§ Sir WILLIAM BULL
I want to call the attention of the House to the subject of the fifth Report of the Sub-committee on the Ministry of Munitions, in regard to the arrangements of the Ministry for obtaining cellulose acetate. The bulk of the Report is devoted to certain allegations against the British Cellulose Company, and they are felt very deeply. I have decided to ask the House to listen to me for a brief time in regard to this matter. Immediately the Report was issued the company wrote to the Ministry of Munitions asking for a full investigation into the charges it contained; it was asked that evidence should be given, and that the papers should be unreservedly submitted for investigation. The Parliamentary Secretary for the Ministry of Munitions promised investigation. A letter was sent to the Press asking the public to suspend judgment, and a majority of the papers freely inserted it; but the "Daily Chronicle" did not do so, and it published this morning a long article dealing with the affairs of the British Cellulose Company. The company feel that they have not been treated fairly in this matter. In the first place, the hon. Member for Greenock, the Chairman of the Sub-committee, took upon himself a rather unusual course. The Report was dated the 23rd, and on Friday, the 26th, copies were placed in the Vote Office; yet on the following morning the whole of the Report, or the greater part of it, appeared in the Glasgow papers, and on further inquiries 1036 being made by the company it was discovered that the Chairman had taken the unusual course of sending a typewritten letter, signed by his own hand, to various newspapers, underlining in blue pencil certain passages dealing with the affairs of the British Cellulose Company. That company is composed of men of high positions who hold important posts in various large concerns. I will give the names of two or three who are members of that board. There is Sir Harry Macgowan, managing director of Nobel's; Sir Lionel Phillips, so well known in connection with South Africa; Sir M. Mitchell-Thomson, who is also very well known in Scotland, being a railway director, bank director; and others.
All these people are connected with this company, and apparently on the chairman's ipse dixit, certain statements were made in the fifth Report. The allegations against them are unreasonable delay—they say they have a complete answer to that—that they had an extravagant capital expenditure, poor quality of product, and excessive profits. All they ask is that an independent tribunal should try their case and that the evidence should be taken upon oath. They were never aware, when the Committee was sitting, that they were on trial at all, but they understand now that some thirty-four witnesses were called. When they were asked whether they would give evidence they said they would be only too pleased to do so and to help the Committee in any way possible. Questions were put, and Colonel Grant Morden asked, "Are we on our trial?" The chairman of the Committee, so I understand, said, "Certainly not. We are merely considering the Ministry of Munitions." Colonel Grant Morden said, "If I am on my trial, I should like to be represented by solicitors or counsel," and the chairman said, "Not at all; we are only asking certain questions with a view to testing the efficiency of the Ministry of Munitions." The gentlemen forming this company thought they were doing an extremely patriotic work indeed in getting this acetate of cellulose into this country. It is an extraordinary invention, first invented by an Englishman named Cross about forty years ago, but it was only a laboratory triumph, and it was not until a few years ago that some Swiss chemists named Dreyfus succeeded in turning it into a valuable commodity, which will become more and more valuable as the years go 1037 on. This is one of the constituents of dope, and dope is the material which is necessary to coat aeroplanes with. Dope has to have certain extraordinary qualities. It has to be heat-proof, water-proof, frost-proof, it has to be transparent, it has to be to a certain extent elastic, and it also has to be damp-proof and wet-proof. All these things are necessary for the purpose of coating the wings of aeroplanes, and no aeroplane can fly unless it has got this kind of material for covering its wings.
