§ SECOND READING.
§ Order of the Day for the Second Reading read.
§ LORD RUSSELL OF KILLOWEN
My Lords, having explained the principles and provisions of the Bill at considerable length on the occasion of its introduction, I do not intend, in moving its 415 Second Reading, to delay your Lordships by making more than a very few observations. The Bill has not only been largely discussed in the Press, but it has also been very generally considered by the Chambers of Commerce, the Trade Associations, and the various Co-operative Associations throughout the country, and there has been a unanimous opinion expressed by these various authorities in favour of the principle of the Bill, and I would go further, and say, in favour of a stringent measure to enforce the principle of this Bill. This is not merely an opinion which has been expressed apart from the opportunity of seeing the Bill itself, because the Bill has been widely circulated by myself amongst the Chambers of Commerce, and the opinions they have expressed have been arrived at after consideration of the actual provisions of the Measure. I do not desire that your Lordships should understand that in all the details of the Bill these various bodies agree, but the great majority of them have expressed a general approval of the Bill as it stands. I have myself been in communication with representatives of certain interests that might be supposed to be affected by the Bill if it became Law—persons representing Bankers, Insurance Companies, and Solicitors. I have listened to the representations they have made, and have very little doubt that in Committee I shall be able to make such alterations in the Bill as will meet any just objections they may be inclined to put forward to its provisions. In moving the Second Reading of the Bill, I will conclude by stating the course I propose to take if, as I should hope I may anticipate, your Lordships give the Bill a Second Reading this evening. I intend to put it down for the Committee stage on Thursday; and, inasmuch as it would be much more convenient that the Bill should go before a Committee, whether a Select Committee or a Grand Committee, to be considered in detail, with all the Amendments printed—and I may mention that the number of Amendments which I have to propose is not inconsiderable—I shall propose on Thursday to recommit the Bill pro forma, in order that it may be reprinted with the Amendments. I now beg to move that the Bill be read a second time.
That the Bill be now read 2a."
—The Lord Russell of Killowen.
*THE LORD BISHOP OF LONDON
My Lords, this Bill, as the Preamble states, is for the purpose of putting a stop to a practice which is producing great evils by corrupting the morals of the community, and from that point of view I cannot abstain from taking a great interest in the Bill, and from expressing the hope that it will successfully pass through your Lordships' House. If the Bill was concerned solely with what is called commercial morality, I should not have ventured to address the House upon it; but it concerns all pecuniary dealings between man and man. It deals with a practice which taints almost everything men are able to do one with another. It deals with a mischief, the principle of which is that no money is to be passed from one person to another without some of it sticking to the fingers of everyone who touches it. Such a principle as that, which meets with mute and tacit acceptance by society, really constitutes a very great danger, and prevents us from trusting even those who are in our most intimate employment; it prevents them, when they wish to be strictly honest, from entirely succeeding, and it removes the basis of confidence which it is so desirable to maintain in all the dealings which we have one with another. If this practice only extended to the matter of gratuities passing between one person and another upon every transaction that took place, though it might be exceedingly undesirable, yet it might not be entirely reprehensible. There was a time, I believe, when even the occupants of the Judicial Bench received gratuities from those whom they tried; and, though it might be urged that if they received them impartially from both parties, and decided the case according to the evidence, no particular harm was done, I think it will be admitted that the practice was not one calculated to promote honourable dealings between the parties. Even the passing of gratuities is exceedingly undesirable; but it is impossible that the evil can stop short there. Gratuities rapidly give an opportunity for blackmailing, which is one of those incidents of ordinary life to which we must all feel a deep-seated objection. The process by which blackmailing is reached is a very simple one. For instance, the representative of a firm doing business with another firm on a tolerably large scale may get a letter from the principal foreman suggesting that a subscription to a philanthropic object would be greatly 417 welcomed. The subscription is given, and then the area of subscriptions rapidly extends. Clubs, feasts, festivals, athletic sports, and every pursuit of the employees of the firm which receives goods are brought forward as deserving of support in one form or another, and eventually a period is reached when the communications