HC Deb 13 April 1921 vol 140 cc1211-27

Order for Second Reading read.


I beg to move, " That the Bill be now read a Second time."

This Bill, in brief, provides for an official audit by the Board of Trade of the accounts of all banking institutions with which it is not satisfied, and, in moving the Second Reading, I only wish to make a few remarks to deal with some of the criticisms which have been made. It is merely a measure to prevent unsound institutions gaining the confidence of the public. The leading institutions are automatically exempted by the provision that the Bill will not be applicable to any bank whose certificate of audit is accepted by the Board of Trade. Now, what are the objections to the measure, so far as I can gather them? The first is—and I am quoting the opinions of others, not my own—that the Government will have the opportunity of the knowledge of all the transactions of our banking institutions. Another objection is that there will be the possibility of variation in the Board of Trade officers, and a further objection is that the average civil servant is inefficient to do the work. I really think that this suggestion that the whole structure of the secrecy of the transactions between a bank and its clients would be destroyed its sheer exaggeration. There is no reason to think that the larger or the great majority of banks would ever be troubled. Moreover, I think the Board is quite capable of finding first-class officials to do this work. They are always obtainable if you are prepared to select the best men.

Then it is said that the Institute of Chartered Accountants, with its strong disciplinary powers, is sufficient to guarantee a proper discharge of all bank audits. With this I quite agree, and suggest this Bill will strengthen their position, but I am not aware that the Institute of Chartered Accountants intervenes or that the Board of Trade had power to intervene when the accounts of Farrow's Bank were audited by a gentleman who is not a professional accountant. I would like to make it clear that I am not introducing this Bill solely because of Farrow's Bank. There are still undesirable institutions masquerading under the name of banks, and the best class financial papers are continually attacking them. Nor is Farrow's Bank an isolated instance. I am quite able to remember other banking failures in relatively recent times. Probably everybody in this House remembers Dumbells. I am glad to notice that most of the papers realise the honest intention underlying this measure, and if I might read an extract from the "Times" I think it pretty well sums up the newspaper criticism. They say: We think that the case for a properly qualified audit of this kind is clear, and responsible banking opinion ought to realise that the public has the right to demand it. The suggestion that the passage of such a, Bill would be a reflection upon the great banks is clearly absurd; the law-abiding citizen might equally well claim that the criminal law is a reflection upon him. Laws are necessary to deal with the abnormal and not the normal citizen. It has been urged that a State audit would require the creation of a new horde of bureaucratic officials. That is an excuse, but not a reason for depriving numbers of ill-informed, thrifty people of some measure of protection which it has been proved, not once but several times, to be necessary. There are comparatively few banks in this country, and the fees of a few accountants to inspect the books of a limited number of them need not amount to more than a small sum. In the United States a State audit of bank accounts has been in force for years. I need say little more, except to point out that the operation of the Bill would be very little, if any, expense to the State, since the Board of Trade have already a staff with considerable powers and experience as regards banking, while it is obvious that the actual official audits would be very few.

The Bill is no reflection on high-class professional men. It is not aimed at diminishing the number of banks, but merely to ensure that all are working on sound lines. I do not believe there would be the least inconvenience to the banks, and I am quite sure the scheme I put forward would be of benefit to the public. I have alluded to Farrow's Bank and Dumbell's Bank. I might have quoted the Liberator, the Birkbeck, the Charing Cross Bank, the Civil Service Bank, Barker's Bank, of Mark Lane, and others all in our own day. These failures may not be many, but they recur with painful regularity, and they leave behind them a trail of disaster in thousands of humble homes. There are many aged poor who are unfortunately very poor because they have lost everything in these smashes. I do not wish it to be thought that if anything could be done to prevent a recurrence of these tragedies of the past Parliament abstained from taking the obvious action out of consideration for a few individuals or institutions which really have no cause whatever in view of their own well-doing to trouble about what happens to evil-doers.

The position is: Is the measure necessary, and, if so, what should be done? I submit that this is a case of endeavouring to meet a great grievance. I am informed that the Government are proposing to bring in a Bill to deal with the same matter. The information I received in a very courteous letter from the Chancellor of the Exchequer when he was President of the Board of Trade. He informed me—and this is the only information I have received—that in its present form the draft Bill proposes that auditors shall be chosen from a panel of accountants and auditors nominated by bankers. I am informed that that is strongly opposed by the accountants themselves, on several grounds. One ia that it assumes that certain accountants have some super-qualification for this particular class of work. Another objection is that it is nominated by bankers, and banks are the institutions over which the supervision is to be effective. Another one is that it limits very materially the free choice of professional men who undertake this work. Assuming that the principle of a panel was adopted, I submit that it is open to very serious objection, not only on the grounds that I have mentioned, but because it would, I think, leave to the Government only the right of objection to the name of any professional men on the panel; it would give them no power of investigation. I therefore appeal to the hon. and gallant Gentleman, who, I understand, is replying to the Government, whether he cannot see his way to accept this measure, and possibly to mould it in accordance with the Government's desire in Committee.

