HC Deb 02 May 1900 vol 82 cc501-25


Order for Second Reading read.

* MR. EMMOTT (Oldham)

I rise to move the Second Reading of this Bill. It is not a new Bill, but one which has been before the House on many occasions, originally as part of a much larger measure, the Partnerships Bill, but since 1882 alone and very much in the form in which it is now introduced to the House. But although it has been before the House on so many occasions, and although it is backed by the practically universal opinion of the commercial world, it has never yet had the good fortune to be debated on its second reading. Obviously, I as a new Member of this House, have no right to claim any credit in connection with this Bill, but there are two Members in the House who have done so much for the measure in the past that I should like to allude to them. One is the hon. Member for Gloucester, who sat on the Committee which, in 1872, considered the principle underlying this Bill, and I am sure it will be a pleasure to him who has done so much useful work in an unostentatious way, and who has made so many friends, and, I think, no enemies, to see this Bill pass. The other hon. Gentleman to whom I desire to allude is the Member for South Islington, whoal so has done much for this Bill in removing misconceptions and in helping it forward both during and since the time he was president of the Associated Chambers of Commerce. If I were addressing an assembly of purely commercial men I confess I should speak very shortly in regard to this question, but the House necessarily, and most properly, represents other important interests than those of commerce, and it will be only respectful to the House, and I shall be only doing my duty to the Bill, if I deal briefly with the history of the question, make out the case for the Bill, show what the measure will do, and reply to criticisms which, in the past at any rate, have from time to time been passed on the proposal. If in doing so I have to detain the House at some length, I hope the House will understand that it is because I desire to do whatever my poor ability will allow me to do in support of the Bill. I have said that this is no new subject to the House of Commons or to the commercial world. In the Committee to which I referred—the Committee of Trade Partnerships, which sat in 1872— consideration was given to the question with which this Bill deals, and also to other questions. At that time it was impossible for a firm to be sued in the firm's name for a civil debt. That gross anomaly and injustice was removed by the Judicature Act of 1873. But most of the evidence taken and most of the Report made by that Committee dealt with this question of the registration of firms. The evidence was preponderatingly in favour of the principles of the Bill the Second Reading of which I have the honour to move this afternoon. Evidence was given in favour of those principles by the representatives of the London and Westminster Bank, Baring Brothers, Smith, Payne and Smiths, and some of the country banks; by Stubbs' Agency (the great private inquiry agency); by Mr. Ryland, the well-known solicitor of Birmingham; and by two Members of this House whose authority in commercial matters at that time was very great—the late Mr. Samuel Morley and Mr. Duncan McLaren. There was, of course, some evidence against the principles of the Bill given before that Committee, principally by the late Lord Fairer (then Mr. Thomas Farrer, permanent secretary to the Board of Trade), Mr. Edmund Potter {the Member for Manchester), and the late Mr. Robert N. Philips. With the nature of that evidence and the objections which were made against the principles of this measure I will deal later, but I want to draw particular attention to the fact that Mr. Potter and Mr. Philips gave evidence at that time against those principles. That Committee sat in 1872, and both those gentlemen came from Manchester. At that time the country was enjoying a period of extraordinary prosperity. We are rejoicing now in a period of great commercial prosperity, but our present prosperity is nothing like so great as was that of 1872. In 1872 much of the great prosperity of the country was put down to the successful carrying out of the principles of Free Trade, and probably what is known as the Manchester school of thought was inclined to attach too much importance to what laissez faire could do in regard to the trade of the country. The principles of those who follow the doctrine of laissez faire are, of course, opposed to anything in the way of restrictions and registrations, whether in regard to trade or the conduct of our factories or any other question. I think this circumstance accounts to a large extent for the fact that Manchester at that time gave evidence against the principles of the Bill. Now the case is different. The Manchester Chamber of Commerce is in favour of the Bill. There are three Members of this House who are directors of the Manchester Chamber of Commerce, each of whom, I believe, is in favour of the measure. In connection with the Committee of which I speak, a Report against the principles of this Bill was proposed by Mr. Potter but rejected by eight to three, and the Report as eventually carried was very definite in regard to the question we are considering. For the purpose of proving that I must read a few extracts therefrom. Paragraph 4 of that Report said— It further appears that the public registration of names and addresses of the persons composing trading firms would … without imposing any unreasonable obligation … be of much advantage to honest traders and to the public generally. It goes on in Paragraph 5 to say— … your Committee are of opinion that no sufficient reason exists for registering the names of persons who carry on business in their own full names. Then follows an opinion against the necessity of registering temporary partnerships and small traders, because the former are not strictly firms, and the latter mostly trade in their own names. Paragraph 6 says— Your Committee have arrived at the conclusion that it is expedient that the real constitution of all firms should be known, and that it is practicable to effect that object by a system of compulsory registration. Paragraph 7 deals with the particulars which ought to be registered—particulars almost exactly the same as we ask for in this Bill. Paragraphs 8 to 12 deal with the machinery, and Paragraph 14 with the question of penalties. Finally, in Paragraph 15, dealing further with the question of penalties, this Report says— Nevertheless, some penalty must be affixed for neglect to register." "…. they recommend that non-registration by any firm may be pleaded in bar of any action brought by a member of a non-registered firm in respect of any debt or contract by such a firm. And, further, that the fees for registration should be on a rapidly increasing scale in reference to the time elapsed from the time when the registration should have been made. I therefore claim the support of that Committee for the principles of this Bill, and I further claim the support of the commercial world. Ever since 1862 the Associated Chambers of Commerce have had this question before them almost year by year, and they have always passed resolutions in favour of such a proposal by a very large