HL Deb 14 December 1900 vol 88 cc801-11

My Lords, I crave your Lordships' indulgence while I make a few remarks in reply to the comments made by the noble Earl, Lord Rosebery, in his speech on the Address, in reference to my appointment as Under Secretary for India.* I have given the noble Earl private notice of my intention to make a statement this afternoon, a courtesy which he did not think fit to extend to me, or I should have been able at once to reply to his observations, and thus to have saved your Lordships' time this afternoon. I could hardly have been expected to foresee that the noble Earl would have included my humble name in the list of personalities he introduced into his versatile and entertaining speech. In making this statement this afternoon I have only one object in view, and that is, to place your Lordships and the public in full and entire possession of the whole of the facts in connection with my position in the City. It is, I think, a fourfold duty I owe to the noble Marquess the Prime Minister, to your Lordships, to the public, and, perhaps, to the noble Earl himself, who expressed the conviction that I had severed my connection with the London Stock Exchange before accepting office. But why, my Lords, if the noble Earl was so convinced, was it necessary to introduce the question of my appointment into his speech at all? Did the noble Earl mean, when he insisted on the perils arising from any connection between Her Majesty's Government and the Stock Exchange, that no man can serve in any Government who has ever been a member of the Stock Exchange? If that was the noble Earl's meaning there is very little I can say in answer to it. The facts, my Lords, with regard to myself are these. About a month ago the noble Marquess the Prime Minister offered me this appointment. I pointed out to him, through his private secretary, and personally to the Secretary of State for India, that though I could undertake to relinquish all active share in the conduct of the business of the firm of Messrs. Basil Montgomery and Co., in which I am a partner, I could not undertake to sever my connection with that firm; and, my Lords, I will explain why. Eighteen or twenty years ago a private Bill was passed through Parliament, known as the Hardwicke Estates Act. This Act transferred to trustees the administration of the estates, and it seems almost like the relentless irony of fate that after ten years those estates should have passed into the hands of the mortgagees, who became the possessors of all that that Act *See page 48. was passed to secure to myself. I was left without a shilling, and I had to consider what I should do, and which way I should turn. I decided to embark on a career in the City, and it is eight years since my connection with my present firm commenced. I do not say, my Lords, that the course I elected to pursue was the only course open to a Peer who, early in life, finds himself involved in financial embarrassment. I am told there are pleasanter and easier methods of rehabilitating one's fortune than working for a living in the City. But, my Lords, however that may be, I took that course, and I am very glad of the connection I have had with the London Stock Exchange. In the City a man can gain an experience and a knowledge of men and matters that is not easily obtainable elsewhere. The plain fact of the matter is that I cannot afford to cut off my only means of livelihood for the sake of a few years of office—no, not even to oblige the noble Earl. What, therefore, I decided and have arranged is this. I remain a partner in my firm; I remain a member of the Stock Exchange, and I have the right in the future to return to it; but in the meantime I shall never enter the Stock Exchange, and I shall take no active part of any kind in the conduct of the business of the firm. Naturally, my Lords, this arrangement could not be carried out in a day, and I therefore asked that I might be allowed to defer taking up my duties at the India Office until the beginning of the new year, and to this request the Prime Minister and the Secretary of State acceded; and I have to thank the noble Earl the Under Secretary for the Colonies for having so kindly undertaken to discharge my duties in the meantime. Perhaps I may mention, to save the noble Earl a personal explanation if the question was raised, that though he is doing the duties of two Under Secretaries he is only receiving one salary. Seeing that the Opposition are making much of a personal line of attack I have been scrupulously careful to avoid even the most formal communication with the officials of the India Office. I have not even had the pleasure of being introduced to the heads of the Department. We have recently learned that the most harmless and natural acts can be made the pretext for unjust and unworthy insinua- tions; and, further, in case the