SUBMARINE CONTRACTS (ELECTRIC BOAT COMPANY). (Hansard, 17 December 1934)

§ Mr. MORGAN JONES
I wish to draw attention to a matter which I raised in Question 29 on the Order Paper this afternoon. I gave notice at that time 930 to the First Lord of the Admiralty that I would raise the matter on the Motion for the Adjournment at the earliest possible moment because of the reply he had given. I gathered that it would be convenient to raise the matter to-night, and I accordingly gave notice to the First Lord of the Admiralty that I should raise the matter at 11 o'clock. I cannot complain if the right hon. Gentleman is not present in the House at the moment for he could not have anticipated the collapse of the Debate at so early an hour. It will suffice for my purpose to have the Solicitor-General present, because the point really is a point of law rather than a point of Admiralty practice, although it is perhaps a little of both. Perhaps I had better recall to the House the precise terms of my question to the First Lord of the Admiralty. It was as follows: To ask the First Lord of the Admiralty, whether he is aware that Sir Charles Craven informed the Electric Boat Company of America, on 6th January, 1933, that the Admiralty had promised Vickers, Limited, an order for His Majesty's ship 'Clyde' (a repeat of the 'Thames'), but that the contract was not to be given officially until after the letter had been received in America, and that he asked the American company not to let the information get into the hands of the American navy department; and whether he intends taking action under the Official Secrets Act in respect of this action by a British firm. Those were the terms of my question, and, by the courtesy of the First Lord of the Admiralty, I have a copy of the reply which he gave to me. I am sorry that I am not able to accept it as an adequate reply to my question. I should like to put the Solicitor-General in possession of the precise terms of the letter to which I refer, so that the point at issue may be clearly before the House. I am, quoting from the actual Minutes, issued by the United States Printing Office, containing the report of the proceedings of the Special Committee which has been set up by the United States Senate to conduct an investigation into the munitions industry of that country. The letter to which I refer is to be found in page 333 of the report and is called "Exhibit 23." It is headed "Confidential" and is from the Naval Construction Works, Barrow-in-Furness, dated 6th January, 1933, and is addressed to "H. R. Carse, Esquire, Electric Boat Company, 40, Wall Street, New York.": 931 My dear Mr. Carse, You will be glad to know that I have now received a letter from the Admiralty saying that the contract for His Majesty's Ship 'Severn' (the 'Thames' repeat), will be placed with us, and I expect to receive it within a few days' time. Immediately I do I will credit your account here with the sum of £7,500 and send you a cable. At the same time, the Admiralty also promise us"— This is the vital point— the order for His Majesty's Ship 'Clyde' (another repeat of the 'Thames'), but in this latter case they will not give us a contract until after the end of March. In other words, they will have to withdraw their promised order for the second ship if Geneva or any other troublesome organisation upsets the large submarine. In view of this I am not saying anything publicly about the 'Clyde,' and I would suggest that it would be wise that Spear should not let the information get into the hands of your Navy Department until after I can tell you that we really have a proper contract. Cammell Lairds will get the two small S boats. On the whole, I am very pleased, because it is impossible in these days of starvation of shipbuilding to get all the submarine orders. With every good wish for 1933. Yours very sincerely. (Signed) CHARLES W. CRAVEN. That is the letter to which I referred in my question, and as the Solicitor-General will have observed, I wanted to know whether to communicate this information to this American counter-part, shall I call it, of this British firm is not to act in a way that is prejudicial to the interests of this country. It is a case of one firm placing another firm in possession of knowledge not only as to what is to be done during the current year, that is 1933–34, but as to what it is anticipated the Admiralty will do in the consecutive year, 1934–35.
The question I raised with the First Lord of the Admiralty was whether such an act does not come within the terms of the Official Secrets Act. I should not dream of attempting to make any reference to the report in the newspapers of current proceedings under this very law, because that would be highly improper, but it is important that we should know whether a firm of this sort is acting properly in communicating information of this kind to an American firm. It is true that this American firm has business relationships with the English firm and, so far as I can see, very profitable relationships too, for without doing anything at 932 all themselves, so far as I am aware, they get a nice little present of something like £7,500, with pleasant anticipation of further benefits to come. The simple point is whether this action does or does not fall within the terms of the Official Secrets Act; and, if it does, why is it that proceedings are not taken—not against the American company, for they, of course, are outside the operations of our law—but against this gentleman who communicates this information to his American confrères on the other side of the ocean?

§ The SOLICITOR-GENERAL
I was, perhaps, rather slow in leaving the Chamber, and when the hon. Gentleman rose to say, very courteously, that he did not complain of the absence of my right hon. Friend, I sat here because I thought I might be of use in taking a note which I could communicate to my right hon. Friend when he arrived. Efforts have been made to reach him, but my hon. Friend has concluded before he has arrived.

§ Mr. JONES
I do not complain of that.

