their numbers, and the temptation is very strong on the Part of the Members to 477 make use of such a Committee for party purposes. I say that anybody, whichever side of the House he belongs to, who has been watching what has been going on on that Committee, would be bound to admit that very largely our deliberations have been tainted with party prejudice and bias. Speaking for myself as I do here, and not for the party to which I belong, they will take their own action in this matter. We give a free hand, and we accept our responsibility—I am prepared to accept the responsibility for signing the Majority Report. I know that Report has been called a white-washing Report, but it is no more a white-washing Report than the other two Reports which are now before the House. It does not whitewash Ministers in regard to their American share transactions. It says there has been no corruption, and that has been said by the Noble Lord the Member for Hitchin, and it was stated in the Report which the Chairman of the Committee proposed. The question which this House is now discussing is not the corruption of Ministers at all, but the question of impropriety. Corruption has all gone. The Opposition, who were talking of corruption six months ago all over the country—[An HON. MEMBER: "Where?"]—and making every scrap of party capital they possibly could out of it——
§ Mr. PARKER
I do not think it is right to make use of a Committee of this House for party purposes. I do not believe, nor do the majority of the party with which I am identified believe, that serious matters of this kind should ever be used by this House for party purposes. If Ministers are guilty of corruption or impropriety or indiscretion, they should be brought to book on the floor of this House. But to use an occasion of this kind for party purposes, would take away all the advantage of bringing questions of this kind forward. The Report which the majority have 478 adopted, does not condemn Ministers for impropriety. I do not know what actuated the minds of other members of the Committee as to why they voted for the Report, but I tell hon. Members candidly, and I wish to speak through this House to the Constituency I represent, why I voted for that Report,' and why I am prepared to take responsibility for it. I say this House should be very jealous in allowing a Select Committee to lay down new rules of conduct in any way for Ministers or hon. Members of this House. That is a matter for the House itself, and it has no place in our reference. The House ought to decide that question, and the Report which the majority has presented deals with the relevant matters submitted in the reference to the Committee. Our Report does not hinder any hon. Member of this House from voting as he thinks fit after hearing the explanation of the Ministers concerned. I shall not attempt to take the House through the evidence which has been so freely quoted. I have heard enough evidence to last me a life time. I was delighted to hear the frank admission which the Ministers concerned made to-day because it does them credit. I would rather Ministers should themselves admit what I think is quite true, that they made a blunder and a mistake, and it is best that they should admit it instead of being charged with it. The question of public financial probity and a high standard of purity in this House is of as much importance to my colleagues 'and myself as to any other party in this House. I will not put it any higher than that. It is of great importance to all of us, but we have no right to make scapegoats and turn out into the wilderness two men who have done probably things a great deal less indiscreet, and a great deal less corrupt than has been clone continually in this House from time to time. [An HON. MEMBER: "Where?"]
Let us look at this question for a moment, and see what happens from day to day. There is the question of Members casting their votes in this House for things in which they are financially interested. There is the question of Members advocating the all-red route, increasing the supply of aeroplanes or armaments when they themselves are large shareholders in armament contracting firms. There is the question of voting for a Bill to raise railway rates, when hon. Gentlemen opposite get up in their places and say they represent this or that company, and they go into-the Lobby and "Lobby" Members and 479 shepherd them into the Lobby to vote for Bills which put money into their own pockets. It is suggested that we should not make party capital out of this, but that we should try and set up a Committee to arrive at some standard for Ministers' indiscretions. I admit the indiscretion in this case was a very grave one. That is my view of it; but that was no part of our duty. If this House is going to set up a standard of conduct in this matter, the kind of body to which such questions ought to be submitted should be a good deal more judicial than the body on which I have had the pleasure of sitting. I do not know how this House could set up such a body. Probably if I had as much money as some hon. Members, I might use it in pretty much the same way as they do. From my point of view, every man who buys shares with the object of making profit for himself out of a rise in price contributes no benefit to the community at all, and such a man is taking that which does not and cannot rightly belong to him. I do not expect this House to subscribe to that doctrine, but surely, if this House is going to lay down a code of conduct, it is not going to lay it down merely for Ministers. I admit that if we pay Ministers a decent salary they should be 'careful not to use their public position to advance their private interests, but equally the country has a right to expect, if it pays its Members £400 a year, that they will not go into the Lobbies to put money into their own pockets. I admit that when we vote our own salaries we do that and that taunt is often levied against its; but when the hon. Baronet votes for the Railway Rates Bill, he, in the selfsame way, votes for putting money into his own pocket. Therefore, I say, that my conscience is quite clear with regard to my attitude with respect to this Report. I am glad that the Ministers have made the statement they have made to-day. I am satisfied with that statement. I do believe that at the time they were foolish, but. I believe that they had no intention of either doing an indiscreet thing, or one which would conflict with their honour as Ministers of the Crown. Having heard the statements they have made, I am fully satisfied. Let the future decide whether the Report we brought in with regard to them is a worthy one or not.
§ Mr. MACMASTER
I, like the last speaker, am a member of the Marconi Committee, and I have endured the bur- 480 dens and the exertions which accompanied its operations for the last seven months. I propose to say a few words with regard to the Report and the Minority Report and the Motion which is more immediately before the House. Any of the rumours that have been put in circulation are simply distorted versions of rumours that practically have been created by the two right hon. Gentlemen who are charged here. It was on 17th April, 1912, that the Attorney-General tells us he bought 10,000 shares of American Marconis privately from his brother Harry and sold 2,000 of these shares to the Master of Elibank and to the Chancellor of the Exchequer. They say that they bought these for an investment. The Attorney-General says it was his intention to retain at least half of them; he expected a rise in the shares, and he intended to sell a portion of them in order to reduce the cost of his investment. The transaction took place on the 17th, and the public market for the sale of these shares was not open until the 19th April, two days afterwards. What happened on the 19th? Two striking things happened. On the morning of the 19th the Chancellor of the Exchequer sent a telephone message to his broker in the City, not to buy, not to sell, but simply that "he was interested in American Marconis." That message passed through two or three hands in reaching the broker's office in the City. Strange to say a remarkable coincidence happened. On the same day, at about mid-day, the Attorney-General sent a telephone message to his brokers, who were different brokers from those of the Chancellor of the Exchequer, is which he said he was "interested in American Marconis."
How are we to explain the circumstances of these two messages being sent to two different firms of brokers without any request. to sell or without any request to buy? What was the object of the messages? Surely it is perfectly plain, if information of that kind passes through several hands, and clerks and subordinates become aware of the fact, what they would do. They would pass on the tip to other people, stating, "The Chancellor of the Exchequer is interested in American Marconis. The Attorney-General is interested in American Marconis. Why should we not buy? The Government is, in fact, concerned." Many a rumour has less foundation than that, and in my view that is the real foundation of a great many rumours with regard to 481 Ministers being interested in Marconi shares. I do not wish to make any improper imputation. We are dealing here not only with the honour of the House, but with the honour of Ministers. Is it not a singular thing that messages of that character should be sent to a broker's office by two Ministers on the very same day at the opening of the Stock Exchange unless they had some ulterior motive? What that ulterior motive was it is not for me to indicate. I simply state the fact, mid it cannot be contradicted.
