HC Deb 11 May 1881 vol 261 cc246-52

(Lord Randolph Churchill, Mr. Arthur Balfour, Sir Henry Wolff; Mr. Gorst.)


Order for Second Reading read.


, in moving that the Bill be now read a second time, explained that its object was to diminish the evils of the long-credit system which obtained so largely in this country by limiting the period during which debts under £100 could be recovered to 12 months. Among the upper and middle classes it was a common thing for bills to run on for three or four years, and, as the result, people were tempted to buy articles which they could not really afford; minors ran up enormous bills without the knowledge of their parents or guardians, and wives and daughters in a similar way deceived their husbands and fathers; while the tradesman charged an excess of 16 or 17 per cent, or even more—there was a tailor's case not long ago before the Courts in which as much as 50 per cent was charged—to recoup him for the loss he sustained by waiting so long for his money. He heard the other day of a man owing as much as £14,000 to his fruiterer. The lower class, though affected in a lesser degree, suffered a good deal from the "tally" system. On the whole, therefore, the Bill would, no doubt, be of great public advantage. Tradesmen, as a rule, he believed, would welcome it, though he was not surprised to hear that it had been condemned by some of the West End tradesmen, who, having a wealthy clientèle, were interested in keeping up the long-credit system with its attendant surcharges, Even to West End tradesmen, however, it would probably in the long run prove a boon by saving them from the bad debts which very frequently led them into bankruptcy. Under a ready-money system the co-operative stores, which. had done so much harm to tradesmen, would have no raison d'être, and the tradesmen of the lower class would reap a direct and immediate benefit from the Bill by receiving the ready money which now went exclusively to the publican. He believed the working classes very seldom paid for necessaries on the spot. The long-credit system was peculiarly English. It was, at all events, quite unknown in France and America, the principal commercial rivals of England, the ready-money system obtaining almost entirely in those countries. Financially, English society at the present time was in a very unhealthy state, and the habit which so many people had of living beyond their incomes was greatly stimulated by the long-credit system. As minor evils of this system, it would be within the knowledge of many hon. Members that young men at the Universities ran themselves head over ears into debt, and that people who were not careful with their receipts were not unfrequently made to pay a bill twice or thrice over. He was aware that there was another Bill before the House on the same subject—the Limitation of Actions Bill—which had come down from the Lords in the name of Earl Cairns. But that Bill applied to all debts, no matter of what amount, and did not limit credit to less than three years. He thought that in the case of large commercial transactions interference of this kind would produce great embarrassment. Hence he had restricted his own Bill to debts incurred on account of necessaries, for which a year's credit seemed ample. It would be well, of course, to allow some interval to elapse before it passed into law, so that tradesmen might prepare for it; but a period of commercial depression like the present was, perhaps, the most favourable for securing the public acceptance of its provisions. People, he believed, would welcome any legislation which promised to enable them to bring their expenses within their diminished incomes, and which would place the country at large in a sounder financial condition. Of course, he did not propose to make the Bill compulsory; it would always be open to people to contract themselves out of it. The limit of six years now set to the recovery of debts was a purely arbitrary one; and it seemed to him that 12 months, so far as sums under £100 were concerned, would be in every way a more convenient one. The noble Lord concluded by moving the second reading of the Bill.

Motion made, and Question proposed, "That the Bill be now read a second time."—(Lord Randolph Churchill.)


said, no doubt, the subject was an interesting and important one. He entirely agreed with the noble Lord the Member for Woodstock with respect to the evils of long credit; but the question was whether the Bill which he had now introduced would have the effect he had in view. Under the Bill, the tradesman would not be able to refuse credit altogether; but he would—except in cases of special debts exceeding £100—be able to give credit for 12 months, and recover the amount within that time. The consequence would be that although the credit would be limited from six years to 12 months, they would not diminish the number of times during which credit was given. They would put a weapon into the tradesman's power of being able to give the credit, and of having the excuse to enforce payment within 12 months. The Bill, therefore, would not abolish the evils of the credit system; on the contrary, its effect would be, in some measure, to aggravate them by giving a kind of legislative sanction to credit in the case of the smaller transactions of life, and by producing a crop of summonses at the end of every year. Besides, the foolish undergraduates and dressy women, to whom the noble Lord the Member for Woodstock had referred, would be tempted to raise their bills to more than £100, so as to escape the limitation of credit proposed in the Bill. There was a Bill before the House, sent down from the House of Lords, which had been introduced by Lord Cairns, and had received the approval of the Lord Chancellor, reducing the limit for special debts to six years, and for simple contract debts to three years. To that Bill, which would obviate the evils attending the present Bill, the Government were prepared to give their assent; and it would be perfectly open to the noble Lord the Member for Woodstock, when that Bill came into Committee, to move Amendments embodying his present proposals.


saw the hon. Member for Derby (Mr. Bass) in his place, and he wished to state publicly that he had considerably changed his opinion on the subject of imprisonment for debt since they both sat on the Select Committee on that subject a few years ago. Without pledging himself to any definite measure, he should like to see an alteration of the existing law, provided that some provision was inserted preventing the fraudulent contracting of debts. He thanked the noble Lord for having brought the subject under the notice of the House; but, speaking for the Friends with whom he usually acted, he preferred the Bill of Earl Cairns, which, he thought, would secure the advantages which the noble Lord desired without the inconveniences which would attend the present measure. He hoped the noble Lord would agree to the postponement of the further discussion of this measure until Earl Cairns' Bill was brought forward for consideration.


