HC Deb 22 May 1900 vol 83 cc943-69

Order for Committee read.

* MR. SPEAKER

The Instruction on the Paper in the name of the hon. Member for East Mayo—namely, "That it be an Instruction to the Committee that they have power to insert provisions in the Bill securing the interests of the debenture-holdersand depositors "—is out of order, because in so far as it proposes to insert provisions in the Bill securing the interests of the debenture-holders and depositors that may be affected by the operation of the Bill as it stands, Amendments doing that will be in order; but any Amendment going beyond that, and altering the general position of the debenture-holders and depositors, under the principal Act, would not be in order.

MR. DILLON (Mayo, E.)

Am I to understand I shall be at liberty to move in Committee, by way of new clauses or Amendments, provisions securing the interests of debenture-holders and depositors?

* MR. SPEAKER

Yes, in so far as they are affected by the scheme of the Bill itself.

(In the Committee.)

[Mr. J. W. LOWTHER (Cumberland, Penrith) in the Chair.]

Clause 1:—

MR. DILLON

said the first Amendment on the Paper was merely a drafting Amendment. It seemed to him doubtful what were the societies which came under the provisions of the Act of 1843, but he would not press the Amendment if the Attorney General did not think it necessary.

THE ATTORNEY GENERAL FOR IRELAND (Mr. ATKINSON, Londonderry, N.)

I have no doubt that it is unnecessary.

MR. DILLON

I do not move it, then.

MR. SWIFT MACNEILL (Donegal, S.)

said it appeared to him that the object of this Bill was to legalise an illegality. It would make legal certain transactions and enable certain persons to be sued in petty sessions. He did not object to that. What he did want to secure was that the societies should not be able to pursue the proceedings in the Superior Courts. He himself, as the right hon. Gentleman knew, would like another Court to be substituted under this Act.

Amendment proposed— In page 1, lines 10 and 11, to leave out the words 'in any court.' "—(Mr. Swift MacNeill.)

Question proposed: "That the words proposed to be left out stand part of the clause."

MR. ATKINSON

said the hon. Gentleman was entirely mistaken in saying that this was an Act for legalising illegal action. A promissory note without a stamp on it might be enforced in any court of law under the 24th section of the statute, and the decision of the Superior Court was that in any case where all the requirements regulating the proceedings of these societies were not observed, they were not entitled to enjoy one of the privileges, so that they should not be required to put a stamp on the note. The Bill said that these notes "shall not be invalid or incapable of being enforced in any court, or liable to stamp duty, by reason of any of the matters following." To insert in the Bill that societies could not sue in any other court would bring about most absurd results. He did not think it had been proved that it was desirable to leave out the words the hon. Gentleman objected to.

MR. SWIFT MACNEILL

said he accepted the statement of the right hon. Gentleman, and would withdraw the Amendment.

Amendment, by leave, withdrawn.