Mr. Godfrey Isaacs returned from the United States of America on the 8th April, after having made the arrangements there which we know about now. On the 9th April he met his two brothers, the Attorney-General and Mr. Harry Isaacs. What is his statement with regard to the rumours at that date. He says:—I would like to tell you. The first rumours I heard were in the month of April. Directly I returned from America I was informed that there was to be a very strong attack indeed upon the Marconi Contract; it was being talked about very freely.. … The Marconi Contract with the Government was being talked about very freely. I was told that there was a very strong syndicate which was promoting or had been endeavouring to promote a Poulsen Company, and that they were being strongly supported by very influential persons, amongst whom were some Members of Parliament who were going to assist them in preventing this Marconi Contract being put through. I took very little notice of those rumours at the time.At this very early stage in April we had the managing director of the Marconi Company stating that he had heard these rumours about an attack on his company. It may have been the same clay—it is not established definitely whether it was the same day or a day earlier or a day later—that we find him in consultation with his brothers, and what is the proposition he is putting before them? The Attorney-General said that these were communications between brothers. But it is impossible for us to ignore the fact that one was a public contractor seeking a contract with the Government, another was a City man of some financial position, and the third was the Attorney-General of the United Kingdom of Great Britain. We cannot ignore what passed between them when we consider what took place subsequently. The proposition put before the Attorney-General and Mr. Harry Isaacs by Mr. Godfrey Isaacs was this: That they should have the liberty, if they liked, to take 100,000 £1 shares in the American Marconi Company, which Mr. Godfrey Isaacs said 482 would be put on the market at an advance of 5s. on the £1 share, and that, in all probability, the shares would go up from 25s to 30s. That was, of course, a considerable profit, and that was the prospect held out. The proposition was that a direct benefit would accrue to these two men at that time. The Attorney-General very properly declined, for the reasons he has stated. But his brother took 56,000 shares, for which it appeared he was to pay the sum of £56,000. This brother, Mr. Harry Isaacs, saw the Attorney-General two or three times during the following week, and, in the end, the forecast of Mr. Godfrey Isaacs being realised, and the shares having advanced in value, the Attorney-General consented to take from his brother Harry 10,000 of these shares at the price of £2 per share. It must not be forgotten that in the first interview between the brothers, Mr. Godfrey Isaacs fully explained the whole position. It is true, also, he told them, that the American Marconi Company had no connection whatever with the British Marconi Company, and he pointed out all the advantages, so that when Mr. Harry Isaacs, on the 17th April, discussed the matter with the Attorney-General and asked him to take 10,000 shares, he had all the information with regard to the position of the American Marconi Company, and he had the tip for the purpose of purchase from the managing director of the British Marconi Company. On the expectation of a rise in the shares according to the tip received, the Attorney-General must have come to the conclusion that it was a wise thing for him to invest, and so he took the 10,000 shares.
That was the position at that time. Is it not a very remarkable circumstance that on the evening of that very day the Attorney-General, through motives of generosity, I assume, should have gone to the Chancellor of the Exchequer, the man who would have to provide the money for building stations for the wireless system, and for other expenditure in connection with it, and that he should also have gone to the Chief Whip of the Liberal party and should offer each of them to go in with him and share in the advantages he had that day obtained from his brother Harry, on the strength of information received from Mr. Godfrey Isaacs? He made a proposal to these two gentlemen; he explained the circumstances; he told them what Mr. Godfrey Isaacs had told him, and they, on the strength of that knowledge, determined 483 to take 2,000 shares between them. Let us go back to the statement of the Attorney-General, for we have to dissect his statement as well as that of anybody else who has given testimony He states that he intended to keep half of the shares as a permanent investment, and that he would sell—if the market advanced—the other half to pay for those he was holding. In the first place, he sold 2,000 to his colleagues—the Master of Elibank and the Chancellor of the Exchequer. Thus he had 8,000 left. But on the 19th April, what happened? What was the action of this investor on that day? In the first place he sold 5,000 of the remaining 8,000 shares. The sale was effected at about noon, and later in the day he sold 2,000 more, making 7,000 in all, while a few days afterwards he sold the remaining 1,000, so that he actually got rid of all the shares he took from his brother Harry on the advice of the managing director of the Marconi Company at over £3 a share. On the very first day, therefore, he sold every share he had, except 1,000 shares which he sold a few days later, and the profits of the transaction represented to him a sum in the neighbourhood of £8,000. I examined him myself and brought out these facts, and it cannot be contradicted that he parted with every share of the 10,000 a short time after he got them. If it was intended to be an investment, surely he would have kept part. But there can be no doubt about the sale of the shares. He tells us that he had a side arrangement with his brother Harry, that in connection with the selling of the shares there would be a proportionate distribution of the number of shares sold. But that is carrying the transaction a little too far. It is too remote. What this House is entitled to know, and what the country is interested in, is not what was contained in the outside arrangement with his brother Harry, but what he did with the 10,000 shares he obtained on the tip of the managing director of the Marconi Company, from the hands of Mr. Harry Isaacs, who was present at the original interview, and who subsequently became, as it were, an intermediary for the sale of the shares.
I am not particularly interested in following the transactions of the Chancellor of the Exchequer through all their details. But it seems to me it is quite preposterous to call what he did "making an investment." In the first place, it was admitted 484 by financial men, under examination, that the ordinary plain meaning of investment is this: You have some money to invest, and you invest it in something as an alter native to keeping ready cash. But how can it be said it is "making an investment" when you have no money to invest? The Chancellor of the Exchequer obtained, through the courtesy of the Attorney-General, a right to 1,000 shares, and the Master of Elibank also obtained the right to a similar number. No money passed. The Attorney-General told them they "need not bother about money." I do not wish to put a strained construction on his words. Doubtless he meant that the money was not immediately required, because the shares were not existing, and would not come into existence for a month, or perhaps a couple of months. At all events, no money passed between the Chancellor of the Exchequer and the Master of Elibank and the vendor, the Attorney-General of the United Kingdom, to this day, and, if they had all gone on to the market on the 19th April—Mr. Harry Isaacs, the Attorney-General, the Master of Elibank, and the Chancellor of the Exchequer—they could have sold every share they held for from 3½ to close on 4, netting on the price of issue a round profit of nearly £100,000. The transaction is almost incredible when looked at in its real perspective, and when one is able to see the whole play in detail as exploited through the medium of the Committee. Subsequently, it is true, the Chancellor of the Exchequer bought shares in the open market—some time later in May. I have very little to say with regard to that. I only make this criticism, and it is a very relevant criticism, that the hon. Gentleman who moved the Amendment said the Attorney-General considered the acceptance of the tender on the 7th March was a completion of the contract! Surely the Attorney-General knows better than that. Surely he knew that the letter sent accepting the tender was subject to what was stated in the tender, and that a formal contract would have subsequently to be executed. Surely he knew that that contract would be subject to the approval of Parliament, and that it would have to be ratified by this House. To suggest that the Attorney-General of all persons in the world regarded the acceptance of the tender as the completion of the contract is simply incomprehensible. [An HON. MEMBER "He did not 485 say that.] Yes, he said he regarded the acceptance as the completion of the transaction. Those were the exact words; I took them down at the time.
Mr. LLEWELYN WILLIAMS
The Attorney-General is not here. I do not know whether the hon. Member heard what the Attorney-General said.
Mr. LLEWELYN WILLIAMS
I understood you to say that the Attorney-General ought to have known that the contract had to be ratified. He said he knew it had to 13,2 reduced to writing, and that it had to be ratified, and he mentioned the Standing Order.
§ Mr. MACMASTER
The hon. Member is under a complete misapprehension. What I said was that the Mover of the Amendment stated that the Attorney-General regarded the acceptance of the tender as a completion of the transaction. The Mover of the Amendment gave that explanation of the Attorney-General's conduct in the subsequent proceedings after the acceptance of the tender. My hon. and learned Friend is under a misapprehension—a perfectly natural one I admit. I want to call the attention of the House to the conditions that prevailed after the acceptance of the tender. In the first place, no contract was signed for four months afterwards—not until the 19th July. What was happening in the period between the 7th March and the 19th July? Negotiations were proceeding—important negotiations, as the Chairman states in his Report—between the contractors and the different Government Departments, and between the different Government Departments themselves as to the terms of the contract. Indeed, not only were these negotiations important, but they were not fully completed until a few days before the contract was signed in July. Some of these negotiations related to the Department of the Treasury, because the Treasury made some strenuous representations about the impropriety of some provisions in the draft contract. There were also representations from the Admiralty as to the inadequacy of provisions with regard to the Admiralty. These negotiations were going on up to the time the contract was signed on the 19th July. During all that period, when they were hammering out the terms of the contract, and settling precisely the words in which 486 this important contract should be expressed, whose services to the State were more exigent and necessary than those of the Attorney-General, the chief law adviser of the Crown? The Attorney-General in examination told us that about two years before, in 1910, he was called in and asked by the Admiralty to advise upon a contract, and that whenever he was called in he came in. Imagine the circumstances. The Attorney-General, interested in these Marconi shares, which undoubtedly would be affected by the good or ill fortune of the British Marconi Company, might be called in to advise in a matter of difference between the company and the Government of which he was a Member! That, I submit, is a thing to be avoided, and it can only be avoided by the responsible administrators under the Crown avoiding not merely evil, but the very appearance of evil, and keeping themselves free to render service to the State whenever called upon.