Lieut.-Colonel ARCHER-SHEE

I propose to oppose this Bill for one or two reasons. The first reason is that it means setting up a new bureaucracy and very expensive to deal with matters regarding the banks, and in the second place I notice that on page 2, Clause 5, it is stated: This Act shall not apply to foreign banks trading in Great Britain and registered in compliance with Section two hundred and seventy-four of the Companies (Consolidation) Act, 1908. I should like to know why it should not apply to foreign banks? Is there any reason why British banks should have to submit to an audit and foreign banks should not have to undergo the same treatment? The effect of this would be to act preferentially in favour of the foreign banks. I remember introducing a Bill for the purpose of making foreign companies undergo the same scrutiny as British companies have to undergo in regard to filing their account, having directors in the country, and so on. Although that was refused, and not taken up by the Government at the time, the idea was taken up by the Government during the War. If there was no other reason I would vote against this Bill on account of its not applying to foreign banks.

The FINANCIAL SECRETARY to the TREASURY (Lieut.-Commander Hilton Young)

It will probably assist the proceedings on this Bill if I, at this stage, state the views of the Government upon it. The Government is unable to accept this Bill. But I should like to make it clear to the hon. Member for Pontefract (Mr. Forrest), who has introduced it, and others that it is not out of any lack of sympathy or agrement with the general purposes and direction. Recent events have made it clear that some further regulation in the nature of auditing may very well be desired as regards the banks. In respect to that, I should like to make it further clear that while that is so it is not because reputable institutions require further control or legislation, but because the public require protection against the black sheep in the flock.

It is, therefore, the intention of the Government, on an early occasion, to introduce legislation to deal with this question. It is hoped that the legislation which it is intended to introduce will have a rather wider sweep than has this Bill; that it will deal, in particular, with such matters as the amalgamation of banks, and that it will fill a gap which very much needs filling in the legislation on this subject and that is the definition of what is a bank. Having said that much, I would like to add just one or two words about the broad reasons and principles why it is not possible to accept the Bill which is now proposed in spite of our concurrence in the circumstance that it is aimed in the right direction. In the first place I entirely adopt, if I may say so, the view expressed by the hon. and gallant Gentleman who has just spoken that it is quite unnecessary to commit the administration at this point to the employment, for this purpose; of a new series of Government officials. Nothing could be more undesirable, and that is, I am sure, the opinion of the House, in a case where it is not absolutely essential, to establish, as a Government service, what could probably be done with even greater efficiency by professional men.

I would point out that in the second Clause of this Bill there is a provision which it would not be possible to contemplate as adopting as the foundation of legislation on the subject. The sweep is very much too wide as to the powers-granted of audit. It is a root principle in the banking world, as is well known to many Members of the House, that the banker is a confidential trustee, as it were, for his client, the depositor, and that the confidence between them must be protected. The effect of the machinery of this Bill would be quite practically that depositors' accounts should be open to the inspection of the official auditor. That is certainly not essential for the purposes of audit. The matter certainly needs the most careful and the most meticulous consideration in order to confine the powers of the auditor to such as may be necessary for the purposes of an efficient audit—and no more. These are the two broad reasons as regards the machinery of this particular Bill which would make it impossible for His Majesty's Government to accept it, even as the foundation for legislation to be carried upon the subject. I should like, m closing, to emphasise the point of view I have already expressed, that I see between the intention I have expressed and the intention of the Mover of this Bill no difference in object or policy, and it is very likely that there is no essential difference as regards the mechanism to be adopted in carrying out that policy. If we do not accept this Bill on this occasion, it is merely because a measure is under consideration to be devoted to exactly the same end as those which my hon. Friend proposes.

