HC Deb 19 March 1918 vol 104 cc826-36
Sir CHARLES HOBHOUSE

A statement made by the counsel of the Marconi Company, in the course of an action brought by that company against the Crown, has imputed to me both an intention and an attempt generally to induce the Telefunken Wireless Company, of Berlin, before the War, to come to England and start in rivalry with the Marconi Company, and take partly from the Marconi Company the contract for the second trio of the six Imperial wireless stations. This statement, for which Mr. Godfrey Isaacs, manager of the Marconi Company, is responsible, is wholly false and without any foundation. The Marconi case has been settled without any reference to this statement; therefore, I have no opportunity to refute in Court the statement which was made therein, and as it reflects upon my capacity, not as an administrator, but an honourable Member of this House, and of the Government, I ask leave of the House to make the following statement:

In August, 1913, I was appointed Chairman of a Committee to investigate the subject of wireless telegraphy. Of that Committee Sir Henry Norman was also a member, and he was a member of the War Office Wireless Committee. We went very fully into the question of wireless research in other countries, and in December, 1913, Sir William Slingo, who was then Chief Engineer of the Post Office, presented me with a memorandum, in which he said that "the German Administration is the only one in which any serious effort has been made to investigate systematically the problems of telegraphy and telephony by means of a Research Department." In February, 1914, I was appointed Postmaster-General and I resigned the Chairmanship of the Committee. There was a short interval between my appointment as Postmaster-General and the meeting of the House of Commons. I had been well acquainted with the mechanism of the Post Office, because I had been for more than two years Chairman of a Select Committee on the Post Office service. There was no particular difficulty, therefore, in my getting a fairly quick knowledge of the conduct of the Department, and I determined to utilise the time which was avail- able to me by going to Berlin and looking into the matter of this Eesearch Department. Ineither speak nor do I understand German. Therefore, for the purpose of communication with German officials, I required an interpreter. I asked the right hon. Member for Blackburn (Sir H. Norman) to act as interpreter, and he was qualified to do so by his expert knowledge of telephony and telegraphy.

About the time of our starting a paragraph appeared in the daily papers that the wireless station at Nauheim, near Berlin, was able to communicate with Togoland. I asked my right hon. Friend to get into touch with the proper authority and obtain leave for us to visit the station at Nauheim, On reaching Berlin we spent two days visiting the Research Department and Post Office institutions. On the third day my right hon. Friend and I went on a car, sent by the Telefunken people, to their headquarters in Berlin. We there picked up two gentlemen, who I understand were directors of the company. We drove then to Nauheim, about twenty miles from Berlin. I examined the station as well as I could. It was only half-finished, but the engine power there was very fully developed, of a very high order, and very complete. The attempt, if it was really made, and I have some reason to think since that it was not made, to talk to Togoland was a complete fiasco. But I spoke on the wireless telephone to Boulogne and was heard well enough. My right hon. Friend and I lunched with the directors and the staff; perhaps there were a dozen people in all. We then drove straight back to the British Embassy, where we were staying. I had no further communication with anybody belonging to the Telefunken Company during my stay in Berlin, nor have I had any communication, directly or indirectly, with any of them since. I did not mention the subject of competition with Marconi at any time during my visit to Nauheim, nor have I done so since. I may possibly have made some allusion in conversation at lunch to the Marconi Company—we were talking about wireless, naturally enough—but I have no recollection of doing so. Of the other persons who were mentioned by counsel on Friday last I have no knowledge whatever. I have never had, directly or indirectly, any communi- cation with any of them, except, as will appear from the letter which I propose to read in a few moments, that my right hon. Friend introduced me at the Berlin Railway Station as we were leaving it to a Baron von Lepel, but I do not actually remember speaking to him.