We could not have a better illustration of that than in what happened later. The Marconi Company repudiated the contract. The Attorney-General was asked to advise whether or not they could repudiate it, and he declined, and very properly declined, to advise. He told the Prime Minister that he could not advise in the circumstances, on account of the rumours which were in circulation. He ought not to have been in a position of having rumours put about, so that his services should be available to the State whenever required.
The Mover of the Amendment said that we should look at the circumstances at the time when the investment was made in these shares by the Attorney-General and the Chancellor of the Exchequer. I thoroughly agree. That is absolutely right. But when we look at the circumstances, do we not see that an important contract was then in process of completion, and that it was not completed; and we can only judge men, not by their declared intentions, but by the inferences which arise from their acts. When we see a man deeply interested on behalf of this company in getting a contract signed, approaching responsible officials of the Crown, and putting before them benefits, and pointing out to them roads to profits. and when we see later certain officers of the Crown acting upon suggestions that have been made to take shares—it is true, at a higher price—may we not have our suspicions as to whether the tempter, at all events. I go no further than that—did 487 not intend to put a substantial money advantage in the way of those officers of the Crown in order to bias their judgment? I have endeavoured to give and to comment upon the facts, and not to deliver an opinion as to high policy or matters which concern affairs of State. I leave those things to my seniors, who are much better able to dilate upon them.
I want to call attention to the important fact that when the Attorney-General obtained these shares from his brother, Harry Isaacs, he was placed in a position of advantage that was not open to the general public. The skilled public, or a limited section of them, might have known how to do it. They might have gone to a broker, who would telegraph to New York to buy a few shares, and get them over to London on arbitrage terms; but the ordinary man, who did not know the ropes, would not know these methods. The Attorney-General was put in a position of advantage in getting this large block of shares at the price he did. As the Noble Lord the Member for Hitchin (Lord Robert Cecil) pointed out, the testimony showed that it would not have been possible in the New York market at that date to purchase so large a number as 10,000 shares. When the Attorney-General was asked about the position of advantage he enjoyed over the general public, he said this—the question was:—No doubt you did come in before the general public, did you not?The answer was:—No, not in any way in reference to him.I think that is in reference to his brother Harry.No, but you obtained these shares before they were available for the general public and at a price lower than they were afterwards introduced to the public?Yes. I think you can say that on their introduction here.It is perfectly true that afterwards to a certain extent he qualified that, but there is no important qualification of that condition. The stockbrokers explained that you could not go into the public market here and buy that number of shares at that time, so that the Attorney-General had that great advantage as against the general public.
I want to say two or three words with regard to these two companies and the interest one had in the other. To anyone who will look into it carefully it is impossible not to see the close business relationship between the two 488 companies. In the Annual Report of the British company they speak of their company in England being the parent company, and they speak of the American company as being the "associate company." They both operate the same patents. The British company owned the majority of the shares in the American company, are represented on the Board of the American company, and, in fact, put the American on its feet, because if it had not been for this reorganisation, which was carried out with British money, these American Marconi shares would not be worth half-a-crown in the £. So that the real power behind was the British company, and without the aid of British money the American company's position was utterly hopeless, because they were absolutely beaten in the race in the United States by the United Wireless Company. To pretend that there is no connection between the two companies, using the same patents which constitute their chief asset, and having the same object, the distribution of news and other messages by telegraphy through the Western Continent and the rest. of the world, seems to me to be absurd. I should like to read a sentence from the Annual Report of the British company, so that we shall see how the British company itself regarded the American company. I am referring to the Annual Report dated 31st December, 1911, which surely might have been accessible to these gentlemen speculating so largely in the shares of the American company.The agreement now entered into enables this company (that is the British company) in conjunction with the American company immediately to embark upon the erection of the stations which were opened up and a cheaper telegraph service to all these parts of the world.They further say:—Arrangements are now in progress. The work will be carried out as expeditiously as possible for the construction of stations, placing this company (that is the British company) in direct communication with New York instead of, as at present, passing through our station at Glace Bay, for the construction of stations at San Francisco communicating through the Hawaiian Islands, the Phillipines, China, and Japan, New York, Cuba, Panama, and subsequently with each of the South American States.That is a statement by the officials of the British Marconi Company, who were represented on the board of the American company, who own the bulk of the shares, and who until recently controlled, and, for aught I know, may now control that company. The connection is so evident that I am surprised that anyone should contradict it. 489 I have not attempted to make aspersions upon the character of any individual or to pass judgment on anyone. I join most heartily with the hon. and learned Gentleman (Mr. Buckmaster) in the eulogy he passed on the Attorney-General's career at the Bar and the prominent position in statesmanship of the Chancellor of the Exchequer, and I think we should be extremely guarded in any step we take in an important matter of this kind. He says we must be careful lest we should mar a great public career. That is very true. The public career of any man is very dear to him, but that only imposes upon him the greater obligation not to put that career in peril. But great as is the career of any individual man, greater still is the reputation and the tradition of this ancient and honourable House which we are bound to cherish and preserve.
§ Sir WALTER ESSEX
Perhaps it would have been, on the whole, better for those of us who were made members of this Committee to have remained silent throughout the whole of this discussion. It was my intention, and the intention of a number of my Friends on that Committee, to take no part in this discussion, but inasmuch as some of our colleagues, in the exercise of their judgment, decided that their view of the case should be presented by them even at this comparatively early stage, they will, I am sure, with all fairness allow some of us on this side of the House to make our statement of the ease as it has appeared to us. I have been thinking while reviewing the whole of this discussion, during the weary weeks in which I have had to listen to evidence submitted upstairs, whether if the position of all the questions involved could have been foreseen as we now know them, any of this trouble would have arisen. If we subtract the greater charges, as by common consent they are subtracted, from the discussion, is there enough remaining to have caused one-fiftieth of the excitement and uproar and smoke and noise and din which has gone on all too long. What is there in this matter? Let us look at it as businessmen. Is it at the worst, whatever it may be, at all equal to many transactions which have already taken place as between Members of Governments of the past and Members of this House? I can understand reluctance on the part of hon. Members opposite to my discussing it on that basis. If we were 490 starting afresh with the facts as we now know them it would be impossible to get up any degree of interest in this question, and, indeed, the whole thing has dragged its weary length over the public mind and interest simply because the slanderers would have it that there was nothing less than the grossest corruption behind all this talk. Someone has said that there was party spirit upstairs. I am afraid that is true. What else can we expect? After all, we who have got entrance into this House, with the exception of a favoured few, are men who came here after fighting for our seats. I trust the majority of us are here because we feel that the principles we hold dear are essential to the well-being of our country, and being of that temperament, and holding these convictions strongly, when we are faced with a question which has a political aspect, is it wonderful, whether we be Tory or Liberal, that it is impossible altogether even for the fairest-minded to keep a perfectly unprejudiced view and unbiassed judgment. But as I watched the discussion going on upstairs there was one thing I noticed, and that was the increasing bitterness as it proceeded. We have it in the Report presented by the Noble Lord the Member for the Hitchin Division (Lord Robert Cecil). It is regrettable as coming from him, because with his powerful intellect he hardly needed to resort to that. Let me give the House one vivid vignette. A witness was being examined as to the business of a brother. He was only the custodian of property temporarily for that brother. He was met with the question by the Noble Lord:—You are the private secretary, I believe, of a Cabinet Minister?What does it mean? It means that if this had not been ruled out of order, the question would have been followed by the dragging in of another name. When there was an attempt from time to time to stop that sort of proceeding, and we have been charged with taking up too much time in the discussion of the rules of procedure there has been the querulous complaint too often, "Oh! you want to shut up the inquiry." [HON. MEMBERS "Hear, hear."] I am glad to hear that one or two of my colleagues have not forgotten what took place in the Committee. The whole world that cares to take an interest in this matter knows that we followed out our inquiries far too widely. We were needlessly prolix and involved enough, and there was nothing in the least degree 491 related to the subject matter which was not probed to the very bottom, and to the full satisfaction of anybody who had a right to seek for information.
