§ (1) After the expiration of three months from the passing of this Act every individual and firm required by this Act to be registered shall, in all trade catalogues, trade circulars, and business letters, on or in which the business name appears and which are issued or sent by the individual or firm to any person in the United Kingdom, have mentioned in legible characters—
- (a) in the case of an individual, his present Christian names or the initials thereof and present surname, any former Christian name or surname, his nationality if not British, and if his nationality is not his nationality of origin his nationality of origin; and
- (b) in the case of a firm, the present Christian names or the initials thereof and present surnames, any former Christian names and surnames, and the nationality if not British, and if the nationality is not his nationality of origin the nationality of origin of all the partners in the firm.
§ (2) If default is made in compliance with this Section the individual or, as the case may be, every member of the firm shall be liable on summary conviction for each offence to a fine not exceeding five pounds:
§ Provided that no proceedings shall be instituted under this Section except by or with the consent of the Board of Trade.
§ Sir F. BANBURYI beg to move, in Sub-section (1), to leave out the words "and business letters," and to insert instead thereof the words, "bill-heads, invoices, advertisements, show cards, notices, letter paper, or other stationery issued or used by the individual or firm." The Clause as it stands only requires individuals and firms to put the names upon trade catalogues, trade circulars, and business letters. The Amendment of my right hon. Friend (Mr. Stuart-Wortley), who has asked rue to move it on his behalf, would carry the matter further, and will put what is specified on invoices, and, what I think is very important, on bill-heads, invoices, show cards, etc. I am not quite certain myself, though I undertook to move this Amendment, whether it is necessary to put in advertisements. That would perhaps make a very large and very expensive advertisement; but I think it is necessary to put in the others. My right hon. Friend has given me a copy of Clause 63 of the Companies (Consolidation) Act, 1908, which reads as follows:
Every limited company shall have its name mentioned in legible characters in all notices, advertisements, and other official publications of the company, and in all bills of exchange, promissory notes, endorsements, cheques, and orders for money or goods purporting to be signed by or on behalf of the company, and in all bills of parcels, invoices, receipts and letters of credit of the company.So that my right hon. Friend's Amendment does not go quite as far as an Act of Parliament which was passed so recently as 1908. The question raised a short time ago by my hon. and learned Friend with regard to the giving of publicity would be very much furthered by the Amendment of my right hon. Friend. This would be publicity in a very easy way by enabling everybody to see without going to inspect the register. It would give a very increased amount of 1513 publicity to the fact that the firm was trading in another name, or had formerly been an alien firm, and had changed its name. Perhaps with the omission of the word "advertisements" my hon. Friend will accept this Amendment?
§ Mr. PRETYMANThis is rather a difficult Clause, and I gave this a very great deal of consideration. All the points in this Amendment I considered very carefully from this point of view: are we going to gain more in obtaining the publicity we require, or lose more in inflicting unnecessary trouble or injury upon British trade at home? That really is the point of view, and from that point of view I considered all these suggestions. Take, for instance, the words "letter paper, or other stationery issued or used by the individual or firm." That would open a very wide door indeed. Stationery might not necessarily be used in connection with the particular business. It must be "issued," I think, and not "used," in any case. Then there are the words "letter paper." I think it is better to treat it as in the Clause, and use the words "business letters." If you say that, then you are on perfectly firm ground.
§ Mr. McNEILLI quite follow what my hon. Friend has said, but there is one word that is important, and that is the word "advertisements." It is important that people who are dealing with firms should know with whom they are dealing, and therefore, if a firm is advertising its goods all over the country, that is particularly the part of its apparatus where the true facts should be known to everyone.
§ Mr. PRETYMANMy right hon. Friend and hon. Friend are a little unfortunate, because my right hon. Friend said that that was the one thing he did not wish to insert.
§ Sir F. BANBURYIt was not that I did not wish it; but that I was rather afraid my hon. Friend would not accept that, and I rather suggested as a compromise that if I withdrew the word "advertisements" he would accept the other words. Another compromise is to accept "advertisements," and to withdraw all the others.
