SECOND READING. (Hansard, 8 May 1860)

§ MR. BOVILL
, in moving the second reading of this Bill said, that it had its origin in the proposition of the Chancellor of the Exchequer to obtain a revenue by 914 imposing a penny tax upon contracts made on the Stock Exchange. The Chancellor of the Exchequer declared that Sir J. Barnard's Act was obsolete, and on that ground proposed to repeal it, and convert the contracts against which it was directed into a source of revenue. But the right hon. Gentleman did not seem then to be aware of the existence of the Act of 1845, which prohibited all contracts by way of wagering and gaming. The Government afterwards stated that they did not intend to give validity to gambling transactions, but only to deal with contracts for bonâ fide transactions. Now, if the object of the Bill introduced by the Government was merely to prevent interference with the legitimate transactions of bonâ fide purchase and sale, then he quite concurred in it; but, on the other hand, if they intended by their Bill to do more, and to remove the restrictions upon gaming transactions, that Measure would meet with his most strenuous opposition. The Bill which he had prepared, whilst it preserved the penalties against gambling, would be found to do away entirely with every possible restriction which could be considered objectionable as interfering with bonâ fide transactions; and he did not confine it to the mere transactions of immediate purchase and sale. He quite understood that it might be right and proper, in ordinary transactions on the Stock Exchange, that there should be contracts made which might be completed at a future day, and that contracts should be entered into by persons who at the moment might not be possessed of the stock which they contracted to sell. Transactions of that kind however were prohibited by Sir J. Barnard's Act under heavy penalties, and he proposed by his Bill to do away with those restrictions. There was no bonâ fide transaction of purchase and sale which would, after the passing of his Bill, should the House sanction it, be at all interfered with by the provisions of Sir J. Barnard's Act. But he had guardedly abstained from giving any countenance to transactions which were of a purely wagering or gambling character, and had left all the penalties in force as to such bargains, and that was the main difference between the Bill proposed by himself and that proposed by the Government. The objection he felt to the Government measure was, that it remitted the penalties on gambling in the Funds, which were imposed by Sir John Bar- 915 nard's Act, and it rested with the Government to make out a case for a repeal of those provisions. He had never yet heard any sound argument for the remission of those penalties. The object no doubt was to raise a revenue by taxing gambling transactions, but the Government could not tax them without also legalizing them; and he would ask, was there not something of far higher consideration than the mere question of revenue? He could not help thinking, that of all species of gambling that on the Stock Exchange was the worst and most pernicious. If a man went into a gaming I house, and threw dice, or played at hazard, the chances were equal; but was; there any element of fairness in the gambling on the Stock Exchange? Persons who had secret information of the movements of Governments abroad, or who had obtained intelligence from those who ought not to impart it, might operate on the Stock Exchange with a certainty which others could not enjoy, as to the events which would take place. Again, nothing was so easy as for men of large capital to combine in their operations to their certain gain, but to the certain loss of other speculators. Suppose three capitalists on the one hand, and three on the other, wished to realize a million of money —what so easy as to employ six different brokers on either side—innocently, so far as the brokers were concerned—to operate so as to raise or depress the stocks? The parties could themselves sustain no loss, because they were dealing one with the other, but the man who went there to speeculate in good faith could not fail to be led on to his destruction and ruin. Such gambling was so easy that if the restrictions upon it were removed an inducement would be held out to many persons, who now resisted the temptation, to embark on those speculations, which, if at first unsuccessful, at once produce ruin, and which, if temporarily profitable, only postponed the fatal period, by fostering a habit of gambling. It was on that account that the repetitions of such scenes as had lately alarmed the commercial world— the case of Mr. Pullinger, and others of the same sort — were so frequent. He was told that there was speculation in other descriptions of property produced by such operations besides the funds, but was that any argument for removing the penalties upon gambling? Would the Government, because they found gambling 916 transactions in existence, be prepared to legalize them? So far from equalizing the market, an effect which had been ascribed to these speculations, they had a most ruinous effect upon trade. A recent case had occurred in which a certain firm having entered into time-bargains to an enormous extent for tallow, found it worth their while to buy up all the tallow in St. Petersburg, in order to keep up the price, but the consequence was that the consumer was taxed with an unnecessarily high price, to satisfy the speculations of one house. In India some years ago, an influential firm employed agents all over the country to bargain for