SECOND READING. (Hansard, 18 July 1889)

§ LORD HERSCHELL
Your Lordships may remember that last year a Bill to diminish the liability of trustees was introduced, and a clause was inserted in that Bill when it was before your Lordships' House enlarging the power of trustees with regard to the investment of trust funds. The matter came before the House of Commons somewhat late in the Session, and in view of some difference of opinion on the subject which might have imperilled the passing of the Bill, that clause was struck out of the Bill. The Bill which is now before your Lordships is an enactment substantially of the clause which passed your Lordships' House last year. There are one or two slight alterations to which I might call your Lordships' attention. The Bill of last year authorized the investment, amongst other things, in the preference shares of railways which for the previous 10 years had paid dividends on their ordinary stock. As the Bill now stands they must have paid a dividend of not less than 3 per cent on their stock. I think that is the only alteration of importance in the clause of last year, with one exception. In the clause which passed your Lordships' House last year a provision was inserted placing certain Colonial stocks in the same position as the other securities authorized by the clause. An endeavour was made to provide an automatic test which should distinguish between those Colonial stocks which should not be regarded as trustee investments, and those (and undoubtedly there are some) Colonial stocks which are investments quite as sound as any to be found in this kingdom. When the matter came before the Committee of the House of Commons 664 to whom this Bill was referred, there was some difference of opinion upon the subject of Colonial trust investments, and a Resolution was passed by that Committee that it was inexpedient to enter, with reference to that Bill, into the question of having any investments in Colonial stock. Consequently, so such provision is to be found in the Bill before your Lordships, and I feel very strongly that, whatever one's own doubts upon the subject may be, it would be very inexpedient to attempt to introduce such a provision into the Bill which is now before your Lordships' House. I think it is to be regretted that Colonial stocks are altogether to be excluded from this Bill, not merely because some of those stocks are perfectly safe and sound investments for trust funds, but because there is a feeling on the part of the Colonies that they ought not to be excluded from investments of this nature; and if you add to the list of those trust investments Indian stocks and other securities mentioned in this Bill, it is not right that all Colonial stocks should be treated as though they were not proper funds in which trust moneys should be invested. I understand that that matter has been pressed upon Her Majesty's Government by those who represent the Colonies in this country, and that the matter is under consideration, and that it will be the subject of inquiry, and I hope that the result of that inquiry may be to secure some understanding as to the conditions upon which, or the legislation subject to which, Colonial stocks might be put into the list of trust investments. I hope there will be no difficulty in arriving at such a result, and, seeing that the matter is thus under consideration, I think it would be inexpedient to delay this measure at all, or to run any risk with regard to it by pressing the matter at the present stage. I shall await with interest the result of the inquiry which I understand is now taking place upon the subject, and I may probably upon some future occasion trouble your Lordships further in the matter.

§ * LORD KNUTSFORD
I have to express concurrence in the greater part of what the noble Lord has said. As he knows, I am personally desirous that trustees should have power to invest in these Colonial stocks, upon sufficient security being given as to their stability, 665 but I think it would be unfortunate if any step were now taken which might delay the passing of this useful measure. My noble Friend, is perfectly correct in stating that this matter has been again pressed upon the attention of Her Majesty's Government, but after the Resolution which was passed by the Grand Committee of the House of Commons upon this very clause intimating that they thought full inquiry ought to be made before the clause was passed, or before it was brought up again for consideration, Her Majesty's Government have decided that it will be the best course to have that full inquiry which the Committee of the House of Commons desired made by a Departmental Committee. That Departmental Committee will be soon appointed, and I hope that the result may prove satisfactory, and that there may be some means found of enabling trustees to invest in these securities.

§ LORD HERSCHELL
Under ordinary circumstances, I should move to refer this Bill to the Standing Committee for Bills relating to Law, &c, but inasmuch as, with the trifling exception to which I have alluded, it is substantially identical with a clause which has already passed your Lordships' House, I think it is unnecessary to take that course, and under those circumstances I will move to commit the Bill to a Committee of the Whole House.