HC Deb 08 August 1894 vol 28 cc403-9

Order read, for resuming Adjourned Debate on Amendment proposed [6th August] on Consideration of the Bill, as amended by the Standing Committee.

And which Amendment was, in page 9, line 6, to leave out from the word "society," to the word "shall," in line 7.—(Mr. Hopwood.)

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

MR. HOPWOOD (Lancashire, S.E., Middleton)

said, that he did not propose to proceed with the Amendment.

Amendment, by leave, withdrawn.

On Motion of Mr. HOPWOOD, the following Amendment was agreed to:—Page 9, line 6, leave out "he proves,"; and insert "it appear."

COLONEL HUGHES moved, in page 9, lines 30 and 31, leave out "after the year one thousand eight hundred and fifty-five." He said, this Amendment had reference to Societies which called themselves Building Societies, although many of them were banks. He referred especially to the Birkbeck Building Society, which was, properly speaking, a bank. Building Societies were prohibited from calling themselves banks, and he thought banks ought not to be allowed to call themselves Building Societies. He objected to the retention of this date in the clause, inasmuch as the effect would be to exempt the Birkbeck from the operation of the Bill. The Birkbeck Society had £460,000 lent on mortgage, while its total assets were over £6,000,000, so that they borrowed 12 times as much as their mortgages. Whilst the Government were imposing restrictions upon Building Societies with the object of preventing them borrowing more than their mortgages, here was a Building Society which had borrowed 12 times as much as its mortgages. It was really having one law for the rich and another for the poor. The exceptions made by the Bill was made in favour of the strong, whilst very onerous terms wore put upon the weak. He was sorry that he believed his Amendment was not to be accepted by the Government. He thought the Birkbeck ought to trade under its proper title.

Amendment proposed, in page 9, line 30, to leave out the words "after the year one thousand eight hundred and fifty-five."—(Colonel Hughes)

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


said, the Government had considered this question very carefully. He admitted that the clause as it stood entailed a somewhat anomalous condition of things. Certain Building Societies carried on business in land and banking under the Act of 1836, which would be illegal under the Act of 1874. If these Societies were brought under the Act of 1874 and the Bill they were now considering, undoubtedly they would be put to great inconvenience and possibly exposed to great danger. Having regard to this and to recent events connected with the Birkbeck Society, the Government had come to the conclusion that it would not be right to force them to become Incorporated Societies, and they had therefore inserted this provision in the Bill, which exempted Societies established before 1855 from the action of the Bill with the exception of placing them under Section 40 of the Act of 1874. This provision was inserted in the Bill and agreed to by the Select Committee last year, and various Societies affected had constantly accepted it as a decision not to be disturbed. The Amendment of the hon. Member, therefore, could not be accepted. From the Societies established subsequent to 1855 he might say that they had not received a single protest as to this clause.


said, it was a great pity that Institutions like the Birkbeck did not take the opportunity, when it was afforded to them, of making themselves into banks. It was a great anomaly that any Institution should carry on a banking business under the title of a Building Society. There was a great deal of feeling upon this subject, and as they were anxious not to lose the Bill by opposition which might have been offered upon this point, they decided not to go into it. He hoped the Amendment would not be pressed, because he and his friends would be obliged (though with great reluctance) to support the Bill as it stood.

Question put, and agreed to.

On Motion of Mr. H. GLADSTONE, the following Amendments were agreed to:—

Page 9, lines 32 and 33, leave out "submit to the Secretary of State an Annual Report," and insert— Cause to be made an abstract and report of the annual accounts and statements of societies and.

Page 9, lines 34 and 35, leave out "this Report shall be laid," and insert "shall lay the same before the Secretary of State and."


said, he had an Amendment down in page 10, line 9, to leave out "five," and insert "six." He understood that the Government were opposed to the Amendment, but that they were prepared to meet the views of those he represented under Clause 2. Under these circumstances, he would not press his Amendment.

On Motion of Colonel HUGHES, the following Amendments were agreed to:—

Schedule 1, page 11, line 4, after "mortgage," insert "where the property is not in possession of the society and."

Schedule 1, page 11, Part I., column 4, after "leasehold," insert "and term unexpired at end of official year."

On Motion of Mr. WHITTAKER, the following Amendment was agreed to:—

Schedule 1, page 11, line 16, leave out "is," and insert "has been twelve months."

*MR. CREMER (Shoreditch, Haggerston) moved an Amendment to add an additional column to Schedule 1, which should set out the nature of the property upon which advances had been made by the Society, and if the property consisted of houses to state whether they were occupied, and if they were unoccupied how long they had been so. He said that one case which bad come under his notice would satisfy the House as to the necessity for some such Amendment as this. A Building Society which some years ago had an extensive business in London, by some means or other, unfortunately for the investors, advanced very considerable sums of money upon house property in the neighbourhood of London, a great deal more than the property was really worth. For a series of years the houses were unoccupied, and they fell into the hands of the Society. The Directors could neither sell or let the houses, yet for a series of years the members of the Society were practically unacquainted with that fact, the houses having been returned year by year in the assets as valuable property, when, as a matter of fact, it was unrealisable and practically worthless. In the column which he proposed should be inserted in the Schedule, he wanted to prevent a recurrence of such disasters. Fortunately, the members of that Society discovered the imposition which was being practised upon them, turned out the old Directors, and saved the Society from absolute wreck. It was wound up, and all the obligations which the Society had incurred were paid off. But other Societies had from the same causes been more unfortunate, and had been wound up without the depositors and shareholders getting anything in return for the money they had invested. If this column were inserted it would be practically impossible for a Board of Directors to continue the practices to which he had referred.

