Lords Sitting of 14 March 1907

PRIVATE BILL BUSINESS.
The LORD CHANCELLOR acquainted the House, That the Clerk of the Parliaments had laid upon the Table the Certificates from the Examiners that the Standing Orders applicable to the following Bills have not been complied with: Burnley Corporation, Collooney, Ballina, and Belmullet Railways and Piers.
The same were ordered to lie on the Table.

STANDING ORDERS COMMITTEE.
Report from, that the Standing Orders not complied with in respect of the Boston Spa Gas Bill, and the South Eastern, and London, Chatham and Dover Railways Bill, ought to be dispensed with.
That the Standing Orders not complied with in respect of the Petition for a Bill by the Simon-Carves Bye-Product Coke Oven Construction and Working Company, Limited, ought to be dispensed with, and leave given to introduce the Bill.
That the Standing Orders not complied with in respect of the Alexandra (Newport and South Wales) Docks and Railway (General Powers) Bill, ought to be dispensed with, subject to Clause 18 being modified, so as to apply only to the intended railways and to the se companies concerned whose shareholders approve thereof, and to Clause 20 being struck out.
And that the Standing Orders not complied with in respect of the London County Council (Tramways and Improvements) Bill ought to be dispensed with, subject to the powers to construct Tramways Nos. 1A, 2, 2a, 2b, 4, 5, 6, 7, 8, 9, and 9a, being struck out of the Bill.
Read and agreed to.
Middlesbrough, Stockton-on-Tees, and Thornaby Tramways Bill [H.L.]. Read 2a, and committed: The Committee to
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be proposed by the Committee of Selection.
West Riding Tramways Bill [H.L.]. Read 3a, and passed, and sent to the Commons.
Barnsley, Wombwell, and Wath Tramways Bill [H.L.] Burnley Corporation Bill, Collooney, Ballina, and Belmullet Railways and Piers Bill. Examiners' Certificates of non-compliance with the Standing Orders referred to the Standing Orders Committee on Wednesday next.
Manchester Corporation Tramways Bill [H.L.] Report from the Select Committee, That the Committee had not proceeded with the consideration of the Bill, the opposition thereto having been withdrawn: read, and ordered to lie on the Table. The orders made on the 25th and 28th of February last discharged, and Bill committed for Tuesday next.
Tyne Improvement Bill [H.L.] Report from the Select Committee, That the Committee had not proceeded with the consideration of the Bill, the opposition thereto having been withdrawn; read, and ordered to lie on the Table. The orders made on the 25th and 28th of February last discharged, and Bill committed for Tuesday next.

BAINES'NAME BILL [H.L.]
The CHAIRMAN of COMMITTEES (The Earl of Onslow): My Lords, with the permission of your Lordships, I should like to say a word with reference to a Bill which is not before the House to-night, but which was before us last night, and upon which a question was put to me by my noble and learned friend Lord Ashbourne—I refer to Baines' Name Bill. As I had received no notice of the intention of the noble and learned Lord to call attention to it, I was not in a position at the moment to explain exactly what the Bill was. The Bill is a peculiar one. It is not, as the noble and learned Lord seemed to infer, a Bill to change a man's surname—that undoubtedly could be done without an Act of Parliament—but it is a Bill to change a Christian name. It so happened that the testator in this case

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left the property to this man on condition that he took certain names to the exclusion of all others—that is to say, to inherit the property he was obliged to drop his Christian names. As the noble and learned Lord on the Woolsack observed, if by Act of Parliament you take property away from A and give it to B, you obviously do something which the general law of the land did not intend. But in this case, although there were remainders over from the first legatee the same condition was imposed, and therefore everyone would have had either to relinquish the property or ask Parliament to pass a Bill. I must say that this seems to me an unreasonable clause for a man to put into his will. At the same time I do not think there was any way of settling the matter except by asking Parliament to sanction a Bill, and it was for that reason that this Bill was introduced.