§ Mr. PRETYMANI have been through the whole matter. "Advertisements" would include advertisements for employés in the columns of a newspaper. Is it suggested that a man advertising for an employé should put all these particulars in the advertisement? [HON. MEMBEBS: "It 1514 would increase the cost."] Yes, it would enormously increase the C03t, and therefore be a very heavy burden. We must disabuse our minds that all the firms registered under this Act are criminal. Perhaps I am putting it too strongly. We must disabuse our minds that everybody registered under this Act has to be registered because he is attempting to conceal something. There are an enormous number of firms absolutely British in every sense who have the goodwill of some previous owner of the firm, or some business name they have used for a very great number of years which would be registered, and there would be no odium in being registered. But we cannot separate the treatment of those firms from other firms who are trying to conceal their identity, and whom we wish to get at, and we have so to temper our legislation that while doing everything necessary to discover the real identity of firms who have been attempting to conceal it, we do not put too heavy a burden on other firms who are simply registered because they do not happen to be trading under the names of the individual owners. It was from that point of view only that I considered this particular proposal very carefully and all these points one by one, and eventually, with considerable regret, I put them all aside and came down to the words in the Clause. Take the case of an invoice. A firm may require to send out a large number of invoices, and it is hardly necessary for every invoice that the particulars required here should be inserted. There would be a covering letter with the invoices, which would contain the information instead of the invoices themselves. That is the kind of case which is met by the Clause, I think, as it stands.
§ Sir F. BANBURYI do not think it follows that there need be a covering letter.
§ Mr. PRETYMANNot necessarily; but I suppose an invoice could hardly be sent without. There must be some document, I take it.
§ Mr. PRETYMANRemember we have the words in the Clause "business letters, on or in which the business name appears," so that if the paper has either a stamp on it or written upon it the business name, or if the business name is signed in the letter, then a letter is a 1515 pretty wide term and a good deal wider than "letter paper." If a business name appears either on or in the letter, then the particulars that are required have to be added, and I think it is very difficult to send an effective business communication which does not contain in the form of a business letter the name of the firm either on or in it. But when you come to trade circulars and trade catalogues, there, I think, it is important, because these trade circulars or catalogues are issued broadcast without letters at all, and where these are issued it is a temptation to people to deal with that particular firm. Therefore, in those trade circulars and trade catalogues, when the business name does appear upon it, they must add these other particulars. That, we think, is necessary, and there can be no reason against it; but the ordinary communication which passes in the post from one firm to another is usually accompanied by something in the form of a letter, and, therefore, although I would like to go further, I am afraid by going further we should do more harm to the mass of traders in this country who would have to be registered than would be gained by the advantage over the firms from whom we want to get those further particulars. And, remember, those particulars given will be an indication of the further particulars which can be obtained from the register.
§ Sir WILLIAM PRIESTLEYThe Clause says "to any person in the United Kingdom." Why is it confined to the United Kingdom? Should it not be the Empire? We are doing an enormous trade with our Colonies, and why should not anyone there have the same advantage as traders in the United Kingdom? I would suggest that words should be put in so as to embrace the Empire.
§ Colonel GRETTONI think the hon. Gentleman opposite does not appreciate the fact that in the vast number of transactions in trade and business it is very seldom indeed that a letter is sent with an invoice, although occasionally a piece of paper printed with compliments and no name upon it is sometimes inserted. If this Bill is to be effective to carry out the intentions which the hon. Gentleman has expressed, if there is any paper more than another on which the names should appear it is on the invoice. That is far more important than the advertisement. 1516 I think invoices must be included, and I strongly press upon the Parliamentary Secretary to the Board of Trade to reconsider this point.
