Marconi scandal
Encyclopedia
The Marconi scandal was a British political scandal that broke in the summer of 1912. It centred on allegations that highly-placed members of the Liberal
government
, under H. H. Asquith
as Prime Minister
, had profited by improper use of information about the Government's intentions with respect to the Marconi Company
: knowing that the government was about to issue a lucrative contract to the British Marconi company for the Imperial Wireless Chain
, they had bought shares in an American subsidiary.
The political consequences were in fact slight, but the group around the New Witness drew conclusions about corruption in British politics, which were to resonate for 25 years.
in Marconi's shares and involved a number of government ministers, including Lloyd George
, the Chancellor of the Exchequer; Sir Rufus Isaacs
, the Attorney General; Herbert Samuel
, Postmaster General; and the Treasurer of the Liberal Party, the Master of Elibank, Lord Murray
. The allegations included the fact that Isaacs' brother, Godfrey Isaacs, was managing director of the Marconi company. While some have seen anti-Semitism
in the charges, the majority of those accused were not Jewish, and the allegations, whether true or not, were well-founded and serious enough to be brought to public attention. Particularly active was the New Witness, edited by Cecil Chesterton
. This was a distributist publication founded in 1911 by Hilaire Belloc
as Eye-Witness, with Cecil's brother G. K. Chesterton
on the editorial staff.
In February 1913 the French newspaper Le Matin
alleged that Sir Rufus Isaacs and Herbert Samuel had abused their position to buy shares in the English Marconi company. Both men sued for libel and Le Matin withdrew and apologised: during the case Isaacs testified that he had however bought shares in the American Marconi company and sold some on to Lloyd George and Lord Murray.. It was not made public during the trial that these shares had been made available through Isaacs's brother at a favourable price. The factual matters were at least partly resolved by a parliamentary select committee investigation, which issued three reports: all found that ministers had purchased shares in the American Marconi company, but while the fellow-Liberal members of the committee cleared the ministers of all blame, the other members reported that they had acted with "grave impropriety". The truth of the matter has been described as "obscure".
action against him. The New Age (June 12, 1913) described the trial this way:
The court ruled against Cecil Chesterton and fined him a token £100 plus costs, which was paid by his supporters. Some supporters claimed the decision would have gone differently had Cecil's lawyer aggressively gone after the accused ministers who were at the heart of the scandal. In the next issue of the New Witness, Cecil Chesterton repeated his allegations against the ministers, who still did not sue.
In her biography of G. K. Chesterton, Maisie Ward devotes an entire chapter to the scandal and notes, "Four days after the verdict against Cecil Chesterton, the Parliamentary Committee produced its report." She goes on to describe that report: "By the usual party vote of 8 to 6, it adopted a report prepared by Mr. Falconer (one of the two whom Rufus Isaacs had approached privately) which simply took the line that the Ministers had acted in good faith and refrained from criticizing them." She concludes the chapter with these words, which suggest that, at the very best, the ministers involved lacked judgment:
A completely opposite view is argued by Bryan Cheyette. He argues that the anti-Semitic 'Jewish financier' stereotype was present first, and indeed was established in British culture quite some time before the scandal broke.
It has been said that the scandal effectively ended the UK's chance of being the world leader in radio.
Liberal Party (UK)
The Liberal Party was one of the two major political parties of the United Kingdom during the 19th and early 20th centuries. It was a third party of negligible importance throughout the latter half of the 20th Century, before merging with the Social Democratic Party in 1988 to form the present day...
government
Government
Government refers to the legislators, administrators, and arbitrators in the administrative bureaucracy who control a state at a given time, and to the system of government by which they are organized...
, under H. H. Asquith
H. H. Asquith
Herbert Henry Asquith, 1st Earl of Oxford and Asquith, KG, PC, KC served as the Liberal Prime Minister of the United Kingdom from 1908 to 1916...
as Prime Minister
Prime minister
A prime minister is the most senior minister of cabinet in the executive branch of government in a parliamentary system. In many systems, the prime minister selects and may dismiss other members of the cabinet, and allocates posts to members within the government. In most systems, the prime...
, had profited by improper use of information about the Government's intentions with respect to the Marconi Company
Marconi Company
The Marconi Company Ltd. was founded by Guglielmo Marconi in 1897 as The Wireless Telegraph & Signal Company...
: knowing that the government was about to issue a lucrative contract to the British Marconi company for the Imperial Wireless Chain
Imperial Wireless Chain
The Imperial Wireless Chain, also known as the Empire Wireless Chain, was a strategic international wireless telegraphy communications network, created to link the countries of the British Empire. Although the idea was conceived prior to World War I, Britain was the last of the world's Great Powers...