become of a somewhat more person character, and when a postscript is attached giving the private address of the writer. That is the beginning of an indication that, unless a gratuity is given immediately to the correspondent, some objection will be taken to the goods that are supplied, and the commercial transaction may be brought to an end. It is obvious that the existence of a state of things such as this is destructive of all morality between man and man. I have been informed of a case that is still worse, where a foreman received from a firm a whole sheaf of postal orders with the request that they might be distributed among foremen of other firms, accompanied by written instructions as to the way in which the recipients were to pick holes and find fault with the goods supplied by another firm which the first firm meant to cut out in the trade. I need not enlarge upon the report of the London Chamber of Commerce, which supplies an adequate number of instances in which the principle of gratuities rapidly develops into blackmail. I suppose we are all agreed as to the great evil of these illicit secret payments, but I can quite understand that there may be some differences of opinion whether or no the practice can be stopped by legislation. I take a high view both of the functions and possibilities of legislation. It is quite true that men cannot be made virtuous by Act of Parliament, but at least temptations can be removed from their path, and it can be made more possible for men to be virtuous than vicious. One function of the law, at all events, is that it should express the public conscience, and so break down corrupt conventions. There is nothing more difficult or more important than to break down the conventions of society when they become corrupt. It is very hard for an individual to resist them by himself, or to raise an isolated voice against them; and it is only when he has something to support him that he can really hope to succeed in escaping from them. These conventions cannot be attacked by legislation until they have reached a point at which they are ready 418 to fall, and on this question of corrupt practices I venture to think that conventions of trade have reached a point when they are ready to fall if a sufficient impulse is given to them. There are many who are groaning under them, and who only require some such support as this Bill, if passed, will give them to enable them to free themselves. Trade custom in itself is very hard to contend against. It is not so much a regulation or a habit as an atmosphere in which ordinary morality has often to be abandoned, frequently with a sigh on the part of those who adandon it. There are, however, many who long to get back to that ordinary morality which in their private life they can afford to practise, but which they are compelled to put on one side in their commercial life. How are they to do so? If a man says to one who asks him to consent either to give or to receive an illicit commission, "You are asking me to do a dishonourable act," the answer is, "If you want to keep your honour you should not come here." If he says, "You ask me to do an illegal act," the answer is, "What does it matter, there is no penalty?" But when he is in a position to say, "You are asking me to commit a misdemeanour for which you and I can be imprisoned," the position becomes entirely different. It is by the introduction of that position, and by giving that support, that a corrupt convention can be broken down, evil habits adandoned, and a new start made. The great force of law, after all, lies in its power of isolation, tracing an offence back to its causes, and onwards to its consequences. It is useless to say that the law has not succeeded in the past. The law has succeeded. A representative of a great firm to whom I was talking on this subject told me that in his dealings with foreign countries he was compelled to give bribes to obtain orders, and in dealing with firms in this country gratuities had also to be given. "But," he added, "there is one class of the community—those who bear Her Majesty's Commission—in dealing with whom there is no suggestion of a gratuity." There is, therefore, one class above suspicion. An Act of Parliament has been passed to enforce upon public bodies the same standard as that which prevails amongst those who hold Her Majesty's Commission; and I venture to think the time has arrived when that Act should be extended universally, when the whole community 419 deserves the same protection, and when the same sentiment of honour may be encouraged in the mind of everybody, because they have behind them the law which explains and enforces the true meaning of their actions, and gives them the necessary stimulus to be true to what, in their own hearts, they know to be right, and to stand up for uprightness in their dealings one with another. No doubt the provisions of the Bill will meet with close criticism, but the acceptance of its principle will, I am quite sure, be welcomed by the sound majority of the commercial world, who will feel their hands strengthened in resisting the tyranny of the petty dishonesty which at present weaves its meshes around them in a way which it is exceedingly difficult for them to overcome without such help as this Bill provides.