MR. DILLON

moved to leave out sub-section (b) of Clause 1, which provides The said note having been given as a renewal, in whole or in part, of, or in substitution for, any promissory note theretofore made by the borrower, or any person on his behalf, to the treasurer or secretary of such society. He said this was a very peculiar clause. It was really the most important clause of the whole Bill. The purpose of the Clause might be described in very few words. The officers of the societies who were under the control, or nominally under the control, of a central board in Dublin, had for a long series of years — indeed, ever since the passing of the Act of 1843, and the Report of the Committee of 1855—persisted, in spite of repeated warnings, in defying all the provisions of the law, and the provisions laid down for their guidance by the Dublin board. This was not a course adopted by the officers in ignorance, and it was not a novel course. The influential Committee which reported in 1855 pointed out the irregularity of the course now complained of, and all the troubles which had induced the Government to produce the present Bill had arisen through the misconduct of these officers. The sub-section which he proposed to omit raised the whole question of re- newals, and what they had to inquire into was the justice of such a provision as this—whether by the system of renewals, admittedly illegal and irregular, injustice was done to borrowers. He held that a great injustice had been done to borrowers, and if this subsection was passed without safeguards it might be the means of increasing that injustice, and also the means of protecting the officers from the consequences of their own misconduct. The question of renewals was a very important one, and it was dealt with very forcibly in the Report of the Committee of 1896. That Committee, which was appointed at the request of the Loans Fund Board itself by the Lord Lieutenant of Ireland, found in the course of its investigations that there had been the most appalling abuse and corruption and injustice to the unfortunate borrowers of these so-called charity loan funds, and the Committee unanimously submitted a set of recommendations which had been absolutely ignored in this measure. The hon. Gentleman directed attention to paragraph 4, on page 20, of the Report of the Committee of 1896, which he said went to show that Section 24 of the Act of 1843—an important clause, which was put in for the protection of borrowers— had been set at defiance for fifty years. The purpose of the Act was that the borrowers should pay as a maximum £8 per annum, but by this renewal system the wretched unfortunate borrowers had been compelled, by a flagrant breach of the law, to pay in many cases £25 16s. 5d. per annum on their loans. What was it the Government proposed to do? These officials carried this system on, knowing they were acting illegally, and defied the Board of Control in Dublin, who had no proper and adequate powers to enforce the law. The Government now came forward to legislate not for the purpose of carrying out the recommendations of this Committee, or of giving the Board of Control the powers for which they had again and again asked in order that they might regularise the proceedings and make the charitable loans a benefit instead of a curse to the people, but they came forward for the purpose of releasing and relieving these officials and societies from the effect of their own irregularities. This Report pointed out that this system also had the effect of bringing the unfortunate borrower with his sureties into the Loan Fund office frequently, when he had to lose a whole day, and generally a considerable sum of money also. Paragraph 240 referred to a system which was found to prevail in some of the Loans Fund offices, where the clerks themselves or their friends stood in the office and handed men who were coming in to get renewal bills a £10 note or whatever was necessary to pay off the loan, whereupon the borrower went to the desk, got a fresh loan, and paid the money back to this person in the office. It was, of course, a cloak for an evasion of the law, in order to carry on the system of renewal. This Report was made in 1896, and one would have thought that by now the Government would have come forward with a comprehensive scheme which would give powers somewhat similar to those contained in this sub-section for the recovery of what was equitably due on these bills or promissory notes, and at the same time introduce provisions protecting the public from depredations of this kind in future, and as far as possible protect the property of the unfortunate depositors and debenture-holders from the loss which must occur even if this Bill passed exactly as it stood. A question was put in this House in the spring of 1897, in which the Attorney General was asked whether his attention had been directed to the abuses disclosed by the Report of this Committee, and whether the Government intended to introduce any legislation on the subject. The reply was that the Report was receiving the careful consideration of the Government, and that they hoped soon to introduced a Bill for regulating the proceedings of the Loans Fund societies and providing a more effective control. Two Bills had been introduced since then in addition to the present measure, but not a single proposal had come from the Government in fulfilment of that answer of the Attorney General. The Government had deliberately abstained from making any proposal having for its object the protection of the public in the future against these abuses. He asked the right hon. Gentleman the other day when the Government intended to bring in such a Bill, and was told that the subject was so difficult and complicated that he could not be given even so much as a hint when it would be possible to legislate for the better management of these societies. He would now refer to the next step in the history of this ques- tion of renewals—the allusions to the system in the extraordinary letter published in the Dublin daily papers on the 19th June, 1899, and written by Mr. Young when he resigned his post as inspector under the Loans Funds of Ireland. Mr. Young had been inspector for seven or eight years, and it was on his urgent and repeated reports that the Committee of 1896 was appointed. That Committee more than confirmed all that had been alleged by Mr. Young in regard to the abuses prevalent in the system, and Mr. Young proceeded to endeavour to get the views of the Committee carried into effect. These renewals had been denounced as illegal; it had been shown that they had been the means of increasing by 50, 60 or 80 per cent. the legal interest chargeable to the borrower; they had been remonstrated against, and this inspector, after years of unavailing effort to check these abuses, resigned his position after, he had been censured and treated as a nuisance in consequence of his endeavours to bring about reform. The Government now came forward with this proposal to relieve the officers from the results of their own misconduct. He urged that the House ought to be very cautious to see that no injustice was done and that ample safeguards were afforded to the unfortunate borrowers who required and deserved consideration as well as the depositors and debenture-holders. When he asked the other day what the Government proposed to do he was told that a body of rules had been issued embodying most of the recommendations of the Committee of 1896. But nothing would be more absurd than to suppose that that was going to remedy the evil, as the Board themselves had again and again stated that they had no adequate statutory powers to enforce their rules on the societies. It had also been stated that more than half the societies refuse to accept the rules, and therefore they might just as well be so much waste paper. He had received a deluge of letters from unfortunate investors, and borrowers who had been overcharged in the most monstrous way. He was therefore as much interested for the one class as for the other. He pitied the unfortunate investors, who, believing they had Government security for their money—

THE CHAIRMAN

Order, order! I do not think this is relevant to the Amendment the hon. Member desires to move.

MR. DILLON

I was only going to say that in the action I am taking I do not appear as the advocate of either the borrower or the debenture-holder specially. I think both have suffered dreadfully by these irregularities, and my object in debating the Bill is to show its insufficiency for the purpose which the Government profess to have in view, and to show that the interests both of the borrower and of the debenture-holder are being sacrificed by these provisions. I beg to move.

Amendment proposed— To leave out Sub-section (b) of Clause 1." —(Mr. Dillon.)

Question proposed, "That Sub-section (b) stand part of the clause."

MR. ATKINSON

I shall not follow the hon. Gentleman in all the topics he has referred to. I have on more than one occasion endeavoured, but without success, to explain to him what this Bill is, and that it does not affect many of the questions to which he has referred, and that it does not prejudice in any way the prospects of any measure being introduced to reform the Loans Fund system in Ireland or to secure the debenture-holders' rights. This Bill is introduced simply to validate certain existing securities, and to secure that they shall be recovered on against the borrowers to the extent of such sum as is equitably due and nothing more.

MR. DILLON

Then put it in the Bill.