Lieut.-Commander WILLIAMS

We nearly all realise that it is essential that the Government should take some steps to see that the disasters, the very serious financial disasters that have occurred in the banking world in the past, should not occur again. I am certain the House heard the clear and lucid statement of the position of the Government on this ques- tion with a great deal of feeling of satisfaction. Even for a new representative of the Government we get that phrase which we know so well in connection with Government legislation, that is, the phrase, "We will introduce legislation at an early date." When we hear that phrase, although many of us are young and some of us optimistic, we are inclined to doubt exactly whether we shall live long enough to see this early date. I quite realise that the present Government have rather revolutionised things in many ways, and some of us think they are too quick in our legislation, and they are not quite like the old fashioned Government that ruled 10 or 15 years ago which sat still and did so very little.

The point I wish to raise and emphasise and, if possible, to get a further statement upon from the Government is Clause 1. It is essential, as far as Clause 1 is concerned, that whatever administration the Government sets up to deal with this factor, both in the interests of the banks and the public, to eliminate, as far as is humanly possible, all chances of disaster. That should be done in some way or other, and if this is to be done it is essential that the Government should endeavour to do it by some means of registration fee rather than proposing any further charge upon the taxpayers of the country. As this is something to the advantage of the banks, the cost should fall entirely on the banks concerned.

I was glad to hear that as far as Clause 2 is concerned the Government are going to be quite certain that what has always been one of the greatest assets of the banking community, that of protecting the confidence of their individual clients, is not in any way going to be interfered with. I do not know whether my hon. and gallant Friend intends to take this Bill to a Division, in view of the Government's promise, but if a few Members would urge the Government to accelerate their progress and bring their legislation forward on this subject really at an early date, say, within the next two months, I am sure that it would receive a very great deal of support from all quarters of the (House, and it would get through without any opposition on lines such as those which have been laid down from the Treasury Bench.

Lieut.-Colonel D. WHITE

I have listened with considerable interest to the statement which has been made by the Financial Secretary to the Treasury all the more so because in the year 1911 I introduced a Bill on very much the same lines as the Government scheme, but I had the misfortune of being counted out. That measure included the title of banks, and it was very soon after the failure of the Charing Cross Bank. There is a very strong feeling in the country now, and it is not confined to the shareholders in Farrow's Bank, as to the necessity for some sort of legislation. I think it would be a very good thing if the Government would contradict the statement so often made at meetings of the depositors and shareholders of Farrow's Bank that the. Government had known for years that that Bank was insolvent. I believe that is not the fact, but I suggest to the Secretary to the Treasury that if it is possible the Government should deny that statement, because it has been said at more than one meeting, I mean the statement that the Government did nothing to protect the shareholders and depositors.

I agree that this Bill is not quite what one would wish for. Clause 2 is of far too drastic a character. We do not want to interfere with properly conducted banks or be inquisitorial, but we do want to deal with banks which are started very often under very shady circumstances. I would also like to know why foreign banks have been exempted from this Bill. I think it should include foreign banks if it is applied to any banks. I hope the Government will proceed with the Bill which they say they have in prospect, and if they do I am sure they will receive a large amount of support in this House, although I am perfectly well aware that the banking community, as such, do not like the idea of anything which savours of interference with them. I agree with my hon. and gallant Friend in urging the Government to bring in their Bill.


I desire to add my voice to those who have already spoken in expressing my gratification that the Government should have determined to resist the starting of a further Department of State for the auditing of accounts. What would be one of the effects of such a Department of a Department of State being constituted? It would mean that our banks would be liable to have their accounts examined by clerks with salaries of £400 or £500 a year instead of having them examined, as they are now, by the most eminent experts in figures which the country can produce and thereby giving a most valuable safeguard to the people of the country. The second objection which occurs to me on looking at this Bill is the enormous inquisitorial powers which would be given to the Government of the day over the affairs of individuals. Bankers are in very special fiduciary relations with their clients, and if Government Departments are to be allowed to examine at their will the whole of the relations between a bank and its clients, the fiduciary relationship which has hitherto existed will be largely done away with. I also think it is very detrimental to British banks that they should under this Bill be liable, for this Government audit, whereas foreign banks are excluded. There is a further difficulty that I see in Clause 8, which says that the Act shall not apply to Ireland. There are several British banks which have important branches in Ireland. Is the part of the bank which conducts its business in England to be subject to this Government audit and the other part of the bank which does business in Ireland to be free from that audit? That seems to me to be a state of affairs which is very anomalous, and for this and for other reasons I desire to oppose the Bill.