§ THE MARQUESS or LONDONDERRY
My Lords, I cannot but think that this Bill is one that should be only alluded to and supported or opposed by those whom I may call legal experts on this somewhat complicated question; but I am quite sure we all welcome the admirable speech which has just been delivered by the right reverend Prelate, I who has touched upon the question from a moral and thoroughly practical point of view. I confess that, under these circumstances, I feel considerable diffidence in rising to address your Lordships on this question, and, indeed, I should not do so but for the fact that I have the honour to be a member of a most important Chamber of Commerce—the Chamber of Commerce of the City of Belfast—the members of which watch with a very jealous eye all measures that come before Parliament, and do me the great honour of asking me to criticise or put forward their views when any measure in which they are interested comes before your Lordships' House. The Belfast Chamber of Commerce have taken considerable interest in this Bill, and, like all right-thinking business men, they regard its object as most laudable. At the same time, they would feel greatly obliged to the noble and learned Lord in charge of the Bill if he could see his way in Committee to make some slight alterations which would meet their views. As I understand, this Bill was originally recommended to the noble and learned Lord 420 opposite, and, consequently, to your Lordships' House, by the Chamber of Commerce of the City of London. The Bill, as it then stood, was closely considered by the Chamber to which I have the honour to belong, and some of its provisions did not meet with their approval. They consequently issued a draft on first reading that Bill, and in that draft they protested against a provision which appeared in one of the clauses to the effect that every case of undisclosed commission or inducement should be deemed to be corrupt and, ipso facto, punishable. Since that draft was issued a considerable change has been made in the provision referred to, and it has been amended in such a way that no consideration given or offered to any agent, by any person having business relations with the principal of such agent, shall be deemed to have been corruptly given or offered when it is proved that the principal had given his consent thereto, or that the consideration was not calculated or intended, and had no tendency, to corrupt the agent by inducing him to do or to leave undone something contrary to his duty, or by creating any other undue influence on the mind of the agent. The Belfast Chamber of Commerce welcome the change in Clause 3, which has been made under the auspices of the noble and learned Lord the Lord Chief Justice. But there are two clauses in the Bill which they think will work harshly and unjustly—I allude to Clauses 7 and 8, which the Belfast Chamber of Commerce consider of somewhat too wide and drastic a character. They consider that there might be greater leniency shown in certain cases between a donor and a recipient, and that there should be a difference made between persons between whom fiduciary relations exist and those between whom no such relations exist. They also consider that hard cases might arise under these clauses, and that persons might be injuriously affected who had no intention to carry on their business except in a bonâ fide manner. In a report sent to me examples have been given to show that it would be possible for recommendations to be given in a perfectly bonâ fide manner to employ a doctor or solicitor, or to patronise a particular establishment; but apparently under the Bill any gift or advantage conferred in recognition of such friendly offices, even a return of similar recommendations, 421 might be treated as a criminal offence. The Belfast Chamber of Commerce speak in the highest possible terms in support of the provisions of the Bill dealing with the giving to agents of false or misleading accounts or receipts, and they consider these very excellent provisions. There is one other point upon which the Belfast Chamber of Commerce offer a suggestion, and it is that prosecutions under this Bill, when it becomes an Act, should, so far as Ireland is concerned, be instituted by the Attorney-General for Ireland. They are of opinion that if a provision to that effect were inserted frivolous objections would not be raised, and they consider that it would be the means, to a great extent, of avoiding the blackmailing of innocent people. I know quite well that these are questions which should be dealt with in Committee, and I feel that I owe your Lordships an apology for having brought under your attention so many details at this stage of the Bill; but, as a member of an important Chamber of Commerce, I felt it my duty to bring before the House the opinions of the Chamber upon the Bill, so as to give the noble and learned Lord who is in charge of it an opportunity of thinking over the suggestions, and, I hope, eventually acquiescing in them.