RETURNS, REPORTS, ETC.

  ARMY (ARMY RESERVE).
  Statement showing: Actuarial calculation of the normal strength of the 1st Class Army Reserve; and
  Explanation of the difference between the actual strength on the 1st October, 1899, and the normal.

RAILWAY AND CANAL TRAFFIC ACTS, 1854–1894.
Eighteenth Annual Report of the Railway and Canal Commission; with Appendix.
Reports on the valuation of the Teachers' Pension Fund (Ireland) on 31st December, 1905.
EDUCATION (SCOTLAND).
General Report by the Chief Inspector of the Northern Division of Scotland, for the year 1906.

MISCELLANEOUS, No. 1. (1907).
Translation of the alien law of the Republic of Honduras, 8th February, 1906.
Presented [by Command], and ordered to lie upon the Table.

SHOP HOURS ACT, 1904 (COUNTY OF LANCASTER).
Order made by the council of the county of Lancaster, and confirmed by the Secretary of State for the Home Department, fixing the hours of closing for certain classes of shops within the urban districts of Royton, Failsworth, Crompton, Lees, Littleborough, and Milnrow. Laid before the House (pursuant to Act), and ordered to lie on the Table.

COMPANIES BILL [H.L.]
[Second Reading.]
Order of the day for the Second Reading read.
THE EARL OF GRANARD: My Lords, the Bill to which I have the honour to call your Lordships' attention to-day is based on the Report of the Departmental Committee called together by Mr. Gerald Balfour in the year 1905, and I do not think it would be out of place if I were here to mention the composition of the Committee in order to show your Lordships what a very representative body it was. It included names which stand foremost in this country in the departments of law, of commerce, and of finance. The Chairman of the Committee was the present Lord Chancellor, and on his being translated to this House his place was taken by Mr. Warmington. Among the other members were Mr. Hichens (Chairman of the Stock Exchange), Sir W. Holland (Chairman of the Associated Chambers of Commerce), Lord Faber, Sir Felix Schuster, and Sir Edgar Speyer. These gentlemen were all busy men, and I think that they deserve a word of thanks from the Government for giving up so much of their valuable time unreservedly to the purposes of the inquiry, which was conducted with so much ability, and which has enabled the Government to bring in the present Bill.
I should like to bring to your Lordships' notice the great importance to trade of the limited liability system, and the very great interests involved. Since this system was first inaugurated, in 1862, it has made the most wonderful progress; in fact it has increased by leaps and bounds until a very large proportion of the trade of this country is