It was due to Colonel Grant Morden, who discovered that the Dreyfuses were able to make this peculiar material which was necessary, that it was brought over to this country. I understand that when first put before the War Office they pooh-poohed the idea of any large supply of dope being required in this country. They thought a quarter of a ton per day of acetate of cellulose would be ample for the purpose, but I understand that ever since that they have been pressing more and more, until they are now pressing this company for something like 60 or 80 tons a week. Therefore, what was first a small company, in which £120,000 was put up by debentures, with £4,000 of capital in sixpenny shares, has naturally grown, and the public are interested in seeing that these 6d. shares are now worth £14 10s. Nothing of the kind. They are exactly worth what they were when they were 6d., and no more. I understand from inquiries I have made that the £4,000 of shares were made 6d. shares for division amongst those persons who put up the £120,000 worth of money in debentures. It was an easy way of dividing them into small sums, and there was no expectation that any profit would be made. No profit has been made, but from that report you would hardly think that possible. No excess profit has been made, and no profit at all. I understand from the accountant, who in a very short time will be able to get out the balance-sheet, that there is a considerable loss at present, and has been ever since the company was established, in making this material. These gentlemen, out of their own money, found over a million and a half with which to set up works at the earnest request of the Minister of Munitions to turn out this valuable product. Their works near Derby are a mile in length and half a mile broad, and they have been put up at a cost of approximately three millions of money. That has been done absolutely at the urgent request of the Government and the particular 1038 Department, who have again and again begged that they should turn out more and more of this peculiar composition.
That is the whole story. At first it was quite a small thing, and £120,000 in debentures and £4,000 in sixpenny shares seemed to be a right kind of size for the company. All the men connected with it were men connected with large concerns, and they did not trouble about increasing it in any way. No shares have been sold on the Stock Exchange whatever. They have kept them amongst themselves, and when they wanted money, money was advanced. One of the chief banks in London. I believe, advanced £900,000, and also one of the firms connected with the concern put in £500,000. Therefore, these shares might just as well have been £50 shares. It makes no difference. It was only to show what the company was worth, and for the purpose of paying back the debts to the bank and the other firm the alteration in the company took place whereby an arbitrary figure of £14 10s. was chosen as the amount at which the shares should stand. I think the Report of the Committee, which has been criticised in many respects like the Sixth Report of the Committee, does not fairly represent the case of the Cellulose Company. There are a great many things in the company's favour that have never been mentioned. They had not the slightest idea that their rivals in trade were being examined behind their backs and giving evidence which was totally irreconcilable with the facts, which can be disclosed from their books. They know the House of Commons is the fairest inquest in the world, and all they ask the House of Commons to do is to suspend judgment, and they ask the Press also not to make comments upon the matter, until this Committee of investigation has thoroughly examined it on oath.
I am asked to say that every help that the company can give, by means of their books, or their officials, or their records, they will give to such an investigation, but they do complain that the chairman of the Committee should have taken upon himself rather more than he ought to have done in absolutely writing to the Press a letter, and under-marking in blue all the way through the Report everything that affected the British Cellulose Company, and asking, I believe, the editors of those papers to comment upon it. That may or may not have been a judicial act, but all the company ask is that judgment 1039 should be suspended until their side of the case has been heard. They have put in a detailed answer to the Report of the Committee to-night to the Minister in charge—namely, the Minister of Munitions—and they are willing to back up that reply in every way that this investigation thinks fit. I think I have said enough to the House to show that there is another side to the question. These men have honourable careers behind them. They are men of large positions, who have done everything they can to supply the Government with what was absolutely necessary, and they feel that they have been unjustly attacked in this Report. I should like to say something about cellulose. I am no chemist, but it is an extraordinary invention, this acetate of cellulose. The base of it apparently is cotton or paper. It is then torn to pieces, ground up, and mixed with this chemical until it practically becomes a flour. It is then turned back from being something of a floury nature until it is in the form of a jelly and transparent. They have practically solved the difficulty which Mr. H. G. Wells put in one of his books as one of the first and most desirable things that ought to be invented after the War, namely, glass that will bend, and they have practically turned out glass that will bend in any direction. In addition, it will make a synthetic silk of the finest quality, and I have got some in my pocket now. Further, it makes unbreakable films, and Messrs. Pathé Frères use nothing else than cellulose, and, as I have said, it is absolutely necessary for the purposes of dope. This company feels very strongly the remarks which have been made in this Report, and they ask for justice at the hands of the House of Commons.
