§ Bill considered, as amended, in Committee.
§ Clause 17,
§ MR. BENTINCK
said, he proposed to ask the House to omit this clause. It repealed the 7th of George II., which was framed for the express purpose of putting an end to the practice of gambling in the funds, commonly called time bargains. The enactment was originally passed for three years, but it worked so beneficially that it was made perpetual, and had been in operation up to the present time. To repeal the enactment because it was to a certain extent inoperative was not the proper mode of proceeding, for that would countenance every description of gambling that the ingenuity of man could devise, 1686 and they would have no right afterwards to break into houses on suspicion that gambling was carried on, or to punish the detected parties. The proposition in short struck a heavy blow at the morality of the country. The Chancellor of the Exchequer, who was more remarkable for his eloquence than the extreme courtesy with which he treated opponents, did him the honour of saying that there was extreme confusion in his mind on the subject of this Bill; but he, on the other hand, believed that the ideas of the Chancellor of the Exchequer were marvellously at variance with all sound reason and practical sense. The right hon. Gentleman laid great stress on his first argument; he said none of his distinguished constituency had remonstrated against the announced intention of repealing Sir John Barnard's Act. Probably that distinguished constituency had never even heard of the Act; the law as to time bargains was not likely to be much discussed in that seat of piety and virtue which the right hon. Gentleman so ably represented. It was, therefore, not a very sound argument. He then contended that time bargains stood precisely on a par with the purchase and sale of shares in railway or other companies. Now, time bargains were exactly the converse of such transactions. The sale of shares was a bonâ fide transfer of property. The right hon. Gentleman who seemed to know everything, really did not know what a time bargain meant. It was a vicious arrangement between two persons, both of whom might be equally penniless, by which they agreed to run the chance of which should lose and which should win on the contingency of the price of stocks on any given day and the price of that day week. It was said that the law against these bargains was a dead letter; to a certain extent he admitted it, but that was no reason why the law should be repealed. It was rather a reason why the House should remodel it and make it effective. Then the right hon. Gentleman asked a most extraordinary question. He asked, as if in doubt, whether making time bargains could be considered an immoral practice or not. If he could not see that it was immoral, could he perceive the immorality of any species of gambling? Then, with that extraordinary method of arguing peculiar to the right hon. Gentleman, he pleaded that the gentlemen connected with money transactions in the city were highly respectable individuals. 1687 Why, what had the respectability of persons engaged in large mercantile affairs to do with the malpractices of men who met on the Stock Exchange solely for the purpose of gambling? The right hon. Gentleman said he was not prepared to admit that time bargains were wrong in the sense in which he (Mr. Bentinck) had spoken of them. He had described them as the worst and most pernicious mode of gambling ever devised; if the right hon. Gentleman could not see it, his ideas on the subject of gambling must be of a very peculiar description. He asserted that dealing with all kinds of property involved a certain amount of hazard, and had instanced the practice of forestalling and re-grating; but they were nothing like time bargains. Actual property was bought and sold, and the seller got money for money's worth. It should be recollected that these time bargains materially affected the value of all funded property; the small property of those who had invested all they possessed in the funds was influenced and altered by the practice which the right hon. Gentleman was so anxious to countenance. That of itself was a sufficient ground for objecting to the repeal of Sir John Barnard's Act, which was proposed solely to obtain the penny for the stamp on each time transaction. The proceeds would be excessively small, and for this they were asked to sacrifice the character of the Government and the country. Again, the law as it stood was by no means inoperative. The brokers having no means of recovering any sums of money which they might risk in time bargains were extremely averse to have anything to do with them unless they were perfectly satisfied as to the solvency of the parties who sought to employ their services. Was the noble Lord at the head of the Government, who took such an active part in 1853 in trying to put down gambling in London, prepared to carry out the singular views of his colleague on the practice? Would the noble Lord hazard the reputation he acquired in 1853? Sir John Barnard, he understood, was, by a singular coincidence, one of the noble Lord's ancestors; if he consented to this clause it would be enough to make the shade of his ancestor blush. It would give a legal stamp to a kind of gambling with which more villany was mixed up than any other, for the sake of a few wretched pennies of revenue.
