THE APPEARANCE OF EVIL.
OUR readers are no doubt familiar with the facts which have been published in the newspapers as to the purchases of silver by the India Office. Here we have an Under-Secretary of State holding office in a Department which carries out large financial dealings with a firm controlled by several of that Under-Secretary's relations. Just as we are satisfied in the case of the Marconi Contract that there was no corruption whatever, although the Managing Director of the Marconi Company is a brother of the Attorney-General, so in this case we are satisfied that there was no corruption whatever, although Mr. E. S. Montagu's Department effected large transactions with the firm of Messrs. Samuel, Montagu and Co. and paid them over £7,000 in commissions. No one questions Mr. E. S. Montagu's assurance that he did not know that the purchase of silver was being made through his rela- tions till the business was arranged. And it may further be admitted that .the deal with Messrs. Samuel, Montagu and Co. very likely saved money to the Government of India. At least Lord Crewe said in the House of Lords that the only other firms through which purchases could have been made had formed a ring against the India Office. Although money may have been saved in the sense that the India Office escaped paying the price of the ring, we can hardly believe that Messrs. Samuel, Montagu and Co. were the only other firm through which silver could have been bought. Mr. Rupert Gwynne, who has taken much trouble in asking questions in the House of Commons on the financial transactions of the India Office, and wrote an article on the subject in the Morning Post on Friday week, says, for instance, that an. offer of silver at a lower price than the India. Office paid to Messrs. Samuel, Montagu and Co. had been made previously and had been refused. Possibly the India Office did not want silver at the time, but in this case it is difficult to understand altogether the methods of the India Office, because it was certain that the large cash balance in London would have to be returned to India in silver ultimately ; and to make no purchases of silver for a long period (none apparently had been made since 1907) was to encourage speculators to -orner the market against the India. Office. The cash balance held by the India Office used to average about 4,000,000, but latterly had risen to about £18,000,000. Unless the lending out at interest of large sums of this sort, and the business of converting part of the sums periodically into silver to be minted in India, are managed in a way that absolutely excludes all grounds for suspicion., it is bound to happen that the people of India will think that their interests are being sacrificed to the personal interests of Ministers in London.
One cannot imagine a more unfortunate or injurious suspicion, especially as the people of India are not repre- sented in the House of Commons. It should surely be the earnest concern of every Minister of the Crown to avoid everything that could possibly, in any shape or form, directly or indirectly, give rise to a glimmer of suspicion that in money matters there is any carelessness or any postponement of other people's interests to those of mem- bers of the Government. In the present case we must say that the accumulation of so large a balance by the India Office was a mistake. And we cannot help believing that if the Bank of England were employed to buy silver regularly the purchases could be made with the necessary secrecy, and thus the argument that some firm personally known to the staff of the India Office must be called in in a matter requiring much discretion would be deprived of all cogency. It may be said that Mr. E. S. Montagu could really have done nothing, as the business was already completed when he heard of it for the first time. But we entirely and vehemently disagree with this facile con- clusion. It is Mr. Montagu's duty to know what is happening in his Department, and if there is some good reason—as there may have been—why he should not have known, then, in our judgment, it was his duty to state explicitly in the House of Commons what had happened, to declare his relationship to the members of the firm of Messrs. Samuel, Montagu and Co., and to take the opinion of the House on the whole matter. That course would have enormously mitigated, if it had not killed, suspicion. We say plainly that we cannot understand the state of mind of officials or private persons who fail to foresee that a Minister of the Crown will be placed in a most invidious and embarrassing position by such an incident as this. If Messrs. Samuel, Montagu and Co. had carefully and generously considered the position of their relation at the India Office and the public interest they would not have consented to expose him to misunderstanding even though they had made a sacrifice for the purpose. Nor would the Finance Committee of the India Council have recommended that the purchase be made through Mr. E. S. Montagu's relations. Mr. E. S. Montagu himself is away, and it may be that he would have made during the last few weeks some statement highly creditable to himself in the House. As it is, what has happened is that details of the transaction have been gradually obtained piecemeal from the repre- sentative of the India Office through a series of questions extending over many days. This in the place of the full, voluntary, and disarming statement that would. have been possible !
