CLAUSE 4.—(Travellers' cheques, etc.) (Hansard, 4 December 1946)

§ Mr. Birch
I beg to move, in page 3, line 34, to leave out "enable," and 10 insert "entitle."
This is a very small point, almost only a drafting point, but I think it is of some importance. What the Amendment seeks to do is to substitute the word "entitle" for the word "enable." As Clause 4 (1) is drafted, it does allow a wide latitude of interpretation, because there are a great many types of documents which enable one to get money and enable one to get foreign currency. A letter saying, "This is my friend Mr. Smith, and I very much hope you will look after him," may, in certain circumstances, be much more valuable than a letter of credit. This is, presumably designed to apply only to travellers' cheques and letters of credit, which do definitely entitle as well as enable; whereas a letter may entitle one to get money, although not enable one to get it. I think it right to have greater precision in the drafting of this Clause.

§ Mr. Glenvil Hall
I think we are agreed that this is a small point, and it is certainly a drafting point. Experience alone will show whether the word "enable." is the correct word to use in this connection, but we are advised that "entitle" would certainly not be the right word, because it has a certain legal connotation; 393 and it might be assumed, on what, after all, is purely a banking facility, that the individual to whom the travellers' cheque or letter of credit is addressed is under obligation to pay. I hope the hon. Gentleman will not press this point. He can take it that we shall watch this matter. If we do find that the word used is not the right one, and that because we are using the wrong word—we do not think we are, but if we are—some change has to be made, because the word we are using excludes certain documents which should be included, we shall certainly look into it, to see that a change is made.

§ Mr. J. S. C. Reid
I do not know what the hon. Gentleman means by waiting to see, because by that time the Bill will be law, and it will not be subject to change. I hope he will look into this again, because there are other words, not only the word "enable," but the words "document of a kind intended to enable." Intended by whom? The writer of the document or by the recipient? I think the hon. Gentleman ought to look at the whole phrase "intended to enable," which, I am sure, is much too wide. We can leave that to the Report stage.

§ Mr. Glenvil Hall
"Intended to enable" refers to the parties to the transaction. In all probability it would be a bank of issue here—perhaps the right hon. Gentleman's bank. If he were going to South Africa they would give him a letter of credit or travellers' cheques, addressed, perhaps, to the Standard Bank of South Africa. It means "intended to enable" him to get the amount specified in the letter of credit when reaching South Africa. It means that and no more. In regard to the second question, I would direct his attention to Clause 31. A change of this kind could be carried through under the provisions of that Clause.

§ Mr. Pickthorn
I do not know whether I am missing some legal point. If so, perhaps, the lawyers here could put me right. But on the ordinary construction of the words, surely, "intended to enable" must mean that the intention is in the person who issued the document; and it seems to me that the hon. Gentleman who replies for the Treasury is—I am sure unwittingly—misleading the Committee, in telling us it is the intention of the parties. Surely, it must be an intention by the person issuing the document. If 394 so, the definition which we have just been given is fundamentally incorrect, and I think we ought to have it amended and supplemented. Secondly, we were told that the word "entitle" is, from the Government's point of view, too narrow. We have been inclined to think that their word is, from our point of view, too wide. Is it not really the duty of the Treasury Bench to give us some instances, or some analytical distinction, showing why it is necessary to have it too wide, as it seems to us, and not merely to say to us, "Your word is narrower than ours"? That was obvious; that was the intention in putting down the Amendment, but that is all that we have been told on that point. Cannot we be told why it is necessary to have a wider word?

§ Mr. Henry Strauss
The point seems to-me to be a slight but not unimportant one. I can conceive that the word "entitle" may not, for technical reasons, be entirely appropriate, and therefore I am not inclined to press it at this stage, but it seems to me, although I feel considerable confidence in the gentlemen who advise hon. Gentlemen opposite, that the words "intended to enable" are too wide. The main point I want to put is this. It is quite clear that the point, if it is a good one, is one which must be considered before the final stage of the Bill in this House, and not in its working. If the right hon. Gentleman says that he will consider the point on the lines I have suggested before the Report stage, my hon. Friend and I will ask the leave of the Committee to withdraw the Amendment.

§ Mr. Dalton
Certainly.