The right hon. Gentleman has asked the House to suspend judgment on the Report issued by the sub-committee on the Ministry of Munitions. I have the honour to be the chairman of that Committee, and I am sure that the request of the right hon. Gentleman will be appreciated and accepted by my Committee. In view of his request, and of the statement made at Question Time this afternoon, that the Government proposes to set up a Committee of Inquiry into this case, I have no intention of now speaking to justify the Report, but I can say that, at the proper time, my colleagues and I will 1040 attempt to justify every statement therein made. At the beginning of his speech the right hon. Member referred to my action when the Report was issued, and rather inferred that I had issued a copy of the Report to the Press before it was made public. That I desire to contradict emphatically. On the day the Report was issued I sent to the Vote Office for several copies of the Report. I have heard that the right hon. Gentleman has suggested to Mr. Speaker that the substance of the Report was published in the "Glasgow Herald" on the day that the Report was issued in London.
§ Sir W. BULL
No; the Report was issued in London at two o'clock. It was then in the Vote Office, and it appeared almost in full in Glasgow on the next morning.
The Report was issued in London at two p.m., and appeared in a Glasgow paper the following morning; that is only natural, because it would be sent along the wires in the afternoon. I desire to deal with that point, because it had been stated to Mr. Speaker that I infringed the privileges of the House by sending a copy of this Report to the Press before it was issued to Members of this House. I did not take any such action, and I am glad the right hon. Gentleman has seen fit to withdraw any suggestion which he conveyed to Mr. Speaker in the earlier part of the afternoon. The second reference to myself consisted in the fact that, as chairman of the Committee, I sent a copy of the Report to the Press with certain sentences specially marked. I admit at once that I did do so. It was a long Report, and I conceived it my duty, as I shall conceive it my duty in future, to see that the substance of the Report is referred to in the Press. The Report, as I say, was a long one, and unless someone had taken the trouble to mark the salient factors it might not have been dealt with satisfactorily by the Press at short notice. The right hon. Gentleman seemed to think that I was animated by some bias against the company. But I marked the Report carefully myself and I purposely omitted marking any reference to two gentlemen, one an officer and the other Sir Trevor Dawson, to whom reference has been made here. If the right hon. Gentleman had gone through the marked copy he would have seen that I did not mark 1041 those names at all. I might further mention there is a reference to myself in page 2 of the Report in a complimentary sense, and I did not mark that reference. The reference in question was in the Report presented to the House by a Subcommittee of the War Office. My sole object in issuing this Report and marking the paragraphs was to draw public attention to these matters. My Committee had spent a good deal of time on this question, and I considered it advisable to take the action I did under the circumstances. It might be said that I have exceeded my duty in so doing, but I think in view of the action of the Government, and in view of the general practice of hon. Members when sending a copy to the Press to mark it for their convenience and in order to draw attention to the salient facts—in so doing I was not doing anything unusual nor was I attempting to cast blame or otherwise on the persons mentioned in the paragraphs. I only desire to make that personal explanation. I hope the House will accept my assurance that I was only influenced, in issuing the Report and marking it, by the public interest and by a desire to draw the attention of the public to the work which the members of the Sub-committee had been doing for many months—a thankless and difficult task. We have endeavoured in our Report to hold the balance fairly between all the parties, and when the Committee appointed by the Ministry of Munitions comes to investigate the Report I feel confident myself it will be found that we have in this Report dealt justly with all the interests concerned.
§ The PARLIAMENTARY SECRETARY to the MINISTRY of MUNITIONS (Mr. Kellaway)
It is not necessary for me to enter into the controversy which has arisen between my two hon. Friends who have addressed the House, but I think it desirable that I should state at slightly fuller length than I was able to do at Question Time the course which the Ministry of Munitions intends to adopt on this matter. This contract, the centre of so much criticism, was entered into early in the War by the War Office. The country then found itself in this position, that it was dependent for its output of aeroplanes on a particular ingredient, small in bulk, but absolutely essential to the carrying out of our aeroplane programme. It found that this product was not being made in this country and that we were 1042 entirely dependent on imported supplies of cellulose acetate. The War Office at that time decided that if it was at all possible the necessary arrangements should be made for producing cellulose acetate in this country. It was obviously undesirable that for an essential material of this kind this country should be dependent on foreign sources. The War Office then got into touch with Dr. Dreyfus and his company, who were one of the two firms on the Continent amongst neutral and Allied nations who were able to produce cellulose acetate, and, as a result of the long negotiations that took place, a contract was entered into between the War Office and Dr. Dreyfus as representing this neutral company. They made a contract under which Dr. Dreyfus was to erect works in this country which would be capable of manufacturing cellulose acetates.