majority, while of late years the resolution has been introduced with very little debate at all and passed absolutely unanimously. I proceed now to deal with the case for the Bill. This Bill seeks to make compulsory the registration of the names and addresses of the person or persons who are in business for the purpose of profit, and who do not trade under their full or usual name or names. For example, if John Smith is trading as John Smith he need not register under this Bill; but if he is trading as John Smith and Company he must register. If John Smith and James Jones are partners trading together they may trade as John Smith and James Jones without registering; but if they trade as John Smith and Company, or as Jones and Company, or as Brown and Company, they must register. That is what the Bill seeks to do. The reasons for the Bill are, I think, obvious. In the first place, it will tend to promote commercial honesty. The Bill would make it much more difficult for a man to trade under several names for purposes of fraud. I am perfectly aware that one cannot make people honest by Acts of Parliament. But what Acts of Parliament can do is to remove temptations to roguery. Many men desire to be honest, but are weak; but if, when tempted to roguery, they find detection easy and permanent success improbable, they refrain. Secondly, I claim as the great advantage of this Bill that it will be an enormous aid to people in business who give credit. In regard to this matter the theorist, who always knows so much better than you do how to conduct your business, says, "Oh, you would never give credit without inquiry." But the fact remains that an enormous number of people in business do, and people who talk like that know, as a rule, very little of business. An enormous proportion of the business of this country is done by people without a knowledge of who are the partners of the firms with which they are trading. I have seen figures which show that of the private firms dealt with by a very large house, in only one-sixth are the names of the partners known. Englishmen in some ways are peculiar. They easily resent too searching inquiries about themselves, and if too searching inquiries are made of them they are inclined to say, "Oh, very well, if you do not trust me your competitor will," and they go elsewhere. I venture to say that a great deal of the business of this country is done without that strict conformity to law or to prudence which my ideal theorist is apt to advocate. I beg the House in this matter to be guided by the practically unanimous opinion of commercial men. In regard to this question I think I can confute my theorist out of the mouths of the very people whose aid he invokes. The theorist's argument is, "Oh, you would never give credit without inquiry!" Well, you must make inquiry either from the person about whom you want information, and if he happens to be a rogue that is very little use; or from the references whom he gives you, and who also, if he is an unsatisfactory person, are not likely to give you very much useful information, or from a bank. The process of inquiring from a bank is not very satisfactory. If the firm about whom you are inquiring happens to owe the bank money, it is obviously to the interest of the bank to make their credit appear as good as possible, so that the firm which is inquiring may give credit as far as possible. I know a case in which a great engineering firm in the North of England was making inquiries about a firm to which it was supplying machinery. They received a very favourable answer. But the firm in question failed almost immediately afterwards, and the engineering firm took the trouble to ascertain how this favourable information came to be given by the bank. The bank of the firm which failed said that they found that the great engineering firm of which I speak were supplying machinery to this firm, and they concluded that this great engineering firm would never do such a thing unless the firm were perfectly sound. That is a case showing the carelessness with which these inquiries are sometimes conducted by banks. The best method of obtaining information is from the private inquiry agencies to which I have referred, and these agencies are the very people who most want this Bill to pass. They are the people on whom the theorists rely, and to whom commercial people are referred for their information. Their reply is, as I will show directly, "Your Bill is a step, but only a step, in the right direction. To make our inquiries effective we should want an even more stringent measure." Mr. Fithian, the secretary of the Associated Chambers of Commerce, who has taken a great interest in this question, wrote recently to Stubbs' Mercantile Offices, which I believe are the largest inquiry offices in England, or even in the world. He received a letter from them, which is so important and so definite that I would ask the leave of the House to read one or two extracts therefrom. They say— We should, of course, heartily welcome such a Bill as a step in the right' direction, but … it appears to us that the penalty is quite inadequate, and the Bill as it stands at present drafted will not be really effective. The honest trader will register his firm readily and without making necessary the imposition of any penalty, but the fraudulent trader and the long firm will care nothing for the penalty of £1 per day. … Thus, Brown, the well-known offender, will call himself William Jones, and will not register. A trader from whom he seeks credit may search, and will find nothing registered, and may therefore reasonably assume that he is actually trading with William Jones and not with a man named Brown, who may have been convicted of offences of the gravest commercial kind. Then they go on— In the daily course of our business we experience the danger which the present unsatisfactory condition of the law presents to the ordinary trader who in the ordinary course of his business has to give credit. One of the greatest difficulties that we as a trade protection agency have to contend with is to establish the identity of doubtful persons and firms engaged in seeking credit. It frequently happens that no satisfactory clue to the antecedents of a trading firm can be obtained in consequence of a change of trading title and the place of business. The difficulty is a grave one for us, and is full of pitfalls. A mistake in identity may involve us in a threat of an action for libel or slander by persons quite unworthy of credit, yet such actions must be defended, and there is no possibility of recovering costs, even though we may win the case. To all traders, as to an agency conducting a trade protection business, it is of the first importance that they should know the names of the persons actually seeking credit, or engaged in business involving credit. They then go on to point out that in too many cases one member of a firm opens an account with a bank in his own name, and not in the name of the firm at all; cheques are drawn by this individual, although orders are given by the firm, and in many cases the name or names of the person or persons actually trading in that firm are never known to the public at all. I think this shows very conclusively that at present such inquiry agencies as I have mentioned