Viscount Clements
In pursuance to the notice that I have given, I beg to call the attention of the House to the state of the Charitable Loan Funds generally, and more particularly to that
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which is commonly called the Reproductive Loan Fund. I regret that a matter of so great importance should be brought on at so late a period of the Session, and at a time when so few Members are present, and more particularly when so few of the Members of her Majesty's Government are present. Sir, this bill is entitled "A Bill to Consolidate and amend the Laws for the Regulation of Charitable Loan Societies in Ireland." There are many persons who are of opinion that the word "Charitable" ought to be struck out of this bill, and I confess that I feel, after having carefully considered the Reports of the Commissioners of the Loan Fund Board, that it requires a great deal of charity to believe that there are any of these loan societies that are not decidedly injurious to the interests of the country—and to the poor; and a still greater exercise of charity is required to believe that there may be a few that are working well, and doing that good which is so much to be desired, and which it is to be supposed was the intention of the founders of these societies. I fear very much that the laws regarding Charitable Loan Societies have been observed much in the same light as Sir John Falstaff's notion of a good Government, when he says,—
We be men of good Government, being governed as the sea is, by our noble and chaste mistress, the Moon, under whose countenance we—steal.
And this is, unfortunately, the opinion which has been very commonly entertained from the abuses which have existed, and which I shall endeavour to point out to this House. But if these loan funds are to be considered as charitable institutions, it can only be by their becoming a benefit to the poor, and by being carried out on purely charitable principles, taking the lowest possible rate of interest that will enable them to defray the expenses of recovering the money and keeping accounts. Not as banks of discount carrying on extensive business, and only evading the Bank Charter by enrolling themselves under the name of a Charitable Loan Society. Nor by their being made the means of raising large sums of money for the purpose of supporting infirmaries, dispensaries, schools, or agricultural establishments: and however desirable it may be that these public institutions should be established and supported—it is not by the means of the profits
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of loan societies that they should exist, or that the highest rate of interest should be wrung from the poor for the purpose of endowing establishments however useful to the community, and then call that charity! It is also considered very generally, that the system of weekly repayments of loans is very injurious in many respects to the welfare of the country by inducing the farmer to sell stock to a disadvantage; this is more particularly felt in the butter trade, and I will trouble the House by reading part of a letter that I have received from a gentleman who has paid great attention to this subject. He writes from Ballyconnell:—
The injury occasioned to the butter trade by the loan funds is, that the farmers, to pay up the weekly instalments, are obliged to send their butter to market in small quantities of two and three pounds to meet their weekly payments, little attention is paid by the females in making these small quantities. The markets are glutted with small quantities, and a new trade has sprung up, that called 'packers,' who buy up all small quantities met with, and melt all together, colour it with some dye, and put it into tubs, sending it to Dublin, Newry, and elsewhere. Butter made in this way keeps good, I understand, a very short time, and in a foreign market is despised, lessens the value, and lowers the name of Irish butter.
I have presented petitions from the county of Leitrim complaining of this mode of adulterating the butter. There has also been a petition to the like effect from Sligo. I have received information that this practice, so injurious to the butter trade, is carried on to a very great extent throughout Ireland, and that in the little green market in Dublin, almost all the butter there sold is made up in this way. It was my intention to have called the attention of the House to the present state of the butter trade in Ireland during the present Sessions; but, unfortunately, other matters have so engrossed its attentiod, that I have been compelled to defer it. If the loan fund system is to be allowed to exist, there ought to be established a strict inspection for the purpose not only of preventing frauds and usury, but also as a security to the debenture holders. The abuses which exist at present are very considerable, and I will mention only a few of them which I have extracted from the last report of the Loan Funds Commissioners that has been laid upon the Table;—
Clerk and manager obtaining loans for
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themselves, in the names of other parties, p. 22.
Clerk a defaulter to the amount of 125l., but his securities, members of the Loan Fund Committee, are unwilling to proceed for its recovery, p. 27.
False reports sent to the central board, making the amount of fines appear less than what they really were, p. 34.
100l. abstracted by the clerk, p. 37.