4.0 P.M.

When I came back to this country I initiated a considerable scheme for research in wireless telegraphy on behalf of the Post Office. I bought a site, drew up plans, and obtained the leave of the Treasury to spend a considerable sum of money. All that, of course, came to an end with the War. Difficulties and differences between the Post Office and the company are not strictly germane to my subject. We were in the midst of the tension caused by the Government denunciation of the contract when I received the following letter from Mr. Evelyn Murray, who was at that time Secretary to the Post Office. You ought to see the enclosed. Its origin is as follows: This morning a naval officer at the Admiralty rang up Loring— 'one of the officials at the Post Office'—and asked to see him. Loring has been ill, and was not at the office, so one of his assistants went down. He had no idea of the object of his mission. The naval officer gave him the enclosed, which I understand was originally intended as a private letter to Loring, but on second thoughts he proposed not to commit anything to paper. The naval officer is very anxious that his name should not be brought in; I do not know it. This is the enclosure referred to: During a conversation I had yesterday with Mr. Godfrey Isaacs, he told me the following story quite openly and in no confidence, so you can make what use you like of this letter. I cannot, of course, vouch for the truth of Mr. Isaacs' statement, but he showed me the letter from the Telefunken Company. My object in writing you is to enable you, if you think fit, to give the tip to your superiors of what Mr. Isaacs intends to do. During the summer, not the winter, Mr. Hobhouse and Sir Henry Norman went over to Germany to try to induce the Telefunken Company to establish a factory in England, with a view to breaking the monopoly of the Marconi Company. In this they failed, and then made a similar offer to Lepel, Sir Henry Norman promising to find financial support. In other words, the Postmaster-General and Sir Henry Norman are accused of trying to find and help a German firm to ruin an English one. We all know what an immense advantage would have been given to the Telefunken Company if the Marconi Company were broken. On receipt of these letters I wrote to my right hon. Friend and received from him the two following letters. I ought to have stated that that letter of Mr. Murray's was dated the 19th of January, 1915, after the War had begun. On the 22nd of January I wrote the following to the right hon. Gentleman the Member for Blackburn: My dear Norman,—It has been brought to my notice that rumours are in existence, and may possibly be given definite expression to, that during our visit to Berlin you and I tried to induce the Telefunken Company to start a factory in England in competition with the Marconi Company, and on the failure of this enterprise made a similar offer to Lepel, whoever he may be. I have never contemplated such projects, and I have, therefore, never discussed them with you or anyone else, but I shall be glad to be able to assert without fear of contradiction that my name has never been used or mentioned in such a connection. I therefore write to you, as I am confident I can do, without hesitation, to ask you to assure me that, as far as you are concerned, my name has not been mentioned in connection with any such scheme. I really hardly like to make what in ordinary cases would seem almost an insulting request, but I have to protect myself against slanderous and malicious inventions. I received the following reply on the 27th of January: My dear Hobhouse,—In reply to your letter, it is of course ridiculously untrue, so far as I know, for anyone to say that during our visit to Berlin you tried to induce Telefunken or Lepel, or anybody to start a wireless factory in England in competition with the Marconi Company. Indeed, Telefunken were already intimately allied with Marconi, and your only relations of any kind with Lepel lasted less than half a minute, when he was formally introduced to you at the railway station just as the train was leaving. Under these circumstances it can hardly be necessary for me to say that I have never made any statement to the contrary effect.—Yours sincerely, HENRY NORMAN. After hearing from my right hon. Friend, and believing that the whole story was a German plan to make mischief.—the Telefunken letter was written ten days before the outbreak of war.—I saw Lord Reading, whom I knew very well, and told him exactly what I have told the House. I asked him to assure his brother that the whole thing was a pure fabrication, and said that I hoped his brother would accept that assurance, but that if he did not, and repeated the story, I should certainly protect myself in the Courts as well as I could. That message was given by Lord Reading, and in the hope that it would reassure Mr. Godfrey Isaacs I asked him to see me in my house. He came one night after dinner, and we had a considerable conversation, and, as I thought, not an unfriendly one. But it was inconclusive. I kept no note of it. I, therefore, pass to a second interview with Mr. Isaacs. He has given a description, which I will read. This is described in a letter to Lord Gainsford, as he now is, on the 29th of June, 1916: I thank you for your letter of yesterday's date. I am astonished to hear that Mr. Hobhouse now alleges that there is no foundation of any kind for the statement contained in the letter of 21st July, 1914, from the two directors of the Telefunken Company in Berlin. I would point out that as long ago as the 6th November, 1914, I gave Mr. Murray, at an interview with him at the Post Office on that date, the contents of the letter in question, as one of the principal reasons why I mistrusted the Post Office, and he informed me that he would report the interview to the Postmaster-General, who in turn would have to put the matter before the Cabinet."— I may interject here that Mr. Murray has no such recollection. He did not inform me of that letter, because he had no such information from Mr. Isaacs to convey to me. From that day till the receipt of your own letter I have never received, notwithstanding its gravity, one word of repudiation of the contents of the letter, either from Mr. Hobhouse or Sir Henry Norman. Early in 1915, how ever, Mr. Hobhouse approached my brother, Lord Reading, with a view to obtaining a. private interview with me."— It is not quite accurate, but is sufficiently accurate for the purpose. I met him first at his private house, at his request. I then informed him personally of the contents of the letter. I shortly afterwards met him, also at his wish, at the Royal Automobile Club. On both occasions he admitted that he did make the offer in question to the Telefunken, but said he did so because he thought that competition would be a very good thing for the country, although he had since recognised that as a Minister of the Crown he should not have done so, and he asked me what, it was my intention to do. He pointed out that I had my foot on his neck. Did I intend to crush him, which would mean his leaving the Government, or was I disposed to help him. The occasion was a painful one. It old him that I had no desire to make use of the letter unless I was compelled to do so, and that if any settlement of the Imperial contract matter could be arrived at, which I would do everything in my power to assist, there would be no reason whatsoever for the letter ever being disclosed. He thanked me sincerely for this assurance, and said he would do his utmost to bring about an equitable settlement of the matters in question, and pressed me for my suggestions as to how this could be done. These I gave to him. and it was in consequence of them that the negotiations with the Admiralty, with which you are conversant, were at once opened. There was only one point at issue when I saw