HC Deb 29 June 1854 vol 134 cc929-31
THE CHANCELLOR OF THE EXCHEQUER

said, he would now move for leave to bring in a Bill for the repeal of the Usury Laws. At that late hour (one o'clock) he could not ask the attention of the House, but would fully state the objects of the measure on the second reading.

Motion made and Question proposed, "That leave be given to bring in a Bill for the repeal of the Usury Laws."

MR. SPOONER

said, he could not assent to that course. He did not think that a Bill of such importance should be introduced at that hour, and without any explanation of its provisions.

MR. BROTHERTON

moved the adjournment of the House.

Motion made, and Question put, "That this House do now adjourn."

The House divided:—Ayes 18; Noes 49: Majority 31.

Question again proposed.

COLONEL DUNNE

, moved that the debate be now adjourned.

THE CHANCELLOR OF THE EXCHEQUER

said, he must complain that the course taken by the hon. and gallant Gentleman was an unusual one.

MR. SPOONER

said, he objected to the Motion because the Bill was attempted to be brought in sub silentio.

Motion made, and Question put, "That the debate be now adjourned."

The House divided:—Ayes 18; Noes 47: Majority 29.

THE CHANCELLOR OF THE EXCHEQUER

said, he would now briefly explain the object of this Bill, which bore a rather too ambitious title, for, in point of fact, the usury laws were already repealed to a great extent, and now only a mere remnant was left of what they were in former times. Three hundred years ago an Act of Parliament existed in this country limiting the rate of interest on money to 10 per cent; in the reign of James I. another Act was passed limiting it to 8 per cent; in the reign of Charles II. another Act was passed limiting it to 6 per cent, and in the reign of Anne the present law was passed, limiting it to 5 per cent. It would seem, however, as if the framers of that law had contemplated that the State would perpetually break the law, but be that as it might, if they asked themselves who had been the greatest offender against the law, the answer must obviously be the State. [An Hon. Member: No, the Chancellor of the Exchequer.] Yes, the Chancellor of the Exchequer, and not only the Chancellor of the Exchequer, but his backers also, and those who had supported him in passing resolutions to borrow money at usurious rates of interest. The Act, however, of Anne appeared to contemplate that the State would require to evade it, since it expressly provided that this limitation of the rate of interest was not to operate in any way that would be injurious to Parliamentary securities, but the superstition which formerly prevailed on the subject, and which was partly Judaical and partly Mahomedan, had long ago subsided, and step by step the usury laws had almost beets swept away. The law that he now proposed to repeal was the law which prohibited the loan of money at a greater rate of interest than 5 per cent, and this change would largely benefit two classes of securities, namely, mortgages upon land in Scotland, which were liable to be paid up at call; and railway debentures in England, which partook very much of the character of mortgages on land. The system of fixing the rate of interest on money in Scotland differed very materially to that of England, and the consequence was that in a time of pressure mortgagors found a difficulty in obtaining money at the legal rate, while with regard to railway debentures there were periods when even railway companies, with first class resources, could not borrow money under 5 per cent, so it was clear that a railway company of the second-rate kind could not at such times borrow money at all at that rate. Now this Bill would meet both these cases; it would obviate the difficulty of the Scotch mortgagor and the necessity which some railway companies were sometimes under of issuing their debentures considerably below par. He believed that if they were to rip up the history of many of our railway companies, it would be found that the usury laws had driven them to constant evasions of the law. It was proposed therefore to give them the most perfect freedom in the money market. They had already recognised the principle of freedom of trade as applicable to money, and let them not keep up a fragment, a mere shadow of the law, that had the effect of driving men to all kinds of shifts and tricks to evade it. Let the landed proprietor and the railway proprietor go into the market free and unshackled like other people, and then would be completed entire and unrestricted freedom of trade in all that related to the borrowing and lending of money.

Main Question put, and agreed to; Bill ordered to be brought in by the Chancellor of the Exchequer and Mr. Wilson.

Bill read 1o.

The House adjourned at a quarter before Two o'clock.