MONEY-LENDING BILL [H.L.] [SECOND READING.] (Hansard, 22 February 1900)

LORD JAMES or HEREFORD

My Lords, my duty in asking your assent to the second reading of this Bill is, I am happy to say, almost of a formal character. Your Lordships will remember that during the last session of Parliament a similar Bill was introduced into this House, and passed through its different stages without any expression or recorded expression of dissent from your Lordships. The Bill that is now being introduced by the Government is almost identical with that Bill. There are, however-, one or two alterations of a purely drafting character, and others of not very important effect, upon which I need not dwell except just to mention them. Your Lordships will recollect that when the Bill was introduced last year' I stated that it was of such a character that great care ought to be taken so as not to affect interests with which we did not desire to interfere. I knew the difficulty of the task of avoiding interfering with the interests of those who were not sought to be affected by the Bill. I their asked for assistance from Members of your Lordships' House, and even from others, so that suggestions might be made to remedy any injurious effects that it was thought the Bill might produce. I received a great deal of assistance from those whose opinions are of great practical value—from the Law Society of England, the Faculty of Advocates of Scotland in Edinburgh, and the Faculty of Procurators in Glasgow, and from men of commercial experience, who pointed out to me the difficulties that would arise if the Bill had become law as originally framed. The suggestions they made were of great practical utility, and they were made with the most sincere desire to assist the passing of the Bill and not to oppose it. I have, I hope and believe, met every one of the objections to the Bill. I have done my very utmost, and the Government has done its very utmost, to prevent this measure interfering with those who are not intended to be reached by it. The free circulation of money is absolutely essential to the commercial interests of this country, and there is a borrowing and lending of money demanded by the interests of our industrial classes which 768 ought to be encouraged rather than checked by legislation. I have, there fore, sought to limit this Bill to the evil that it has been thought ought to be dealt with, and I have endeavoured to remove from its scope every class of the community except those professional money-lenders whom we recognised last year' were men whose proceedings were of an evil character. I have done that by means of the definition which now exists in the Bill, and by special exemption of certain classes of fair dealers. Those are enumerated. The Bill of last year required that every money-lender should register himself as such, and if he entered into any contract when he was not registered that contract would be absolutely void, and would be set entirely on one side. It was pointed out to me by Members connected with the legal profession that there may be men, under that definition in the Bill, who have doubts whether they ought to be registered or not, and if a man in perfectly good faith made the error of thinking he did not come within the Bill, and if In; did not register, the effect would be that if he had advanced £50,000 or £100,000 he, would, by virtue of that error of judgment, lost; the whole of the money. Well, my Lords, that was a penalty which was out of proportion to the offence. Therefore I have, in this Bill, so altered the proposed provisions that non-registration shall not vitiate the security, but that the offence shall be met by a penalty which will be affected in its amount by the nature of the offence committed: that is, whether it was intentional or' unintentional. It was also pointed out to me. from the same legal source, that if you declare void all contracts made by unregistered money-lenders, including contracts in the hands of innocent transferees and assignees, it would be inflicting a penalty upon persons who had not erred at all. The present Bill is, therefore, framed in such a manner that it will not vitiate a security in the hands of a bona fide holder for value. Only the money-lender who has passed a security to an innocent holder can be sued, and the person injured must look to the money-lender to recoup him, and must not test the matter with the innocent transferee. There are scarcely any other alterations in the Bill except those I have mentioned. In the Bill of last year it was provided that a man must be registered in his own name.

769 Under the present measure it is sufficient for him to register under one name, whether assumed or not, but it must be the name under which he carries on business. I purposely avoid entering on the general consideration which your Lordships were good enough to extend to this Bill when it was submitted last year. As you are aware, this Bill passed through stage after stage with the uncontradicted, untested assent of your Lordships, but demands upon the time of the House of Commons prevented the Bill becoming law last session. I have every reason to hope and believe that the public have made such demands for this Bill that a better fate will be dealt out to it in the other House of Parliament, and I trust that with the assistance of your Lordships and of the Members of the House of Commons the Bill will be passed into law before the close of the present session.