MR. ATKINSON

Therefore all the observations the hon. Gentleman has made in reference to the excessive rates of interest and the amounts demanded upon the occasions to which he alludes are really beside the point. The clause he has criticised is really a clause later on in the Bill, which provides that if these securities are validated so that it is possible to sue upon them, the amount recoverable should not be more than the amount equitably due. That clause provides that the borrowers should pay the original sum advanced, plus legal interest, and that deductions should be made for any excess demands which have been paid. Whether ultimately the debenture holders are compensated or not, it is desirable to make these existing securities available. I suppose the hon. Member does not contend against that?

MR. DILLON

Certainly not, so far as they are equitably due.

MR. ATKINSON

But that is not the Amendment of the hon. Gentleman. The Amendment is to strike out the subsection, thus enabling every man who has borrowed money upon the renewal note to refuse to pay a farthing of it. The hon. Member can scarcely contend that it lies in the mouth of the borrower to say, "Oh! because you have given money on a renewal note I will pay nothing." According to the Report which he himself has quoted I can confidently say that 90 per cent. of the existing notes are renewals. How does the matter stand? The capital of these societies is £141,539, and of that sum there is at the present moment £125,869 outstanding on notes. The average loan is only about £5. In that set of circumstances, when that money has been raised from the debenture-holders —a class for whom the hon. Gentleman professes an extreme sympathy—are you by adopting this Amendment practically to say that 90 per cent. of these debtors may keep all that money in their pockets for ever? Or are you to say to them as the Bill says, "You must repay what you have borrowed, plus legal interest, and if you have been charged any excessive amount for interest or fines that amount will be credited to you"? If the section validating the notes which have been given as renewals be struck out, the Bill might as well be torn up, as it would be perfectly useless. I resist this Amendment. It is misconceived; it ignores the real point of the matter. The Bill affects only notes current on the 1st March, 1899, and it does nothing what- ever to validate any future renewals. If these people persist in taking renewal notes hereafter, they will do it with their eyes open.

MR. DILLON

They will expect another Bill.

MR. ATKINSON

Then they will be disappointed in that expectation. The hon. Member stated that the Board in Dublin had no power of enforcing their rules on the societies; but surely he must know that the way in which the Board can enforce their rules is to dissolve the society which will not accept them. The affairs of that society would then be wound up, and that is the only way to deal with it.

MR. T. M. HEALY (Louth, N.)

said he did not see why these people should be called unfortunate borrowers, for he thought they were very fortunate in being able to borrow at all. Having got the money he did not see why they should not be made to pay it back. His mind went back to the year 1877, when there was a proposal made by the Government in this matter, although they would give no promise upon the arrears question. At that time they all opposed the Bill because it would ruin shopkeepers all over the country. Supposing those men, instead of getting their £10 from a bank, got £10 worth of goods from a shopkeeper, was there any reason why they should not pay for them? He thought these societies were an anachronism. Instead of making a man pay off his £10 by suing the man on the spot, or his sureties, they said they would not sell him out of house and home, but they would lend him a bogus loan of £10 by way of paying off the original loan. He thought that was a bad system, and it was illegal. It was, of course, done in kindness, and with the idea that they would not sell those people out of house and home. These societies were started when banking was hardly known, and he knew the bankers had to go round to different people assuring them that their money would be all right if they put it into the banks. He agreed that some of the officers were too officious. He did not want the idea to get abroad that because a man had borrowed money which he wanted at the time, and was very glad to get, what was practically a successful fraud on these loan societies should be permitted. It was argued that, because this form of loan had been gone through, the people should not be made to pay. If these people did not mean to pay they should not have borrowed. He thought this Bill had some element of risk in it, and it was to that extent an encouragement to illegality. The question was, should the third parties be made to suffer? He confessed that he regarded the Bill with some anxiety, for it was simply an experiment. What they ought to do was to endeavour, later on in the clauses, to prevent excessive interest and fines from, being charged. If the Government would put 3 per cent. interest in the Bill, and not allow any fines to be recovered, he thought they would have done very fairly.

MR. DILLON

The reason why I alluded to these people as the unfortunate borrowers was that, owing to this renewal system, they have been compelled in some cases to pay 20 per cent. for their money. If the hon. Member for North Louth went to a bank to-morrow, and had to pay 20 per cent. interest, I should say that he was an unfortunate borrower. I have no. desire to aid any man in avoiding the payment of a just debt, but what I do. want to make clear is that in the anxiety of the Government to look after the interests of the debenture-holders and depositors it would be most unfair to. forget altogether the case of the borrowers. The Attorney General refuses this, on the ground that it will encourage dishonesty and enable these men to make-away with their goods. I desire to inform the Attorney General that I have been urging upon the Government for the last two years the necessity of passing a Bill of this description, but it should not be a Bill to aid men who have permitted this evil which it is now proposed to remove. The hon. Member for North Louth cannot have read the Report on this subject, because Paragraph 59 says that, whatever may have been the case in the early days of the loan, at the present time, in the majority of cases, the management, so far from being under local committees, has passed into the hands of men who are merely money-lenders, and who have taken advantage of this to open private offices. The system in vogue is practically the worst form of usury, and they have taken the very skin off the bones of some of the people in the constituencies of hon. Members whom I see opposite. The Report states that these loans have been issued with a recklessness. which would soon have reduced any private money-lender to beggary. You are now going to increase these facilities. I am disposed to agree with the hon. Member for North Louth that my Amendment goes too far, but I find a difficulty in raising the point in any other shape. I do not want to let off any man from the necessity and obligation of paying what is due when he has borrowed it. By the very wording of their own Bill the Government prove clearly that they realise the fact that gross injustice may be done. I wish to direct the attention of the Attorney General to Sub-section 5, Clause 2. The case made out against me is that in all cases where I object to these increased facilities I am conniving at men who have had this money refusing to pay it back. The sub-section I allude to—