Clerk absconded with 128l.; clerk absconded with 195l., p. 39.
Greater interest given for large sums deposited than for smaller sums, pp. 25, 26.
Fictitious borrowers put forward, and the securities actually receiving the loan, p. 28.
Acting as a bank of discount, and doing very extensive business, p. 29.
Building a fever hospital, dispensary, and cottages, out of the profits which ought to be turned to charitable purposes, pp. 29–31.
Winnowing machines and ploughs bought, and a school-house built out of the profits, p.35.
The Mount Shannon case, p. 41.
These, I regret to say, are only a few of the abuses which are to be found in the last report, and which hon. Gentlemen may refer to, but which I do not wish to mention by name, as I do not think that it would tend to any good result publishing more than is absolutely necessary the deformities of particular societies. It will be found by reference to the reports of the Loan Fund board, that the sums of money passing through the hands of these societies are very great, and that their profits are very large and on the increase. It will be found, that in the year
| 1838 The total profits were |
£ 2,547 |
| 1839 |
11,047 |
| 1840 |
15,477 |
| 1841 |
14,853 |
Which profits, according to law, ought to be expended in charitable purposes; yet these reports show, that in the year 1841, the amount of fines are stated at 12,978l., and the amount actually expended in charitable purposes, including the building of infirmaries, schools, &c., was only 8,8791. In 1842 the amount of fines are reported at 14,689l., and the amount expended in charitable purposes only 13,469l., while the net profits for the year after paying interest and expenses, and deducting bad debts, amount to 19,130l. Now, I am anxious to know what charity is to be found in such a state of things where not even so great an amount is expended upon what may have been deemed charitable objects, as has been levied off the poor in the shape of fines. But, as the report observes:—
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This does not include returns from all the Loan Societies in Ireland, as there are about 100 in operation, legally exempt (under the provisions of the last clause of the Act 1 & 2 Vict. c. 78), from rendering any account of their proceedings, as having loans from the Irish Reproductive Loan Society in London, and about thirty more working illegally, under colour of the operations of this exemption clause.
I beg leave to observe, that all these abuses are equally applicable to the reproductive funds, as far as are known of them, some having been inspected by the secretary of the Central Board. Before I proceed any further, I will attempt to show the House the state in which the law at present exists with regard to these institutions, and the history of them. In the year 1822, a period of great distress and famine in Ireland, a subscription was entered into for the purpose of relieving the wants of the starving poor in the provinces of Connaught and Munster, and, after the most pressing wants of the poor were said to be alleviated, part of the surplus funds, namely, 45,000l., were disposed of in the following manner: 5,000l. were sent to the Commissioners of Fisheries, and 40,000l. were sent to ten counties, as I will presently show, for the purpose of forming reproductive loan funds. The latter sum was placed in the hands of trustees in the several counties, and became the origin of the present loan fund system. In May, 1833, an act was passed, 4 Geo. 4th, c. 32, for the purpose of enabling the loan societies now formed to recover before the magistrates in petty sessions. The other provisions of this act obliged such societies to lodge their rules with the clerk of the peace; that rules thus lodged should be binding, Loans of 100l. might be made to committees, to be repaid in twelve months, with interest; and no loan to be made to an individual exceeding 10l. in twelve months. This act was amended in June, 1829, by the 4 Geo. 4th, c. 32, which provided that the funds in the hands of deceased treasurers, and belonging to societies, should be vested in their successors, and to give powers of suing. It was found necessary in 1836 again to amend these laws; and the 6 & 7 Will. 4th, c. 55, was passed, which provided, 1st. that rules already formed should be enrolled; 2nd. a Central Board to be formed in Dublin; 7th. rules to be certified by a barrister, enrolled, and copy transmitted to Central Board;
