answer fully and frankly the substance of the Question which the hon. Gentleman has put to me, and for that purpose I think the House will agree that it is probably desirable that I should enter into matters on which my mouth was closed while the case out of which this Question arises was still pending. When this matter was under discussion a year ago I told the House that nothing would induce me to say a word which would prejudice either the prosecution or the defence, and to that resolution I adhered. Now, of course, no such considerations are applicable, and I am at liberty fully to answer the Question asked by the hon. Gentleman. I desire to say, before I enter into the matter, that I hope that the fact that this Question has been raised at this stage and that I now make a statement upon it, will not in any way interfere hereafter with the fullest possible discussion of the Question which the House may desire. Opportunities may arise hereafter, and it certainly would be my desire, and I am perfectly certain that it would be the desire of the Government, that the fullest possible discussion which the House might think requisite, should take place upon this subject. In the first place, I wish to make clear one matter on which I think there is a good deal of misconception. It seems to have been supposed that the decision as to not putting the Director of Public Prosecutions in motion in the case of Whitaker Wright was the decision of the Government. It was nothing of the kind. The sole responsibility for that decision rests upon myself as Attorney-General. It is not a case in which the Government decide. It is not a case in which the Government are advised by the Law Officers. The law casts upon the Attorney-General the duty of deciding upon such a question in what I may call almost a judicial capacity. In the discharge of the duties which the law devolves upon him no other member of the Government either can or would dream of endeavouring to interfere with his discretion. the responsibility of the Attorney-General in this matter is not one which is to be shared with any of his colleagues. I am the first to acknowledge the invaluable assistance which I have derived in this and in all other cases from the gentlemen who have co-operated with me, but the decision rests with the AttorneyGeneral, and for that decision those who have assisted him in the matter are in no sense responsible. The sole responsibility rests upon him alone, and it is the Attorney-General alone who is answerable to the House and the country for the manner in which he exercises his responsibility. In dealing with the question as to putting the Director of Public Prosecutions in motion the Attorney-General, as I have said, must decide almost as if he were a judge. It is for me to decide in a quasi judicial capacity. I have referred to the fact that last year I said that on the subject of the grounds of my decision my mouth was closed, because a summons was then pending before a judge for leave to prosecute, and I felt that anything I attempted to say in justification of myself might have operated either to help the prosecution or the defence, and no consideration relating to myself would induce me to utter one syllable which would interfere with a fair and unprejudiced trial of any case which was pending. Now I am at liberty, after what has taken place, to state what my grounds were; and I think that, in answering the Question put by the hon. Gentleman, the House is entitled to expect from me not only a categorical answer to the Question, but also an explicit statement of the grounds upon which I took the action I did in the case of Whitaker Wright, and of the grounds upon which I thought, as I still think, that an amendment of the law is urgently required. What I have to say, of course, as to the grounds on which I acted relates solely to the case as it appeared on the materials then before me in 1902, when I had to decide upon it. I am about to deal with the With regard to the subsequent prosecucase as it was then presented to me. tion and the result of these proceedings, I have one thing to say to the House, SIR ROBERT FINLAY: One other and one only, and that is that since observation I desire to make is that the case has been terminated the A NATIONALIST MEMBER: On what principle do you send people gaol? to rence, determined that they ought to bear the cost of the prosecution. I now proceed to state what were the grounds that actuated me in the course which I took. Whitaker Wright was, as is wellknown to the House, the managing director of the Globe Company. The Globe Company was a company Treasury have, with my full concur- prosecution of Whitaker Wright for a conspiracy of this kind if it had been possible to obtain any evidence that others acted in conspiracy with him in the matter. I was informed that no evidence of that kind was obtainable. So strongly did I feel upon this point that I adjourned the consultation in order that inquiries might be made as to whether any such evidence could be obtained. I was informed that no such evidence was obtainable, that Whitaker Wright had operated in substance alone. I do not think that the criminal law can reach an enterprise of this kind carried out by one person by himself and not in combination with others. The law of conspiracy would not apply. The question, therefore, was reduced to this, whether I could properly direct a Treasury prosecution of Whitaker Wright for issuing a fraudulent balance sheet. the which carried on carried on a highly speculative business. In the