§ Mr. Howard (Westminster, St. George's)
I beg to move, in page 4, line 1, to leave out Subsection (4).
The purpose of this Amendment is to-draw attention to the extremely wide terms in which this Clause is drawn. It seems that it will have the effect of making some perfectly normal and ordinary transactions illegal. If it is the desire of the Government to render illegal certain improper transactions, or any particular acts which would lead to an abuse of the exchange control generally, then I for my part would be only too glad to see specific Clauses prohibiting those Acts in this Bill, but when it is drawn so widely that perfectly legitimate transac- 395 tions are made illegal, it is surely time to ask for some explanation. If I may put it this way all of us would agree that it is a useful and desirable practice that a policeman should hold up his hand at one particular crossing and stop traffic there to enable other traffic to go through, but it does not follow from that that the best way to increase safety on the roads and to improve traffic is to have every policeman holding his hand up at every crossroad the whole of the time. That seems to be the effect of this Clause. The first words of the Subsection are: Every person in or resident in the United Kingdom. Then it refers to "any document," and after the short debate we have just heard on Subsection (1) of this Clause, it is still not quite clear what "any document" might be. It is very wide, but refers mainly to travellers' cheques. Then it goes on: shall encash it or cause it to be encashed …with the person issuing it or with a banker. 6.15 p.m.
In the case of a person who is in this country and has come from abroad, presumably the person issuing it will also have been abroad in the country from which the visitor started, and quite clearly it will not be possible for a person in this country to encash it with the person who issued it in the first place. The alternative with which he is presented is to encash it with a bank. On the face of it that would not seem unreasonable, except when one considers the normal form of a traveller's cheque itself. It is surely not a very wrong or wicked thing to use a traveller's cheque to pay one's hotel bill; it is quite normal to pay one over into the hotel, which accepts it. It is a normal and proper convenience, but as the Subsection is drawn at present, that would be illegal.
Again, a traveller's cheque could quite properly be used for purchasing a ticket, whether by air or rail, to travel. But under this Subsection it must be encashed with a bank. If, as unfortunately, rather frequently happens these days in connection with air travel, one has to go at short notice, it is quite conceivable that it would in fact be impossible for the intending traveller to get his traveller's cheque cashed at a bank. Quite apart from the 396 question of convenience, it might actually be impossible, and it would still be illegal for him to get the money in any other way. These difficulties will arise under the Clause unless the Treasury can and will consent to retention or encashment elsewhere than at a bank. But how is the Treasury to indicate its consent when a foreigner may have got the traveller's cheque in a foreign country? Indeed, it need not necessarily be a foreigner; it might be a British subject who happens to have been abroad, perhaps in one of our own territories, and who has obtained a traveller's cheque before coming back here. How, when obtaining that traveller's cheque, is he to obtain the consent of the Treasury in this country to the exact purposes for which he may use it when he comes into this country? I submit with great respect that it is much too wide, and I therefore hope that the Amendment will be accepted.

§ Mr. Glenvil Hall
We take the view that this Subsection is not, in fact, too widely drawn. This Clause deals with traveller's cheques and similar documents, which of course must be covered if exchange control is to function in all its parts, because a traveller's cheque is cash once removed, and can be foreign currency once removed. Therefore, we have got to deal with documents of this kind, and this Clause does so. Where Subsection (4) refers to a document, it is dealing with the kind of document defined in Subsection (1) of Clause 4, and that is the kind of document to which I have just referred. What we want to do is to prevent anyone using a letter of credit or a traveller's cheque, whether got from a bank or from a travel agency, and building up a stock of them, because that would be possible and indeed legal if we did not include this Subsection in the Bill. Therefore, we must have it, and after all it is only commonsense, and fair, that if someone applies for a letter of credit or traveller's cheque to go for a holiday, he should use the money for the purposes expressed in his application and for which the money or currency was given him.

§ Mr. Howard
Abroad, and not in this country?

§ Mr. Glenvil Hall
He should use it for the purposes which he stated in his application. If he does not use it for those purposes, it is only right and fair that 397 he should hand back the cheques to the authorised dealer, who is probably his banker. For these reasons, and for others which I, take to be obvious, we must ask the Committee to reject this Amendment.

§ Mr. Howard
Is the Financial Secretary really suggesting that travellers who wish to get travellers' cheques in some foreign country to come here, must obtain the consent of the Treasury in regard to the purposes for which the money is to be used in this country?

§ Mr. Glenvil Hall
The hon. Member is now talking about a national who is resident in another State. In that case he would have a bank in his own territory from which he would obtain credit and currency to come over here. We are obviously not dealing with him. How he gets the money, and the reasons he gave to his banker are purely his concern and not ours.

§ Mr. J. Foster
I think that we ought to have a clearer explanation from the Financial Secretary. This Clause is drawn too widely. A person who comes here from outside the United Kingdom with travellers' cheques has to cash them with a banker. In this connection, I should like to ask whether the Treasury have consulted the organisation which has to encourage tourists. Anyone who has travelled knows that travellers' cheques are used as cash or currency, and it will therefore be a great inconvenience if travellers' cheques cannot be cashed at railway stations, or with the concierge of a hotel. These cheques can now be cashed in a hundred and one different ways, but if these people are to be driven to the banks, it will not help at all. The Financial Secretary as I interpret him says it is not desirable that foreigners should be be able to build up cash in this country, but it seems to me that a man who has travellers' cheques for £100 can go to Lloyds Bank and cash them and build up the nest-egg he wants. The Financial Secretary suggested that it would not be proper, for instance, for an American to come here with £10,000 worth of travellers' cheques, when he had not received permission from the Treasury to cash that amount, but submit that this money could not have been acquired without the sale of dollars. What possible safeguard is it to make a man cash his travellers' cheques in Lloyds Bank on one 398 side of the street, and prevent him from cashing them with the concierge at the Savoy Hotel on the other? I understood the Financial Secretary to say that the Government did not want a man to have travellers' cheques in dollars or francs, and use them for purposes which were not intended. I understand that but that has nothing to do with the case. The Clause is much too wide and restricts legitimate tourists. The Treasury have to rely on the ordinary restrictions in other parts of the Bill as to what a non-resident can or cannot do with his cash.

§ Mr. W. J. Brown (Rugby)
I have an interest in this matter, because I have some travellers' cheques. I am not sure how I am to be treated under this Clause. If I spend precisely the number of travellers' cheques which I hold, then this practical issue will not arise. But suppose I come back with £20 or £30 of travellers' cheques in my pocket. There are many other Members in this House who go abroad, and I can well imagine that I might meet one in the smoke room, and find that he wanted some travellers' cheques. I might say, "I have some which I do not want. Will you buy them from me?" Do I understand that I am not allowed to carry through what I have hitherto regarded as a perfectly harmless transaction?