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carried on by corporate bodies formed under the Companies Act of 1862. It may interest your Lordships to know that the number of companies now carrying on business under the Acts is 40,000, and the capital embarked in them reaches the huge total of £2,000,000,000 sterling. Your Lordships will fully understand with what a deep sense of responsibility the Government have approached any amendment of the Companies Acts, and, in order that no change should be proposed which could in any way be considered ill-advised or unnecessary, they have sought the advice and assistance of the Committee I have already mentioned.
The reference to the Committee was framed in wide terms—namely, to inquire into what amendments were necessary in the Acts relating to Joint Stock Companies; and afterwards the Board of Trade expressed a hope to the Committee that they would consider generally by what means Joint Stock Companies could best be fostered and encouraged, as well as the means to be taken by which illegitimate or fraudulent practices might be put an end to. I may now tell your Lordships that the policy of the Bill, so far as it deals with fraud, is by insisting on publicity, and it is hoped that by making information accessible to all who may seek it the best protection to investor and creditor may be created. This policy was included in the 1900 Bill, but is carried a good deal further in the present measure.
Now, as regards the Act of 1900, one of the requirements was that certain information should be given in every prospectus issued by a company; but, like most Acts of Parliament, this provision was immediately got round, and companies, in order to avoid complying with this requirement, simply did not issue a prospectus at all, but put the shares on the Stock Exchange and sold them there, instead of issuing them by means of a prospectus. Consequently the buyer had no knowledge of the circumstances of the company, and had no redress whatever, no matter how fraudulent the circumstances of the formation of the company might have been.
In the present Bill, my Lords, by the first Clause, it is hoped to stop this state of affairs by compelling every public company which does not issue a prospectus
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to deposit with the Registrar of Joint Stock Companies a statement containing the same information as would have been contained in a prospectus had one been issued. It is only proposed to apply this section so far as public companies are concerned, and in this respect it is important to note that a distinction is made for the first time between public and private companies. The definition in the Bill of a private company is—a company which limits the number of its members to thirty and restricts the right to transfer its shares, and is prohibited by its regulations from issuing any invitation to the public to subscribe for its shares or debentures. All such companies are not to be required to file a statement in lieu of prospectus. Although the distinction between public and private companies is introduced for the first time, the Act of 1900 divided companies into two classes, those which issued a prospectus and those which did not; and this provision, your Lordships will not be surprised to hear, has proved quite useless, for a large number of companies have been launched on the Stock Exchange and shares sold to the public without any information being available to the purchasers of the shares as to the enterprises in which they had become partners. Surely, my Lords, this is a most unsatisfactory state of affairs.
I will now turn to Clauses 7, 8, and 10, which deal with the questions of issuing new capital at a discount and of the payment of interest out of capital during construction. As the law at present stands, companies formed under a special Act of Parliament usually have power to issue new capital at a discount and sometimes to pay interest during construction, but this does not apply to companies established under the Companies Acts. It is proposed by the Bill before your Lordships to remove these disabilities, subject to certain restrictions. Your Lordships will probably agree that it would be dangerous to give companies unrestricted power in these respects, and the Bill proposes, therefore, to limit the power of issuing new capital at a discount to companies which have carried on business continuously for more than two years; and, further, to insist that full information as to any capital issued at a discount shall be filed with the Registrar of Joint Stock Companies, and that the

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amount of the discount shall be stated in any balance-sheet of the company until the whole amount has been written off. In the same way, no payment of interest out of capital can be made unless the payment has been authorised by the regulations of the company and has received the sanction of the Board of Trade.
The Bill proposes, in Clause 11, to extend the particulars of mortgages and charges affecting a company's property which it is now necessary to register. This is a very important provision, and carries out what I think is the main principle of the Bill—namely, the affording of effective information regarding companies to those who have business dealings with them. We all know that the Legislature cannot make a man prudent or wise. But this Bill, in my opinion, certainly safeguards the fool from the knave as much as is possible; and this is, I think, best arrived at by giving ready facilities by which the public can inform themselves with regard to any material facts affecting the company which may be in question.
Another step in the same direction is the provision that every company is required to forward to the Registrar a statement of its assets and liabilities in the form of a balance-sheet. This change has long been demanded by a large section of the mercantile world, but has been opposed by a minority for fear that the giving of such information would disclose trade secrets. In order to meet this point the clause provides that the balance-sheet filed need not include a statement of profit and loss. It may interest your Lordships to know that balance-sheets have been required to be filed by the Law of India since 1882, and by the Law of Victoria since 1896.
Clauses 15, 16, and 17 deal with the same matter as was raised by my noble friend Lord Avebury in his Bill. These clauses are of great importance to bankers, and Clause 17 restores what had been believed to be the law for many years until a recent decision of the Court declared the contrary. Stated very briefly, the intention of Clause 17 is to enable companies to re-issue debentures which have been paid off, and care has been taken to insert in the clause words which it is hoped will effectually safe-
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guard the rights of third parties. As the law stands at present, since the recent decision of the Court, to which I have just referred your Lordships, a debenture once paid off is dead and cannot be re-issued. An important result of this decision of the Court is that it is now impossible effectually to secure a current account by deposit of debentures, for directly the balance of the account is in credit the debentures are thereby in law repaid and the security is destroyed. Your Lordships will at once appreciate of what great importance this matter is to the commercial commuuity, and that the present state of the law has a tendency to operate in restraint of trade.
I will now pass on. The next clause to which I think it necessary to draw your Lordships' attention is Clause 25. Under the Act of 1862 it was provided that every company should call a meeting once in every year, but, unfortunately, no penalty was imposed in case of a company not acting in accordance with the law. The result has been that in the case of some companies, whose directors, perhaps, were not anxious to meet the shareholders, no meeting has been called sometimes for many years in succession. We propose to remedy this deficiency and to provide for a penalty. We propose also to afford the shareholder an additional resource by giving the Court power at any time to order a meeting to be called on due cause shown. The next clause to which I would call attention is Clause 33. As your Lordships are aware, the present law acts in some ways very harshly on directors, and by Clause 33 the Court is given power to relieve directors and promoters when the Court is satisfied that they have acted honestly and reasonably.
There is now, my Lords, only one more clause which requires a few words, and that is Clause 36, which deals with companies registered outside the United Kingdom. It is proposed to require from every such company a certified copy of the Memorandum and Articles of Association, a list of the directors of the company, and the name and address of one or more persons resident in this country authorised to accept service of any notices required to be served on the company. Companies registered outside