* THE CHAIRMAN

Order, order! This matter will arise later in the debate. The only question now is that of renewals.

MR. DILLON

Then I will confine myself to that point. The Attorney General gave as a reason for opposing my Amendment that no injustice would be done by this sub-section. I contend that a great injustice may be done owing to this very illegality of excessive interest, and it may be found that instead of owing money to the society a man may have paid all his debt and may have paid more than was due. That is the reason why I object to this provision. However, I am not disposed to divide the Committee on this particular Amendment, because I agree that it would be better to endeavour to amend the Bill by getting rid of the consideration for the borrower. I beg leave to withdraw my Amendment.

Amendment, by leave, withdrawn.

MR. DILLON

I now move to leave out Sub-section (c); but I wish to postpone what I desired to say on this subject until the whole clause comes up. It is a subject of enormous importance, because I think I shall be able to show that owing to the system of excessive interest, the borrowers have more than repaid the loans.

Amendment proposed— In page 1, line 20, to leave out Sub-section (c) of Clause I"—(Mr. Dillon.)

Question proposed, "That Sub-section (c) stand part of the clause."

Amendment, by leave, withdrawn.

MR. DILLON

In moving the omission of Sub-section (f), I desire to say that it has been calculated that the discount would amount to a rate of over £8 pet-cent. What do the loan societies do? At an early period of their history they proceeded to charge not £4, as provided by the Act, but £7 discount, and in spite of the warnings of the Committee which sat in 1855, they persisted in charging a series of illegal fines. The result of their conduct was that for a long period, instead of 8 percent., quite 20 per cent. has been charged. Observe what we are asked to do. Here is an unfortunate borrower in Ireland who borrowed some ten, fifteen, twenty, and, in some cases, forty years ago, and, owing to excessive interest, illegally charged at a rate nearly double what the Act allowed, and excessive fines illegally imposed, the borrower may have paid back the full legal interest and the principal of his loan, and now we are asked to authorise the society to come down upon him for the principal and interest.

Amendment proposed — In page 2, line 1, to leave out Sub-section (f)of Clause 1."—(Mr. Dillon.)

Question proposed, "That Sub-section (f) stand part of the clause."

MR. ATKINSON

said that if this proposal were agreed to there would scarcely be a single case in which the borrower would not be able to show that excessive interest had been charged. If the loans were invalidated by reason of excessive interest then they would simply be making a present to the borrowers of about £120,000.

SERJEANT HEMPHILL (Tyrone, N.)

My constituents in North Tyrone have been the principal sufferers from the bursting up of these loan societies, and I have a sheaf of letters which I am not going to trouble the Committee with, written by labourers and small farmers, and by people who had scraped together a few pounds and invested them in these loan societies in debentures at 5 per cent. The writers of these letters appeal to me to do anything I can to rescue them from the ruin which is staring them in the face. Bearing that in mind, of course, I approach the consideration of this Bill with every anxiety not to obstruct but to promote the objects of the Government, and I think, in dealing with the Bill, we ought to bear in mind what the right hon. and learned Gentleman the Attorney General has said, that it is really only a provisional measure, and that the passing of this Bill will not prevent legislation being afterwards initiated either by this or some other Government, in order to repair the mischief which has been done to the depositors and to the debenture holders in what I cannot help saying was very gross neglect in some quarter or another.

THE CHAIRMAN

Order, order! The right hon. Gentleman is not entitled to; discuss the Bill as a whole, and he must confine himself to the particular Amendment now before the Committee.

SERJEANT HEMPHILL

I was endeavouring to do so. I regard this as a provisional measure only applying to existing circumstances, and not dealing with future transactions or countenancing the irregularities which have been attended with such calamities. I think it is quite right to retain this Sub-section (f), because the effect of having exceeded the statutable limit of interest would be just like the effect of its being renewed, and would be a ground for defeating any proceedings that might be taken against the holders of these promissory notes. This sub- section stands in the same position as Subsections (b) and (c), which Amendments the hon. Member has withdrawn. I hope the hon. Member for East Mayo will withdraw this Amendment, for it is only right that these borrowers should be chargeable with the legal rate of interest, and I think the proviso at the end of this clause meets the objections that have been put forward by the hon. Member. As I read this section, you could recover notwithstanding those legal defects and the departure from the statute, and having sureties who were borrowers themselves. Notwithstanding having charged an excessive interest, I think you can recover, but you can only charge the debtor with what he got in hard cash and with legal interest. It occurs to me that we might very well add another section, because there are cases in which more than £10 was originally lent, and if more than £10 was borrowed that would be in contravention of the Loans Act, and I would suggest that to meet such a case an Amendment should be drafted in the following terms—

THE CHAIRMAN

Order, order! We have not disposed of Sub-section (f) yet.

