§ Order for Second Reading read.
§ Motion made, and Question proposed, "That the Bill be now read a second time."
Mr. RUTHERFORDWe have during the last few days seen a very large number of Bills passed in a few minutes, and which the majority of us private Members understood had been substantially agreed between the Leaders of both sides. In this national emergency I imagine that almost every private Member has felt it his duty not to interfere more than can possibly be helped consistently with doing what he considers to be his duty. But when I read this Bill I found it in many respects unreasonable, and calculated to do a great deal more harm than good. We only got prints of the Bill this morning, and there has been no time for full consideration. Speaking broadly, on reading the Bill carefully from one end to the other, it appears to me that if it became an Act of Parliament it would at one blow entirely destroy all commercial credit in the whole country, and it would immensely extend all kinds of difficulty and distress. It gives power, at the uncontrolled discretion of every registrar of a Court, to postpone any kind of payment and every legal remedy to recover any sum of money whatever. This is the broadest and most drastic suggestion which I have ever heard introduced into the House of Commons upon any subject whatever during the whole eleven or twelve years that I have been a Member of the House.
The Chancellor of the Exchequer has undoubtedly been in touch with a number of leading banking and other authorities, and after reading a Bill like this through, knowing his great ability and the enormous grasp that he has shown of the exigencies of the situation, and knowing the kind of people with whom he certainly must have been in conference, one can scarcely believe that a Bill containing powers of this description, and which will have, I verily believe, consequences such as I have endeavoured to indicate, could have been brought forward by him, and I shall certainly wait with very great interest to hear from him some justification for asking 221 us to destroy at a blow the whole credit system of the country, and whether there are circumstances now obtaining in banking and commercial and financial circles which would warrant any Bill of this wide range being brought forward. I feel that although we have the duty in this time of great emergency to sit still and be silent and very largely trust those who have the control of affairs, yet we are asked as a House to take the responsibility for passing each of these Acts, and I think it is the duty of each individual Member to take the trouble to read the Bill for himself and to try and understand what would be its effect if it were put in force.
The Bill comprises all judgments, all orders, all distresses for rent, and foreclosure by mortgagees, but these are comparatively small matters. The real, overwhelming importance of the Bill to the whole commercial community rests in the relation of every individual to his debtors and to his creditors, and largely to his bank. Paragraph (a) of the first Clause says that no execution or enforcement of a judgment or order of the Court for payment or recovery of any sum of money is to be gone on with without leave. I ask the House to consider what that means. Supposing that two years ago I had to begin an action to recover some money which was lawfully due to me, and that after the debtor had put every obstacle in the way, and driven me into Court at great expense, I got my verdict, say, a couple of months ago. I find now that if that man chooses to set up, that either directly or indirectly, that in consequence of the War at the moment he cannot pay, I am going at all events to be placed in the position of being deprived of my remedy at the last minute, after going through such formalities as I have indicated. I am only giving this as an illustration of the kind of thing that might happen under this Bill if passed. Then, again, I find that the Bill is to apply to every sum of money that is due, arising out of any contract or transaction entered into, either before or after the Bill being passed. I could have understood how a good case might be made out for the general principle of the Bill if it was confined to moneys due on transactions entered into before the War. But supposing 222 two people enter into an ordinary commercial transaction to-day. They know, the War being in existence, of the financial difficulties of the present situation. They know that there is a moratorium, they enter into a contract, but when the money becomes payable they are, under this Bill, to be deprived of their remedy.
I could have understood that if this Bill had been confined to monetary obligations arising out of transactions entered into before the War, and that if thereby one of the parties was placed at a disadvantage, there might be something to be said for the adoption of some means of relief, but I cannot see any case whatever for giving relief from carrying out contracts to pay money due in respect of transactions entered into ex post facto by people with their eyes open, knowing what the state of affairs actually is. There are possible cases where some people could not be made to pay even after judgment were obtained against them unless the creditor first applied to some Court for leave to recover his own money. The onus would not even be thrown, under this Bill, upon the debtor of proving that he was unable to pay because of the War. The onus would be laid upon the creditor to make application to the Court and prove his case, whereas he might know nothing whatever of the debtor's circumstances. Not only in principle but in detail from one end of this Bill to the other, I find matters which I have considered it my duty to bring to the attention of the House and of the Chancellor of the Exchequer. I very much regret having at this stage of the proceedings, in regard to our national finance, to intervene as to the provisions of this Bill.
I come to paragraph (b), which provides that nobody is to levy distress without leave of the Court. Take the position of the landlord. His rent is owing to him, and it is not paid. After the passing of this Bill he could not distrain without the leave of the Court, and he must make application for leave. I hope I am not unduly detaining the House on this important question. I feel strongly about it, and I ask the House to believe that I do not wish to occupy their time unduly. I ask the House to look at the chain of difficulties that would arise if a man owning 223 say half a dozen houses cannot get his rents. A whole chain of loss and difficulty immediately follows. A landlord does not get his rent—suppose that that arises from the fact that some works in the particular district are on short time owing to the War. There the tenants could successfully say that owing to the War they are not getting their full wages and that they cannot pay their rent. Under this Bill when the owner makes his application the registrar would say, "You cannot distrain." I would point out that in the meantime the sum due for rent does not remain the same, because from week to week it is continually growing and being debited against the tenants. In cases like these it would be directly owing to the War, and the Court would indefinitely put off the right of the landlord to distrain. The owner of the property cannot get his rents, and the result is that he cannot pay the interest on the mortgage which interest is due to the widow and orphans of some man whose estate has lent, say, £1,000 on the property. That interest is say their only livelihood. I know plenty of cases where these facts actually obtain. In these cases the widows and orphans would starve. They could not pay their rent to the landlord, and they could not pay for their food.
Then you have the difficulty with the shopkeeper. If he cannot get paid for the food and goods he supplies he will have to discharge some of his staff, and in each of these cases where you are setting out to alleviate some particular form of suffering at one point it will be like throwing a stone into a pool, the area immediately widens until you have a long chain of persons to whom you pass along all the distress and difficulty which arises in one particular spot. What I venture very respectfully to submit is this: I am only using distraint as an illustration. It is the one mentioned in paragraph (b). Supposing the tenants are away to the War doing their duty to the country, fighting for you and me—and for the landlord and everyone interested—is not that exactly a case where, instead of passing a Bill like this, creating a series of miseries, and passing on the difficulty from one class to another, the proper thing would be for the State to pay the rent, or to help to pay a sufficient part of it, so 224 as to put an end to that difficulty at the source, and not pass it on through other sections and other people?
I see also that under this Bill nobody is to enter into possession of property without leave of the Court, and so on. Without this Bill becoming law no mortgagee can enter into possession of property or exercise any of his remedies unless he has given notice of the calling up of his mortgage, and that notice had been disregarded for months. He cannot exercise any of his remedies unless his interest is two months in arrear. I am one of those who take the view that if interest is in arrear for two months it ceases to be interest, and it becomes a capital sum out of the use of which you are being done. I cannot imagine a case in which any decent-minded mortgagee would take advantage of circumstances arising out of the War by being oppressive in order to put money in his pocket. I was criticising this Bill outside the House with one of the leading Members, and what do you think he said? He said the mortgagee might take advantage of the position to sell the property to himself, knowing that a proper price could not be got for it. It is a well-known principle of English law that a mortgagee cannot deprive a mortgagor of his property by making a mock sale to himself. A mortgagee can sell the property for a fair price in a proper manner, otherwise he is always liable to be called to account.
The real intrinsic gravamen of the Clause is contained in the provision that nobody is to be allowed to take any other measures for the purpose of enforcing payment of any sum of money. Language fails me in trying to characterise that provision. I wish I had the facility of speech of the Chancellor of the Exchequer, in order to characterise a Clause like that in appropriate language. This measure would put a stop to all proceedings in all Courts in all parts of the country except in respect of libels and cases dealing with society matters, race horses, and things of that sort. The whole commercial community would be deprived at a blow of the basis on which all business is carried on, namely, the right of every person, arising out of every contract in every business transaction, to be paid the money owing 225 to him at the time it is due, and under proper conditions. It would put a stop to the issuing of a writ for money owing under a Bill of Exchange. Every kind of action to recover money would be a breach of this Bill. The Courts would be paralysed.