§ Mr. Bowles
I do not know whether the hon. Member has ever seen a travellers' cheque, but the great thing about these cheques is that you have to sign your name in two different places— at the issuing bank, and at the bank which cashes the cheque.

§ Mr. Brown
I am an authority on this subject, because I have just acquired a stock of these cheques. If I do a deal with a fellow Member of Parliament, there will be exactly the same number of travellers' cheques as there were before, and exactly the same amount of currency. But in order to carry out this simple transaction, I shall expose myself to a penalty, although I am not sure what the penalties are. Is it really necessary to have a closed shop on transactions between one Member and another, and one citizen and another?

§ Mr. J. S. C. Reid
I hope the Financial Secretary will tell us a little more about this. I am sure that this Clause is extremely confusing to a person who wishes 399 to have this type of credit and take travellers' cheques abroad. It is right that the public should know what this Clause means. I have studied this—I am not an expert, although I am not completely ignorant on these matters—but I do not know what it means. Let me first suppose, unlike my hon. Friend the Member for Northwich (Mr. Foster), that we are dealing with travellers' cheques issued in this country.

§ Mr. Glenvil Hall
That is al1 we are dealing with.

§ Mr. Reid
My hon. Friend was apparently dealing with travellers' cheques issued in sterling in America, and I do not know whether that is feasible or not. I think it is if such a thing exists, and I see no reason why it should not exist. But let me come to the traveller's cheque drawn in this country. What must I do with it? If it is issued by one of the limited number of people who are authorised dealers, it is covered by Clause 5. But we were told, earlier today, that you can count the Dumber of authorised dealers almost on the fingers of one hand. Accordingly, one of the documents will, quite properly, be issued by persons who are not authorised dealers. I take one that is so issued. Unless the Treasury have given me specific consent— and it takes time and trouble to get it— I must encash it, or cause it to be encashed in the scheduled territories. I must do it immediately, before I have an opportunity of using it, because the Treasury consent is to my retention of it. If I have no consent to retain it, I must be committing an offence unless I get rid of it at once.
It is true that the third, fourth, and fifth lines of the Subsection do not say that I have to encash it at once and one would think what was meant was a reasonable time, in all the circumstances. But that seems to be contradicted by the next line which appears to indicate that I cannot retain it at all unless I have Treasury consent. The Treasury must consent to my retention of it, not to my retention after its purposes have been served. I am taking the Subsection before we get to the last three lines—the general case, not the exceptional case. Unless I get one of these cheques from an authorised dealer, or obtain specific consent from the 400 Treasury, I may commit an offence if I retain it at all. Suppose I get a cheque this week, intending to use it a fortnight hence, and I have no consent to retain it for a fortnight I am committing an offence in retaining it for a fortnight. The only thing I can do is to put it in my pocket on the day I am leaving. I therefore hope that the Government will give us an adequate explanation of this matter.

§ Sir Frank Sanderson (Ealing, East)
I feel very confused as to the meaning and interpretation of Subsection (4), the first line of which says: Every person in, or resident in"— If anyone from the Continent, or from the Americas, were visiting this country he would, in fact, be in this country. If that be so, this would refer to travellers' cheques issued in the visitor's country, to be expended here in Britain. On the other hand, it may also refer, and only refer, to a resident in this country who has received travellers' cheques and who desires to cash those cheques abroad. I would like to know whether it refers to the first of the two cases I have enumerated, or to the second, or to both. A travellers' cheque issued by a banker in this country, to be expended abroad, is used for a variety of purposes. It is used for paying for railway tickets, or for air travel, for payment of a hotel bill, or merely for the purpose of securing money to be expended in other ways. I would like the Chancellor to make it clear whether he desires to limit the means by which travellers' cheques can be cashed abroad, whether he is referring to travellers' cheques issued to nationals at home to be spent abroad, or whether he is referring to travellers' cheques issued abroad to foreign nationals to be expended here. It is essential that these points should be made clear. If the Minister considers that the words of the Subsection are clear I assure him that the man in the street does not think so, and would like some clarification of these points.

§ Mr. Solley
I submit to the Committee that this matter is not so complicated as might appear from the speeches we have just heard. The apparent complication has arisen from the fact that Members opposite have forgotten that the documents we are discussing are documents which have been created to fulfil a particular purpose. Subsection (1) of Clause 4 says that it applies to: 401 …any document of a kind intended to enable the person to whom the document is issued to obtain foreign currency … in certain circumstances. Putting it shortly, the purpose of the document is to enable an applicant for the document to obtain foreign currency for certain purposes—

§ Mr. W. J. Brown
It is not foreign currency for certain purposes. Clause 4 (1) says: This Section applies to any document of a kind intended to enable a person to whom the document is issued to obtain foreign currency … That covers travellers' cheques, and letters of credit.

