CHAPTER XVIII

THE HOUSE OF COMMONS STANDS FOR EXTRAVAGANCE

Authoritative character of the evidence tendered by the several Secretaries of the Treasury. Testimony, in 1902, of Lord Welby, who had been in the Treasury from 1856 to 1894. Testimony of Sir George H. Murray, Permanent Secretary to the Post Office and sometime Private Secretary to the late Prime Minister, Mr. Gladstone. Testimony of Sir Ralph H. Knox, in the War Office since 1882. Testimony of Sir Edward Hamilton, Assistant Secretary to the Treasury since 1894. Testimony of Mr. R. Chalmers, a Principal Clerk in the Treasury; and of Sir John Eldon Gorst. Mr. Gladstone's tribute to Joseph Hume, the first and last Member of the House of Commons competent to criticize effectively the details of expenditure of the State. Evidence presented before the Select Committee on Civil Services Expenditure, 1873.

Before proceeding to the subject proper of this chapter, it is desirable to say a word about the organization and the work of the Treasury.[419]

The Treasury consists of the First Lord of the Treasury, who is almost invariably the Prime Minister; the Chancellor of the Exchequer; and three Junior Lords of the Treasury. "The Treasury is pre-eminently a superintending and controlling office, and has properly no administrative functions." Its duty is to reduce to, and maintain at, the minimum compatible with efficiency, the expenditures of the several Departments of State.

The Treasury has three Secretaries: the Financial Secretary, the Parliamentary, or Patronage Secretary, and the Permanent Secretary. The Financial Secretary, after the Chancellor of the Exchequer, is the political head and conductor of the Treasury. He is one of the hardest worked officers of the Government. His duties were well described, recently, by Mr. Austen Chamberlain, in the course of a brief sketch of his official career. Said Mr. Chamberlain: "From the Admiralty he was transferred to the position of Financial Secretary to the Treasury, where, as his chief explained to him, he was in the position of an old poacher promoted to be gamekeeper, and his first duty was to unlearn the habits of five years and save money where previously it had been his pleasure to spend it." The Parliamentary, or Patronage Secretary is the principal Government Whip. "He is a very useful and important functionary. His services are indispensable to the Leader of the House of Commons in the control of the House and the management of public business." "It devolves upon him, under the direction of the Leader of the House, 'to facilitate, by mutual understanding, the conduct of public business,' and 'the management of the House of Commons, a position which requires consummate knowledge of human nature, the most amiable flexibility, and complete self-control.'" As "Whipper-in," the Parliamentary Secretary is generally assisted by two of the Junior Lords of the Treasury, who are, at the same time, Government Whips. "Those useful functionaries are expected to gather the greatest number of their own party into every division [of the House of Commons], and by persuasion, promises, explanation, and every available expedient, to bring their men from all quarters to the aid of the Government upon any emergency. It is also their business to conciliate the discontented and doubtful among the ministerial supporters, and to keep every one, as far as possible, in good humor." "An estimate of the importance of the duties which would naturally devolve upon these functionaries--from the increasing interference of the House of Commons in matters of detail, and the necessity for the continual supervision of some Member of the Government conversant with every description of parliamentary business, in order to make sure that the business is done in conformity to the views entertained by the House--induced Sir Charles Wood,[420] to declare, in 1850, that the reduction of the number of Junior Lords from four to three was a very doubtful advantage."

The Financial Secretary and the Parliamentary Secretary are political officers, that is, they sit in the House of Commons, and they change with every change in the Government. The Permanent Secretary, on the other hand, is a non-political officer, or civil servant, who retains office through the successive changes of Government, and secures the continuity of the office. He is the official head of the Department, and of the whole civil service.

The foregoing facts make it clear that for the purposes of this present discussion, one can cite no more authoritative personages than the several Secretaries of the Treasury.

* * * * *

The Select Committee on National Expenditure, 1902, took a great deal of evidence on the effect of the intervention of the House of Commons in the administrative details of the several Departments of State, particularly on the impairment of the power of the Treasury to control the expenditure of the several Departments.

