Marconi finance, in which there were several references to the rumours in circulation; and these were repeated by him in an article in the October number of the 'National Review.' The references were studiously vague, but their implication was that Ministers had probably been guilty of the impropriety of speculating in shares of the parent Marconi Company. In so far as Ministers had been speculating improperly, the charge was true in substance. In so far as it indicated a particular kind of improper speculation, viz. on official information, it was inaccurate. Yet this inaccuracy-for it is nothing more--has been worked up by Ministers and their friends into a tremendous grievance, and treated as part of a monstrous campaign of unfounded calumny, wholly disconnected, in everything but the mere coincidence of the name Marconi, with the trifling error of discretion which they have since incidentally admitted. And even opponents of the Government seem, judging by the debate, to have hesitated to expose the unreality and insincerity of this counter-demonstration.

The errant Ministers were now in a serious quandary. The persistence and extent of these rumours in the City and in society, and their appearance in the public Press, were calculated to inflict grave injury not only on themselves and the Government to which they belonged but on the whole of British public life. It was their duty to put a stop to them without delay. The facts were communicated-not, indeed, sufficiently fully or frankly-to the Prime Minister and to the Postmaster-General before the end of July 1912. If, in the opinion of the Prime Minister, the dealings of Ministers in American Marconi shares were only a venial indiscretion, it was obviously his wisest course to secure, either in the House of Commons or in the Law Courts, the immediate publication of the facts, which would, there and then, both explain and dissipate the fabric of misleading rumour which had grown up. If, on the other hand, he took a serious view of these dealings, then he was bound, in the most explicit fashion, to dissociate his Government from the grave error into which individual members of it had fallen. Neither course was adopted, and, after a last desperate effort on the part of the Postmaster-General to rush through the contract on the closing day of the

summer session and thus avoid further discussion and enquiry, the matter was allowed to drift till the autumn.

The moment the House of Commons met in October, Ministers were given an opportunity for a frank statement. They rejected it. Knowing, as they must have done, the true origin not only of the more or less precise charges which had appeared in print, but of the general disquiet which affected the House of Commons, they preferred to conceal it, at any rate for the time being. They made declarations or interjections which, to quote Lord Robert Cecil's report, even if on a careful scrutiny they can be seen to refer only to the specific charge of having bought British Marconi shares, were calculated to convey an impression, and did in fact generally convey an impression, that none of them had had any interest, direct or indirect, in Marconi shares of any kind.' It is difficult to read into those declarations any other purpose than that of disposing of the rumours if possible, while at the same time keeping within the limits of verbally correct statement if the facts about the American Marconi transactions should, after all, have to be disclosed.

The Select Committee on the Marconi agreement forthwith assembled and issued a notice to all who had information to give to communicate with the Chairman. Neither the Prime Minister, nor any of the other Ministers who knew, complied with the invitation. The Ministers more directly concerned intimated a general readiness to be called. But when the Committee, in the absence of any definite evidence to support the rumours, proceeded at great length with its chief ostensible task of investigating the business merits of the agreement, Ministers waited contentedly through what Mr Lloyd George has since described as a dreary dark winter of martyrdom. Early in January the Master of Elibank, now Lord Murray, who had resigned the position of Chief Whip in August and gone into business, left for South America. He did not ask to come before the Committee before he left; and it is now obvious that he had no intention of returning before the 'Marconi muddle had been cleaned up.' The shares bought for the Party Fund had never been handed over to his successor, Mr Illingworth, and were now entrusted to the safe custody of a brother. That series of transactions, at any rate, was

never meant to be disclosed, and never would have been disclosed, even to Lord Murray's colleagues, but for the accident that the failure and absconding of his broker brought them to light almost at the very end of the enquiry. Supposing that a rumour of these transactions had reached the Press and been published, it is easy to imagine the righteous indignation with which Mr Illingworth would, in the witness box, have repudiated the foul scandal.

On January 22 last Mr Lawson was to come before the Committee, and some days before this the AttorneyGeneral informed Mr Falconer and Mr Booth, the two most active Liberal members on the Committee, of the fact that Ministers had dealt in American Marconi shares. They did not tell the Chairman, and it is clear that the Chairman was not meant to know. That communication, obviously, cannot have been intended to hasten the disclosure of the facts. Its only object can have been to prevent questions being framed or answers given in a form which might prove awkward if the facts should afterwards come out. And a study of Mr Lawson's examination shows the skill with which on more than one occasion that hapless witness was headed off from the subject of the American Marconi gamble whenever he came near it. It is difficult to resist the inference that, at the end of January, the Ministers involved were still undecided whether it would be necessary to make a disclosure or not.

