DIRECTORS IN PARLIAMENT.
THE short debate on the question whether directors or even shareholders should be permitted to vote on Bills which directly affect their private interests, came up- once more on Tuesday, and the minority in the House showed themselves by no means willing to let the pre- cedent made by so large a majority in Mr. David Plunket's case, govern the similar case of Sir William Houldsworth, whose vote on the Bill of the London and North-Western Railway Company it was proposed to disallow. Mr. Haldane, indeed, strove to make this distinction between the two cases, that while Mr. Plunket voted, and his vote was allowed, in spite of his being a direc- tor of the London and North-Western Railway Company, he did not pretend to have voted in his capacity as director, but only in his capacity as a Member of Parliament, while Sir William Houldsworth declared that he took charge of the new Bill because he was a director, and held it to be his duty to do so. The difference so far as it went seems to us to tell in the opposite direction. The danger to be feared is that Members of Parliament will be influenced by their private interests to give a different vote on a private Bill of this kind, from that which they would give in the public interest only, and that danger seems to us not greater, but less, if their private interest in the Bill is openly acknowledged and made the subject of public scrutiny, than it would be if ib were left for other Members of Parliament to bring to light and to criticise. The more these kinds of influences are frankly acknowledged and submitted to the light of day, the less mischievous they will be. We should regard Sir William Houldsworth's frank declaration as rather tending to compel him to ask himself seriously whEther he thought that private Bill to be for the public good, and one for which he would have voted whether he had had an interest in the company or not, than as tending to make his vote the mere dubious. It is the covert effect of this kind of interest on public conduct, when the private interest. of the representative is not plainly professed and declared,. that we should fear. We do not see, then, that Mr. Haldane's distinction makes any difference unfavourablo to Sir William Houldsworth's vote, even if it does not tell rather on the other side ; but of course the general ques- tion remains whether, as Mr. Burns rather disagreeably put it, " guinea pigs,"—in other words, directors who make a portion of their private means by the guineas they get for attending Board meetings,—do not constitute both an unpopular and a dangerous element in Parliament, and do not tend to discredit the House of Commons in the minds of the people at large. We should be inclined to hold that they do, and that it would be better if we could have a Parliament entirely free from these indirect inducements to consider legislative measures from any point of view except that of the public interest. But so long as measures deeply affecting men's pecuniary interests are determined by Parliament at all, so long it will not be possible to exclude a certain amount of more or less legitimate suspicion of the purity of its Members' motives. The question does not really affect " guinea-pigs " alone, or even so much as it does those large shareholders who are too rich to take the trouble to be directors, and whose earnings as directors would be quite insignificant as compared with their dividends as share- holders. As Mr. Balfour pointed out,—though Mr. Lough threw some doubt upon the remark,—the guineas gained for attendance at the Board of Directors, do not vary directly with the profits of the concern they direct, though their gains as shareholders do. The director gains materially by the increased dividends of his shares, but even if some Boards vote themselves larger payments for attendance when their concern is prosperous, than they do when their concern is in low-water, they do not usually expect to gain qua directors, half as much as they gain qud shareholders. If, therefore, the " guinea-pig's " vote is to be disallowed, it would follow u fortiori that the large shareholder's vote should be disallowed, and then it would become very difficult to say which of the share- holders possess shares large enough to bias their judgment and render them bad judges of the public interest. Oae thing only can be said in favour of disqualifying directors for a Parliamentary vote, and leaving the larger share- holders who are not directors, alone :—the general public knows the names of the directors, and suspects the purity of their motives, while the general public does not usually know the names of even the largest shareholders, and is not, therefore, inspired with the same distrust and sus- picion concerning them. And it is something, no doubt, that the cynicism of popular feeling about the House of Commons should not be magnified and exaggerated as it is by the number of paid directors who figure in the ranks of the Members of Parliament. So far as it goes, that consideration does make a distinction between directors and mere shareholders, however large, so that if the votes of directors of companies were disallowed in any matter directly affecting the interests of the company in which they were concerned, a good deal of popular suspicion would be laid to rest. At the same time, it could not be denied that the root of the mischief had not been touched so long as the votes of the principal shareholders were not dis- allowed also. Even directors cannot carry their companies with them, unless they can carry the votes of most of their larger shareholders.
We are very glad that Mr. Balfour agreed to Mr. Courtney's suggestion that a Committee should be appointed to consider this very delicate and complicated question. For our own parts, we believe that far more can be done by taking the consideration of private Bills altogether out of the hands of Parliament, and submitting them to a fixed tribunal, not elective, of well-known and generally respected experts, than by passing any standing rules as to the disallowing of directors' votes. That may perhaps be desirable, if only as a public indication of the distrust felt for the judgment of Members pecuniarily interested in, and supposed to be directly responsible for, the conduct of public companies. But, after all, the exclusion of the votes of directors on the measures which affect the interests of the companies which they represent, will not go to the root of the matter. What is really needed is to dissociate Parliament as much as possible from these public jobs, and to submit them to the indepen- dent judgment of a tribunal not elected by a popular suffrage at all. Such tribunals would of course some- times make mistakes as all human tribunals do. But they would make much fewer mistakes, and would command much more public confidence, than the House of Commons ever commands for its votes on private Bills in which so many of the Members have large personal interests. No one proposes to put every Member to the scrutiny as to what shares in private or public companies he possesses, and even if half the House were excluded from voting on a private Bill, the other half would not be either the most unprejudiced or the most competent judge of the public interests involved in the Bill in question.
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