Mr. Hobhouse on the above occasion, and that was as to-whether he had been once or twice to Berlin. I was under the impression that he had been there twice; he assured me that this was a mistake, and that he had only been once. After my interview with Mr. Hobhouse, I reported what had taken place to my brother, Lord Reading, Mr. Marconi, and some of my directors and others in the employ of the Marconi Company, who were in our confidence, and upon whose silence we could absolutely rely, and to our solicitors. I have never had any conversation upon the subject with Sir Henry Norman. On the occasion of the second meeting with Mr. Hobhouse he informed me that he had seen Sir Henry Norman, and he confirmed the date of the visit to Berlin, as to which there was some doubt upon the occasion of the first meeting. It is true that I did not show Mr. Hobhouse the letter in question, but I offered to do so, and within a day or so of our interview he sent his private secretary to my office for it, but I declined to let it go out of my possession. It so happened that I kept very close notes of what took place at that interview, which I made on returning to my house. They are as follows: I saw Mr. Godfrey Isaacs to-night between 6 and 8 p.m., at the Automobile Club. I asked him whether he still entertained the idea that I was personally hostile to his company. He said he had in his possession a letter, one of two, written by von Brebow and another director of the Telefunken Company, sometime in July last, in which it was stated that I had visited Berlin in that month in company with Sir Henry Norman, and had proposed to the Telefunken Company to come to England and there start a factory and organisation in opposition to Marconi. In answer to questions by me, I understood Mr. Isaacs to say that he had met von Bredow in Paris, who had there told him the story, and had at his request promised to confirm it with details by letter from Berlin, which he had done. I told Mr. Isaacs there was no truth whatever in the story; that I had only once visited Berlin, and that was in February, 1914, in company, no doubt then, with Sir H. Norman; that we had stayed, I at the Embassy, he at a hotel, and had dined together twice, and once only seen the Telefunken establishment, station and directors. I have it that I had not made, or authorised anyone else to make, such a proposal, which indeed had never crossed my mind. I was indeed in favour of competition as against monopoly, and it was because Telefunken claimed to have talked to Togoland that I visited their station at Nauheim and for the same reason that I gave Poulsen every latitude and extension of time that they might make good their claim to talk across the Atlantic. In one case my inspection, and in the other reports, convinced me that neither party could do what they claimed to do, and I therefore threw no obstacle in the way of Marconi getting the second three of the stations. Mr. Isaacs said that might be so, but why had I, in our interview of October, acquiesced in his statement that I had given Telefunken favourable encouragement. I said I had not so acquiesced, and Mr. Isaacs himself only alleged that encouragement had been given at the July and not at the February visit, and I could not have admitted that something was done in July at a visit which I denied ever having taken place. Mr. Isaacs admitted the strength of this argument. I asked him if he knew the names of the directors present at Nauheim in February. He said, von Bredow, Count Arcot and another. I recollected Count Arcot's name, and then said, but if these two or three saw me in February how was it possible for them not to recognise me in July? He admitted that though it was possible it was unlikely. He said he would send me copies of von Bredow's letters. I then said that if his mind was disabused of any idea of my personal hostility could we not come to some agreement as to the contract. I had understood him not to be anxious to proceed with it. After some further conversation on these lines. Mr. Isaacs suggested that it might be possible to take advantage of the fact that the Admiralty were making their new contracts for fifteen stations, and get them to take over the construction for the old six on terms to be agreed with him. I said I must consult the Prime Minister, but personally I would facilitate and not hinder such an arrangement, and would let him know as soon as I could, if it were possible to make such provision for the construction of the chain. If the House will accept the note which I at once made of that interview, it will see how wide is the difference between the two, and that if mine is accurate it must be emphatically declared that the other is a pure fabrication. I sent my private secretary next morning for a copy, not the original, of the Telefunken letter, but I am very sorry that I cannot produce my private secretary's confirmation of that fact, because, unfortunately, he has been killed while fighting in the War. He was unable to obtain it after he had waited a long time for it, and, although I wrote once or twice for it, I never obtained a copy. I will read the copy sent to me, not by Mr. Isaacs, but by Lord Gainsford. It is dated Berlin, 21st July, 1914, and addressed to Mr. Isaacs by the Gesellschaft Fur Drahtlose Telegraphie, and signed Bredow and Solff: As I told you upon the occasion of our meeting in Paris, when the Postmaster-General and Sir Henry Norman were in Berlin, they made an offer to the Telefunken that they should start in keen competition in England with the Wireless Company, and that we could rely upon the Government's support, provided that the Telefunken would make offers lower than the Wireless. Having regard to the arrangements which we have made, we told these gentlemen that we are naturally competing with the Wireless in England, and that it would be practically impossible for us to make lower offers than the Wireless Company, having regard to the fact that our expenses on account of licences, etc., would be higher than those of the Wireless Company, besides which our patent position in England was uncertain. From this Sir Henry Norman formed the opinion that there would be little question of relying upon the Telefunken Company as a competitor of the Wireless in England, and he therefore approached Herr von Lepel with the object of encouraging him to form an English company, and to obtain for him financial assistance with this object. Amongst others, we understand that these gentlemen are endeavouring to obtain financial support from Mr. Beit.—P.S—Mr. Hird knows more. I have made a fair statement, and I had never heard Mr. Hird's name; I did not know him nor his position in life. I can only again say that the statement is entirely and wholly untrue. I have only one or two brief comments to make on the interview. I acquainted the Prime Minister with the allegation, and he accepted my assurance that it was quite untrue, and that the expression about putting my "foot on his neck" were words which would not have occurred to my mind, nor did they ever cross my lips, as he mentioned. Mr. Isaacs has never produced the second letter of von Bredow of which he made mention. I heard no more of the subject so long as I was Postmaster-General. In August, 1915, I was told that the whole difficulty had been settled. Whether Mr. Isaacs was the victim of some ingenious attempt by some powerful-German corporation to make mischief in England I cannot tell, but this I do know, he has taken advantage, in the absence of witnesses, to give a wholly untrue and malicious account of the private interview which I arranged in order to get the company and the Post Office out of the difficulty for which neither of them singly was responsible. I have submitted this statement to the House rebutting the charge, and I leave the facts to the judgment of my colleagues in the House with perfect confidence.

