Lords Sitting of 10 March 1903

PRIVATE BILL BUSINESS.
THE LORD CHANCELLOR THE LORD CHANCELLOR acquainted the House that the Cerk of the Parliaments had laid upon the Table the Certificates from the Examiners that the further Standing Orders applicable to the following Bills have been complied with:
Scottish American Mortgage Company, Limited [H.L.].
Hastings Harbour District Railway [H.L.].
The same were ordered to lie on the Table.
Bradford Corporation Bill [H.L.]; Read 2a (according to order).
Old Bridewell Burying Ground Bill [H.L.].
Somerset and District Electric Power Bill [H.L.].
Rickmansworth Gas Bill [H.L.].
Committed. The Committee to be proposed by the Committee of Selection.

RETURNS, REPORTS, ETC.
  QUEEN ANNE'S BOUNTY.
  Annual Report and Accounts of the Governors, for the year ended 31st December, 1902. Presented [by Command] and ordered to lie on the Table.
  EDUCATION (WELSH INTERMEDIATE EDUCATION ACT, 1889).
  Report of the Board of Education on the administration of schools, under the Welsh Intermediate Education Act 1889. Laid before the House (pursuant to Act), and ordered to lie on the Table.

  PREVENTION OF CORRUPTION BILL [H.L.]
  Order of the day for the Second Reading read.
  THE LORD CHANCELLOR (The Earl of HALSBURY): My Lords, the practice against which this Bill is directed, of giving secret commissions, is, I regret to believe, very much on the increase. Indeed, few people realise the extent with
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  which it has spread and is spreading. Your Lordships will remember that the late Lord Russell of Killowen, then Lord Chief Justice of England, himself introduced a Bill on this subject, which was received with sympathy in this House, but which contained one or two defects that prevented its being very enthusiastically received in the other House. In the first place, it was too wide. It is not an uncommon thing, when one discovers a great system of fraud, to attempt drastic remedies, and it is sometimes forgotten that the effect of attempting with great violence to alter any course of events is that your measure has little chance of passing into law, and that, if it passes, the very violence of it prevents its being put into operation. The Bill now before your Lordships does not possess these defects. Before I explain the provisions of the Bill I should like to quote one or two of the conclusions of the Special Committee of the Chambers of Commerce on the system with which this measure attempts to deal—
  "Your Committee conclude from the evidence before them that secret commissions in various forms are prevalent in almost all trades and professions to a great extent, and that in some trades the practice has increased, and is increasing, and they are of opinion that the practice is producing great evil, alike to the morals of the commercial community and to the profits of honest traders.
  "Bribes in all forms, including secret commissions, owe their existence sometimes to the desire of the donor to obtain the assistance of the donee; sometimes to the demand expressed or implied of the donee that the bribe shall be given.
  "In the first class of cases your Committee have reason to believe that the bribe is often given unwillingly and wish a pang of conscience, as the result of the keen competition in trade, and in the fear, too often well founded, that unless given, other less scrupulous rivals will obtain an advantage; many cases have come before your Committee in which traders have believed (often, though not perhaps always, without reason) that their entire failure to obtain orders has been due to the want of a bribe.
  "The second class of cases are those in which the recipient extorts the bribe from those who have established business relations with his principal. This practice is rendered more effective and oppressive by a combination between the blackmailers. The servant or agent who demands a commission, and fails to receive it, not infrequently warns his fellows in the same position in the trade against the honest trader, who thus finds himself shut out from dealings with a whole circle of firms."
  The Report of the Committee dealt with a great variety of offences—it even gave