On February 12 the Committee examined Mr Maxse, the editor of the National Review,' a very different witness from Mr Lawson. Mr Maxse's refusal to produce confidential letters which he had received in connexion with the rumours aroused so much attention that the public overlooked the really significant feature of his evidence, namely, his insistent demand that Ministers should appear before the Committee at once and declare if they had had dealings in the shares of any Marconi Company. The Ministers now seem to have realised, what should have been obvious to them from the first, that disclosure could not be avoided and had better come as soon as possible. A providential chance came to their assistance. On February 14 a Paris journal, ‘Le Matin,' contained what purported to be an account of Mr Maxse's

evidence. It bore indeed little resemblance to that evidence. But it did contain, formulated in very much the same way as Sir Rufus Isaacs had formulated them for himself in the House of Commons on October 11, the definite charges that he had used improper influence with Mr Samuel to secure the contract for his brother, and that Ministers had bought the shares of the parent Marconi company at the beginning of the negotiations and had sold them at an immense profit after March 7. The Attorney-General's attention was drawn to it the same evening, and he at once instructed his solicitors to take proceedings. The matter came into court on March 19, when 'Le Matin' apologised, while the AttorneyGeneral in the witness-box took the opportunity of making a partial disclosure of the American transactions. Amid immense public surprise and consternation Ministers were at once summoned before the Committee. In the course of the next few weeks the whole of the story which is now public property was unfolded. How much more has been left undisclosed owing to the unwillingness of the majority of the Committee to press for further information, and to their sudden closing down of the enquiry, is another question.

Before the Committee, as at the Chesterton trial at the end of May, Ministers took a high line, and refused to admit that there was anything in the slightest degree amiss either with their Marconi transactions or with their subsequent policy of concealment. The majority of the Committee, led by Mr Falconer, took the same view, and on June 13 produced a report, which is, in itself, not the least amazing feature of the whole amazing affair. In this Report the Ministerial line of defence is pushed to its logical conclusion. By a bold use of Mr Harry Isaacs's unsubstantiated and prima facie incredible evidence, the whole of the rumours to which reference was made in the Press from July onwards are declared to have originated not later than January 1912, and are accordingly treated not as the mere inaccurate echoes and perversions of the Ministerial dealings, but as having been from beginning to end sheer malignant inventions. The assumption, in fact, is that by a mere fantastic coincidence Ministers happened to speculate in the shares of a company whose name accidentally resembled that of another

company with regard to which they were already then the unconscious victims of a wholly baseless and, indeed, inexplicable campaign of calumny! More than half the Report is devoted to this counter-demonstration. The second and smaller half is given to the American Marconi transactions; and it will be sufficient characterisation of this portion to mention that in it the American Company is stated to have had no interest, direct or indirect, in the Imperial contract, that Ministers are declared to have received no favour, advantage, or consideration of any kind from Mr Godfrey Isaacs or any advantage in the price paid to Mr Harry Isaacs, and that all reference to Mr Godfrey Isaacs's original offer and information and to Ministers' reticence in Parliament is discreetly omitted. Needless to say, no attempt was made to provide a narrative of the actual transactions which would support these astounding conclusions.

Fortunately there were two other draft reports. That of the Chairman, while it assumed the Ministerial view that the rumours published in the Press had no connexion with the dealings in the American shares, gave a full and fair account of those dealings, and concluded with a most mildly worded, but at the same time unmistakable, censure both on the transactions of Ministers and on their subsequent reticence. Lord Robert Cecil's report differed from the Chairman's not so much in its general point of view or judicial tone as in the much clearer arrangement of its narrative, the more correct perspective in which it placed the rumours and charges, whose recklessness it emphatically deplored but whose origin it could not overlook, and in its more carefully reasoned and definitely expressed conclusions as to the 'grave impropriety' of the transactions of Ministers and as to the 'want of frankness and respect for the House of Commons' shown in their subsequent conduct.

The Falconer report only reproduced the line taken by Ministers themselves before the Committee, and may be presumed to have had their approval. But, for the moment, it proved too stiff a dose, not only for the general public but even for the most obedient sections of the Liberal party. Almost the whole Liberal Press repudiated it and fell back upon the position taken up in Sir A. Spicer's report. When the Unionists tabled a