have no moans of getting to know what they desire to know, and that the Bill is very badly wanted. If the Bill is passed most people—I trust all—who ought to register will register, and we should in time see if any extension was required, and, if so, what. Finally, I would lay stress on the fact that the existence of this register would save valuable time in making the inquiries in question, and that time in regard to such a matter as that of credit is absolutely of the essence of the question. I want to bring home the question of the necessity of the Bill still further to the House, and events which have occurred recently enable me to do so. In the first place, I may allude to the Money-lending Inquiry, and in alluding to that I should like to refer to the sad death of my predecessor in the representation of Oldham, the late Mr. Ascroft, who took such a prominent part in regard to that inquiry. The circumstances of that inquiry will be fresh in the memory of the House, and particularly will the House remember the case of Isaac Gordon. I am sorry to say anything disrespectful of the dead, but I hardly know how to bring this case home without referring to the case of Isaac Gordon. Three-fourths of the men and women whom Isaac Gordon helped to ruin wore deceived by the many aliases that he adopted. The Government have recognised the evil in this case, and have brought in a most stringent measure. I remember in regard to this question of money-lending a peculiarly flagrant case in reference to Members of the House itself. A firm calling itself Mundella, and Co. wrote offering to lend money to Members of the House of Commons. In that firm there was no Mundella at all, and they actually made use of the name of the late Mr. Mundella in order to make Members of the House suppose that he had something to do with it. That is a particularly gross case of the misuse of a name, and a ease in which unquestionably the firm ought to have been registered. I next refer to the question of the fraudulent contractors, in which the House and the country have taken so much interest of late. A certain gentleman was struck off the list of contractors to the War Office on account of frauds in connection with coal, and then under another name supplied bad hay. The Financial Secretary to the War Office, with whose troubles in this matter I am sure the House sympathise very deeply, said in the debate on the question** See The Parliamentary Debates [Fourth Series], Vol. lxxx., page 1332. Although we were looking out for him in regard to coal, we were not looking out for him in regard to forage. It is very difficult in dealing with an enormous number of contractors to ascertain whether or not a contractor is trading under an alias. Exactly; that is what the commercial world has been saying for forty years or more, but have not yet succeeded in convincing Parliament of it. In reference to this question of fraudulent contractors, I think for a man who deliberately defrauds his country in the hour of her need our language contains no words strong enough to describe him and our code of laws no punishment severe enough to inflict upon him. I am sorry that such a thing has been done, and above all I am sorry that any Englishman has been base enough to do it. But wherever you have war I an afraid you will have fraudulent contractors, and if our laws favour the taking of aliases they certainly will take aliases. The Government in regard to this matter—I do not allude to this Government only, but previous Governments also—if they have not refused to deal with have at any rate passed this question by. I think, perhaps, I ought to exclude the present Colonial Secretary, who was President of the Board of Trade in 1882, and approved the principle of this measure, and the present Chancellor of the Exchequer, who also approved the principle in 1889. It is a melancholy satisfaction to anyone to say, "I told you so," and it is irritating. I do not want to irritate in this case, and therefore I will not say it; but I do hope that we may now claim the sympathy and support of the Board of Trade in regard to this matter. I have another instance of how the Government have been handicapped by the want of a register such as I advocate. In the last Report of the Chief Inspector of Factories there is a case in which one of the sub-inspectors reports as follows— I often have occasion to take advantage of Section 91, Sub-section 5 of the Act of 1878, when laying informations stating therein the title of the firm by which the occupiers are usually known; but some magistrates' clerks decline to accept informations made out in such manner, on the ground that in the event of a conviction and of default the name of the person or persons in default, and thus liable to imprisonment, would be required, and should, consequently, be disclosed at the time the information was laid. In one case during last year I was totally unable to procure the names as required by the clerk, and, as a consequence, proceedings in respect of neglect to limewash, which had been approved by Her Majesty's superintendent inspector, had to be abandoned. I ask again, is it not scandalous that the law should be set at defiance, and then when the inspector tries to bring the firm to book he cannot do so on account of the partners not being known? We have the remedy in our hands. If the House would pass this Bill the partners in such a firm would have to register, and the law could no longer be set at defiance. I think I have made out a case for the Bill, and now I should like to refer to the condition of things in foreign countries. In the United States of America there is no such binding law as we are advocating here, but the custom is universal of posting the names of the partners of firms on the door of the office and on the invoice, memorandum, and letter forms, and the great commercial agencies in the United States have means of obtaining the information which they have not in this country. Over there it is sufficient to say that such and such a firm refused information, and it is like putting a bad mark against the firm; therefore, for all practical purposes, the information we want in this country is obtainable in the United States. In Germany there is a very stringent law. Every firm is compelled to register the proprietor or partners; any change has also to be registered, and those are published in certain papers. The law is strictly enforced, and the tendency is to make the law even more stringent. I mention these two nations first, because they are the two nations which we most have to dread in the commercial competition of the future, and, at any rate, the statement shows that the greater stringency of the practice in the one case, and of the law in the other, has not interfered with the serious competition which they have already brought against us in many of the great industries in which we are interested. In France the law is not so satisfactory. Registration has to take place, but the registers are in many cases not open, and there is no continuing register; there is no registration of the changes in regard to the partners of a firm. In Austria the law is quite as stringent as in Germany, and very much on the same lines. In Holland also that is the case. In some of our colonies such a law as