§ Mr. W. YOUNG
I must again ask the indulgence of the House to follow up further the question of timber purchases on behalf of the War Office. With all due respect to the two hon. Gentlemen who have spoken in defence of the agreement the other evening, I do not think that they made out any case in defence of this arrangement that was either satisfactory to the Members of this House or to the public outside. It cannot be said that this is a small matter. I think that the interest shown in the Debate last week must have made it perfectly clear to the Government that this whole question of War Office purchases and contracts involving the expenditure of what might be termed fabulous sums of money, both at home and abroad, is one which is receiving, and must receive, the most serious attention of this 490 House. I really think that I am doing the Government a favour in having ventured to call attention to this extraordinary appointment, and I hope that the Government may look upon it in that light.
As I ventured to say a week ago, if errors or blunders are being committed or allowed to pass, it may be through lack of business experience or pressure of work in the various Departments of the Government, or through other causes, it is better in the public interest that they should be remedied now and not in a year or eighteen months hence, when the whole of the damage is done, and it will be beyond the power of this House or anyone else either to remedy or even to mitigate the effects of that extravagant expenditure. If we are to derive any profit or enlightenment from this discussion, it seems to me that one of the first things which we have to do is to fix the responsibility for the timber-buying arrangement which has been brought to the notice of this House. In my opinion, and I speak as a business man and not as a lawyer, notwithstanding what was stated by the hon. Gentleman the Financial Secretary to the War Office in the last Debate, the main responsibility clearly rests with the War Office. As far as this particular transaction is concerned, the War Office is clearly responsible, at any rate, to this House. If, for example, this House were to entrust to me a large sum of money, say, £100,000,000—not a very likely occurrence—for the purpose of purchasing material and equipment, including timber, for the use of the country, and I choose to delegate, or permit to be delegated, to some other person or persons part of the work or duties which have been entrusted to me, involving the expenditure of a large part of the money, clearly I have been, and should still remain, the person responsible to this House should they have occasion to call him to account.
That is the position, I think, of the War Office with regard to this Meyer arrangement. I really fail to see how the Financial Secretary to the War Office can justifiably refuse to admit the responsibility of the Department he represents, as he did in a former debate on this subject. I do not propose to occupy the time of the House in repeating the arguments I used last week in order to show that the arrangement entered into is an extravagant one, and against the public interest. I do not think that the speech of the hon. Gentleman convinced a single Member of 491 this House, or anyone outside it, that the timber-buying arrangement was other than I and various hon. Members who spoke on the subject represented it to be, namely, a most unbusinesslike proceeding on the part of the War Office and the Office of Works, but a remarkably good piece of business for the buying agent whom they appointed. The main and outstanding reason given for the appointment of Mr. Meyer was that the timber trade, or the large timber merchants in the trade, as is alleged by the hon. Gentleman, had shown a desire, or even made an attempt, to hold up or "squeeze" the Government, Then, as we were told by the Financial Secretary to the War Office, Mr. Meyer, of course brimming over with patriotism to the tune of some £60,000 a year, and himself a timber merchant, by the way, made his dramatic appearance, as we were told, on the scene, and, as we can imagine, he would say, "Here am I, ready to take it at 2½ per cent. on the value of the purchases the War Office require." And the situation was saved, and the country. The House knows that there are plenty of timber merchants of the highest respectability and standing in the trade who would have been only too glad to do this business for very much smaller remuneration.
I hold no brief for the timber or any other trade, but I do say that in the timber trade there is at least as high a proportion of honourable and patriotic men as in other great trades and industries of our country. I think this will be clearly proved by the bonâ-fide offers which were made to the War Office—and they were neglected, or not even replied to—by, at any rate, some of the oldest and most highly respected persons in the trade. I will only add that I am very certain that it will be clear to every business man, both inside the House of Commons and outside it, if it be true as alleged—I am not arguing about that now—that the timber trade made this attempt to hold up or "squeeze" the Government—that was the term used by the Financial Secretary to the War Office. I can only say that if they were able to do it, it must be clear to every business man that they were equally able to hold up a second or third-rate timber merchant like Mr. Meyer, as buying agent of the Government, had they chosen to do so. Either the Office of Works or the War Office, as is alleged was done in a former Debate, were not then aware that purchases of timber would be 492 required on such a large scale as has been the case. I cannot help saying that this appears to me to be a pure evasion of the whole question, and a very lame excuse for the blunder which has been committed. The agreement was entered into some three or four months ago. They were bound to know that this business would assume very large dimensions. If they did not know they certainly ought to have known, and I do not think that anyone in this House will imagine that Mr. Meyer would have been anywhere around with his magnanimous offer of assistance had there been the slightest prospect that the business was to be on an insignificant scale. I should add that, in my opinion, the official—I do not know whether he is at the War Office or at the Office of Works—who made this arrangement, whoever he may be, ought certainly to be transferred to some other Department where he would not have the power to pay exorbitant rates with the country's money as has evidently been done in this case.
It was not enough that the Financial Secretary to the War Office should make an evidently unwilling and hesitating statement that some kind of modification of this preposterous agreement is under consideration by the Office of Works. I believe that the feeling of this House, and of business men generally, is that the agreement with Mr. Meyer should be terminated forthwith, as one which is in every way unbusinesslike and contrary to the public interest. It was admitted by the hon. Gentleman who spoke the other evening on behalf of the Office of Works that those purchases of timber have increased, that they have assumed enormous proportions, and are likely to increase. I say at once, that in any great business of this kind, involving almost fabulous sums of public money, it is absurd that the War Office authorities should have been inveigled into it, or should have allowed themselves to be tied up with an agreement which, as I have said before, was flagrantly opposed to the public interest. In a great business of this kind it seems to me that the patriotism of those of the timber trade ought to have been appealed to, and that offers, which were undoubtedly made, ought to have been listened to by the War Office; and had this been done, I think that these men would have made a hearty and sincere response to their country's requirements, as has been done in so many other directions by the majority of the community.
493 The method adopted by the War Office or the Office of Works, as the case may be, I was told yesterday, is such as to create a feeling of very serious uneasiness throughout the whole of the country in regard to the whole question of Army purchases. The whole trend of opinion both in this House and throughout the country, I believe, is that this matter ought to receive the immediate and most serious attention of the Government.
My own opinion is, and others who have spoken have given expression to the same opinion, that a Committee of business men, not necessarily all Members of this House, although this House is responsible, should be at once appointed with full powers to advise upon and deal with the contracts and purchases of the War Office, Office of Works or other Departments of the Government. Already purchases are made on a gigantic scale, which, in the unprecedented conditions in which we find ourselves, involves the expenditure of enormous sums of public money. With regard to Mr. Meyer's purchases as sole timber buying agent for the War Office, I repeat that the universal opinion is that it is a bad and unbusinesslike arrangement from beginning to end. As to the proposed modification which we heard from the hon. Gentleman yesterday, and due I suppose to the extraordinary benevolence of Mr. Meyer, I say that it is neither more or less than an attempted imposition on the supposed credulity of Members of this House. Mr. Meyer is to be allowed to put into his pocket 2½ per cent. on purchases up to £600,000, and 2 per cent. on purchases from £600,000 to one million, and on purchases over one million to receive 1½ per cent. I desire to read one letter which I have received from one of the best known timber brokers in the trade to show what is the regular commission in the business. It comes from Liverpool, and is dated 19th February. I will show it to any hon. Gentleman who wishes to see it. It is as follows:—Since the year 1843 all the timber required by the Mersey Docks and Harbour Board has been bought through my firm, and the commission paid to us for purchasing this timber has always been 1 per cent. ….and, mark you, this is a much smaller business, probably not exceeding fifty or one hundred thousand pounds worth of timber in the year.which we have considered quite adequate, as it is the customary rate of brokerage in the timber trade.Yet we are offered a modification, and just picture the position. Here you have a 494 great Government Department practically on their knees asking this timber buyer to reduce his commission. I think this House has the right to demand the immediate rescission of this contract, and also for an inquiry to find out who is the really responsible person for having made this extraordinary and preposterous appointment. To talk about the timber trade holding up the Government, why it seems that this timber buying agent is attempting to hold up the War Office and the Office of Works. I am determined, succeed in that as he may, that at any rate as far as I am concerned, and I feel sure others will be with me, he shall not succeed in holding up the House of Commons. I think the opinion of the House of Commons will be found to be that this timber buying arrangement must be dissolved and terminated forthwith, and that the business should be thrown open under proper supervision and with businesslike methods to the whole market, so that every respectable firm and member of the trade, without fear or favour to any one—and Mr. Meyer will have his chance along with the rest—should have a fair share and a fair chance in open competition of securing some share of the nation's business. I demand further, and I believe I shall have the House with me in this, that the War Office be relieved from an arrangement which everyone knows and everyone feels ought never to have been entered upon, and an arrangement, as I have already stated, which is clearly and admittedly contrary to public interest.
