SOUTH SEA AND OTHER ANNUITIES COMMUTATION BILL. (Hansard, 2 May 1853)

§ EARL GRANVILLE,
on moving that the House go into Committee, proposed, at the suggestion of certain noble Lords, who were anxious to make some observations on the Bill, that the discussion should be postponed until the third reading.

§ LORD MONTEAGLE
would not ask his noble Friend, at that hour of the evening, to enter into an explanation of the Bill; 905 but it was desirable that such explanation should be given at a future stage.

§ LORD ST. LEONARDS
said, he wished to call the attention of their Lordships to the manner in which the interests of the suitors in the Court of Chancery were affected by this Bill. In all previous cases of commutation there had only been the single alternative offered to holders of stock either to accept the new stock or to be paid off; but in the present case the holders of the stock to be converted had no fewer than three alternatives—they might either take 3½ per cents, with a reduction of their capital, 2½ per cents, with an increase of their capital, or Exchequer bonds. Now he thought that the Accountant General could not be allowed to choose according to his own will, for the suitors holding stock, which of these alternatives they should accept; and that a good deal of machinery would therefore require to be invented by his noble and learned Friend on the woolsack in order to meet this case, and to give the suitors those rights which he (Lord St. Leonards) thought they were entitled to: for he thought the suitors in the Court of Chancery should have precisely the same rights with respect to the conversion of their stock as any other holders. Take, for instance, the case of trust property: a man's trustees might have thrown his property into the Court of Chancery without his leave and against his wish, and he thought it would be clearly unjust if he were, by such a step, deprived of those rights which he would have enjoyed had his property remained out of court. As he understood the Bill, however, it merely gave the Accountant General the power to assent to the conversion on behalf of suitors in the Court of Chancery holding New and Old South Sea Annuities and Bank Annuities, but did not extend to suitors holding Consols, or 3¼ per cents. Now, it would be the most unjust thing in the world if this latter class were purposely left out. Every suitor in the Court of Chancery had just the same rights of property in his funds, and just the same right to any advantages which might be derived from their conversion, as any other person who held stock; and it would be manifestly unjust to deprive him of any advantages which he might otherwise have derived, merely because his property was in the custody of the Court. By such a measure the 17,000 suitors in whose names so large an amount of money 906 stood in the Court of Chancery would be placed at a very great and unfair advantage. It devolved upon his noble and learned Friend on the woolsack to protect them by the adoption of machinery, or by the introduction into this Bill of provisions calculated to protect them, and to secure them their just right, and this, he felt sure, was a duty which would not be neglected.

The LORD CHANCELLOR
said, that he was perfectly aware that this Bill would impose upon him a very difficult duty in respect to making proper orders in reference to the funds of suitors in the Court of Chancery which might be effected by this Bill. These funds were obviously divisible into two classes. With reference to the South Sea Annuities, and several other stocks that stood in the same category, it was expressly provided by this Bill that the Accountant General might, in lieu of them, accept either of the two new classes of stock created by this measure, or the Exchequer bonds. Nor did he (the Lord Chancellor) see that such funds would be in any different predicament from those invested in the names of trustees, whom a clause in this Bill expressly empowered to assent to any conversion which they might deem best. As to Consols and the 3¼ per cents, the case was different. Nor did he mean to deny that this part of the subject was not attended with considerable difficulty. Under former Commutation Acts, the holders of stock had merely the alternative of being paid off, or of taking the stock offered them in exchange for that which they originally held; but in the present case they had, besides, a third choice—they might say that they would take neither the one nor the other, and that they preferred remaining in statu quo. There would, therefore, he thought, be no injustice in telling suitors who held these classes of stock, that they were not in a position to claim something different from what they held at present. This Bill, instead of giving to holders of these stocks an unlimited option with respect to their conversion, merely gave them a right to claim something else to a limited extent; and the position of holders of stock whose property was in the Court of Chancery would not, therefore, be different from other holders of stock who had not accepted, or been able to obtain, the advantages of the terms of conversion offered in the Bill.

§ LORD ST. LEONARDS
said, that he was extremely sorry to have heard the statement of his noble and learned Friend. As far as regarded the holders of South Sea and the other annuities of that description, his noble and learned Friend's explanation was satisfactory; but he could not say the same with respect to what he had said of the case of the suitors who held Consols and Eeduced 3¼ per cents. His noble and learned Friend said that such persons would be left by this Bill precisely as it found them, and they would be in just the same position as parties who had not chosen to accept any of the alternatives offered by the Bill; but he forgot that justice required that suitors of the Court of Chancery should have the power to choose amongst the alternatives offered by the Bill, like other holders of stock, and that it was a manifest injustice to deprive them of this right.

§ EARL GRANVILLE
said, that he should be very glad to hear any suggestions of the noble and learned Lord opposite (Lord St. Leonards) on this subject. With respect to the South Sea Annuities and other minor stocks, the conversion contemplated by this Bill was compulsory, and as to these he was gratified to find that the noble and learned Lord considered the explanation of the Lord Chancellor satisfactory. He could not deny that it would be unjust to exclude permanently from the advantages of the option given by the Bill suitors in the Court of Chancery who held Consols or Reduced 3¼ per cents. It must, however, be remembered that this part of the measure was merely of an experimental character—intended, in fact, to discover how the wind blew upon the Stock Exchange. When it was recollected that the power of converting these classes of stock was limited to thirty millions, he thought this very much diminished the force of the objection taken by the noble and learned Lord; and, under these circumstances, he thought that the Bill would be allowed to pass through its present stage.

§ LORD REDESDALE
thought it would be a great convenience if the holders of stock had the power of converting it into terminable annuities.