It is not for me to defend, and I have no intention of doing so, the action taken by the War Office at that time. The essential thing was that the stuff should be produced in this country. It might have been possible, with all the information we now have, to have adopted some better course. It might have been possible to have had two or three alternative sources of supply, but these happened to be the only people, so the War Office were advised, who were capable of producing cellulose acetate of the necessary quantity, and this contract they made with them. Whether it was the most ideal contract that could have been made or no, I am not concerned to state, but that contract was entered into with that motive, and the motive was a good one. It was not until February, 1917, that the Ministry of Munitions had any concern at all in this business. In February, 1917, the Ministry of Munitions took over the Aircraft Production Department, and it was then that the Ministry had to take over the contract then made, and the responsibilities attaching to that contract. Negotiations went on for some time. The demand for cellulose acetate went up by leaps and bounds. The programme of aircraft production multiplied twenty times compared with what it was at the time when the War Office first entered on these negotiations, and it was inevitable in those circumstances that the expenditure should multiply to a degree which was not anticipated when the original estimates were made. The 1043 question of whether the Ministry were right in following up that contract, and in adhering to the process, which was first adopted by the War Office, is one about which there might be some controversy. But about this there is no controversy, that the particular process which was adopted for this country—that is what I may call the Dreyfus process—has since been adopted by America, France, and Italy, and in America there is the Kodak Company in existence which the Government have been told might have been an alternative source of supply, and in France the Usines du Rhone Company. Therefore, these other countries have adopted the same process that has been adopted in this country, namely, the Dreyfus process, and, whatever may be the defence in regard to this contract, this at any rate is certain, that at no time has the great aeroplane programme of this country—twenty times what it was at the beginning of the War—been held up for lack of this essential material.
Those, I admit, are only large considerations which do not touch, to any great extent, the particular criticisms made by the Select Committee over which my hon. and gallant Friend presided. But they are criticisms which should be in the mind of Parliament and in the mind of the country in view of the sweeping criticism—something amounting to denunciation—which has been indulged in in certain quarters. I devoted my weekend to the study of the Report, and of such documents as I was able to read during the time, and, as a result of that study, I came to the conclusion that, whilst these large considerations might be held fairly to justify the broad lines which the Government have pursued, still, in view of the conclusions of the Committee and certain statements made in that Report, we could not allow the matter to rest where it then was, and, as a result of a conversation I had this morning with my right hon. Friend the Minister of Munitions, we agreed that we would immediately set up in the Ministry a strong competent body to examine the three recommendations which the Select Committee has made, and to report at the earliest possible moment in regard to those recommendations. I make no criticism whatever of the Report of this Select Committee. On the contrary, I think the Ministry of Munitions is under 1044 a debt of obligation, as indeed is Parliament, to the Select Committee for the manner in which it examined every detail of this contract. I am not concerned with what may be the attitude of the company towards the Select Committee, but it was impossible, in my view, that the Ministry of Munitions, in view of a report of that kind, should let the matter rest. That Committee will be set up in the course of the next two or three days. It will be given terms of reference to confine it to the recommendations which the Select Committee has made, and, as soon as we have received the Report, we shall not hesitate to take such action as may be called for.