said, he had put an Amendment on the Paper that the Bill should be read on that day six months, and he did not feel inclined to withdraw it after what had been said from the two Front Benches. He did full justice to the intentions of the noble Lord, but objected to the principle of the Bill. The chief argument against the Bill was that it was not wanted. The shopkeepers had made no demand for the measure; on the contrary, they were opposed to it. If, as the noble Lord contended, co-operation had been caused by the high prices charged by shopkeepers, why not let co-operation bring down the prices of West End tradesmen? The noble Lord had also said that minors and wives could run up bills without the knowledge of their guardians or husbands; but, in point of fact, the law took good care that neither guardians nor husbands were charged too much. No people would be so much affected by this Bill as the working classes. He was well aware that credit had many evils, and that it might be abused; but there were times when it was of the greatest advantage, and when it prevented working men from falling into a state of absolute destitution. He did not think this measure was wanted. The period of limitation was at present six years; and even, as the law now stood, the Judges did not look with favour on any person who pleaded the Statute. In conclusion, he moved that the Bill be read a second time that day six months.


seconded the Motion. There were, he said, several objections to the Bill, and the chief one was that it did not apply to either Ireland or Scotland. There ought to be a provision in it to prevent Irish landlords recovering their rack rents when a year in arrear. As it stood, it would be so much waste paper. If, too, it were framed in such a way as to prevent shopkeepers charging frightful prices for articles of household use, it might be of avail, and should have his support. Under all the circumstances the measure was unworthy of the consideration of the House, and he hoped the Motion of the hon. Member for Brighton (Mr. Marriott) would be accepted.

Amendment proposed, to leave out the word "now," and at the end of the Question to add the words "upon this day six months."—(Mr. Marriott.)

Question proposed, "That the word 'now' stand part of the Question."


thought the House was much indebted to the noble Lord the Member for Woodstock for introducing this question. It was a mistake to suppose that the working classes did not want the Bill. At the annual meeting of the Trades' Unions Congress, which represented more than 1,000,000 of our organized working people, a demand had been made for a number of years past for a measure of this kind. Credit such as this Bill was designed to limit was the bane of the life of the working classes. It was not natural credit, but artificial and false credit, from which they suffered, and from which the Bill would relieve them. He also thought the noble Lord had rendered another service in eliciting from the Attorney General and the late Home Secretary their strong language in support of the abolition of imprisonment for debt.


said, he should not have risen at that late period of the debate, had it not been for the remarks of his hon. and learned Friend the Attorney General on the subject of cedit. He had held the office of County Court Judge for many years, during which he had had ample experience of the habits and necessities of the working classes; and he was convinced that credit was a great boon to them. There were periods, when from want of employment and from sickness in their families and other causes, they were obliged to have credit for food and clothing. At these times the tradesman was their best friend; and he must add, from his own long observation, that the tradesman was kind and forbearing to the debtor. If the artizan could not obtain credit, he would frequently have to go to the workhouse. If the Bill of the noble Lord were to become law, one of two things must happen. Either the tradesman would not give credit at all, which would leave the working man in great stress; or, if the credit were limited to one year, he would prosecute his claim for the debt long before the expiration of the 12 months—the time to which the Bill limited credit for small debts. As regarded imprisonment for debt, he had had many opportunities, during the period he had set as Judge—nearly 20 years—of conferring with the artizan on that question, and he had invariably found that he did not desire the short imprisonment now lawful to be abolished. Workmen frequently had neither goods nor furniture; and if the tradesman could not put this pressure upon them to induce them, to keep up their payments, made generally by instalments, he would withhold credit from them altogether.


remarked, that although he differed from the noble Lord on many important questions, he had the highest opinion of his views on these small, minor matters. He was surprised to find, however, that the hon. and learned Member for Chatham (Mr. Gorst), whose name was on the back of the Bill, had written a letter to a newspaper stating that his name had been placed there without his authority, and that he was, in fact, opposed to the measure. He saw opposite him three Members of the Fourth Party, or three-fourths of the Party, and he hoped some one of them would explain this discrepancy.


, said, he considered that the discussion had been, on the whole, satisfactory, as opinions had been generally expressed in favour of a considerable limitation of the period during which debts should be recoverable. As far as the present Bill was concerned, he would not trouble the House to go to a division. His object was to get an expression of opinion, and that object had been attained. After what the Attorney General had said, he would ask the House to allow the Amendment to be negatived, and then to have the Order read and discharged. If that were done, he should be quite satisfied. He had not seen the letter referred to by the hon. Member for Northampton (Mr. Labouchere). The hon. and learned Member for Chatham (Mr. Gorst) had drawn up the Bill, and it was with his consent that his name had been put on the back of it. If there was any explanation required, it should be given by the hon. and learned Member for Chatham.


said, he thought that such a change as was proposed by the Bill would tend to the improvement of the condition of the people.

Question put, and agreed to.

Order for Second Reading discharged.

Bill withdrawn.