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  instances of medical men receiving commissions from undertakers—and, without going through that list, I think it can be stated broadly that there is hardly a form of industry in which there is not a practice existing of doing that which, not always perhaps intentionally, but certainly in effect, does betray the principal to the profit of the agent. I would call your Lordships' attention to a letter which appeared in The Times on the 2nd instant, giving an example of a system which is being carried on among horticulturists. The letter is as follows:—
  "Sir,—I hope you will consider the enclosed letter of sufficient interest to justify me in asking you to print it. It comes from a leading firm of horticulturists which is in the habit of allowing 5 per cent. discount on all orders to customers, at the same time giving a commission of 5 per cent. to their gardeners.
  "I have lately got a new man who will not accept commissions.
  "I therefore wrote to the firm saying that I proposed in future to deduct 10 per cent. from their account. This, their answer, speaks for itself, and may, I think, revive the interest of the public in the Bill of the late Lord Russell of Killowen concerning secret commissions.
  "Yours, ERNEST DE LA RUE.
  "26, Belgrave-square, S. W., February 13."
  "February 16, 1903.
  "Sir,—We have your letter, and are very sorry indeed you did not mention the matter to which it refers to our Mr.—when you were here. He would have been, and now is, quite prepared to speak quite frankly on this deplorable custom, to which we are forced to submit, and on the rights of which we think every right-minded person can have but one opinion.
  "We must, however, say there are many gardeners to whom we do not give presents, sometimes in obedience to the men themselves, more often in obedience to the wish of the employer.
  "Prices are fixed by competition and by the quality of the stock supplied, and these 'presents' in no way affect such. We have always, and always do, decline orders when we are asked for a 'present,' which our published and fixed prices do not allow us to pay.
  "The tone of your letter leads us to think you may not realise how ingrained this custom is or to what lengths it is notorious some firms go to seduce the loyalty of private servants, and if you would care to talk over the point, our Mr.—will be only too glad. In the meantime, we beg you will believe we never have paid an improper commission, nor improperly attempted to obtain an order, and that there are gardeners who do not accept any present and employers who do not permit presents in money to be made, though, on the other hand, there are employers who have no objection.
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  "We cannot allow you more than 5 per cent. for cash payments, and will not send your gardener presents, and beg before you take away your custom, which Mr.—will he sorry indeed to lose, you will look at this question in all its hearings.
  "We are, Sir, your obedient servants,"
  Among the communications I have received on the subject is one from the Chamber of Commerce of Manchester, dated yesterday, in which they state the deep interest they take in this legislation, and express the earnest hope that there will be an early enactment of the measure. The latest development of this evil is in the motor car industry. Motor cars are very complicated pieces of machinery, and require great care on the part of those who manage them; and the form of secret commission adopted in this case consists in a payment to the person who is responsible to his employer for the care of the machine on the annual bill for repairs. Under such circumstances nobody would suppose that the motor would be very well cared for.
  I will explain to your Lordships the form in which this Bill endeavours to put an end to the practice. It is proposed to enact that if any agent corruptly, and without the knowledge of his principal, accepts or obtains, or agrees to accept, or attempts to obtain, from any person for himself or for any other person, any gift or consideration as an inducement or reward for doing or forbearing to do any act in relation to his principal's business, or for showing or forbearing to show favour or disfavour to any person in relation to his principal's business; or if any person corruptly gives or offers any gift or consideration to any agent as an inducement or reward; for doing or forbearing to do any act in relation to his principal's business, or for showing or forbearing to show favour or disfavour to any person in relation to his principal's business; or if any person knowingly gives to any agent any receipt, account, or other document in respect of which the principal is interested, and which contains any statement which is false or erroneous, or defective in any important particular, and which to his knowledge is intended to mislead the principal, he shall be guilty of a misdemeanour, and shall be liable on conviction or indictment to imprisonment with or without