opium, with a view to raise the price, while the firm itself ostensibly was working for a fall in the market, and by those speculations stood to win a million and a half of money. That was no imaginary transaction, for the circumstances of the case were investigated by the Courts of India, and afterwards became the subject of judicial decision in the Privy Council. Were not such cases as those likely to be most destructive to the morality of a people, and was not their immediate effect most injurious upon persons legitimately engaged in trade? The Government of India, in consequence passed a Bill to prohibit all wagering and gambling contracts. He trusted the House, with these examples before them, would not consent to encourage these gambling transactions. Again he would ask why, when year after year, every endeavour was made to put a stop to gaming-houses, the Government should now come forward, and, by a side wind, endeavour in order to obtain a revenue to legalize or remove a single restriction upon gambling? If the great gaming-house in Throgmorton Street were licensed, why should not other gaming-houses be licensed, too, if they applied for the privilege? Why should a penalty be continued against them, and why should not all restrictions be removed from lotteries or betting-houses? It was said that all transactions for the purchase of goods at a future day were of a gambling nature; but if those transactions were confined to legitimate bargains, and were based on the principle of supply and demand, they would be limited in their extent, and would not be productive of injurious results; but not so with gambling in the Funds. He contended, then, that no sufficient grounds were shown for removing any of the penalties and restrictions imposed upon gambling 917 contracts by Sir John Barnard's Act. That Act declared all contracts by way of wagers and gaming to be void, a heavy penalty was imposed for making the wager, and an action for the return of the money was also authorized. The Government proposal would remove the penalty and the power of getting back the money, and simply render the transaction void. That was virtually to encourage gambling; and if they sanctioned it, would they not admit that those speculations were not looked upon by that House in so serious a light as formerly? He had endeavoured to ascertain, from time to time, upon what grounds the Government were resisting his proposal, and insisted upon extending the repeal to gambling transactions. The first suggestion was that Sir John Barnard's Act was an obsolete Act of former days, but that argument was at once removed by showing that in 1845 the Legislature had not treated it as obsolete, but had passed an Act to extend its provisions. The next ground taken up was that the Act was not efficient; but it was a strange way of increasing its efficiency to remove two of its most important restrictions. But did the right hon. Gentleman mean to say that if no Act existed these transactions would not increase. He (Mr. Bovill) thought on the contrary that the effect of the provisions making the broker liable to a penalty, besides refunding the money, had a tendency to render him extremely cautious as to the persons with whom he transacted that species of business, and to limit greatly the number of persons who embarked in those gambling speculations. If only six tradesmen in the course of a year were prevented by these restrictions from entering upon that wild course, they ought certainly to be retained by the Legislature. Why was it that the Stock Exchange gentlemen were so anxious for the repeal of this clause? Was it not because the Stock Exchange knew that if the restrictions were withdrawn, and the penalty removed, their transactions in gambling in the British funds would be extensively increased? Could it be said, that the penalties imposed upon gaming-houses did not prevent gambling to a great extent? But it was argued that so long as these contracts were declared illegal the persons who embarked in them had a temptation held out to them to act dishonestly. But then, if that were so, what would they do with the Act of Parliament of 1845, which de- 918 clared them illegal, and which it was not proposed to touch? Was it not to encourage dishonesty to tax the contracts, while they were declared null and void by the Act of 1845? There was only one argument more. The Solicitor General had said that the object of the Government was to make the law uniform, and to put an end to an Act which imposed a penalty only on one description of transactions. But if the question were to be dealt with as a whole, let the Government bring in a Bill to deal with all wagering and gambling transactions whatever. If Sir John Barnard's Act did not apply to transactions in the foreign funds or in railway shares, let the penalties be extended to those cases also. This, however, they did not pretend to do, and therefore to talk about making the law uniform was a mere afterthought. He offered his Bill as one that would legalize every bonâ fide transaction in the way of contract and sale, and if it was asked how they could ascertain when a transaction was bonâ fide, his answer was that juries would decide that just as they decided other questions of a similar kind. There would be no difficulty whatever about the matter, for an examination of the broker's books would at once show whether any transaction in which he had been engaged was a real or a gambling transaction. His object was to legalize honest dealing and to discourage acts of gambling, and in that spirit he moved the second reading of the Bill