year 1900 it had got into very great difficulties, and Whitaker Wright, on behalf of the company, engaged in an enterprise which was intended to restore its fortunes. That enterprise was this-he endeavoured to establish what is called a corner, on a very large scale, in the shares of a company called the Lake View, a corner in Lake View Consols; and the particular operation that he was engaged upon was this he entered into contracts for the purchase of Lake View Consols The balance sheet of 1900, in my on a very large scale, and at the same opinion and I of course speak time he was taking measures to secure only of the case upon the evidence that the very shares which he was as it was submitted to me in the buying should be under his control, so summer of 1902-contained statements that many of the sellers to him would which were grossly untrue. That was have to go to him when the day for the impression I formed upon delivery came and give him any terms evidence before me, and I do not he chose to ask for in order that they pretend to speak as to anything else. might be in a position to fulfil the But then a further question arose before purchase. That was the operation. If a prosecution could be properly directed, that operation had succeeded, as it very and that was the question as to the nearly did succeed, the fortunes of the intent with which these misrepresentations Globe Company would have been to had been made. Now I feel very a very great extent retrieved. It failed. The enterprise in itself was, in my view, contrary to every sound code of commercial morality. I believe that it is an absolutely immoral thing for a man to enter into a transaction of that kind when he is buying and at the same time is taking steps to prevent those from whom he is buying from being able to fulfil their contracts, except by submitting to any terms he may choose to dictate. Further than that, I have no doubt whatever that such an enterprise falls within the range of the criminal law if it is carried out by several persons in combination, at least if any circumstances of misrepresentation attend it. I most carefully considered this question in the summer of 1902, and I most certainly should have directed a VOL. CXXIX. [FOURTH SERIES.] strongly that the law ought to be that any wilful misrepresentation in any document issued by officials of a company ought to be punishable. The shareholders. and the creditors of the company are entitled to know the truth; and whatever the intent with which a misleading statement is put forth, if that misleading and untrue statement is wilfully made, I think the officials of the company who make that statement ought to be punishable. But beyond all controversy that was not the law up to the end of December, 1900. It was necessary, further, that the misrepresentation should have been made with intent to defraud certain classes of persons. The question depended upon Section 84 of the Larceny Act of 1861. According to the provisions of that section there must not only have been misrepresentation in a document. F issued by the officials, but that misrepresentation must have been with the intent to deceive or defraud shareholders or creditors, or to induce persons to become shareholders in the company, or to induce persons to entrust or advance property to the company, or to become security for the company. The section. does not provide at all for the case of misrepresentations made with the general intent to defraud the public, unless it happen to fall within the particular classes to which I have referred as enumerated in the section. The most material intent for this purpose was the intent to deceive or defraud shareholders or creditors. The word deceive in that collocation, in my mind, means, substantially, the same thing as defraud-that is, to mislead persons on questions of fact with a view to prejudicing them pecuniarily. I cannot better illustrate my meaning than by quoting to the House the language in which Chief Justice Cockburn charged the jury in a case under this section in the year 1880. The case was one of great magnitude, the trial of which extended over many days. It was a prosecution under this same Section 84 of the Larceny Act of 1861. It was a case in which the assets of the company had been dissipated in rash speculation, and after that had taken place the directors issued a balance sheet in which certain of the assets of the company were most grossly overvalued. The summing up of Chief Justice Cockburn appeared in The Times of May 6th, 1880. In the course of that summing up he dealt with the question of the intentional misrepresentation of the facts in stating that assets that were said to be worthless were of the value of between one and two millions. Then he came to the question of intent, and he said, addressing the jury "But even if you should be of opinion that the accounts were intentionally falsified, that alone would not be sufficient to determine this question, because, even if you are of opinion that the defendants acted contrary to their duty in treating this property as a real and substantial asset of the company, you will have to say whether you are satisfied that they did so with the fraudulent purpose of defrauding the shareholders and the creditors of the com pany or to induce persons to become share holders in order to defraud them also. There would scarcely have been any intention on their part to defraud the shareholders and the creditors, because it is plain that the best very thing that could be done under the circumstances in the