§ [SECOND HEADING.]
§ Order for Second Reading read.
§ * THE CHANCELLOR OF THE EXCHEQUER (Sir M. HICKS BEACH, Bristol, W.)
said it had been the custom for many years to empower trustees in this country to invest in colonial stock, but the colonies had long desired that the power should exist where it was not specifically given in settlements. The matter required and had received a great deal of consideration, and it seemed to the Govern- 970 ment that the proper basis on which to deal with it was that there should be some sort of security to trustees that the colonies would maintain good faith with their creditors, that they would respond to any judgment of the courts in this country, and would come under the limitations of the Colonial Stock Acts, thus differentiating colonial stock from foreign stock, which, of course, was not subject to Parliament, the courts of this country, or the action of the Government. Therefore, this Bill, in the case of trust money where there was no special authority to invest in colonial stock, would enable trustees to make such an investment, provided the colony concerned came under certain conditions to be laid down by the Treasury. Those conditions would be, in the first place, that the colony should thoroughly accept the legal position, that any legislation on its part detracting from or interfering with the security of its creditors would be properly vetoed by the Imperial Government; in the second place, that their stock should be brought under the regulations of the Colonial Stock Acts of this country: and thirdly, that the colony should provide from its own revenue for the satisfaction of any judgment of the courts given against it in the United Kingdom. Further, that the colony shall provide funds in the hands of an agent or firm of high standing and position here for that purpose. These conditions would be laid down by the Treasury, and would have to be assented to by any colony coming under the Bill. An arrangement had been come to with the Dominion of Canada, and colonial legislation had been passed for the fulfilment of these conditions, and a similar course would be pursued by any colony desiring to come under the Bill. In Committee he hoped to meet a suggestion that public notice should be given whereby trustees in this country might know the colonies in whose stock they might safely invest. He was quite sure all of them would be ready to do anything they could for the welfare of their colonial fellow subjects. He did not think he needed to say anything more, and he hoped the House would give the Bill a Second Reading.
§ Motion made, and Question proposed, "That the Bill be now read a second time."—(Mr. Chancellor of the Exchequer.)971
§ MR. HALDANE (Haddingtonshire)
So far as this Bill proposes to extend the scope of those securities in which trustees may invest in Colonial stocks, it is a useful measure, but in so far as it relates to giving control to the Treasury, although it is comparatively small, I dislike it. It has been a tradition on the part of the Treasury—not in the time of the right hon. Gentleman, for this is a tradition which he has inherited from his predecessors—that it is their duty to take care of trustees not only in connection with Colonial stock but with every sort of investments. The policy of the Treasury has been systematically to proscribe the limits within which trustees may invest to an extent, which has not only proved a great embarrassment to trustees, but which has very much restricted the scope of what I think was a much better system. This Bill proposes to extend the scope of colonial investments in which trustees may invest, and so far this Bill is good. But what I very much demur to is the extent to which the Treasury is made the judge in this matter under this Bill, which I consider is the extension of a bad principle. How can the Treasury usefully supervise the conditions under which Colonial stock is to be deemed good or bad? It is all very easy in case of first-class colonies from a trustees' point of view, but when you come to deal with other Colonial stock what does this Bill hold out? On the one hand there is the Treasury an don the other hand the trustees, who, I think, would be able to form a much more reliable judgment than the Treasury. I do not think we shall get a satisfactory condition of trustee investments until the trustees are allowed to judge for themselves. I demur altogether to this guardianship of trustees by the Treasury, even under the right hon. Gentleman, who is one of the most sympathetic Chancellors of the Exchequer towards trustees. Even if this Bill were a larger measure I should take the sense of the House upon it, because I object to the principle of control by the Treasury which underlies it.
§ MR. COHEN (Islington, E.)
said that with all respect to the views expressed by the hon. gentleman who had just sat down he thought this Bill would be welcomed not only by the Colonies but also by the trustees. The imprimatur of the Trea- 972 sury, in his opinion, enhanced and safeguarded the value of Colonial stock.