[Sidenote: _Lord Welby on Change in Public Opinion_]

The most important witness was Lord Welby, who, as Mr. Welby, had entered the Treasury in 1856; had been Head of the Finance Department from 1871 to 1885; and had been Permanent Secretary from 1885 to 1894. Lord Welby said that in theory the Treasury had full power of control over the expenditures of the several Departments, but that in practice that power of control was limited by the state of public opinion as reflected in the House of Commons. As soon as the Treasury became aware that it had not public opinion at its back, that fact "would have a certain influence on many of its decisions." Then again, as soon as the other Departments of State became aware that the Treasury was not supported by public opinion, the authority of the Treasury over those Departments was impaired. "If an idea gets abroad that the House of Commons does not care about economy, you will not find your servants economical." Lord Welby then went on to say that in all the political parties in the House of Commons, "the old spirit of economy had been very much weakened." He put the change of public opinion at about the middle of the seventies, or, perhaps, rather later, say, in the eighties. Previous to that change the influence of the Chancellor of the Exchequer had been "paramount, or very powerful, in the Cabinet." But with the change in public opinion, "the effective power of control in the Chancellor of the Exchequer had been proportionately diminished." Lord Welby concluded: "I constantly hear it said now by people of great weight that economy is impossible, that you cannot get the House of Commons to pay attention [to counsels of economy].... The main object [to be striven after], I think, is that there should be some correlation both in the minds of the Government of the day and in the minds of the House of Commons between resources and expenditure; I think that ought to exist, but I do not think it does exist at present. I see no evidence of it."[421]

Mr. Hayes Fisher,[422] a Member of the Committee, and Financial Secretary to the Treasury, in 1902 to 1903, replied to Lord Welby: "But is not the business of the Treasury, and the main business of the Treasury, to check that expenditure and keep it within reasonable bounds, outside of questions of policy?" Lord Welby replied: "Quite so; but might I venture to ask the honorable Member, who occupies one of the most important posts in the Government, whether he would not be glad of support in the House of Commons?" "Most certainly we should on many occasions," was the answer.

[Sidenote: _Sir George H. Murray on Change in Public Opinion_]

Sir George H. Murray,[423] Permanent Secretary to the Post Office, was called as a witness because "in the official posts he had held, particularly as Private Secretary to the late Prime Minister, Mr. Gladstone, he had had frequent opportunities for observation not only of the reasons for expenditure, but of the control exercised over it in Parliament." He said: ...

"But I think the whole attitude of the House itself toward the public service and toward expenditure generally, has undergone a very material change in the present generation.... Of course, the House to this day, in the abstract and in theory, is very strongly in favor of economy, but I am bound to say that in practice Members, both in their corporate capacity and, still more, in their individual capacity, are more disposed to use their influence with the Executive Government in order to increase expenditure than to reduce it.... That is the policy of the House--to spend more money than it did, to criticize expenditure less closely than it did, and to urge the Executive Government to increase expenditure instead of the reverse."[424]

[Sidenote: _The Commons the Champion of Class Interests_]

Sir Ralph H. Knox,[425] who had been in the War Office from 1856 to 1901, and who, for forty years, had listened to the discussions in Parliament of the Estimates of Expenditure, said: ... "The mass of speeches that are made in Supply before the House of Commons, are speeches made on behalf of those who have grievances, their friends or constituents, or those with whom they work, or in whom they are particularly interested. If you take speech after speech, you find they are simply to the effect: 'we want more'--and they get more.... In former days there were more Members who were willing to get up with some pertinence and some knowledge to criticize those proposals. But I cannot say there has been any very great tendency in that direction when details are being discussed.... What I want, is [someone] to nip in the bud, new proposals which are made by Members of Parliament very often on behalf of their constituents. A Member, for instance, represents what I should call a labor borough; he gets up and proposes that the pay of every man employed in certain [Government] factories or dockyards should be increased by so much a week, what I want is somebody to get up and say: 'That is not the view of the country, you must not accept that;' but instead of that the matter goes _sub silentio_, and the Government, which is naturally interested in economy and in keeping the expenditure down, is induced to think if there is any feeling in the House at all, it is in favor of doubling everybody's pay." Sir R. H. Knox said he desired more opposition to unwarranted proposals, "because I know what extreme weight is attached to the speeches in Supply by the Minister in charge of a Department, and by the Department itself; but if they find that there is not a single man interested in economy when the details of the Estimates are discussed, it places them in an exceedingly difficult position."[426]

[Sidenote: _Commons Debates weaken Treasury's Hands_]

Sir Edward Hamilton, Assistant Secretary to the Treasury since 1894, said that the Treasury could depend less than formerly upon the support of the House of Commons, and that often-times the tendency of the debates in the House was to weaken the hands of the Treasury.[427] Sir Edward Hamilton had entered the Treasury in 1870; had served as Private Secretary to Mr. Lowe, Chancellor of the Exchequer, in 1872-73; and as Private Secretary to Mr. Gladstone, First Lord of the Treasury, in 1880 to 1885. He had been made successively Principal Clerk of the Finance Division in 1885; Assistant Financial Secretary in 1892; and Assistant Secretary in 1894. In 1902 he was made Permanent Financial Secretary.