MR. ARCHDALE (Fermanagh, N.)

said that although he agreed with a good deal of what the hon. Member for East Mayo had said, still he thought that the Amendment might do harm to the people who ought most to be protected—namely, the debenture-holders. They were men in a low class of life, such as railway guards, and they had saved up their money and invested it in these loans, which they thought were under Government security. They now found, however, that they could not recover all the money they had saved for their old age. If the Amendment were accepted it would do harm to the Bill, which he regarded as an honest endeavour on the part of the Attorney General to obtain some redress for the debenture-holders.

MR. MURNAGHAN (Tyrone, Mid)

said that all the Amendment proposed to do was to safeguard the unfortunate borrowers from the excessive interest from which they had suffered in the past. He, himself, had known cases where 33 per cent. was charged. They desired that the debenture-holders should get their money, but they desired also that the interest to be charged to the borrowers should be at a small rate. The Government ought to be generous in the matter. They gave their imprimatur to those societies, and money was deposited on the understanding that the Government had an inspector over the fund and was responsible for its stability. He thought the Government ought to step forward now and reduce the interest to the very lowest figure.

MR. SWIFT MACNEILL

said that in , order to show the terrible injustice that had been inflicted not only on debenture holders but also on borrowers, he would quote paragraph 147 of the Report issued in 1897. That paragraph stated— From the statements of borrowers who have appeared before us, from the replies we have re- ceived from the circulars we issued, from the admissions of the officials we have examined, and from the evidence of borrowers we can come to no other conclusion than that thousands of poor persons have been victims of a system which has kept them permanently in debt owing to the high rate of the charges over a long period of years. The debenture-holders were a most deserving class, who had invested the savings of a lifetime in an investment which; they believed was secured by the Government, and as for the borrowers their debt in many cases has been paid several times over. If the Attorney General would only bring in a Bill to the effect—

* THE CHAIRMAN

The hon. Member is not discussing the Amendment before the Committee. He is now discussing some future possible Bill.

MR. SWIFT MACNEILL

said his hon. friend had no idea of pressing the Amendment. It was framed in order that the question might be discussed in its general aspect, and he thought that provision should be made that every illegal fine charged should be deducted from the original debt.

MR. DILLON

said that the condition of things which the Attorney General confessed prevailed in Ireland was perfectly astounding. The particular provision under discussion would legalise that state of affairs, because it would cure the informality and would not prevent the recovery of a loan, although owing to the illegal interest and fines which had been charged it had been twice repaid. He would, however, withdraw the Amendment.

Amendment, by leave, withdrawn.

* SERJEANT HEMPHILL

said he proposed to insert another sub-section —" The loan being in the first instance for a sum exceeding £10 in contravention of Section 24 of the principal Act." That section provided that it should not be lawful for any society to make any loan exceeding £10. The subsection would meet cases where borrowers obtained more than £10, and who would otherwise escape.

Amendment proposed — To insert as a new sub-section—' (g) the loan having been in the first instance for a sum exceeding £10 in contravention of Section "24 of the principal Act.' "—(serjeant Hemphill.)

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

MR. WILLIAM MOORE (Antrim, N.)

said it might be well if the Attorney General would see his way to put in a sub-section covering all breaches of the provisions, of the principal Act. That would strengthen his hands, because a combination of circumstances might arise to which neither of the existing sub-sections would apply. A drag-net clause such as he suggested would cover any possible state of affairs.

MR. ATKINSON

said he could not possibly accept a general clause of that kind. He would be prepared to accept the Amendment of the right hon. (Gentle- man, but would suggest that it should precede Sub-section (f).

MR. DILLON

said that the hon. Member for North Antrim in his zeal thought the Bill did not extend far enough. The Government started a system of charitable loans in Ireland. An elaborate Act was passed through the House to guide and direct the operations of the societies; a body was set up in Dublin to supervise the officials; and now, after a period of forty years, the hon. Member for North Antrim thought that the proper course was to provide a dragnet clause to cover all breaches of the law, in order that the officials who had robbed and plundered the unfortunate people might be set free from the consequences of their irregularities. His com- plaint was that there was nothing in the Bill to reform the system. If the Bill would save the debenture-holders who had deposited their money, criticism would be disarmed, but it would not save them, because they would lose half their investments if the Government did not come to the rescue, and they would lose entirely through the misconduct of clerks who were now to be whitewashed by the Bill.

Amendment, by leave, withdrawn. Amendment proposed— In page 2, line 8, after ' charged,' to insert, ' and illegal lines and charges exacted, including sums charged for petty sessions, stamps, or summonses that were not issued."—(Mr. Swift MacNeill.)

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

MR. ATKINSON

said he would meet the hon. Gentleman by providing in the Bill that the expression "fines" should include any sum charged for stamps, or fees in connection with summonses.