6.0 P.M.
It is impossible to imagine the situation which would arise if the words of the Bill were literally acted upon. I am not dealing at the moment with what people would do, or with what the Courts would be likely to do. All I am entitled to deal with at the moment is the power which could be exercised if the words of the Bill were read according to the ordinary interpretation of the English language. Supposing this Bill became an Act, how would it affect the case of an ordinary citizen who is perfectly solvent and who has a substantial balance at his bank? I think I see two or three hon. Members opposite who entirely and absolutely fulfil that definition. They are ordinary citizens. Some of us are very ordinary, some of us are perfectly solvent, and have a substantial balance at the bank. The Prime Minister has said, "Go on as usual, as if the War did not exist, so far as you possibly can, in regard to your business and other matters." How would such a man as I have referred to be affected? He is perfectly solvent and has a substantial balance at his bank. Early this month every bank put into every person's bankbook a moratorium slip. I understand that in the majority of cases this simply meant that unnecessarily large cheques would not be allowed to be withdrawn. But if we open a series of bank books we find in them those moratorium slips, and a line drawn right across the book to say that although you might have to your credit—I am referring to some hon. Members opposite—five or six thousand pounds, as the case might be, you could not draw a penny of it as a matter of right, but the bank would be glad enough to lend you £5 or £ 10, and it is kind enough to say at the bottom of the slip that it would not charge you any interest for this sum. Suppose that the citizen to whom I refer has £2,500 to his credit, and that he wants £2,000 of this money for the purposes of his own business, then under the powers of this Bill the bank conceivably might say—in other countries where a Bill like this has been 226 passed they have said—"we are solvent, but we have a large sum lent out on security and on the Stock Exchange, and we cannot get in our money. We are allowing our customers to draw 10 per cent. of the moneys to their credit and no more." That is exactly the kind of thing which is being done under Acts that have been passed with Clauses substantially the same as those which the Chancellor has put into this Bill. This man then could only get £250, or 10 per cent. of his money, which would be no use to him. He wants £2,000 for his business or it must stop. It may be said that he could go to the bank and explain the position, and they will let him have this £2,000. Will they?
I can give a very short instance within my own knowledge upon this particular point. I am speaking of a company that has got £1,000,000 worth of property. It has got £40,000 worth of valuable stock. Its property is not in a country which is at War. This company has no debentures and does not owe sixpence in the world. But it had occasion ten days ago to try to get £3,000 or £4,000 for the purpose of paying for certain machinery ordered in this country, which was ready for delivery, and which it wanted to take up. The directors went to the bank, and after five days of being put off and referred to committees and told to call again, and then only because of an ultimatum, this company with its £1,000,000 worth of property, its £40,000 worth of stock, its £250,000 worth of machinery, and its 8,000 shareholders, all in the United Kingdom, and not owing a penny in the world and without a debenture on it, was actually able to borrow £1,500. That is the amount which the bank in their goodness were willing out of the £6,000 asked for to lend. They may have had very good reasons. At all events, that is what they did. When I say that if you pass this Bill the banks will do so-and-so, if anybody says to me they will not do it, then I give this instance of what they actually have done, and from one thing you must judge of another. This is the way in which banks assist business and give facilities for trade. It happens that these very goods, which the company wanted to pay for in the United Kingdom, represented the first attempt on the part of that company to place orders for such goods in England, instead of in Germany, where 227 they had previously been obtained. I have referred to the case of the man who wants £2,000 out of the £2,500 to his credit. Suppose he sued the bank. Even suppose he got judgment against the bank he cannot, if this Bill passes, get his money, and he has no remedy. That arises directly or indirectly from the War. His business is gone and his staff is dismissed. It may be said, "True, he cannot get his money from the bank, but has he not got some other property?" Yes, he has money out on mortgage, but under the first Clause of this Bill he is not to be paid his capital or his interest. If it is said that he has got houses, then the next Section provides that he is not to get his rent. There is absolute paralysis.
§ Mr. DAVID MASONHis own debts.
Mr. RUTHERFORDThe hon. Member has forgotten that I started with the assumption that he did not owe any money. The broad principle is that by passing this Bill you at a blow put an end to all credit. You make every transaction absolutely a cash transaction. You prevent the wife of the Reservist from getting a house, because nobody will accept her if he can find another tenant. You are meeting in a sentimental and insufficient manner what may in itself be a very good case for relief, such as the case of the poor man who cannot pay his rent on account of the War, but you are widening the difficulty, spreading distress and misery in every direction, and you are making dozens of miseries instead of one. I am open to conviction. If the Chancellor of the Exchequer can satisfy me that there really is to-day such a case made out for such drastic interference with all contracts with all moneys owing, and all remedies, legal and otherwise, such as is shown in this Bill, then I shall be deeply grieved. I shall be more grieved than I can express, but, of course, I shall at once give way.
At the present moment I see nothing in the commercial position of affairs in this country which calls for an Act involving the entire suspension of credit, and interference with every contractual debt, and stopping all legal remedies puts people all over the country at the mercy of every country registrar, without power of appeal—a registrar who is allowed to continue his 228 private practice. I do not like to say anything against these gentlemen, but there is a sort of idea that their own clients never would pay anything. This is the kind of Bill which should only be resorted to in the very last extremity. There is a further point, which is very important, because it shows the spirit in which the whole of it is drafted. The onus of proof in reference to the ability of the man to pay and the consequences of the War is by this Bill thrown upon the creditor, if he wants his money, instead of being thrown upon the person who is trying to get relief. I only had an opportunity of seeing this Bill an hour before coming to the House. I have endeavoured to understand its contents. They have shocked me immeasurably. All the other Bills which we have passed, or could pass, pale into insignificance compared with this drastic and most comprehensive document, and if I have erred in detaining the House at such length, I hope that the House will excuse me on account of the strong feeling that I have that a remedy of this kind is not required, at all events for the present.
§ Mr. LLOYD GEORGEIf the hon. Gentleman will allow me to say so, one part of his speech is irrelevant to this Bill, another part of it is grossly exaggerated, and a third part contains a very shrewd suggestion, which I hope may be embodied in some sort of proposal. With regard to the former part of his speech, in which he dwelt on the troubles of the man having a very large balance in bank who could not get money out of the bank to pay his debts—
§ Mr. LLOYD GEORGETake a case of that kind. All those cases of moratorium were protected equally. This is a Bill which is a preparation for getting rid of the moratorium, and as long as the moratorium lasts it is a most effective bar against the prosecution of any legal remedy.
§ Mr. LLOYD GEORGEWill the hon. Gentleman allow me? I listened to him 229 delivering a diatribe against this Bill which had nothing whatever to do with it. In a case of that kind there is a most effective bar. None of them can be sued; they could not go to Court at all in respect of a debt of that kind now because there is a moratorium. That is not what I propose. I propose that the position should be improved from the point of view of the creditor in those cases under this Bill the moment that the moratorium has been taken away. The hon. Member is dealing with the case which has nothing whatever to do with this Bill at all. I come to the case which he has put, and I should like to ask him what is his idea as to what should be done in the case of a man who has got half a dozen houses. He said that men are out of work. Presumably they are men who have always paid their rents promptly and punctually, but they are out of work and cannot pay their rent. There is not a decent, self-respecting landlord in the Kingdom who would sell up an honest working man who had paid his rent regularly because, owing to the troubles of the time, he had been unable to earn any wages. All that I say is that this Bill gives a power to compel the man who will not behave like the majority of his fellow citizens to behave in that way. That is all.
§ Sir T. WHITTAKERindicated dissent.
§ Mr. LLOYD GEORGEMy right hon. Friend seems to think that that is most contemptible.
§ Sir T. WHITTAKERI did not say that What I said is that it goes a great deal further and does a great deal more.
§ Mr. LLOYD GEORGEThen I suggest in a case of that kind that it is a thing which the Court ought not to be prevented from dealing with.
§ Sir T. WHITTAKERI agree.