I hope the hon. Member in charge of the Bill will go to a Division on this matter in order to mark the sense of disappointment of the House at the very vague promise which we have had from the Financial Secretary that the Government will, at an early date, do something. Apparently the Government have utterly failed to realise the urgency of this matter. An early date means, as we all know, that there will be nothing done as far as this year is concerned. We have had the failure of Farrow's Bank, and last year another important bank, known as the Penny Bank, dragged down a large number of poor people, and year after year associations of people calling themselves banks are taking investors' money and are coming to grief, and the request now made to the Government is that the time has arrived when the Government should take action to protect investors from the dangers to which they have been exposed for so long and to which otherwise they will remain exposed in the future. I listened with very great attention to the remarks of the hon. Member for South Kensington (Sir W. Davison), who talked about crowds of officials, and the Financial Secretary stated that it would mean the appointment of a number of auditors, and that he did not himself consider there would be any advantage gained by interference at too great an expense. Anyone would think that this proposal is a novel proposition, but it is nothing of the kind. The Financial Secretary to the Treasury as a matter of fact does appoint auditors to-day to deal with friendly societies, and why cannot these same auditors or a similar body of auditors be appointed to audit the accounts of the banks? I am not prepared to endorse all the propositions contained in this Bill. There are very few of us who would, but there is such a thing as a Committee Stage, and then the Government themselves can make any proposals or alterations that in their judgment are necessary. There is no need for any delay whatever to take place. Let this Bill go to a Committee, and let the Government produce any Amendment they may think necessary. In the absence of some assurance from the Financial Secretary that such a course will be taken, I trust the Bill will be pressed to a Division in order to mark our disappointment at what has transpired.


It is a very important suggestion that is made in this Bill, and it is one with which we must have a great deal of sympathy, but it is a pity that the Government themselves have not taken any step in the matter and have left it to a Private Member to bring in a Bill which is necessarily imperfect. The operation of auditing all the accounts of all the banks in Great Britain must be extremely expensive and one which must occupy an enormous staff. In a Private Member's Bill it is not, I believe, possible to put in a Money Clause, and how all the accounts of all the banks can be examined without money being spent is a puzzle. Therefore it seems to me that if this Bill is to pass into law, it will fail of its object, because there will be no money behind it to enable it to carry out its objects. We have a motto in law which says, "Hard cases make bad law" The hon. Member for Pontefract (Mr. Forrest) is extremely anxious on account of the tragedies which have occurred, through the failure of small banks, that all banks and banking accounts should be investigated thoroughly. "All banks in Great Britain," my hon. Friend says, and he proceeds to except two sets of banks. Firstly, he excepts all the banks in Ireland. Surely that is another injustice to Ireland. Why should not the Irish people be protected as well as the English?


They will have their own Parliament.


I wish there were some Irish Members present to tell us what they think of a Bill which deals with all the banks in England, but does nothing for Ireland.


We can leave that to their own Parliament.


That is a cry which has endured for many generations, and is, of course, at the bottom of all the difficulties we have had in Ireland. Then the Bill exempts all foreign banks. I should have thought that it was quite as important to investigate the accounts of a foreign bank as of an English bank, because they may be guilty of fraud on a very much larger scale, and, although that would not hit poor people so much, it might hit a very large class of traders and cause "a great deal of serious trouble in the City. Again, the Bill contains, as far as I can see, no definition of a bank. I have tried to find a definition, and have been unable to do so. I have made inquiries of my friends, but no one has yet been able to give me a definition of what a bank is. My hon. Friend has made a gallant attempt, in Clause 5 of the Bill, to state what are the institutions that will be dealt with. Clause 5 says: For the purposes of this Act a bank shall be denned as any corporation or company registered under the Companies Acts, 1908 to 1917, partnership, firm, or business which employs the word 'bank ' in its name, title or description, or which carries on the business of banking in all or any of.its branches. It only remains for a company not to put the word "bank" into its name, and it is outside the Bill at once, and can carry on all the business of banking exactly in the same way as banks do at the present time. It will not be liable to have its accounts audited at all; it will only come under the general law of the Companies (Consolidation) Act of 1908. It will, therefore, be given all the opportunities of fraud that exist at the present time. The audit that, is provided, too, is an official audit. It is not a professional audit, be it noted, but an audit by officials, and I would draw the attention of the House to the considerable distinction between the two. I have no doubt that some of the officials of the Board of Trade are particularly skilled in accounts, so far as regards the accounts that they are in the habit of keeping. They pass a Civil Service examination in bookkeeping by double entry, and that is about all they know of it when they go into the office; and when they leave it at the age of 65 they know no more about accounts than when they went in, except the accounts that have come under their purview in the Department. My hon. Friend, however, insists that it shall be an official audit, and that the Board of Trade shall appoint officers of the Department to carry out the work.