MR. SWIFT MACNEILL

said he was much obliged to the right hon. Gentleman, but. the words would hardly cover money paid under bogus summonses—namely, documents which appeared to be but were not summonses.

MR. ATKINSON

said he would meet that by adding after summonses " or documents purporting to be summonses."

Amendment, by leave, withdrawn.

* THE CHAIRMAN

The latter part of the next Amendment, standing in the name of the hon. Member for East Mayo, ought to be taken as a separate clause. As to the first part, I do not quite follow what the words " such an account " refer to. No account is mentioned in the first clause.

MR. DILLON

said the clause was drafted on the supposition that, in order to arrive at the proper sum, an account should be taken. In moving the first part of the Amendment, he understood the position to be as follows. After the Rill was passed into law, the officials of the society would furnish a man who had signed a. note with an account, but that account only went back six years. That he contended would inflict very grievous injustice. Take the case of a man who had borrowed ,£10 twenty years ago, and was charged from 20 per cent. to 30 per cent. for his loan, although the law only gave power to the society to charge 8 per cent. If that man had paid 20 per cent. on that loan for ten or fifteen years it was manifest that he had paid full legal interest as well as the loan itself. Were they to be told that these unfortunate borrowers who, as could be shown by the books of the society if they had not been fraudulently destroyed, had paid back the whole of their loan and the full legal interest, and very often a great deal more, were now to be charged the whole amount of the loan again, merely because the transaction went back more than six years? What argument was there in favour of going back six years and no more, when a transaction extending over-twenty years could be traced if the books of the society were honestly and fairly kept? Why should a borrower be deprived of the advantage of his payments?. The object of his Amendment was, that if the Court found, on the one hand, that there wore suspicious circumstances connected with the operations of the society,. they might order an inquiry to extend, back ten or twenty years, and if they found that the books had been falsified or destroyed, then a grave case of suspicion would arise, and he maintained that it should be left to the discretion of the Court to act equitably in the matter. If some provision of that character were not inserted there would be a likelihood of the most grievous injustice being, done. When he referred to the falsification of the books he was not speaking without authority, because it had been for many years a widely prevalent custom for these societies to make false entries. Interesting evidence on that point was given by Dr. Richard Hart, who was one of the best inspectors under the Act, and a man of high literary culture, who. effected very considerable reforms in the whole system of charitable loans. Speaking of the state of the books of the societies, he said that the books had been, fraudently kept by clerks in the interests, of themselves and their friends. Then he was asked whether in the year after the famine a great deal of money was not lost, and he said " Yes." Asked whether that was not due to the inability of the people to meet their engagements, he said: " It was; but I think also advantage was taken by fraudulent clerks who embezzled the money and endeavoured to get out of the charge of embezzlement by falsifying the accounts of the borrowers." That was a very serious position, and yet there was nothing in the Bill to protect unfortunate borrowers. The Amendment would allow an account to be taken if the books were honestly kept, and if the books had been fraudulently kept or destroyed it would give the Court discretion to act equitably.

* THE CHAIRMAN

The Amendment must be altered by the insertion of the words " as hereinafter provided.

Amendment proposed— In page 2, line 11, after the word ' excess ' to add the words, ' or in the event of its being found impossible to obtain such an account, as hereinafter provided, such sums as may under all the circumstances appear to the Court equitable.' "—(Mr. Dillon.)

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

MR. ATKINSON

said that he had endeavoured to arrive at an equitable solution of the difficulty. It should be remembered that everything that was done in favour of the borrower was against the debenture-holder, and everything that was done in favour of the debenture - holder was against the borrower, and under such circumstances they had been obliged to strike on the best and fairest mode of preserving the rights of both parties and doing justice to them. The hon. Member for East Mayo again and again talked as if it were the easiest thing in the world to obtain the materials for taking an account back thirty or forty years, and that the Government, in a spirit of perversity, had fixed a period of six years. He had taken the utmost trouble to ascertain the position of the societies, and he was assured by persons in a position to know that materials did not exist for carrying the accounts back more than six years, in the vast majority of cases. He would assume for a moment that the Castle Board behaved not only neglectfully but iniquitously; but how would that justify a borrower in refusing to pay a loan? He should have been glad if the material existed to carry the accounts back for twenty years; but that did not exist, and for that reason six years was suggested as a fair and reasonable time. The hon. Member for East Mayo appeared to consider that to go back in these cases for twenty years would be a simple matter. The loans were, as a rule, for £5, and he ventured to say that no accountant in Ireland would undertake to prepare such an account going back for twenty year's, calculating interest charges, deductions, etc, for loss than a £20 fee. Nothing could be more difficult. If the society had to pay the cost of such an investigation they would probably forego the account altogether, allowing the borrower to walk away with the money in his pocket. The complication increased almost in geometrical proportion for every year the account went back, and it would be found quite impossible to go back more than six years. The hon. Member for East Mayo suggested that in the event of its being impossible to take an account because the books were not forthcoming the tribunal should have the power to fix any sum they thought equitable. But the tribunal had no material on which to base a calculation; and how could they possibly arrive at a conclusion that would not be an absurd and wild conjecture? If they were to endeavour to recover these sums and prevent the debenture - holders from losing their money they should fix a practical limit.