§ Amendment proposed, to leave out Clause 17.1688
§ MR. EDWIN JAMES
said, that he did not agree with the arguments which had been used by the hon. Member, but still he thought that some explanation was required, as the clause under notice was utterly inoperative, and not worth the paper on which it was written. It professed to repeal the 7th of George II., but the Act only lasted three years, and was succeeded by the 10th of George II., which perpetuated it. The clause, therefore, repealed an Act which had expired three years after it passed, and left untouched the only Act on the subject which was now in existence. With respect to Sir J. Barnard, every Gentleman knew that Sir J. Barnard took part in the great debates of 1733, and was the person who opposed Sir R. Walpole. The Chancellor of the Exchequer of that day was burned in effigy, Sir It. Walpole was assaulted in passing through the Court of Requests, and Lord Chesterfield was dismissed from his office of Gold Stick in Waiting, because he opposed Sir R. Walpole's measure for turning the system of Customs into a system of Excise. If they wished to repeal the 10th of George II., it seemed to him that it was not by a clause in a Stamp Duties Bill that it should be repealed. The Act of Sir John Barnard was become perfectly nugatory. It had been decided, over and over again, in the courts of law, that it did not apply to the great system of gambling in foreign funds, but only to gambling in the funds of the day, which were English funds. There was the 7th and 8th of Victoria, which applied to such transactions, and all the courts of law held that they applied to all gambling, and all wagers, whether in cases of stock jobbing, or railway scrip, or foreign bonds. Therefore he agreed with the Chancellor of the Exchequer that Sir J. Barnard's Act was perfectly useless. It was a sort of Act which, when pupils with pleaders, young lawyers always made use of when they wanted a sham plea. It happened once, when a tailor sent in his bill, a sham plea was put in that a Bengal tiger had been delivered in satisfaction of the debt, and an attorney's clerk having made affidavit to that effect, a verdict for the defendant was returned. He was opposed to the clause as a useless one.
THE SOLICITOR GENERAL
said, that his hon. and learned Friend must feel that he had made the most of the very notable discovery on which he had hit. He could not dispute with his learned Friend 1689 that the 7th of George II., c. 10, had been enacted to endure only for three years, and by another Act, the 10th of George II., c. 8, the former Act was made perpetual, and the latter had no operation except to perpetuate the earlier Act. That being so, he agreed with his hon. and learned Friend that it might have been better not to have made an express reference to the former Act, but only to the Act which perpetuated it. Still he could not allow that the clause would be a dead letter on account of its reference only to the 7th of George II., because he did not see what operation the Perpetuation Act could have if the original Act was annihilated. There would, however, be an opportunity afforded of correcting any defect in the clause either at the present stage or on some future occasion. As to the objections of the hon. Member (Mr. Bentinck) to the seventeenth section, he did not think them well-founded. The Act to which they referred, whatever its merits, had been undoubtedly, almost from the time of its having passed into law, a dead letter. The Act began by a very vituperative preamble against a class of people, not then in such good esteem as at present, the stock-brokers. So far as it applied to stock-jobbing, he need not say that it had been utterly inefficacious; and when the hon. Member opposite asked for its continuation, he did not of course desire that the class of persons in the City of London engaged on the Stock Exchange should be put an end to. He rather applied his objections to the second provision of the first section, which provided for the rendering void of all contracts in the nature of wagers and other contracts, of a particular description, being gambling contracts, with reference to dealing in stock. Sir John Barnard's Act was provided for those purposes, with the most cumbrous and entirely useless machinery, principally to be exercised through qui tam actions at law, and by Bills in Chancery. With respect to that machinery the Bill appeared to have been absolutely a dead letter. For the last 100 years there had not been shown in the Court of Chancery any practical, or, at all events, any successful, application of its provisions for these purposes, and, at law, the Act had been equally nugatory. It remained, therefore, for him (the Solicitor General) merely to deal with the question raised by the hon. Member as to repealing such sections of the Act as seemed to prevent or restrict gambling or wagering in stocks. The hon. and learned Mem- 1690 ber for Marylebone had anticipated him in reference to that point, by mentioning that the dilatory and unsatisfactory mode of procedure to which he had referred had been superseded and rendered unnecessary by a recent Act, the 8 & 9 Vict., c. 109, generally known as the Gaming and Wagering Act; the 18th section of which provided that all contracts or agreements, whether in writing or otherwise, by way of gaming or wagering, shall be for all purposes and under all circumstances void. This Act was in full force and vigour, and therefore, in repealing an old enactment, prohibitive of a particular class of gaming and wagering, they were in no way interfering with that later Act, which would continue in operation, and which absolutely and entirely put an end to every contract having reference to gaming or wagering. The effect of the present measure, by which the former Act was to a certain extent repealed, was virtually little more than to get rid of an abusive and vituperative preamble which had proved obnoxious to stockbrokers and others whose pursuits brought them into connection with the Stock Exchange.