§ Sir A. WILLIAMSONWhy are we to make this great difference between private firms and companies? The last speaker has told us about the importance of having the names on the invoice. If the hon. and gallant Gentleman opposite takes his own firm, it is a company and would not be affected. The name of a firm always appears on the invoice, but here you want printed the names of all the partners in the firm. I belong to a firm where there are twelve or fourteen partners, and are we to print on all our invoices the names of all those partners? At the present time there is nothing printed on the invoice at all, and I speak not only for my own firm in this respect, but for thousands of merchants. It is preposterous to do this. Often we send out 300 or 400 invoices, and are we to have printed on each sheet the names of all the partners? I see no object in it. If there were people in the firm who are foreigners there is a very simple remedy, because they could then call themselves a limited company and they would have to print nothing at all. There is no object to be gained by this. By this kind of trivial legislation, instead of helping trade, you are going to harass the merchants. This Clause is a most objectionable one from the point of view of giving trouble, and it will do nothing to accomplish the object of those who support it. With regard to the business letter, take, for instance, a large firm in the City of London like Messrs. Rothschilds. When they write a letter they simply head it, "Number So-and-so, St. Swithins Lane." Is it proposed that all these firms are to have the names of all their partners printed on everything they issue? I agree it would be less objectionable on trade catalogues and trade circulars, but when you come to invoices, notes of all sorts, and memoranda, it is quite a different matter. I suppose this would also apply to contract notes and bills of lading, and I see no reason why you should not have it on cheques. I really think that we are carrying this matter to an absurd length, and I am sure the business community and the large houses will be very much opposed to it when they realise what it means. There is no other country in the world where this sort 1517 of thing is done. I know there are countries where it is necessary to register partnerships and all your partners. We do it in South America every day, and we have no objection to that, but there is an objection to printing the name of every person connected with the firm. This is to be done after the expiration of three months. May I point out that there are many catalogues for 1917 already printed, and all those catalogues, which probably hold good for a year, are going to be out of date and will have to be scrapped at a time when paper is very dear, and they will have to be reprinted. This proposal bristles with absurdities, and I hope the Government will reconsider this point.
§ Mr. CURRIEI beg to support what my hon. Friend opposite who spoke last has said. I think he has made out a very strong case for firms such as his own. I would like to raise a similar case. Take, for instance, A, B, and Company, Solicitors. That firm, perhaps, has printed on its paper, A, B, and Company, and not the names. Many firms do not have the names of the individual partners printed upon their letter-paper. Are we to understand that for the future it will be illegal for A, B, and Company to send a letter on paper that simply carries their address, and that if they write such a letter they will be liable to some penalty?
§ Sir F. BANBURYI certainly think the invoice ought to be included. Possibly the Amendment of my right hon. Friend goes too far in other matters, but my hon. Friend must remember that for once he has made a mistake in thinking that a covering letter always accompanies an invoice. I should say that this is very rarely the case, and I hope he wall consider my suggestion that the word "invoice" should be inserted. With regard to what the hon. Baronet opposite has said, I do not think there is any great hardship in printing ten or twelve names. Assuming that there are a large number of partners, I suppose the reason for that is that it is a very good business, and only a small expenditure is involved. The point as to whether it is going to inflict a hardship and inconvenience upon the business community is quite another question, and I have always opposed anything which I thought would have that effect. It is only because now circumstances have altered under the stress of war, when we find to what length our 1518 enemies have taken advantage of our kindness and have misused the facilities we gave them, that I have withdrawn my objection, and although this will inflict inconvenience and expense on business firms I do not think they will object in view of the facts which I have stated. I ask leave to withdraw the Amendment.
§ Amendment, by leave, withdrawn.
§ Motion made, and Question proposed, "That the Clause stand part of the Bill."
§ Mr. PETOI hope the hon. Gentleman who represents the Board of Trade will give some answer to the point made by the hon. Baronet (Sir A. Williamson). It seems to me that this is most upside-down legislation. It is open to any firm, no matter how undesirable such firm may be, to conceal the identity of the partners simply by adopting the guise of a limited company, and then they will not have any obligation to publish any of the names of the directors or the shareholders. In this way we might have a British company entirely alien in its whole nature and constitution. While that is possible, I do not see what is the use of closing this door. I should like to hear what the hon. Gentleman representing the Board of Trade has to say on this point. If this proposal is going to result only in a largo number of firms with partners who do not want to disclose themselves becoming limited companies, I cannot see of what use this Clause is going to be.