we are proposing is in force, and the last of our colonies to adopt it is West Australia, which adopted it only last year. I do not press the example of foreign nations further than it can reasonably be pressed; I do not ask you to do what they do simply because they do it; but I do claim that in a matter of this sort the change we are proposing has the sanction of a large part of the civilised and progressive nations of the world. I will now examine very briefly the provisions of the Bill. Clause 3 is the interpretation clause, and in regard to that the form in which this Bill has hitherto appeared has been altered by the substitution of "trade name" for "firm" in some instances, because the word "firm" has a technical meaning under the Partnership Act. Temporary ventures, which caused us much trouble in the past as regards opposition to this Bill, are excluded by the words "for the purpose of carrying on any business in common with a view to profit." That, I think, would exclude a purely temporary venture between two or more people. Clause 4 is the operative clause, having for its purpose the effect to which I have already alluded. Clause 5 describes the nature of the registration that is to be enforced, and in regard to Sub-section (b) the "general nature" of the business has been put in, in order that the old reading should not be found inconvenient. Subsection (c) asks for the place or places of business, it is very desirable that all the places of business, by which I take it are included those places that have an office which transacts the business of the firm, should be in the district register. Clause 7 provides for registration before commencing business, for this reason: that in many cases people who are intending to begin business require large credit, and I think it is important that in such cases they should be registered. Clause 9 deals with the question of the registration of changes, and Clause 11 is the penalty clause, a clause which may perhaps—at any rate, it has in the past— give rise to considerable controversy. In 1882 the present Colonial Secretary, then President of the Board of Trade, approved the subject-matter of the Bill, subject to that penalty clause being dropped. It was thought to be sufficient—and I must acknowledge that the Committee of 1872 held that view—that non-registration may be pleaded in bar of any action. My own opinion is that it is not sufficient. If we want registration let us impose a penalty, however small that penalty may be. If we want annoyance, irregularity, and imperfect registration, let us leave it till firms want to bring an action. I am sure that that penalty clause ought to be adhered to; but in regard to that, as in regard to other matters, the promoters of this Bill do not desire to be stupid in any way, and would willingly accept any reasonable Amendment the House thought proper to make. Clause 12 deals with non-registration being a bar to action. Clause 13 deals with false returns, and returns knowingly made as false, making; it a misdemeanour with a serious penalty. Clauses 14 to 18 deal with the registers, and Clause 19 gives the Board of Trade power to make and alter fees, provided the fees are not in excess of 5s. for each registration. It only remains for me to deal with certain objections which have been raised to this proposal in the past. I have received many communications in, support of the measure, and only one in opposition, and that was from the Faculty of Procurators in Glasgow. I believe the procurators in Glasgow are equivalent to the solicitors in this country. It is a curious thing, but I had to ask four Scotch Members before I could find one who could tell me what a procurator was. I therefore think there is some reasonable ground for asking for a dictionary of Scotch terms. The procurators begin by saying that this measure is uncalled for. That is an equivalent of the old objection that we have heard in regard to this Bill—namely, the argument whether the Bill is wanted, and, if so, on what grounds. I have endeavoured to show to the House the grounds on which the Bill is needed. As, to whether it is wanted I need only appeal to the unanimous resolutions of the chambers of commerce which have been passed for so many years in regard to. this question. It has been said in connection with another matter that traders, and capitalists are not the people who help revolutions easily. That is absolutely true. What other means have we of enforcing our view except that of passing resolutions and pressing upon the Government reforms which we desire to see carried out? It is said also that this measure would be very troublesome, that it would affect everybody—professional and business men, doctors, solicitors, engineers, architects, bankers, merchants, and tradesmen. It would affect them only if they were trading under other names than their own. Moreover, solicitors, doctors, bankers, and many engineers and architects are registered already. We have a register of shareholders in joint stock companies, and it is much less important to know who are the shareholders in joint companies than to know who are the actual partners in firms who are liable to the very last penny they possess for any debt they may incur. It is said also that this Bill would be very troublesome in regard to the swarms of small tradesmen who trade under old names. In most cases they could change their old names and trade in their actual names without doing themselves one farthing of damage. But if the old name is important, then I say, for the sake of the commercial world as a whole, they ought to register. The question of the temporary joint venture I do not know that I need dwell upon. The favourite example that used to be taken was that of two costermongers who bought a donkey between them for a temporary purpose. That donkey stood in the way of this Bill for a very long time, but I think it has now practically been removed. I need not go deeply into another question which is, perhaps, a serious one—namely, that of the law of partnership. I am told that the question of who is a partner in many cases is a very difficult legal point. In regard to this matter I may point out that the Bill docs not in any way affect the present law of partnership. But if the Bill has the effect, and I think it would have, of making people think a little more of whether or not they were partners, if it has the effect of clarifying the ideas of those people who are so doubtful as to what their position is, it would be an enormous benefit to them, and also a much needed reform for the rest of the commercial world. In conclusion, I have only to apologise for the length at which I have detained the House, and for the dryness of my speech, and I will conclude by begging the House to agree to the Second Reading of the Bill. I particularly ask the President of the Board of Trade, as well on account of recent revelations as on the broad ground of commercial morality and fairness of dealing between man and man—objects which are, I am sure, as dear to him as to any of us who promote this Bill—to assent on behalf of the Government to the Second Reading, and to allow the Committee stage to be referred to the Standing Committee on Trade. I have much pleasure in moving that the Bill be now read a second time.

