LORD HARDWICKE AND THE STOCK EXCHANGE.
WE cannot rest satisfied with Lord Salisbury's decision that Lord Hardwicke may remain a member of the Stock Exchange and a sleeping partner in a firm of stock- brokers while a Minister of the Crown. Nor do we believe that the country will ultimately be content to accept that decision as embodying the true principle in regard to the question of public office and private interests and employments. But before we deal with the problem as a whole we desire to state in the strongest possible way that we hold no blame to attach to Lord Hardwicke. He seems to us to have behaved in the most honourable and straightforward way throughout. When he was offered the important post of Under-Secretary of State for India which he now holds, he most properly explained his exact position in regard to the Stock Exchange to the Prime Minister. The Prime Minister, in effect, declared that there was no need for Lord Hardwicke to cease to be a member of the Stock Exchange, or completely to sever his connec- tion with the firm of stockbrokers in which he was an active and remains a sleeping partner; and that declara- tion, in our opinion, must be held to have made it perfectly legitimate for Lord Hardwicke to accept office. He is a young man and possessed of no special knowledge of or experience in the political world, and he could not be expected to set up an opinion contrary to that of Lord Salisbury. He may well be excused, even by those who most regret the precedent of his appointment, if he argued It is not for me to teach the Prime Minister on a matter of this kind. If he, the most trusted of public servants and the wisest statesman of the age, considers that I have a right to remain a member of the Stock Exchange and a member of my old firm, my course is obviously quite clear.' In the same way we desire to make it absolutely clear that we do not hold that a connection with the Stock Exchange ought to be considered incompatible with high political office because we in any way share the ridiculous notion that there is something per se mean or discreditable about the professions carried on on the Stock Exchange. Needless to say, we do not regard a stockbroker or stock- jobber as a kind of leper. Members of the Stock Exchange are, of course, just as honourable as other men, and there is nothing in their profession to render them in the least degree suspect.
We want to avoid any connection, or appearance of connection, between holders of political office and the Stock Exchange, not because the profession is an unworthy one, but simply because it happens to be a profession in which political information is of such special importance, and in which knowledge in regard to the action of Governments is most eagerly desired. The obtaining of knowledge a day, or even a few hours, before the rest of the world may mean on the Stock Exchange opportunities for acquiring wealth on the largest scale and in the most rapid manner, So keen are the members of the Stock Exchange for news, and so suspicious as to early information, that the writer of a letter to the Times suggests that people would probably be suspicious of dealing with the firm in which Lord Hard wicke is a sleeping partner for fear that they had obtained some secret information. It is true that the writer of the letter to the Times uses this fact as an argument to show that a firm of stock. jobbers would not be helped, but injured, by any supposed connection with Government ; but it seems to us to prove rather the keen atmosphere of suspicion which prevails in the Stock Exchange. It is unnecessary, however, to dwell upon the evils of any direct connection between Govern- ment and the Stock Exchange. They are as much ad- mitted by those who agree with Lord Salisbury that Lord Hardwicke's appointment is justifiable as by those who take the other view. The only difference is that Lord Salisbury and those who agree with him declare that there is no danger of any corruption arising because a Minister of the Crown remains a member of the Stock Exchange and a sleeping partner in a firm of jobbers. Lord Hardwicke, they point out, can be trusted not to make use of his political position to help himself or his firm, and therefore there is no need for him to sever his connec- tion with the Stock Exchange if he accepts office. Now we entirely agree that Lord Hardwicke is to be trusted to act as an honourable man, but that is, we submit, by no means the final word on the question. Lord Hardwicke would no doubt never take advantage of his position, and would never be so indiscreet as to let other people do so, but how can we be sure that in time to come there will not be some less scrupulous or less careful Minister? Some people think that because solicitors as a whole are a highly honourable body of men, no precautions ought to be taken in regard to their possible dishonesty, but all prudent men of the world admit that a knowledge of the honourable character of solicitors generally does not absolve a wise man from taking all reasonable precautions against dishonesty. The fact that Lord Hardwicke and his firm of stockjobbers are honourable people does not, in fact, in the least affect the general argument. Equally futile, it seems to us, id the plea that if a man wanted to make an improper use of his knowledge he could do so just as well after he had ceased to have any direct connection with the Stock Exchange as before. That argument strikes at the heart of all precautionary measures. In a sense it is true, but it is one that the world cannot act upon in practice. The clerks of stockbrokers and bankers and of great City houses in general are, we believe, forbidden to speculate in the Stock Market, but nobody proposes to do away with the prohibition because it can be secretly evaded. You must do what you can, even though you may not be able to ensure complete success. You must stop as many holes as possible, even though vou cannot stop all. We must remember also that if in the future any danger were to arise from a relaxation of the rules in regard to a connection between the Stock Exchange and the Government, it would probably come, not in the simple and melodramatic shape of a great speculation made on secret news by a Minister, but rather through a certain vague and indefinite assist- ance and half-imparted advice given not in exchange for money down, but in order to lay important persons on 'Change under an obligation, or to do them a good tura which might be reciprocated later. The temptation to make use of an official position comes in ways of this kind and not directly. But that being so, who can doubt that the more completely the severance of a Minister from all connection with the Stock Exchange is prescribed by the etiquette of political life, the better for our public life ? Men are not logical machines, but are very easily influenced by what may in theory seem rather arbitrary standards of conduct. If it is laid down strictly that when a man takes political office he must sever all connection with the Stock Exchange, we may be sure the rule will greatly help him to shut his ears to all suggestions as to transactions of the kind that are described as " perfectly innocent per se," or as " only capable of misconstruction by malignity or pedantry."