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  hard labour, for a term not exceeding one year, or to a fine not exceeding £500, or on summary conviction to imprisonment, with or without hard labour, for a term not exceeding four months, or to a fine not exceeding £50. I anticipate that such an enactment would have an indirect as well as a direct effect. No doubt there are many people who submit to this evil with great reluctance, but who may feel at the same time that in the keen competition of trade they have no alternative. But if the thing was made a misdemeanour, and if the person who was sought to be induced to do it could say, "I must be guilty of an indictable offence in order to obtain your favour," the indirect effect of such an enactment would be even greater than the actual putting of it in force. I hope your Lordships will facilitate the passage of the Bill, in order that this great blot on our mercantile system may be removed.
  Moved, "That the Bill be now read 2a."—(The Lord Chanceller.)
  LORD BURGHCLERE: I should like to ask the noble and learned Lord on the Woolsack one question with regard to this Bill. As I understand it, what is proposed is, that no agent shall be able to take a fee or gratuity from any one without the knowledge of his employer. The Clause, however, which enacts this is governed by the word "corruptly." and I should like to ask the Lord Chancellor whether the Act is to come into operation only in the cases of commissions which are given corruptly.
  THE LORD CHANCELLOR: The word "corruptly" governs the whole matter, and I think that without it there is not the smallest chance of passing the Bill into law. No jury would convict, and indeed ought not to convict, unless they came to the conclusion that the money passed corruptly for the purpose of influencing business.
  LORD TWEEDMOUTH: It seems to me that the noble and learned Lord's interpretation knocks the bottom out of the Bill. I should have thought that if it could be shown that these gratuities
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  were given without the knowledge of the principal, the Act would then come into force; but if a corrupt intention has to be proved in order to secure a conviction, it certainly does seem to me that the Act will be rendered nugatory. I hope that when we come to consider the Bill in Committee the Government will not look unfavourably on an Amendment to omit the word "corruptly."
  *LORD ALVERSTONE: I wish to say a word or two with regard to the point that has been raised by the noble Lord opposite. I desire, in the first place, to congratulate the noble and learned Lord on the Woolsack on having again brought in this Bill. It is quite unnecessary to go over ground with which your Lordships are already familiar, but I can assure your Lordships that the evidence showing the necessity for this Bill is growing day by day. The practice of secret commissions not only affects the relations between employer and employed, but leads to the goods being quoted at more than their fair value in the market, as the commissions have to be provided for by additions to the price. Many people think that the Bill strikes at the payment of commissions under any circumstances. But there are many trades in which the remuneration is solely by commission, and therefore it is absolutely necessary to retain the word "corruptly" so that the Bill may affect only the agent who secretly pays commissions for the purpose of influencing persons to buy his master's goods. One of the elements in considering the question of corruption would be whether or not it was known to the person by whom the agent or servant was being employed. Without expressing a final opinion as to the desirability of inserting some explanation or definition of the word "corruptly"—as it may be better, perhaps, to leave the interpretation to the Courts—I would point out that if we attempt to include within the scope of the Bill commissions which are not dishonourable or secret, and not in that way corrupt, we should be defeating the object of the measure and spreading the net far too wide. In my opinion it is wiser to lay down a broad principle

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  and then see whether or not the Bill is sufficient to meet the real evil, and, if not, to amend it by subsequent legislation. There is one point in regard to which I think the Bill needs amendment. I do not think it sufficiently deals with commissions paid for past services. It often happens that corrupt commissions are not paid at the time of the business transaction, but after the order is completed some method is found of remunerating the agent. These, however, are points more properly considered when we go into Committee on the Bill.
  On Question, agreed to; Bill read 2a accordingly and committed to a Committee of the Whole House.

  THE 1ST BATTALION GRENADIER GUARDS.
  *THE DUKE OF BEDFORD: My Lords, I beg to ask His Majesty's Government the Questions standing in my name on the Paper, viz.—
  "1. Whether the ordinary strength of a battalion at home is about 700 of all ranks, and if the 1st Battalion Grenadier Guards, when under command of Colonel Kinloch, had for a considerable time about 3,000 men on the company pay lists of the battalion, and about 2,500 men in barracks.
  "2. Whether during Colonel Kinloch's command 1,600 recruits joined the battalion, and over 2,000 officers, non-commissioned officers and men were equipped and sent out in drafts to South Africa, and whether these drafts were well reported on by the inspecting officer previous to embarkation; whether 1,230 men invalided from South Africa passed through the battalion, and whether the Reservist Company disposed of 1,746 men since June, 1900; and whether about 1,500 Reservists from the 2nd and 3rd Battalions were paid off and disposed of.
  "3. Whether during the period of Colonel Kinloch's command about forty officers joined the battalion; and whether at one time there were about twenty second lieutenants doing duty, and only two senior subalterns, both of whom were absent on detachment.
  "4. Whether during the five months from November, 1901, to March, 1902, inclusive, the battalion was without a quartermaster, a second lieutenant acting as quartermaster, in consequence of which Colonel
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  Kinloch had to equip drafts for the front himself; and whether the battalion was not at one time without an orderly room clerk.
  "5. Whether the ordinary strength of a company at home is about 100; and whether the number of non-commissioned officers was not at one time so short in the 1st Battalion Grenadier Guards that one company's pay sergeant alone had 500 men on his list.
  "6. Whether Colonel Kinloch applied several times for clerical help which could not be provided."
  THE UNDER-SECRETARY OF STATE FOR WAR (The Earl of HARDWICKE): My Lords, the questions of the noble Duke contain a number of figures which I do not propose to contradict. In order to verify them it would have been necessary for the War Office to ask the regiment to prepare a return which would have entailed a considerable amount of work on the staff; and, owing to the circumstances in which the 1st Battalion of the Grenadier Guards was situated during the South African war, we are willing to accept the noble Duke's figures, with two minor exceptions. The ordinary strength of a battalion at home is not 700 of all ranks, but 831; and the number on the company pay lists under Colonel Kinloch's command was not 3,000, but 3,300 men. I admit that the staff of the battalion under Colonel Kinloch's command was placed in great difficulty owing to the large amount of work it had to perform during the war; but the situation of the staff of this battalion in no way differed from that of all other regimental staffs at home during the war. The simple matter is that the staffs of all the regiments were apportioned to the organisation of a field army of 75,000 men, while they really had to administer and supply during the war a force of 250,000 men abroad. It was therefore inevitable that a very severe administrative strain should have been placed on the clerical staffs of all the battalions; but, in order to prevent a recurrence of these administrative difficulties, His Majesty's Government two years ago brought forward their scheme for reorganising the Army. The noble Duke lays particular stress on the fact that the clerical staff of the battalion was overtaxed, and ho asks whether