§ Mr. McNEILLI agree with the hon. Member for Devizes (Mr. Peto) that this legislation is very incomplete, but I have always understood that the Government were treating this Bill as the first instalment of legislation dealing with this subject, and I do not gather that the Government are not going to deal with companies. I think that ought to be the answer to the criticisms which have been made on this point. I agree that it would be a ridiculous result if a firm with more than seven partners turned itself into a company at once with the object which has been suggested. I hope that the Government intend to legislate and deal with that point. The hon. Baronet opposite, referred to the great hardship which he seems to think would be inflicted upon such firms as his own, because they would have to put the names of the partners on trade documents. I really think he is exaggerating the hardship. I know a firm of brokers who are in the habit now of printing the names of all the partners on 1519 every letter I get from them. The hon. Baronet also spoke of catalogues and invoices' which may already have been printed and the cost of scrapping them. I imagine for 10s. or less you could get a rubber stamp with the names of all the partners on it, and then all you would have to do would be to stamp the invoices. I do not think the hon. Baronet would find this legislation so expensive as he imagines, and I think we might safely support the Clause as it stands.
§ Sir A. WILLIAMSONI am strongly opposed to this Clause not on account of the cost of a rubber stamp, but because here we are differentiating between companies and private firms to the disadvantage of private firms.
§ Mr. BUTCHERWe differentiate between private firms and companies throughout the whole of this Bill. I agree that this legislation will be quite incomplete if it is confined to firms, and I hope the Government after having passed this Bill will turn their attention to companies so as to get the same information for the public and the customers of companies as that which is provided for by this Bill in the case of firms. I think that is absolutely essential. I do not say it is easy, but I do not think it is beyond the competence of the Board of Trade to do that.
§ Mr. BRUNNERI think the Unionist Enemy Influence Committee do not quite understand that 99 per cent. of the people who will be registered under this Bill will be purely British, that one-half per cent. will be rogues, and one-half per cent. aliens. We are merely legislating for that 1 per cent., and inflicting these regulations upon the 99 per cent. who are purely British firms. It seems to me to be nonsense. The hon. Gentleman who has just spoken suggested that we should try to do this in the case of companies. That is obviously impossible. There are companies, such as railway companies with 50,000 shareholders. It would be impossible to print the names of 50,000 shareholders on each invoice. The directors might be all British, and the shareholders might be 99 per cent. aliens. You cannot print thousands of shareholders upon your invoices, so that this is differentiating against British firms. It is quite wrong that our legislation should tend to abolish firms and establish limited companies. The private firms in this country are disappearing very rapidly, but in commercial life it 1520 is an admirable thing for a young man to join a firm. He can never join a limited company, because he has to acquire his fortune before he can become a shareholder in a limited company, whereas in a partnership he can join as a junior partner and rise to the top. The limited company principle has had a very serious effect upon the prospects of young men in business life, and I trust that the House will do nothing to injure firms in this country.
§ Sir FREDERICK CAWLEYI should like to support the hon. Baronet (Sir A. Williamson). I think it is carrying legislation a little too far. It is almost getting to witch-hunting. I have no objection to it so far as catalogues and trade circulars are concerned, because they are invitations to buy, and it is quite fair when you send a person a catalogue or a trade circular that he should know by whom he is invited to buy. I have therefore no objection to that, but it is perfectly absurd that you should have all the names of the partners printed on all the business letters and invoices. I also agree, in view of the fact that you cannot legislate for limited companies, that it is an unfair differentiation to make. I happen to belong to a limited company consisting of myself and my family. I shall not have to print the names of the shareholders at all, whereas another man who is trading without being a limited company will have to put every name on his invoices. There is unfairness as between the private firm and the limited company. I really think the Government ought to drop this Clause altogether, but, so far as I am concerned, I am prepared to support it if the words "business letters" are left out, and it is merely confined to trade Circulars and letters which are invitations to buy.