§ Mr. LLOYD GEORGEThen why did the right hon. Gentleman interrupt?
§ Sir T. WHITTAKERI said that the Bill goes a good deal further.
§ Mr. LLOYD GEORGEI must deal with one thing at a time, and I say that in 230 a case of this kind there ought to be protection against the possible abuse of a power which in Scotland is not possessed at the present moment, and I have expressed the view that it ought not to be possessed in this country. If a man is in the position, in consequence of the War, that he cannot pay his rent, then I think he ought to have the protection of the Courts. The hon. and learned Gentleman sneered at the powers of the registrar in the County Court, but at the present moment, where the ordinary trader sues a man for a debt, the County Court can intervene now and make an order for payment by instalments. All I propose is that the power of the ordinary grocer or draper or butcher in regard to the recovery of small debts shall be extended to cases where the person is unable to pay his rent in consequence of the War. That is all I propose. The hon. Gentleman says that the landlord cannot get his rent. Does he really mean to tell the House that that is what the Bill is? On the contrary, what the Bill says is that he cannot turn a man out for his rent except by process and sanction of the Court. That is exactly the position in which the trader is at the present moment, and that is all I propose. If the Bill were anything like the description which the hon. and learned Gentleman gave, I agree that it would be open to all the adjectives which he used, but he did not describe it fairly. So much for the question of rent. The hon. and learned Gentleman himself admits that no decent landlord would turn the tenant out if his inability to pay was consequent upon the War. If that be so, where is the harm of the Bill? Is not this a Bill to prevent a person who has not a sufficient sense of propriety under those conditions, from exercising his power, save with the sanction of the Court?
§ Mr. LLOYD GEORGEI am putting my reply to his case. Take the question of mortgagees. A man before the War may have borrowed money upon the security of property. In consequence of the War the property might be unsaleable for the moment, or if it were saleable, it might be at a figure which represented utter ruin to the mortgagor. I say again, that no 231 decent mortgagee would take advantage of his power unless he was convinced that the mortgagor was abusing the protection given him in order either not to pay his interest or discharge his liability. Of course that is a case of which cognisance should be taken. The hon. and learned Gentleman referred to the case of hire-purchase agreements.
§ Mr. LLOYD GEORGEThen the hon. Gentleman in the case of a hire-purchase agreement, if a man failed to pay his instalments, having, in consequence of the War, been thrown out of employment, would, without any access to the Court, enable the holder of that agreement to break up the man's home.
§ Mr. LLOYD GEORGEI am very glad of that. The man may have paid four-fifths of his instalment, there may have been a very little sum left to be paid, and I do not think that any fair-minded or self-respecting person in a case of this kind would put a warrant into execution. What is to prevent the man from going to the Registrar in order to put this power into operation?
§ Mr. LLOYD GEORGEThe hon. Gentleman knows perfectly well that in a case of that kind the imposition of costs would be a sufficient penalty for the refusal to pay. The Court would say at once, "You ought to have paid, you are in a position to pay, and the whole of the costs must be paid by you." That would soon teach gentlemen of that kind, at any rate, not to abuse the protection which the law extends to them under those conditions. I am not proposing anything which is to be a permanent part of the machinery for the collection of debts in this country. I am proposing something to deal with an emergency. The great banking and financial interests of this country have been dealt with very generously by the State. The State has 232 come to their rescue, involving some hundreds of millions, and what position would they have been in if we had harshly and rigidly said, "No, the conditions which existed before the War must be the conditions after the War. If you say that political economy cannot help them, then let political economy take its course." The State, I say, has come to their rescue, and let us, at any rate, treat the rest of the community with the same consideration. That is all we suggest. I do not say the Bill does not need amendment. Certain suggestions which the hon. Gentleman made, and others have made, we are considering. There may be certain cases in which we may compel the person himself to seek relief. I do not think that is the case with regard to hire-purchase agreement, nor do I think it is the case with regard, at any rate, to small rents, though there might be eases of big rents to be dealt with. I say now, as I said on the Second Reading, that the principle of the Bill is to give protection against harsh, unconscionable and brutal exercise of legal powers, and that is why I ask the House to give the Bill a Second Reading.
§ Mr. CHAMBERLAINI must say that I regret any warmth that may have been introduced into this discussion, and I hope that we will get back to that calmness in which most of our discussions have been conducted. After all, we are dealing with a Bill which, whatever view we may take about it in principle or detail, we all agree to be one of great consequence, dealing with questions of great complexity, to which the House as a whole may well bring all the assistance it can give, and, if it is to do that, it should keep cool and have a clear head in dealing with these very complicated problems. I welcomed the announcement of this Bill yesterday by the Chancellor of the Exchequer, but I am bound to say that when I saw it this morning I found it was a great deal wider than I was led to anticipate. I think it will be found in Committee desirable to limit its operation in certain respects. I am very glad to hear from the Chancellor of the Exchequer that he does not propose to take the Committee stage to-day, so that Members of the House will have an opportunity of considering the Bill further and putting down Amendments. I was 233 equally glad to hear the right hon. Gentleman say that he had an open mind to receive suggestions from Members in all quarters of the House. I am myself convinced, though not so convinced as I was yesterday, that something of this kind is necessary. I am quite certain, to take one instance, that of the building trade, that you cannot leave it to the unrestricted mercy of the ordinary operations of the law. Everybody knows the extent to which small-house property is subject to mortgage, and any man can picture to himself what would be the consequence of any general attempt to call in such mortgages at the present time.
You have got not only to deal with exceptional cases of men who wish to take an unfair advantage of their neighbours in time of emergency, but you have, also underlying all these measures of the Chancellor of the Exchequer, to deal with persons who have taken fright, and whose action is as fatal to them as it is to its immediate victims. I have had representations, as I dare say other Members have, from those interested in mortgages of that kind. I had a conversation with a gentleman in the profession to which my hon. Friend belongs—and to which the right hon. Gentleman the Chancellor of the Exchequer used to belong—and who is very largely concerned in business as between mortgagors and mortgagees. Speaking in the interests of both of them, he said he believed that it would be to the real interest of both to press for some measure of this kind. In connection with the question of hire-purchase agreements, I am quite sure that it is not too severe an operation for the great mass of the community to protect particular people against the enforcement in any unconscionable way of powers which would become abusive owing to the exceptional circumstances of the present moment. I believe it is the desire of all of us, as I am quite sure it is the desire of the Chancellor of the Exchequer, to reduce exceptional legislation of this kind within as narrow limits as possible, without undue prolongation of the moratorium. It is not very easy, I think, to bring a moratorium which has once been declared at an end. I am with the Chancellor of the Exchequer in his desire, and I am 234 speaking now on broad principle, to provide for special cases which would stand in the way of bringing the moratorium to an end so that we may hasten the time when it can be brought to an end.
I do not want to say any more to-day. The questions which are to be raised, and which will, I have no doubt, be raised today, are largely questions for Committee, but it may be well to ventilate them now in order to bring them to the attention of the Chancellor of the Exchequer, so that he may have time to consider them before the Committee stage. I myself have grave doubts whether the Bill ought to apply to new bargains, specifically new bargains. I do not call it a new bargain if a house is let by the week and the man is in continuous occupation. That is substantially the one bargain. But take the case which the Chancellor himself mentioned of a new mortgage created. I should very much doubt whether you would, in fact, be doing any good by applying the provisions of this Bill to a mortgage created after the state of war had arisen. I think that might naturally prevent anybody lending on mortgage during the time of the War. Bargains created after the War stand on a different footing to bargains created before the War, and may well be dealt with separately in Committee. Those and other points may well be ventilated now and considered in Committee. I do hope the House will give the Bill a Second Reading and that the discussion will be carried on in the same businesslike way as we have been carrying on all our discussions, and without any passion being raised on one side or the other. All of us have the same objects in view, and none of us need raise our voices in denunciation, because nobody is taking up the defence of indefensible acts. The whole problem before us is to find the best machinery to give the protection which is necessary with the least disturbance of the ordinary obligation and ordinary duty of citizens.