§ SIR HUGH CAIRNS
said, it was natural that mistakes should at times be made, more especially when dealing with the cumbrous volumes of Acts of Parliament, but when a mistake had occurred he thought it much better that it should be at once confessed. He had been amazed to hear the hon. and learned Solicitor General argue the proposition that a clause which repealed an Act that had come to an end somewhat more than 100 years ago could be stretched be as to repeal a wholly different Act, which made the former one perpetual; and as the Act prohibited time bargains in the stocks at the present day he would not insult the good sense and understanding of the House by debating a question which was not arguable. He agreed with the hon. and learned Member for Marylebone in thinking that this clause, if it passed, would become a perfectly dead letter, and would not alter the existing state of the law. But since the Solicitor General had addressed the House the question had assumed an entirely new shape, and it was consequently most important that before going further the history of this clause should be distinctly remembered. The Chancellor of the Exchequer proposed, as a part of his financial scheme, to impose a tax on contracts for the purchase and sale 1691 of stock. The gentlemen connected with the Stock Exchange, who were he believed of the highest respectability, contended that if a tax was thus about to be imposed on their transactions, they ought, at all events, to be relieved from the difficulties under which they had hitherto laboured, because by Sir John Barnard's Act time bargains could not take place with any faith in their validity. The Chancellor of the Exchequer acceded to this proposition; he stated that in his view Sir John Barnard's Act was unwise in prohibiting bargains of this kind, and that he was prepared to propose a Bill repealing that Act. Time bargains, as every one knew, were contracts in which one party agreed to sell at a future day stock which he did not possess and which he did not intend to buy. This circumstance being well-known to the other party, they mutually intended to settle on the day fixed upon, according to whether the price of stocks had risen or fallen in the meantime. This was the class of contracts distinctly struck at by Sir John Barnard's Act, which the Chancellor of the Exchequer expressed his willingness to repeal. The Solicitor General, on the other hand, told them it was a delusion to think that time bargains or wagering contracts were to be made legal; and he stated that the only object of the present Act was to remove from the statute-book a preamble which was offensive to the stockbrokers, through its describing them as a highly discreditable set of people. He hoped the gentlemen of the Stock Exchange would like the description which had been given; but they certainly would find that they had been hitherto in a fool's paradise, for, trusting in the promise which had been given, they believed a new vista was opening and that they were to have the power of making time bargains to any extent in return for the 1d. which they would contribute to the Exchequer on each of these bargains. The hon. and learned Solicitor General, however, declared that they had no need to go back 100 years to Sir John Barnard's Act, as there had been recent legislation on the subject which rendered a time bargain, as a contract made by way of wagering, null and void; and that not by any cumbrous process of the Court of Chancery, but by a fresh, vigorous, green statute of the present reign. He was quite willing to accept that description, and it was therefore clear that the House was called on to pass a Stamp Act, not for the 1692 sake of imposing or renewing duties, but in order to expunge from the statute-book an offensive preamble—a purpose to which he had never before known a Stamp Act to be applied. A solemn explanation had been given by the Chancellor of the Exchequer of the reasons for postponing the measure to that evening; and now they were told by the Solicitor General that this had all been much ado about nothing, that the law was not to be altered, but the sensitive minds of stock-jobbers were merely to be relieved from the disagreeable terms in which Sir John's Barnard's Act spoke of them. More ludicrous treatment of a grave question he had never known. The clause as it stood, the hon. Member admitted, was not worth the paper it was written on, for it would leave the old Act untouched, while the cumbrous proceedings in Chancery, which had never been resorted to before, would never be resorted to again. As time bargains were not to be legalized, it was unnecessary for him to trouble the House with the observations which he should otherwise have felt it his duty to make.