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the United Kingdom will be further required to conform to the same requirements as regards filing of annual statements of assets and liabilities as are required from companies registered in this country. Further, any company using the word "Limited" must state in every prospectus and at every place of business the country in which the company was registered.
In the event of your Lordships giving favourable consideration to this Bill, it is proposed to introduce a Consolidation Bill with the object of consolidating into one Statute all the Companies Acts, which at present number seventeen. I have, my Lords, now outlined, I fear at some length, the main provisions of the Bill, and I should like to be allowed to say before I sit down that the Bill is in no way a Party one, and that the Government will welcome any suggestion which noble Lords may consider will strengthen the Bill on any point.
Moved, "That the Bill be now read 2a."—(The Earl of Granard.)
LORD AVEBURY: My Lords, the noble Earl who has just sat down spoke in high terms, but not in too high terms, of the Departmental Committee of the Board of Trade whose recommendations it is proposed to adopt in this Bill, and I am sure that not only the Government, but the commercial community also, are indebted to that very able Committee for the careful consideration they gave to this important subject. We are also indebted to His Majesty's Government for introducing a Bill which will, I think, on the whole give general satisfaction.
Not only bankers but the companies themselves who issue debentures are very anxious that the provisions removing doubts as to the validity of perpetual debentures and debenture stock should become law. There is a third class of persons who are also very much interested in the matter—namely, the general public. Misapprehension as to the real state of the law has led companies in perfect good faith to re-issue a number of debentures which, under the law as it at present stands, must be regarded as cancelled. That has introduced considerable doubt as to the status of debentures, and investors gener-
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ally are very much interested in seeing the matter put on a sound footing.
There will, I think, be general agreement in regard to the main provisions of the Bill; but it is not quite easy, at the first glance, to see what the full effect of the detailed provisions will be, and accoringly I am sure my noble friend will not think I am asking anything unreasonable in venturing to express the hope that he will allow a fair time to elapse before he asks the House to take the Committee stage, so that lawyers and those affected by the Bill may have time to consider, not merely the general provisions, but the exact wording in which they are embodied. Many persons will be glad to hear that His Majesty's Government propose to introduce a Bill with the object of consolidating into one Statute all the Companies Acts. At present the law relating to companies is to be found in a variety of Acts, and it will be of great convenience to have the law combined in one single measure. I beg to thank my noble friend for the introduction of this Bill, and for the very clear statement he has made in regard to it.
*LORD FABER: My Lords, I should like, if I may, to congratulate the noble Earl upon the speech in which he moved the Second Reading of this Bill, and I do so because I happen to know from my own experience that this is a very difficult and complicated question. I had the advantage of sitting on the Departmental Committee which was appointed in 1905 to consider the Companies Acts. There were several experts on that Committee. We sat very frequently, and gave long and careful consideration to this difficult matter. We also had the great advantage of sitting under the Chairmanship of the Lord Chancellor, whose clear guidance was of incalculable value to us. This Bill embodies the conclusions arrived at by the Departmental Committee. Its chief objects are to protect shareholders in limited companies and those traders who trade with limited companies.
The Bill proposes to enlarge the requirements of the Companies Act, 1900, so as to provide that no material fact which would be calculated to influence the minds of intending investors