§ The FINANCIAL SECRETARY to the WAR OFFICE (Mr. Harold Baker)
The question of responsibility as between Government Departments is, I think the House will agree, relatively unimportant in this matter.
§ Mr. BAKER
As the hon. Gentleman (Mr. Young) who has just spoken has thrown some doubt on the subject, I think it might be convenient if at this stage I restate the position with regard to that responsibility. The War Office as a Department came into this transaction at the beginning of it and again at the end. As I informed the House the other day when this matter was under discussion they came into it at the beginning in this sense. Having asked the Office of Works for advice, and having received from the Office of Works the suggestion that they should be relieved of the task of timber buying, 495 they accepted it, and the whole subsequent arrangements were made and carried out by the Office of Works. The War Office come into the arrangement again at the end, in that they have received the timber, and on that I can only say that the timber has been delivered quickly and of good quality, and that the War Office has no objection of any kind to find with the way in which the contracts have been exercised. My hon. Friend appeared to me to betray a very evident disappointment that he was not able to fasten the whole of his strictures upon the War Office. As between the two Offices the matter is relatively unimportant, but if he asks who is ultimately responsible I quite agree that the War-Office, having agreed with the Office of Works, may be considered ultimately responsible, but it is a responsibility which they cheerfully accept.
Mr. J. HOPE
I think in times of this kind it must needs be that mistakes will arise, but no one I think will visit the representatives of the War Office personally with blame for those mistakes. All we say is that when mistakes arise it is our duty to brand them and notify them to the public, and to take such measures, as far as we can, to see that they shall not arise again. As far as Mr. Meyer is concerned, I dismiss him personally from the case altogether. I know nothing about him. I have nothing against him, and if his name were John Bull I would say neither more nor less. However, a very bad mistake has been made, and the House of Commons must record, informally it may be, its sense that a very bad mistake has been made. It is really only doing its duty by the War Office to let them know what is thought of occurrences of this kind. Personally I must say I think that the whole system of buying on commission is a bad one. Any system which allows it to be to the buyer's interest to make the highest prices, however unconsciously it may work with him, necessarily must be a bad system. But I suppose, such a system is common, from what we have heard, in the timber trade, and occasionally prevails in other Departments of Government buying. But, even if we grant that circumstances may admit of Government Departments buying on commission, surely to allow the buyer to buy on a commission two and a-half times as large as is the custom of the 496 trade, and without any maximum, must be altogether wrong. Here you have on present transactions a lump sum of £15,000 gone into the buyer's pocket, besides whatever profit he may have made on his own timber, as I understand. It is clearly contemplated, by the terms of the proposed new arrangement, that at least another £400,000 worth will be bought. That brings the commission up to £23,000. Then there is an indefinite amount over, at a rather lower commission, it is true, but I do not think I shall be a very rash prophet if I say that at least £1,500,000 worth will be bought, which will bring the commission up to £30,500. That is three times the Lord Chancellor's salary for one year.
Mr. J. HOPE
If when a new arrangement is to be made a maximum amount is not fixed, it seems to me inexcusable carelessness on the part of the Department concerned. The hon. Member opposite (Mr. Beck) had a very ungrateful task in having to reply for a Department whose delinquencies were some months old when he had only been in office two or three days, and I was extremely sorry for him. He said that this arrangement was necessary in order to break a ring. I think he said there was a ring of 500. But the number was afterwards reduced to 200, so presumably there must have been a large number outside who might have been called in to do the business. But is it seriously suggested that a Government Department had no other resort in order to break this ring than to employ a buyer on these extraordinary terms? In November last, the Government passed one of their lightning Acts, in reference to the withholding of supplies. I know that it was intended to be used in respect of timber just as in respect of other articles, because complaint was made that certain buyers at East Coast ports were holding up Norwegian timber that was wanted for ordinary building purposes, and the Board of Trade acted in the matter. With those powers to come down upon anybody who was withholding supplies, I submit that the Office of Works had a weapon in their hands with which they could have broken down any possible ring. Even if they had not had that weapon, in the general state of public opinion, they had only to threaten to hold up the offenders to public execration, and no 497 ring could have stood against them. Therefore the argument that this arrangement was necessary in order to break the ring will not hold water for a moment. I think hon. Members opposite have made out an overwhelming case. I do not wish to attack hon. Gentlemen who represents the Departments concerned in this matter, but I do say that this matter has been a real bad scandal, and that if it is allowed to pass there will be similar scandals in other Departments. I submit that this preposterous contract should be broken immediately, that a maximum salary should be given, whether to Mr. Meyer or anyone else, and that this system of indefinite liability should be put an end to at once.
Sir HENRY DALZIEL
I think we have some reason to complain of the arrangement of this Debate so far as the Government Bench is concerned. It is usual, especially on the Motion for Adjournment, when an attack is made upon a particular Department, that the Minister concerned should at once reply to the criticisms that are made. If that reply is satisfactory, the time of the House may be saved and the House adjourn. Had the Financial Secretary to the War Office, who I think treated the House with rather scant courtesy, had anything to say that would have thrown any light whatever upon the Subject before us, his intervention would have been excusable. As it was, he might just as well have remained upon his seat. My hon. Friend (Mr. W. Young) started by making an apology for introducing this matter again. I make no apology, and I am surprised that my hon. Friend did, because if he had not pursued the matter from the point where it was left on the previous occasion, I think he would have been failing in his public duty.
It is desirable that this question should be cleared up, so that we know exactly where we stand, and whether the Government have got the excellent case which they say they have in connection with what has been described as a "splendid business arrangement." I have in mind the fact that this is not the only question to which Gentlemen on the Government Bench will have to reply, in regard to which the complaints are somewhat similar, but perhaps more important than in the case which we are now discussing. I associate myself with my hon. Friend in saying that there is no suggestion of any personal attack upon the gentleman principally concerned—Mr. Montague Meyer. 498 All I can say is that I admire Mr. Meyer's business capacity, and only wish there was a little more of it on the Treasury Bench. It is not Mr. Meyer whom we complain about in this matter. I take my hat off to Mr. Meyer as a very smart man. He does not go to the City for the benefit of his health, and if he was able to make a profitable contract with the Government he was certainly not to be blamed. He was there as a business man, not as a patriot, although I have no doubt his patriotism is as strong as that of other people.
Instead of troubling to quote, Mr. Meyer took a cab from the City to the Office of Works, and offered to undertake the responsibility of buying for the War Office. This is after the War Office had decided that the Office of Works were the people who ought to handle the job. Probably Mr. Meyer said, "Gentlemen, you know nothing about this business. There are an awful lot of swindlers in the timber trade who will run the prices up yet higher. Employ me as your buyer, and I will take the responsibility off you." The Office of Works, who were to be the purchasing authority in the eye of the War Office, immediately handed on to Mr. Meyer the responsibility which the War Office had abrogated. That is exactly what happened. Mr. Meyer then went back to the City, and no doubt said to his partner, "This has been rather a lucky day. I have got in my pocket a contract worth at least £50,000, and with ordinary luck it ought to be worth a good deal more." This is a question of criticism, particularly of the Office of Works, and indirectly of the War Office. What are our points of criticism? "We say, in the first place, that the commission is altogether too high. There is no precedent in the business for 2½ per cent. to an unlimited amount. My hon. Friend quoted a public body, and doubtless many more could be quoted, showing that 1 per cent. is accepted in the trade as the ordinary commission for such purchasing.