§ Mr. KELLAWAY
As it will be a Departmental Committee Report, I should not care to say at the moment whether it will be made public. But I should say that all conclusions and the action taken thereon will be made public. I thought it necessary to make these observations, and especially those in the first part of my remarks, because I should not like the House or the country to suppose that this contract has been of such a nature as could not be defended on broad lines. The broad considerations are those which I have put. But I also recognise, as I have shown, that there may be other considerations which should be taken into account, which, so far, have not been taken into account. I am most anxious that the Ministry, and especially the financial side, should give Parliament the assurance that in regard to all these contracts involving great expenditure the most scrupulous care should be taken to see that the country gets really value for its expenditure, and, so far as my hon. and gallant Friend's Committee is concerned, I personally feel that Parliament and the Ministry are under an obligation to him and his fellow members for the spirit and the thoroughness with which they have made this examination.
§ Mr. HOLT
I am exceedingly pleased to know the Ministry of Munitions means to have a thorough investigation. I trust that the terms of reference will be wide enough to investigate the whole matter. There are several aspects of the case. There is, first of all, the technical question. If you follow the Report of the Select Committee, assuming that Report 1045 to be correct, there can be no question that this company failed lamentably and scandalously in their promises and assurances to the Government.
§ Mr. HOLT
Promises were made which were entirely unfulfilled. Negotiations began in July, 1915, and were apparently concluded in September, 1915, but according to this Report it was July, 1917, before anything substantial was produced, and it was April, 1918, before the goods were coming in in quantities. If there is an investigation we ought to know why, assuming it to be, as I have no doubt it was, an article of very great importance to the conduct of the War, such a very long period of time elapsed between the time when the contract was set in hand and the time when any goods whatever were delivered. We certainly ought to have much more information than we have got as to how it was that various reputable concerns which, primâ facie, were more reputable were not encouraged to take up production in this matter. We ought to have got more information about that. I do think, also, we want more information about the constitution of this company. There is no use shutting our eyes to the fact that the financial story of this company is an exceedingly uncomfortable one. I know nothing whatever, I frankly admit, about the Stock Exchange and the floating of companies, but when I discover that shares which were valued at 6d. have come to be worth £14 10s. I think everybody who knows anything at all about it would like an explanation, though it is explained to me that there is no particular signification attached to the change.
§ Sir W. BULL
I do not want to bore the House with these details, but the £120,000 is now £3,000,000. As I explained, the shares are merely for the purpose of showing how the matter stands.
§ Sir W. BULL
The money has gone into the company and has been spent, not the money of the Government, but the money of these people.
§ Mr. HOLT
If the person who put in sixpence now finds his share is worth £14 10s., all I can say is that the explanation is not adequate, is not satisfactory. If that is not what the Gentleman opposite means I fail to understand what is exactly his explanation. If somebody has found the money it may be that the explanation of the hon. Gentleman who spoke the other evening is the right one and that, after all, whether or not some peculiar bargains were made does not matter so very much so long as the directors of the company did not take the taxpayers' money. But the taxpayers ought to know something about it. Are we to understand that the whole of this bargain about not paying the Excess Profits Tax amounts to nothing, and that there was never any profits? We should look for a very full, and a very close and clear investigation. There is another matter about which I should like to know. I want to know what is the connection between this company and the Ministry of Information? I think that the gentleman who is a great light in this company, Mr. C. G. Bryan, of the Prudential Trust Company of Canada, and who produced the £120,000, is one of the managers of a Department in the Ministry of Propaganda. I find also that another, an officer of the Ministry of Propaganda, was lately a director of the bank with which the Prudential Trust of Canada kept their account. This is what I have discovered in my own investigation into books of reference and so on that can be had in the Library of the House. I should like to have all these matters thoroughly investigated. It is not altogether a pleasant transaction. We have had a list of shareholders published by the "Daily Chronicle." There are some very reputable gentlemen in this list, and some persons not altogether so. It is not altogether pleasant to the man in the street to see some of these names, and about this matter we should like to know a good 1047 deal more. All this explanation of Colonel Grant Morden is very unsatisfactory. The right hon. Gentleman referred to him as a gentleman who introduced this process into England. We have had other very reputable people in touch with these matters which were not carried on next door to Germany. We ought to have a very full and complete investigation of the whole matter.