§ MR. HUBBARD
said, he conceived that the imposition of the stamp duty on contracts, if it were expedient, ought to have been made without any consideration given or received by the Members of the Stock Exchange, and that if Sir J. Barnard's Act were objectionable it ought to have been repealed independently of anything in the way of concession. He could not agree with the opinions expressed by the hon. Member for West Norfolk, for he believed the Act to be a standing disgrace to the statute-book. It was the remnant of an antiquated and bigoted policy. It struck at the very root of liberty in transactions of buying and selling. Nothing tended more to maintain the steadiness of the funds in this country than the existence of a large body of men who were always ready to enter into operations in that particular article. It was a mistake to suppose that the operations were all in one direction. There were habitually as many ready to buy as to sell. The noble Lord the Secretary for Foreign Affairs made a speech the other night reflecting in severe, but not too severe terms on the conduct of a near political neighbour of ours. The next day on returning from the City he was asked by several Members—"Was there not a great panic on the Stock-Exchange to-day? Did not the funds experience 1693 a great fall?" But his answer was, that, though there certainly was a feeling of agitation and apprehension, the funds had only fallen about a quarter per cent. The existence of a body of men, ready to take advantage of any depreciation in the funds, had, no doubt, arrested the fall at a quarter per cent, when it would otherwise have been 3, 4, or 5 per cent, considering the formidable nature of the speech. In fact, but for the presence of those men, and the operations deprecated by the hon. Member for Norfolk (Mr. Bentinck) the very event which he most dreaded must occur. He begged to differ with the hon. and learned Gentleman on that side of the House (Sir H. Cairns), who, when he told the House what constituted time bargains, said that they were mere gambling transactions. He stated a time bargain to be an offer for sale of £100,000 stock by one man, stock which he never had or would have, and which was offered to a man equally unprepared to take it. He (Mr. Hubbard) did not deny that isolated transactions of this kind might occur—but such were not the transactions which ordinarily took place on the Stock Exchange. The ordinary course of dealers was to sell for the next settling day, at the middle or end of the month, a certain amount of stock which they had in their own engagements purchased. But the operations of Sir J. Barnard's Act was to make illegal every transaction which was not consummated upon the spot. Unless a man could at once deliver over the stock sold he became the participator in a time bargain. But this disability was not confined to stocks and shares; it operated on all kinds of bargains. The whole of our foreign commerce was carried on by time bargains. It was impossible to sell upon the spot. Cargoes were bought in foreign countries to be delivered at a distant day; and were they to be told that these operations were illegal? While the necessities of commerce and the stimulants of common interest led traders to make these bargains, there had not been wanting men who, adverting to this act of disability, had tried to evade those bargains when it suited their purpose. And it had led to the further inconvenience that, in the event of the buyer's insolvency, the honest merchant had been defrauded of his dividend. The most honest and straightforward merchants in the City of London had had their transactions branded as illegal on account of the interpretation of this law in the Bank- 1694 ruptcy Courts. He hoped that the Government would not allow the matter to rest where it was, but would remove the disability from time bargains in stocks and shares as well as in goods.
§ MR. BUTT
thought it would be absurd to pass the clause if, as the Solicitor-General had stated, the effect of the Wagers Act would be to leave time bargains exactly in the same position as now. His great objection to the clause, however, was that it was tacked to a money Bill, and if the House of Lords attempted to exercise the discretion which they undoubtedly possessed, and struck it out, the House of Commons might be disposed to treat it as a breach of their privileges, and refuse to pass the Bill altogether.
§ THE CHANCELLOR OF THE EXCHEQUER
said, he was not much moved by the objections made to this particular clause; and he thought the speech of the hon. and learned Gentleman opposite showed that he did not quite clearly understand either the operations of the Stock Exchange or what fell from his hon. and learned Friend the Solicitor General. No demand had been made by the members of the Stock Exchange for an amendment of the law. But, after the stamp was proposed on contract notes, a communication was made to him through the hon. Member for Kendal (Mr. Glyn), that the Act of Parliament known as Sir John Barnard's Act might be repealed, as by that Act transactions which entered into the daily course of their business were prohibited, though the Act itself had grown obsolete, and they thought it was but just that they should be free from this bond when it was proposed to put a stamp upon the notes by which these contracts were carried on. The Government thought it was but fair to comply with that request. But now the hon. and learned Member for Youghal (Mr. Butt) had raised an objection to the clause, appearing in this Bill, which he thought a perfectly good one. In truth, it was his intention to have proposed the repeal in a separate Act; but finding the clause inserted in this Bill as it was drawn up in the Revenue Office, he allowed it to pass. He quite saw the force of the objection, however, that the fact of this clause being inserted in a Money Bill would oust the jurisdiction of the House of Lords; and therefore he would withdraw the clause, and would give notice of his intention tonight to move for leave to introduce a new Bill on the subject to-morrow.