noble Marquess might have been convinced by the noble Earl's arguments, I took the earliest opportunity to offer to resign the appointment. Perhaps the noble Earl will be surprised to learn that the noble Marquess did not see the necessity. As regards the observations of the noble Earl, I am not ungrateful to him for his generous and kindly expression of pleasure at my appointment, apart from the dangerous principle he deems my appointment to involve. But I cannot help thinking that the noble Earl came down to this House, having taken as little trouble to consider my position as ho did that of Mr. Gerald Balfour. He insinuated that the right hon. Gentleman was a director of several companies, while, as a matter of fact, he is not a director of any company at all. I do not doubt that the noble Earl has already apologised for his mistake. Then, if the noble Earl had considered the past administration of the India Office, I think he would have left alone the question of my appointment, as he would undoubtedly have left alone the question of Mr. Gerald Balfour and his supposed directorships. Noble Lords are aware that the powers of the India Office in respect of finance are wholly in the hands of the India Council. Its members have it in their power to use any special knowledge they may have for their own personal advantage in the City through the medium of the Stock Exchange. Now my Lords, whom did Mr. Gladstone appoint as finance member of the India Council in 1880? Mr. Bertram Currie, a leading banker in active business, a member of the important bank of Messrs. Glynn, Mills, and Co. The noble Earl was a member of that Government. Did he protest against that appointment? And again, my Lords, in this same Administration whom did Mr. Gladstone appoint as Under Secretary for India? He appointed Mr. Kynaston Cross, a partner in a firm of cotton merchants; and it may not be uninteresting to your lordships to be reminded that the two principal questions which the India Office had to deal with during the life of that Government were the fall in silver and the cotton duties. I should like to know if the noble Earl pointed out to Mr. Gladstone that the purity of his Ministry was in question? However that may be, I do know that the practical commercial experience and trained financial ability of Mr. Currie and Mr. Cross were of great value to the Secretary of State in one of the most serious economic crises through which India has passed. I do not for a moment mean to say, or even to suggest, that I shall be of any special value to my noble friend the Secretary of State for India, but I must say that I fail to see why any practical experience I may have gained in the City is to be considered a disqualification. To-day, my Lords, on the India Council there are two gentlemen, both of distinguished and conspicuous ability, both of unquestionable integrity, but they are both members of business firms in the City of London. From the noble Earl's speech we must assume that he has the merest, the simplest, knowledge of matters connected with the Stock Exchange, or he would know that it does not require a man to be a member of the Stock Exchange to make use of any special knowledge for speculative purposes. Anyone in the public service, from a Cabinet Minister to a Permanent Secretary, can in ten minutes send an order for the purchase or the sale of any security in the world without anyone being one whit the wiser. If, however, the noble Earl, on highly technical and moral grounds, holds that there is a danger in a member of the Stock Exchange, who, after all, is only the agent who executes the business of others, being a member of Her Majesty's Government, what are we to say of the stockbroker's client? Surely, if the stockbroker is to be debarred the client must be debarred also; and it comes to this. Does the noble Earl hold that a man who at any time has been engaged in financial or speculative operations is not worthy to be a Minister of the Crown, or even an Under Secretary? Does the noble Earl accept that proposition? Is he prepared to adhere to that principle? The noble Earl gives no sign of dissent or assent. I pass to the general public question raised in his speech, only to say that I think it would be almost an impertinence in me to discuss it. While I was made the peg on which to hang an argument, the argument was obviously directed against the noble Marquess the Prime Minister, for it was he, not I, who made the choice of an Under Secretary—a choice which the noble Earl thinks is so fraught with peril to Her Majesty's Government. I have endeavoured plainly to place my position before the House, and, while thanking your Lordships for the indulgent hearing accorded me, I desire to express my regret at the unpleasant necessity which has compelled my first utterance at this Table to take the form of a personal explanation.