, they had bought shares in an American subsidiary.
The political consequences were in fact slight, but the group around the New Witness drew conclusions about corruption in British politics, which were to resonate for 25 years.
Insider trading allegations
Allegations and rumours centred on insider tradingInsider trading
Insider trading is the trading of a corporation's stock or other securities by individuals with potential access to non-public information about the company...
in Marconi's shares and involved a number of government ministers, including Lloyd George
David Lloyd George
David Lloyd George, 1st Earl Lloyd-George of Dwyfor OM, PC was a British Liberal politician and statesman...
, the Chancellor of the Exchequer; Sir Rufus Isaacs
Rufus Isaacs, 1st Marquess of Reading
Rufus Isaacs, 1st Marquess of Reading, GCB, GCSI, GCIE, GCVO, PC, KC , was an English lawyer, jurist and politician...
, the Attorney General; Herbert Samuel
Herbert Samuel, 1st Viscount Samuel
Herbert Louis Samuel, 1st Viscount Samuel GCB OM GBE PC was a British politician and diplomat.-Early years:...
, Postmaster General; and the Treasurer of the Liberal Party, the Master of Elibank, Lord Murray
Alexander Murray, 1st Baron Murray of Elibank
Alexander William Charles Oliphant Murray, 1st Baron Murray of Elibank PC , called The Master of Elibank between 1871 and 1912, was a Scottish nobleman and Liberal politician. He served as Parliamentary Secretary to the Treasury under H. H...
. The allegations included the fact that Isaacs' brother, Godfrey Isaacs, was managing director of the Marconi company. While some have seen anti-Semitism
Anti-Semitism
Antisemitism is suspicion of, hatred toward, or discrimination against Jews for reasons connected to their Jewish heritage. According to a 2005 U.S...
in the charges, the majority of those accused were not Jewish, and the allegations, whether true or not, were well-founded and serious enough to be brought to public attention. Particularly active was the New Witness, edited by Cecil Chesterton
Cecil Chesterton
Cecil Edward Chesterton was an English journalist and political commentator, known particularly for his role as editor of The New Witness from 1912 to 1916, and in relation to its coverage of the Marconi scandal....
. This was a distributist publication founded in 1911 by Hilaire Belloc
Hilaire Belloc
Joseph Hilaire Pierre René Belloc was an Anglo-French writer and historian who became a naturalised British subject in 1902. He was one of the most prolific writers in England during the early twentieth century. He was known as a writer, orator, poet, satirist, man of letters and political activist...
as Eye-Witness, with Cecil's brother G. K. Chesterton
G. K. Chesterton
Gilbert Keith Chesterton, KC*SG was an English writer. His prolific and diverse output included philosophy, ontology, poetry, plays, journalism, public lectures and debates, literary and art criticism, biography, Christian apologetics, and fiction, including fantasy and detective fiction....
on the editorial staff.
In February 1913 the French newspaper Le Matin
Le Matin
Le Matin is a daily newspaper published by Edipresse in Lausanne, Switzerland. The French language tabloid has a circulation of 69,350 and a readership of 331,000.The Sunday edition Le Matin dimanche has a circulation of 207,945....
alleged that Sir Rufus Isaacs and Herbert Samuel had abused their position to buy shares in the English Marconi company. Both men sued for libel and Le Matin withdrew and apologised: during the case Isaacs testified that he had however bought shares in the American Marconi company and sold some on to Lloyd George and Lord Murray.. It was not made public during the trial that these shares had been made available through Isaacs's brother at a favourable price. The factual matters were at least partly resolved by a parliamentary select committee investigation, which issued three reports: all found that ministers had purchased shares in the American Marconi company, but while the fellow-Liberal members of the committee cleared the ministers of all blame, the other members reported that they had acted with "grave impropriety". The truth of the matter has been described as "obscure".
Court case
Cecil Chesterton expected to be sued by the government ministers under the nation's libel laws, which put the burden of proof on the defendant. Instead, Godfrey Isaacs, Marconi's director, brought a criminal libelSlander and libel
Defamation—also called calumny, vilification, traducement, slander , and libel —is the communication of a statement that makes a claim, expressly stated or implied to be factual, that may give an individual, business, product, group, government, or nation a negative image...
action against him. The New Age (June 12, 1913) described the trial this way:
If circumstantial evidence were ever sufficient to justify a charge, we do not doubt that in the case of Mr. Godfrey Isaacs v. Mr. Cecil Chesterton, the latter and not the former would have won. The case of Mr. Chesterton was admittedly based on circumstances and on such reasonable deductions from them as on the face of the facts any average mind would have felt impelled to draw. Unfortunately, however, for him the circumstances themselves proved insusceptible of any further evidence than their own existence.