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  Colonel Kinloch applied several times for clerical help, which could not he provided. The answer to that question is in the negative. What Colonel Kinloch did, was to apply in writing in the summer of 1900, and again by personal interview in the following year, for double extra duty pay for the existing staff of soldier clerks. Such an issue would not in any way have relieved the pressure of clerical work, and there was no regulation which would have enabled the War Office to grant such a request, but they informed Colonel Kinloch that additional soldier clerks, with the usual rates of extra duty pay, might be appointed to relieve the pressure. As a matter of fact Colonel Kinloch made no further application to the War Office therefore we can only assume that he did not take on the extra staff which he was authorised to employ. The War Office is well aware that a very heavy strain fell on that staff, but I must repeat that they were not in an exceptional position. The whole Army was strained, as must happen during a war, and the position of the War Office simply is that in such circumstances every soldier must do his utmost for the pay of his rank. It is just as much the duty of a colour-sergeant to do extra clerical work in time of pressure as for a foot soldier to march forced marches without extra pay when called upon to do so.
  *THE DUKE OF BEDFORD: I beg to ask the noble Earl for a reply to my seventh Question.
  "Who is responsible for directing a unit of 3,000 men, the strength of a brigade, to be administered with a staff insufficient for a battalion of 700 men."
  The noble Earl the Under Secretary of State for War has accepted more or less the figures I have quoted, which I think proves that Colonel Kinloch's command was not that of a battalion, but of a unit amounting to the strength of a brigade. Colonel Kinloch was unfortunate in having no chain of responsibility among his officers such as he ought to have had according to the service regulations. The noble Earl said the extraordinary strain is in future to be remedied. I do not see that this is any excuse for having put such an extraordinary strain on Colonel
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  Kinloch in the past. The War Office have treated him as Pharaoh treated the children of Israel when he required them to make bricks without straw, and said that although they had no straw they must give the same tale of bricks. It easy to put responsibility on the shoulders of a commanding officer, but it is not so easy in the case of the War Office to determine who is responsible. I therefore put the Question standing in my name.
  THE EARL OF HARDWICKE: I thought that in the few remarks I made I fully explained how the strain came to be put on Colonel Kinloch, and I can only repeat that his case was not an isolated one. Hundreds of colonels throughout the country had the same administrative strain placed upon them in consequence of the war.
  LORD RIBBLESDALE: In his third Question the noble Duke asked whether "at one time" there were about twenty second-lieutenants doing duty and only two senior subalterns, both of whom were absent on detachment. It would be interesting to know what that particular time was, and how long it lasted. Can the noble Duke tell us?
  *THE DUKE OF BEDFORD: I am afraid I cannot give the exact date at this moment.
  *THE DUKE OF BEDFORD: I beg to ask the Under Secretary of State for War whether it is a fact that Colonel Kinloch was not allowed to speak in his own defence until nine days after his sentence had been promulgated at Aldershot. Our military procedure admits of an officer being sentenced before he is charged and being condemned unheard, and I believe that was the course followed in the case of Colonel Kinloch. I am not myself in favour of that procedure, and I think it will always he a fruitful source of trouble, for it is absolutely repugnant to the sense of the whole British nation as well as to the British Army. In this particular case it was generally understood that Colonel Kinloch had been allowed as a matter of favour that which he could not claim as a matter of right, and that he had been fully heard in his defence. When we are told that a man has been heard in his defence, we naturally assume that he has