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16th. recovery by summons before a justice of the peace; 23rd. abstract of accounts to be sent yearly to the Central Board; 24th. profits shall be applied to charitable purposes. I beg that the House will observe, that there is nothing in this act which does in any way exempt the Reproductive Loan Funds: under this act they are obliged to transmit their rules to the Central Board, and to forward yearly an abstract of their accounts; and by this act they are still bound. In the year 1838, it was found necessary to amend the foregoing acts by the 1st and 2nd Victoria c. 78. The provisions of this act were as follows: 4th George 4th, c. 32, and 10th George 4th, c. 42, were repealed after twelve months from passing of this act. 2nd. Existing societies, whose rules have not been certified, to produce them to be certified within twelve months, or disabled from suing. 12th Board to transmit an annual report to Parliament. 26th. Act not to extend to loan societies, in connexion with the Irish Reproductive Loan Fund Institution, provided that the chairman of said institution send to the secretary of the Loan Fund Board, within six months after the passing of this act, lists of last-mentioned societies, enrolled under the 6th and 7th, William 4th, c. 55. Now there was no such clause as this in the bill when it was introduced into this House, nor in the bill as printed, after being amended in committee; nor can I find any record in the Parliamentary Debates of anything having been said regarding the introduction of such a clause as this; but I find that this clause was slipped into the bill on the third reading, at a late hour of the night; and it is thus always that interested persons in London contrive to obtain exemption from acts of Parliament which are considered applicable to Ireland. Thus the Irish society, as I attempted to show the other night, were made exempt from a law which was considered applicable to all Irish corporations, yet was not applicable to an English corporation; and it just amounts to this, that there is to be one law for a man living on the River Thames, and another law for the man who lives on the River Shannon; and Ireland is to be ever made subservient to the interests or wishes of a London citizen—and I ask you, if this is just or right? But notwithstanding this act of 1 & 2 Vict., I maintain that by the 6 & 7 Wm. 4th, the Re-
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productive Loan Societies are under certain obligations to the Central Loan Fund Board—that they have not attended to those obligations—and that there is nothing in the 1 & 2 Vict. which exempts them from the provisions of the 6 & 7 Wm. 4th: and I think, that they also must have been of this opinion; for I find that in the year 1839, Mr. John Abel Smith brought in a bill for the purpose of freeing those societies from the Central Board, and for re-enacting and amending the 4 Geo. 4th, c. 32: that bill was read a first and a second time, and was then thrown out. And now I will endeavour to show the House how far these societies deserve to be exempted from the inspection of the Central Board. In May 1822, a subscription was raised for the purpose of relieving the Irish poor; a committee was formed for disposing of the funds; many of the members of that committee are still alive. A sub-committee of treasury and accounts was formed: all of this last committee are now dead. Messrs. Smith, Payne and Smith were appointed bankers to this subscription; Mr. Hyatt was appointed the travelling agent to the committee. The sum of 44,177l. was collected in Ireland, and sent over to the committee, besides what was subscribed by Irish people living in England. The following sums were sent from India, &c.:
| Calcutta |
£18,944 |
5 |
0 |
| Madras |
8,971 |
0 |
0 |
| Bombay |
2,000 |
1 |
3 |
| St. Helena |
280 |
8 |
1 |
|
£30,195 |
14 |
4 |
I mention these facts to show, that the subscription was not an English subscription. On the 29th August, 1822, there was a meeting of the general committee, for the purpose of disposing of the surplus funds, and then it was decided that amongst other grants, 5,000l. should be given for the purpose of forming reproductive loan funds, for the exclusive use of the poor fishermen in the distressed districts; and that 40,000l. should be placed in the hands of trustees in the following counties, and in the proportions I am about to mention, for the purpose of forming reproductive loan funds in those several counties:—Clare, 3,000l.; Cork, 5,500l.; Galway, 6,000l.; Kerry, 4.000l.; Leitrim, 2,000l.; Limerick, 5,3001l.; Mayo, 4,500l.; Roscommon, 4,000l.; Sligo, 3,200l.; Tipperary, 2,500l.—Total, 40,000l. After all these sums were
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paid, I find by the report of this committee, which is signed by Mr. John Smith as chairman, and Mr. M. W. Troy, hon. Secretary, that on the 30th August, 1823, there was—
| A balance on hand |
£24,040 |
17 |
2 |
| There was also an additional remittance from Bombay |
5,059 |
13 |
10 |