It is now, perhaps, too much to hope that the wholly superfluous degree of suspicion in India and among par- tially informed people in this country will be removed. It is only too natural that there should be such suspicion. Personal details are remembered long after political details are forgotten. It will be remembered that the firm of Messrs. Samuel, Montagu and Co., which was not formerly on the list of the India Office, appeared on that list after Mr. E. S. Montagu had taken up his dutiss at the India Office. Observe such personal details as the following. Lord Swaythling, a partner in the firm of Messrs. Samuel, Montagu and Co., is a brother of Mr. E. S. Montagu ; Mr. G. S. Montagu, another partner, is also his brother ; Sir Stuart Samuel, another partner, is his cousin. Mr. Herbert Samuel (the Postmaster-General), who is also his cousin, married Miss Franklin, and her relation, Mr. E. L. Franklin, married Miss Henrietta Montagu and is another partner in Messrs. Samuel, Montagu and Co. There are even more ramifications to contribute to an appearance of evil. Sir Felix Schuster, who is chairman of the Finance Committee of the India Council, and arranged for the purchase of the silver, is Governor of the Union of London and Smiths' Bank, with whom (according to Mr. Rupert Gwynne) Messrs. Samuel, Montagu and Co. have their banking account. Surely persons of real delicacy and scrupulous carefulness would have refrained from choosing the moment when Mr. E. S. Montagu was at the India Office in the service of the Crown from bringing so many of his relations and friends into a financially profitable connexion with his Department. Quite apart from the purchase of silver Messrs. Samuel, Montagu and Co. have been allowed a larger loan (X1,000,000) than any other private firm on the approved list, and the Union of London and Smiths' Bank (of which, as we have said, the Governor is Sir Felix Schuster, Chairman of the Finance Committee of the India Council) has been lent £3,050,000 within a year. We repeat that there is no question of corruption. It is a question of persons who serve in the most responsible offices in the land setting a fine example to the country and the Empire, and keeping the tradition of unquestioned and unquestion- able personal integrity undimmed by the breath of suspicion. The range of influence of an indifferent example is enormous. It extends far beyond Imperial politics. Many of the municipal bodies throughout the country, especially the smaller bodies, are habitually at the edge of the preci- pice of corruption. How will they be affected ? It is a most serious consideration. In a small borough it continually happens that the most obvious recipients of contract work are friends or relations of the councillors. There is, of course, a tendency to say "It is very hard luck that I can't get a job for so-and-so, who is just as good a man as anyone else, merely because he is my relation." The only possible path of honesty is for municipalities to know that there is no rule in this country but this: that all suspicion—every appearance of evil—must be avoided like the plague unless corruption is ultimately to creep in. But what if the example at the top of the tree of all govern- inent is a careless one ? The practice of municipalities will also become relaxed—very much laxer even than it is now. There is no middle course. The choice is between a standard of rectitude that may seem to some people almost fantastically high and ultimate corruption. We could not have believed, if we had not had painful experi- ence to the contrary, that when one lays down this principle in all sincerity, some of those whose aspirations for their country are no doubt the same as our own would have thought it worth while to argue that we were making " nasty " insinuations of corruption. Sir Alexander King, for example, maintained in his evidence before the Marconi Committee, that it is the duty of Government officials to make a " fair " bargain with a private company. We protested that Government officials should act exactly as trustees for private persons would act, not holding themselves free to make anything but the strictest bargains they can with other people's money. All schemes for achieving some ideally " fair " bargain— for being generous with the money of others—must ultimately lead to corruption. Of course, Sir Alexander King's argument was honourably held and honourably advanced, but we are convinced that he was wrong. Instead, however, of giving us the credit for a genuine and patriotic concern for honest administration he pro- tested publicly against our " nasty " insinuations of corruption on his part. It is really deplorable.
This has not been an agreeable article to write, and we are quite conscious that it comes less well from a Unionist journal than it would have come from a Liberal one. We inevitably expose ourselves to the charge of cloaking partisanship with unctuous rectitude. We would most willingly have looked on silently if the Liberal newspapers had done their duty. Unhappily they have not done it. Newspapers are the watchdogs in public affairs. But if the Liberal watchdogs do not bark, the dogs which are supposed to be off duty for the time being must come to the rescue. We have a very uncomfortable feeling, and may as well confess it, that if the India Office and Marconi affairs had happened during a Unionist administration the Liberal watchdogs would have given tongue freely. Liberals write letters to us actually accusing us of gross partizan- ship. Well, let them persuade their party to return to the position it took up in such matters as these when the Liberals were in Opposition, and we will promise to atop barking and to do nothing but admire and applaud their honest chorus.
We will make use of a simple personal analogy to illus- trate and enforce what we have written, and to show that we have not exaggerated. Suppose that Lord Cromer, when he became Consul-General and British Agent in Egypt, had not been content to employ when necessary the financial house which he found in possession, but had introduced the firm of Bariug. He might have said that the help of his brothers would be most useful, because he could put entire confidence in their discretion and sympathetic co-operation. He might have talked about the dangers of a ring of Levantine or Jewish financiers. In fact, if the arguments in favour of the present Liberal methods are valid, the firm of Baring might have appeared in Egypt shortly after Lord Cromer took up office there, without a word being said in criticism. But we know perfectly well what Liberals would have said, and they themselves know as well as we do. It is utterly inconceivable that Lord Cromer would have put Egyptian financial affairs into the hands of his relations, because he would have said that the atmosphere of suspicion that would have been created would have been so deeply injurious as wholly to counter- balance the advantages of co-operating with people whom be knew intimately. We can say so much with certainty on the evidence of Lord Cromeis career. As to what the firm of Baring would have said to a proposal that they should take part in Egyptian affairs we can form a pretty accurate judgment. We give it as our strong opinion that such a thing as embarrassing Lord Cromer by entering into competition with the existing firms would never have entered their heads. They would have been the first to recognize the fact that Sir Evelyn Baring's appointment barred them from Egyptian public finance. Why should we descend from this high standard to that represented by the maxim, "If there is no actual cor- ruption no one has a right to complain. Why should a Minister's relations not have a look-in when Government business is going ? "
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