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should be omitted from the prospectus. We on the Committee thought that a man who was applying for shares in a limited company should know everything that it was material for him to know, otherwise he would be unable to form a true and accurate judgment of the company and its standing. That provision is for the protection of shareholders. The next provision in the Bill is to render necessary the registration with the Registrar of Joint Stock Companies of all mortgages and charges, including those relating to landed property and book debts. We thought—and I think rightly thought—that mortgages were very often danger signals, and that if a limited company created a mortgage it should be registered so that any shareholder in the company or any one dealing with the company should know of its existence.
This Bill removes doubts as to the validity of perpetual debentures and debenture stock, and enables a company to keep alive and re-issue debentures which have been redeemed. It has been lately held that debentures re-issued in the manner explained by the noble Earl in charge of the Bill are no better than waste paper, and the provision in the Bill is therefore for the protection of the public at large. The next provision requires every company to file annually with the Registrar a statement of its affairs in the form of a balance-sheet and containing a summary of its capital, liabilities, and assets.
When I first had to do with business what obtained was this. If you traded with a man who called himself John Smith and anything happened to him, you knew that all John Smith possessed was liable for his debts. Time went on and John Smith turned himself into John Smith, Limited, and the man who traded with him then was in a very different position. A certain amount of capital was put into John Smith, Limited, and when the concern did badly and the capital vanished John Smith walked out of the concern. He had no liability whatever, and the poor creditor had to do the best he could. A limited company shelters itself behind its limit, and if a man turns his business into a limited company he should be called upon to file a balance-sheet every year at Somerset House, so that persons trading with the
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company can ascertain how it stands. I cannot think for a moment that there is any hardship in this. It is asked, Why should a private limited company be obliged to file a balance-sheet? Simply for the reason that it has become a limited company. If a private company places itself within the category of limited companies, then we believe it is for the good of trade generally that a balance-sheet should be published.
Another important provision in the Bill is to give power to the Court to grant relief to directors in cases where a breach of duty has been caused by honest oversight, inadvertence, or error of judgment. If a director commits himself in this way at the present time the penalty is far too severe for the offence. Clause 33 of the Bill will give absolution to directors who have acted honestly and in good faith. The point is that if you punish directors too severely for this kind of error you will not get directors of the sort you desire. Good men will be driven away and their places will be taken by directors of an inferior class.
The Committee felt that the question of foreign companies was one that should be dealt with, and I am glad to note that by this Bill every foreign company which, after the commencement of the Act, establishes a place of business within the United Kingdom, will be required to file with the Registrar a copy of its charter or statutes and a list of the directors of the company, together with the names and addresses of some one or more persons resident in the United Kingdom authorised to accept on behalf of the company service of any notices required to be served on the company, and to file annually with the Registrar such a statement of its affairs in the form of a balance sheet as is required of companies established in the United Kingdom. These are particulars to which we think we are entitled, and they are the sort required in foreign countries from English companies trading there. We thing it is a fair demand to make and that general advantage will result. Other opportunities will occur for discussing the details of the Bill; but I desire to say that, having sat for eighteen months on the Departmental Committee which inquired thoroughly into the whole question, I think the Bill is, on the whole, a very good one, and I hope your Lordships