§ THE LORD CHANCELLOR (the EARL of HALSBURY)
My Lords, I should be very sorry indeed to utter a discordant note, and I suppose if it were put in an abstract form nobody would deny that there ought to be punishment for bribing an agent to betray his principal. The only observation I have to make has been in a measure anticipated by the noble Marquess, and it is that several of the provisions of the Bill might be misunderstood, and possibly might work injustice by operating in a direction quite the contrary to what is intended. It is unnecessary to go further into criticisms of this sort, not only because this is not the period for criticism on particular clauses, but also because the noble and learned Lord the Lord Chief Justice has intimated that he himself intends to move amendments which your Lordships will be able to consider. May I say generally that when we are all agreed that something has to be done and that very drastic measures are demanded, it is sometimes the most dangerous condition into which a Legislature can get, because it is very 422 likely then to do a great deal more than it intends by reason of the feeling that something must be done. The inevitable result is that a reaction sets in against what it is desirable and proper to do. Although I have said this by way of caution, I heartily agree with the general object of the Bill. I think there is a considerable demand for it. I confess for myself that, regarding our Acts of Parliament as perhaps the most well-founded portions of our history—I think it has been remarked that it is almost certain they will be accepted as absolute verities by future generations—I do think the preamble of the Bill is a little too sweeping in its allegations of corruption and immorality. The preamble states that—Whereas secret commissions in various forms are prevalent to a great extent in almost all trades and professions, and in some trades the said practice has increased and is increasing: And whereas the said practice is producing great evils, by corrupting the morals of the community, and by discouraging honest trade and enterprise, and it is expedient to check the same and other kindred malpractices, by making them criminal.We need not, I think, stamp our century with the imputation that the whole of our morals are being corrupted by this system. I do not know that a preamble is of very much consequence to any Act of Parliament, but I do hope that my noble and learned friend will not be too much enamoured of the language of the preamble to render it necessary for us to stamp this century in the way this preamble does. On the part of Her Majesty's Government, I have to say that they welcome this Bill, and are not in the least disposed to oppose its second reading.
*THE LORD BISHOP OF WINCHESTER
My Lords, although my right rev. brother the Bishop of London has already addressed to your Lordships words which we should all have been sorry to lose, I hope your Lordships will not feel it inappropriate that something further should be said from this bench on a matter which so closely concerns the moral well-being of the community. Bishops and clergy are specially concerned in this matter, not merely as those who have a supreme interest in the morals of the people, but because, from the circumstances of their life-work, they have of necessity a special knowledge on the subject which is not possessed by all your Lord- 423 ships. The ordinary life of the parish clergyman brings him in contact with those in the lower grades of industrial life. They come to him, not as to an employer, not as to a politician, but as to a personal friend, whose advice they seek and to whom they open their hearts; and it would be very easy for anyone who has had this experience to give your Lordships case after case in which, against their will, men, and perhaps women, have lost their self-respect by having to fall in with these trade customs, from which they cannot escape. The testimony of working men on this subject is, so far as I know, practically unanimous as to the way in which their particular trades are corrupted under this system. In the not inconsiderable correspondence which I have been engaged in on this subject, one man after another bears testimony to this fact, that the present alienation of large bodies of workmen from the ordinary ministrations of religion and the observance of public worship is due, in no small measure, to the fact that they feel it would be hypocritical to appear as religious men when in their trade and ordinary life they are reluctantly but constantly engaged in doing things which are contrary to such public profession. I am sure, therefore, that the bishops and clergy throughout the land will give a cordial welcome to the Bill the second reading of which the Lord Chief Justice has just moved. May I venture to say that I am specially thankful for the quarter from which the Bill has come. I try to picture sometimes to myself what would have been the comments which would have been made on the Bill had it emanated from the members of the episcopal bench. We should have heard of the fantastic, unpractical, utopian ideas of the clergy, living up in a balloon and out of touch with the ordinary commercial conditions of public life and trade. But, fortunately, the Bill comes to us from a source which none dares thus to decry. It comes to us on the motion of the Lord Chief Justice of England, who told us, in his opening remarks on the subject, that he spoke from much experience, largely professional and in part judicial, as to the evils, the magnitude of which it is impossible to exaggerate. The noble and learned Lord has been supported throughout by Sir Edward Fry, than whom no man is more entitled to deal with questions of this 424 kind. They are supported