At a meeting in 1911 Herbert Asquith and
his cabinet approved a plan for a chain of state-owned wireless stations
to be erected throughout the British Empire. Asquith asked the Postmaster
General, Herbert Samuel, was asked to find
a company to undertake the work. He eventually decided to give the
contract to Marconi Wireless Telegraph Company. The chairman of Marconi
was Godfrey Isaacs, a close friend of Samuel and the brother of Sir
Rufus Isaacs, the Attorney General in Asquith's
government.
Although the contract was not made public, shares in the company increased
from £2. 8s. 9d. in August 1911 to £6. 15s. 0d. in March,
1912. By the time the government's decision to build a chain of state-owned
wireless stations was announced in April, Marconi's shares had risen
to £9.
Hilaire Belloc, the editor of the political
weekly, The Eye-Witness, suspected that some members of the
government had been buying shares in the company. He wrote to his
mother, Bessie Parkes Belloc that he had
heard rumours that "Lloyd George has been dealing on the Stock
Exchange heavily to his advantage with private political information".
After investigations by his reporters, Belloc published allegations
of corruption in The Eye Witness. It was suggested that Sir
Rufus Isaacs had made £160,000 out
of the deal. It was also claimed that Godfrey Isaacs, David
Lloyd George and Herbert Samuel had
profited by buying shares based on knowledge of the government contract.
In January 1913 a parliamentary inquiry was held into the claims made
by The Eye Witness. It was discovered that Godfrey Isaacs had
purchased £10,000 worth of shares in Marconi. Rufus
Isaacs purchased 10,000 £2 shares in Marconi and immediately
resold 1,000 of these to David Lloyd George.
Herbert Samuel bought 3,000 shares at £2,532
and the Master of Elibank, the Liberal Chief Whip, purchased 3,000
Marconi shares for himself and another 3,000 for the Liberal
Party.
Although the parliamentary inquiry revealled that David
Lloyd George, Herbert Samuel, Sir Rufus
Isaacs and the Master of Elibank had profited directly from the
policies of the government, it was decided the men had not been guilty
of corruption.
(1)
Herbert Asquith, speech, House
of Commons (11th October, 1912)
I have read carefully the scurrilous rubbish, and I am clearly of
the opinion that you should take no notice of it. I suspect The Eye
Witness has a very meagre circulation. I notice only one page of advertisements
and that occupied by books of Hilaire Belloc's publishers. Prosecution
would secure it notoriety, which might yield subscribers.
(2)
C. K. Chesterton, Autobiography
(1936)
It is the fashion to divide recent history into Pre-War and Post-War
conditions. I believe it is almost as essential to divide them into
Pre-Marconi and Post-Marconi days. It was during the agitations upon
that affair that the ordinary English citizen lost his invincible
ignorance; or, in ordinary language, his innocence.
(3)
Hilaire Belloc, unpublished memoirs written in 1937.
David Lloyd George excelled even the ruck of politicians in
his desire for what he thought was fame, as well as his extravagant
greed for money. The two things do not usually go together but in
his case it was difficult to say which was the stronger. He fully
achieved both. Lloyd George began as a small Nonconformist Radical
member of Parliament. He was a fluent speaker and appealed strongly
to the audiences which in an earlier generation had also been appealed
to by Spurgeon, Moody and Sankey and people of that kind. He may possibly
like other men of the sort who enter public life had some sort of
convictions when he begun, but he had certainly lost them by the year
1900 and was purely on the make.
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