9.0 P.M.

The Parliamentary Secretary to the Board of Trade knows very well that the energies of the officials in the Board of Trade are taxed to the full at the present time with the work that they have to do, and I should think that it will cause him a great deal of care if he has to contemplate diverting their energies to the audit of the accounts of all the banks in Great Britain. That is a gigantic task. It does not consist merely of a day or two's inspection of a balance-sheet which has been previously prepared by the bank. The accounts have to be gone into very minutely, or the audit will be of no use whatever. We know very weL that the balance-sheet of any limited liability company, whether it be an industrial company, a trading company, or a banking company, can be made to show a balance on either side as you please, according to the figure at which the assets are valued. If the owner of an industrial concern chooses to value the stock which he had at the commencement of the yea* at a very low figure, and) to value the stock which he has at the end of the year at a very high figure, it is clear that he will always produce a balance on the right side as regards himself. That, I suppose, is how Mr. Farrow got along. How an official from the Board of Trade, with no more idea of values than the man in the moon, could value all the assets of all the banks in England, passes my comprehension. I look forward with some interest to the provisions which the Government are going to introduce into their Bill, of which they have given us notice this evening. We may have to oppose it on anti-waste principles, on account of the enormous new and unnecessary expenditure which would be created just to catch a few sprats while the whales escape. A highly-skilled chartered accountant is an expensive person to employ. His time is very valuable. The most valuable part of a chartered accountant's audit is the valuation of the assets, and he has, or ought to have, special experience in regard to that. A bank owns, probably, every kind of property that it is possible to conceive. It owns real property of various kinds, which may be subject to mortgages, charges and settlements affecting its realisability. Then it owns personal property of every kind and description—stocks and shares, which may or may not have first or second charges upon them, and so on. To expect that an official from the Board of Trade could ever manage to arrive at a satisfactory valuation of all the securities that all the banks in Great Britain hold at the present time in respect of the advances which they have made to their customers, is a proposition at which I am amazed, and I cannot but admire the audacity of my hon. Friend in bringing in this Bill. I look forward, I will not say with eagerness, but with some curiosity to the reasons that the Government will be able to give for the introduction of the Bill which they say they have under consideration. British credit was never so high as it stands at present, and banking institutions, perhaps, were never so strong. Amalgamations on a scale which was never anticipated are taking place every day. They are almost unprecedented. Yet we hear that the Government is going to propose further amalgamations of the banks in Great Britain. That, of course, will be a very serious matter if the Government ventures to undertake it. It is a proposition which I think the country would say from a financial point of view is highly dangerous. The banking institutions of the country have too much monopoly as it is.

Mr. DEPUTY - SPEAKER (Sir E. Cornwall)

I do not see anything in the Bill referring to amalgamations.


It was in reply to the Financial Secretary to the Treasury who said the Government, as a reason for not supporting this Bill, was going to bring in a Bill, one of the objects of which is a further amalgamation of banks.


When that is brought in will be the time for discussing it.