§ Sir WILLIAM BEALEMy hon. and learned Friend opposite (Mr. Butcher) pointed out that this legislation, taken alone and without similar legislation applying to companies, would only have a very small effect. I want to suggest that the Government, instead of hereafter bringing in a Bill applying this sort of thing to members of a limited company, should, between this and the Report stage, remodel this part of this Bill so that it might possibly be made applicable to limited companies. Personally, I do not see the demand for this Clause at all. We want to prevent what we call penetration. We want to have the means of finding it out. I have no objection to some indication 1521 that there may be something to be found out, but it is a mistake altogether to go to this length in the ease of private firms, hampering them in this way, whilst not applying it to companies. If the Government do not see their way to drop the Clause altogether, I would suggest that they should only require a partnership to do that which they can require a company to do.
Mr. DENNISSIf you put all this information on every letter that is written it will be a very great hardship upon smaller and poorer people. Would it not be sufficient if you had it on your trade catalogue and trade circular, and then on your invoice and order form and letter, put after the name of the firm the word "registered." The public would soon get to know that the word "registered" meant that the firm was not carrying on business in its own name, and if they wanted information they could refer to the register. That little word "registered" would be notice to all the world that the firm was not trading in its own name, and if anybody wanted to know its real name and nationality he could go to the Registry Office in London and find out. That would get rid of this difficulty of printing twenty names or a large number of names of partners and all kinds of information as to their nationality. I do not think that is necessary for the ordinary transactions of business life. It would be a great hardship upon small shopkeepers and people who find it expensive to have printed stationery. Have it on the trade catalogues and invitations to buy, but when you come to the letter, the invoice, the order form, and so on, have the word "registered." It would be a sufficient guide that the firm was not trading in its own name, and if anyone wanted to know its real name he could refer to the register.
§ Mr. PRETYMANThe Clause has been equally criticised upon both sides. On the one hand, it is said that it goes too far, and on the other that it does not go far enough. The Clause really strikes the medium between going too far and not going far enough. My hon. Friend appears to think that we are requiring a great many particulars, but we only require the names and the nationality. I do not think the small firm is likely to have nineteen partners. A tiny business is not likely to have many partners. We did consider the question of using the word "registered," and we referred it to the chambers of com- 1522 merce. They practically unanimously rejected it, because it would convey some kind of suspicion that there might be something to conceal. I cannot quite-accept my hon. Friend's figures, but taking them as a basis of discussion 99 per cent. would have to use the word "registered" and would be subject to some suspicion that there might be something to conceal. There would be a great deal of trouble taken to look up particulars, and it would reveal nothing whatever. If they put their names and nationality on the paper, everybody will see that the firm is not trading in its own name, but that it is British and that the partners are British. That is all people want to know. The majority of the cases would be like that. If you have the word "registered," nobody will know anything except that the firm is registered, and that it may contain a foreign, element. Therefore inquiries would have to be made. We considered all these points very carefully—I myself spent hours over them—from various points of view. This and that suggestion was considered and rejected. If we are to have any sort of publication of particulars by a firm on the documents which it issues, this is the minimum which we can have, giving just simply their names and nationality. I do not think that we can do less than that.
The whole Committee has agreed that it should certainly be on the trade catalogue and the trade circular. It is suggested on the one hand that invoices ought to be included. I am not prepared to go further than we have gone, and I cannot accept that suggestion here. Of course it can be put down for the Report stage if any hon. Member thinks it desirable. Then, on on the other hand, it is suggested by my hon. Friend behind me that we are going too far in applying this to business letters. It is too late to make that Amendment now that we are discussing whether the Clause should stand part, but it will be quite competent for any hon. Member to put an Amendment on the Paper for the Report stage, and, of course, it can be considered. At present I certainly do not think that we can accept that Amendment, but naturally it will be our duty to consider it if it is put on the Paper. On the whole, I think it is desirable that the Clause should be in the Bill. We ask for the minimum only, namely, that the names and nationality should be put upon a small number of documents, and I submit that the Clause should be allowed to stand.