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will see no objection to giving it a Second Reading.
LORD GLENTAWE: My Lords, I congratulate the noble Earl in charge of the Bill on the able way in which he has put this important measure before your Lordships. Although the Bill may not be perfect in all its clauses and may possibly need amendment as we have experience of its working, I think that on the whole the Bill meets present requirements so far as we can understand them. I quite agree with what was said by my noble friend Lord Avebury with regard to the question of debentures. The necessity for legislative action on that matter has been felt in commercial circles, especially by bankers, for a long time. Generally speaking, I think the Bill fairly meets the necessities of the day, and I congratulate His Majesty's Government on having brought it forward.
LORD ASHBOURNE: My Lords, the noble Earl who has presented this Bill to the House has done so with singular clearness, and I think there were very few of your Lordships who do not realise the great importance of the measure and the complexity and interest of the topics with which it deals. It affects very large interests, and is obviously a Bill which must attract a great deal of attention. The principle underlying its main provisions is that as wide a publicity should be given as every person interested in companies has a right to expect. That is the keynote of the measure. It will be necessary at a later stage to consider whether the machinery could be improved, but I think an honest effort has been made to secure by adequate penalties that the provisions of the Bill shall be carried out. It will be necessary in Committee to see whether that has been done uniformly, and whether all the clauses have adequate penalties to secure the publicity that is needed.
The noble Earl mentioned one clause which it is obvious will attract a good deal of attention both in the later stages of the Bill here and also elsewhere—the clause requiring an annual statement to be filed and the fullest information given. It is obvious that that is a clause of the very highest importance, but I do not find any
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adequate penalties annexed to it. I have no doubt that the clause is put down in perfect good faith and with the earnest desire that it should be efficacious, but it is obvious that there should be some penalty. It is obvious likewise that the clause relating to foreign companies will require some consideration from the same point of view. A point to be considered is how you are to make a foreign company liable in the event of its not carrying out the provisions of the Bill, and how you are to get at its officers, who may be living abroad and not amenable to our legislation, for the purpose of enforcing the penalties to which they are in theory liable. I merely indicate that as a point to which we shall have to direct some attention when the Bill reaches a further stage.
The provision in regard to private companies is one of the very highest importance. That clause must necessarily be approached from a different standpoint, and great care will need to be taken to ensure that it leaves this House in a form capable of being carried out in a useful and effective way. I am extremely glad to hear from the noble Earl that a Consolidation Bill is intended. The noble Earl was quite right in emphasising the fact that it would be a strictly consolidating Bill, because I know from my experience of another place that if any attempt is made in a Consolidation Bill to introduce anything by way of an amendment of the law you have the philosophers in the House—sometimes a numerous but not always an agreeable class—getting up and saying that as you are amending one matter why not amend another; and, in the end, your Consolidation Bill becomes almost hopeless of passing. I have no doubt your Lordships will readily accord a Second Reading to the measure now before you.
LORD COURTNEY OF PENWITH: My Lords, I do not wish to prolong the debate on this measure, which is eminently one of detail and will have to be considered in Committee. But I rise to make this practical suggestion, that it might be useful, with the view of economising labour in Committee, if the Report of the Departmental Committee and possibly the Minutes of Evidence on which that Report was