Of course, when that time comes I shall take advantage of your suggestion, and will consider carefully the question of amalgamation. If you say it is out of order, of course, I bow to your ruling. I think we ought to know how the expense that this Bill will involve is going to be met. Is there going to be some private association of individuals philanthropic enough to come forward and form a fund to pay the expenses of the investigation of all these accounts? That is always the weak point of every private Bill. It has to be done either voluntarily or by calling on the Government to spend money. As the Government have refused now to spend the money it is quite clear that the Bill must be a failure. I am going to appeal to the hon. Member (Mr. Forrest) to withdraw it. I must, however, make one observation on Clause 2, which contains a principle that I am sure no self-respecting business community would ever assent to— These officers shall have access to all books, documents and papers in the bank. [Interruption.] I know my observations are not of very much value, but perhaps they may be allowed to reach the ears of other Members. The books of the bank contain securities deposited by companies for advances. Nothing is more detrimental to a man of business than to know that his assets are pledged. I cannot for the life of me see how it is possible to make an audit of banking accounts unless you know the value of those assets to the bank. As a consequence of that, they must know what these assets are and practically to whom they belong in order to arrive at a proper valuation. In the case of ships, for instance, a great deal depends on the person who owns them as to their value in many cases—whether they are owned by a small company or a great line, and so on. I should have thought it was sufficient to satisfy the provisions of the Companies Consolidation Act, which provides for the security of the British public with regard to banks. Section 108 says: Every company being a limited banking company or an insurance company, or a deposit, provident or benefit society, shall, before it commences business, and also on the first Monday in February and the first Tuesday in August in every year during which it carries on business, make a statement in the form marked ' C ' in the First Schedule to this Act or as near thereto as circumstances may permit, and a copy of the statement shall be put up in a conspicuous place in the registered offices of the company and every branch, office or place where the business of the company is carried on. Of course, that involves an audit, and the audit is one which in every respectable bank is done by a properly qualified accountant. My hon. Friend would change all that and say it must be done by an official of the Board of Trade. I have already commented upon the small protection that that would be to the British public. There are penalties for not doing that, and my hon. Friend, or anyone interested in banking companies, can always enforce the preparation and the publication of that statement by a simple means in the police court under Section 108 of the parent Act. It may lead to the conviction of the bank and to a revelation of the state of its accounts, so that the British public may know exactly what the position is. Then at any time any of these banks may be inspected and audited by the Board of Trade. If there is anything doubtful in the accounts or the Board of Trade or any other person thinks there is any reason for acting, he may apply to the Board of Trade and the accounts may be inspected and audited. Here is the provision in Section 109: The Board of Trade may appoint one or more competent inspectors to investigate the affairs of any company and to report thereon in such manner as the Board directs. In the case of a banking company having a share capital an the application of members holding not less than one-third of the shares issued. In the case of any other company having a share capital in a different way and in the case of any company not having a share capital, which a bank may not have—the Glasgow bank was not a limited liability company at all and therefore would not come under the Act—one-fifth of the members. All they have to show is that they have good reason for supposing that it would 'be a good thing that the accounts should be investigated, and that their motive is a bond fide one; and they must show that there is some reason for the investigation, which comes to the same thing— The Board of Trade may, before appointing the inspector, require the applicants to give security for payment of the costs of the inquiry. Under those circumstances the books and documents, of course, have to be produced and there must be an examination on oath of the officers and agents of the company in relation to its business, and the oath may be administered accordingly. Then there are penalties for not producing the books, and then, on the conclusion of the investigation, the inspectors will report their opinion to the Board of Trade and a report is forwarded by the Board.


Is the hon. Member in order in reading Clause after Clause of the Statute?


It does not seem to me that the hon. Member is out of order. He is pointing out what the Statute does already in regard to this matter.


I was pointing out the powers that exist already, and that instead of putting all the banks of the country to great expense and trouble, and to the great detriment of having to expose the position of their clients' accounts, and the securities that they hold, these things are amply provided for under the Companies Act and the provision with regard to inspection. This Bill is brought forward, I suppose, simply because of the few cases that have occurred in recent years where small companies, calling themselves banks, have failed to meet their obligations. I suppose that all the money that has been lost in these small banks could easily have been repaid by one or two years' contributions of the amount of expense that will be involved by auditing under this Bill all the accounts of the banks of Great Britain. I think I have said sufficient to show how unnecessary this Bill is, and I suggest to my hon. Friend that he should withdraw the Bill. If he does not, and goes to a Division, I shall be obliged to vote against it. My sympathy is very great for the poor people who have lost money by depositing it with people who are entirely untrustworthy. If my hon. Friend had insisted that no bank should be allowed to undertake business without a certain amount of capital, the minimum limit of which should be fixed in an Act of Parliament, that might have been extremely useful, and I am sure the banking community in this country would have welcomed such a contribution as useful commercial legislation, with which this House does not often indulge the country. The great weakness of banking in the past has been the insufficient capital which the banks have had at their command. I remember that the first banking account I had as a boy was with some people called Green, or something else, in Lombard Street—a highly respected old firm, which had been in existence for generations—but one day they failed, and the monthly allowance which I had had from that bank suddenly came to an end, and I was put in a position of considerable difficulty.


The hon. Member is travelling beyond the subject of Debate.


I bow to your ruling, but I was going to point out that that failure was due entirely to want of sufficient capital, and to urge that sufficient capital is necessary for banks, in order to give British people some sense of security for their funds. I shall certainly oppose this Bill should it go to a division, but I hope my hon. Friend will withdraw it.


Having heard expressions of opinion from all sections of the House, I would like to say that the principle involved in the Bill is of far more importance to me than anything else, and having regard to the sympathetic attitude taken by the representative of the Government, I should like to beg leave to withdraw the Motion and the Bill. [HON MEMBERS: "No!"].

Question, "That the Bill be now read a Second time," put, and negatived.