§ Mr. NEEDHAMCould the hon. Gentleman say whether the words "business letters" include postcards, which, after all, are very largely used in correspondence?
Mr. HAZLETONI think the hon. Gentleman has made out a very good case. The only reservation in my mind—and I think it will be in the minds of a good many hon. Members—is with regard to companies. He has said nothing with regard to them. He has not said whether it is the intention of the Government to deal with them in some corresponding form later on. It would appear as if something were necessary in that way in order to make this legislation watertight. Unless we are sure that some time in the near future that will be proposed and carried out by the Government, there is an unfair discrimination in this Bill, and before we leave the Clause I hope the hon. Gentleman will make some statement to the Committee about it.
§ 8.0 P.M.
§ Mr. PRETYMANIt is quite obvious that the effect of this legislation will be rather to accentuate the tendency towards the conversion of private firms into limited companies. The tendency is very much in that direction. I agree with my hon. Friends behind me that it is not a desirable thing that the private firms in this country should all be turned into limited companies. A certain amount of responsibility goes. You have a company and you have officials who are responsible for making as much money as possible, and, on the other hand, shareholders who do not know how the business is being managed. The human element is very largely eliminated. I cannot, of course, give any pledge to introduce a Bill now dealing with limited companies. I do not think the Committee would expect me to give any such pledge, but I will give an undertaking that the matter will be considered. I do not mean to say simply that it will be considered and then not to consider it in detail, but I will undertake that we will look into the question and see what legislation is possible and necessary. It cannot, of course, be on the same lines as this Bill. You cannot, for instance, ask a company to put on its notepaper the name of every shareholder. The Committee will remember that limited companies are already registered, and the register includes the name of every shareholder. Therefore anybody who wishes to know particulars about the 1524 company can get them by going to the register and ascertaining all they want to know.
Mr. HAZLETONThe register would not include any change of name that might have been made by a shareholder or a director.
§ Mr. PRETYMANCompanies have to keep their registers up to date and to furnish a return of any change.
Mr. HAZLETONIn the case of a shareholder who is not of British nationality, that fact is not set out in the register, or the fact that some years ago he may have changed his name from a foreign name to a British one.
§ Mr. PRETYMANNothing appears in the register but his name. A company is usually rather on a larger scale: than many firms. The original object of this Bill when first introduced many years ago was to prevent the kind of practice that was called, I think, long-firm business —individuals who took offices in the City, sent out orders for goods, and, when the goods were sent, both they and the goods disappeared. That was really the primary object of this Bill. These sort of people can, of course, never be registered as companies. We have now got into a different region from that in which the Bill was first introduced. I can quite appreciate the point made against this Clause. It is imposing liabilities on firms not imposed on companies. And I agree that there appears to be no valid reason why particulars as to the constitution and ownership of companies and the business carried on by them should not be as easily available for their customers and the public as particulars of the business and the ownership of private firms. I express that general opinion and I give an undertaking to go into the question, but I cannot go any further at this stage.
§ Mr. NEEDHAMWhat about my point about the postcards?
§ Mr. PRETYMANOh, as to the postcard, the legal advice on one side of me was that a postcard would be included, but on the other side that it would not. We do not wish a postcard to be included, and if found necessary on consideration we will put in words to make it clear that it should not be included.
§ Mr. BRUNNERThe hon. Gentleman said that the figure of 99 per cent. British 1525 firms which would be affected by this Clause was too high. I want to ask him whether the Board of Trade has formed any estimate of the proportion of British firms which would come under the Bill. Have the Board of Trade any information on that point?
§ Mr. PRETYMANThat is the kind of information which the Bill is designed to secure for us. It would be impossible for me to give any kind of estimate as to what proportion of the firms would be purely British and what proportion would contain any other element.
§ Mr. BRUNNERWell, then, I think my estimate of 99 per cent. stands.
§ Question, "That the Clause stand part of the Bill," put, and agreed to.