Amendment proposed, in page 11, in Part II., of Schedule 1, after column 4, to insert as a new column, the words— Whether occupied, and if unoccupied how long it has been so,"—(Mr. Cremer.)

Question proposed, "That those words be there inserted."


said, be quite agreed that the object which his hon. Friend bad in view was a desirable one, and be would be glad if the Government could see their way to give effect to it; but as it stood they could not accept it. He thought that the additional columns would overload the Schedule, and that it would be found not to work well in practice. In addition, he thought that the Amendment as it stood could be very easily evaded. He would undertake, however, to see whether, perhaps by the addition of a foot-note to the Schedule, they could in any way meet his hon. Friend. But they could not accept the Amendment as it stood.

* MR. JACKSON (Leeds, N.)

said, he hoped the hon. Member would not press the Amendment, as he thought it would be quite inoperative. He would point out to the hon. Member that this Schedule was to set forth particulars of each property upon which a mortgage had been granted, but that property might include a number of houses—might include, in many cases, 20 houses. But there might be one of those houses unoccupied, and it would be quite impossible to set out in the Schedule one house in 20. There was another difficulty. One object which had been carefully looked to and guarded was that of trying to avoid identification. It was not proposed to set out a description of the property, and supposing there were 20 houses under one mortgage, if one house should be unoccupied, it appeared to him that it would be impracticable to state that, because particulars would have to be given. He thought, however, the hon. Member's object would be gained in that; he would get in the Schedule what was the income from the property, and that was the real point which was of importance to the members of the Society generally. They would get, for the first time, as the result of this Schedule, what was the gross income, what were the outgoings, and what was the net income from the property, and that was the information which he thought it was desirable should be obtained in the interest of the members of the Society. He hoped the hon. Member would not press the Amendment.


said, that though he did not agree with the views expressed by the right hon. Gentleman the Member for Leeds, if the promise made by the First Commissioner was given effect to in another place, he would be quite willing, if a foot-note to the Schedule were inserted, as had been indicated, not to press the Amendment. He gathered, although he indistinctly heard the First Commissioner, that he would make an effort in another place to give effect to the Amendment by inserting such a foot-note?



Amendment, by leave, withdrawn.

On Motion of Colonel HUGHES, the following Amendments were agreed to:—

Schedule 1, page 11, Part II., column 5, after "leasehold," add "and term unexpired at end of official year."

Schedule 1, page 11, part II., add additional columns,—

Column 12, "Net Income."

Column 13, "Annual percentage of net income on account in column 9."

*MR. H. GLADSTONE moved—Schedule 1, page 11, at end of Part II., add—

Part III.
Particulars to be set forth in the case of a mortgage where these repayments are upwards of twelve months in arrear.
1. 2. 3. 4. 5. 6. 7. 8.
Date of advance. Original valuation of property. Whether subject to any prior mortgage or change; if so, what amount. Whether freehold, copyhold, or leasehold. Amount of advance. Present debt. Number of months in arrear. Amount of payments in arrear.
£ £ £ £ £

MR. WHITTAKER (York, W.R., Spen Valley) moved, as an Amendment to the proposed Amendment, in line 2, after "mortgage," insert "not included in Part I. or Part II. of this Schedule."

Amendment agreed to.

COLONEL HUGHES moved, in line 3, at end, add "and where the property is not in possession of the Society."

Amendment agreed to.

MR. STOREY (Sunderland)

said, he would like to know what was proposed to be done with regard to the extension of time under Clause 2?


said, the Government were anxious to do all in their power to help Societies to meet the difficulties that they would find themselves in under the new situation, for they felt that the terms imposed by Clause 2 were very stringent. They were ready to move an Amendment in another place suspending the operation of the second clause for a year from the passing of the Act.

Amendment (Mr. H. Gladstone), as amended, agreed to.

*MR. H. GLADSTONE moved, in Schedule 2, page 12, column 3, at end, leave out and the words from 'if any Society under this Act receives loans or deposits,' to 'so received in excess.'

Amendment agreed to.


asked if, by the consent of the House, he might take the Third Reading now?


The Question is, "That the Bill be now read the third time."


said, he should like, on behalf of the Government, to express his acknowledgments to the Members in various parts of the House who had assisted in the passing of the Bill; in particular he had to thank the right hon. Member for North Leeds for the valuable assistance he had given in perfecting the measure. Several clauses had been taken from the Bill which he (the right hon. Member for North Leeds) introduced last year, and the Government were under great obligations to him.

Bill read the third time, and passed.