Is everyone satisfied that these Swiss manufacturers are entirely above suspicion? We have been told that every person who is not a natural-born British subject has got to have a special investigation made into his character; yet we make no special investigation into the character of any of these people who are concerned in the matters we are discussing. After all, I should like to remind the House that if you are going to have dangerous spying, and dangerous communications with the enemy, these things are not going to be done by some wretched barber or butcher of German origin living in a miserable suburb of London or Liverpool. These are not the people. The thing is more likely to happen in connection with some international syndicate which has got the opportunity to do it. Where are you going to find these things done than by those who have access to all sorts of confidential information? These are the people for whom you really want to be on the look out. On the other hand, here are people whose financial methods are very queer and peculiar, who have every opportunity, if they desire, to get information through to the enemy. It is these great international syndicates who have the opportunity of doing harm—the people you would not suspect, the people above suspicion! That is the direction in which you should look. When you find people who have in this way carried on business by peculiar methods, failing to deliver the goods, and at the same time carrying on financial transactions of a very dubious character, surely the time has come that there should be a most thorough, complete, and searching investigation into the whole operation! I hope such investigation will take place. I hope it will prove that these people are in all respects absolutely above suspicion. But I must say that if they do, or have come under severe animadversion, that they have only themselves to thank for it The transactions right through are 1048 not of the character which ordinary business men are accustomed to be associated with. It is not the usual thing to have great syndicates set up mainly by people who have got nothing whatever to do with the business. Surely there were plenty of respectable chemical manufacturers in every direction, and yet we have this Swiss-Canadian Syndicate, with its peculiar and extraordinary relations with the War Office. Perhaps the hon. Gentleman opposite will be able to give the names that will be appointed on the Committee?
§ Mr. KELLAWAY
I do not know whether I can. It was only this morning that we came to a decision to appoint the Committee.
§ Mr. HOLT
I trust it will be a very strong Committee. It ought, I think, to be more than a Departmental Committee. This Committee is to investigate allegations made by a Committee of this House, and we ought to have the power to compel witnesses to attend and produce papers and to have an examination on oath. Nothing less than that will satisfy us.
§ Mr. KELLAWAY
The recommendations of the Select Committee are our recommendations, and we think the Ministry of Munitions should consider them. That is exactly what we propose to do. We propose to act on the recommendation of the Committee and to consider those recommendations, and we intend that there should be a searching examination.
§ Mr. HOLT
We do not want a Departmental Committee simply to consider the recommendations of the Committee, because I understand the facts are disputed. You want a Committee which is capable of making a proper judicial investigation of what is going on and what has been going on, and which can really get to the bottom of matters, for this subject has a most unsavoury smell. It may be capable of explanation in a thoroughly satisfactory way, but it does not look nice at present, and the bad impression which has undoubtedly been given to the public will not be got rid of 1049 by any hole-and-corner investigation. It must be a thoroughly drastic inquiry, and unless that is done there may remain something which may possibly be very unfair to the company and an impression that something very improper and scandalous has taken place.
§ Mr. H. SAMUEL
I do not desire to go into the merits of the question under discussion, but I think we should have it stated a little more clearly what is the action which the Government really intend to take. There are two points in question, one comparatively narrow and the other much wider. The narrower point is what the Ministry of Munitions is going to do with regard to obtaining the supply of acetate. That is a single question to be decided on the merits of the particular case. The other point upon which the House has expressed anxiety is whether there is to be a free investigation into the history of the events which have taken place, the constitution of this company and the financial methods adopted and all the other aspects of the case. I understand that, so far, the Ministry of Munitions have decided to hold an inquiry only into the narrower point. Clearly that will not satisfy the company in fact, the company would not have any locus standi to explain any of these transactions, if the point is simply whether the particular factory existing is to be taken over by the Ministry or not. I doubt whether that would satisfy the House. If there is to be a further inquiry, which one might describe as an appeal by the company from the decision of the Report of the Select Committee, I hardly think it ought to be an appeal from the Select Committee to a certain number of officials of the Department.