Probably my hon. Friend who represents the Office of Works, will ask us to look at the number of things that Mr. Meyer has to do. But we have to deal with the contract, not with the generosity of Mr. Meyer. What Mr. Meyer has to do under the contract is very small beer indeed. He has to do the checking, and to arrange for the timber being moved about; but when the hon. Gentleman tries to make out a case in which enormous expenditure is involved, I say that no such case can 499 be made out from the contract, and it is the contract that we, as business men, must consider. Outside the buying there is the checking to be provided for, but two clerks are provided by the Office of Works to assist Mr. Meyer; and I say that outside that, the extra work will not represent a half per cent. or a quarter per cent. increase. If that is the case which the hon. Member is going to try to make, I think it is rather ingenious, but it cannot be made from the contract of Mr. Meyer, who may have undertaken voluntarily additional work which he was not required to do. That is, of course, another matter, and one which does not affect in any way our criticism of the contract. We say, further, that insufficient inquiry was made before Mr. Meyer was appointed. Three or four days only elapsed between the time Mr. Meyer called at the Office of Works and the day on which he received the letter confirming the appointment. The night of the very day he had that interview—for we have no record of any other—with Mr. Baines at the Office of Works he wrote a letter, in which he stated, and practically assumed, that he had been appointed after the interview. When we are talking about commission, it is rather interesting to note that Mr. Meyer is a man of rather large ideas. This may be useful in the buying of timber, but Mr. Meyer's large ideas hinge upon the possibilities of the future. I observe, that Mr. Meyer says in the letter to which I have referred, and which is the basis of the contract:—It is not a question of the Commission we shall make out of this transaction, but we hope later on that the Government will be able to make us their official purchasers for all timber required on Government Contracts for railways and for any undertaking for which they may require wood. Firms with whom you place your building contracts would have their timber at a very considerable reduction from the price we have to pay now.Mr. Meyer is going to step in as soon as he is done with the Office of Works and deal with the contractors, who, at the present time, buy their own timber! I do not know what the contractors will say to that. He goes on to say that the timbercan be purchased much cheaper than now. The size of the purchases which we should be enabled to make would be so vast that the prices we should obtain for you would be lower than those obtained by any other firm in existence ….This is a firm which, after all, has only had a few years' existence!The proposition we put before you is bound to be right for you. If we give satisfaction …. we hope to get the whole of the Government's work in the future.500 We must regard the commission in this case, although Mr. Meyer treats it as not an important matter; it is the future he has in view. I repeat there was insufficient inquiry made before Mr. Meyer was appointed. Why do I say that? My hon. Friend who represents the Board of Works said the other day, in answer to me at Question Time—where we have little opportunity of putting our case:—Oh no, that is not so; 500 inquiries were made.He has since admitted that he was wrong. He has admitted to 200.
Sir H. DALZIEL
Will all respect, the answer given as to the inquiries made have tended to mislead us. That is the result, whether it was intended or not. This is the point: How many firms were you dealing with? Where did the hon. Gentleman get these 200 from? He did not get them at the Office of Works, because they have not, as I shall show presently from their own documents, got these; they are not in the habit of buying timber. The contractors are in the habit of buying their own timber. He did not get the War Office list, which I imagine would have been a correct list to take. Some of the largest firms are nearly every day doing contract work for the Government. Why did he not take that? Some of the leading firms in London are on the War Office list, and they are discharging the work to the satisfaction of the War Office. They were never asked to quote! I think that wants looking into. Why were not they asked to quote when Mr. Meyer was asked to quote—and when the directories were being searched for these 200 firms?
I would like light upon that point, because it suggests that the thing was not thrown open to competition, as I think it, ought to have been. We further complain 501 there is no limit in the contract to the commission that Mr. Meyer can pay to a third party. We assume that all discounts that Mr. Meyer gets are handed over to the Government, but there is no provision whatever in the contract to prevent Mr. Meyer paying, say, 2 per cent. or any per cent. that he likes to a third party, a broker or anybody else in connection with it. That is a very serious matter. It practically means that Mr. Meyer has power to gamble with the money of the State. The only check is when your invoice comes in later after the transaction has been concluded, and in that way you can get probably a limitation. Mark you, I am not dealing with a personality in this matter. We have got to deal with the contract as it is, not what you think is intended, or what might be intended, or the result of it; you have to take the letters forming the contract, and they are the only two things we have to consider. I would like a little more information about this. There is no limit to the amount of interest the State may pay on Mr. Meyer's overdraft. It is an express understanding between Mr. Meyer and the Office of Works that they are going to pay the bank rate for any monies advanced. There ought to have been a limit.
There is also the question of insurance. There is no express provision as to the insurance of this enormous amount of timber. Surely, in making a contract with a man and in handing over the whole responsibility of this matter, when there was very little time to make further inquiries, it ought to have been provided who was to pay the insurance, either the Office of Works or Mr. Meyer, and it ought, further, to have been added what the rate should be, and where it should be transacted. That seems to me to be an ordinary thing. Two people making a deal of this kind would have provided for it in the contract. Mr. Meyer is therefore free to carry out transactions so far as insurance is concerned without any real control whatever. I say that is placing power in Mr. Meyer's hands which he or any man in the position ought not to possess. We heard something the other day from my hon. Friend who represents the Office of Works. I observe from the papers that he got well sustained cheers for his remarks. I saw, too, that the Under-Secretaries applauded it as a brilliant performance.
Sir H. DALZIEL
My hon. Friend made the point that Mr. Meyer's stock was taken over by the Government at a price, which lost Mr. Meyer £2,000. This was put forward as a splendid exhibition of the business ability of the Office of Works.
Sir H. DALZIEL
There are two remarks that can be made upon that. Will the House believe that in a matter of this kind, taking over £11,000 worth of Mr. Meyer's stock, there is absolutely no mention whatever of it in the contract? It is not alluded to. Therefore, if Mr. Meyer has handed over at the invoice price at which he bought it, he is doing something outside his contract. But I should like to know exactly the date when it was decided that Mr. Meyer's stock should be taken over, and when he, as Mr. Meyer for the Office of Works, should pay himself 2½ per cent. for buying from Mr. Meyer in the City, because if, as the hon. Gentleman rather suggested, it was made originally, then it ought to have been in the contract, and if at the time it was made Mr. Meyer consented to hand over his stock at that time at 2½ per cent., although we were told it had gone up in value, do you imagine Mr. Meyer gave up £2,000 without getting something for it? Of course, that was the sprat thrown to catch the whale. Mr. Meyer might well offer to give £2,000 if sure of making £15,000 for the first three months, and it was no doubt that generosity of Mr. Meyer which impressed Mr. Baines at the Office of Works.
Therefore, I say we want a little more light on that point, especially light as to why it was not in the contract. We say, further, that the Office of Works was not the Department to which this responsibility ought to be handed over. They ought to have had a buying commission to advise them of the best business men in the trade. You need not have taken their advice. They have letters from some of the biggest firms in London offering their services in any way possible to assist the Government in the present crisis. You must not imagine Mr. Meyer is the only person in London who can buy wood through brokers without their knowing it is being bought for the Government. Men who have been in the trade longer than he has can carry out that transaction just as well. In that way a considerable amount of money, there is reason to believe, might have been saved. The Office of Works themselves admit, in a letter which they wrote a few 503 months ago, that they are really not buyers of timber. This is an extract from a letter they sent some time back in reply to a person offering to do business:—The supplies of sawn timber required in connection with the Departments having contracts were purchased by the contractors for the respective works, and not direct by the Board.That is their own letter from the Office of Works, and then the Under-Secretary tells us the Office of Works is the best Department to do this work, though they they admit in their own letter that they are not buyers of sawn timber, so that I cannot see how they can reconcile those two points of view. I say they have no list of contractors. Will they tell us exactly how this list was formed, and where it was taken from? We further say that we want a little information on a great point that was made on behalf of what was called Mr. Montague Meyer's trial transaction. I am interested to know whether it was before the letter or the interview in which his appointment was practically made, or whether it was subsequent to that date. Of course, when told to go out and make a trial order, it may pay you very well to lose on the transaction. If I am sent by the War Office to buy twenty horses, and an appointment of great value depends on the results of that purchase, do you suppose I am going to charge the War Office full price for the first twenty? Nothing of the kind. I should probably let them have them at half price to get the appointment later. I have no doubt whatever that that principle was in the mind of Mr. Meyer.
I hope the hon. Member representing the Office of Works will answer this question. In the figures he gave the other day as to the difference in the quotation in Mr. Meyer's trial purchase, were landing charges, freight, and any other expenses, free of delivery to the Government in the quotation he made? I should like to put one or two definite questions, to which I hope the hon. Member will reply. Lord Emmott was primarly responsible for the Office of Works, and, consequently, for this Department. Was he consulted at all in regard to the matter? We see it will go into millions. Surely it was a matter on which the President should be asked his opinion. What officers outside Mr. Haines were consulted in regard to the contract, and were they consulted before the letter was sent? I want to know, further, whether the solicitor to the Office of Works was consulted in the drafting of 504 the contract. I think a more loose contract I have seldom seen—I am not speak-of a Government Department but of the smallest business concern—a loose and entirely indefensible contract. The whole obligations are on the side of the Government. Even obligations not asked for by Mr. Meyer are thrown at him, one after another, to make it easier. Therefore, I think it would be a good thing, in any case, where all these big amounts of money are concerned, that the solicitor should pass the contract that is to be made. The point has been made as to a ring squeezing the Government. It is a very pretty phrase, but there is absolutely no tittle of evidence up to this moment, and I say it is a libel on a number of men who are straightforward, honest, and anxious to carry business through properly. As long as you do not ask a man, or give him an opportunity of quoting what you are asking, you have no right to say there is squeezing unless you give definite evidence of it. I hope: my hon. Friend will be able to give some information on the points I have raised.