§ Mr. Solley
That is true. It says: … to obtain foreign currency from some other person on the credit of the person issuing it … If we apply that definition to Clause 4, we find that a person, having obtained that document, which was issued for the purpose of getting foreign currency, must encash it in the scheduled territories with the person issuing it, or with a banker. Under Subsection (1) of this Clause the purpose of issuing this document is not to enable a person, having possession of the document, to obtain foreign currency, but to enable the document to be encashed. Members opposite may not agree with this submission, but I think it is the right one.
This document, therefore, is issued for the purpose of obtaining foreign currency which must, in the ordinary case, be cashed in the scheduled territories. If, however, the applicant changes his mind and does not propose to cash this document in the scheduled territories, or does not propose to use the document for the purpose for which it was required or intended under Subsection (1) of this Clause, then he must apply to the Treasury for consent to retain it, or, in other words, for consent not to use it for the purpose for which it was required and the purpose intended under this Clause.

§ Mr. C. Williams
Can the hon. Member explain what happens if no one wants the document?

§ Mr. Solley
If no one wants the document, and the hon. Gentleman will give it to me, I can use it for a very good purpose.

§ Mr. W. J. Brown
I might be disposed to solve some of my own problems by 402 handing all my surplus cheques over to the hon. Member, but I am afraid that I should still be committing a crime.

§ Mr. Solley
I am not going to argue that point. The point which I am making is that although Subsection (4) of this Clause could have been worded more clearly, it is, nevertheless, reasonably clear to any person who cares to read it carefully, and, in my submission, it ought to stand as it is.

§ Mr. Henry Strauss
I regret to inform the Chancellor of the Exchequer that the elucidation to which we have just listened has not entirely removed my doubts about the Subsection as it stands. I think the simplest way in which I can put my point is to give an example of what may well occur at any time to any of us. If one of us obtains a traveller's cheque for the purpose of foreign travel, the utmost he will get is £75, because that is the most that the Chancellor wishes him to spend abroad. Assume that the person who has taken it wishes to travel by air, but on arriving at the aerodrome finds that the weather is such that he cannot depart, and he has to stay for a night or two waiting for better weather. He runs up an hotel bill, and, finally, when the aeroplane can take him, he starts before any local bank is open. It will now be a criminal offence under this Subsection for him to use a traveller's cheque which he has obtained by the consent of the Chancellor of the Exchequer for his foreign travel, to pay his hotel bill in this country. Does the right hon. Gentleman really desire that fantastic result? I cannot think that he does. I cannot think that those advising him wish to produce this ridiculous result. If this Subsection does not produce that result—I do not wish to be unkind to the hon. Gentleman who has explained the whole thing to the Committee—perhaps the learned Solicitor-General will show me where I am wrong. The case which I am putting is nothing like the rather dangerous transaction in which the hon. Member for Rugby (Mr. Brown) is determined to indulge. It seems a perfectly normal transaction but one which is made illegal by this Subsection
Let me turn to another matter. It is quite common for a person here to obtain travellers' cheques for use in this country —a Member of Parliament, for example, who has to travel to different places— which he can use to obtain cash in a 403 place where he has no banking account. At the moment, it would be possible, no doubt, for bankers to issue sterling travellers' cheques for use only in this country, which would solve that problem, but I do not think that there would be anything necessarily improper if travellers' cheques expressed in sterling, such as we are all accustomed to get for use in travel abroad, were also available for use in this country. Under this Subsection it will not be legal to use them here. My main purpose, however, is to ask that a Minister should meet the perfectly simple point regarding the gentleman who has obtained travellers' cheques, who is held up at an hotel near an aerodrome, and who wants to use one of those cheques to pay his hotel bill.

§ Mr. Glenvil Hall
The short answer to the question put by the hon. and learned Member for the Combined English Universites (Mr. Strauss), is that the traveller who visualises going abroad on a holiday and who is held up by bad weather will have paid his fare, and it will not come out of the £75. The travellers' cheques, if he has been wise, will not be in sterling, but in some foreign currency. In addition, as I think is well known now, all travellers are permitted to take £5 sterling with them for eventualities such as has been suggested on the journey going and coming back, when they are within the jurisdiction.
The present Bill, I might add, is designed to protect the exchange position of this country. It is true that the provisions laid down in the Bill are, in many respects, very stringent. That may be regrettable, but, nevertheless, they are necessary. At the same time, as I think the Committee know, it has been decided that by exemptions, orders and regulations of one kind and another, many of the provisions of this Bill can be limited or made of no avail. So far as foreign travellers to this country are concerned, we are fully alive to the fact that we want them here, and under exemption orders to be made under Clause 31, conditions governing their stay here will be made as easy as possible, subject to the overriding needs of the country to preserve its foreign exchange.

§ Mr. H. Strauss
The hon. Gentleman says that travellers' cheques, which a man obtains for the purpose of foreign travel, 404 will not be expressed in sterling. Any Member of this House who has travelled abroad in the last few years will know that that is entirely incorrect. When you go to your bankers to get travellers' cheques for use abroad, you can get them in denominations of £10 if you wish, and you then get cash for them in any foreign currency, according to the place you are visiting. With regard to the £5, if the traveller is held up at an aerodrome for some time with his family, he may need more than £5. If he takes more than he needs in cash and is not held up by bad weather, there is nothing which he can lawfully do with his excessive cash because he is not allowed to take it out of this country.

§ Mr. Glenvil Hall
If the hon. and learned Gentleman intended to go abroad, and he came back with more than the requisite amount upon him in sterling, and made a clean breast of it to the Customs and Excise, either they would accept his explanation—if he looks innocent and is obviously a bona fide traveller—or they would take the money from him and credit his account with it or pay it to him personally, or in any way in which he desired to have it. That is how the thing works. I do not want to labour this, but frankly, if the travellers' cheques are expressed in sterling, what on earth is the hon. and learned Member trying to say? If they are cashable in sterling, or in a foreign currency, it seems to me that the person holding such travellers' cheques would be covered against all eventualities.