Mr. Austen Chamberlain, a member of the Select Committee, asked Mr. R. Chalmers,[428] a Principal Clerk at the Treasury: "Is it within your experience as an official of the Treasury that Ministers of other Departments not infrequently represent, as the reason for allowing expenditure, the strong pressure that has been put upon them in the House of Commons?" "Yes; I have seen repeated instances of that." "And their inability to resist that pressure for another year?" "Yes."[429]

Sir John Eldon Gorst, M. P., a man of large experience of the Public Service, said he had no doubt that in all offices there were officers who had ceased to have anything to do; and that was particularly true of the Education Department, where there was much reading of newspapers, and much literary composition. He had "even heard of rooms where Ping Pong was played, there being nothing else to do at the moment." Sir John Eldon Gorst continued: "The Treasury has power to make an inquiry into every Office, it could institute an inquiry to see whether the office was or was not economically managed, but so far as I know that power never has been exercised. It would be very difficult indeed for the Parliamentary Head of a Department to call in the Treasury for such an investigation. It would make the Parliamentary head extremely unpopular. The only person who, in my opinion, as things are, can really influence the expenses of an office, is the Civil Service head.... But although the Civil Service head of the office has a very great motive to make his office efficient, because his own credit and his own future depend on the efficiency of his office, he has comparatively little motive for economy. Parliament certainly does not thank him; I do not know whether the Treasury thanks him very much; certainly his colleagues do not thank him; ... and the natural disposition of a man to let well enough alone renders him reluctant to take upon himself the extremely ungrateful task of making his office, not only an efficient one, but also an economical one. I think anybody who has any experience of mercantile offices, such as a great insurance office, or anything of that kind, would be struck directly with the different atmosphere which prevails in a mercantile office and a Government office.... I have no hesitation in saying that any large insurance company, or any large commercial office of any kind, is worked far more efficiently and far more economically than the best of the Departments of His Majesty's Government."[430]

Sir John Eldon Gorst's statement that he knew of no instance of the Treasury exercising its power of instituting an inquiry conducted by Treasury officers, into the administration of a Department of State, recalls to mind some testimony given by Sir R. E. Welby, Permanent Secretary to the Treasury, before the Royal Commission on Civil Establishments, 1888. Mr. Cleghorn, a Member of that Commission, asked Sir R. E. Welby: "Is there anybody at the Treasury, for instance, who could say to the Board of Trade, or any other particular Department: 'You have too many clerks, you must reduce them by ten?' Is there anybody at the Treasury with sufficient power and knowledge of the work to be in a position to say that, and to take the responsibility of it?" Sir R. E. Welby replied: "No." Thereupon Mr. R. W. Hanbury, another Member of the Commission, asked: "There is not?" Once more the answer was: "No."[431]

Again, in 1876, before the Select Committee on Post Office Telegraph Departments, Mr. Julian Goldsmid, a Member of the Committee, asked Mr. S. A. Blackwood, Financial Secretary to the Post Office: "You would not like, perhaps, to give the reasons for that enormous overmanning which existed in some of the [telegraph] offices [in 1873 to 1875]?" Mr. Blackwood replied: "I am not acquainted with the reasons myself."[432]

Sir Ralph H. Knox, in the course of his testimony, had quoted Mr. Bagehot's statement: "If you want to raise a certain cheer in the House of Commons, make a general panegyric on economy; if you want to invite a sure defeat, propose a particular saving." He had continued: "I should like to add, 'If you want to lose popularity, oppose the proposals for increase.' There ought to be some Members in the House of Commons who would undertake that line."