§ Sir A. MARKHAM
In the first place, I am sure I am voicing the views of many Members in expressing our feelings for our hon. Friend the Member for Saffron Walden (Mr. Beck) in the unfortunate position in which he is placed. He came into this office with the support of both sides, but, under the party system of Government, he is unfortunately bound to defend any contract, however undesirable, which is made by his Department. In this particular case is the contract in such a form that it can be said by any business man to be a business transaction which the Office of Works ought to have prevented? I have had an opportunity of seeing this contract, and a more unbusinesslike contract I have never seen in the whole course of my experience. What is the form of contract, and how did it come to be entered into? In the first place, I may say I do not know Mr. Meyer and never heard of him prior to this transaction. I understand he is a German-Hebrew who comes from the City, who has for some time in recent years been engaged in the timber business. He, with other persons, receives inquiries for the Government supply of timber. He goes down to the Office of Works, and I want the House to note that within a few hours after that time he receives from the Government an order to buy all the timber that they require, at a price which is at least 100 to 505 150 per cent. higher than is paid in the trade for the buying of timber. I buy something like 100,000 tons of timber a year, and this gives me some knowledge of timber buying. I pay about £500 a year for buying timber, but the buying of it for the War Office seems to be a proceeding so simple for any straightforward business house to carry out that if the Board of Works had gone to any old-established firm and said, "We are at a time of great national danger when everybody ought to help the State, and we want you to undertake this work of buying timber for us because we think if it were kept secret that you were buying timber for us you might buy on better terms," they would have done so. After Mr. Meyer got the contract it became known that he was the buyer on behalf of the Government, and what happened? In the first place he holds the benefit of this agreement, and how was it granted?
There were many old-established firms in the City who were never asked to quote. Why should you have given to Mr. Meyer the right to buy timber at this exorbitant rate without asking other people what they were prepared to do it for? When you are dealing with an expenditure of £20,000 or £30,000 the least the Government or any business man should have done would have been to inquire what other people would do the work for. Is Mr. Meyer the only person who can buy timber on behalf of the Government, and, if not, why were not other inquiries made? If you had gone to an old-established house and said, "We want to buy timber and we think it is going to be an advantage to the Government for you to do it for us," I undertake to say that they would have bought the timber without charging the Government a single penny. Many men have given up their time and labour to the State during the last six months without any payment whatsoever, and there are numerous firms who would have been glad, if not for nothing, to have done this work for a couple of thousand pounds per annum. What was Mr. Meyer making out of his own business prior to this undertaking? Was he making anything like the profit he is going to make out of this one transaction? The contract provides that all other charges shall be paid to Mr. Meyer. What does that mean? Is Mr. Meyer entitled to give any commission he likes to any buyer in Norway and Sweden and charge this against the Government? The whole contract is drawn in the most loose manner. As far 506 as I can gather, Mr. Meyer can make any charge he likes and put it on the Government to pay. My hon. Friend gave the figure of the prices received for timber and at which Mr. Meyer was able to buy. I would like to know if the figures he gave were for prices delivered in London or England, or were they pi ices at which Mr. Meyer bought abroad? I understand that the Government had quotations from 200 firms, but by some unfortunate occurrence some of the leading firms were not asked to quote. When these inquiries were sent out prices were received. Is the House to understand that the price at which Mr. Meyer has been able to buy is £2 per standard lower than any quotations the Government had received? If that is so, then possibly the Government have a good answer to make. At the same time they would have no answer to the charge that they are paying Mr. Meyer 100 per cent. higher commission than is usually paid by the trade. The whole of the contract is not in a business form at all. With regard to the inquiries which were made, it is very strange that so many inquiries were sent out and the contractors on the Government list were omitted. Who prepared this list? I have had some experience of the Board of Works in years gone by, and I have always been of opinion that it is the worst and the most unbusinesslike Department of all the badly-managed Departments of the State. We are entitled to know where this list came from and who supplied it to the Board of Works, and why the regular Government contractors were not consulted.
§ Mr. BOOTH
I do not know whether my hon. Friend wishes to reply at this time, but I do not want it thought that I am afraid to make my remarks before he speaks. I am not quite sure in the stress of business how far his junior reported to the Prime Minister. Without any disrespect to my three juvenile friends on the Front Bench, I may say that I am disappointed that the arrangements made for this Debate do not correspond either with the Prime Minister's answer to my question or the importance of the subject. I am not now prepared to express myself in the way I intend to do, before this matter is finally disposed of, in the face of a Front Bench of this description. The Prime Minister indicated to me two definite occasions upon which this question could be raised. I may say quite frankly that we do not go into a disagreeable 507 subject like this to be fogged off on a foggy evening of this description.
We are entitled to introduce the matter when we can move a reduction of some important vote. Then when the Front Bench is threatened with a division they will see that one Minister comes in in order to ascertain why the bells are ringing. I say that advisedly, because when the subject was last under discussion an intimation was given which misled the House. The answer was given that 500 inquiries of firms had been made, and I say the only interpretation a business man could put upon that was that 500 firms had been approached, but now we understand that only 200 firms were approached and 1,000 inquiries were made. The inquiries have doubled, but the number of firms have been reduced to 40 per cent. When answers of that kind are given, the hon. Gentlemen on that Front Bench must forgive us—they must not take it that there is anything personally against them; they are more or less the tools or instruments of people we cannot get at—if we say that they give answers which do not inspire confidence. I drew the Prime Minister's attention to the fact, and I did it deliberately. I assert again that when we are treated to answers of that description they do not carry conviction, and, when they are denied the following morning by newspapers which are usually supposed to be friendly to the Government, and which have a reputation quite as good as any junior Minister, I say that we are made very uneasy.
I quite understand the position of the Opposition. There is not the smallest doubt that in normal times Members of the Opposition would have pressed this matter, and that is all the more reason why it is our duty to do it now. I know that the hon. Member for Sheffield felt that. Since the War began there has not been the slightest trace of any attempt on the part of any Member of the Opposition, either on the Front or Back Bench, to snatch the slightest party advantage, and it is exceedingly difficult for them to press a point like this. It is all the more important, as the Opposition cannot do it, that we should do our duty. What does it mean? It means that one of the most terrible scandals that has ever occurred in the history of the Government is being investigated by this House. There has been nothing 508 since I have been a Member of this House which has staggered me like this transaction. I do not hope to carry with me the 62 and two-thirds per cent. of the Government that I see on the Front Bench, but I do hope to carry the 33 and one-third per cent., when I say that the ordinary business proceeding, if you had a large purchase of this character to make, would have been to endeavour to get a suitable man and make a definite bargain with him, or, if you could get, as you can in this time of crisis, the very best men in the country offering their time and talent freely to the Government, to take advantage of that.
What does one hear every day? Junior Members of the Government may not hear it, but what does ordinary Members of the House hear almost every day? One hears that persons who are too old to go to the War, or are not suitable, are going to the War Office and to various Departments of the Government and saying, "What can I do? I have such and such experience"—giving particulars. "Make use of me, without salary, or without expenses if you like. I will do anything to help my country in this crisis." Strange enough, the Government have to admit that was so in this particular question of timber buying. That has nothing to do with permanent officials who have some other scheme or with junior Ministers who have never been in business in their lives, but it is a natural thing to some of us who know what business is. They sent out some inquiries, and one of the smartest of men turns up and says, "You do not want to do it in this way." The first endeavour of the very smart man when he finds he can only make a profit with risks is to remove that element of all business risk, and, when he finds he is subject to severe competition, his first aim is to remove all competition. So Mr. Montague Meyer, a giant among pygmies, comes along, and says, "You do not want to do it this way. I am the man. Do not deal with any of the other people. Deal with me only. Deal with me in such a way that I do not run any risk whatever and that I cannot lose a penny, but that provided your orders are big enough I make my pile whether the War is over by Easter or not."