With regard to the Select Committee itself and its work, we were obliged, owing to the magnitude of the task, which has been placed upon our shoulders by this House, to devolve some of our work on to Sub-Committees, and by no other means would it have been possible for twenty-six Members to examine so many Departments of State. The Sub-Committee which has dealt recently with the Ministry of Munitions and this contract has been described in one quarter as consisting entirely of lawyers. As a matter of fact, it consisted of two business men, one other Member who is a chartered accountant, one who is a stockbroker, and one who is a lawyer. 1050 They gave an infinity of pains to this contract, and held a large number of meetings, and they were unanimous in regard to the Report presented to the Select Committee. The Select Committee heard the members of the Sub-Committee, examined their Report, and endorsed it and presented it to this House. In these circumstances until some other competent tribunal has examined this question more thoroughly—I do not know whether it is intended that counsel should be heard—I think the House and the public will be disposed to accept as accurate the statements in the recommendations of the Report.
§ Colonel GRETTON
I have been waiting to hear some further expression of opinion on this question. I do not think a Departmental Committee can satisfactorily deal with this controversy. It would hardly be possible to make a close examination into the whole of these transactions without examining the whole of the period in which the Ministry was involved. This is one of the subjects in regard to which a full and searching investigation ought to be made, and if it is undertaken by a Departmental Committee the facts might never reach the knowledge of this House, and their Report would always be open to suspicion. I suggest that in the interests of everyone concerned there should be a certain judicial inquiry before which witnesses could be examined on oath. I have no bias in this matter, but I have read the Report, and I am convinced that it is a very serious matter which should be gone into further. I have only risen to add my small voice to the request that the Government should abandon the proposal for a Departmental Committee, and should set up instead a Committee which will make a thorough investigation.
§ Mr. DILLON
I wish to draw attention to the treatment of this question by the representative of the Ministry and the right hon. Gentleman the Member for Hammersmith (Sir W. Bull). I do not understand why the right hon. Member for Hammersmith should have come here with a brief on behalf of this company and constitute himself the impassioned champion of the company.
§ Sir W. BULL
I can answer that question. The two gentlemen concerned are friends of mine; the papers were attacking them, and I appealed to the House, before deciding the point, to wait until some action can be taken before a more satis- 1051 factory tribunal. If this cannot be done, then they must appeal to the Law Courts, unless a satisfactory tribunal is set up which can take evidence on oath. As far as I am concerned I have not a share in this company; I have no interest whatever in it—in fact, I have nothing to do with it.
§ Mr. DILLON
That is a very strong argument in favour of a tribunal very different from a Departmental Committee. I have listened to this Debate very carefully. The representative of the Ministry of Munitions said that he would confine his defence to the broader considerations and the broader considerations had nothing whatever to do with the financing of this company or with another question of vital importance to which I shall draw attention. He pointed out the importance at a critical moment of getting this cellulose acetate, and he said that the only available method was the Dreyfus method. What had that to do with the conduct of the company which was to operate the Dreyfus method? I understand there were other candidates, well-established British chemical companies of the highest repute, who were in the field for this contract, and what is really at issue is not the value of the Dreyfus method as against any other method, but the character of the company which has got this extremely valuable monopoly conferred upon it by this contract. It is this that appears to those who have read the Report as extremely sinister. There are undoubtedly among the sharer-holders, and I think even the directors, of the company men who might reasonably be supposed to have a strong pull upon the Government. That is really at the bottom of the uneasiness of the House of Commons. I maintain that if the Government considered it desirable to set up a totally new company and to enter into an immense Government contract with that company, conferring upon it a valuable monopoly which might be the source of great profit, they ought to have been scrupulously careful that there was no shareholder and, still more, no director who had any connection whatsoever with the Government in any kind of way. I have been talking to people who have examined the list of shareholders and they tell me that there are several who answer that description, men who either by family connection or otherwise would be supposed by the public to have a pull on the Government. That is a very sinister 1052 and objectionable state of affairs. If it be true, as I am told, that this company got this contract as against other companies who were prepared to make this cellulose acetate on at least equally good terms and that there are concerned in this company men who have connections with the Government, then I say that is a most sinister state of affairs.