When we came to the consideration of our Report, one hon. Gentleman after another brought forward their literary effusions, and the question arose as to what we should do. I was one who hoped that we might have unity even at that late hour upon one common Report. I have said in the Committee, and 1 say in this House that even the Report of the Noble Lord the Member for the Hitchin Division might not have proved to b too strong meat if a little accommodation could have been found on both sides. My colleagues in the Committee who have sat longer in the company of the Noble Lord knew him a little better than I did, and they smiled at my ingenuousness. I had hoped that we should have been able to come to an agreement by the elision of one or two spots in his Report and the inclusion of one or two sentences to satisfy some members of the Committee. But the Report was not spotty, it was stained, and stained deep, and when you read that Report this conclusion will force itself upon your mind, as it has done upon my mind, and I doubt not upon the minds of many others. The measure of the bitterness in that Report, and the harshness of its judgment are wholly unwarranted by the evidence given before the Committee, and they are strong indications of the disappointment and chagrin of the whole movement, which sought nothing less than the destruction of a couple of men and the injury of the party with which they are associated. These are strong statements to make, but I believe they are warranted by the evidence submitted. If you look through the Cecil Report, which believe was signed by a goodly number of us—[Indications of dissent,]—I know that the worthy Baronet opposite (Sir F. Banbury) is an authority upon this matter. They take this Report and base quite a number of their condemnatory sentences by postulating the proposition "if" or "may," or "if this were the case," and so on. Our idea was to make a small and complete Report. We came to the conclusion that two things were not wanted, namely, a long recapitulation of the evidence and précis of our proceedings. and the other was that it should not be a mere expression of opinion on things which were not matters 492 of fact. Therefore we did present the country with a Report which will challenge the criticism of any fair-minded man when it is compared with the evidence upon which the Report is founded.
My predecessor in this Debate (Mr. Macmaster) made a strong speech about the American company and its relations to the English company. I do not want to go into the refinements of commercial associations. I want rather that this matter should be looked at as business men look at ordinary business transactions. Here is a company which is a parent company. Here is another company which is an independent company, but the offspring of the parent company. It is perfectly true, as my colleague said, that everyone of us would say that the parent company shared in the profits which accrued to its offspring, but it is not true in the general way of trade to say that the profits of the English company would benefit the offspring. It acts in one direction, but not in another, and the purchase of shares in the American company could not bring profit to their shareholders through what happened to the parent company, except, of course, in so far as the shareholders of the daughter company would be able to say that their greatest asset is a patent that has received the approval of his Brittanic Majesty's Postmaster-General. I know there is something in that. It is a matter of what we commonly call kudos, but an impression has been caused that there was financial advantage accruing from the parent company to the daughter company, and that they were inseparable and interrelated companies. It was said that the Attorney-General could not advise in a matter in which his advice was asked for by the Government because he had placed himself in this unfortunate position. That man, therefore, is to be injured by a calumny, and then blamed because he refuses still further to give opportunity to add to the calumny. The Noble Lord the Member for Hitchin, in an extremely eloquent speech in the Committee—I wish it was reported—said that one of the reasons that prompted him to take the line he did was that he desired to see the increasing purity of our public life in all its departments widened and hastened, and he therefore desired not needlessly to temper the stricture of his Report in this particular case. Into that sentiment, which is a lofty one, no one would enter more heartily than we, but I 493 would ask since when has this new attitude been adopted? When has it begun? Did it begin With the relations of the telephone service and the Government? Did it begin in shipping circles? Did it begin in the transactions for real estate? Did it begin in a whole lot of other matters? Certainly not. That, it should be desirable to lay down a new and far-reaching standard upon this matter, we should all be prepared to agree. But why associate that with the matter under discussion affecting these officers of the Government? We say that such a thing is insincere. There is an attempt to hang this great. question upon two persons at the very outset. Let the House see how great is the proposal that has been made. My Friend, who sat with us as representing the Labour party, pointed out how it is almost impossible to arrange that to which we are invited as by a side-wind to commit ourselves.
There is hardly a man in this House who might not conceivably be in some financial relations with the Government some time or other. It is said that we ourselves have acted in that relation as paid Members, but I would not hold it down to that particular point. I know that if you insist to the very utmost in laying down a law which will exclude all possible relations as between Members and the Government, you will probably have to stuff your House with persons whom you would take from the infirmary wards of your workhouse, who have neither property, not value in their labour. The question is not merely a matter of capital. It does not affect only the railway director or the director of a mining company or an oil concern. It affects the Labour party. It would affect those who would come here to fight for higher wages for those who support them, and send them here. So the House is to enter on a gigantic revolution in its affairs and constitution, and when you are invited to do that, it shows the extremes to which the Opposition has become committed. Our invitation to the Opposition is this: Let them join in appointing a body that shall authoritatively give decisions for guidance in all these things. We will help them effectively and earnestly. But let it be understood that as far as this matter is concerned they come up like gentlemen and say, "The thing is by no means as large as we expected. The most we can say of it is that there was indiscretion, and God knows that that is likely to happen to us all. That has been 494 acknowledged frankly and freely, and the trouble not being so great as we had expected, we rejoice in the knowledge that our House retains still among all the Council Chambers of the world its high peerless position unblemished, and believing that as we do, let the matter drop, while like English gentlemen, we regret that we have been led into a mistake."
§ Sir F. BANBURY
The hon. Gentleman who has just sat down has in his concluding remarks, endeavoured to lay down a rule which would apply to all Members of this House. It is a rather extraordinary rule, and he has apparently overlooked altogether the fact that Ministers are in a, different position from ordinary Members of this House, and that what may be foolish and inadvisable in an ordinary Member is certainly very wrong in a Minister of the Crown. The hon. Gentleman also told us that the Minority Report to which I have the honour of subscribing was a document tinged with party bias. Allow me to inform the hon. Gentleman what took place with regard to that Report. I did not draw that Report, and therefore if I say that in my opinion no more able Report has been presented to the House of Commons, I shall be in no way imputing the praise to myself. That Report was drawn by my Noble Friend the Member for Hitchin, and by my hon. Friend the Member for South Birmingham. But though that is so, that does not complete the whole of the history. The whole of the Unionist Members of the Committee for very many hours, one day from three o'clock until eleven o'clock, and on the following day went though that Report in order to see that there was not a single statement in that Report which was not borne out by the evidence. There was a statement in that Report which was put in by myself, and to which I attached, and do still attach, considerable importance, and which I believe was a correct statement, but on going through the evidence we found that there was a certain part of it which did not altogether bear out the conclusions at which we had arrived, and we cut it out. Therefore, I venture to say that that Report—I am not talking about the conclusion—was drawn in a judicial spirit, and was drawn entirely from the evidence which had been submitted to the Committee—the conclusions perhaps are a different thing.