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founded could be again circulated for the information of your Lordships.
*The LORD CHANCELLOR (Lord LOREBURN): My Lords, the substance and purport of this Bill were so clearly stated by my noble friend who moved the Second Reading that it is quite unnecessary for me to elaborate his statement. As to the proposed Consolidation Bill, I agree that it ought to be purely consolidating. It is very desirable that what we did last year for marine insurance we should do this year for the company law, and in future years for other branches of the law. If the consolidated law on a particular subject is put down plainly in black and white in an Act of Parliament, then people know how to act. The Colonies and Dependencies of the Crown have often wished to have a code of our Criminal Law in order that they might make use of it as the foundation of their own legislation, but unfortunately no such code was available, and they have been obliged to have recourse to the Indian penal code. With regard to Clause 22, to which the noble and learned Lord referred, I would call attention to the fact that Section 26 of the Companies Act of 1862 does provide under penalties for a certain summary to be forwarded to the Registrar of Companies. Section 22 of this Bill merely has the effect of adding further duties to those already created by the Act of 1862. If in the course of considering this Bill, which, like all human productions, may be capable of improvement, any Lord thinks further provisions ought to be inserted we shall raise no objection, but, on the contrary, shall be very grateful for any suggestion.
THE MARQUESS OF SALISBURY: Perhaps the noble Earl will tell us when he proposes to take the Committee stage. I suppose it will not be taken until after Easter.
THE EARL OF GRANARD: The Government had thought of taking the Committee stage on Wednesday, if there is no objection to that course.
THE MARQUESS OF SALISBURY: Considering that the measure is very complicated and intricate and affects a great many interests, I think time ought
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to be allowed for private study of the Bill before it is considered in Committee. I would point out that a similar appeal was made by Lord Avebury, who is a great authority on this subject.
*The LORD PRESIDENT of the COUNCIL (The Earl of CREWE): We are in the hands of the House in this matter. There is a desire to get the Bill down to the other House as soon as possible, but, as the noble Marquess has made this appeal to us, we will not proceed with the Committee stage until after Easter.
On Question, Bill read 2a, and committed to a Committee of the Whole House.

COUNTY COURTS BILL [H.L.]
[SECOND READING.]
Order of the Day for Second Reading read.
THE LORD CHANCELLOR: My Lords, this Bill I can confidently state contains nothing except what has already been assented to by your Lordships in other Bills. I will only refer to three points. The Bill provides that the duties of certain selected registrars in hearing cases may be extended. They are to be allowed to hear more small cases in order to relieve any congestion which may be produced by the new duties imposed on County Court Judges. Power is also given in the Bill to make rules for the purpose of providing for summary judgment against a defendant when there is really no defence. There is already a practice of that kind in the High Court of Justice. It is desired with proper safeguards to extend it to County Courts. It is also proposed to allow pensions to be given to Judges in certain circumstances, and to provide in the case of their having to find deputies that the cost should be borne by the Treasury. It is very hard that a County Court Judge whose income is only £1,500 a year, should be compelled to pay a deputy out of his own pocket when he is ill and has all the attendant expenses of his illness to defray.
I wish to refer to the absence of one proposal from the measure. I would have liked to make some provision with

