Arthur listened to Palmerston's words and didn't react with the panic Palmerston had anticipated.
Since joining Scotland Yard and patrolling the East End at night several times, Arthur had realized that the difference between people wasn't as significant as he had imagined, especially in terms of psychological fortitude, which could definitely be trained.
As a seasoned Scotland Yard officer, he thought that threats of treason were clearly not as direct as having a gangster from the East End hold a knife to his throat.