My Lords, I confess that the speech of the noble Earl has placed me in a position of considerable difficulty, because no one could have heard it without the liveliest sympathy at the position which he has described. I was aware of that position as far as regards the private Act of Parliament of which he spoke when I addressed your Lordships the other night; and it was my knowledge of the circumstances attending that Act and following upon that Act relating to himself that caused me to speak in terms which he, I think, acknowledges as warm and generous with regard to his career. In the circumstances I am, therefore, in a position of great delicacy, because, as the noble Earl has pointed out, though I spoke of him, as I felt, in warm and generous tones, I also asserted a public principle. Now I am sorry to say that there is nothing in what the noble Earl has said which shakes my maintenance of the public principle I laid down. He said: "Are we to understand that no one who has ever been connected with the Stock Exchange or with commercial pursuits is ever to be a Minister or to form part of the Government of the country?" Of course this is reducing my argument to an absurdity. My argument did not refer to the past, it referred to the present; and if the noble Earl asks me whether I maintain the principle that no member of a firm on the Stock Exchange should be a Minister of the Crown I am obliged to say that I maintain my opinion. I say it with the deepest regret. I do not mean in saying that to disparage the Stock Exchange. Many of my friends are connected with the Stock Exchange, and I know how high and honourable a pursuit it is, or it may be. But that is not the point. The point is whether connection with a firm on the Stock Exchange is or is not compatible with the position of a Minister of the Crown. It has never been so held in the past, and I hope it will never be so held in the future, because, though I am perfectly certain that the noble Earl is as incapable of misusing his position as Minister of the Crown as any of those who have occupied that high and honourable position, yet it is unfitting in these days that there should be any circumstances connected with a Ministry of the Crown which should in any degree lend the slightest foundation to any suspicion affecting their honour as Ministers. The noble Earl has referred to past precedents. I do not thoroughly carry them in my mind. He has said that even now there are two members of the India Council who are connected with firms. But members of the India Council are not members, so to speak, of the current Administration of the country. They are in the position of permanent advisers for a fixed term to the Minister responsible for the Government of India. In these circumstances they do not fall in the same category as those more responsible Ministers who sit in this and the other House of Parliament. The Minister who makes these appointments is responsible for them, and behind that responsibility, where I know nothing of the case, I am not willing to inquire. The noble Earl also referred to a case which occurred twenty years ago—that of an Under Secretary for India appointed by Mr. Gladstone in 1880; and he says to me, "Were you not a member of that Government?" Well, in 1880 I was not. But there is a Member of this House who was Secretary of State for India at that time, and he can give every information to the noble Earl on that appointment—I mean the noble Duke the Lord President of the Council. It is, therefore, going over his head to seek information from a private Member of this House as to that appointment. Later on, no doubt, I did become an Under Secretary; but I do not think that it is a practice of Cabinet Ministers, and especially of Prime Ministers, to inquire of Under Secretaries their opinions as to appointments. I am not sure that it is a precedent which even now the noble Marquess would care to have set, because Under Secretaries are naturally apt to be critical of those who are placed over them. But, in any case, I had nothing more to do with the appointment of the Under Secretary for India in 1880 than the noble Earl himself. I am quite sure of this: that, according to the high and honourable tradition which inspired Mr. Gladstone, he made himself perfectly clear that there was no actual connection between a firm doing business in India and Mr. Cross at the time of his appointment; and if Mr. Gladstone failed in that duty I am quite sure that the noble Duke himself very carefully made that inquiry. I do not know that I have anything more to say in pursuance of this ungracious and ungrateful task. Except this. The noble Earl charged me with having misrepresented the position of Mr. Gerald Balfour as regards being the director of a public company. It is quite true that I stated my belief the other night and expressed my regret that Mr. Balfour should have accepted the Presidency of the Board of Trade—a Ministry mainly concerned with companies and company matters—he being a director of public companies. I was delighted to receive the promptest contradiction of that statement from Mr. Gerald Balfour. Mr. Balfour, as I understand, had been a director of a public company, or of public companies, up to the time of his appointment to the Presidency of the Board of Trade, and had resigned his directorship on being appointed to that post. I am very glad to have elicited from Mr. Balfour the statement that he had done so; but I venture to think that as these appointments to directorships are published and public, and as much comment is naturally directed to these positions, it would be well if those who hold them and who are also Ministers of the Crown when they divest themselves of them should make their resignation as public as the fact of their appointment. We cannot be supposed to know that they have resigned these directorships unless they say so; and we are bound to go on the public information which is conveyed with regard to them. I must say that I feel less shame in my ignorance as it appeared to be shared by the noble Duke who replied to me, and, as far as any contradiction goes, by all the other Ministers on the Bench opposite. On that part of the case I have no more to say. I was told by the noble Earl that he was coming here to make a personal statement. It was a personal statement from two points of view. It was personal as regards himself, and perhaps a little personal as regards myself. But of that I cannot complain. I am very much obliged to him for giving me notice. I would have given him notice the other night if I had had the slightest intention of making any attack upon him, but, as he truly said, I made no such attack, and I had no fixed intention of speaking. If I had in any way intended to impugn his honour or to attack him in' any personal manner I should have thought it my duty to warn him beforehand of the course which I was about to take. But I had no such intention; and the noble Earl admitted that he had no fault to find with the way in which I spoke of him. I only ventured to lay down a public principle, and I lay it down again. A precedent of this kind, though it may involve no present inconvenience and no reflection on any Minister, is full of the gravest peril to the largest interests of the Government of this country.