§ Mr. H. Strauss
I am sure that the Financial Secretary wishes to answer the point that I put to him. I put to him the specific case in which a person wishes to pay an hotel bill incurred while he is waiting for the weather to become sufficiently good for his aeroplane to fly. The person has no other money upon him adequate to pay the bill except sterling travellers' cheques, and the aeroplane leaves before the bank is open. He cannot, therefore, cash the travellers' cheque at a bank. Why should he not be allowed to pay his hotel bill? How does the Financial Secretary answer that question?

§ Mr. Glenvil Hall
The answer is that he should have upon him enough sterling to cover the bill. If people who travel are too simple or too poor to have a sufficient surplus to meet an eventuality of the sort 405 visualised, obviously one cannot legislate for that kind of thing in any Act of Parliament. Whether one had exchange control or not, the situation visualised would face that particular traveller.

§ Mr. J. Foster
The hon. Gentleman said there would be exemptions under Clause 31. Will he tell us, either now or when we discuss Clause 31, the main lines of the exemptions which are to be granted?

§ Mr. Dalton
It is a much wider question than this.

§ Mr. J. Foster
But in this case the Financial Secretary has said, "Do not worry about foreign travellers, because there will be adequate exemptions." Can he tell us, now or on Clause 31, on what lines those exemptions are to be? Will he undertake to do that?

§ Mr. Glenvil Hall
An opportunity will occur later, either on Clause 31 or on an earlier Clause, to deal with that point. If the hon. Gentleman will permit me, I will not deal with it now, and indeed, I am not sure whether I would be in Order in dealing with it now. I can assure the hon. Gentleman that the point is covered by the Bill, and it will be permissible for the Treasury, by exemption order, to grant travellers who come to this country every facility to pay hotel bills and to have petty cash in their pockets for 'bus fares, cab fares, or fares on the underground or even to buy meals for their wives. I think it was the hon. Member for Northwich (Mr. John Foster) who talked about an American coming to this country with his pockets full of dollar bills. The hon. Gentleman made my right hon. Friend's mouth water. That is the kind of visitor we want, because dollar exchange is always acceptable to us. If and when he came with foreign exchange in his pocket, he would come under another part of the Bill.

§ Mr. J. Foster
I am sure the Financial Secretary does not wish to misrepresent me, but I did not deal with dollar bills. With regard to the other matter which I raised, all I was asking was that the Government should state what exemptions there are to be. It is quite understood that the Treasury can make exemptions. What I want is an assurance from the hon. Gentleman that, when the time comes, he will state the main lines of those exemptions.

§ Mr. Glenvil Hall
I thought I had made it clear that, at the appropriate moment, such a statement will be made either by me or by my hon. and learned Friend the Solicitor-General, on behalf of the Chancellor. I think the main point to which attention should be directed is that which was made by the right hon. and learned Member for Hillhead (Mr. J. S. C. Reid). He wanted to know whether, under this Subsection, it would be essential for an individual holding the currency mentioned to get rid of it. The answer is "No," because the Subsection does not name a time, and, therefore, we must use common sense about it. The crux of the whole thing is the purpose for which the travellers' cheques were issued, and if that purpose is fulfilled, whether it is today, tomorrow or next month, obviously the provisions of this Subsection will not have been contravened. I think that is self-evident.

§ Mr. J. S. C. Reid
The Subsection is so drafted that in the general case there is no statement of purposes in the application, because the last three lines begin: and where in his application for that consent he has stated that he requires it for a particular purpose … That is a special case, and the main part of the Subsection deals with a general case where no purpose is stated. Take the general case, where no purpose is stated in the application; take the case where the travellers' cheques are not issued by an authorised dealer. As I read the Subsection—and I ask the Solicitor-General if that is the right meaning—the person is not allowed to hold the cheque at all unless he gets the specific consent of the Treasury for its retention. Therefore, it seems to me that, in that case, if you carry out the obvious purpose you have in mind, you are committing a crime. I cannot think that is intended, and, therefore, I say that the Subsection ought to be redrafted.

§ The Solicitor-General
To understand the object of Clause 4, one has to bear in mind Clauses 1 and 2. Clause 4 applies only to documents which enable one to obtain foreign currency. Either that is ordinary foreign currency, or it is specified foreign currency. If it is ordinary foreign currency, Clause 1 applies to it, and one treats the travellers' cheque just as if it were foreign currency within Clause 1. If it is specified foreign cur- 407 rency, it falls within Clause 2, and one treats that travellers' cheque as if it were specified foreign currency. With that introduction, to return to the question asked by the right hon. and learned Member for Hillhead (Mr. J. S. C. Reid), the position is as follows. If the Treasury have not consented to the retention of the travellers' cheque, it has to be turned in immediately. Obviously, it has to be done at once. It has to be done as soon as the consent to retention expires. Suppose that it is ordinary foreign currency, and not specified foreign currency, the position will be that, under Clause 1, it will have been obtained from an authorised dealer, and it will have been obtained pursuant to an application, and in terms of a particular Treasury consent, namely, a consent to use it for foreign travel on some specific purpose for a specific period. The person who holds the travellers' cheque which comes within the ambit of Clause 4 (4) will, therefore, have to encash it within the scheduled territories only when the time for which the Treasury consent to his retaining it expires. That makes it perfectly workable and easy. In other words, when one is discussing travellers' cheques, one has to visualise them as foreign currency.
7.0 p.m.
If they are ordinary foreign currency, only got through authorised dealers and with Treasury permission for a specific purpose, they specify that the foreign currency will have to be turned in under Clause 2. A traveller has to encash it within the scheduled territories as soon as the purpose for which he obtained it from the Treasury or the time he is allowed by the Treasury to retain it expires, not before. Altogether it works simply and easily, but I can see it is not easy to define the reason on the first reading of the Clause. What has to be borne in mind is the simple thesis that one has to draw foreign cheques with foreign currency, and then look back to Clauses 1 and 2 to see what happens to them. It will be found that the result is perfectly simple.
I have been asked a question with regard to aerodromes. If a traveller goes to an aerodrome and finds that his plane is not leaving and he has to wait two or three nights, can he use a travellers' cheque to pay his hotel bill? The answer to that is that he would not be able anyhow, because the Clause only applies to 408 travellers' cheques enabling him to obtain foreign but not English currency.