| There was also an additional remittance from Calcutta. |
140 |
0 |
0 |
| Total |
£29,240 |
11 |
0* |
I am told that this sum has been all disposed of and that reports were made at the time, I am also informed that a certain portion of this balance was at that time funded for the purpose of providing for the supervision of the Reproductive Loan Societies; but as I have never seen any further reports, than two papers which were printed in the years 1836, and 1838, and which I shall presently refer to, I can form no opinion respecting this portion of the business. In the year 1836, a paper was printed with Mr. Hyett's, and Mr. John Abel Smith's names attached to it, purporting to be a statement of the Reproductive Loan Funds, and I find by that statement a vast sum of money unemployed, in the different counties, and also that considerable sums of money have been invested in the stocks. I will first refer to the paper of 1836, which reports as follows:—†
In 1838, the amount unemployed in the different counties was not so great as in 1836, while the sum reported in 1838 as the amount of the grants in 1824, does not tally with the paper of 1836, nor can I reconcile either of them with the statement laid before the Select Committee, which states the total of the original grants in 1822 as 54,079l.‡ Thus it will be seen by these two papers, that not only have these funds been considerably mismanaged; but, that the money which was granted for the benefit of the Irish fishermen has been withdrawn, and that it has, together with a portion of the grant for establishing agricultural schools, been invested in the 3½ per cent. stock. Besides the grant for defraying the expences of supervision, which has been altogether
* The total amount of the subscription previous to receiving these additional remittances from Bombay and Calcutta, appears to have been 304,180l. 17s. 5d.
† See Tables (as notes) following pages.
‡See Table, p. 610 18*
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kept in the dark; and no report whatsoever made, either of its amount, or of the manner in which it is applied. Thus, matters stood, when it was found to be necessary again to apply to the Legislature to amend the laws relating to the Loan Societies in Ireland, and a bill was framed under the directions of the Commissioners of the Loan Fund Board, and sent here for the consideration of this House, accompanied at the same time with the strongest remonstrances against any exemption being granted to the Reproductive Loan Funds. If hon. Gentlemen will take the trouble to read the report which has been laid upon the Table of the House this Session, they will find that the Commissioners after citing a case of very gross abuse rising out of the exemption clause of the 1st & 2nd Vic. report as follows:—
The anomalies caused by the operation of this exemption clause are very numerous, and some of them very unjust and dangerous; but the board feel it unnecessary to enter at further length upon the subject in this report, as what has been above adduced will amply suffice to point out the mischief which may arise from the continuance of such an exemption from the provisions of a public statute.
And the names of the commissioners attached to this report, and giving this opinion are deserving of some respect. They are as follows:—
| DOWNSHIRE, |
JOHN BARLOW, |
| ERNE, |
JAMES JOHN BAGOT, |
| COURTOWN, |
THOMAS HUTTON, |
| CLANCARTY, |
JOHN N. V. VERNON, |
| J. W. L. NAPER, |
GEORGE ROE, |
| A. BURGH CROFTON, |
THOMAS MC KENNY, |
| R. OWEN, |
C. FITZSIMON, |
| THOMAS HINCKS, |
ROBERT MAUDE, |
| JOHN D'ALTON, |
WILLIAM HODGES, |
| CHARLES VIGNOLES, |
JOHN LENTAIGUE; |
and GEORGE A. HAMILTON, who I have the honour of seeing opposite to me. In addition to the opinion thus expressed, when the bill was forwarded by the Loan Fund Board, there accompanied it a printed paper in which they again remonstrated strongly against any exemption being granted to the reproductive loan societies. I have also had the honour of receiving a letter from Lord Clancarty on this subject, and that noble Lord thus expresses his opinion.
I must express my regret, at the introduction of the clauses exempting societies in connection with the Irish Reproductive Loan Fund from the control of the commissioners, I can see no public object whatever to warrant such an exemption, but on the contrary, great
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facilities opened for abuse of system which, under proper and uniform regulations and control, I think calculated to be of the greatest advantage to the country.
Now, in these opinions I entirely concur, but as those of noblemen and gentleman of much greater experience, than so humble an individual as myself can lay claim to. In the form that this bill was read a first, and a second