HC Deb 18 March 1867 vol 186 cc96-102

Order for Committee read.

Motion made, and Question proposed, "That Mr. Speaker do now leave the Chair."—(Mr. Leeman.)


, in moving that the Bill be referred to a Select Committee, said, he must preface his observations by apologizing to the hon. Member for York for again asking the House to discuss the matter after an apparent decision had been arrived at. He did so not as the representative of any body or community, and much less of his colleagues in the Bank of England, but he made that proposal because he believed that the failure of the joint-stock banks had been erroneously attributed to the proceedings of certain speculators on the Stock Exchange, and that the Legislature ought to be exceedingly careful before interfering in transactions that were common not only to the Stock Exchange, but to many other places where men engaged in different branches of commerce met under special regulations of their own together. He believed that the causes of the disastrous failures of joint-stock banks last year lay deeper than the hon. Member for York seemed to suppose. The real cause of these unfortunate failures was, that the managers of those institutions had failed to regulate their proceedings by those rules of prudence and caution which had been effectual in the past few years in securing for the Bank of England the confidence of the Government and of the country; and it was because of this belief, and because he had no faith in the assertion that the joint-stock banks failed last year from the operations of Stock Exchange speculations, that he moved that this Bill be referred to a Select Committee. It was well known to the House that certain economists were in favour of a more unrestricted currency than was allowed by the Act of 1844. Whatever might be said on that score, there could be no doubt that every panic created a most unlimited paper currency in the shape of pamphlets and letters to the newspapers. And in none of these pamphlets—many of which were replete with wisdom and sound commercial advice—could be found the name of any joint-stock bank which had stopped from the cause assigned by the hon. Member for York; and when he (Mr. Grenfell) asked for information as to what bank had so stopped he was always answered, "Oh, the Agra and Masternmn Bank." Now, what were the facts with regard to Agra and Masterman's Bank. Far be it from hint to say anything to add one atom to the pain of those who had lost their incomes or their capital in these banks. Still less did he wish to offer impertinent criticisms of his own on the management of that or other similar establishments; but when he was told that Agra and Mastsrman's Bank had stopped, solely through the action of speculators, he was justified in asking for something like proof of the facts. He had sought in vain among all the pamphlets and papers that had been written on the subject, and he could not find anything like a statement in figures of the position of the Agra and Masterman Bank which would justify the directors in attributing their misfortunes to those causes. But he did find statements directly in contradiction of that allegation. He had before him an extract from a grave review which appeared in The Economist of the week before, on the whole commercial events of 1866, in which it was stated that the causes of the principal bank failures was unsound financing, and it especially mentioned the cases of the Bank of London, and Agra and Masterman's. If that were so, and all that legislation accomplished after the panic was the punishment of a small body of jobbers, the result would be very insignificant indeed. In 1847, the late Sir Robert Peel said, in a speech on the commercial distress of that year, it was the fashion to put down commercial failures to the Bank Act of 1844, and cited the balance-sheets of some of the houses which failed, the partners of which had the assurance to say, "We could have got money if it had not been for this confounded Act of 1844." So it was in the case of the panic of 1866. Managers and shareholders of banks which had stopped payment, in consequence of imprudent financing, came down to this House and said, "Oh, we have stopped in consequence of the proceedings of a certain number of speculators for a fall on the Stock Exchange. But the House must recollect that besides those who speculated for the fall were those who speculated for the rise, and in his humble opinion the latter did the greater mischief of the two. They Lad already appointed a Select Committee on Companies with Limited Liability, and if it were wished to interfere in the regulations of the Stock Exchange, he thought that the reference of this Bill to a similar Committee would complete the investigation, He moved that the Bill be referred to a Select Committee.


, in seconding the Motion, disclaimed any intention of casting any reflection upon the honour of the great body of the Stock Exchange in a previous debate.

Amendment proposed, To leave out from the word "That" to the end of the Question, in order to add the words "the Bill be committed to a select committee,"—(Mr. Grenfell,) —instead thereof.

Question proposed, "That the words proposed to be left out stand part of the Question."


said, that if this Bill really was likely to accomplish what it professed—the prevention of an undue depreciation in bank shares by fictitious sales—he should cordially support the measure; but he did not think it would be effectual for the purpose. Notwithstanding all its machinery, there was nothing to prevent collusion being resorted to to effect the objects which the Bill sought to put down. If the Bill could be made effectual, he admitted that it would be a been to the public; but, believing that it would be totally inoperative, he thought it was only a waste of time to discuss it.


said, it was somewhat late in the day to be discussing the principle of this Bill—if there had been any real intention of Opposing its progress some indication of that purpose should have been made known earlier. The observations of the hon. Gentleman who had moved the Amendment would have been made more appropriately on the second reading, when, however, the hon. Gentleman was not present. The arguments in favour of the Bill did not proceed merely upon what had occurred during the monetary panic of 1866, but its object was to prevent the recurrence of acts which were well known, and which might otherwise be repeated. Nor was this Bill merely introduced with reference to London, which was not the only place where a Stock Exchange existed; for many of the Stock Exchanges in the provinces had expressed their thanks to him for introducing the measure; indeed, since the Bill had been read a second time, a great many petitions had been presented to the House in its favour and not one against it. He hoped the Rouse would reject the Motion for referring the Bill to a Select Committee.