Motion made, and Question proposed, "That this Bill be now read a second time."—(Mr. Emmott.)


As having previously introduced this Bill when the ballot was not so fortunate for me as it has been for my hon. friend, I desire to say a few words in support of the measure, and to acknowledge the ability with which it has been introduced to the House. I can confirm what my hon. friend has said, that the feeling of the commercial community, as expressed through chambers of commerce, has for a very long time been in favour of some measure, and unanimously in favour of this one. My hon. friend has an advantage in the particular moment at which the Bill has been introduced. The scandals in connection with War Office contracts have attracted a. large amount of attention to the undesirability of trading aliases, and though in those cases they were companies, the objections apply equally in the cases of firms which might be even more difficult to trace in consequence of the absence of registration. I thoroughly agree that much more legal notice of these transactions, so prejudicial to the interests of the country, ought to be taken, and perhaps it is not too much to say that such offences ought really to be classed as some form of treason. The next way in which the time of the introduction of the Bill is an advantage is in relation to money-lending. I received one of those circulars to which reference has been made, in which one was given to understand that a former President of the Board of Trade offered monetary assistance on almost any terms. That circular was very largely distributed, and I do not doubt was the means of doing much injury to those who entertained the proposal. I would like the House to consider that the presumption—and I think the proper presumption—is that a man is trading in his own name, or that a firm of partners are trading in their own names. That presumably is, and ought to be, the case. But it is perfectly true that in commerce it is absolutely necessary that there should be a means of trading in firm names, and that what is often the most valuable asset of a business should be capable of being transferred as one of the chief elements of the goodwill. 'Of that there is no question. I think the principle is the same with regard to the assumption of a name. I believe that legally persons may call themselves anything they think proper, but if they use such an assumed name for the purpose of obtaining credit, or even for the purpose of deceit or for the purpose of misleading people, then I think the privilege—for it is a privilege—should cease, or, at any rate, should be made conditional upon the opportunity existing for testing the accuracy of their assumptions and the true meaning or reason for which such names have been assumed. We know that the privilege is largely abused by long firms, undischarged bankrupts, and others, in a form which is more honest, but perhaps even more disadvantageous. I allude to the case where a firm has existed for a very long period, and then, silently and secretly, the capital is withdrawn by one of the partners, but the firm proceeds in business just as before. But its resources are very largely diminished, and certainly the opportunity ought to be at the disposal of old customers, at any rate, if not of new ones, of ascertaining what is the position of the now firm so far as its composition in respect of partners is concerned. Such cases are very dangerous and disadvantageous, as they are the means constantly of leading to credit being given when the means of sustaining that credit and meeting obligations have been entirely removed by the withdrawal of a partner or partners with his or their capital. I also think the trading community ought to have placed at their disposal facilities for knowing exactly with whom they are dealing, what risk they are incurring, and what are the possibilities or probabilities of obtaining payment. In these days of telegraphs and telephones dealings are almost momentary, and unless immediate facilities exist such as can be used by telegraph or telephone in case of necessity, there is no time to make the inquiries which are necessary, and a stop is put to a very large amount of business. Reference has been made to the experience of foreign countries. I think I am not misstating the general fact when I say that all commercial countries have some provision or other for dealing with this question. Illustra- tions have been given, but my hon. friend was mistaken in supposing that we have not one form of experience here which is valuable. We have the case of bankers. I have a letter from the Institute of Bankers, in which, instead of being opposed to such a measure as this, as I thought my hon. friend indicated, they, on the contrary, approve the proposal, and that proposal is in accordance with their own practice.