I know nothing whatever against this person. I know nothing either of his politics or of his religion. I turn up the list of my club, the National Liberal Club, and I am mightily relieved to find 509 that he is not a member. If he is not a member of the National Liberal Club, I suppose he may belong to the Conservative Club, but I do not know whether that is so or not. I have been unable to find anything whatever about him. I do know, however, that while my hon. Friend the Member for Saffron Walden, who has, to my great delight, as he knows, been taken into the Government, receives a matter of about £1,000 a year, which is certainly an increase on his £400 as an ordinary Member, Mr. Montague Meyer, about whom I know nothing, asks us to believe that he is worth thirty, or probably sixty, times as much. He is open to make, I understand, about £30,000 in six months, and the hon. Member can only earn £1,000 in twelve months. I refuse to believe that this gentleman is worth sixty times as much as my hon. Friend. Nothing will induce me to accept that. We must ask this: How is it that a stranger of this description can walk into this beautiful job? That is what everybody is asking. My hon. Friends on that Bench may think the question is something else, but if they will venture to go out and meet people who do not know that they are Ministers, they will find that in the smoke-rooms and in the circles where business men meet the one question asked by everybody is: What is the meaning of this? Who is responsible for this job? I have spoken to Conservatives, I have spoken to Liberals, and I have spoken to leading trade unionists, and they cannot get it out of their heads—I am hoping that an answer will be given which will get it out of their heads—that there has been some corruption. I cannot credit it. I do not believe it, and until it is actually proved, or we can actually find it, I will not credit such an idea as that, but it is the common view, and it can only have arisen from the fact that they cannot see any ordinary business explanation of this transaction.
§ Mr. BOOTH
Looking at it in the ordinary way they say that is their own construction, and, whether the Government realise it or not, that at the present time is the view which prevails and which is spreading. I hope that they will be able to remove it. I honestly and quite sincerely say that at the present time I do not think that there is any corruption about it. I think that it is slovenliness, inexperience 510 and perhaps haste, but I want my non. Friends to understand that a contract like this is a kind of thing for which any board of directors, any managing director or any secretary of a company would be sacked. It may be that in politics we have to take this kind of thing. I do not know. I only say that this is one of those things I cannot overlook. I am prepared to think that in high politics and matters of policy I may be mistaken. But this is just one of those things which party loyalty cannot possibly expect us to support. It has not strength enough. Even the attachment to one's own party and one's own leaders—even party bonds and fetters are not strong enough to make men who have to earn their living in business agree to be parties to a thing of this kind.
If there is no other way to prevent these things I am going to advocate a Coalition Government. I am going to say quite frankly to my own party that if there is no other way to avoid things of things character, let us have a Coalition Government composed of Liberals, Conservatives, and Labour men. That is the solution we must have. The effect of this goes far beyond what hon. Gentlemen think. It is leading working men to go out on strike; it is leading to a jealous feelings against our Friends of the Labour party who are moderately inclined; it increases the difficulty of their heavy task in counselling moderation and peace. When the working classes have to pay increased prices for food and see their own firm making large profits, they get restless when they hear of huge profits of this description being made on a commission basis. They are becoming more and more restless, and I venture to prophesy that we shall have increased trouble. There are already manifestations of a spirit which does not bode well for the industry of this country in some, at any rate, of its departments. It is things like this which have been published which make it hard to represent to the working classes that they should stick to their jobs on comparatively small wages and help the country through this time of difficulty. But how can you expect men, when prices of food are going up, to be content when they hear that Mr. Montague Meyer is making thousands upon thousands of pounds by the mere purchase of timber? You cannot really expect it. I intervened at this stage in order that my hon. Friend, in his answer, may realise that it is not sufficient to make an ordinary, 511 clever or debating speech in reply to a thing like this. It is really far-reaching. It goes to the root of the matter of the whole conduct of the nation's affairs in this time of crisis, and the whole principles of the employment of labour in this country.
§ Mr. BECK
I must particularly claim the indulgence of the House, standing here for the first time, on a not very easy occasion, and I think the indulgence thus requested is oven more desirable when claimed by one who has been some years in the House and who knows the high standard exacted of men here. My hon. Friend who has just sat down is a little difficult to please, because he made the point that no interest was taken in this Debate.
§ Mr. BOOTH
Nothing of the kind. I only mentioned a casual remark in the Lobby. I certainly think that the attendance here is not characteristic of the opinion of the House. I know scores upon scores of Members thoroughly loyal to the Government who are bitterly disappointed. I never suggested that the attendance was any reflex of the dissatisfaction of the House.
§ Mr. BECK
I am sorry I misunderstood my hon. Friend, but that was the impression he conveyed to me. Really ten minutes past ten on Thursday evening is not an impossible hour for Members interested to attend the House and take part in the Debate if they so desire. But, after all, these are very small points, as is the one respecting the amount of remuneration and suggesting that I am only a sixtieth part of Mr. Meyer. What is much more surprising to me is that I find myself nearly three times as great as the hon. Member for Pontefract, if salary is to be the basis of comparison.
§ Mr. BECK
Really, these things are trivial. If we are going to approach this thing from the business point of view I 512 would submit it is absurd to compare the payment made to Mr. Meyer for his services with the salary which is paid officially to the Prime Minister, or to yourself, Mr. Speaker, or to any of the other great figures in our national life.
§ Mr. BECK
I will, if I may, come to the case I have to make. I would say, first of all, that, as I understand it, no one—certainly no one I have spoken to, has the least objection to this case being raised. I am authorised on behalf of my Noble Friend, the First Commissioner of Works, to say that if any business man in this House likes to go over to the Office of Works, every detail of this transaction is open to his inspection.
§ Mr. BECK
Really, I think my hon. Friend might allow me to make my speech in my own way. The name of every firm who has tendered to us is there. The profits of Mr. Meyer's business in the past, as testified to by chartered accountants, are there—of course, only for the private information of Members and not for the use of his trade rivals. There is nothing any Member can request us to show at the Office of Works which is not open to his inspection to show that there is nothing the least suspicious or doubtful in this case. That offer my Noble Friend allows me to make, and I can also say that he and the whole Board has full knowledge of this case, and take full responsibility for it.
§ Mr. BECK
It is not concluded at this moment. I only wish to say, as regards my own humble part in it, that I have given the best of my mind to trying to understand it, and I really do think that my hon. Friends who have been, as I say, rather misled in this matter will be disappointed if they expect to find what my hon. Friend the Member for Pontefract (Mr. Booth) called a "terrible scandal." I am afraid I shall be rather long. I am very sorry, that I have to be, but after all the matter has been swelled up somewhat beyond its value, and the figures are large even in these times of colossal expenditure. May I come to the case? The interest of my hon. Friend the Member for East Perthshire (Mr. William Young) in these 513 matters is, I am sure, praiseworthy. I believe it is the duty of every Member of this House to take the keenest interest in any matter of this sort, and therefore it is desirable that all these things should be investigated. I was rather sorry that to-night the hon. Member somewhat slightly altered the tone of his speech from that of the other night—not seriously. He called Mr. Meyer a second or third-rate timber merchant, and talked of officials as playing ducks and drakes with the nation's money I really do not think that that is the sort of thing that helps us. What I think should be kept in mind is that at the time this bargain was made a real and very pressing crisis had arisen.
This was only one of innumerable problems facing the Government in the terrific struggle in which we are engaged. What happened was this. Here was the month of October, and our troops were under canvas It was absolutely necessary that these troops should be hutted. Wood had to be obtained. Hon. Members talk as if the wood was in this country. I can assure them, from the best of my information, that the wood we had in this country was nothing like the quantity required. I am very sorry that I said to the House the other night—the statement was made in a hurry—that 500 inquiries had been made. What happened was this: I was shown an enormously big file of names, and the person who showed me the file informed me that 500 or over inquiries had been made. We had not then carefully investigated into all the facts. The fact is that over 200 firms were approached and over 1,000 quotations were obtained. These quotations are written out, and they can be seen by anyone who takes the trouble to walk round to the Office of Works. I hope that small point will not come up again. I would say this: Neither Mr. Meyer nor the Office of Works have been quite fairly treated—I do not say by hon. Members in this House—but statements have been made and repeated after it has been shown that they have absolutely no foundation. I have a paper here called "Timber." It is a trade paper which has been sent to me, and which deals with the timber trade. It starts by saying that the agitation was started by an important daily newspaper. Then it says:—We hold no brief for Mr. Meyer, but we like to see fair play, and until we know all the factors which led to his appointment and the way he has carried out the work entrusted to him since then, we certainly do not Teel inclined to criticise either the Office of Works or 514 Mr. Meyer, although we do contend that one of the leading Finnish agents could care done the work for a smaller commission, and should, of course, have been able to purchase on at least as low a basis as Mr. Meyer.They say, for instance, that particular statements published by that newspaper were bristling with inaccuracies, and also that it had ignored certain official statements. In the same way this paper is not entirely friendly to the transaction. They think it could have been made by employing other buying agencies.