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  been heard before being condemned, but now I gather from the statement of the Secretary of State for War that he was not so heard until nine days after his sentence had been promulgated at Aldershot.
  THE EARL OF HARDWICKE: It is true that Lieutenant-Colonel Kinloch did not see the Commander-in-Chief until nine days after his sentence had been promulgated at Aldershot. No officer has a right to interview the Commander in-Chief in such circumstances; and Lieutenant-Colonel Kinloch's case did not differ in any respect from similar cases with which Lord Roberts has had to deal, except that Lieutenant-Colonel Kinloch complained that his personal honour had been impugned, and consequently Lord Roberts arranged an interview with him, as an act of grace, not as of right, at which the Adjutant-General and the General Officer Commanding the Home District were present. Colonel Kinloch fully stated his case, and was assured that, although his judgment and supervision as a commanding officer were in question, there was no slur on his honour. The dereliction of duty for which Lieutenant Colonel Kinloch has been punished might have been committed by an officer commanding a battalion at some out of the way part of the Empire whom it would have been impossible for the Commander in-Chief to have seen before coming to a decision on the case, and Lord Roberts cannot think it would be fair to countenance one code of discipline for a regiment which may happen to be favourably situated for access to the authorities and a different code for other units of His Majesty's service. The King's Regulations are applicable to the whole Army; there is nothing laid down in them which gives an officer a right to see the Commander-in-Chief in order to speak in his own defence; and the honour and credit of all officers in the Army are equally sacred to Lord Roberts, irrespective of the branch of the service to which they may belong.
  Lord Roberts formed his opinion of Lieutenant Colonel Kinloch's conduct from the evidence given by that officer before the Regimental Court of Inquiry held by the General Officer Commanding the Home District, and from General Sir Henry Trotter's summing up of the report of that meeting. The general tenur of
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  General Trotter's communication was to the effect that, while Colonel Kinloch was unaware of the treatment the subalterns had received, it was his duty as commanding officer to satisfy himself that all was going on well with those under his command. I need hardly say, my Lords, that Sir Henry Trotter most deeply deplored the whole circumstance, and considered it discreditable in the highest degree. At the interview which Lord Roberts accorded to Lieutenant-Colonel Kinloch excuses urged by that officer were precisely the same as those which had been previously brought to Lord Roberts's notice—namely, that he had been unusually hard-worked, and that he was ignorant of what had occurred, neither of which reasons seemed to the Commander in-Chief sufficient for him to alter the decision he had come to. I desire to emphasise the fact that Colonel Kinloch gave evidence before a Court of Inquiry appointed by Sir Henry Trotter, and that it was on that evidence that the Commander-in-Chief formed his opinion.
  *LORD BELHAVEN: My Lords, with the indulgence of your Lordships I desire to make a personal statement with regard to that made by the Secretary of State for War in another place, to the effect that Lord De Saumarez and I had called on the Commander-in-Chief and made a verbal complaint of the treatment of young officers in the Grenadier Guards. To this, which was quite contrary to fact, I demurred; and failing to obtain a retractation from the Secretary of State, I made the contradiction which appeared in the public Press on Saturday last. As, however, the right hon. Gentleman has made a further statement in another place which, while admitting my contention, does not give sufficient prominence to the points where I disagreed with the first statement, I ask to be allowed to read an extract from a letter of Lord De Saumarez to the noble Earl the Commander-in-Chief, which he has had since last Thursday, and which I must presume was in his possession when the statement of the Secretary of State was made last night—
  "Lord Belhaven particularly stated to Lord Roberts that he was not there to make a complaint himself, but only to corroborate those