§ The SOLICITOR-GENERAL
The hon. Member is kind enough not to complain about that. Also, I am sure that he will not expect me to give anything except a most very general answer to the point which has been raised, because I could not possibly do otherwise. I only heard of the matter from my hon. Friend, and it would be quite improper for me to do so. As the matter has been raised, I would only point out this fact which, indeed, I take from my hon. Friend's speech, that the communication to which he referred was one from a British firm to what he describes as their counterpart in America. Clearly the fact that one person in business having got particular information talks about it or discusses it or discloses it to his counterpart, whether in this country or America, is something which I should have thought, so stated, was quite clearly outside anything which was contemplated by the Official Secrets Act, because if a Government gives an order—I am speaking quite generally—to a particular firm, that firm, in order to fulfil the order, may have to communicate the fact to 933 other persons in the business. That is a general aspect of the matter which strikes me at once, and I am afraid beyond that general statement it would be quite impossible for me to go at the moment, and I must ask the House and my hon. Friend to excuse me further.

§ Mr. JONES
I am afraid the hon. and learned Gentleman did not quite seize the point. I am not complaining so much of the communication of the actual order for 1933–34—that I understand—but what I am raising is the propriety or otherwise of intimating to this American gentleman, Mr. Carse, that in 1934–35 there was to be a further order, but that Mr. Carse must not communicate that to the American Government. The Solicitor-General quite rightly says that he has not had notice of the point, and I do not complain if he asks for time to consider it, but that is the point with which I am immediately concerned—the promised work for 1934–35. If that is information which it is not fit for the American Government to know, how came it to be fit for the American Mr. Carse to know? Another point which arises is how does Sir Charles Craven come to know of it. Although he is not himself in the Admiralty, necessarily he must have business relations with the Admiralty, and how does he know what the Government are going to do in 1934–35? He knows what the Estimates were for 1933 and 1934, but on what authority is he informed what is going to happen in 1934–35? That is the point for consideration.

§ Sir S. CRIPPS
May I say a word on this subject in order to ask the Solicitor-General to bear in mind this aspect of the case? The letter which has been read sets out a promise which the Admiralty have made of certain future business for Sir Charles Craven's firm. He says: In other words, they will have the right to withdraw their promised order for the second ship if Geneva or any other troublesome organisation upsets the large submarine."— That, presumably, is referring to the Disarmament Conference— In view of this, I am not saying anything publicly about the 'Clyde,' and I would suggest that it would be wise that Spear"— 934 presumably that is Mr. Carse's man who is in contact with the Navy Department of America— should not let the information get into the hands of your Navy Department. One thing is clear; Sir Charles Craven has no control over Mr. Spear, but he is afraid that Mr. Spear might communicate the fact to the Navy Department in America, and, realising that it would be wrong if the information got into the hands of a foreign Government, via Mr. Spear and the Navy Department, he is asking that Mr. Spear shall not let the information get into those hands.
What right has Sir Charles Craven to communicate information which he clearly sees will get to Mr. Spear? It is not a case, as the hon. and learned Gentleman has said, of a man discussing with his foreman or manager or someone who has to carry out the work—not that there was any work to be carried out. Work might have materialised in the future, but this was not something which actually had to be done. Suppose that Sir Charles Craven had—as he might have had, for all that I know—a similar arrangement with Krupps, and that he had written to Krupps saying, "We have a contemplated order but we ask you not to let the German Government know," or to a French firm, say the Comité des Forges, saying "We ask you not to let the French Government know." He would thereby be risking a matter, which might clearly be covered by the Official Secrets Act, coming to the knowledge of the very people from whom the Official Secrets Act was designed to keep it.
A prosecution is going on at the present moment, I understand from the papers, in which an officer from Woolwich Arsenal is alleged to have tried to communicate information to Government contractors at Imperial Chemical Industries; not to a foreign firm, because there is no suggestion that the information might have got to a foreign Government. The Government contractors were dealing with the very subject matter that was communicated, and that officer is being accused—whether rightly or wrongly does not matter here—of infringing the Official Secrets Act. Surely it is an infinitely more serious matter for Sir Charles Craven to communicate a secret from the Admiralty to a person over whom he had no control 935 and who he feared might communicate it to a foreign Government.
I ask the Solicitor-General to make an investigation into the relationships between Sir Charles Craven and Mr. Spear, and to ascertain whether Sir Charles Craven had any means of binding Mr. Spear to keep any secret. If Mr. Spear were an employé, circumstances might be different because he might be bound by confidence as an employé would be bound to his employer. I suggest that the hon. and learned Gentleman should ascertain whether there 936 was any such power in Sir Charles Craven to see that this secret did not go any further than Mr. Spear, or whether Sir Charles Craven was merely expressing a pious hope—knowing of the risk that he was taking—that the risk would not materialise because Mr. Spear would not do that which Sir Charles Craven had no power to prevent him from doing.