interests of the shareholders and of the creditors was to keep the bank going." Sir John Holker, I should observe, was then Attorney-General, and this was a Treasury prosecution. The Chief Justice continues the very motive of the fraud he imputes to the defendants. But how could keeping the bank going defraud the shareholders or the creditors? No doubt to have made the real state of things immediate depreciation of the property of the known would have been to have produced an shareholders, and it was in the interest of the shareholders that the facts should be kept, as it were, in abeyance, and not at once disclosed so as to alarm the public." "Sir John Holker suggested that that was I do not think that ought to be the law. I think that if an untrue statement is made by officials of a company in the balance sheet they ought to be amenable to the criminal law. But in deciding this matter one could only deal with the criminal law as it stood at the time when the transactions took place. I therefore had to inquire before I set the Public Prosecutor in motion whether, on the facts before me, the intention of Whitaker Wright in making these misstatements in the balance-sheet was to defraud any class of persons mentioned in the section. After most carefully considering the matter on all the materials that were at my disposal in 1902, when I determined this point, it seemed to me that the purpose of these mis-statements was really to support a corner which, if successful, would have re-established the fortunes of the company, to keep the company going till it succeeded; and, however reprehensible the whole enterprise in its very nature was, however reprehensible these misrepresentations which were intended to assist it were, that it was done, not with intent to injure, but with a desire to benefit, the shareholders and the creditors of the Globe Company. was the real substance of the matter with regard to this transaction in the year 1900. As regards the balance sheet of 1899, there is one further observation which I should make. The Official Receiver did not bring the balance sheet of 1899 before me at all as a possible subject of prosecution. It was brought before me subsequently in the month of December, 1902, by Mr. Flower. That I, with my colleagues, had a long consultation upon this point. The Official Receiver reported to me that, in his opinion, the case upon this balance-sheet of 1899 was a very weak one upon the fact misrepresentation. Upon these materials I came to the conclusion that I ought not to direct that the Public Prosecutor should institute a Treasury prosecution in this case. of I need hardly say that the fact that the case is not taken up by the Public Prosecutor sets no bar whatever against a prosecution by anyone else. Anyone may issue a prosecution, and anyone, where a company is in liquidation, may apply to the judge for a direction that, at the expense of the estate, a prosecution be instituted. My decision was given and announced in this House in the summer of 1902. It was open to those who desired a prosecution either to prosecute themselves or to apply at once to the judge in whose court the windingup of the company was proceeding. Nothing of that kind was done until the month of January, 1903. During the six months that elapsed before that application was made, attempts were made in various ways to induce me to give the weight of the name of the Director of Public Prosecutions to the proposed proceedings. I think the House will agree that it is absolutely unnecessary for me to notice any suggestions that were made, that my action in this case was due to any unworthy motive; and I think the House will further agree with me that it is important, and, indeed essential, that those with whom the responsibility of administering the criminal law rests should not allow themselves to be urged into action either by pressure or by dread of misrepresentation of their motives. There is another consideration which had weight with me in determining whether this was a case in which the Director of Public Prosecutions should lend all the weight of his name and authority to the proceedings that were desired. Many Members of the House will be aware that in the year 1902 an action was pending by the Globe Company against certain brokers for selling shares in the Lake View Company, in breach, it was said, of agreement not to sell under a certain price, and by that sale under the agreed price causing the collapse of the whole scheme on which Whitaker Wright had relied for the restoration of the fortunes of the Globe Company. If that action had succeeded large damages would have been recovered for the shareholders and creditors of the Globe Company. That action was continued by the Official Receiver; it had been commenced by the company before the company went into liquidation. The question of directing a prosecution was never brought before me until after that action had failed, as it failed in the summer of 1902. In that action Whitaker Wright had been the principal witness in fact, the material witness who was put forward on behalf of the company. All the matters which were relied upon in respect of the application for a prosecution had been known for a long time and were known while that action was pending. The question I had to consider was whether the Public Prosecutor should, at the instance of the Official Receiver, when the action failed, lend the weight of his name to a prosecution in respect of these very matters which had been known at the time when Whitaker Wright was put forward