We may have arrived at conclusions which do not meet with the approval of hon. Gentlemen on the other side of the 495 House, but to say that that Report was drawn in anything except a judicial spirit is quite incorrect. The hon. Gentleman went on to say that certain charges were made against the majority of the Committee., in 'which it was said that they had endeavoured to hush up the inquiry. I am rather sorry that the hon. Gentleman alluded to that, because I feel sure that on reflection he cannot deny that there was good foundation for the charge. I will give only one instance. When I was examining Mr. Heyburn, I asked him a question which was absolutely vital to ascertain the truth. I wanted to know to whom he had given these shares. I put it to every lawyer and business man in the House: How can you investigate who was really at the bottom of this arrangement between Mr. Godfrey Isaacs, Mr. Hey-bourn, and certain other people, unless you know what Mr. Heybourn had done with these shares? By a majority vote we were prevented from asking that question. That is evidence that the majority were not really animated by a desire to get at the truth. I was present in the House during the Debate on 11th October. I had heard in the City certain rumours as to Ministers speculating in Marconi shares. I did not believe those rumours, because—I am going to speak quite frankly—I could not believe it possible that Ministers could have been so foolish. When I listened on 11th October to the denials of the Attorney-General, the Postmaster-General, and the Chancellor of the Exchequer, I felt sure then that the rumours were wrong, and that the right hon. Gentlemen in question had never had anything to do with Marconi shares. It never entered into my mind to distinguish between the American and English companies. [Hon. MEMBERS: "Oh, oh!"] I am only telling what was in my mind. I will deal with the difference between the shares very shortly. It never entered into my mind to distinguish between the different shares, and with regard to the statement of the Attorney-General that on the 9th April he had no knowledge when it was Mr. Godfrey Isaacs told him that there was such a company as the American Marconi Company, I asked him how he reconciled that statement with the fact that before that he had sent a telegram to New York congratulating his brother upon the result of his meeting in that city. Why did Mr. Godfrey Isaacs go to 496 America? It was because the English company had dealings with the American company, and there was a question of infringement of patents. I will deal very briefly with the question of investment. It is a fact admitted by the Attorney-General that both the Master of Elibank and the Chancellor of the Exchequer were offered those shares at 2. Both of them asked about the payment, and the Attorney-General said, "Oh, never mind about the payment; that does not matter." It is curious to me that you can make an investment, and that you can make a purchase, having previously stipulated that you need not pay for it. Up to this date no payment has been made to the Attorney-General for those shares. That cannot be disputed. Then we come to the question as to whether or not the Attorney-General received any favour from Mr. Harry Isaacs on that occasion. I do not for a moment wish to distinguish between Mr. Godfrey or Mr. Harry Isaacs. That is too thin to hold water for a moment. On the 17th I asked Mr. Harry Isaacs when he saw his brother, the Attorney-General, and offered him those 10,000 shares. He replied that he did not remember the time exactly; it was after he left the City and before dinner.
Therefore it is very evident that the Attorney-General cannot have seen the Chancellor of the Exchequer and the Master of Elibank until after that, and that it was some time in the evening of the 17th that these shares were offered to those Gentlemen at 2. We all know that the Stock Exchange closes at four o'clock in the afternoon and that there are some dealings in the street afterwards. Street dealings rarely go on after seven o'clock, and never after eight o'clock, and then, I think, on very exceptional occasions. Therefore it would have been quite impossible for anybody in the ordinary way to have bought after about six or seven o'clock in the evening. In regard to a statement of the Attorney-General that he was getting no advantage in buying at 2, what happened? We have a great deal of evidence on that point which to my mind is perfectly consistent. The Master of Elibank on that evening bought 1,000 shares at 2. He was so impressed, I presume, with the advantage of the purchase that on the following morning he determined to invest a considerable sum of money out of the Liberal party fund in those shares. The Master of Elibank knew certain things which the 497 ordinary public did not know. He bought at 2, and on the following day the American shares had began to rise.
§ Mr. FALCONER
The evidence before the Committee was that in the night a complete change had taken place in the price.
§ 10.0 P.M.
§ Sir F. BANBURY
I think my mention of the evidence is perfectly correct. I do not wish to make the slightest exaggeration. A question was put by the hon. Member for York, and in answer the witness stated, according to my recollection, that the purchase was made in the afternoon of that day.
§ Mr. FALCONER
If the hon. Baronet will allow me, I would point out that the gentleman who made the investment on the instruction of the Master of Elibank on the 18th April said it was late in the evening on the date when they were bought. The question was asked:—And was that order executed that evening?—Yes;the order was executed that evening.
§ Sir F. BANBURY
I do not quite see what the correction is. On the 18th April the Master of Elibank had to give 3¼—that was for the party fund—whereas on the previous evening he bought at 2, and the difference between that and 3¼ is very considerable; it means 325 as against 200 for What he had bought for himself on the previous evening. That shows it would not have been possible for the ordinary person to have bought at 2. I would not attribute corruption to any of the right hon. Gentlemen who were charged, and in that I follow other hon. Gentlemen who have spoken on this side. My definition of corruption is taking a bribe or a valuable consideration from a person in order to do something which you have no right to do. I do not think that there was any proof that any of the right hon. Gentlemen proposed to exercise their vote in any manner inconsistent with their duty to themselves and to the public. But because I believe that of these three right hon. Gentlemen, it makes it all the more incumbent upon the House of Commons that it should see that this does not become the common practice. It must be remembered that the Attorney-General was for a considerable time a member of the Stock Exchange, and therefore he knew perfectly well what was the feeling of the City on these matters and what were the custom and practice of certain people upon these 498 matters in the City. I would like to recall to the memory of those of us who are old enough to remember what took place some seventy-five or seventy-six years ago. About that year a Committee of this House was appointed to inquire into proceedings relating to the issue of foreign loans. There had been a considerable amount of speculation in foreign loans. The public had lost a great deal of money, and rumours were floating about that certain leading journals had put into. their City article a certain recommendation which had been made in the interests of some of those financial houses which were floating those loans.
A Committee of the House of Commons was appointed to consider this matter, and anyone who will look at the evidence will find that it came out clearly that a gentleman, called Mr. Sampson, who was then City editor of the "Times," had been in the habit of receiving preferential treatment from certain City people—that is to say, we will suppose I was desirous of issuing a loan which I did not think would be very likely to be taken by the public unless it was well puffed. I do not go to Mr. Sampson and say, "Here is a cheque in order that you may do so." Certainly not. I do riot even offer him a share in this loan. I go and say to Mr. Sampson, "I am going to bring out a certain loan (not connected with the loan which I wanted puffed). This loan is now at a premium, and I will put your name down for a firm allotment in that loan," and Mr. Sampson could go and sell on the market, knowing he would get the profit for which he would sell. Nothing passes between us as to what is going to happen, but it is perfectly well understood, having received a favour, it would be perfectly open to me to say, "I am going to issue a loan, and, of course, you and I are very good friends, and I hope you will regard the issue favourably." That is what happened, and that is the danger of what might happen now. I sweep aside all question as to whether the Marconi Company was the same as the English company. It does not matter a straw. The point is, Mr. Godfrey Isaacs, who was desirous of obtaining from this House ratification of a contract which would put into his company's pocket, and probably into his own, a considerable sum of money, offered preferential advantage to three. right hon. Gentlemen in this House.. [HON. MEMBERS: "No, no."] I say he did. I say that the evidence proves it—offered 499 preferential advantage—[HON. MEMBERS: "No, no."]—to right hon. Gentlemen in this House, whose votes would have been very useful to him. Those are plain facts. HON. MEMBERS: "No, no."]
I only want to add one word more, and I am sorry to have to say it: this House must receive with considerable hesitation the evidence of Mr. Godfrey Isaacs. Mr. Godfrey Isaacs was asked by the hon. Member for Clapham (Mr. G. Faber), whether there were any options given in these various deals which had taken place, and he said "No." Then when we came to see the contract between the United Wireless Company and the American company, which we only got after a great deal of difficulty, and after a considerable amount of opposition had been put by the majority of the Committee against our getting it, we came on the fact that in that agreement there was an option, and a large option, for the English company. On page 303 of the evidence, Mr. George Faber asked:—Was there any option, or was it an -and-out deal?and the reply of Mr. Godfrey Isaacs was:—No options. I have told you the conditions.In face of that, I venture to say that the evidence of Mr. Godfrey Isaacs must be received with a considerable amount of caution, and it was this gentleman who offered to the Attorney-General the opportunity of making a sum which might have been £100,000. I have endeavoured to put the case as it appears to me. I have had something like thirty or thirty-five years' experience of business in the City, and I hope hon. Gentlemen opposite will give me this credit, at any rate, that I am honest in my desire., although I may possibly be misguided, though I do not think I am. I went on that Committee determined to do my duty and to act in a judicial capacity, and in no way in a, party capacity, and that endeavour I hope that I succeeded in maintaining. I regret very much this incident. I am sorry the two right hon. Gentlemen concerned did not at once say they had made a mistake without introducing all the various side issues which they did introduce. I hope that the House will take a proper view and a serious view of this, and will say that they regard it as serious, even though it was a mistake without any intention of doing anything wrong, that those three Gentlemen did accept a favour—[HON. MEMBERS: "No, no."]—from a gentleman 500 who was about to get a contract from the Government.