Major Sir HENRY NORMAN

It is essential that the House should clearly have in mind how the visit of my right hon. Friend (Sir C. Hobhouse) and myself to Berlin came to be made, and, although my right hon. Friend has spoken of this, I may be allowed to restate it so far as it concerned myself. A Committee had been formed to consider how far and by what methods the State should make provision for research in wireless telegraphy. My right hon. Friend was chairman until he became Postmaster-General, when he was succeeded by Lord Parker of Waddington. I was a member of that Committee, and when an agreement in principle had been reached a Technical Sub-committee was formed to draw up a definite scheme, of which I was chairman. It had been given in evidence that an elaborate and very efficient system of research into all telegraphy existed in the German Post Office. My right hon. Friend therefore, as Postmaster-General, was faced with the necessity of deciding whether the research laboratory recommended by the Committee should be created as part of the Post Office or whether it should be an independent institution. Before deciding he desired to see for himself what the German system was, and how it was worked. He therefore decided to visit Berlin, and asked me to accompany him, partly because, as chairman of the Technical Sub-Committee, I was very familiar with the proposed British scheme, and partly because I spoke German, which he did not. We reached Berlin on Thursday, 26th February, 1914, and left on Tuesday, 3rd March. We had thus four full days in Berlin. The greater part of our time was. taken up in examining the organisation of telegraphic research in the German Post Office, but, being in Berlin, my right hon. Friend expressed the desire to see the Telefunken wireless station, which is about 20 miles distant, and this visit was accordingly easily arranged, and we spent several hours at the station. This visit was thus an incident, not the main object, of our visit.