said, he must complain that the right hon. Gentleman had given no explanation of the views of the Government whether time bargains were illegal or not. The Solicitor General said that the repeal of Sir John Barnard's Act would leave these time bargains exactly where they were before; that they would not be legalized, but that the Wagers Act would apply to them. But the right hon. Gentleman had not told them what was the opinion of the Government on this point, which was not an unimportant one. The discussion began in the complaint that Government was about to legalize gambling by putting on it a penny stamp. Well, was that the intention of Government or was it not; and if so, did they mean to repeal the Wagers Act, as well as Sir John Barnard's Act? He wished further to know whether Government intended to reprint this measure, for there had been so many Amendments proposed by the Government, and those Amendments had been made in such confidential whispers between the Secretary to the Treasury and the Speaker, that he believed there was no Member of the House who now knew how the Bill stood.
§ VISCOUNT PALMERSTON
said, that, as direct reference had been made by the hon. Member for Norfolk to the part he took in the passing of the Act for putting down gambling-houses, he would offer a few observations to the House. But he thought he could give the hon. Gentleman another instance which was more appropriate. In the time of Charles II. a law was passed making all bets on horse-races above the value of £20 illegal, and subject to a penalty, which might be recovered by a qui tam action. The hon. Gentleman's lamented relative (Lord George Bentinck) was actually sued under that Act, and when a Committee of the House was appointed to sit on this subject, of which he (Viscount Palmerston) had the honour to be Chairman, a Report was made, and in consequence of that Report it was felt that this was an obsolete system of legislation which did not belong to the present age. Consequently an Act was passed repealing that statute, and relieving from any penalty those who made wagers upon a horserace. He thought the present question was to be viewed upon precisely the same principle. He would not enter upon the legal question, but would take the hon. Gentleman upon his own ground. Viewing this as a simple question of a wager 1696 upon the future price of a given amount, of Stock, it fell, in his opinion, within the same category as a wager upon a horserace; and upon the same principle as that by which the House of Commons thought fit to relieve persons who made wagers upon horse-races, he said they should also relieve from liability those who entered upon time bargains. By so doing he thought they should not be disparaging the memory of Sir John Barnard, who introduced an Act no doubt very well suited to his own age, though not to the present.
§ MR. MALINS
said, he thought the right hon. Chancellor of the Exchequer had exercised a wise discretion in withdrawing the clause, and hoped he would take more time to consider the points that had been raised. At present bargains might be made in reference to all kinds of merchandise, without being liable to the penalties for gambling.
§ MR. LAING
said, the few Amendments that had been introduced were intended to carry out the various suggestions that had been made in the course of conversation on the previous evening. At present the Wagers Act applied to many transactions upon the Stock Exchange, without which it would be impossible to dispose of the immense quantities of stock that were in the market. It was for the convenience of the public that these transactions should take place; and the object of the present measure was to render legitimate the operations of the middle men, who acted for the public convenience.
§ LORD CLAUD HAMILTON
said, he must deny that wagers on horse-racing were at all analogous to time-bargains. But what he rose for was to point out the services which his hon. Friend the Member for West Norfolk had rendered to the Government, in preventing them from proceeding to legislate in too hasty a manner, and thus avoiding the blots which had been pointed out to-night, and which they had corrected, but which would have been inserted in the Bill, if the Government had been allowed to proceed in the hasty manner they at first insisted on doing.
§ MR. BOVILL
said, he would suggest that, as it was admitted that this Bill had received neither the assent of the Solicitor General nor the Attorney General, it should now be remitted for their Amendments.
§ Question, "That Clause 17 stand part of the Bill," put, and negatived.1697
§ In reply to Mr. T. BARING,
§ Bill to be read 3° To-morrow.
§ House adjourned at a quarter after Twelve o'clock.