That a precedent should be made for holding office while retaining a, dormant connection with the Stock Exchange is bad, but it is, in our opinion, particularly bad that this precedent should have been created at the India Office. The Indian Administration, from the Governor-General down to the youngest civilian, is governed by very strict rules designed to prevent those who conduct the govern. ment of India from being able to make any use of their official position in order to obtain private gain. The general result of these rules has been excellent, though taken in detail they are often galling to individuals and appear pedantic- ally severe. Under them it is inconceivable that a Member of Council could remain a sleeping partner in a firm of Calcutta stockjobbers. But it must be remem- bered that Lord Hardwicke as Under-Secretary of State may have to take his share in enforcing this very strict code,—a code which sometimes seems harsh, but which nevertheless could not be relaxed without the gravest pos- sible risks. Again, the Indian Government is very largely concerned with Stock Exchange transactions,—as a rule far more so than the Home Government. Its railway policy, its currency problems, and the nature of its public Debt compel it to come very frequently into contact with the Stock Exchange, and thus may give cause for suspicions which, though entirely unfounded, may yet be made to appear serious. And remember that the inhabitants of India are suspicious in a high degree, and that the creation of an atmosphere of suspicion is one of the commonest artifices of native agitators. We are aware that we shall be told that suspicion does not matter, and that it should be treated with disdain and not encouraged by any anxiety to avoid it. We do not agree. We hold that suspicion is a thing to be got rid of by all reasonable means. The integrity of the public service is, in our belief, so precious that it is essential not only to provide against actual corruption at the moment, but also against the possibility of corrup- tion growing up in the future and against any plausible ground being given for suspicion. The way to stop an atmo- sphere of suspicion growing up is not to encourage a blind and reckless trustfulness, not merely in known men, but in all future holders of office, but instead to have an etiquette as regards high political office which shall banish as far as possible the opportunities and temptations of misconduct.
We have one more word to say. Lord Salisbury in his speech argued that if too many restrictions were laid down as to the holding of office we should be unable to fill the offices in the Government. We agree if the restric- tions were unreasonable or pedantic, but they can easily be prevented being either. Take for example the case of Lord Hardwicke. If there had been a statute compelling the resignation of membership of the Stock Exchange on the acceptance of office, it would no doubt have excluded Lord Hardwicke, but he is probably the only man in the House of Lords it would have excluded. No reasonable person can want for a moment to make rules which would exclude members of ordinary commercial firms from the Government, or to force them to resign all connection with their businesses if they accept office. All we would do would be to say (1) that Ministers must cease to hold directorships while in office ; (2) that they must cease to be active partners in ordinary com- mercial houses while they hold office ; and (3) that in the case of members of the Stock Exchange, or of firms con- tracting with or having large dealings with Government, they must on taking office sever their connection entirely with such businesses. In the case of Ministers holding shares in companies doing business directly and on a large scale with Government, we hold, further, that they should sell their shares. It is said that when Lord Lansdowne became Secretary of State for War he sold his shares in Armstrong's, thus setting a most excellent example. No doubt in this matter it is difficult to draw any very hard-and-fast line, but the public has a right to demand that in cases of doubt Ministers should err on the side of caution. The question in detail is largely one of delicacy. Ministers should feel proud and anxious to show that their service of the State could not by any possibility be inspired or influenced by selfish aims. No doubt in order to exact this high stan- dard Ministers should be well paid. We would have no Cabinet Minister paid less than £5,000 a year, and no member of the Ministry less than £2,500. That the country would object to the necessary additions to present salaries we do not believe for a moment. Any Govern- ment which had the courage to make such a proposal would be rewarded by the ready assent of the country. We must exact the highest standard for our public servants, but we must also pay them well. In any case, let the public insist on refusing to listen to the absurd plea that in demanding great precautions against the possibilities of corruption they are doubting the honour of their public men and degrading our public life. That is sheer non- sense. When the butler has been careless about the wine or the silver, and his master takes him to task and insists upon proper regulations, the butler is, no doubt, very apt to declare in a rage that he is being charged with theft, or, at any rate, to ask " whether he is suspected." The wise master, of course, refuses for an instant to treat the matter on that footing. His reply is : "I do not doubt your honesty, and I do not suspect you of being a thief, but I do intend to have my cellar and my plate-closet put under proper rules,—rules which would prevent harm arising if, instead of having an honest butler, I should some day have the misfortune to have a dishonest one."
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