§ Mr. HERBERT SAMUEL
My intervention in this Debate need only be a brief one. I do not propose to follow the hon. Baronet (Sir F. Banbury) in his argument, nor, indeed. do I intend to deal with the main subject which is before the House to-night, but I would venture to ask the House, if I may respectfully do so, to allow me to make a short personal statement on the matters that concern myself in the transactions relating to the Marconi contract, which are now under review. Let me say at the outset, so far as I am concerned, the charges which are made to-day are of a very different proportion and of a very different nature from those to which I have been subjected during these long months. Those accusations and charges have, so far as they relate to me, gone through many stages. At first my name was bandied about in the City of London and elsewhere as a Minister of the Crown, who, being charged with the duty of making a contract for a State service of wireless stations, had himself invested in the shares of the company which was to enter into such a contract, and had made large financial profits from his prior knowledge of what was intended; and, whatever the hon. Member for Bury St. Edmunds (Mr. W. Guinness) may say, it is the fact that his newspaper did give publicity to those statements. In a veiled way, so veiled as to secure immunity in the Courts and with that deliberate purpose, it indicated that I was one of the Ministers concerned in these transactions, and when Mr. Lawson, who is now regarded in the light almost of an injured innocent, came before the Committee, he was obliged to state that one of the three Cabinet Ministers whom he had indicated as engaging in financial transactions in shares of this company, was myself, the Postmaster-General. As the House is well aware, that was simply a lie, and if it be said that the investments, purchases, or what you like to call them, of my right hon. Friends in the American Marconi Company's shares were in any degree a justification for the shameful slanders and calumnies that were made current with regard to them, can any man suggest for an instant that they offer the smallest justification for making charges with regard to me?
For the first time an opportunity of dealing with these matters in the light of day 501 was given to me when a French newspaper—no English newspaper had ever done so—printed in its columns the deliberate assertion that I and the Attorney-General also had had investments in these shares. Instantly my right hon. Friend and I took the case into Court, and we were able there for the first time to deny on oath that either of us had invested in the British Marconi Company. That having been disposed of, it was still asserted, not, indeed, by Members of the House, but outside in some quarters, that even if I myself had not invested in the Marconi Company, nevertheless I was biassed in its favour, because relatives of mine had invested in the shares. As soon as that accusation could be investigated on oath, it also was denied and proved to he equally a falsehood. Still men were disposed to say that necessarily I must have been inclined to favour the Marconi Company on the ground that one of my colleagues in the Government was brother to the managing director of the company. I should like to ask the House to consider what in their view my position ought to have bezen in the presence of the facts presented to me when I was called upon, in pursuance of my duty, to make a contract for wireless stations. All my experts advised me that at that time the only company capable of carrying out the work required was the Marconi Company. I accepted their view—I am not an expert on wireless telegraphy myself; I make no such claim—accepted their view, and their view has been amply justified by the Report of the expert Committee Presided over by Lord Parker, whose impartiality no one has sought to question. That being the position, was I to say, "No, I will have no dealings with this company, although I am advised that it is the only company capable of carrying out the work, because the managing director has a brother who, subsequently to his becoming managing director, owing to his own brilliant talents, was offered and accepted a post in the Government of the day"?
Let us take a parallel case. Suppose I am making a mail contract. We have to make mail contracts every few months with shipping companies. Suppose there was a shipping company which was obviously the one which had the best and fastest ships for carrying His Majesty's mails to a certain quarter of the globe. Suppose I found not, indeed, that a director of such a company was a Member of the 502 Government of the day, for that is now impossible, but, as might easily happen to be the case, that the Managing Director or Chairman had a, brother who was a member of the Administration. Ought I then to say, "No, I will send these mails by a slower and less efficient service, because I will not lay myself open to the accusation that I may be giving the company too favourable terms on account of this relationship with a Minister." Obviously I should be falling short of my public duty if I took any course of the kind. One thing ought to be done in such circumstances. The Minister in charge, the Postmaster-General, ought to say to himself, "In view of the special circumstances of this case I shall not by word or deed bring this relative of the managing director into the negotiations at all, unless it is necessary officially to do so." That I did with respect to this contract. Never from beginning to end did the Attorney-General and I have one single word of conversation or any communication, directly or indirectly, with respect to the negotiations that were proceeding between me and the company of which his brother was managing director. Let me say further that this was stated on oath in the Courts of Law and before the Committee of this House by representatives of all the great Departments of State concerned—the Admiralty, Treasury, War Office, India Office, Colonial Office, all concurred in the terms, all were consulted on the negotiations, and none of them saw the slightest evidence of any influence being -brought to bear upon any one of them to give terms unduly favourable to the contracting company. Those were the charges that were made in regard to myself. I am not complaining, though I need hardly say that I felt them deeply. But let that pass? We come now to the floor of the House. The Opposition put down an Amendment dealing with this question. What is there in that Motion concerning me Not one word! In the Report of the Noble Lord there are two paragraphs dealing with matters which he himself has described as relatively small, which relate to myself, and which it is necessary for me to trouble the House with a brief reference to. In the first place, the Noble Lord draws attention to the fact that the company, when it issued its circular in March, stating that its tender was accepted, did not also mention the fact that if we desired to instal another system in place of the 503 Marconi system at any time we had reserved to ourselves the right to do so. That is a clause in the tender which we put in for the protection of the Government, which we thought was an important clause as a safeguard, and which I still think is a very important clause as a safeguard; but which I have not thought was a clause in fact likely to be acted upon. It may in the future be acted upon. I cannot say. Possibly as the years go by it may be that some other system will have proved its superiority, not merely to the Marconi system of the present, but to the Marconi system as it may have then been developed. We may take out the Marconi apparatus, as we have the power to do, and instal something else. But I have never regarded it as a clause which was likely to be put into operation.
We have also in the contract a clause to the effect that if the Marconi Company's stations are not able efficiently to communicate over the whole distance required for the purposes of the chain, they are to receive nothing in payment. That also is a necessary clause, but I do not think it is a clause which is likely to be brought into operation. When the company issued their very brief notice to the shareholders saying that their tender had been accepted for so many stations, and at such and such a price, it is true that they did not insert either this one provision or the other. At that time there was no gambling. There was no great Stock Exchange excitement about the Marconi shares, which afterwards sent them up to the figure of 19. There was no question of any investments by Ministers. My attention was not drawn especially to this circular. I probably read it when it was issued. Nevertheless, the Noble Lord complains that I did not issue at once an announcement to the public, drawing attention to this particular clause, and that in spite of repeated questions in the House of Commons. I did not make the position clear. The paragraph in the Noble Lord's Report stating that I refused to answer repeated questions on the point is a sheer misstatement of fact: that I shall show. There was no question on the subject until 8th May. I was then asked a question put by the hon. Member for Wednesbury (Mr. Norton Griffiths). He asked me:—Whet her the legal officers to the Crown had provided a clause in the contract now being considered with the Marconi Company by which the Government shall not be precluded from taking tip or controlling any other system of wireless telegraphy that might prove more efficient for long distance transmission?504 That is the very point. My answer was:—The contract with the Marconi Company will meet the contingency referred to by the hon. Member.I was further asked this question:—Mr. Lynch: Will the right hon. Gentleman take into account that in various foreign countries America, France, Germany, and Denmark—extensive experiments are now being made with a view to increasing the scope and the accuracy of wireless telegraphy, and will he not tie down the Government without having considered the whole scope and possibilities of these inventions?And I answered:—I appreciate my hon. Friend's contention, but if we are to wait until wireless telegraphy is absolutely perfected we should never be able to complete our Imperial wireless scheme. The Government are not tied down to any one system, and if later on any other system is found to be superior it can be substituted for the earlier one.That was a clear categorical answer. I was asked no other question upon the subject until my hon. Friend (Sir Henry Norman) the Member for Blackburn asked me on the 13th June:—1f any estimate is formed of the amount of the annual payment of the 10 per cent. royalty?. … And for how many years this royalty will he payable?That was long after the Stock Exchange excitement which it is said I ought to have checked by issuing the announcement to which the Noble Lord refers. At that time I anticipated the contract would be laid before the House in the course of a very few days. Negotiations and correspondence. extended for another month, greatly to my disappointment and contrary to my expectations. At that time I anticipated the whole contract would be before the House in black and white in the course of a, few days, and I thought it far better, instead of giving piecemeal information, to lay the contract and to have a Debate upon the whole subject. Further, the wording of this particular clause in the contract had not been settled—the principle was settled, but the wording was not so settled as to nut me in a position to state to the House precisely the terms upon which the Royalty might be terminated, and I said:—The contract will require to he approved by a Resolution of the Rouse, and, in accordance with the usual practice, will be laid upon the Table as soon as signed. It would not be convenient at present to furnish the details required by the lion. Member.That is the answer upon which the charge is based. But the hon. Member for Blackburn himself did not regard this particular clause which was omitted from the company's circular as being of any importance, as is shown by his own remarks in the Debate of 11th October, when he 505 criticised me severely for not giving the information. He said:—On the 13th June I asked for this information and the Postmaster-General replied it would not be convenient to furnish the details asked for. After that question and answer appeared in the Press, a correspondent sent me a copy of a circular issued on the the 9th March by the Marconi Company to its shareholders—that is, two days after the agreement was signed and more than three months before the Postmaster-General had declined to furnish certain details to this House. To my amazement I rind in this circular—I have it here—the very details refused three months later.It is quite plain my hon. Friend was not disposed to criticise or blame me for having concealed anything which had not appeared in the circular, for he said the circular itself, of which he had not been previously aware, gave the information he desired in that regard. That is the whole story with regard to that matter. I was never asked a question on the subject until the 8th May, and I answered it then definitely and categorically. I was asked no further question until the 13th June, and I then suggested that the question should be postponed until the contract was laid upon the Table, and I think the Noble Lord has done me less than justice when he says that in spite of repeated questions in this House I refused to set the matter right. I must indeed admit that it never occurred to me at any time that it was part of the duty of a Minister who had entered into a contract with a company to watch the Stock Exchange to see how the shares of that company went up and down, and to frame answers in Parliament in consequence. There is only one other point. The Noble Lord in his Report criticises my action because he says I regrettably endeavoured to press the contract through the House of Commons at the end of the Session of 1912 after I had known of the transactions of my right hon. Friends in American Marconi shares.