§ Sir T. WHITTAKERIf this Bill was what the Chancellor of the Exchequer represented it to be, and if it were only to do what he described it as doing, then personally I, for one, would gladly support it and should not have a word of criticism 235 to say about it, but the Chancellor's description of this Bill was a ludicrous travesty of the Bill. It was not the Bill. If it dealt with rents and mortgages and hire agreements, and if it was to prevent a man's home being sold up, I would be the first to welcome it. That is not the object of the Bill. It is a very infinitesimal part of the Bill which goes much further than that. The Chancellor of the Exchequer did not attempt a word of justification for the wide extension in the other parts of the Bill. As for mortgages, yesterday in a few remarks I made, I suggested that mortgagees should be included in any extension to the moratorium. I have the fullest sympathy with any provision for protecting men out of work owing to the War, and more especially those homes of men who have gone to the War being protected in every way. It has been well said every decent landlord will protect them, and we shall all agree that legislation to deal with any who do not protect them will be welcomed. But that is not this Bill, and that is the point the House needs to consider.
We are in danger of losing our head a little in these matters and legislating somewhat in a panic. The Bill is far too sweeping, far too far-reaching, and is too shortsighted. In this kind of legislation we do need to recognise that any interference with the ordinary working of trade is a serious evil which can only be justified by great necessity, but it is an evil of itself. It is an evil to cut a leg off, and although it may be necessary, it is a serious business, and when you cut one leg off and the operation does not achieve its object consent will not be willingly given to a suggestion that the other leg should be amputated. This is not a limitation of the moratorium. Pass this Bill and you will not get rid of the moratorium until this Bill has ceased to have effect, because you cannot deprive people in certain directions of the means of getting their payment without relieving them on the other hand from the obligations of meeting their debts. This is that kind of limited obligation which will involve the perpetuation of the moratorium which, in my judgment, is the great evil we have to contend with to-day. What we need to do is to get back as 236 rapidly as possible to ordinary conditions. Anything that interferes with that, the moratorium or a Bill like this, except in the special cases to which I have referred, is like thrusting a crowbar into some delicate machinery which does damage, which strikes far. A man may be in difficulties through inability to pay, and that may affect twenty or thirty or forty other people and prevent every one of them from paying. If he cannot make payment the trouble has got to be borne, but every time you pass legislation rendering it possible for people to avoid payment, you will have a number of people who otherwise would have paid taking advantage of that, and therefore widening the extent of the evil and spreading inconvenience and loss.
What we want to do is to restore credit in every way we can and to maintain it in every way we can, but anything that checks and interferes with the security on which credit is given and loans are made will at once check that credit and those loans, and will do the very damage you wish to avoid. It is often no kindness to induce people to defer payments. Anyone who has a pretty wide experience of humanity in these matters knows the temptation there is to defer payment if there is the opportunity to do so. When those payments are recurring and accumulating ones, the people concerned are only laying up for themselves an amount of debt and trouble, impossible for them to meet. Therefore it is extremely undesirable to give any facilities in that direction that can be avoided. I am with the Chancellor entirely, as I have already said, as to rents of people out of work, as to mortgages, and as to hire agreements, which, in my judgment, are an abomination in one form or another, but this Bill goes much further than that. It refers to any security of any kind or for the purpose of enforcing the payment or recovery of any sum of money. It is not a question of rents and mortgages, it is anything, any debt that is owing to any man for any purpose whatever. It is very wide reaching, it includes the others mentioned, but is not limited to them. You cannot take measures under this Bill, if it is passed, for the enforcement of any debt if the man can plead before the Court that he cannot pay.
§ Mr. LLOYD GEORGEI desire to ask my right hon. Friend a question to see whether we cannot have some basis of agreement. I understand he does not object to the particular cases which I gave.
§ Sir T. WHITTAKERassented.
§ Mr. LLOYD GEORGEI should like to know rather for my information, and with a view to considering what Amendment would be desirable, what sort of case he thinks ought not to be included?
§ Sir T. WHITTAKERMy main point is this, debts occurring since the War. Who is prepared to give credit and lend money on security now when you have a Bill like this, which, if it becomes an Act of Parliament, will stop all loans on securities because you can take no action for recovery?
§ Mr. LLOYD GEORGEThat is a case which I did say to the House just now I certainly was prepared to consider in an Amendment dealing with mortgages, loans, etc.
§ Sir T. WHITTAKERReference was only made to mortgages, but the question refers to all kinds of loans and securities. They are being made in every direction, and it is extremely desirable that they should. Take the case of which I have more knowledge, namely, that of insurance offices. They are lending money on policies, and have to lend it very widely. Their applications are very excessively numerous now, naturally. That is a security that would come within the purview of this Act. Will the insurance companies lend on that security if they are to be debarred from enforcing it? A security that cannot be enforced is of no value whatever, and they will not do it. It is desirable to encourage lending, but you will not do so and will stop it unless you make the security valuable on which the lending is made. I do think that this Bill is too far-reaching and too exceptional, and does need very considerable reconsideration. It is all very well to sympathise, and we need to sympathise, with everybody who is in trouble and distress, but do not attempt to put the responsibility on one class of people only. Let the State take its share, and if you feel that anybody ought to have certain burdens borne for them, then I have no doubt the spirit of this House, and of 238 the country, would be to deal with them liberally, but do not attempt to put it on one particular class of persons. That is not fair or just. My main objection to this Bill is its wide scope. If it is passed in anything like its present form, it is going to strike a fatal blow at credit at a very critical time in commercial history.
§ Mr. RAWLINSONI venture to submit that the difference between us is really one of form and not one of substance. The Bill in its present form is, I contend, absolutely indefensible, and I do not believe carries out for one moment what the Chancellor of the Exchequer meant to carry out, and certainly what he expressed in the strong speech which he has just made on the matter. As I understood him yesterday, and as I understand him now, what we want to do is this: If any man can show that either directly or indirectly in consequence of this war he is unable to pay some particular debt, then he shall be afforded by the Court certain leniency and certain time given to him to pay off the debt gradually. This Bill goes infinitely further than that. Let me take one example. What is the effect of Clause 1 (a)? It applies to every Court—every Police Court, as well as every High Court. Take the case of a woman who has a bastardy order against a man in a Police Court. See what trouble she is put to. The Bill applies to her order, and before she can get her money in the ordinary way she has to get the man somehow or other to that Court again. That is a pretty troublesome and costly matter. The order may have been made a year or two back. She has to go to the Court and get a fresh order, and she has to get the man himself back to the Court. I feel sure the Bill applies to that case, but if it does not I can give many other illustrations equally good for my purpose to which the Bill will apply.
All that is needed can be secured perfectly well by altering the form of the Bill. All that is necessary is to say that the execution shall go on in the ordinary way unless the debtor can satisfy the Court that owing directly or indirectly to the War he cannot pay. That is all the Chancellor of the Exchequer wants, and that is all he is entitled to have. Take a distress for rent. If the landlord distrains the tenant can go to the Court, and if he 239 can show that he is unable to pay because of the War he can obtain relief. That is the form which this Bill has introduced as far as bankruptcy is concerned. Clause 1 (3) puts it perfectly properly that, in the case of a bankruptcy, the debtor has to show that he cannot comply with the order of the Court owing directly or indirectly to the War. The Bill consists of two parts. The first provides that no person shall enforce any judgment of any Court unless he makes an application for that purpose. I can give a number of illustrations on this point. A judgment has been obtained, and execution would be levied in the ordinary course. Under this Bill it cannot be, unless you go to the Master of the High Court or to the registrar of the County Court as the case may be. The second part provides that people who have certain powers of levying distress and so forth can only exercise them on application to the registrar. That applies, as I gather, equally to distress for rates. Therefore you have this position. At the present time if a local authority wishes to distrain for rent it has to go before a magistrate and get a distress warrant. That would be an order of the Court under this Bill. Having got the order the authority could not levy a distress without going to the County Court or High Court as the case might be—a process which in either case would involve considerable time and cost. Then, when they had got the debtor to the Court, he might not set up any such defence as that he was withholding payment in any way in consequence of the War, and all that extra expense and trouble would have been put upon the creditor for no reason at all connected with the War.
