11R. BAXTER'S CAMPAIGN AGAINST CONTRACTS.
EVERY seller in the world likes "Government " as a buyer, for very evident reasons. The State buys things in large quantities,—for example, the British Admiralty wants 18,000 pounds of "saloon candles" a year,—it is never insol- vent, and it always pays ready money. One would imagine that, under those circumstances, it would have "the pick of the market ;" that it would only have to ask, and be offered the best possible article at the lowest possible price consistent with any profit at all. The profit in such transactions is so certain and comes back so quick that capital need hardly be invested, and an energetic contractor could turn over his money a dozen times in the year. A contractor, for example, authorized to supply 5,000 dozen of port to the military hos- pitals during the year could do it without spending £1,000 in actual cash, and would be splendidly paid by a profit of two shillings a dozen. Nevertheless, in spite of all these advantages, the most serious of the minor practical difficulties which beset Governments is to purchase anything decently good at anything approaching market price,—or rather, to tell the whole truth a little more plainly, to bid in open market at all. One-third at least of all departmental machinery, in every country except Prussia, is directed towards that end alone, and in some countries much more than one-third. We are told by an experienced official that in many departments of the French Government two-thirds of the entire army of the bureaus are employed in "checking,"—in work, that is, which would be needless if the other third could be relied on. The Russian and Austrian Governments which do not employ so many checks,—their theory being to unite power and responsibility,—are directly plun- dered to an almost equal extent ; while the Government of India, which in some departments is splendidly served, is, in its great purchasing 'bureau, the department of Public Works, robbed of at least 30 per cent, of its expenditure. It is not quite so bad in England, bat it is evident from the hot discus- sions upon Admiraltylmance that the taxpayer is outrageously robbed. The system here is a little peculiar. In France the robbery is indirect, direct plunder being prevented at the cost of paying two or ihree officials instead of one. In Russia and Austria there used to be enormous plunder committed through false indents, that is, through demands for stores and wages which were not wanted, and the supply of bad materials which were "passed." for a consideration. In India the grand instruments of fraud are false measurement and demands for "speed-money," while in England the master evil is monopoly. As a rule, we fancy, Government gets very decent articles. Mr. Napier, we remember, once told a Committee that the real cause of dock- yard waste was that everything was three times as good as it ought to be ; that everybody used copper where iron would do, and everybody built as if he intended to make improve- ment impossible. The national love of comfort, in fact, protects us, and the Services, if badly supplied, make their discon- tent audible. The plunderers are, therefore, driven to a different mode of operation, which generally, as Mr. Baxter has publicly stated, resolves itself into a scheme of this sort. The market is repulsed in favour of a few firms which have bought their privilege by illicit arrange- ments with subordinates. They supply good articles, but receive in different ways prices above market rate. If com- petitors enter, they are welcomed, of course, but required to submit to such a variety of conditions that they lie at the mercy of the clerks, who, lenient to their confederates, are zeal itself as against interlopers. Smith and Co. for instance, tender to supply string at a low rate. Smith and Co., have "squared the office," and get their contract for string, as they should do, and get besides permission to supply small rope at "reasonable rates," that is, at their own rates. The supply of string is, perhaps, £1,000, the supply of small
rope £10,000 a month ; and as Smith is paid at once, 3 per cent, profit all round gives him 36 per cent. per annum for his money, out of which, of course, he can pay very liberal douceurs. Suppose Brown breaks into the ring, Brown is treated very 'civilly, but lee has to specify the price of his rope, has a quarrel once a month about quality, and gradually comes to the conclusion that the department is so stingy he had better trust the public.
But surely fraud of that kind can be pat down ? Well, we do not despair, if the House of Commons will keep on watching till it is in a mood to pass severe laws ; but just look at the facts. The Admiralty is the one spending de- partment that is vigilantly watched, nobody really hitting the military departments, or the Public Works, or the management of the Crown lands as they hit the Admiralty ; and at the Admiralty we have Mr. Childers and Mr. Baxter, both 'unusually competent, and all heartily in earnest to reduce expenses. Yet they have to begin by declaring that
so deep has the poison gone that the only cure they can think of is to abolish contracting, a system with great advantages, and try purchase,—a capital plan if we were sure of good purchasers, which we are not, and if it did not introduce another evil worse than the one it cures. The purchaser under the direct system does not invite tenders, but selects the dealer as a private individual does. But, unlike the private indi- vidual, it is not the personal interest of the State purchaser to select the best dealer, and he is consequently liable to incessant charges of favouritism, charges brought by the hot- test-tempered people in the world, English tradesmen when at once disappointed of a bargain, and subjected, as they think, to a professional slight. The angry talk in the Commons this week about the Deptford Yard was obviously based on an impression that people related to officials had been "favoured," not corruptly, but unfairly, fairness, be it remembered, being most important. John Smith's grandmother may be as good a chandler as any going, but if John Smith always buys of her the trade will retire, and the old lady will obtain as complete a monopoly as if she had bought it. The idea of Mr. Childers and Mr. Baxter favouring relations is grotesque enough, but we may one day have a shaky Ministry, and then the temptation to secure seats by conciliating dealers who influence them must be very great indeed. The chances in such a case that the goods of a Dover man, or a Southampton man, or a man in Leith will seem better than the goods of a London man will be consider- able, and the chance that people will say so approaches certainty. Now we believe that the kind of talk which went on in Parlia- ment about, say, the Churchward contract, is infinitely more mischievous than almost any blunder in legislation, does more to make good government impossible, by destroying the con- fidence of the people, which is essentially a trading people, in the trade honesty of its rulers. We had, as far as results go, rather see a 'Ministry go to war to secure popular support than see it give contracts, or make contracts in order to secure seats. The first is a wickedness out of accord with the bad side of the national character, and therefore does only temporary mis- chief ; the latter is a baseness in accord with it, and therefore permanently relaxes the tone of political honour. This, as it seems to us, is the second great objection to Mr. Baxter's scheme of purchase, the first objection to which is, as we said a month ago, that he is not immortal. We cannot hope always to have Baxter to exhibit as moral quinine. We want a system of purchase which can be worked by average politi- cians who do not know exactly what blue cloth ought to cost, but who do know how to make a clerk afraid of ordering pounds of candles for single candles, and reading "gallons" for " bottles " of wine in a hospital indent.
For the present, Mr. Baxter is fighting a good fight in the only way in which it could for the moment be fought ; but victory will only belong to him when he has devised a good self-acting system, which shall not allow of jobbing, as close contract does, or of the supply of bad goods, as severe com- petition always tends to do. Whether any system will be strong enough to defeat the growing tendency to plunder we are not certain, but it is clear that any scheme to be suc- cessful must be based upon three principles,—that the pur- veyor must be a permanent and not a Parliamentary officer, that he must deal with the market and not with selected per- sons, and that he must have some means of punishing cor- ruption among his subordinates sharper and quicker than those now provided by the law.
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