§ Mr. HERBERT SAMUEL
I will read the words:We think that the action of the Postmaster-General in trying to obtain the ratification of the agreement by the House of Commons without inquiry, after he knew of the share transactions of the Attorney-General and the Chancellor of the Exchequer, was regrettable.The Noble Lord knows that I was anxious for a discussion. The facts about that matter I can very simply explain to the House. My position was this: After the contract had been signed on the 19th of July, after nearly a year's negotiation, I 506 was anxious to get it sanctioned by Parliament in order that the stations might be erected. That was my desire, and I mentioned to my colleagues in the Government and the Chief Whip, the importance of having a Parliamentary opportunity for the discussion of the contract as soon as might be before the House adjourned for the summer recess. It is utterly untrue to say that at any time I was anxious to press this contract through without any discussion at all after eleven o'clock. Such a suggestion was never made by me, but I did press for a Parliamentary opportunity for a debate. After a little while various notices of opposition appeared on the Order Paper of the House, and there were one or two notices for a Select Committee. At that time I was unaware of the transactions in the American shares. My position, which I stated to my colleagues with whom I discussed the matter—not the Chancellor of the Exchequer or the Attorney-General, but the Chief Whip and others, and as I stated to the officials of my own Department, and it is very clearly in the recollection of two of them—was this. I said it is very unfortunate that these notices of opposition are down and that there is a desire for a Select Committee, as it undoubtedly means prolonged delay. Those are the words I used to several people on several occasions. I said that in my view if the Opposition of the day desires an inquiry into any Government contract it would be both wrong and impracticable for that Government to endeavour to force through that contract by using its majority without an inquiry; but if the opposition comes from only two or three we may po3sibly get the contract through before Parliament rises.
That was my position. Having come to that conclusion, some time later I went to the Chief Whip and asked how it was that these notices kept on appearing on the Order Paper. He said he thought it was due, not mainly to any demerits of the contract, but to the fact that there were rumours about Ministers investing in shares, and he told me that so far as he knew no Minister had invested in any British Marconi shares, but that he himself and the Chancellor of the Exchequer and the Attorney-General had holdings in American Marconi shares. I then inquired as to whether there was any connection between the two companies, and I was assured that there was none. Let the House remember that at 507 that time it never entered my head or the heads of my right hon. Friends that there was likely to be or could be any suggestion that they had received any favour from the managing director of the Marconi Company. Such an idea never occurred to me, nor was there any suggestion at that time that the American company's shares had been floated in such a way as to establish a close connection between the English and the American companies. All that I knew was that my right hon. Friends had a holding, as I thought quite in the ordinary way in which any man might invest in any company, in an undertaking which was not the undertaking contracting with the Government, and which had no interest in the contract, and it never occurred to me that that was any reason why I should change my policy and why I should go to the Prime Minister or to the Cabinet and say, "Under the new circumstances, I must ask that this contract should stand over until the autumn, and that a Select Committee should sit to inquire into the matter." So little importance did I attach to this—perhaps I was wrong not to have foreseen the portentous magnitude to which this transaction might be blown—that when I wrote privately to the Attorney-General asking him whether in his opinion we ought or ought not to take legal proceedings against a paper called the "Eye Witness," which was engaged in a very scurrilous attack upon him and me in this connection. although they slid not assert that. we had bought shares, I never even mentioned to him in that letter this question of the American purchase, nor did I think it would have any bearing upon the case at all.
The matter then stood thus. Re-repeatedly I pressed the Chief Whip for an opportunity for a Debate, but the Session was gradually drawing towards its close, and other business which was pressing made it difficult for him to give me the opportunity, but I was told that an opportunity would be given for discussing the contract. At last we came within a day or two of the end of the Session, and he informed me, and the Prime Minister informed me, that at that period of the Session, and in view of the opposition to the contract it would not be possible to bring on the matter before the Recess. That was a great. disappointment to me and to my Department. We had been working for months 508 on this matter, and we had the Report of the Committee of Imperial Defence, which was then a year old, that the matter was urgently necessary in the interests of Imperial defence. I then went to the Chief Whip and said, "If this opposition is really serious, it must stand over, but have you any objection to my making an attempt to see whether the chief opponents can be persuaded to withdraw their opposition "I took the course of asking the hon. and gallant Member for Central Finsbury (Major Archer-Shee) to come and see me. I regarded him as the chief opponent, and, as far as I knew, as dictated solely by a desire to secure the best interests of the State; and I have no reason to suppose anything else now. I felt it my duty, as Minister in charge of the contract, to see if I could get it through the House of Commons, and I spoke to him as one would speak to an opponent who had got a blocking Motion down to a Bill which one was anxious to get through the House of Commons to see if I could get him to withdraw his opposition. I pointed out to him that the Committee of Imperial Defence attached great importance to this matter. I knew he was a Member greatly interested in matters of national defence, and I thought that possibly he might not consider his opposition so serious as to warrant this long delay of months pending an inquiry by a Select Committee. I saw the hon. and gallant Gentleman, and he told me that he could not withdraw his opposition. He has stated that late at night, at 12.30, I saw him again in the Lobby of the House of Commons. I have no recollection of that conversation, but, since he says it took place, I have no reason to doubt it. He is under the impression, though he stated in Court that his recollection is not clear, that I then said that. I intended to force the contract through. That I am sure I could never have said. It was perfectly clear to myself and to the Chief Whip that if he and his Friends persisted in the opposition, necessarily the matter must stand over until the autumn: These are the whole of the circumstances with regard to that. I did press for and I did succeed in obtaining an opportunity, at all events, to make a statement as to what the contract really was in view of the gross misrepresentations which were abroad as to the provisions of the contract itself. But it was understood at that time, and I accepted it, that as the Opposition 509 objected to a conclusion being reached on the matter on that occasion, it must stand over until the autumn. That is the story with regard to that matter.