I press this point strongly because I am convinced that it is not merely such a matter as ought to be raised in Committee. We ought to redraft the Bill so as to turn it from a prohibition of the enforcement of debts, whether the non-payment is due to the War or not, into a measure enabling the debtor to take advantage of it if he can make out his case. This is a vital point. We have heard a great deal about landlords, debtors, and so forth, But all creditors are not rich bankers or rich insurance companies. I 240 have known creditors who are honest but not rich. In carrying out this well-intentioned shot for the benefit of people who deserve our sympathy because they are being oppressed by wicked people, the right hon. Gentleman is likely to hit many people who do not deserve to be hit. It is not always the man who declines to pay his debts who is the honest man. It is not every creditor who can afford to give time. I want a provision of this kind put in the Bill—that the master or registrar who has to deal with the matter must take all the circumstances of the case into consideration. He must think of the position of the creditor as well as that of the debtor. I submit that it is the debtor who ought to go to the Court and get relief. You ought not to make it a general provision that every creditor is denied ordinary relief unless he first hales the debtor to the Court. I hope it will not be thought that in making these criticisms I am disloyal or anxious to do anything to hinder the Government. I am anxious to support the Government, but I cannot support the Bill in its present form. I hope, therefore, that this well-intentioned Bill will be amended so as to do what it is intended to do, and not what it does at present.
§ Mr. MAURICE HEALYI cannot but think that this Bill has been somewhat hurriedly drafted, and requires careful consideration before it is passed into law. I hope the Chancellor of the Exchequer will not consider that in criticising the Bill I am in any way finding fault with the Government. I am simply trying to make some contribution to the discussion of a most difficult question, and certainly it is the last thing in my mind that I should make any unreasonable criticism, because, in the circumstances of distress and difficulty in which the Government have found themselves, they have not been able to consider every conceivable point. This Bill is not the moratorium, but it arises out of the moratorium. The first point is that it is not at all limited in the way that the moratorium 1s. The moratorium simply dealt with debts which fell due when the War broke out. If this Bill was so limited a great deal of what I have to say would not be necessary. I understood the Chancellor of the Exchequer to say that in the 241 case of mortgages he was disposed to consider the limitation of the Bill to mortgages made before the Bill was passed into law. I think the right hon. Gentleman would be well advised to consider whether he ought not to limit the operation of the Bill to debts which were in existence when the War broke out or when the Bill passed into law.
§ Mr. LLOYD GEORGEWhat about rent?
§ 7.0 P.M.
§ Mr. MAURICE HEALYI will come to rents in a few minutes. It is inevitable that the War will inflict great hardship upon many sections of the community, and the House is greatly mistaken if it thinks that all those hardships can be dealt with in this way. If the right hon. Gentleman attempts to do that he will be in danger of creating evils worse than those which he is trying to avoid. Only the other day I was consulted by a builder who, a fortnight before the War broke out, had made a tender to construct certain buildings. His tender was accepted the day that War broke out. He came to me and asked, "Am I bound by that tender? Since I put in the tender the prices of all materials have doubled or, at any rate, largely increased." I know that that is not a case that could be dealt with by this Bill. I merely cite it to show that, whatever legislation this House passes, it is hopeless to attempt to put an end to all cases of hardship to which the War may give rise. Let me then go back to the question: Is it wise to apply this measure to debts which have been incurred since the Act has passed? I quite agree that if you do not do so there will be cases of great hardship, cases of difficulty in paying rent to which the right hon. Gentleman has referred, and in hundreds, and it may be thousands, of other cases. But is there no evil which will result from this Act which will not be ten times worse than any of the evils which will follow if the Act is not passed? In the first place, What will be the effect of this Bill upon credit? The War has greatly restricted credit, and shopkeepers and banks have largely limited their transactions to cash transactions—so far, that is, as it has been possible for them to do so. They have carried that policy to an extent which has 242 created hardships in individual cases. But why should the shopkeeper give credit after this Bill has passed? The hon. Gentleman who spoke from the opposite benches, and the hon. Member who spoke from this side of the House, has referred to the case of mortgages, insurance companies, and other matters of what I may call high finance. They are important questions affecting not only the working men, not only the labourer, but the ordinary inhabitant of these countries who has to go to his shopkeeper, to his merchant, to his banker to get credit.
At present a person of this description goes to his shopkeeper and asks for credit. The shopkeeper knows that if he fails to pay the law is there to protect the creditor. But suppose a merchant comes to me to-morrow and asks, "What position will I be in when my customers come to me and ask for goods on credit?" And if a banker comes to me and asks what position he will be in if a customer of his comes and asks for credit? What am I to answer in regard to the question of legal liability? I should be obliged to tell these persons that in eon-sequence of the passing of this Bill into law any credit that either of them may give they will give at their peril; that if either of them chooses to give credit he must give it with the full knowledge that he runs the risk—until the War comes to an end—that he will never be able to make his debtor pay. I therefore say with great respect that one of the first and inevitable consequences of passing this Bill into law will be that the contraction of credit transactions, which has already taken place to a large extent, will grow and extend until practically every shopkeeper and every banker in the community will do no business except on the basis of cash down. That is the first criticism which I am disposed to make upon this Bill.
I have given a point in which I believe the Bill has gone too far. I want to give the right hon. Gentleman a point in which I think the Bill does not go far enough. Take the case of mortgagees, about which we have already heard. At present, in the case of sums advanced on mortgage, the debtor is liable to have the mortgage called in. This Bill only protects the 243 debtor if his inability to pay arises in consequence of the War. But in nine cases out of ten the man's grievance will not be that his inability to pay arises from the War. The mortgage may have existed for years. The man's inability to pay may have existed for years. What the man really fears, and what he has reason to fear, is that in consequence of the War his property may be sacrificed at a War price. He is liable to that disadvantage and that loss, though his inability to pay has not arisen at all in consequence of the War. I would ask the right hon. Gentleman to consider these propositions, the latter to extend the scope of the Bill, and the former to limit it. No doubt there are cases in which Parliament ought to give relief, but there are other cases in which Parliament by interfering will do more harm than good. Take the case of rent. You have, it is said, a labourer or an artisan, or other person in a humble walk of life who is unable to pay his rent, who has got, it may be, five or six weeks in arrears with it. The landlord, whose own inability to pay has arisen from the War, is seeking to enforce his legal rights. If in cases of this kind you could protect the tenant, I should be the first to join in any attempt to do so. But it is impossible to do so. This Bill does not do it. This Bill only gives relief to the tenant where proceedings, whatever they are, are taken in consequence of the rent being due, and it is the right of the ordinary landlord to serve a notice to quit on his tenant, whether that tenant owes rent or does not owe rent. A weekly or monthly tenant can at any time, even if he had paid his rent up to date, get a notice to quit. Docs the right hon. Gentleman take up the position that if the tenant owes money he ought not to be served with a notice to quit, that if he does not pay any rent at all that his ordinary rights are to continue? This Bill does not intend to interfere with the landlord's right to give notice. What then is the good of passing it?
Even in the particular cases for which the right hon. Gentleman is trying to provide, this Bill will not provide any real remedy. The remedy for hard conduct of the kind is the good feeling of the average member of the community. I 244 agree with the non. Member above the gangway that there are persons who are quite ready to take advantage of hard conditions in order to enforce rights, and secure advantages for themselves, but there always will be in a community persons of that kind. I think they will be in a small minority, but I think that Parliament, in endeavouring to hold the hands of that small unjust minority, will do untold mischief and hardship to other classes of the community. May I make another point? What is the position of banks under the Bill? Take the ordinary case where the bank has lent money on stocks or shares or securities of that kind which are transferred. In such a case there is no mortgage in the legal form, though there is a mortgage in effect. What is intended in the case of loans of that kind? Is this Bill designed to hold the hands of the bankers in that case? The debtor has secured a loan on the security of stocks and shares. Suppose there is a rapid fall, must the bank wait for a fortnight or a month while the points are dropping upon the Stock Exchange, to realise its securities, or until the somewhat slow processes of the Courts have enabled it to get the remedy which this Bill gives? If that is the case, obvious mischief might be done to the banks, or the creditors who have accepted securities of that kind. The case of distress has already been referred to by the hon. Gentleman above the Gangway. The Bill in form is to suspend distress until the leave of the Court has been given. In effect it is a Bill to abolish distress. The owner of the goods in a case of distress has to be given notice that he is to be brought before the Court. During this time his hands are free. By the time the Court has granted an order enabling distress to be made there will not be many goods to levy distress upon.