§ MR. COLLIER
said, it had been often asked of late who was Sir John Barnard? He was a citizen of London, and a Metropolitan Member who, 130 years ago, persuaded the House of Commons to pass a very foolish Act of Parliament—an Act that had never met with much favour on either side of Westminster Hall—an Act to which the Judges gave but little effect; and an Act that had been virtually repealed by common sense and the common practice of mankind. Sir John Barnard's views were, that it was necessary, in order to ensure our commercial morality, that men should be prevented from bargaining for that which at the time of the bargain they had not got. The fallacy of his views was pointed out 130 years ago, when it was predicted by many eminent lawyers then in the House that if it passed it would prove in its operations most injurious to 919 trade, and one Member at the time said that it ought to be entitled "A Bill for destroying the commercial credit of the country." If all the evils prophesied in respect of this Act had not arisen, it was because it had been treated as a dead-letter, and men had gone on bargaining and trafficking as if the Act had never passed. He was only surprised such a Bill as that introduced by the Government had not been proposed before. Now, however, there were two Bills before the House. In one the Chancellor of the Exchequer proposed to repeal entirely Sir J. Barnard's Act; and by the other, which the hon. and learned Member for Guildford had introduced, and in regard to which he appeared to have stolen a march on Government in the nature of a time bargain, it was proposed to repeal a certain portion only, and to retain another portion of Sir John Barnard's Act. His hon. and learned Friend appeared to have changed his opinion lately with reference to Sir John Barnard's Act. A short time since the hon. and learned Member considered it the perfection of wisdom; but, having discovered his mistake, he wished now to repeal a portion of it only. He (Mr. Collier) considered the simple mode of dealing with this subject was to adopt the Bill of the Chancellor of the Exchequer and repeal Sir J. Barnard's Act. If that Act were good as applied to time-bargains in funds, it would also be good for railway shares, stock, and every description of mercantile contract. His hon. and learned Friend, however, shrank from such an absurdity. A few years ago an Act had been passed which, by a recent decision of the Courts, applied to every transaction in the nature of a bet. It was quite enough to say that all gaming transactions were illegal, and then Sir J. Barnard's Act was unnecessary. He therefore submitted that the Bill of his hon. and learned Friend was useless and mischievous. To use a homely expression, borrowed from the hon. Member for Birmingham, it made "two bites of a cherry"—it repealed a part instead of a whole—while it was desirable to repeal Sir J. Barnard's Act entirely, and at once, and have done with it.

§ MR. MALINS
said, he should support the Amendment. The measure of the Chancellor of the Exchequer to repeal Sir John 920 Barnard's Act, and leave all trading transactions of a gambling nature to be dealt with under the provisions of the general statute of the present reign, was plain and intelligible. But the partial repeal proposed by his learned Friend drew a distinction of which he was at a loss to understand the principle or advantage. He concurred in the view that if the Act was to have operation at all, it ought to be extended to all gambling transactions in trade. The man who sold Russian or French stock, or corn, or any other merchandise which did not belong to him, was quite as culpable as he who sold a quantity of Three per Cent Stock which was not in his possession. In his opinion, however, the Act was so defective, absurd, and inoperative, that the wisest course the House could take would be to get rid of it altogether.

§ MR. MELLOR
said, he approved of the measure of the Chancellor of the Exchequer in preference to that of the hon. and learned Member for Guildford. Sir John Barnard's Act was known to have been brought in because Walpole had been suspected of stock-jobbing; but the Minister, with lofty disdain, allowed it to pass without notice, and against his own judgment. It was, moreover, based upon arguments wholly untenable in modern times, and as it had become a complete dead letter it should be repealed outright. No longer back than Lord Kenyon's time 200 actions were brought against parties for gambling transactions on the Stock Exchange; but all failed on account of the refusal of a broker called as a witness in the first case to make any disclosures. Since then there had been, he believed, no actions of the kind.

§ MR. BOVILL
said, his Bill only imposed penalties upon what were universally admitted to be improper transactions, while in other cases it removed restrictions which interfered with business.