§ Mr. H. Strauss
It does not say that

§ The Solicitor-General
With very great respect, it does. If the hon. and learned Gentleman will look at Clause 4 (1), This Section applies to any document of a kind intended to enable the person to whom the document is issued- to obtain foreign currency.

§ Mr. H. Strauss
It does not say "foreign currency and not English currency."

§ The Solicitor-General
By implication it does not apply to travellers' cheques other than travellers' cheques described in Clause 4 (1). Under this Subsection he could not use one of these to pay an English hotel bill, but he probably could if he read the terms of the permission given by the Treasury. The terms of the permission would allow him to do so because the cheques were given for the purpose of foreign travel which means journeying in and out of England. Therefore it depends upon the terms of the Treasury consent. I repeat that really the thing is not so difficult if one takes the trouble to read Clauses 1, 3 and 4.

§ Mr. J. S. C. Reid
The Solicitor-General's explanation has made the position even worse than it was. Let me draw the Solicitor-General's attention to this. Clause 4 (4) deals with a document expressed in terms of sterling. There is nothing whatever on the face of that document to show what its ultimate destination is intended to be. Here is a perfectly good letter of credit addressed to all and sundry all over the world expressed in terms of sterling.

§ The Solicitor-General
Will the right hon. and learned Member for Hillhead {Mr. J. S. C. Reid) give effect to the words to which this Clause applies?

§ Mr. Reid
I am coming to that. The question of whether that applies to this document under the Solicitor-General's explanation is answered by the fact that it is not dependent on what is written in the document. It depends solely upon the intention of the parties who issued the document. A letter of credit or a travellers' cheque is issued by a certain bank or a travel agency. That is not, on the face of it, cashable only in certain places; it is cashable in any place in the world.

§ Mr. Glenvil Hall
Against these provisions.

§ Mr. Reid
You have to get behind that, and you have to inquire what happened when the traveller went to the travel agency and asked for the document. That does not appear on the document. All that appears on the document is that it can be cashed in America or in Australia, or inside the sterling area or in some place where there are different rules. Whether or not I commit an offence under Subsection (4) depends not solely on what I do, not on what the document says, but on what was said to the travel agency when they issued the document. Let us assume that I go to one of these agencies and say, "Please give me a document to use in America." I then get a document with a certain understanding. If I say, "Give me a document to be used in Australia," that is quite a different thing and this Clause does not apply. However, if I say, "Please give me a document that I can use either in America or in Australia because I am going to both countries," what happens then? I do beg the hon. and learned Gentleman to believe that he has not explained this Clause at all, and we shall have to divide against it because it is even more unintelligible now than it was before.

§ Mr. Turner-Samuels (Gloucester)
On what authority does the right hon. and learned Member for Hillhead (Mr. J. C. Reid) say that the cheque depends on what took place between the parties when it was issued and not upon the terms of the document itself? It is perfectly clear, in the terminology of the document, that this Clause applies to any document intended to enable the person to whom the document is issued to obtain foreign currency. It is the document not in the construction of what has been previously negotiated between the parties which decides the issue. The right hon. and learned Gentleman should adduce some authority for the proposition he has made, because it does not make legal sense.

§ Mr. Reid
I do not like to be accused of not making legal sense. Will the hon. and learned Gentleman agree to this—that the form of document is precisely the same, whether I have asked for a document which can be used in America, or for one that can be used in Australia? 410 The document may be for £75 and it is expressly sterling with which we are dealing. If it is a letter of credit intended to be used in Australia, this Clause does not apply to it. If it is a letter of credit intended to be used in America this Clause does apply to it, and the only way of understanding it is by asking the man who wrote it out what he did intend.

§ Mr. Turner-Samuels
I do not agree with that at all.