I did not mean to convey that impression.


I think the possibility of even a misapprehension on that point should be removed. We have had other cases given, and it is not needful for me to pursue that point further. My hon. friend said that he had had only one letter in opposition to this Bill. There is one class, if I may judge from letters directed to me when I had charge of the Bill, which has been opposed to it, the commercial interests of which I do not think ought to be very strongly regarded. This class consists of persons of high social position who carry on business—honourable business—as greengrocers and the like, but who do not care about the fact being generally known. If there are such persons, and there are many, I would remind them that our nobility is very largely recruited from trade, and so far from being ashamed of carrying on an honourable calling, they ought rather, like other people engaged in commerce, to be very proud of it. At any rate, I do not think we need deviate from what is a good proposal in order to consider such interests. They have no reason to be ashamed of trade, and I do not think that we need consider that interest. Publicity is by no means a modern commercial principle, and it has been embodied in the new Companies Act for reasons which apply equally to the present proposal. I hope the Government will, after the many appeals that have been made to them, sanction and support the principle of this Bill. Certainly there will be some need of carefully considering the details in Committee. I do not agree with the hon. Member who moved the Second Reading, that small traders—a class with very limited resources—should be compelled to dispense with the use of the names under which they have been carrying on business. On the contrary, it would, I think, involve a serious sacrifice and loss on their part. Again, with regard to compelling a firm to trade under the full Christian names and surnames of the partners, I can quite understand that that might be a very cumbersome proceeding in trade transactions, and that, too, is a matter which will have to be considered in Committee. Still, with the principle of the Bill I believe we are all in hearty sympathy, while I do not think there is any real or practical objection to the details which could not be overcome in Committee, and I therefore hope the measure will soon become the law of the land.

* MR. MONK (Gloucester)

I believe that few, if any, Bills have appeared on the Order Book more often than this. The hon. Member who moved the Second Reading stated that it had been brought forward a dozen times; as a matter of fact it has been before the House on fifteen separate occasions, although on only one did it reach a Second Beading, and then the debate turned on the partnership clauses which were embodied in it, and not on the question of the registration of firms. The history given by my hon. friend was a not uninteresting one. He carried it back as far as the year 1872. Really, however, the history of this Bill dates only from 1879. In that year the Partnerships Bill was brought in by the late Mr. Sampson Lloyd. That Bill was divided into five parts—three of which had reference to partnerships, the fourth to limited partnership, and the fifth to the registration of firms. The Bill was drafted by Sir Frederick Pollock, and had on the back of it the names of Lord (then Mr.) Herschell, as well as the late Mr. Gregory, who in his time was one of the highest known authorities on commercial matters. There was no discussion that session, as the Bill was introduced too late, and at the General Election in 1880 Mr. Sampson Lloyd lost his seat. It devolved on me in 1882, as president of the Association of Chambers of Commerce, to re-introduce the Partnerships Bill, and having had the good fortune to obtain its Second Reading,† I assented to the Bill being sent to a Select Committee upstairs, where a † For Second Reading Debate (22ml Feb. and 24th March, 18S2) see The Parliamentary Debates [Third Series], Vol. cclxvi., page 1355; and Vol. colxvii., page 1958. certain amount of evidence was taken mainly on the partnership question. Not much was said with regard to the registration of firms, but it was decided by the majority to eliminate Parts 4 and 5 of the Bill dealing with limited partnerships and the registration of firms. In the following year these two subjects were brought in as separate Bills, and although on twelve occasions since then we have had a Registration of Firms Bill there has been no opportunity of debating it or obtaining a Second Reading for it. The various Bills were in charge of Sir Stafford Northcote, Sir Bernhard Samuelson, the hon. Member for South Islington, and others. So much for the history of the Bill up to the present time. I think the House will agree it is now high time to consider the Bill on its merits. I have never heard any real objection to the full names and addresses of the persons who carry on business under a trade name being registered. The Bill only applies to persons who do not trade under their own names, and I do think it will afford some security against fraud. What better security can you have than the imposition of a money penalty? The proposed penalty of £1 a day is not excessive, and what other security against long firm frauds could be found? It has been said there is no demand for this Bill. But I hold in my hand a letter from a large firm in the north of England stating that they do business with 4,000 firms, and they do not know who the persons are who constitute those firms in more than 10 per cent. of the whole number. Is that a reasonable state of things? They cite a case in which they had large transactions with a merchant for many years. He retired, and was succeeded by his son; no notification of the change was sent to them, and in two years the son became bankrupt, with the result that they incurred a heavy loss. Such a thing could not occur if this Bill were passed. Similar provisions to those of this Bill are to be found in the Money-lending Bill, which has twice received the unanimous support of the House of Lords, and I hope will soon become law. "Why should persons who trade in another name not be registered as a protection against fraud? I see no means of preventing fraud except through the provisions of this Bill. I hope the Bill will not be shelved by being sent to a Select Committee. Let it be sent to the Grand Committee on Law or Trade, as the delay which would ensue from its being sent to a Select Committee might prevent this very necessary Bill being passed into law during the present session.