§ Mr. BECK
I do want to approach this merely from the business point of view. In pursuance of that, I would say that as regards the Department which I have the honour to represent, the Office of Works, they only undertook this duty of timber buying because they felt of their own knowledge that the War Office was intolerably overdriven in the great crisis which had arisen, and because they felt, whether rightly or wrongly, that the knowledge which they possessed enabled them to do a real service to the country at this time of great national strain. I can assure hon. Members of this. I have made the fullest inquiries, and whatever faults the Office of Works may have committed, want of zeal has not been one of them. They have worked and overworked themselves to a most astonishing extent to see that this timber was obtained without delay, of suitable qualities and sizes, and, above all, delivered at the camps so that the work might proceed with as great expedition as possible. I am informed that the names of the firms to whom inquiries were directed were taken from the Directory of the Timber Trades Federation. My advisers tell me that they are not conscious of having omitted any important firm. I do not say for a moment that no firms were omitted, but I do say that I have in my possession a long list of firms, in every corner of the Kingdom, who were asked to quote prices and to give an opinion as to the stock which they possessed. The Office of Works formed the judgment that the quantity of timber was somewhat limited, and, above all, that prices were ruling very high. It was then that Mr. Meyer came on the scene with his solution. Of course, in 515 this life, all of us object to the other man being chosen. All of us feel, if we have interests or capabilities, that we have merits which are denied to our less fortunate neighbours.
Doubtless the timber trade do feel that it is extremely unjust that Mr. Meyer should have been chosen out of so many worthy gentlemen as the official buyer of the War Office. But I would say that I am glad that the very unworthy imputations made against Mr. Meyer because of his name have been dropped. You must remember this—I do not want to rely on the fact, but it is a fact—that at the beginning of this agitation in the newspapers, great play was made with the name of Mr. Meyer, and even the firm with which Mr. Meyer has been employed, the great firm of Bamberger was dragged in. It was stated a few days ago in the "Times" what services Mr. Bamberger and his family were rendering to the country, and the fact was stated that he has already lost a son in this terrible War. I know that my Friends may say that this has nothing to do with the case, but the case grows from day to day. It started with the statement that Mr. Meyer had been only four years in the timber trade. He has been eighteen years. He has been eight years his own master. We were then told that Mr. Meyer was a German. [HON. MEMBERS: "Of German origin."] No, that was not the statement. We have met every point as it arises to the best of our ability, and I hope that after to-night, though the case is badly put, as it is not in very worthy hands, all these wretched little points, which have nothing to do with the matter, will be finally disposed of.
I say that everything has been done to prejudice this case along the most well-known lines of journalistic and trade jealousy vitriol. The task has been made a great deal more difficult by the prejudice that has been gathered together by means of these methods, and I hope this House, for the dignity of the assembly, will really once for all banish those allegations. Before dealing with my right hon. Friend's points, I would like to say that before finally adopting Mr. Meyer's suggestion, we considered various alternative methods, among them the appointment of a representative committee. But the Board felt, and I must say I agree, that even if it had been an effective proposal, the appointment of members of the 516 committee, the setting up of machinery, and the putting of it into operation, must necessarily have involved delay, and we firmly believed that before the committee could have been formed, the wood would not have been obtained for, at any rate, two or three months. Then there is the further point, which, of course, will arise, namely, the commission which is paid.
It is not admitted that this is merely a buying transaction; it is essentially one under which arrangements were to be made for the delivery of timber, as well as the buying of it. The transport had to be arranged, and when timber was declared contraband, a new route had to be arranged for conveying the timber, besides giving attention to blockages on the railways, which continually occurred in those days. I am only pointing this out in order to show that it would not have been easy for a committee, representative of the trade, to undertake all these various duties, unless they gave the whole of their time; and it will be seen that a committee is not a likely body to do business quickly or without delay. I think the suggestion that anyone would come forward and offer to do this work without payment, in view of the immense amount of work to be done, is not one worthy the serious consideration of business men. I am perfectly certain that the hon. Baronet, the Member for Mansfield (Sir A. Markham) would never employ a man who came into his office and said he wanted to do work for nothing. A great many of us in this House do a great deal of work for nothing, but we all know that the man who is not paid, or is not paid sufficiently, is not the man from whom you get value. I come to a question which, if I may, I will handle with some discretion. I come to the description of the prices. I do not, and I think the House will agree with me, in the least wish to gibbet great timber firms as having given to the War Office or the Office of Works quotations which were unreasonable or exorbitant, but I have here the names from the Office of Works, with the prices given by the great trade firms. If there is any desire to have them published they can be but I do not think there will be on anybody's part, as it would be grossly unfair, I submit, to do so, as those firms when they sent their tenders did not expect their names published.
§ Mr. BECK
I will give the House some figures which I think will really show that at any rate there is a primâ facie case, on investigation by the most exacting business man, for saying that the Office of Works did save the country, by the employment of the scheme devised by Mr. Meyer and by employing Mr. Meyer himself. These are prices before the contraband of war, and prices which in each case covers the cost of insurance and freight. [An HON. MEMBER: "Are they piece prices?"] They are prices before Germany declared timber contraband of war, and when the timber still came down through the Baltic instead of taking it through the North Sea.
§ Mr. BECK
Yes; these were prices quoted. We have not got anything like the information we will have, because there has not been time to prepare it, as the Department is overworked, and some of the transactions are still incomplete. What we have done is to try and get out as far as possible, and on the most equitable lines, absolutely equal cases, so that we can test whether economy has been effected by employing Mr. Meyer and his system. These are the average prices, before timber was declared contraband of war, taken out of particulars given by the great firms. I am assured that in no case are there any tenders anything like as low as Mr. Meyer's, no individual tender, much less the whole transaction. I take 2 by 4, and the average quoted price by the great firms is £13 14s. 6d., the standard and the price actually paid through Mr. Meyer is £11 8s. 6d. In 3 by 9 the average price in the one case was £16 13s., and in the other £12 3s. 4d., and in 3 by 4½ £15 9s. 9d. from the trade, and through Mr. Meyer £11 12s. 6d. The price for roof boarding was £14 2s. 8d., as against £11 16s. 3d.; and for weather boarding £14 10s., as compared with £11 17s. 3d. I could go on with the list—
§ Mr. BECK
They are as exactly comparable as they can be made. I come now to 17th November. These are the prices quoted on that date by one of the greatest London timber firms, and the actual prices at which our buyers obtained the; same quality of wood: 100 standards tongued and grooved boards, average quoted price, £14 2s. 6d.; bought by our buyer. £12 7s. 6d. 100 standard weather boards, average quoted price, £14 5s.; bought by our buyer, £12.
§ Sir A. MARKHAM
There is no sense in an average quotation. No business man has ever heard of such a thing.
§ Mr. SPEAKER
The hon. Member (Mr. Beck is making his speech; the hon. Baronet has made his; surely he should give an opportunity for a reply. It is really not fair to make these running comments. The hon. Member is a new Minister; therefore he should be treated with the more consideration.
§ Mr. BECK
I quite admit that it is a very dull subject, but I am trying to give the House the information which it ought to have. We have tried to test this question in every possible way. If these quotations are objected to. I will only say that they show savings, per hundred standards, of 35s., 45s., 55s., 60s., and so on. Now let us see how the prices we, actually paid Mr. Meyer compare with prices given at public auction in London at the same time. At a public auction, the 23rd January, held by Messrs. Foy, Morgan and Co., at Cannon Street Hotel, the auction price for 3ft. by 4ft. 4½ in was £15 15s., we were buying at £14; 3ft. by 3ft., auction price, £15 10s., we were buying at £12 5s.; 4ft. by 9ft. 10 in., auction price, £16 5s., we were buying at £14 10s. I have another long list which can be seen by any Member who is interested. Now we come to the most remarkable case of all, where we have an offer from a timber firm of some goods "ex ship," and the wood actually came over in the same ship that brought over timber purchased for us by Mr. Meyer, The quality was the same, the timber came from the same place, it was borne in the same ship, and in a transaction amounting to £2,800 in all the saving under Mr. Meyer's scheme was £850.