§ Mr. W. J. Brown
I have in my hand a document covered by the Clause. It is a traveller's cheque for £5. I want to know how the use of that cheque is going to be affected by this Clause. It will be covered by Clause 4 (1), because that Clause says: This section applies to any document of a kind intended to enable the person to whom the document is issued"— that is me— to obtain foreign currency. There can be no doubt that the purpose of this document is to enable me to obtain foreign currency. It is true that on the back of the document it is written: Available only in the sterling area, but, in fact, I can get foreign currency within the sterling area. There is no difficulty about that. I can get foreign-currency in any country that comes within the sterling area on the basis of that document. I can use that cheque in various ways. I might use it to pay my mess bill on the boat, or to buy a ticket for a train or plane, or I might use it to pay a hotel bill. In fact, it is a substitute for cash and an effective substitute at that. In the old days, if I had some of these over when I came back, I could sell them to another Member of Parliament, get my money back, give him the cheques he wanted, and thus complete a smooth transaction. [An HON. MEMBER: "No."] Oh yes I could, and I happen to know, because I have done it. For alls practical purposes the cheque served the purpose of cash.
If I turn to Clause 4 (4), I am confronted with a sharp limitation. All I can do with this instrument, I am told is to … encash it or cause it to be encashed' in the scheduled territories with the person issuing it or with a banker … The "person issuing it" is Barclays. Bank in London, and if I am in Bermuda 411 they would obviously not be accessible so that therefore I must cash it with a banker and nobody else in Bermuda. The whole flexibility of this piece of paper as an instrument of travel and accommodation is destroyed, if those words stand as they are now. I can make no other sense out of the English of the Subsection. When the Solicitor-General spoke I must Say that I thought I was beginning to see light on the matter, and that he was envisaging what was to happen after the journey was over and the traveller was back home. The learned Solicitor-General says that when the journey is over and I am back in England I must, if I have not used these cheques, do one of two things. I must either take them back to Barclays Bank or to some other banker. That is all right, and the only effect would be that I would have to make the exchange through a banker, and not through someone else. But there is nothing in these paragraphs to suggest that Clause 4 operates only after the Englishman has been abroad and has come back with some spare cheques in his pocket.

§ The Solicitor-General
Read the last three lines.

§ Mr. Brown
They are: … where in his application for that con-Bent he has stated that he requires it for a particular purpose"— I have said that I require this traveller's cheque for a particular purpose.

§ The Solicitor-General
Read on.

§ Mr. Brown
I may be taking too much with me and underrating the hospitality I shall enjoy. I may not use all the cheques, and when I come back I understand that I am obliged to do certain things under Clause 4.

§ Mr. Glenvil Hall
Now the hon. Gentleman has it.

§ Mr. Brown
If that is so, then I wish the Government had inserted words to that eftect, because the Subsection as it stands does not say that this is what one must do with an instrument of exchange for foreign travel when one has come back and has not spent it. At least the thing would then have been clear, whether desirable or not. It certainly is not clear now, and if it bothers hon. Members to 412 interpret the wording what effect will it have on people outside? From now on, we shall have to protect ourselves by carrying a copy of the Act wherever we go. At least let us make, it intelligible. I urge the Chancellor of the Exchequer and the Financial Secretary to take the Clause out and, if this is something that has to be done at the end of the journey, I beg them to think not only of the American who comes to England—I have a great affection for him and his dollars— but also of the Englishman who goes from this country to some other country. I ask that the Englishman may be considered—which is almost heresy in these days—and that the Subsection should be redrafted to make it clear that we shall still be able to use these travellers' cheques for foreign travel as before, and that all the Chancellor is concerned with is what we do with them when we return.

§ Mr. Dalton
Although I have not yet taken part in the discussion on this Clause, I have listened with great attention to the speeches which have been made from various parts of the Committee. I hope that the difficulties which have been suggested are really nonexistent, and if I can I will certainly endeavour to make the position clearer than it has seemed to be to some hon. Members—and to some hon. and learned Members who are accustomed to construing these documents. Before Report stage I will consider whether we can introduce some further clarification into the Clause, since it is evidently confusing to a number of hon. Members who have different views on it. I cannot agree to withdrawing the Clause at this stage, but I do undertake to look at it with my advisers to see whether we can make clear the intention, which is, of course, merely to protect our exchanges resources from improper raids. That purpose is common, I think, to all hon. Members, and as I say I will undertake to re-examine the wording before Report stage and, if possible, introduce some qualifying Amendment.

§ Mr. Pickthorn
May I ask the right hon. Gentleman just one question? Is it part of his intention, as I thought it was of those making most of the speeches from this side of the Committee, that a world letter of credit should be usable for paying, for instance, hotel bills, railway fares and so on—

§ Mr. Dalton
In this country?

§ Mr. Pickthorn
No, in foreign countries. Or must it always be turned into cash first and the cash then used for the purposes I have indicated?

§ Mr. Dalton
I do not think a straight reply to that point would do justice to the question. I undertake to look at the various points which have been raised, and see whether a further clarification can be made. I do not want to go over the ground again, taking up point by point the arguments that have been advanced. I think that that would waste the time of the Committee, and that the undertaking I have given will be more useful to the Committee than a prolongation of the present discussion.

§ Mr. Howard
I think there is only one course open to me now, but I should like to say that nothing in the world would have induced me to move this Amendment had I thought that we were going to be led into this discussion of legal details. I moved it as a perfectly straightforward Amendment for practical reasons, and I had hoped to receive a reply. In view of the Chancellor's undertaking, however, I beg to ask leave to withdraw the Amendment.

§ Mr. Glenvil Hall
I beg to move, in line 20, to leave out Subsection (6).
The Committee will notice that this Amendment has the backing not only of my right hon. Friend but of an hon. and gallant Gentleman who sits on the other side of the Committee. We dealt with this point on Clause 2 but, as I indicated then, the arguments in favour of the retention of the same wording under Subsection (6) of Clause 2 do not apply here. The traveller's cheque or letter of credit with which we have just been dealing invariably says on its face, in a most unmistakable way, just who are the parties to it. That being so, it is quite inapplicable that this Subsection should be included in this Clause.