I did endeavour to get the Bill through the House at that time. I did so solely because I thought it urgently necessary to establish these stations, and I deprecated delay. The Noble Lord who seconded the Motion this afternoon said it was difficult not to believe I had an idea in my head that to press the matter and avoid a Select Committee would be convenient to my right hon. Friends who had been engaged in investing in American Marconi shares. I never discussed the matter with my right hon. Friends. They never asked me to press the matter in order to avoid a Committee. I never told them I was going to press the matter. I was animated solely by a desire as Minister in charge of a Bill to get that Bill through the House of Commons without any undue delay. During the last year every action of mine in all these prolonged negotiations has been under the microscope. Almost every word I have spoken in interviews and elsewhere has been magnified as by a megaphone. I do not complain of that. But I claim now to the House that this inquiry, searching as it has been, has not given the smallest colour—has not provided one atom of foundation for any allegation or suggestion that any action of mine, on any occasion, in any particular, has been clue to any motive except an unqualified desire to render the best service in my power to the great public interests committed to my charge.
§ Mr. ALFRED LYTTELTON
I trust the right hon. Gentleman who has just addressed the House will not think that it is out of any disrespect for him if I pass rather lightly over the speech he has just made. His complaint was that he was not included in the Motion which my hon. and learned Friend has submitted to the House. I should have thought he would have been very glad not to have been included. I certainly think my hon. Friend was quite right and that the Opposition were quite right in not including his action as in any degree alike or similar to that of his colleagues. Neither do I in the least resent—it would be most ungenerous to do so—his warm repudiation of the charges of corruption which were made against him from anonymous sources. I think he was most naturally incensed by those charges, and that he had 510 a perfect right to repudiate them as he did. I do think, if I may say so—it is not a matter of great consequence—that it was unfortunate—I might use, I think, a stronger word—that it was unfortunate he should have gone into the Lobby of this. House to a private Member of the Opposition—to my hon. and gallant Friend. [HON. MEMBERS: "Why?"] I will state why. Old Members of this House know perfectly well that there is a very great obligation of good faith—what lawyers call uberrima fides—towards those whom you approach in the Lobby in a private way. I do not wish in the least to put it too high, but I think it was unfortunate that the right hon. Gentleman, when he approached my hon. and gallant Friend in the way he did in the Lobby, should have failed to disclose to him that if this matter were brought on before a Select Committee was appointed there would have been no opportunity of bringing out that which was in his knowledge, namely, that his colleagues had been parties to transactions of this kind. I do not wish to press it in the least beyond what is right. My own opinion is that anybody who approaches a Member of the Opposition in the Lobbies should approach him with a full disclosure of everything that is relevant.
After all, these are minor matters. I trust that in what I have said I have not treated the Postmaster - General ungenerously. I have admitted his right to repel the serious accusations which were unjustly made against him. [HON. MEMBERS: "Admitted!"] I have admitted not only his full right to do that, but that he should take the opportunity of a Debate in the House to do so. The material question before the House is not the individual question, but what is the attitude the House should assume on great public questions. The Postmaster-General has in his Department an official who was dealt with with great severity in connection with this matter—Mr. Taylor. I should like to bring before the attention of the House another occasion which occurred much earlier, in 1854, in which great severity, you might say an austere severity was shown towards a public servant, in circumstances which I will narrate to the House, because if you take the casein 1854, and if you take the case of Mr. Taylor in 1913, you get, at any rate, the practice of this House and the opinion of Parliament with regard to these matters over a period of sixty years. In 1854 a private secretary to a Minister—I will not mention his name 511 because it might give pain—engaged in speculations on the Stock Exchange. He was appointed, not long afterwards, as Governor of one of the Australian Colonies. This matter came before the House. The appointment was at once and peremptorily cancelled, and Sir George Grey, who stated the facts to the House, said in relation to this charge:—I have stated that the charge I understood to be made against the official was this: That he had availed himself of his official knowledge as private secretary to my right hon. Friend to engage in these speculations in the funds. I have no reason to believe that that is the case. I am informed that the speculations in which the gentleman engaged were losing speculations and not gaining speculations.
§ Mr. LYTTELTON
The Prime Minister may shake his head and laugh. Let me remind him, if he thinks it is a laughing matter, that he is going to defend tomorrow, not the case of a humble private secretary but the case of his own Chancellor of the Exchequer who has, as every man in this House who is not a simpleton knows, engaged in speculations on the Stock Exchange, not, it is perfectly true, and I am only too glad to recognise it, on official information or knowledge and With an entirely uncorrupt motive, but who is seeking by the aid of his majority to extend a different justice from that which was extended to a private secretary.
§ Mr. LYTTELTON
The appointment as Governor to the Australian Colony was cancelled peremptorily. [HoN. MEMBERS: "Why?"] Because he speculated. [HoN. MEMBERS: "No!"] Although not on official information. Perhaps we have got a great deal more insensitive since that date, but the Postmaster-General. at any rate, as regards the conduct of his own Department, has not become more insensitive as regards the conduct and discipline which he exercises over his own subordinates. What happened in the year 1912 to Mr. Taylor, a humble member of the Department over which the right hon. Gentleman presides, who engaged, not on any official information and with no corrupt intent——
§ Mr. HERBERT SAMUEL rose——
§ Mr. LYTTELTON
Let me correct that. It. is quite true the Postmaster-General 512 informed us this afternoon that Mr. Taylor was present at a meeting of the Committee in the Post Office, and did have, it may be said, inside knowledge with regard to this matter. I freely acknowledge that, and I understand that it has been found definitely that this gentleman did not in the sense in which that word has been used to-day use his knowledge corruptly, and yet he was degraded from the position which he held. If we put these two cases together, the practice of sixty years is, I quite admit, an austere practice, a severe practice, if you please, and I most earnestly ask the House whether they are going to mete out to the humble members of the Civil Service a different justice from that which they are going, I suppose, by their votes to mete out to the distinguished officials whom we have heard this afternoon.
§ Mr. HERBERT SAMUEL
The right hon. Gentleman has left out a very important consideration. Mr. Taylor invested in the shares of a company which was in negotiation with his own Department, to which he was an expert adviser, with the view to getting a contract from the Department.
§ Mr. LYTTELTON
Do not let the right hon. Gentleman suppose for a moment that I am questioning the discipline administered to Mr. Taylor. Mr. Taylor acted contrary to the rules of the Civil Service, but he acted incorruptly. I do not put that ease on all fours—[Interruption and indications of dissent]—with the earlier case I quoted, but it leaves a very unpleasant impression upon our minds that men in inferior positions are treated in a very different way from those holding high offices. I am glad to be able to say. and I think it is my duty to say, as I do frankly, that in respect of the Attorney Genera], whom I have known for a long time, I wish entirely to endorse the opinion that was pronounced by my hon. and learned Friend the Member for Kingston (Mr. Cave), that he holds the highest. reputation amongst. his fellows, but may say also, without presumption and without any idea of patronage, that in a misfortune which occurred to him earlier on the Stock Exchange he is credited with having acted not only with integrity, but with the highest honour. That is a point I wish to make at the very outset of my observations. I wish also to say equally for him as for the Chancellor of the Exchequer, that it 513 ought always to be borne in mind about the whole of this case, that there was no concealment as regards the documentary evidence of the transactions they entered into on the Stock Exchange—a very important matter. Those two factors, the character of the Gentlemen who went into those transactions, and the circumstances that the transactions were conducted quite openly and in their own names, are things which I am very glad, before the Adjournment to-night, freely to acknowledge, and I gladly concede that they throw a colour on the whole proceedings that we ought to be most pleased to recognise. That is the reason why so much of the present Debate, so far as it has been conducted by supporters of the Government, seems to be quite irrelevant. They have repudiated charges of corruption which 514 every single Member of the Committee has found not only not to be proved, but disproved. It is quite natural that they should do so, but it is irrelevant to the present discussion. [An HON. MEMBER: "Why is it not in your Motion?"] We should be quite delighted to put it in our Motion if the right hon. Gentleman thinks it desirable. I think myself it is implied in the Motion which we have laid before the House.
It being Eleven of the clock, the Debate stood adjourned; Debate to be resumed to-morrow (Thursday).
§ The remaining Orders were read, and postponed.
§ Adjourned at Three minutes, after Eleven o'clock.