said, that his reason for abandoning his intention of moving that the Bill be referred to a Select Committee was that the House bad affirmed the principle of the Bill after full discussion, and therefore he did not like to be a party to defeating it by a side-wind. The Bill contained only one clause, and he thought the House was quite competent to consider it with sufficient effect in Committee of the Whole House. He did not think it would be desirable to bring the question of the Stock Exchange before that House, any more than it would be proper to introduce there the business of the Corn Exchange, or any other similar body; but if such a mode of proceeding were taken it ought to be by a distinct Motion, and not by a mere side-wind. So far as the Bank of England was concerned, it was indifferent to the Bill. As to the petitions that had been presented, He knew there had been a great number of them, but he thought they were not entitled to much weight, the mass of them being lithographs, and emanating from some central authority; and everyone knew the little reflection with which signatures were attached to petitions got up in such a manner.


said, that on the second reading He thought it his duty to state the objections he felt to the pleasure. He approved its object, and certainly felt no sympathy for the speculators against whom it was directed; on the contrary, he would like to Put in every honest hand a whip To lash the rascals naked through the world. He questioned the means proposed for effecting the object, and his doubts had been confirmed by an Amendment on the paper to extend the operation of the Bill to railway shares; and if so, why not to all other shares and all other kinds of pro- perty? The House, however, decided in a contrary sense, and he bowed to its decision. The matter being one of principle rather than of detail, he saw no reason for referring the Bill to a Select Committee, nor would be now have troubled the House had it not been for a matter partly public and partly personal. The hon. Member for York (Mr. Leeman) was reported to have said the other day— The Vice President of the Board of Trade was connected with one of the largest institutions in the City of London, of which in that debate he must be taken to speak as the representative. He did not catch the hon. Member's words at the time, or he would have noticed them then. He begged leave to state that he had no interest directly or indirectly affected by the fate of the hon. Member's Bill; and if the hon. Member alluded to his former connection with the Bank of England, he gave up that and every other directorship when he accepted the office he had now the honour to hold. He apologized for saying so much about himself; but he thought it inconvenient that public men, even in the humble, responsible position he held, should be supposed liable to be actuated by personal or interested motives on such questions.


read an extract from The Economist newspaper to the effect that it would be difficult to propose a restriction more foolish than that contained in the Bill.

Amendment, by leave, withdrawn.

Main Question put, and agreed to.

Bill considered in Committee.

(In the Committee.)

Clause 1 (Contracts for Sale, &c., of Shares to be void unless the Numbers by which such Shares are distinguished are set forth in the Contract.)


proposed in line 15, after the word "banking," to insert "railway or other," contending that if the principle of the measure was good in the case of banks, it should be good in the case of railway and other companies.

Amendment negatived.


moved, in line 15, to leave out "England and Wales" and insert "the United Kingdom of Great Britain and Ireland."


protested against, extending so absurd a Bill to Scotland.


said, it was at the re- quest of an Irish and Scotch Member that he proposed the Amendment.


inquired whether the hon. Gentleman intended that the Bill should apply to any foreign bank carrying on business in this country, as well as to banks established under the Joint Stock Companies Act?


said, he did not.


said, that as the measure was penal in its character, its language ought to be more precise, and he would appeal to the legal Gentlemen opposite whether the words of the measure as they stood would not embrace the institutions to which he had referred.

Amendment agreed to.


moved to omit, in line 18, the words that the-contract or token "shall be in writing and."

Amendment proposed, in page 1, line 18, after the word "token," to leave out the words "shall be in writing and."—(Mr. Lusk.)

Question proposed, "That the words proposed to be left out stand part of the Clause."


, to prove the sincerity of his desire to facilitate the passing of the measure, would recommend the hon. Member who had charge of the Bill himself to move that the Chairman report Progress, and he gave that advice in consequence, not only of the lateness of the hour (a quarter to One o'clock), but also from the construction of the measure itself.


said, it would be better to alter the words in the clause so as to cause the shares to be designated by number in writing, leaving it to the parties to decide whether the contract should be in writing or oral, as might be most convenient.


said, the difficulties of passing this measure appeared to be so great that he thought it would be better to report Progress, which would enable the hon. Gentleman (Mr. Leeman) to consider the Amendment. He moved that the Chairman report Progress.

Motion made, and Question put, "That the Chairman do report Progress, and ask leave to sit again."—(Mr. Bass.)

The Committee divided:—Ayes 35; Noes 75: Majority 40.


then moved that the Chairman leave the Chair.

Motion made, and Question, "That the Chairman do now leave the Chair,"—(Mr. Lusk,)—put, and negatived.


said, he would adopt the suggestion of the Solicitor General, and expressed a hope that he would be allowed to proceed with the Bill.


said, they ought not to be called upon in this Bill to enact something like the Statute of Frauds, and he moved that the Chairman report Progress. The Bill required further consideration.

Motion made, and Question put, "That the Chairman do report Progress, and ask leave to sit again."—(Mr. Moffatt.)

The Committee divided:—Ayes 23: Noes 71: Majority 48.


felt it was impossible to withstand the determination of the nority, and therefore himself moved that the Chairman report Progress

Motion agreed to.

House resumed.

Committee report Progress; to sit again To-morrow.

House, adjourned at half after One o'clock