18 FEBRUARY 1899, Page 7


THE question whether a Member of Parliament ought to be a director of an-industrial company is rather more complicated than it looks. It is quite clear, on the one hand, that no person entrusted with the right of legislation ought to have interests which might induce him to legislate unfairly, or to prefer his own advantage to that of his constituents or the nation ; and quite clear, also, that a director, say, of a shipbuilding company, or an African expansion company, or a small-arms factory, might be in that position. The deduction that no Member ought to be a director would seem therefore to be natural, more especially as the existence of an actual abuse is not denied. Nobody questions that there are Members who are given directorships because they are Members and for no other reason whatever, or that a few make a profitable trade of their legislative position. If Mr. Hooley is to be believed, a point on which we have no opinion, there are Peers who sell the charm of their titles for heavy sums in cash down, and there may be Peers who would, if strongly tempted, sell particular votes. Nevertheless, if Parliament drew the deduction and acted on it, it would probably gravely deteriorate the Legis- lature. We do not want Houses filled with philosophers, full of ideas, and especially of Utopian ideas, but entirely dissociated from the industrial life of the country. We need men of business, familiar with every kind of work done throughout the Empire, if only to criticise the Government, and we cannot get them by fining them heavily for the knowledge of which we acknowledge the need. If there are no railway. men in Parliament railway legislation will be theoretical and bad. A man with a heavy stake in a company is interested in that company, and may be too much interested for his independence, but to order him to sell his shares and buy Consols, besides being practically impossible, would be eminently foolish. He would simply stand aside and let in some candidate who would either be his agent, and, therefore, much less independent than himself, or would know nothing of " business," that is, of the daily life or engrossing needs of the body of the people. Yet if a man may hold a stake in a company, he may surely be permitted to manage business which is virtually his own, without being disqualified because he performs his duty to other shareholders. The fact that he is paid for his attendances as director, which is so much dwelt on, has very little to do with the matter, at least until we resolve that no one who takes fees shall be a Member of Parliament. We wish strongly that no director of any company were paid anything, because that rule would confine the work of management to men with a stake in the concern, but to say that because shareholders choose to pay directors, directors are untrustworthy Members of Parliament, seems to us unreasonable. Why should they be more untrustworthy than landlords, who are perpetually affected by legislation, or soldiers, who are directly concerned in the heaviest items in the Budget, or lawyers, who are hoping to be made Judges, or the men with nothing, with whom getting something may be a consideration of the first importance ? As Mr. Balfour said, all business is not rotten, nor are directors necessarily rogues, and until they are proved to be such the people must be left free to elect them as representatives. If they doubt them they have a quick and perfect remedy in their own bands. They have only to signify that the candidate must sell his shares or give up his business, and he will choose at once between their favour and his profits. So far we are entirely with Mr. Balfour in his con- clusive answer of Tuesday to Mr. MacNeill ; but as regards the Ministry we change sides, and agree rather with Sir H. Campbell-Bannerman. We think it distinctly inexpedient that any Minister of the Crown, and especially any Cabinet Minister, should be a director of any indus- trial association. We hold that the grand danger of democracy in all countries and all ages has been the corruption of its agents, and that this corruption should from the very first, and before it has become a visible force in affairs, be rigidly guarded against. The freedom from the evil which we enjoy in this country, and which is as nearly as possible complete, is, we believe, in part accidental, and might after a very slight change in the method of electing representatives suddenly disappear. Ministers in England give contracts, though Members do not; and theirpower of benefiting by those contracts through the intervention of companies in which they are interested should be steadily provided against. No such provision is wanted now, but it will be wanted in the near future, and the precautionary etiquette can be established:with a much better grace while there is no danger than after a scandal which has destroyed the present confidence in the pecuniary purity of public men. Ministers are paid, and there would therefore be no injustice in requinng them to give up a portion of their private incomes, and no inconvenience except this, that all directorships must be treated alike. It may seem absurd to require a Minister of State to surrender a seat on, say, the Equitable or the Alliance Insurance Companies because his colleague must give up his seat on the Board of a great arms factory ; but it is hard to draw the line of distinction, and would be intolerably invidious. There should be no line what- ever, all the more because of a peculiarity in the English public mind, to which Mr. Balfour did not allude, and of which he was probably not aware. Englishmen do not suspect all business men, or any business men, without proof, of being rogues, inclining, indeed, to rather too facile a belief in the uprightness of heads of " houses " and chairmen of public companies. But they do attribute to business men a great desire to make money, and do expect in them a kind of acuteness in seeing their private advantage which they do not look for in politicians. The ownership of land, Console, or houses is not regarded as " business " ; but, with those ex- ceptions, they draw no distinctions, but if a contract or a privilege is granted to any company of which a Minister is a director, say a great railway company, they believe that he favoured the grant of that privilege or contract, and if they are interested in a rival associa- tion they grow spiteful and suspicious. We do not sup. pose Mr. Balfour would deny this for a moment, but if he would we will ask him one question. How much does he suppose that any great industrial company in England would pay any first-class Cabinet Minister for his name on their direction ? That is, we may be told, because his name would be a guarantee at once of competence and honesty, and so it would be in the eyes of the sensible, but in those of the masses it would be also a guarantee that the company, as against all rivals, had a powerful friend at Court. He might have asked for nothing, indeed would certainly ask for nothing, but the wish to please him had, it would be said, prevailed with the colleagues who had the favour to bestow. This is the suspicion even now, and in England, about the distribu- tion of patronage, and the distinction we draw here between patronage and money may not always be main- tained. The rule of renunciation would have cost us in times past two or three good men and one first-class Leader of the House of Commons, but the principle that no Cabinet Minister should be actively interested in any business is, we are convinced, now sound, and will in future be needful. No such rule, of course, will prevent corruption if it ever gets a footing among us. It does not provide either against direct bribery, or against the great Continental method of making illicit gain,—namely, " concussion," the unfair use of early official informa- tion. It is by that, and not by the direct taking of cheques, that some foreign Ministers have become rich in office, and against that the ingenuity alike of patriots and Sovereigns has been exhausted in vain. But though all forms of corruption cannot be prevented, the rule against Ministers being actually concerned in business keeps up the tone which helps to make men despise corruption, and keeps down the popular suspicion, which, once excited, makes even innocence helpless and useless to the State. It is hard to imagine a more innocent " holding " than that of shares in a water company ; but the Minister who was a director of one when the County Council wished to absorb the supply, would infallibly be a mark not only for the vituperation which can be answered, but for the silent suspicion to which there is no practical reply.