The court ruled against Cecil Chesterton and fined him a token £100 plus costs, which was paid by his supporters. Some supporters claimed the decision would have gone differently had Cecil's lawyer aggressively gone after the accused ministers who were at the heart of the scandal. In the next issue of the New Witness, Cecil Chesterton repeated his allegations against the ministers, who still did not sue.
Aftermath
In 1919, Cecil Chesterton's A History of the United States was published, posthumously. In the introduction, his brother G. K. Chesterton wrote this about him:In collaboration with Mr. Belloc he had written The Party System, in which the plutocratic and corrupt nature of our present polity is set forth. And when Mr. Belloc founded the Eye-Witness, as a bold and independent organ of the same sort of criticism, he served as the energetic second in command. He subsequently became editor of the Eye-Witness, which was renamed as the New Witness. It was during the latter period that the great test case of political corruption occurred; pretty well known in England, and unfortunately much better known in Europe, as the Marconi scandal. To narrate its alternate secrecies and sensations would be impossible here; but one fashionable fallacy about it may be exploded with advantage. An extraordinary notion still exists that the New Witness denounced Ministers for gambling on the Stock Exchange. It might be improper for Ministers to gamble; but gambling was certainly not a misdemeanor that would have hardened with any special horror so hearty an Anti-Puritan as the man of whom I write. The Marconi case did not raise the difficult ethics of gambling, but the perfectly plain ethics of secret commissions. The charge against the Ministers was that, while a government contract was being considered, they tried to make money out of a secret tip, given them by the very government contractor with whom their government was supposed to be bargaining. This was what their accuser asserted; but this was not what they attempted to answer by a prosecution. He was prosecuted, not for what he had said of the government, but for some secondary things he had said of the government contractor. The latter, Mr. Godfrey Isaacs, gained a verdict for criminal libel; and the judge inflicted a fine of £100.--Cecil Chesterton, A History of the United States (New York: George H. Doran, 1919), xii-xiii.
In her biography of G. K. Chesterton, Maisie Ward devotes an entire chapter to the scandal and notes, "Four days after the verdict against Cecil Chesterton, the Parliamentary Committee produced its report." She goes on to describe that report: "By the usual party vote of 8 to 6, it adopted a report prepared by Mr. Falconer (one of the two whom Rufus Isaacs had approached privately) which simply took the line that the Ministers had acted in good faith and refrained from criticizing them." She concludes the chapter with these words, which suggest that, at the very best, the ministers involved lacked judgment:
As the Times leading article of June 19, 1913, put it: "A man is not blamed for being splashed with mud. He is commiserated. But if he has stepped into a puddle which he might easily have avoided, we say that it is his own fault. If he protests that he did not know it was a puddle, we say that he ought to know better; but if he says that it was after all quite a clean puddle, then we judge him deficient in the sense of cleanliness. And the British public like their public men to have a very nice sense of cleanliness."
That, fundamentally, was what troubled Gilbert Chesterton then and for the rest of his life. He was not himself an investigator of political scandals--in that field he trusted his brother and Belloc, and on this particular matter Cecil had certainly said more than he knew and possibly more than was true. But it did not take an expert to know that some of the men involved in the Marconi Case had no very nice sense of cleanliness: and these men were going to be dominant in the councils of England, and to represent England in the face of the world, for a long time to come.-- Maisie Ward, Gilbert Keith Chesterton (New York: Sheed & Ward, 1943), 362. Previous quotes from 355-56.
Views
In his 1936 autobiography, G. K. Chesterton credited the Marconi scandal with initiating a subtle but important shift in the attitude of the British public: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 the 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.... I think it probable that centuries will pass before it is seen clearly and in its right perspective; and that then it will be seen as one of the turning-points in the whole history of England and the world.--G. K. Chesterton, The Autobiography of G. K. Chesterton (New York: Sheed & Ward), 205–206.
A completely opposite view is argued by Bryan Cheyette. He argues that the anti-Semitic 'Jewish financier' stereotype was present first, and indeed was established in British culture quite some time before the scandal broke.
It has been said that the scandal effectively ended the UK's chance of being the world leader in radio.