These three transactions are all that the three politicians ever admitted, and nothing more was ever proved against them. As we have seen there was no documentary evidence of the principal transaction (the one I have called A), except that Rufus sold 7000 shares on April 19. In his acquiring of the shares, no broker was employed. Rufus did not pay Harry for the shares until January 6, 1913, some nine months later, when the enquiry was already on. There was no evidence other than his own word that 10,000 was the number he had agreed to take or £2 the price that he had agreed to pay, or that he had bought from Harry and not from Godfrey, or that of the 7000 shares he had certainly sold at a huge profit on April 19 half were sold for Harry. There was, indeed, no evidence that the shares were not a gift.
Even on what they admitted, they had obviously acted improperly. The contract with the English Marconi Company was not yet completed, Parliament had not been informed of its terms, Parliament therefore had yet to decide whether it would accept or reject it. Three members of Parliament had committed two grave improprieties:
(1) They had purchased shares—directly or at one remove—from the Managing Director of a Company seeking a contract from Parliament, in circumstances that were practically equivalent to receiving a gift of money from him. They received shares which the general public could not have bought till two days later and then only at over 50% more than the politicians paid.* (On this count, the fact that the shares were American Marconis made no difference: the point is that they were valuable shares sold to ministers at a special low price. This need not have been bribery, but it is a fact that one way of bribing a man is to buy something from him at more than it is worth, or sell something to him at less than it is worth.)
[* H. T. Campbell of Bullett, Campbell & Grenfell, the English Marconi Company's official brokers, gave evidence before the Parliamentary Committee that it would have been impossible for the general public to buy the shares before April 19. And as we have seen, they opened on that day at £3.5.0.]
(2) They—and through the Chief Whip's action the whole Liberal Party, though it did not know it—were financially interested in the acceptance by Parliament of the contract. For though they had not bought shares in the English Company (with which the contract was being made) but with the American Company (which had no direct interest in the contract), none the less it would have lowered the value of the American shares if the British Parliament had rejected the Marconi System and chosen some other in preference. I may say at once that I feel no certainty that the transaction was a sinister effort to bribe ministers. But had it been, exactly the right ministers were chosen. They were the Chancellor of the Exchequer, who has charge of the nation's purse; the Attorney-General, who advises upon the legality of actions proposed; the Chief Whip, who takes the Party forces into the voting lobby. It was this same Chief Whip, the Master of Elibank, that had carried the sale of honours to a new height in his devotion to the increase of his Party's funds.
II. THE PARLIAMENTARY ENQUIRY
On July 19, 1912, the contract was put on the table of the House of Commons. In the ordinary course it would have come up for a vote some time before the end of the Parliamentary Session. But criticism of the contract was growing on the ground that it was too favourable to the Marconi Company. And rumours were flying that members of the Government had been gambling in Marconi shares (which, as we have seen, they had, though not in English Marconis).
Even before the tabling of the contract, members of Parliament, notably Major Archer-Shee, a Conservative, had been harrying Mr. Herbert Samuel, the Postmaster-General. On July 20, and in weekly articles following, it was attacked as a thoroughly bad contract by a writer in the Outlook, Mr. W. R. Lawson. On August 1, a Labour Member asked a question in the House about the rising price of Marconis. The feeling that enquiry was needed was so strong that on August 6, the last day but one of the session, the Prime Minister (who knew something of his colleagues' purchase of Marconis but never mentioned it) promised the House that the Marconi Agreement would not be rushed through without full discussion. In spite of this Herbert Samuel* and Elibank both tried hard to get the contract approved that day or the next. When it was quite clear that Parliament would not allow this, Herbert Samuel insisted on making a general statement on the contract. He too knew of the Ministers' dealings in American Marconis, but did not mention them. There was no debate or division. The question of ratification or rejection was postponed till the House should meet again in October.
[* The argument he put to Major Archer-Shee, M.P. was that the stations were urgently needed for Imperial defence.]
On August 8, Cecil Chesterton's paper the New Witness launched its
first attack on the whole deal (though without reference to
Ministerial gambling in Marconis) under the headline "The Marconi
Scandal":