MR. T. M. HEALY

said that what he hoped was that after the passage of the Bill very few cases would come into court at all, and that therefore the number of eases to be provided for by litigation would be very few. There was, however, something in the contention of the hon. Gentleman for East Mayo, but he thought the proposal was too wide. Would it be possible to provide that where an exorbitant demand was made on the debtor a substantial sum for costs should be granted to the defendant? It should be remembered that they were dealing with a very humble and ignorant class of men, who were naturally afraid of the cost of legal process. There might be some little spirit of triumph and some little spirit of vengeance on the part of the societies in bringing these wretched borrowers up to the scratch and compelling them to pay. He was quite in favour of the Bill, but it should be remembered that human nature was human nature, and that the Bill dealt with the poor ignorant class on the one hand, and with societies on the other, who might regard the Bill as a triumph. He would ask the Government, therefore, whether they would not provide that where a demand of an unreasonable kind was made upon a borrower the whole cost of taking the account should, as a matter of law, be borne by the complainant.

MR. ATKINSON

said he would endeavour to introduce a clause to meet that point.

MR. DILLON

said he would put a point to the Attorney General, who, after careful inquiry and examination, had by some curious process arrived at a six years limit. Suppose a case arose in which the books had been so badly kept that it was quite impossible to take the account back for six years.

MR. ATKINSON

said that the Bill provided that the treasurer of the society should prepare and provide an account, and if he did not do that an action could be taken.

MR. DILLON

asked what was the remedy if it was found that there wore not materials for the account.

MR. ATKINSON

said that the treasurer would prepare and provide an account from the particulars available.

* SERJEANT HEMPHILL

said it was a matter of evidence. The plaintiff suing on the note would have to establish he amount due. The defendant would come forward to show what he had paid, and if the books were not there, so much the better for the defendant. He did not himself see that any advantage would be derived from giving a general roaming authority to whatever tribunals the case would come before.

MR. ATKINSON

said it was provided that the note should not be the security for its nominal face value, but only for that sum which was due to the society. The danger which the hon. Member for East Mayo saw was entirely imaginary.

Amendment, by leave, withdrawn.

Clause 1 agreed to.

Clause 2:—

MR. DILLON

With regard to the Amendment standing in my name as to particulars of the account, do I understand the Attorney General to say that this account setting forth the particulars will be furnished to the defendant in time to be examined?

MR. ATKINSON

Of course. It will be furnished with the writ of summons.

MR. DILLON

Then I will not move my Amendment.

MR. SWIFT MACNEILL

said that the foundation of the Act of 1843, by which these loan societies were established, was that every note should be an original transaction, and that no renewals were to count. But there was a whole series of renewals, amounting to £122,000 or £123,000. The Departmental Committee in 1896 showed in their Report that, notwithstanding the express prohibition of renewals, the majority of the cases investigated were renewal loans, and that not more than 10 per cent. were first loans. He thought his Amendment was a reasonable one, because the Government were directly responsible for the condition into which this question had fallen.

Amendment proposed— In page 2, line 17, to leave out from the word ' note ' to the end of line 23, and insert the words ' in cases wherein the note sued on is the last of a series of notes which have been given as renewals in whole or in part, or in substitution for any promissary note theretofore made by the borrower, or any person on his behalf, the account shall be taken from the first transaction between the parties.' "—(Mr. Swift Mac Neill.)

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

MR. ATKINSON

said the Amendment was entirely unnecessary, and might lead to enormous cost. It would be far better for the Government to pay the debtor three times the money he owed than to incur the cost of such a long research.

MR. DILLON

thought the Government would have to make a present to some of the debenture-holders in the long run because they had allowed the system of irregularity to go on for forty years unchecked. He held that the Government were bound to bear the cost of the investigation, and if the investigation cost more than the amount due, that was because the Government were entirely responsible for the delay.

MR. ATKINSON

said that the Government had no power whatever to interfere between the loan societies and the Board. The only power they had was to dissolve the society, and to sue immediately for what was due. The result of that would have been most disastrous.

* SERJEANT HEMPHILL

said there was considerable difficulty about this Amendment, because he was very much afraid that if the account was carried back twenty or thirty years, the Bill, instead of being a boon to the debenture-holders, would be a curse to them. He did not think his right hon. friend the Attorney General was altogether right in saying that the Government were absolved from responsibility in this case, because, by the Charitable Loans Act of 1843, the Lord Lieutenant had the power to remove the Board if it did not do its duty; and Section 4 of the same Act made it the duty of the Board to inquire into the proceedings of all the loan societies in order to ascertain whether their rules had been observed, and the funds applied to the purposes for which they were advanced.

Amendment, by leave, withdrawn.

MR. DILLON

said the object of his next Amendment was to get an independent officer appointed to take the account: and he wanted the Attorney General to give some explanation on the question of costs.

Amendment proposed— In page 2, line 32, after the word 'defendant,' to add the words, ' (6) If the Court is not satisfied as to the correctness of the account, it may order an account to be taken by an independent office, and the costs of such account shall he charged against the society or its officers, as to the Court may appear just."'—(Mr. Dillon.)