Turning now to the alleged letter from the Telefunken directors, I have to say, and I much regret that I was not afforded the opportunity of saying this on oath in the witness box, that I made no such offer to the Telefunken Company or to anybody else, nor did my right hon. Friend, so far as I knew. Such an idea never entered my mind, and any statement to the contrary is absolutely untrue. Indeed. I had no position or authority whatever to make any offer. I was merely a private individual. No charge, of course, of any kind would lie against me if I had entered into commercial relations with anybody on the subject of wireless telegraphy. As a matter of fact, I have never entered into any such relations, although I have often been asked to do so. But there is no reason on earth why I should not have done so if I chose, though, of course, I should not have discussed such a matter while I happened to be in the company of the Postmaster-General. At the alleged date of these fictitious conversations my official connection with the. Post Office had ceased for four years, and I was under no kind of official obligation or responsibility.

Mr. BILLING

Member of Parliament.

Sir H. NORMAN

My own attitude in this matter can be stated in a word, and it is due to myself that it should be stated, or rather restated. I have always endeavoured, by visiting every wireless station I could, and by procuring apparatus of any new kind and testing it in my own workshop, to keep myself abreast of wireless progress, and whenever I have come across anything of interest to bring it to the attention of the British authorities. My only official relations have been of this nature, and as this is so personal a matter I may perhaps be permitted to add that I have been officially thanked for my services once by the Lords Commissioners of the Admiralty and twice by the Army Council. As Mr. Godfrey Isaacs has said, I have never had any conversation with him on the subjects mentioned in the Telefunken Company's letter. I have never had any communication with Mr. Beit on this or any other financial matter. Of course, I have no knowledge whatever of any communications or interviews between my right hon. Friend and Mr. Isaacs. Indeed, I did not know until this whole correspondence was submitted to me that such interviews had taken place. But, in conclusion, the statement that I had made an offer in the sense alleged in the Telefunken Company's letter is not only untrue, but it is absurd, and for this reason: My whole contention and attitude in the matter of the Imperial Wireless Chain has been that no company, or syndicate, or commercial organisation should be allowed to erect the stations, but that the State itself should do so, taking over any necessary patents under its powers under Section 29 of the Patents and Designs Act. This fact will doubtless be within the recollection of hon. Members who follow the Debates in this House and the proceedings before the Select Committee of Inquiry. I may be allowed to quote one or two passages from a speech which I made in the House on 8th August, 1913: I myself have from the first contended that the Government should erect its own stations.…My attitude is simply that of an advocate of State ownership. My hon. Friend the Member for East Northants (Sir L. Chiozza Money), now Parliamentary Secretary to the Shipping Controller, will also perhaps remember that, after giving many reasons why the contract should be ratified, he used these words: I think there can be no question that in the end there must be absolute State ownership and control. Those words I quoted, and added: Precisely. My only difference with my hon. Friend is that what he wants in the end I want in the beginning. I finished my speech with an appeal on these grounds to hon. Members on the Labour Benches. I said: It appears to me that this issue affords a test of their principles. They stand, if I understand their attitude aright, for the substitution of the State, so far as possible, for the limited liability company and for the elimination of the middle-man. I cannot but believe that they must sympathise with this most legitimate proposal for State ownership to-day. And I strongly reaffirmed my views in a letter to my right hon. Friend the Member for Hackney (Sir A. Spicer), in his official capacity as Chairman of the Select Committee of Inquiry into the Marconi contracts. If, therefore, I had made or been a party to making any such offer to any commercial company, I should have stultified myself in regard to my public attitude on all occasions, and have laid myself open to a charge of gross inconsistency. My view that no commercial company should have been allowed to undertake this Imperial responsibility, but that the State alone should, has never been changed, and I have never said a word or taken any action in contradiction of that view. I hope that the House will now consider that, so far as concerns the small part I played, I have made my action perfectly clear.

Mr. PRINGLE

I wish to give notice that on the Adjournment of the House tonight I shall raise the conduct of the Government.