Take again the case of hire purchase, which I think is a most proper subject for the interference of Parliament. But I think it would be an act of injustice that because of distress arising from the War a man should lose his right of purchase. I do not think this Bill preserves the man's rights which prevent the property being seized. I am not at all sure it preserves 245 the right of purchase. I would also like to ask the hon. Gentleman a question as to the form of the first Clause. Is it an embargo on the sheriff or an embargo on the Court? What it says is that no person shall proceed to execution. I think the language might be made clearer. Otherwise it will entirely take away the protection of the Act from all executions which are at present in the hands of the sheriff, or that at any future time get into the hands of the sheriff. I suppose it has the narrower meaning and that it is intended to operate on the Court and not on the executive officer. But as the Bill is drawn, it is not at all plain that the sheriff acting upon the order of the Court is indemnified by the order of the Court from the consequences that would follow if he seized the goods of a third party, and therefore I do suggest that that also is a matter that might be considered. There is one other point, and that is with regard to the application of this Act in Ireland. I do not believe that the Irish Law Officers have been consulted about this Bill. The law of judgments in Ireland is as different from the law of judgments in England as chalk is from cheese. When I was reading law I learned a long time ago that there was a writ called a writ of execution. I am ignorant whether that form of process exists in England, but there is no such thing in Ireland. A judgment is made operative against lands or buildings, not by a writ of execution but by registering the judgment in the registry of deeds. It is the only way an Irish judgment creditor has for enforcing his judgment against land or building.
It is different from execution. It may be sometimes a writ of execution, as a mortgage may be a writ of execution by proceeding in Chancery. But it is not itself execution. It is a means of securing priority of your debt on the lands of the tenant. This matter is so drawn that no Irish lawyer could tell whether when it passes he will be entitled to register a judgment against lands or buildings once this Bill passes into law, because although it might be execution to register your judgment as a mortgage, I think it might well lead to the enforcement of the judgment, or the order by the Court, and accordingly I think it is a great misfortune that we have no Irish Law Officer in this House to look after Irish 246 interests when a matter of capital importance such as this is under consideration. If a mistake is made with regard to England or Scotland there is a Law Officer sitting upon the Government Bench to look after the interests of England or Scotland, but when it comes to poor Ireland the Bill is drawn by a Government draftsman who does not know the first thing about Irish law, and when criticism is passed upon the Bill there is no Irish Law Officer upon the Government Bench to tell the House whether the criticism is well founded or otherwise. I think this Bill before it passes into law should be submitted to the criticism of the Irish Law Officers, because it is a matter of first-class importance, and I hope that before it is passed some more consideration will be given to it than has been given to the other emergency Bills.
§ Mr. RADFORDI would be very sorry to interpose at this moment in matters of national emergency, but I feel bound to say a few words in criticism of this Bill, which I believe if passed will do more harm than good. I earnestly appeal to my right hon. Friend the Attorney-General to give close attention to the criticisms passed upon the Bill by the hon. Member for the University of Cambridge. The Bill proposes to provide in special cases where men are rendered unable, by reason of the War, to meet their debts to give them such time as a Court may declare them entitled to. To that general principle I have no objection, and, indeed, I heartily support it. But when we come to the method by which the Bill proposes to carry out that result, I think the form is deplorably faulty, and that it will lead to trouble and litigation. Sub-section (a) of Clause 1 deals with the subject called execution debts. There the creditor has already been to the Courts and has obtained judgment of some kind, and it is provided, and I think quite properly, that before he is allowed to proceed to levy his debt by execution the Court should be satisfied that if the debtor is unable to pay, and that his inability to pay is by reason of the War, he should be excused from paying. Therefore, I think there is no great objection to that Clause except this, that the onus of showing that the debt should not be paid by reason of the War should be cast upon the debtor and 247 not the creditor, because otherwise you will find that a very large number of quite unnecessary applications will have to be made to the Courts, to the advantage of the legal profession and not to the advantage of the community. But when we come to Sub-section (d), we come to a class of case in which the Court was not already seized with the matter at all. I take the case of rent first, not because I have any more regard for landlords than for any other creditor, but because it is a case very easily set forth. How many tenants will have to pay their rents up to the 29th September? Throughout the United Kingdom they number hundreds of thousands. Between this date and that, how many men will have to pay rent as weekly tenants?
This Bill actually provides that in all these cases no distress shall be levied for rent without previous application to the Courts. You will have hundreds and thousands of applications to the Courts, either to the High Courts or to the County Courts, and they are unnecessary, because the distress caused by this War I think is extremely streaky—that is to say, it affects some districts and not others; it affects some classes and not others; but in the majority of cases we have reason to hope and believe that the course of business will go on as usual, and that men will pay their rents as they have been accustomed to do. Why should it be necessary for every landlord before he issues a distress to apply to the Courts in order to justify it? I should think that in any proper case of inability to pay rent attributable directly or indirectly to the War the tenant should have time and should be given relief; but let the tenant apply, and the result of that will be that instead of having hundreds of thousands of applications you will have hundreds or perhaps scores. In the majority of cases business will go on as usual, and it will be quite unnecessary before the ordinary remedies can be applied in case rent is not paid to compel a man to have to go to a Court of Justice. Therefore, in the case of rent, I say that delay should only be made on the application of the tenant, and not on the application of the landlord. If the Bill is altered so as to carry out the suggestions of the hon. Gentleman opposite, I think this point should be taken into consideration, and 248 we could then pass a measure necessary and useful, and not a measure which is much more far-reaching than there is any necessity for, and likely to do a great deal more harm than good.
§ Mr. DUKEThe House, I believe, is of one mind as to the necessity for a measure of this kind. When one considers how completely the ordinary course of business is in many cases subverted by the intervention of the War and the dislocation of credit, it is obvious that common justice requires that where its occurrences have-prevented the performance of contracts and the meeting of liabilities in the manner in which honest people like to perform their contracts or meet their liabilities there ought to be power in the hands of His Majesty's Courts of Justice to see that injustice and hardship are not put in action in place of justice and right. To that extent I agree absolutely with this Bill, and was not at all surprised when the Chancellor of the Exchequer announced yesterday the course it was proposed to take in this matter. But everyone who is acquainted with business will see two dangers. One of them is that the slippery fellow, who exists at all times, and has not been destroyed by the War, will see in this optional moratorium a chance of evading the payment of his debts, or at any rate putting himself out of the way of his creditors, and putting trouble in the way of his creditors. And all of us should be particularly careful that none of our fellow subjects are exposed to unnecessary cost or trouble. I am quite satisfied there are people sufficiently unscrupulous, even in times of War, not to resist the temptation of treating their creditors in this way. To hinder the enforcement of just rights is not the object of His Majesty's Government. There is another very serious danger to which the right hon. Gentleman the Member for the Spen Valley has called attention, and that is that in all classes of transaction, if you are going to destroy the creditor, the man holding the security, whether it is in an insurance company or the owner of a weekly house, you are going to destroy credit. Now, credit, of course, is necessarily diminished by War, but I have come to the conclusion myself, if I may respectfully say so, that this Bill does the thing we desire in a form in which we cannot safely do it.