[Sidenote: _Gladstone's Tribute to Hume_]

This wish of Sir Ralph H. Knox recalls to mind the tribute paid, in 1873, by Mr. Gladstone, to the memory of Joseph Hume, the first as well as the last Member of the House of Commons to acquire a knowledge of the expenditures of the Government which was sufficient to enable the possessor to criticize with intelligence the details of the expenditures of the Government. Said Mr. Gladstone: ... "and in like manner, I believe that Mr. Hume has earned for himself an honorable and a prominent place in the history of this country--not by endeavoring to pledge Parliament to abstract resolutions or general declarations on the subject of economy, but by an indefatigable and unwearied devotion, by the labor of a life, to obtain complete mastery of all the details of public expenditure, and by tracking, and I would almost say hunting, the Minister in every Department through all these details with a knowledge equal or superior to his own. In this manner, I do not scruple to say, Mr. Hume did more, not merely to reduce the public expenditure as a matter of figures, but to introduce principles of economy into the management of the administration of public money, than all the men who have lived in our time put together. This is the kind of labor, which, above all things, we want. I do not know whether my honorable and learned friend [Mr. Vernon Harcourt], considering his distinguished career in his profession, is free to devote himself to the public service in the same way as Mr. Hume did. If, however, he is free to do so, I would say to him: 'By all means apply yourself to this vocation. You will find it extremely disagreeable. You will find that during your lifetime very little distinction is to be gained in it, but in the impartiality of history and of posterity you will be judged very severely in the scales of absolute justice as regards the merits of public men, and you will then obtain your reward.'"[433]

The British public, needless to say, still is waiting for the man, or men, who shall take upon themselves the invidious but honorable task of stemming the tide to extravagant expenditure, which, in Great Britain, as elsewhere, is the besetting sin of popular government. The British people still are waiting, though, since 1870, they have vastly increased the functions of the Government by nationalizing a great branch of industry, and therefore are more than ever in need of persons who shall emulate the late Joseph Hume.

* * * * *

In conclusion, let us compare with the testimony given in 1902, the testimony given in 1873, before the Select Committee on Civil Services Expenditure.

A Member of the Select Committee of 1873 asked Mr. W. E. Baxter, Financial Secretary to the Treasury: "Am I right in thinking that you do not agree with the Chancellor of the Exchequer's declaration with regard to the Treasury? I asked him this question: 'Then it is a popular delusion to believe that the Treasury does exercise a direct control over the expenditure of the Department?' And the Chancellor replied: 'I do not know that it is popular, but it is a delusion; I think that it would be much more popular that the Treasury should exercise no control at all.'" Mr. Baxter replied: "I think that the Chancellor stated it too broadly, and would, probably, if he had been Secretary to the Treasury for two or three years, have found that the Treasury did, in point of fact, go back to some extent over the old expenditure as well as try to stop increases." A moment before, Mr. Baxter had said: "The most unpleasant part, as I find it, of the duty of the Financial Secretary to the Treasury is to resist the constant pressure brought day by day, and almost hour by hour, by Members of Parliament, in order to increase expenditure by increasing the pay of individuals, increasing the pay of classes, and granting large compensations to individuals or to classes." The Chairman of the Committee queried: "And that pressure, which is little known to the public, has given you, and your predecessors in office, I presume, a great deal of thought and a great deal of concern?" Mr. Baxter replied: "As I said before, it is the most unpleasant part of my duties, and it occupies a very great deal of time which probably might be better spent." At this point Mr. Sclater-Booth asked: "You spoke of the constant Parliamentary pressure which has been exercised with a view to increasing salaries or compensations, do you allude to proceedings in Parliament as well as private communications, or only to the latter?" Mr. Baxter replied: "I did in my answer only allude to private communications by letter and conversation in the House, because that was in my mind at the time. But of course my answer might be extended to those motions in the House which are resisted without effect by the Government, and which entail great expenditure upon the country." Mr. Herman queried: "When you speak of the pressure put upon you by Members of Parliament for the increase of pay to classes, and the other points that you named, I suppose that you mean that it is partly party pressure, and that you are more subject to it at the present time than you would be if a Conservative Government were in power?" Mr. Baxter replied: "In my experience it has very little to do with party; men from all quarters of the House are at me from week to week." "Do you mean to say that men opposed to you in political principles apply to you for that sort of thing now?" "Certainly I should wish it to be distinctly understood that they do not ask this as a favor; they do not ask favors of me. They simply wish me to look into the question of the pay of individuals and of classes of individuals, as they put it, with a view of benefitting the public service.... In very few instances since I have been Financial Secretary to the Treasury have I been asked by anyone to advance a friend, or to do anything in the shape of a favor. The representations are of this sort: 'Here are a class of public officers who are underpaid. We wish you to look into the matter, and to consider whether or not it would be advantageous to the public service that their salary should be increased.' I look into it, and I say that I am not at all of that opinion, upon which my friend tells me that he will bring the matter before the House, and show us up." "And the other evil is one which is rapidly diminishing, and, in fact, is very small now, namely, interference in favor of individuals?" "Very small indeed."

