(No. 43.) SECOND READING. (Hansard, 1 July 1872)

THE LORD CHANCELLOR
, in moving that the Bill be now read the second time, said, that the Bill, which had undergone much discussion in the House of Commons, had been introduced mainly in consequence of the suggestions contained in the Report of a Royal Commission which sat in 1864 to investigate the subject. That Commission was composed of persons who were connected or familiar with the various Departments of the Court of Chancery. It comprised the noble Duke now at the head of the India Office (the Duke of Argyll), the late Lord Kingsdown, himself (the Lord Chancellor), two eminent solicitors—Mr. Field, who had since died, and Mr. Cookson—Mr. Rogers, the very active intelligent Registrar of the Court of Chancery, Mr. Anderson, and Mr. Crawford, the then Governor of the Bank of England. From time to time there had been great accumulations of funds, until they amounted to £3,000,000 invested in stock and from £4,000,000 to £5,000,000 in cash or other securities, arising from the administration of various estates by the Court of Chancery, and which sums stand in the name of the Accountant General. The difference between the invested and non-invested sums arose 418 from the circumstance that when the parties did not like to run the risk of the investments rising or falling, the cash remained to the credit of the Accountant General, and no interest was paid to the suitors; where, however, the parties having the right to do so asked to have their money then in the hands of the Accountant General invested, the money was invested at the risk of the parties, the interest accruing was paid to them, and if when the money was sold out there was any loss the loss fell upon them. The result was that a sum of not less than £2,000,000 remained in the hands of the Accountant General uninvested. Again, the Court of Chancery was authorized by various Acts of Parliament to invest in the name of the Accountant General all monies belonging to the suitors, and thus large sums of money had from time to time accumulated from which the Court obtained a considerable profit. The interest upon those accumulations stood as security against any sudden fall in the funds. The Commissioners of 1864 recommended steps to be taken to secure to the suitors some interest for the monies they thus left in the hands of the Court. Accordingly under this Bill, it was proposed that upon all such money remaining as cash in the hands of the Accountant General the parties ultimately entitled to it should receive 2 per cent. They would be paid this interest and the principal sum would not be liable to any deduction by reason of a fall in stock. There were other advantages to the suitor. One of these was that checks under £25 would be cashed at the office in Chancery Lane; whereas at present suitors had to take them to the Bank of England. This facility would apply to more than half the checks that were drawn. There had hitherto been no mistakes except to an insignificant amount—a fact highly creditable to those who had selected the Accountant General; but suitors had no adequate security, while the Bill would give them the security of the Consolidated Fund. The measure likewise proposed to take the whole of the existing staff of the Accountant General's Office to the Paymaster General's Office. All this could be done without changing the existing state of things. It also provided for an improved system of audit. The movement made by the Treasury last year was, in his (the Lord Chan- 419 cellor's) opinion, in the right direction, inasmuch as it was most desirable that the whole affairs of the Court, in regard to the suitors' funds, should be placed under one uniform system.

§ LORD CAIRNS
said, that no just exception could be taken to the principle of the Bill. As regarded suitors, it proposed nothing that was injurious and much that was beneficial. They would receive 2 per cent interest; whereas they now received nothing unless they undertook the risk of investing their money in the Funds, with the liability of having to sell out at a discount. They would also have the security of the Consolidated Fund. He thought also that the existing machinery of the Accountant General's Office, although well suited for times past, had become very old-fashioned, and required replacing by that which would work more easily and rapidly. He thought that were the funds to be invested in the manner proposed, not only the suitors, but the public also would be benefited by the change. Under these circumstances, he had no hesitation in supporting the second reading of the Bill.

THE DUKE OF ARGYLL
said, he was glad to hear that the noble and learned Lord who had just spoken (Lord Cairns) entirely concurred in the general principle of this measure, which was the result of the somewhat laborious inquiry on this subject, in which he had had the honour of being associated with the noble and learned Lord upon the Woolsack some eight years ago. It had not been without some astonishment that he, an unlearned layman, had ascertained what had been the practice of the Court of Chancery with regard to the Suitors' Fund. During the whole time the money remained the subject of litigation the suitors did not receive a single farthing in the shape of interest—unless they preferred a special request that it should be invested, when they were compelled to take the risk of any depreciation in the price of stock. That practice had appeared to the Commissioners very unjust, and therefore they had unanimously recommended that some system should be adopted under which suitors might receive interest for their money during the time it formed the subject of litigation. So strong had been the objection 420 at one time to interfere with the Suitors' Fund in any way, that it had been scarcely hoped that Parliament would ever attempt to deal with the matter. By successive steps, however, the recommendations of the Commission had now obtained the universal assent of both sides of the House. The proposed change would confer a great benefit upon both the public and the suitors.

§ LORD OVERSTONE
objected very strongly to that portion of the Bill which would exempt a particular class of holders of public stock from paying income tax.

THE LORD CHANCELLOR
said, that there would be a charge for managing the fund, and the suitors would receive only 2 per cent, whilst the State would receive about 3 per cent, from which, however, income tax would be deducted; so that the gain of the State after all would not be very great. There were a vast number of small payments of £10 and less, and, considering the trouble that there would be in deducting income tax from these small sums, it had been considered better to pay them free of the tax.

§ LORD REDESDALE
observed, that this money was to be invested in Terminable Annuities; but he could not understand how when the Terminable Annuities ceased the suitors were to get their money.