§ Mr. BECK
The information is conveyed in a letter to the War Office of 1st February, 1915. The ship sailed from Trondhjem to Hull, I believe, in January. I am not trying to hide anything. I am trying to make out a case to show that really this so-called scandal is not a scandal at all, but a business transaction which reflects great credit upon the Departments concerned. [Laughter.] Well, hon. Members will judge my meaning. I come to another letter to the War Office written, not for this Debate, but in the ordinary course of business:—You may like to add the following item to my letter to you of yesterday's date, where I state that four by two is being quoted at £17 10s., while the Office of Works hold large stocks all over the country at £14 12s. 6d. average. The Office of Works yesterday bought, two by four, unsorted, Canadian spruce at £11 15s. per standard, c.i.f. London.This was good quality and good useful timber. The letter is dated 22nd January.
§ Mr. BECK
It was written by the Office of Works to the War Office in the ordinary course. It was not Mr. Meyer's letter. Here are two big firms. On 19th October they offered standards 2ft. by 4½ ft. unsorted Reds at £13 5s. ex ship. On 20th October we paid for similar timber of exactly the same description £11 per standard—a total saving of £172 10s. on a transaction of £1,100. Just before the declaration of contraband, on 14th December, another great firm offered standards at £15 10s. per standard. On 16th December Mr. Meyer purchased similar wood at £14 5s. per standard, a saving, after we paid Mr. Meyer's commission, of 2½ per cent., of £271 5s. in a transaction of £3,500. So I could go on, quoting case after case of that sort. I do not want to press any views of mine—they are of no value—nor do I wish to press the views of the Noble Lord the Commissioner. But I do say that before reckless charges are made, and before an outcry is raised in this House, hon. Members might easily have informed themselves of the details of this transaction. I submit to hon. Members that they have been made use of as tools by men who were personally disappointed of great profits.
§ Mr. BECK
The charges were made long before hon. Members took them up, and in a way that showed there was not much impartial or judicial spirit about them, but that there was a good deal of active dislike behind it all. Now to come to my right hon. Friend the Member for Kirkcaldy Burghs (Sir H. Dalziel), who says that the commission of 2½ per cent. is too high. We might argue that to Doomsday. All we can say is that, although we admit that the sums earned by Mr. Meyer are large—they are not in any sense represented by £15,000 net profit, as many charges have to be borne out of that amount—we believe that we can show that the sums saved to the country were infinitely larger than anything he earned. Then he said something about Mr. Meyer's duties. We had that out very fully the other night in my hon. Friend's speech. It is all very well to say he performed the ordinary duties; we say he performed extraordinary duties. But I would say there again the case made has been to a very large extent blown away.
We were told that Mr. Meyer got 2½ per cent., had a staff of clerks, an office, a telephone, and all the rest, provided for him in the Office of Works. All that has disappeared. My hon. Friend did say something about two clerks to assist, but, as will be seen in the contract, they were merely to check particulars in Mr. Meyer's office. Then my hon. Friend said there was insufficient inquiry. Only three or four days elapsed between the first inquiry and the letter written appointing Mr. Meyer. We admit that there was a hurry. As I have said already, and I say it again, there was urgent hurry to have this wood—above all to get it—and we can only say this as regards the Office of Works: That although we started with this one transaction, we had, at any rate, so far satisfied the War Office that we are constantly pressed by them to take more and more of the work—to get the wood they require. There is a reason. As my hon. Friend has generously said to-night, the timber was delivered in the camps punctually to time, and the rejections for defection were well under 1 per cent. of the total timber delivered. We believe, and I think the trade would believe if they knew the facts, that that would be a very difficult record for any committee or anything else to beat.
As to the 200 firms, the names of these were taken from the Directory pub- 521 lished by the "Timber Trade Federation Journal," and I am informed that there was no consciousness that any firms were left out. If one or two were left out it was an unfortunate accident and I am sorry for it. Again, there was an attempt to get a few quotations from the whole of the timber trade of the Kingdom, to get quotations also from every corner of the Kingdom to see what there was and what would have to be paid for it. As regards the solicitor and so on, after all anyone who has taken the trouble to read the contract—and I am sorry that my hon. Friend the Member for East Perthshire has apparently not read the contract—I have been walking about with copies of the contract—
§ Mr. BECK
I beg to move, "That this House do now adjourn."
I have only to say as regards the question of control and solicitors, I have shown that the time was very brief and that there really was no time to indulge in all the technical safeguards which I agree in peaceable times it would be extremely desirable should be observed. I would point out, however, that this letter of the 19th October, written by the Office of Works, is of a very strict character, and that above all it contains the provision that if Mr. Meyer, in our opinion, does anything which is either unbusinesslike or undesirable or exorbitant or anything of that kind, the contract can be cancelled at once at a stroke of the pen by a registered letter or by a letter sent to Mr. Meyer by a messenger. I cannot imagine that any solicitor or any safeguard you could get would give you a greater hold on a man, if a hold is desirable, than this letter gives. I do not know whether I have forgotten anything that has been asked me. Finally, I wish to say that this House does well to be extremely jealous of any contracts that are made by the Government of the day. I believe that, in picking out this contract for criticism and condemnation, hon. Members have picked out a contract which bears scrutiny very well. I say in all seriousness and not in any spirit of undue apology or excuse that, in considering this contract, or the 500 or 1,000 other contracts entered into by the Government, you have to remember the conditions under 522 which they were entered into. As regards the Office of Works, this contrast was entered into purely as a public duty, and there was no need for them to have touched the timber contract at all.
Everybody must know that when you are going to expand an Army as the War Office has done, the pressure must be terrific on that Department, and the Office of Works, by circumstances, not particularly driven at the time, came forward quite voluntarily and undertook this difficult and, as it turns out, very ungrateful task. I say that the way this contract must be judged is on facts ascertained and proved. You cannot judge it by saying that more time ought to have been taken, or that more committees ought to have been set up. If you had done that the attack would have been on the other flank altogether. You would have Members coining and saying, "This is just like a Government Department. They wait, they set up a committee, and meanwhile people are lying under canvas and in mud, suffering every discomfort, which any ordinary business man would have avoided." We have all heard those sorts of attacks. My hon. Friend behind me has made that kind of attack upon the Government within my knowledge time after time, and often, I dare say, with great justice for all I know; but, at any rate, here was a case where red tape did not bind the authorities, and where great firms were not exclusively employed. Another very favourable method of attack upon Government Departments is to say that they deal only with a few fashionable firms. I do ask the House, in the name of fair play and of justice, to finally sweep away all vestige of prejudice. I hate these prejudices and these sneers which are merely raised where a man has this or that name. The fullest investigations were made, and no charge of any kind has been made against Mr. Meyer's character. He is not an alien in any sense of the word. I ask the House to judge this transaction with an open mind, not blinded by any prejudice of the sort I have endeavoured to describe; and I ask any business man who may be interested in this question to come across to the Office of Works, and himself investigate the facts. I do not pretend to have any great knowledge on this subject; but I believe, if they will do that, the whole of this myth, as I think it is, will be blown away.
Mr. L. WILLIAMS
I rise, in the first place, to congratulate my hon. 523 Friend on the success of his first appearance at the box. I can assure him that those of us who fought and worked with him when he was on the Back Benches are very delighted at that success, and, if we have interrupted him, it has only been in order to try his mettle and to hear "the young lion roar." I can assure him, also, whatever may be the case outside this House, that, so far as I know, no one has been prejudiced against Mr. Meyer because of his name, and least of all myself, because I notice in the first sentence of the letter which is the basis of the contract, Mr. Meyer says:—With reference to the interview which my partner, Mr. Williams"—Therefore, whatever prejudices in other quarters may arise by reason of Mr. Meyer's name, I can assure my hon. Friend that among the Members of the Welsh party the name of Mr. Meyer's partner is sufficient protection for him from any prejudice of that sort. I came here tonight in order to listen to the defence which I knew would be most ably put up by my hon. Friend on behalf of the Office of Works. I have listened to every word of the Debate, and I confess that after the very able speech of my hon. Friend I can only come to the conclusion that he has very successfully imitated the official manner in evading every successive point raised against him. He has spoken of all sorts of matters; he has inundated the House with figures and facts, but neither figure nor fact adduced by him has helped to dispose of the complaint—the reasonable complaint—of my hon. Friend the Member for East Perthshire and my right hon Friend the Member for Kirkcaldy. The first question was this, and until the Office of Works are able to enlighten us on this point the question cannot be disputed: Why should Mr. Meyer, of all the timber merchants in this Kingdom, have been selected to be the monopolist agent of the Government in this most profitable transaction? Who is Mr. Meyer? He has been in business, we are told, for eighteen years, and on his own account for eight years. As far as I have been able to ascertain from my hon. Friend's observations in defence of the Office of Works, Mr. Meyer never had any transaction before this with either the Office of Works or the War Office.