§ Mr. Stanley
Certainly nobody on this side of the Committee will quarrel with the decision of the Government to remove this Subsection, but what some of us would like to know is why it was ever put in The hon. Gentleman has just told us that it is wholly inapplicable and that the document concerned shows who 414 are the parties to it; in other words, there never could have been any justification whatever for a Subsection of this kind. I think we are entitled to ask why, in these circumstances, the Government should have included a Subsection which certainly seems, to the layman, to 'contravene every legal tenet in which we have been brought up to believe. We ordinary people have always understood that it was part of the law of this country that one was presumed innocent until proved guilty. Here we have the Government putting in a Subsection to say that one is assumed to be guilty until proved innocent, which is a pretty serious thing to do. Then, shortly after publication, they come down and tell the Committee that they have had second thoughts and wish to withdraw the Subsection after all.
It only shows what many of us have suspected and what anybody who listened to the discussion on the last Subsection must have known, that the drafting of this Bill has not yet received proper consideration. It is all the more important if the Bill has not received proper consideration in the Ministry before its publication that ample time should be given for its proper consideration in the House. We labour already under great difficulties in view of the shortage of time which has elapsed between the Second Reading and the Committee stage. Who knows how many more Subsections there are which the Minister has not already looked at and which when he does look at them he may ask to withdraw? In view of this, I am sure that the right hon. Gentleman will not complain if we are forced to ask for a reasonable explanation for the very complicated Measure which after inadequate preparation we are now being asked to pass.

§ Mr. Dalton
I gather that we are all agreed that this should come out, and therefore I doubt whether there is much more to be debated. There may be important matters later on which we are not agreed and on which we shall be better advised to spend time. I may be on the edge of Order—but not more than the right hon. Member for West Bristol (Mr. Stanley) was—when I say that we regard the general arrangements in the Bill as satisfactory. Of course, reasonable time is always due to be given in everything. The only debate is on what may sometimes be called reasonable. The right hon. Gentleman and his friends will realise that I cannot admit there has been any lack of 415 thought or labour in the preparation of the Bill. I know only too well that it is to the contrary. This is an essentially difficult subject on which to legislate, but it has been considered at very great length and very great detail and the attention of many learned and able persons has been given to it. However, we are all agreed on this and I do not propose to say any more about it.

§ Mr. C Williams
The Chancellor of the Exchequer has put himself in a very difficult position, not only by his previous speech but by his Amendment. Still more has his position been made difficult by the unfortunate remarks earlier by the Financial Secretary. Let us look at what we are doing here. In this Subsection we have a particularly brutal and un-English provision which goes against the highest canons of English law. It is so brutal and so un-English that the Chancellor of the Exchequer has to withdraw it from the Bill. He says that we are agreed about this, but are we agreed? This happens to affect travellers' cheques, and the only difference between this and the other case is that in the previous case great sums of money were affected. Just now, when the right hon. Gentleman was in difficulty, there came to his assistance the hon. and learned Member for North Hammersmith (Mr. Pritt), who pointed out that if that Subsection, which works roughly in the same way as this, was applied, he would then have to ask every bank and every branch of every bank throughout the whole of the United Kingdom for evidence.
It was on that evidence alone that some hon. Members were in favour of withdrawing that Amendment, or else it would have gone to a Division. Now there is no longer that persuasive tongue below the Gangway, but, on the other hand, the Chancellor of the Exchequer has completely thrown over the whole of the arguments put up on his side and has admitted that in this case the thing is too hot even for him. I always welcome repentant sinners, but it is a pity that he did not go a little further and abolish a good deal more. What in the world happens to the individual who cannot get his travellers' cheque cashed? Surely he is just stuck? We have never had any answer to that question. As the Chancellor has met us here, perhaps he will also consider our former Amendment before the Report 416 stage. I hope he will not suffer any inconvenience from any lawyer getting up behind him and cutting away his whole case.

§ Mr. Howard
May I ask the Chancellor if he will extend his undertaking to reconsider the wording of Subsection (4) to Subsection (5)? I knew that Subsection (4) was a little difficult, but I had no idea it was as difficult as it is until the Debate took place. Subsection (5) seems even more complicated than Subsection (4) and it has to be interpreted by reference to other Subsections. Will the Chancellor give an explanation now, or better still, extend his undertaking—

§ Mr. Dalton
Perhaps I did not make myself clear. My undertaking applies to the whole Clause. The Subsections hang together.

§ Mr. H. Strauss
On the Chancellor's undertaking, I only want to put two points to him. The first is that, when he examines the Clause again he will remember that it is not only the obscurity to which we object but what some of us believe to be its absurd and unnecessary provisions. I hope that he will come to the conclusion that the case I have put to him of a man at an aerodrome obtaining sterling in this country to pay his hotel bill is one that he will desire to legalise. The other point is in answer to one put by the Solicitor-General. I hesitate to say that the Solicitor-General is wrong on any point of law, but I think that in this case he must have mistaken the point. Surely the fact that a document is a document within the meaning of Subsection (1) as a document issued to obtain foreign currency does not mean that it is not a document capable also of obtaining sterling. I believe there is nothing whatsoever impossible about such a document coming within that provision.