249 I do not say that the Law Officers, with the burdens east upon them, should be expected to present every Bill in perfect form, and I would venture to suggest this to the Attorney-General, the object here being to give control over proceedings with a view to preventing abuse of legal rights, you might declare that "from and after the passing of this Act no person shall," and then you would set out the cases in Sub-section (a) and (b) of Sub-section 1, and say "that no person shall proceed to execution or take other steps for enforcing the right, with this condition, if it shall be shown to a Court of Summary Jurisdiction that by reason of the effects of the present War the enforcement of the legal right for remedy in question has become oppressive and unconscionable." That shifts the trouble of getting a decision of the Court upon the man who wants the indulgence. I think it is impossible to contemplate that a man who, under existing circumstances, has a legal right is to go to a Court and ask whether he has a legal right which the Court thinks fit to enforce. That would strike a serious blow at credit, and so I would transfer the burden of application upon the man who makes it and needs relief, and I would make the occasion in which he may get that most just and necessary relief this occasion, that by reason of the events of the present War the enforcement of the legal right or remedy has become oppressive or unconscionable. That means that such a change of circumstances has arisen, whether his debt existed before or after the War, that the Court ought to intervene by reasons and causes analogous to those which constantly operate at the present time. My own belief is that if a form of words of that kind is used the jurisdiction of the Court will be limited, the burden will be put upon the right shoulders, and there will not be the dislocation of credit and hardship which otherwise might be apprehended. I would further suggest that either in the Bill or by the rules which would be brought into use under the Bill, it should be required that the application for the advantage of this exceptional and extraordinary jurisdiction of the Court should be in the first instance an ex parte application supported by a primâ facie case made out. I do not apprehend any serious dislocation, because the persons administering justice in this country are 250 well able to take care of the rights of our fellow citizens, but unless we do take some step of that kind I cannot help feeling that there is a risk to the credit upon which so much depends in this country.
§ Mr. JOWETTI hope the right hon. Gentleman will fully and sympathetically consider the very great difficulty under which poor people will suffer if they have to take the initiative in this matter. To begin with, it is extremely unlikely that a large number of those who are entitled to consideration will be familiar with the law which is being passed, and the powers they will have. All those who know much about workpeople are aware that they always hesitate to take any legal action, and if such action is necessary on their part, the House may take it for granted that a large number of those who ought to have the advantage of this Bill will never get it, and it will be a dead letter. Therefore those who want this measure to be a dead letter cannot do better than put the initiative on the poor people, which is only a back-door way of destroying this Bill.
§ Mr. SANDERSONI endorse what was said by the hon. and learned Member for Exeter (Mr. Duke) when he referred to the difficulties of the law on this question. I am sure what my hon. and learned Friend stated was not merely said in a spirit of criticism, but more with a desire to make this Bill work smoothly. I also desire to make one or two suggestions. As this is a very difficult question, I think it would be worth while to take more time for its consideration. I would like to say that, inasmuch as this is an emergency measure and intended only to be temporary, I would like to ask, is it advisable to make it operative until the end of the War? What the end of the War may mean one hardly knows. I remember during the South African War a very distinguished person said that the war was over, but, as a matter of fact, it continued for six or seven months afterwards. Having regard to the difficulties which have already been outlined and anticipated, and inasmuch as this measure is really only an experiment, and one does not know whether it is going to do more harm than good, would the Chancellor of the Exchequer not be upon sounder ground if he made these provisions apply for a limited time only, in order that we might see how the thing worked? Then, if it was found necessary, we could extend, amend, or modify the Bill as we 251 may think right. I think that is a suggestion worthy of consideration. I hope the Chancellor of the Exchequer will change his mind on this point after he has heard our criticisms.
I think the way in which this Bill is drafted is going to have an effect which has never been anticipated. The hon. Member for Cambridge gave one instance and I will give another to show what is the effect of the Bill. Everybody connected with the law knows that you can go to a Court of Summary Jurisdiction and get orders for compensation and small debts, and you can get a special statutory order to levy distress upon goods. Just think what would happen under this Bill. There are hundreds of such cases taken every day before stipendiary magistrates. Under this Bill the claimant goes before a stipendiary magistrate and gets such an order as I have referred to which gives him leave to levy the distress, but under this Bill he would have to go before the High Court or the County Court. Surely that can never have been intended. It is quite obvious that Sub-section (b) of Clause 10 was only intended to refer to cases where a man might levy a distress without going to the Court at all. Nobody can say that it was intended to put the creditor to the inconvenience and expense of such a proceeding as that which I have mentioned. Why limit the Bill to the High Court and the County Court? I should have thought that a Court of Summary Jurisdiction in cases like this would have been just as good. Take the stipendiary magistrates in London. They are far more accessible than the registrar of the County Court, and so are the county justices who sit every day practically.
§ Mr. LLOYD GEORGEIf the hon. and learned Member means cases which come within their jurisdiction, I quite agree.
§ Mr. SANDERSONI understood that this Bill would deal with the cases which came within the jurisdiction of the High Court and the County Court. With regard to contracts which have been made after the beginning of the War I have the strongest opinion that they ought not to be included in this Bill, and I will give my reason. Take, for example, mortgages. They would be drawn with reference to 252 conditions existing. I am sure if the hon. Member opposite, with his great experience, was called upon to draw up a mortgage he would take care that the mortgagee was not called upon without sufficient notice, and he would put in a clause that it should not be paid until after the War was closed. But take the small debts which the working classes are in the habit of contracting. I am convinced that those who have stated that the poor people would be hit by this Bill are quite right. It would destroy their credit and do them more harm than good. With regard to the person by whom the application ought to be made, I agree with what my hon. and learned Friend the Member for Exeter said. I think that in most cases it ought to be the person who wants to get relief who ought to apply to the Court, although I do not think this should apply in all cases.
Take the case of the hire purchaser. There the lender can put into operation his remedy without going to any Court at all, because he can come down to the house, and often does, and take away the furniture. Many of the people who make these purchases are very poor, and they might never know of this legislation, and if they did, probably they would not bother to go to the Court in order to make the application. I am not quite certain that in all cases it ought to be the person who is behind them who ought to make the application. This is a matter which requires very careful consideration, and it cannot be settled in a few minutes. I think there should be the greatest consultation amongst hon. Members with regard to these proposals. There are many cases in which, if this power is left in, the application would not be made at all, and the very hardship we are trying to guard against would occur. After hearing the many points of difficulty there are in this Bill, I have concluded that it would not be desirable to take this measure tomorrow, and I think we ought to postpone it until after the short interval for which the House is going to adjourn. In the meantime the Law Officers will have more opportunity of considering all the points involved.
§ Mr. D. MASONIf I understood the hon. and learned Gentleman who has just spoken rightly, he supports the principle of the Bill for a brief period. The last 253 Section of the Bill says that His Majesty may by Order in Council at any time determine its operation. Surely that meets the point of the hon. and learned Gentleman!
§ Mr. SANDERSONI am not willing to leave it to an Order in Council
§ Mr. D. MASONThat is another matter. The hon. Gentleman then does not agree with the method of bringing the Bill to an end, but still the principle is there in the last Section. I hope that the House will support the Second Reading of the Bill, the principle of which I think in nearly every case has been admitted. A study of the Bill shows that the powers given, although very wide, do not enable a debtor to get rid of his debts. The discretion is left to the Courts, and surely the profession which many hon. Members who have spoken adorn must have very little faith in the discretion of the Courts if they cannot in a case of this sort give them wide powers with regard to the enforcing or the non-enforcing of debts! It seems to me that the cases will not be so numerous as they seem to imagine. One of the principal arguments of this Bill is that it is a step towards a resumption of our normal conditions. The main argument of the Chancellor of the Exchequer was that the Bill was to enable us to get rid of the moratorium. We are all agreed that however necessary a moratorium may be it is a most undesirable condition of affairs. It is a terrible state of affairs. It enters into every condition in every possible corner of the Kingdom, and to a certain extent it paralyses business. It was shown by the figures given the other day by the Chancellor of the Exchequer that opinion is still divided as to whether the moratorium should be brought to an end or extended. There were some 4,000 odd in favour of bringing it to an end and some 3,000 odd in favour of extending it. That indicates, of course, that there are a great number of people who must have this moratorium extended in some form or other. You will be faced with a great deal of distress and bankruptcy unless you provide against it in some shape.