I hope that was not the reason why he was engaged. At all events, there have been other firms—great firms in London—which have been transacting business with the War Office in the timber line and have never been asked to tender for this. I quite agree there is some force in my hon. Friend's statement that this was a transaction entered into in a hurry, in a time of great national emergency. If it had been one solitary transaction I could have understood why Mr. Meyer, or anybody else, might have been selected to carry it out. But this arrangement, so far as one can gather, is to go on as long as the War lasts. I know there is a clause in the letter of 19th October, in which the Department reserves the right to terminate the arrangements by letter should they consider it desirable, and therefore whatever may be said about the emergency on the 10th October, five months have since elapsed and there has been plenty of time for the Office of Works, if it had chosen, to make arrangements with other firms. At any rate, they could have made inquiries of other firms if they were prepared to quote cheaper terms than Mr. Meyer.
There is another matter which my hon. Friend very deftly evaded, and that is this. Why should a commission of 2½ per cent. have been offered to this gentleman when, as we are told—I myself know nothing about the timber trade—the ordinary rate of commission is 1 per cent. One of my hon. Friends read a letter from a firm of timber merchants in Liverpool to the effect that since the year 1843 they had been supplying timber and had been perfectly satisfied with a commission of 1 per cent. Why then appoint Mr. Meyer as the sole agent of the Office of Works for buying timber at a commission 150 per cent. higher than this firm which has been doing exactly the same kind of work, was satisfied with? Why not pay the market rate of commission? The very fact that the contract has been altered since by the Office of Works themselves shows that the original amount was much too high. That is a point which has not been definitely and fully answered by my hon. Friend.
The third point is this: Whatever may have been the urgent causes that led the Office of Works to make this contract with Mr. Meyer in October, surely since then there has been plenty of time to enable them to get into communication with 525 other firms in order to make other arrangements. My hon. Friend suggested in the course of his speech that Mr. Meyer was able to supply timber at a better price than had been quoted by other firms. There are two criticisms to which I would ask him to reply when he comes to deal with the matter further. My hon. Friend is new to the matter and it may very well be that he has not given it so much consideration as he will do in the future. The first point is this: Has he not been misled by this average price which has been quoted? I am not a business man, therefore I should not like to speak with authority or attempt to do so in this matter, but I know something about business transactions, having had to investigate a great number of them. I have never seen or heard before of the average price being contrasted with the price which has been charged for the carrying out of a certain contract. Surely the proper thing would be to contrast the lowest price in each class of goods supplied under the contract with the actual price paid. It is illusory to contrast the price paid with what we call the average price.
§ Mr. BECK
This is, I think, the point: When I say we took the average price it was not a question of taking over a few standards of timber at the lowest price. We had to buy timber in every corner of the country. I did quote the actual prices. We lumped together the average price paid all over the country and said we would obtain a quantity of timber at that average price. As a matter of fact, we obtained it at a still lower price under Mr. Meyer's method of obtaining it.
I am not disputing that. The other point the hon. Member did not make clear was this: When he contrasts the price that was actually paid to Mr. Meyer with the price quoted by other firms, I should like to know whether the point at which the goods were to be delivered was the same in each case—that is to say, Mr. Meyer might have delivered the goods for which he was paid in London, while the firms that were quoting these prices might, according to their contract, have to deliver the goods at Birmingham or Coventry, or some other place.
I would like my hon. Friend to satisfy himself. He says that on another occasion he satisfied himself on this point, and everybody will be glad to accept his assurance, but until he has satisfied himself and told the House, this comparison must be an unfair comparison of prices. I have no prejudice in this matter at all. I have remained in the House, and I have heard the speech of the hon. Member. I congratulate him on the way he has discharged the very onerous duty devolving upon him, but I must say that, after hearing the whole Debate, he has not satisfied my mind that the Office of Works has made a good bargain in this case.
§ Mr. HASLAM
I wish, in the first place, to echo the congratulations offered by the hon. Member on the hon. Gentleman's first appearance in the very responsible position in which he is placed on the Front Bench. The hon. Member referred to the nationality of Mr. Meyer. Some Members of this House may have a prejudice against him on account of his name, but, speaking for myself, and I believe I speak for other Members, that there is no prejudice against him on account of his name. And why should we have a prejudice? I wish to emphasise this point. On the matter of nationality the hon. Gentleman was asked the question whether Mr. Meyer was of British nationality, and he replied, "I do not know." I wish to know whether Mr. Meyer is a British subject. So far as I am concerned, as regards the business transaction, I still believe that 2½ per cert, was a large commission to have given, and I believe the same business could have been done, and would have been done, at far less cost to the public purse. On this subject I feel that it is our duty to safeguard, as far as possible, His Majesty's Exchequer, and when questions of public expenditure come before the House Members on the Front Bench will understand that we criticised those matters with the best possible motives and without any personal feeling towards Members on the Front Bench.
§ Sir A. MARKHAM
I am sorry I interrupted the hon. Member (Mr. Beck). The reason I did so was that there were certain statements in his speech which seemed to require explanation. It was not done for the purpose of treating him unfairly. He has not dealt with the points raised by an hon. Member in regard to the quotations which he gave. He did not 527 give the dates when they were received by the Government, nor did he tell us whether the prices he gave were for delivery at certain specific towns or whether they were for delivery at Hull or other ports. I am rather suspicious of these prices for the reason that I think the Office of Works has been putting salt on the hon. Member's tail. I have never heard of average prices being quoted in an assembly of business men before. I have never heard of a corporation, contractor, company, or firm, giving out the average prices they have received.
§ Sir A MARKHAM
The question is whether they were comparable. Rates have varied so enormously between London and Hull owing to the War, that unless we take the actual port where you have got the quotation from one merchant and the price of delivery to Mr. Meyer, the whole comparison is gone. When the Board of Works put into the mouth of my hon. Friend average quotations, they put in something which ought not to have been put in by any Department claiming to have a knowledge of business. Average quotations are utter nonsense, and the Office of Works know it!
Sir H. DALZIEL
We all recognise that the hon. Gentleman had a very difficult task, and I am sure if it had been possible to make this appear a proper business transaction he would have done it. Unfortunately his eloquence and ability failed, and the opinion of the House remains what it was before the Debate began, that the War Office and the Government have made a great blunder in this matter which ought to be rectified with the least possible delay. It sounds well to talk about crisis and trouble and haste. They have power in this contract to end it in a moment if they please. It has been going on for months. Why did they not say when they had leisure, "This gentleman is making too much money—at the rate of £60,000 a year. The public, who are asked to make 528 all kinds of sacrifices, will resent it. We shall have to modify it at once"? This is a most unbusinesslike contract. There is no business firm in the country that would not be ashamed of the manner with which this contract is drawn. Why were not proper protective clauses for the Government put in? It would have taken only a few minutes' time of a typist. Unlimited power is given to this man to pay away the money of the State. There is no power to prevent him paying commission to any party in the country.
If you terminate this contract you will have to stand by his commitments. The Government might have come down to the House and pleaded their haste. It is said that the Committee would have been ringed. Are these other Committees ringed? They have some of the best brains in the country advising them. No evidence whatever has been put forward that there was any attempt whatever to ring the War Office. What has been put forward is a selected list of contractors who were invited to compete, but there were many contractors on the list of the War Office itself who were not invited to quote. A selected list was chosen. The result did not come up to the expectations of the Government. This is a most unbusinesslike proposal and cannot be defended. These other firms were neither given an opportunity for quoting prices nor for competing with regard to commission. The commission was settled without even asking what was the rate or without inquiry from any other firm as to what they would take. It was all settled in a quarter of an hour. I should like to see the date of the interview and I shall press for it. Who saw this contract before it was made? Lord Emmott takes responsibility. We pay him for taking the responsibility. I would like Lord Emmott to say that he saw this contract and knew the contents of it before it was made. We shall not let the matter rest where it is.
It being half-past Eleven of the clock, Mr. SPEAKER adjourned the House without Question put, pursuant to the Standing Orders.
§ Adjourned at Half after Eleven o'clock until Monday next, the 1st of March.