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

MR. ATKINSON

said that under Clause 3 the costs would be petty sessions costs, which were very small indeed, and did not exceed 2s. for clerk's fee, 3d. for summons, and 6d. for warrant, or 2s 9d. altogether.

Amendment, by leave, withdrawn.

MR. DILLON

said he wished to ask a word of explanation in regard to the taking of the account. The first step was that the treasurer should prepare and provide an account, and that was to be the document on which the account was to lie proved. Was the court to order a separate account in every case?

MR. ATKINSON

said that the court did not take the account itself; it appointed someone to go through all the papers and vouchers, and make the best account he could.

MR. DILLON

said that that was a, novel and somewhat dangerous procedure. Were these poor people to be sued simply on a calculation of what they owed?

MR. ATKINSON

said that if the debtor asked for particulars he generally could get them, and then he could either admit or dispute them.

MR. SWIFT MACNEILL

asked the Attorney General to say whether, if a petty sessions clerk was the treasurer of a society, he would be able to take the account of that society.

MR. ATKINSON

said he could not conceive that a man would be appointed to look into his own accounts.

MR. SWIFT MACNEILL

said that not only petty sessions clerks but magistrates had sat on the bench deciding on questions in which they were personally interested.

MR. ATKINSON

said that there was no principle more rigidly enforced than that a judge could not decide in a case in which he himself was interested.

MR. DILLON

said that this was an extremely important point, The Government did not seem to be aware that in the 118th paragraph of the Departmental Committee's Report it was stated that cases had come before them in which justices and clerks of petty sessions had adjudicated in cases in which they were interested. How on earth were these small borrowers to know the law? If a, magistrate persisted in sitting on the bench in a ease in which he was personally interested, how were these poor people to get rid of him? The Bill should indicate that neither a member of the bench of magistrates nor a clerk of petty sessions should take part in the adjudication of a case in which they were interested in the society or its accounts.

MR. ATKINSON

said he was glad that there was one subject on which the hon. Member for East Mayo had found it possible to speak in favour of a removable magistrate. No Act of Parliament that could be possibly passed would make it more binding that a magistrate could not sit and adjudicate on a case in which he was personally interested. There was no rule of law which was more rigidly enforced. If the hon. Gentleman or any litigant found a magistrate adjudicating in a case in which he was personally interested, he had only to go to an enterprising solicitor, and in a day or two he would find that that judgment was set aside with costs against the magistrate. In regard to the petty sessions clerk, if they had a pure bench it was wiser to leave it to the magistrate to select either the petty sessions clerk, or some other person, to take the account, than to prevent the magistrate by statute from employing the petty sessions clerk to do that work. He had no objection to the appointment of any qualified person to take the account other than the petty sessions clerk.

Clause agreed to.

Clause 3 amended, and agreed to.

Clause 4:—

MR. DILLON

said this was a most dangerous clause. It was a clause which, in his judgment, would be precisely similar in operation to the clause allowing voluntary settlements under the Land Act. The societies' clerks would go round and call upon borrowers, and they would say, " An Act has been passed through Parliament, and the new law will make you pay with costs. Now, I am a humane man, and if you drop this Bill and give new security on your holding I will give you 20 per cent. reduction." He was sure that in innumerable cases poor people who could not study an Act of Parliament would comply with the proposal. Borrowers very often jumped at the offer of a reduction of 10, 15, or 20 per cent., and a new instrument might be entered into by them which, as he understood Clause 4, would be binding on them even if they afterwards found out that they had been swindled. Through ignorance of the new law they would sign the new instrument undertaking to pay. He should like to hear a word or two from the Attorney General as to whether he could see any plan by which that danger could be avoided.

MR. ATKINSON

said this clause was for the very purpose of getting over the difficulty trustees always had in coming to an arrangement. The clause was inserted in mercy to the people concerned.

MR. T. M. HEALY

asked the Attorney General whether, in dealing with the question of costs, if a fair compromise was offered on one side or the other, there would be power to take that into consideration. The question of allowing a compromise seemed to be entirely in the hands of the loan society. He thought it would be fair to allow the bench some little power of the kind he had indicated.

MR. DILLON

said that what he complained of was that the clause was rather vague. Where were these fresh instruments to be executed, and where was the compromise to take place? He would respectfully suggest to the Attorney General that a clause should be introduced providing that the matter should be brought under the cognisance of the Court, so as to prevent borrowers from being trapped or intimidated.

MR. ATKINSON

said he had already provided in Clause 2 power to extend the payment of instalments over a period of three years. He intended to introduce on the Report stage a provision with reference to costs.

MR. T. M. HEALY

said he was in favour of this Bill, as it was a very great departure from ordinary practice. It was practically ex post facto legislation. He was disposed to say that the courts should have been more in the nature of equitable tribunals, and not strictly bound by the ordinary law. He felt quite confident that both the Attorney General and the Chief Secretary were anxious to do absolute justice in this matter.

Clause agreed to.

Remaining clauses agreed to.

Bill reported; as amended, to be considered upon Monday next.