The hon. Member for Hammersmith (Colonel Sir W. Bull) is himself connected with the Government. He is the Parliamentary Secretary to the Colonial Secretary, and it does not give one confidence to see a man who is Parliamentary Secretary to a Minister coming down and engaging in this passionate defence of this extraordinary transaction. I say "passionate defence" because I noticed that the representative of the Ministry of Munitions carefully avoided saying one word in defence of the contract. He said that the War Office made the contract and handed it over to the Ministry of Munitions. All he said was that the contract was made under circumstances of great stress, that the particular method had to be adopted, and that it was a good method. I know nothing about that matter. I dare say it is a good method, but he carefully avoided saying one word in defence of the constitution of the company or of the giving of the contract to it. The hon. Member for Hammersmith not only defends the company passionately, but he defends the transaction. He knows something about the Stock Exchange. Does he really say, when it comes to a question of paying dividends, that it does not matter whether you get your dividends on a 6d. share or on £14 10s.? He utterly failed to make himself clear. The man in the street will not understand this extraordinary system of inflated capital or be able to follow his explanation. He will take it that if he has a 6d. share and it is suddenly turned into £14 10s. that he has done a good stroke of business. I venture to say that the hon. Member will not be able to remove that impression, and if, in addition, you have published in the newspapers of this country, as you have, the names of men connected with the Government as interested in these transactions, you will create a very ugly impression indeed. There is a good deal of scandal going round, and the Government ought to be extremely careful to avoid giving the public the impression that there is anything wrong. I must say, 1053 after listening to this Debate and especially to the speech of the hon. Member for Hammersmith, that I am convinced that it will be the impression of the public that there is something very unpleasant in this whole transaction, and, if the hon. Member who represents the Ministry of Munitions thinks that he can remove that impression by a Departmental Inquiry, he is labouring under the greatest mistake.
§ Mr. BONAR LAW
The two speeches to which I have listened—that of the right hon. Gentleman the Member for the Cleveland Division (Mr. Herbert Samuel), and that of the hon. Member for East Mayo (Mr. Dillon)—raise an issue the importance of which no one can feel more strongly than I do. I am not going to deal with that aspect of the question to which my hon. Friend has mainly directed himself. The House understands the history of this transaction. I am not defending what took place, but I am explaining it. It is very easy long after the event to look upon transactions of this kind and regard them as entirely foolish, but put yourself in the position of those who knew that they must get this particular commodity and must make certain of getting it whatever the price. That is the justification which would be made by those at the War Office who were responsible for the course then taken. I do not need to tell the House that when this transaction came to the Treasury—it came, of course, as an accomplished fact, because in the early days of the War we could not interfere in matters of this kind; we had to let the Departments take what steps they thought necessary to get these things—we felt, as the Select Committee felt, that it was a contract very difficult to justify. What the Government, therefore, had to do was to make the best arrangement which was possible in view of what happened before, and I think my right horn Friend the Member for the Cleveland Division will admit, so far as the recommendations of the Select Committee are concerned, that what the Ministry of Munitions have proposed to do from that point of view is sufficient and all that can be done.
But the other issue is a very different one. It raises the suspicion, not of improper finance, for I do not think it is the business of the Government to take up every case of improper finance, and I should not suggest that we should take any action on account of that unless, 1054 indeed, it was so bad that the Public Prosecutor took action, but it raises a suspicion of an entirely different kind. But to speak of the people being connected with the Government, it is very far-fetched to bring that in at all, that men of great business firms have indulged in a kind of finance in order to do business with the Government, which is, in the highest degree, improper. That is the charge. My hon. Friend has a right, it seems to me, to press that this aspect of the case should be sifted in such a way that the real facts should be brought to light. I do think that the House of Commons has a right to ask that the Government should take the steps necessary to secure that result. I think so too. I do not know exactly what sort of tribunal would be best for this purpose; it is rather difficult to decide right away on that point. It is obvious that it must be a tribunal where evidence can be sifted in the best possible way, and what I would say to the House is, for this is really far more than a Departmental question, that I undertake that an inquiry of that kind will be held, and I hope to be able to announce before the Adjournment the form which I shall recommend for that inquiry.