as a witness in support of that action. It seemed to me that such a course would have been open to very strong and just observation. As regards the alteration of the law in the future, I have two things to say. The first is this-I am not prepared to recommend to the House to proceed to deal with the law affecting what are called corners, or the analogous subject of rigging the market. The question is one of very great intricacy, and legislation upon it, however desirable in the interests of commercial morality, would be attended with very great difficulties. I should like that something should be done in this matter, but it cannot be done until after very full and complete inquiry into the whole subject, and the views are ascertained, not only of lawyers, but of business men, with regard to it. With reference to the question of making punishable the issue of statements by officials of public companies which they know to be untrue, I have a very strong and definite opinion that legislation ought to proceed on the lines adopted in the 28th Section of the Companies Act of 1900. By that *MR. JOHN ELLIS (Nottinghamshire, Rushcliffe): The hon. and learned Gentleman has, with that lucidity which we all admire, dealt with this case as it concerns himself personally. I do not rise to offer any observations on his remarks further than to say that I am sure I for one willingly concur in the sentence with which he concluded his speech. I rise rather to make some remarks in continuation of those which fell from the hon. Member for East Perthshire earlier in the evening, and which I wish had been listened to by a more crowded House than that which the hon. Member addressed. He put some very searching questions to the hon. Gentlemen who is now in the position of Colonial Secretary, and I am about to follow up those questions by some others. In the excellent speech to which we listened from the Leader of the Opposition, it was remarked that this was the first time for long ten or twelve years, I think I might say that we have had no mention in the Speech from the Throne of South Africa. I venture to say that the right hon. Gentleman who holds the seals of that office has found and will find that South Africa bulks very largely in the labours he has to undergo, and will do for many a day. We are all familiar with the rosy pictures drawn from the Benches opposite, and notably by the late Secretary of State for the Colonies, with regard to the state of that country-how we were to get repayment of the money advanced, how the country was to be a field for emigration of white labour and so forth. The right hon. Gentleman made a most remarkable speech on 6th May last, beside which the speech of any company promoter perfectly pales. In that speech, which occupies nearly thirty columns of 'Hansard," the right hon Gentleman came under some very serious obligations. I hope in this connection we shall have from the Colonial Secretary very explicit assurances on the head of finance. With respect to the £30,000,000, the late Colonial Secretary used rather significant language on the 6th May, 1903. He then said. {COMMONS} section, which relates only to documents required by, or for the purposes of the Act of 1900, any wilfully false statement in such a document is a misdemeanour. The provision is not encumbered with the necessity of proving intent to defraud any classes of persons such as contained in the 84th Section of the Larceny Act of 1861. Now, surely this is right. Shareholders and creditors, in regard to statements promulgated by the officials of companies, are entitled to have the truth, and any wilful mis-statement by officials of companies in such documents should be an offence. If there is no intent to defraud, that ought to go and would go in mitigation of punishment, but if a mis-statement is wilfully made, in my judgment in every case, it ought to be amenable to the criminal law. If such a change were made it would relieve all those who have to deal in subsequent cases with such problems as came before me in 1902, from the difficulty which attended the proposal that I should direct the Public Prosecutor to institute a Treasury prosecution in this particular case. I think I have answered the Question which was put by the hon. Gentleman opposite, and in conclusion, I have only to say this: any Attorney-General would be unfit for his position, who from any by-motive failed to prosecute in a proper case, and more than that, and on the other hand, any Attory-General would be unfit for his position, who, because a particular prosecution would be a popular thing to do, sets the Public Prosecutor in motion without being satisfied that it is a proper case for that intervention. Indeed where a case has in it materials which are likely to inflame public feeling, I think it is the duty of the Attorney General, under whose orders the Public Prosecutor has to act, to be very cautious as to what his action is. Whatever view may be taken of the conclusion at which I arrived on the materials which were before me in 1902, I feel perfectly certain that the House-and I hope I may say that every hon. Member, in whatever part of the House he may sit -will have no doubt that in this case I acted to the best of my ability, and with a single eye to the discharge of those delicate and responsible duties which the law casts upon the Attorney-General. ney "It is true we are not dealing to-day with the raising of the £30,000,000 which will be required in order to pay the British Exchequer the contribution the colonies are willing to |