§ MR. CALDWELL
said he was sorry that a Bill of this importance should be brought forward at such a late period of the session. It had only recently come down from the House of Lords, and the House was asked to pass it without the opinion of the various legal bodies in the country being expressed upon it. The Bill applied to Scotland as well as to England, and so far as legislation of this kind was concerned the legal bodies in Scotland had always taken very great pains to furnish Scotch Members with reports upon Bills like this which were of such a technical character. On the present occasion they had had no opportunity whatever of communicating with those legal bodies or of obtaining their reports. This placed Scotch Members under a considerable disadvantage. Clause 1 made a very considerable change in the law, of which they had had no explanation. It proposed that—For the purpose of enabling the Colonial Stock Acts, 1877 and 1892, to be applied to stock issued before the passing of this Act, it shall not be necessary that any prospectus, notice, stock certificate, coupon, dividend warrant, or other certificate or document issued before the passing of this Act in relation to the stock should state the particulars required to be stated therein by Section 19, of the Colonial Stock Act, 1877.The Act of 1877 laid down most distinctly that the revenues of the colony were liable, and not the Consolidated Fund of Her Majesty's Treasury. He could quite understand how they might bring in the case of Canada, where the stock, although practically the same, were not identically similar. In 1892 the same question occurred about the giving of a certain amount of relief, and Section 19 of the Act of that year provided that the provisions of the Colonial Stock Act, 1877, should not apply to any stock in respect to which the provisions of that section had not been observed before the passing of the Act. That was a very reasonable provision in the Act of 1892. With regard to investments by trustees he thought the Chancellor of the Exchequer was going a little too far by declaring that the trustees should be at liberty to invest in Colonial stock subject to certain conditions laid down by the Treasury. He thought it would be better to have Colonial stock put 973 on a proper legal footing. How were the trustees to know whether the conditions of the Treasury had been complied with or not? It was provided in the Bill that they should be set forth in the London Gazette, but he wondered how many people read the London Gazette to ascertain what had been published there. But, supposing they read the London Gazette, how would they know that the conditions had been complied with? He thought those conditions should be put into the Act of Parliament, and a certificate should be required that those conditions had been fulfilled in the case of certain stock. If the Chancellor of the Exchequer would examine the Colonial Stock Acts of 1877 and 1892 he would find that they provided for a register in this country. At any rate the Bill requires considerable care in its preparation, and he thought the House would agree with him that an important question of this kind ought not to be rushed through the House at this period of the session without very careful consideration. It was important that the legal bodies in England and Scotland should have an opportunity of considering this measure.
§ * SIR M. HICKS BEACH
Scotland will be able to do the same thing under this Bill as she is able to do at present under the authority of the Courts.
§ MR. CALDWELL
said he had not looked up the point, and he did not profess to carry the Act of Parliament in his head. He did not know whether the Chancellor of the Exchequer had had his attention drawn to Section 15 of the Act of 1877. It was now proposed to repeal that section, although the law at the present moment provided that the transaction should be entered upon the register. Was it not a very strange thing, when making any alteration in the law, that they should give power to trustees to invest money in Colonial stock, when, according to the law, no trust could be entered on the register? If trustees were to be allowed to invest in Colonial stock, then by all moans that stock should be inscribed upon the register. Under these circumstances he hoped that the Chancellor of the Exchequer would give a little more time for the consideration of this Bill. This was not a party measure at all, and there was nothing contentious about it, but he thought the conditions im- 974 posed by the Treasury ought to have the judgment of the House pronounced upon them. He did not think that a matter of this kind ought to be left entirely to regulations to be drawn up by the Treasury. He did not agree with his hon. and learned friend the Member for Haddington that this was a matter for the judges. He believed it was a matter for the Treasury and for the House, and he thought they ought to know what conditions the Treasury were going to impose.
§ MR. LOWLES (Shoreditch, Haggerston)
thought the measure would be very warmly welcomed by all the colonies.
§ MR. SYDNEY BUXTON (Tower Hamlets, Poplar)
I am entirely in accord with the principle of this Bill, but I am bound to say that I see some force in the objection raised by my hon. and learned friend. I have the good fortune, or the misfortune, of being-a trustee of several marriage settlements, and I am bound to say that I think this Bill throws very great difficulties in the way of those who are trustees. Looking at this Bill as a trustee I should not be inclined to invest trust money for which I am responsible in Colonial stock, because the Bill is so complicated. The measure is another instance of legislation by reference of which we have far too much in this House. The measure gives power to the Treasury to make certain rules to be published in the London Gazette, but it is so complicated that I am afraid it will not facilitate very much the investment of trust money in Colonial stock. I think it would be better to introduce a Bill which would enable the trustee to know exactly how he stood in regard to this matter, and which would throw a little more light upon the subject.
§ * SIR M. HICKS-BEACH
said if the hon. Gentleman did not want to invest money in colonial stock he need not do so.
§ SIR JAMES JOICEY (Durham, Chester-le-Street)
said he was very glad to. hoar the statement of the Chancellor of the. Exchequer, for he confessed he looked with some doubt upon the Treasury in taking up this question. No one recognised more than he did the advantage to 975 the colonists in bringing their funds under the ordinary trusts settlements, but after all he thought, when the Treasury made a move of this kind, it should take such a form as would protect trustees, so that they would have no doubt whether the funds were as safe as our own. He agreed with his hon. friend that the difficulty had been in investing trust funds. In these days, when judges construed the responsibilities of trustees so very closely, the Treasury ought to be most careful in extending the area for trust investments.
§ M R. BANBURY (Camberwell, Peckham)
said he was sorry the right hon. Gentleman had taken this opportunity of enabling colonial stock to become trust stock. On several occasions it had been found that the finance of colonies had not been well managed, and he did not see that at the present moment there was any particular necessity to make a change in this direction. The facilities it would give to the colonies to borrow on cheaper terms would be increased, and he did not think the colonists had yet shown themselves to be quite alive to the position they should feel if their stocks were to be regarded as trustee stocks. They were rather too much inclined to borrow money for all kinds of purposes, some of them, he thought, with the idea of catching votes rather than making good use of the money.