by practically all the chambers of commerce throughout the land, and one has only to be very briefly in communication with those whose affairs bring them into contact with the questions with which this Bill deals to find how general is the approval of it. One man who occupies a position which gives him wide and varied knowledge of the commercial world writes:The evil aimed at is so great and so mischievous that I think the advantage of any chance of checking it far outweighs the possible inconvenience or even hardship which might arise in some really innocent cases.'Five or six years ago a Church society with which I have the honour to be connected, a society which interests itself specially in social problems, issued a large number of inquiries to employers of labour and men of business with reference to the difficulty, if any, experienced by them in reconciling the principles of the highest honesty and probity with the ordinary transactions in which they were daily engaged. The result of these inquiries was seen in the melancholy monotony of the replies. So much information was given by the Lord Chief Justice on the matter that it would be mere repitition were I to quote the answers received, but I could easily do so if desired. There is one answer, however, which I should like to read to the House, as representing the drift of many others and because it concerns closely a good many of those who sit in your Lordships' House. The writer, speaking of the difficulty which he, as a veterinary surgeon, experienced with regard to the acceptance of bribes by the various coachmen and others with whom he had to do business, says:I never give these bribes. But if there be any necessity for it, that is the fault of the so-called 'better classes.' They may not like being robbed, but they would rather be robbed than bothered.When the veterinary surgeon who was pressed for these bribes went to the employer he was told that it was no doubt unfortunate, but it could not be helped, and that it was a pity he had raised the question. Now, my Lords, under the existing law, what can we expect such a man to do? There is, it seems to me, a deep pathos in the position of people, hating the system and longing to get rid of it, but feeling that unless they are prepared to forfeit their 425 daily bread, it is simply impossible to give it up, inasmuch as a few dishonest folk can make it exceedingly hard for so many. A curious object lesson as to the view of working men upon the matter can be seen in the growth of the Co-operative Wholesale Society. It is part of the working of a trade movement which now reaches some £60,000,000 per annum, and the getting rid of this bribery system is one of the motives which has instigated these men to found the Wholesale Society. They contend that they were bound to do so if they were to fall back on what they call the principles of the Rochdale pioneers of 50 years ago—fundamental honesty in trade. On the general policy of this Bill my correspondence shows that there are practically only two lines of objection taken. The first is that the details are unworkable, and in regard to that a good deal may require consideration, but that is an objection which I am very ready to leave in the hands of those who are primarily responsible for the Bill. But there is another objection of which not much has been heard in these debates, though it has been loudly proclaimed outside. There are certainly not a few people who think that our competition with foreign traders will be affected if this Bill becomes law. I again venture to quote a private letter from one who has had experience all over the world in mercantile affairs, and who says:If this Bill became law we should have to face a loud and logical outcry about driving trade away from this country. It is certain that business without bribery is practically impossible with such countries as Russia, Spain, China, South America … British trade is not self-contained, and this question of commissions is as international as the question of disarmament.That is a question upon which, as regards its technical side, I am incapable of expressing an opinion, but I fall back on the general principle which underlies all legislation, or attempted legislation, of this kind—the principle that in the long run "honesty is the best policy." My Lords, either the Bill is likely to have some effect in stopping bribery or it is not. If not, let us oppose it by all means as a useless Bill, but do not let us bring in the totally different question of foreign competition. If, on the other hand, we feel that we are by passing this Bill likely to check in some degree an admitted evil, will anyone have the face to say that we 426 ought to abstain from doing so lest, if we are successful, we might in some degree interfere with our foreign trade? The success of English trade throughout the world has been due to the excellence of our goods; and, secondly, to the honesty of our merchants. I do not know how many of your Lordships have read the extremely interesting Blue Book which was published last year, containing a summary by the Board of Trade of the reports of foreign consuls as to the increase or decrease of British trade in different parts of the world. One learned from that Blue Book, amongst many other things, that where British trade is being ousted by other trade it appears to be, first, in cases where cheapness, and nothing but cheapness, is the consideration, and, secondly, in cases where ingenious adaptation to the peculiar wants of customers has been more readily adopted by our rivals on the Continent than by ourselves; but where quality is what is wanted English trade is able to hold its ground. I should wish on this point to quote two authorities, one of them public, and