This Bill does enable us to get a step forward towards a resumption of our normal conditions. It, in a sense, specifies 254 certain people who are seeking relief. It is not like a general moratorium applying to all, and therefore likely to be used by unscrupulous persons. It is quite true that a certain number of unscrupulous persons may abuse this Bill, but there are certain qualifying conditions in this measure, and in a moratorium there are no qualifications: it applies to all. This Bill is really a partial moratorium. Under it a person has to make good his case, to incur costs, and show good cause to enable him to levy distress and obtain payment of his debt. While there are many faults in the Bill, the Chancellor of the Exchequer has clearly stated that he is prepared to consider suggestions in Committee, to amend the Bill, and, if necessary, to make it safer so that it may not be abused, and I hope therefore the House will give it a Second Beading. I quite agree with the hon. Member for Bradford (Mr. Jowett), that to reverse Clause 1, paragraph (b) and require the tenant to apply for powers rather than to leave it to the landlord, would be likely to create a great deal of injustice. One cannot imagine a working man, in comparatively poor circumstances, taking legal steps to obtain the necessary powers. The probability is that the Bill would be a dead letter. I do hope, therefore, the Government will seriously consider that principle should not be interfered with. I have great pleasure in supporting the Second Reading.
§ Sir J. HARMOOD-BANNERI came down to the House with the full intention of supporting this Bill, thinking it a very clever, well-meant effort to get rid as soon as possible of the moratorium and the injurious effect of it, but sitting here listening to the very legal discussion which has taken place during the last half-hour, almost entirely among the legal element of the House of Commons, I feel rather convinced that it is difficult to create any simple device to get rid of the moratorium. It is quite clear that if we pass this Bill we shall have nothing but a vast mass of litigation and trouble, and the Bill probably will not assist, except by putting into the pockets of lawyers a vast sum in fees for these numerous applications that will be necessary. I would, therefore, ask the Chancellor of the Exchequer if he would not revert to the more simple process of the moratorium. The moratorium 255 may be good or bad. I, like him, do not like it at all, but when you depart from the simplicity of it and try to create devices such as this to get rid of it, you make things worse. We do not want the moratorium for long, but, whilst we have it, let us keep out of measures like this, which will add enormously to litigation. Whilst I am in favour of the Bill as to certain portions, looking at the difficulties which have been pointed out, and the enormous litigation which would ensue, I would ask the Chancellor of the Exchequer, at any rate, to postpone it to the end of any time to which the moratorium may run, and to endeavour to bring out something more simple. The moratorium is simple, and simplicity in these difficulties is the essence of the question. We do not want to have litigation, and we do not want the enormous difficulties which we should have to encounter. The lawyers have clearly shown us that this Bill would be nothing but a happy hunting ground for their profession.
§ Mr. CHAMBERLAINMay I ask the Chancellor of the Exchequer one question, which I think it would be for the convenience of the House to have answered, namely, whether he proposes to take the Committee stage of this Bill to-morrow, or whether he can give the House further time for its consideration?
§ Mr. LLOYD GEORGEI should like, in as much as it is an emergency measure, to get it through as rapidly as possible, because I take the view that it is an essential preliminary to getting rid of the moratorium, and I think it is desirable, in the interests of trade, that you should bring the moratorium to an end at the earliest safe moment, and I am sure you cannot do it unless there is some measure of this sort. At the same time I am also anxious to meet the general views of those who have criticised the Bill in detail. I can assure them that we have taken full note of their criticisms, and my right hon. and learned Friend and I are doing our best to meet them. I should like to get the assistance of those who evidently have given a good deal of study to this question in the drafting of the Amendments which they indicate are necessary in order to meet their views. I agree with the hon. Member who has just spoken that there have 256 been some difficulties which I certainly had not foreseen, and which have been pointed out in the course of the discussion, but I think that they can all be met. Suggestions have been put forward with a view to meeting them, and I hope it will be possible for those who have spoken on the subject and who have got views to meet my right hon. and learned Friend and myself between this and Monday with a view of arriving at some basis which would enable us to get an agreed Bill. I do not like the idea of pressing a Bill which is regarded as controversial. At the same time, for the reasons I have indicated, I cannot see my way to bring the moratorium to an end unless there are some provisions of this kind. If those who have taken part in the discussion on both sides of the House, who have got views about the matter, and who have evidently studied it, will be good enough to meet my right hon. and learned Friend and myself I am sure that we shall be glad to do so. Unless there is an agreement to-morrow on the subject the Bill shall not be taken, but, if we are able to agree before five o'clock, then I do not see any reason why it should not be done. I am afraid that is more than I can expect. Therefore, perhaps hon. and learned Gentlemen will allow me to get the Second Beading now, on that understanding.
§ 8.0 P.M.
§ Mr. NIELDI am loath to prolong the discussion after the very amicable and conciliatory speech made by the Chancellor of the Exchequer, but I would like to invite his persual of the criticisms which have been made from his own side when he comes to read the OFFICIAL REPORT tomorrow—the criticisms which came from the hon. Member for Islington (Mr. Bad-ford), a member of the profession of solicitors, which would be unquestionably benefited by this Bill, who took exception to it on the ground of cost and difficulty of application. I mean the question as to who should be the person to apply. I should like the Chancellor of the Exchequer to realise that in Clause 1, Sub-section (3), he does provide for the case of bankruptcy. When we come to the case of bankruptcy on a petition, which, after ail is said and done, is one of the last steps a creditor takes to enforce his rights, then it is for the debtor to show that his 257 pecuniary position is due to the difficulties of the War. That, curiously enough, is the very case, if I am not wrong, in which the Bankruptcy Court now in exercising jurisdiction has power to prevent oppressive petitions. I ask him to remember this: What will be the position of affairs on the 29th September, or immediately after? The hon. Member instanced the very large number—he spoke of a million, but possibly that "was too large a number—of landlords who may want to enforce their rent, all of them crowding into Court for the purpose of getting leave. Surely the tenant who feels he cannot meet the claim ought to be the person to apply immediately he has a demand which he has reason to know is a hostile demand for rent which may be followed soon by process of distraint? I ask the Chancellor of the Exchequer to Think of a case like this also: A sum of money, representing interest on a mortgage, is due. Under the existing rule, if the mortgage is for £500, relief can be obtained in the High Court. But before that, and without any knowledge as to whether the debtor does really want time and whether his position is due to the War, the creditor is obliged to go into Court and incur costs. It must be remembered that this is a case in which there are no proceedings pending. You have to originate them. The amount demanded may be very small, but still sufficient to bring it in excess of County Court jurisdiction.
You are therefore faced with this difficulty: The creditor must originate proceedings in the High Court in order to get leave to issue execution or to get his remedy by distraint or otherwise. In so doing he may incur costs not only equal to the amount due, but sometimes 50 per cent. in excess of the actual sum sought to be recovered, and then the debtor may turn round and say, "I never asked for time, I never told you by correspondence I could not pay because of the War, and it is wholly inequitable that I should be called upon to pay, not only the arrears but the sum of money for costs which may be twice as much." Surely the proper course is for the debtor to be the person to apply for relief, and if a good cause were shown it would be granted, without the burden of costs being thrown upon anyone, who may not have expressed a desire 258 for any accommodation at all. There is one other point I should like to call attention to. Take the case of a man who moves his furniture in order to avoid distress—a case of fraudulent removal of furniture at night. I think such cases should be exempted from the operation of this provision. There ought not to be any necessity to apply for leave in case of a man who has indicated a fraudulent intention of that nature. He, at any rate, ought not to have the privilege of making the landlord apply to the Court for leave. These are all matters which require to be carefully thought out, and at any rate, to start fair, I think it should be the debtor and not the creditor who should make application to the Court.
Mr. DENNISSIs there not another way of doing this which will meet everybody's wish? I think the whole object of the Bill can be obtained, without any danger to the community, by simply giving to the judge in each Court power to grant time to any debtor who applies and shows proper cause, and power also to postpone execution or enforcement of mortgage and other rights. In that way no hardship Would occur to the ordinary creditor, and only those cases be brought into Court where there is some reason to suppose the debtor ought to have time given him for payment. I hope the right hon. Gentleman will take these suggestions into consideration between this and Monday.
§ Mr. LLOYD GEORGECertainly.
§ Question put, and agreed to.
§ Bill read a second time, and committed to a Committee of the Whole House for To-morrow.—[Mr. Webb.]