* MR. VICARY GIBBS (Hertfordshire, St. Albans)

It may be a refreshing change for the hon. Member who introduced this Bill if I approach the consideration of it in a somewhat more critical spirit than has as yet been displayed. I am far from desiring to oppose the Second Reading, but I shall feel bound to do so if the suggestion of my hon. friend behind me, the Member for Gloucester, that the Bill shall not be sent to a Select Committee, is insisted upon. No doubt the principle which actuates the promoters of the Bill is an excellent one. Someone has said that part of the work of the wise is undoing the work of the good, and, without going quite so far as that, I must say I think it may be necessary to alter and strengthen this measure a good deal before it can be made a really good one. Before we can do that we must take evidence from the very important section of the community which will be affected by it, and such evidence could not be taken unless the Bill is referred to a Select Committee. Very often proposals of this nature have the effect of letting rogues slip through the meshes, while at the same time they inconvenience and put to expense the honest trader. I have been in business a long while as a member of a private firm, and it may not be out of place if I describe how such a Bill as this would affect us. The names of our partners appear in certain well-known books in London, and whenever the death of a partner occurs a circular is issued to everyone who deals with the firm. We therefore should not be affected except by the small fee which will have to be paid, but undoubtedly the enforcement of a Bill such as this would involve a very considerable outlay, and we ought to carefully consider what the machinery shall be, and to make sure that it will not cripple honest traders. We must if possible stop rogues from trading. What is the system that obtains in other countries? I believe that in the Latin countries whore the Code Napoleon is in force the principle is carried a great deal further than in this Bill, inasmuch as if a man—say, William Smith—goes into business with his sons and trades under the title of "William Smith and Sons," if he dies his firm cannot go on trading under that title unless there is actually a William Smith interested in the concern. I believe that many frauds in business are committed by firms being allowed to trade under impersonal and showy names, which sound well and carry with them a sense of confidence to which they are by no means entitled. I fear that this Bill would not put a stop to practices of that kind. With regard to the fine which it is proposed to impose, I think it is perfectly right that there should be a penalty, and I am not at all sure that it should not be heavier than the Bill suggests, and for this simple reason: the Bill will not stop firms from avoiding registration, if they wish to do so, except so far as it may disentitle them to the power of claiming as plaintiffs in an action at law. Firms which are likely to be in the position of defendants in such actions would probably be glad to avoid registration, and such firms could only be got at by means of the penalty clause, as, naturally, they are willing to remain unregistered and so be "ungetatable" at law. I quite agree with the hon. Member for South Islington in what he said on the question of goodwill, and I hold that many small shop-keepers would be seriously injured if they had to give up the names under which they had traded for many years. Then there is the question of the noble greengrocer which has already been referred to—of the nobleman who finances small shops on the sly. I do not know that it is very often done, but it is a question whether or not it is. desirable to allow a man to finance a business, though his name does not appear over the shop, and whether it would be any public advantage to discourage the putting of capital into a business on conditions that may constitute a partnership though the name does not appear. There are good reasons why trading should not be carried on under the name of a person who is not a partner; but if a man's name is concealed from the public it cannot be said that it is used for the purpose of obtaining credit, or for any fraudulent object. We know it is possible for a man to put capital into a business on the condition that he shall receive a certain share of the profit without his being constituted a partner in law. It is a simple juggle which any lawyer can carry out. I am afraid that the Bill will not get at the actual rogue. Take the case of the fraudulent contractor. There is nothing in this measure which would prevent him changing his name and trading under another style so long as he did not make the change for the direct purpose of fraud. If you are going to make this Bill a success you must consider whether you should not carry it further and insist upon the names of all partners in the business being use din full in all transactions. I think something should be done, too, to prevent people changing their names when it can be shown that they have brought themselves within the law and make the change solely with a view of escaping the consequences of their misconduct. There are various other points of doubt and difficulty in this Bill. Still, there is enough in it to justify its being carefully considered by a Select Committee, which should be in a position to take evidence from the very large interests affected. If this course is agreed to I will support the Second Reading, and I hope I shall get an assurance from the President of the Board of Trade that the Bill will be so referred.