one private. In the report to which I have referred it is stated, speaking of the competition of Russia in cheap sewing machines, that—It may be difficult to draw the line between cheap and trumpery articles, but it is something that the word 'English' applied (in Russia) to goods or materials usually means the best that man can make.Such testimony, coming from an official source, is surely of high value. Again, to quote from a private letter, the head of one of the leading firms in the cotton trade writes:The possession of trade marks that are known to and prized by the natives is exceedingly valuable, and merchants who have them will not hesitate to spend any amount of money on their protection from imitation or infringement. What makes them valuable is the fact that goods on which they appear are known to be right. The mark sells the goods, but the goods must first of all have earned their reputation. Thirty years ago we began consigning to China, really in order to get rid of our surplus production. For a long time we did the business at a loss. The goods were new to the market and had to be sold for what they would fetch; but they were honest stuft … and they never varied in quality. Gradually the Chinese grew familiar with the marks. They found the goods bearing those marks could be thoroughly depended upon, and now they order them in large quantities, paying us our price for them.We may lose that reputation if we compete with other nations in the pitiable 427 expedient of bribery and corruption, and once lost that reputation will never be regained. Ten years ago, on the initiative of Lord Randolph Churchill, a Bill was passed for preventing corruption on the part of the servants of public companies. I believe the testimony is unanimous that that Act, after ten years working, has been found to be productive of enormous good, and that the abuses against which it was aimed have been far less prevalent. If anyone will refer to the debate in both Houses of Parliament on the occasion of the introduction of that Bill, he will find that when the complaint was made, "Why stop with the servants of public companies?" the reply was, "We are proceeding one step at a time. Before very long, if it proves successful, the provisions of the Bill will be extended." I venture to think that the time has now come when that step, to which those who introduced the Bill ten years ago wisely looked forward, should be taken. I support the second reading of the Bill on all these grounds, but most of all on the ground that it is our bounden duty to help the helpless against a system which is daily to a larger extent entangling men and women who would fain be free, and by depriving them of their self-respect is inflicting a deadly injury upon English life.
§ LORD RUSSELL OF KILLOWEN
My Lords, the friends of this Bill have, I think, every reason to be satisfied with the course the discussion has taken, and the observations I propose to make to your Lordships will be of the briefest kind. So far as the speeches that have been made are concerned, I have to thank the two right rev. Prelates for the valuable contributions they have made to the debate in support of this Bill. With regard to the criticisms made by the noble Marquess opposite, in his capacity as president of the Belfast Chamber of Commerce, I have to say two things. I shall endeavour, in the Amendments I propose to submit, to give effect to some of those criticisms, but to one of them I cannot give my assent; on the contrary, I shall feel obliged strongly to oppose it; that is, the suggestion that this Bill should be put in operation only in prosecutions to be instituted by the Attorney-General.
§ LORD RUSSELL OF KILLOWEN
Whether in Ireland, or in England, or by the Lord Advocate in Scotland, the admission of such a provision would, I believe, render the Bill practically nugatory. I am willing to consider the suggestion made by the noble and learned Earl on the Woolsack, whether leave from some judicial authority should not be considered a necessary precedent to a prosecution, but that is a different matter. I confess to a feeling of regret that the noble Marquess addressed your Lordships in his character as president of the Belfast Chamber of Commerce rather than—
§ THE MARQUESS OF LONDONDERRY
I am not president at the present moment. I am only a member of the Belfast Chamber of Commerce.
§ LORD RUSSELL OF KILLOWEN
I regret that the noble Marquess addressed your Lordships in his character as a member of the Belfast Chamber of Commerce rather than in his important character as a great coalowner in the North of England, because, if my information is not very misleading, the noble Lord could give us very useful information on the subject, which would tend to make your Lordships feel that a Bill of this kind, and a very stringent Bill indeed, on the lines indicated is absolutely called for. I thank the noble and learned Earl the Lord Chancellor for the spirit in which he made his criticism, and it probably will relieve his mind if I inform him, in reference to his desire for historical accuracy in the preamble, that the preamble is taken verbatim et literatim from a paragraph in the report of the London Chamber of Commerce. I may also add that, inasmuch as I do not myself approve of any preambles in Acts of Parliament, I intend to move an Amendment to omit the preamble altogether. May I again inform the House the course I propose to take, subject to your Lordships' agreeing to the Second Reading to-night? I intend to put the Bill down for Committee stage on Thursday, but merely for the formal purpose of having it re-committed, so that it may come before any Committee your Lordships may decide to refer it to with the full Amendments which I shall propose in print.