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  facts stated by me in connection with Mr. Leveson-Gower's case, with which he was himself acquainted."
  These facts referred to the so-called meeting of some ensigns in his house, who called to ask his advice, and nothing else.
  There are minor points on which my recollection does not agree with that of the noble Earl; but I have too great a respect for him personally, and for the high office he fills, to wish to enter into controversy upon any points of minor importance. There is, however, one matter in the report which the right hon. Gentleman read yesterday in another place which I must take exception to. I refer to the inadequate manner in which the way I had expressed myself about Colonel Kinloch on that occasion was described. So far from my having only accepted Colonel Kinloch's statement, I expressed to the noble Earl my unqualified confidence in that officer; and your Lordships will fully understand my reasons for feeling that confidence, if you will allow me to read a letter which I received from Colonel Kinloch on December 1, at a date when the matter was not yet public, and no charge had been made against him.
  "20, Eaton-place, S.W. "Dec. 1, 1902.
  "DEAR LORD BELHAVEN,
  "Thanks for your letter. I am only in London for a few hours, as T cannot leave my brother, who is not expected to live many hours. I think it only right to tell you that I have only heard this morning—not from your boy—that he was most outrageously treated some months ago at the instigation of a very senior subaltern, who is not at present serving in my battalion. If what I have been told is true, it will be a very serious matter for this officer, as I immediately reported what had come to my ears to Colonel Ricardo, and told him that if after inquiry, which will be made, there are good grounds for believing this report, in my opinion most serious steps should be taken. What I shall never be able to understand is why your boy did not come to me. If he had, and if inquiry had brought out the facts as I heard them this morning, the officer in question would without doubt have lost his commission. Yours very truly,
  "DAVID A. KINLOCH."
  With that letter in my pocket I do not think any of your Lordships will believe that. I would have gone and made a complaint against Colonel Kinloch.
  *EARL ROBERTS: My Lords, I did not intend to take any part in this debate, but I cannot allow the noble Lord's statement to pass unchallenged. I will endeavour in a very few words to explain what occurred on the day when Lord De Saumarez visited me. He came to the War Office on December 12; I was not there at the time, but my private secretary saw him and said that I would be back at four o'clock. If he preferred he could see me at six o'clock at my own house. Lord De Saumarez preferred to come to my own house; and when be arrived there he told me he had some very important matters to tell me with regard to the First Battalion of the Grenadier Guards. He then went into the whole story of what had occurred in the battalion, and after explaining all the facts of the case with regard to the courts-martial held by the senior subalterns, and of the results of those courts-martial, I told him that it would be impossible for me to look upon his visit as a private one, and that as Commander-in-Chief I must take the matter up officially. He then said, "I have brought Lord Belhaven with me. Will you see him? He is in the next room." I said I would, though I had not the pleasure of Lord Belhaven's acquaintance. I went into the next room with Lord Do Saumarez, and on being introduced to Lord Belhaven I repeated to him what Lord De Saumarez had told me, and I asked him whether these facts were true—whether it was the case that the young officers had been tried by courts-martial by the senior subalterns, and that they had been very severely flogged; and I asked him, "Was your son one of those young officers, and did he suffer under this treatment?" Lord Belhaven said, "Yes." I considered, therefore, I was fully justified in telling the Secretary of State for War that Lord Belhaven corroborated the information given to me by Lord De Saumarez. He said to me, "I do not come to complain of Colonel Kinloch." I replied, "that may be the case," and I added, "It is sufficient for me that you have now corroborated what Lord De Saumarez has told me, and on your word, and on the word of Lord De Saumarez, I shall take up the matter officially." Then there was one letter which I see Lord Belhaven has referred to from Lord De Saumarez, but I also

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  have a letter written, I think, on the same day, and there is a part of it which I will read. He said—
  "Charges were only comprehensible by explanation of regimental system, the fact of which Lord Belhaven has corroborated as regards his own son and others. Lord Belhaven also alluded to the harmless nature of the written protest against the system which he had himself drawn up. He expressly disclaimed the intention of making complaints as to his son's ill-treatment, having accepted the word of honour of Colonel Kinloch as to ignorance of the proceedings, though he had said in accepting Colonel Kinloch's statement that he must add that appearances were much against him."
  Now, my Lords, I think you will all agree with me that I was perfectly justified in telling the Secretary of State for War that Lord Belhaven had corroborated the statement made to me by Lord De Saumarez.
  House adjourned at twenty minutes past Five o'clock, to Thursday next, Eleven o'clock.