To a question from Mr. Rathbone, Mr. Baxter replied: "I do not think that the representations in question have much effect; I only stated that the most unpleasant part of my duties was resisting the pressure brought to bear in that way." Thereupon Mr. Rathbone continued: "They may not have an effect when the Government has a majority of one hundred or so, or when there is no election impending, but do you think they have no effect when, as we have seen in former years for long periods, the Government is carried on, whether by one side or the other, by a very small majority, or when an election is impending?" Mr. Baxter replied: "I have no doubt that they have had the effect in former times in those circumstances." "Do you think they would be liable to have that effect again if either party should be reduced to that condition?" "It may be so." "Can you suggest any mode of abating the Parliamentary pressure to which you have alluded, whether it be exercised by public motions or by private influence?" The Financial Secretary to the Treasury replied: "No; it is an evil very difficult to remedy. I think the better plan would be to inform the constituencies on the subject and let them know the practice which so widely prevails, in order that, if inclined to take the side of economy, they may look after their Members of Parliament." A moment later, Mr. Sclater-Booth asked: "Do you not think from what you have seen of the public service, that the Treasury, existing particularly for that purpose, is the body which must be permanently relied upon to keep down expenditure?" "Decidedly so." "Even the constituencies can scarcely, as a rule, be appealed to in that sense, can they?" "No; I attach very much more importance to the power of the Treasury than either to the action of the House of Commons, or, I am sorry to say, to the voice of the constituencies."[434]

FOOTNOTES:

[419] The subjoined statements, excepting the quotation from Mr. Austen Chamberlain, are taken from A. Todd: _On Parliamentary Government in England_.

[420] Sir Charles Wood, first Viscount of Halifax. Private Secretary to Earl Grey, 1830 to 1832; Financial Secretary to the Treasury, 1832 to 1834; Secretary to the Admiralty, 1835 to 1839; Chancellor of the Exchequer, 1846 to 1852; President of the Board of Control, 1852 to 1855; First Lord of the Admiralty, 1855 to 1858; Secretary of State for India, 1859 to 1866; raised to Peerage as Viscount Halifax in 1866; Lord Privy Seal, 1870 to 1874.

[421] _Report from the Select Committee on National Expenditure_, 1902; q. 2,516 to 2,605.

[422] _Who's Who_, 1905, Fisher, Wm. Hayes, M. P., Financial Secretary to the Treasury, 1902-1903; Junior Lord of the Treasury, and a Ministerial Whip, 1895 to 1902; Hon. Private Secretary to Sir Michael Hicks-Beach, 1886 to 1887; and to Right Honorable A. J. Balfour, 1887 to 1892.

[423] _Who's Who_, 1904, Murray, Sir G. H., Joint Permanent Under Secretary to the Treasury since 1903. Entered the Foreign Office, 1873; transferred to Treasury, 1880; Private Secretary to Right Honorable W. E. Gladstone and to Earl of Rosebery, when Prime Minister; Chairman Board of Inland Revenue, 1897 to 1899; Secretary to the Post Office, 1899 to 1903.

[424] _Report from the Select Committee on National Expenditure_, 1902; q. 1,631 to 1,673, and 1,730 to 1,732.

[425] _Who's Who_, 1904, Knox, Sir Ralph H., entered War Office in 1856; Accountant-General, War Office, 1882 to 1897; Permanent Under Secretary of State for War, 1897 to 1901; a Member of the Committee which worked out Lord Cardwell's Army Reform, and of the Royal Commission on Indian Financial Relations, 1896; Civil Service Superannuations, 1902; and Militia and Volunteers, 1903.

[426] _Report from the Select Committee on National Expenditure_, 1902; q. 1,567 to 1,569, and 1,823 to 1,825.

[427] _Report from the Select Committee on National Expenditure_, 1902; q. 2,081 to 2,084.

[428] In 1905 Mr. Chalmers was made Assistant Secretary to the Treasury.

[429] _Report from the Select Committee on National Expenditure_, 1902; q. 615 to 618.

[430] _Report from the Select Committee on National Expenditure_, 1892; q. 2,406 to 2,419, and 2,502.

[431] _Second Report of the Royal Commission on Civil Establishments_, 1888; q. 10,683 to 10,684.

[432] _Report from the Select Committee on Post Office_ (_Telegraph Department_), 1876; q. 5,397 to 5,600.

[433] _Hansard's Parliamentary Debates_, February 18, 1873, p. 632 and following.

[434] _Third Report from the Select Committee on Civil Services Expenditure_, 1873; q. 4,672 to 4,768.