I have no hesitation in saying that I entirely approve of the principle of this Bill. It deals with a matter which has engaged the attention of public Departments as well as of the House of Commons for a great many years, and I think I am right in saying that the opinion of the mercantile community is practically unanimous in favour of the principle. At the Board of Trade we have received a good many representations on this subject in a like direction. There can be no doubt that in the existing state of the law scandals may and do arise through trade being carried on under names that inspire creditors with a confidence the firms do not deserve. I am therefore prepared, on behalf of the Board of Trade, to support this Bill. But with regard to the details, I think it is necessary that there should be a closer examination of them than is possible in Committee of the whole House. The lion. Member who moved the Second Reading named several features of the Bill against which criticism has been legitimately directed, and I cer- tainly should like to see some further examination into these matter's. With regard to the question of registration, it is a somewhat serious proposal that the registration should not only take place in the district where a firm carries on its principal business, but that it should also be effected in every town or district where the business is carried on. This would add considerably to the expense, and it might very well be considered whether the object of the hon. Gentleman is not sufficiently achieved by making the registration compulsory in the place where the main business of the firm is carried on. Then, again, there is the provision which makes it necessary that the name of the firm shall be used in every transaction. I am not prepared to say it is not necessary; but, on the face of it, it does seem rather hard that a firm should be able to get out of any bargain it had made because its name is not distinctly shown in that particular transaction. This might afford a loophole for putting an end to bargains which one party or the other might have reason to regret having entered into; and the question certainly is one as to which further examination is necessary. The loss which might be sustained by a small trader through having to change his name is, I think, a very real one, and I do not believe that the difficulties likely to be caused by this provision of the Bill will be so easily overcome as the hon. Member for Oldham seemed to think. Then, again, it is a question how far this Bill affects the law of partnership. Further, the Committee have a right to know what is likely to be the cost of enforcing the Bill, and some estimate should also be forth- coming as to the number of firms likely to be affected by it. Then there is the question of the date of its coming into operation. The Bill, I see, provides that the Act shall come into force on the 31st January next. That also is a matter which requires to be looked into, because it seems to be a rather early date for making what may prove to be a great change. Still, I am in favour of the Bill. I believe the general feeling of the commercial community is that a Bill of this nature should be passed. But I must press the hon. Gentleman in charge of the Bill—having regard to the difficulties I have indicated and to those pointed out by the hon. Member for Hertford, who has a very special knowledge of matters of this kind, and having regard also to the general fact that this Bill does propose to make a very considerable alteration of the law of the land in connection with commercial matters—to agree to its being sent to a Select Committee with a view to evidence being taken. Reference has been made to the fact that there was a Committee in 1882; but, as a matter of fact, it was not a Committee on this subject.


The Committee sat in 1872. The 1882 Committee was on the Partnerships Bill.


I have not referred to the Report of the Committee of 1872, and I cannot, therefore, say how far it examined into this question. In any case 1872 is a very long time back—matters have changed considerably since that time—and assuming there was an examination then on the general question, I still think it desirable that the details of this Bill should be dealt with by a Select Committee. I do not think that the case which the hon. Gentleman so ably advocated will be prejudiced by the adoption of this course. The Committee need not sit long, and the examination might be concluded in plenty of time to enable the Bill to go to a Grand Committee this session.

MR. BRYCE (Aberdeen, S.)

It is a proof of the very strong desire of the commercial community for something of this kind that there has been no opposition to the Bill, but only some criticisms on details. I can confirm what the right hon. Gentleman has said as to the desire of the commercial community that the question should be dealt with. That has been fully brought out, and I therefore need not dwell upon it; still, I confess to having some doubt as to the difficulties which may arise in a measure of this kind, although they have been largely removed by the extremely lucid and practical speech of the hon. Member for Oldham, who made out a strong prima facie case for it. The question is, should the Bill be sent to a Select Committee? Now, it proposes an important change in the law. In America, in several of the States, the practice is what it is desired to do by means of this Bill, although it is not necessarily the law. But here we have no legal provision and no practice. It must be remembered, too, that our law of partnership is extremely technical, and it is hardly possible that this Bill will not affect it. There are a good many legal questions of considerable difficulty which arise on the Bill, and it is far better to deal with them at once than to run the risk of having later on to pass an amending Bill. On the whole I am not inclined to quarrel with the decision of the President of the Board of Trade, and if the Select Committee were to sit at once I think it would be quite possible for it to report in time for the Bill to go before the Standing Committee this session. I hope that, if necessary, the Government will give the Bill a helping hand.

MR. RENSHAW (Renfrewshire, W.)

I find myself in very hearty accord with the general principle of this Bill, and I therefore desire to support the view that it should be sent to a Select Committee, by which alone, in my opinion, the matters of importance which are raised by it can be properly dealt with. I do not think the hon. Member for Oldham need fear that it will delay the Bill. The Grand Committee on Trade, to which he suggested it should be referred, is already pretty well occupied, and I do not think would be able to deal with the Bill before Whitsuntide. But if a Select Committee wore appointed it could complete the taking of evidence before that day, and it would then be quite possible for the Grand Committee to deal with it, and for it to be added to the Statute-book before the end of the session.

* MR. WARR (Liverpool, East Toxteth)

As one of the representatives of a great commercial community, may I say that so far as I have been able to ascertain, the feeling of the Commercial community of Liverpool is strongly in favour of the principle of this Bill. But in dealing with questions of this nature, affecting so complicated a subject as the law of partnership, it is desirable that they should be thoroughly and carefully examined by persons who are experts, and I therefore support the proposal to refer the Bill to a Select Committee. I hope, however, that its further progress may be expedited, and that the appointment of the Committee will not involve any great delay.


The right hon. Gentleman has spoken with so much sympathy as regards the principle of the Bill that I am very glad to accept his offer to refer it to a Select Committee. I hope the Committee will be able to report this session, and that the Government, if there is a reasonable chance, will give the Bill a helping hand.

Question put, and agreed to.

Bill read a second time, and committed to a Select Committee.