My Lords, I do not wish to pursue the personal aspect of this matter, so incautiously and so unfortunately raised. I can only assure my noble friend who sits beside me that nothing has passed that will diminish in any degree—rather will it increase— the very high esteem in which he is held by his party and his colleagues. But I rise not merely for the purpose of saying that, for I know that his position is too well established to be shaken by any action of this kind. I rise because I think that what the noble Earl was pleased to call a principle is not one of that clearness or certainty or advantage that, in the statement of it from his lips, no notice should be taken of it on the part of this House. The noble Earl has not stated any precedent for the doctrines which he laid down. As far as I know they rest at the present moment on his authority alone. I trust that nothing he has said will cause my noble friend beside me to alter his conduct in the slightest degree. I do not believe that the principles which are laid down are sound, and I think that if they are upheld they will rather be an excuse for gratuitous and wounding attack upon individuals than any advantage to the purity of the Government of the Queen. The noble Earl has given us no precedents in this matter I cannot exactly understand how, if the noble Earl were required to write down the new doctrine which he wishes to write into the code of public policy, it could be couched in Parliamen- tary language. I understand a stockbroker to be a person who sells or buys stock on the order of somebody else. I have heard nothing to induce me to think that stockbrokers are in any special manner speculators in any public companies or funds. On the contrary, my belief is that there is far greater speculation among those who are clients of stockbrokers than in the ranks of the stockbrokers themselves. But what doctrine are you to lay down? My noble friend is a sleeping partner in a stock-broking firm. That is to say, he has invested money in the firm. Are you to lay it down that every one who invests money in the business of a British merchant, if that British merchant goes occasionally on the Stock Exchange, becomes unfit for the service of the Queen? It is an absolutely new doctrine. There is no sort of authority for it whatever. I cannot help feeling that, in thus raising this cry, the noble Earl has taken a superficial similarity of words as expressive of meanings which they do not really convey; and has made a sort of clap-trap cry against stockbrokers because their business is conducted on the Stock Exchange; as people have done against directors who are in no degree more guilty of any commercial sin than any other members of the mercantile community. There are directors and directors. There are directors of the most perfectly innocent kind; directors against whose business it would be impossible to raise any objection; directors whose business does not lead them to cross or to affect in any way the transactions of the Departments of the State. On the other hand, there are directors, undoubtedly, who are connected with the Departments of the State, and, as has been pointed out more than once, even of late, one or two of my colleagues have thought it right to retire from the position of director lest any suspicion should arise. But that does not give any licence generally to attack all directors: nor does the fact that stockbrokers conduct their business in a place where much speculation occurs give you a right to brand them as having naturally inherited such dishonesty that no one who is a stockbroker may be a servant of the Queen. It appears to me that these rash and headlong statements, which really can serve no other than a party purpose, are not of advantage to the public service, and will not maintain its purity against any temptations which may attack it. After all, you must remember that the field of selection is small in our country. We are the only country where Ministers are chosen either from this or from the other House of Parliament; and if you add to the difficulty which that circumstance involves the further condition that no one who has any special connection with any form of commercial business is capable of being selected, then I believe that you not only inflict a very undeserved stigma upon a very honourable profession, but you diminish our power of finding servants who are capable of serving the Queen in her administrative offices. Remember that the difficulty in our Administration and the difficulty in Parliament is not that, on the whole, people know too much about business, but that they know too little, that they belong generally to classes of society not brought into contact with business; and I hold it to be a positive evil if you do anything which will discourage mercantile men of high standing from taking part in the service of the Crown. But, my Lords, I wish to protest against the doctrine which has been laid down, and for my part I do not subscribe to the language which the noble Earl has used, and I earnestly hope that neither my noble friend nor any other gentleman will conceive that this doctrine, lately invented and of no value for any practical purpose, ought to limit the freedom and the opportunity which men of knowledge and experience may have of entering into the political service of the Crown.


I only rise to make one remark. It is this:— The noble Marquess says there are no precedents for the principle I have laid down. There is a very recent principle—that laid down by Mr. Gladstone's Government in 1892, which required members of the Government to relieve themselves of their directorships. Those members did so, and did not remain in any respect less efficient men of business than they were before.


That is not the point. It is that people will not accept political offices if they are compelled to resign the means of livelihood which they previously possessed.


It is exactly the point. These gentlemen did accept office under these terms, and remained Ministers.