HC Deb 06 March 1899 vol 67 cc1369-72

The Bill which I ask leave to introduce is in the main identical with that introduced but not proceeded with last year. It is designed to cure certain technical defects in a number of promissory notes obtained by loan societies in Ireland from persons who have borrowed money from them, by reason of which defects these notes have been decided to be incapable of being enforced. Under the charitable Loans (Ireland) Act of 1843, persons were enabled to form themselves into loan societies, to raise money by the issue of debentures, and to lend he money so raised to persons of a defined class resident within certain districts and under conditions specified rules were framed to regulate the working of the Act. These rules were not adhered to, and a very loose practice in many cases grew up. Interest and fines in excess of the sums authorised by the Statute were, in many cases, exacted. Loans were made to borrowers who were themselves sureties for other borrowers, and again borrowers became sureties for their fellows, and cash loans were made to persons resident outside of the jurisdiction, while the balance of previous loans had been discharged. Considerable privileges were given to loan societies who adhered to these rules. Their promissory notes bore no stamp. Their treasurers could sue in the Petty Session Court before justices at a trifling cost. These privileges would be lost if the defects were not cured. Again, if the debts be not made recoverable the debenture holders will lose all the money they have invested. In their interest, as well as that of the borrowers, it is absolutely necessary that the notes should be capable of being enforced in the cheap and expeditious mode provided by the Statute. But provisions are introduced to guard the borrower against being compelled to pay anything more than is equitably due. Credit will be given him against that sum for all moneys he may have paid in excess of what is legal for interest or fines. The court can make a decree payable by instalments during a period not exceeding three years, and compound interest is not to be charged. From the absence of nil proper materials it is necessary that the account of the amount due which must be taken should not extend back beyond a period of six years from the date of the note. Honourable Members will see that the debt of the borrower is limited to what s equitably due, and the mode of recovery provided for is as little burdensome as it well can be, while, as far as possible, the interest of the debenture holders is protected.

MR. DILLON (Mayo, E.)

This is a Bill which deals with a subject of very great complication, and which affects most seriously the interests of many individuals, both borrowers and lenders. The Bill of last year excited the most widespread and intense interest in the districts of Ireland which have been affected by these loan funds. I would impress upon the Attorney-General for Ireland that it is essential that the Second Reading and Committee stages of this Bill should be taken at a time when fair and reasonable discussion can be had upon it. I do not intend to go into the merits of the Bill at present, but I would impress on the Government at this, the opening stage of the controversy, that this is a most peculiar case, because the loan funds were instituted under a Statute, and all their operations were conducted under rules made under that Statute, and under the direct superintendence of the Local Government Board. What was the effect of that? A number of poor people put the whole of the savings of a lifetime in these loan funds, holding that the Government superintendence was an absolute security for their funds; and, on the other side, people who borrowed were led to believe that as that was done under Government rules and superintendence there was an absolute security against fraud. I shall content myself with reading one passage from the Report of the Committee which sat on the Bill last year in order to strengthen the position I take up. The position I take up is this: that if it is found that justice cannot be done in this matter to borrowers and lenders alike without loss of money, that loss should fall not on the borrowers or lenders who borrowed and lent under the sanction of Government control, but should fall on those who are found responsible for gross mismanagement. Here is the passage in the Report— Whatever may have been the case in the early days of the Loan Fund system, at the present time, in the majority of societies the management, so far from being under the control of representative local Committees, has passed into the hands of men who are merely moneylenders, and who have taken advantage of the Charitable Loan Fund Act to open private money offices. They have, in fact, ingrafted on the Charitable Loan Fund system many of the worst features of 'gombeenism,' and, relying on the facilities in regard to recovery of debts afforded by the Loan Fund Act of 1843, have issued loans with a recklessness that would soon have reduced a private moneylender to insolvency. Loans Have been issued indiscriminately and without regard either to the character of the applicant or his ability to repay the advances, the only consideration being the solvency of the sureties. The entire blame for that scandalous condition of things rests with the Government inspectors and their subordinates, who ought to have put a stop to it long ago. I press on the Government that this important Measure, affecting the very existence of large numbers of poor people, must be discussed in all its stages, and the Government ought to accept the principle that the loss which had been incurred should fall on those responsible for the mismanagement.


then introduced the Bill, which was read a first time.