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regard to the imprisonment under the Debtors Act of persons who are not able to pay and are now put in prison in increasing numbers. I am afraid that in some County Courts—though I do not impugn the good faith of the Judges—the administration of this law has led to great hardship. I regret that I cannot deal with the matter in this omnibus Bill. Perhaps I have laid myself open to the charge of irrelevancy in referring to the subject, but I believe many of your Lordships will sympathise with me in the irregularity.
Moved, "That the Bill be now read 2a."—(The Lord Chancellor.)
LORD ASHBOURNE: My Lords, this Bill deals with a great many very important subjects, and the matter to which the noble and learned Lord referred at the close of his observations has excited the deepest possible interest in the country. There is a very strong feeling that the way in which the provisions in the Debtors Act relating to imprisonment for debt are sometimes administered might well be examined into with a view to considering whether a better and improved system could not be adopted in its place.
There are one or two points affecting this Bill which I hope my noble and learned friend will consider. There is under the Bill a power given of making rules. When solicitors are so much concerned in the administration of the County Courts I think it is right that they should have some voice in this matter. I have been repeatedly pressed on that subject in Ireland, and in Bills that I introduced I gave a status to the President of the Incorporated Society in Ireland to be consulted in the making of the rules. I would suggest that the President of the Incorporated Law Society here should have some voice in this direction. That is a matter which could very well be dealt with in this Bill without interfering with its structure.
Then the Treasury proposals are of the highest importance. The County Court Judges are an admirable body, and have a great deal of work to do, and I regret that there is no provision for considering whether an increase of salary might not be given in some cases. I am very
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glad the Bill proposes to provide pensions for Judges. We have in Ireland, where it is well sometimes to look for sound systems, a system under which County Court Judges can get two-third pensions; that system was in existence long before my time as Lord Chancellor, and now very tardily it is being introduced into England. There certainly ought to be a reasonable pension after a reasonable service. I agree that it is a reasonable thing that the State should pay deputy Judges, but I think they should be appointed by the Lord Chancellor. It is open to question whether it is wise, in calling into existence a system of paid deputies, to leave to the Judges themselves power to appoint the deputies. Therefore, when the Bill is in Committee I shall move, I hope with the sanction of my noble and learned friend on the Woolsack, that all deputies shall be appointed by the Lord Chancellor.
There is a power given in the Bill to the Lord Chancellor to appoint assistant Judges. That is a departure from our system, which has always been that a Judge should be appointed permanently and during good behaviour, and here power is taken to appoint assistant Judges without any durability of tenure The only circumstance that I can see in mitigation of what might be a serious constitutional innovation is that there is a limitation put on the number and that they cannot exceed at any one time five. I am convinced that the noble and learned Lord on the Woolsack would never dream of appointing temporary Judges unless absolutely satisfied of the necessity, but I think this provision should be taken notice of as it is an innovation which requires much consideration.
VISCOUNT CROSS: My Lords, I simply rise to express my regret that the noble and learned Lord on the Woolsack has not been able to introduce into this Bill some provision dealing with what is generally spoken of as imprisonment for debt. It is many years now since I sat on a Committee of the House of Commons to inquire into this hardship. I am satisfied that great hardship is caused by the law as it exists at present. Persons are imprisoned for what is described as contempt of court, though they are quite unable to purge that contempt, for they have no money with which to do so.

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Yet they are sent to prison practically for contempt of court. I regret extremely that the noble and learned Lord on the Woolsack has not yet seen his way to introduce a clause making an alteration in this matter, but I hope that before the Bill does pass through your Lordships' House independent Peers at all events may suggest to His Majesty's Government some way of meeting this great difficulty.
*LORD JAMES of HEREFORD: My Lords, I desire to add a few words of encouragement to the Lord Chancellor. I hope and believe the noble and learned Lord will be strong enough to deal with this subject. If he does make any proposals he will receive support from many of those who have fully considered the matter. It is thirty-four years since I attempted to make some alteration in the law on this subject, and everything that has occurred since has caused me to think that an alteration would be satisfactory. This imprisonment for debt, for that is practically what it is, although it is called contempt of court, is a great hardship on the debtor. I recollect a County Court Judge telling of two men leaving prison together. One said to the other, "What have you been imprisoned for?" The reply was, "I have served fourteen days for stealing a duck." "Oh," said the first, "how very odd. I have had forty days for not paying for one."
The hardship on the debtor is not the only consideration. This is an economic question. If the system were got rid of the trader would resort to a ready-money system. In Scotland there is no imprisonment for small debts, with the result that the man who wants to buy a coat has to save his money before he buys it, and by paying ready money obtains it cheaply. The tradesman has no bad debts, and can sell his wares much more cheaply to the buyer. No money is spent at law, and goods can be obtained at a reasonable price. I hope attention will be given to the matter in every aspect, for the more it is inquired into the more certain I am that the evil that now exists will be shown to need a remedy.
On Question, Bill read 2a, and committed to a Committee of the Whole House.

JUDICATURE BILL [H.L.]
House in Committee (according to Order).
[The Earl of Onslow in the Chair.]
Clause 1:—
THE LORD CHANCELLOR): My Lords, I have thought about this Bill since the short discussion that took place upon it on Thursday last. I am, above all things, anxious to remove the idea that we have any design upon the permanent work of the Court, and accordingly I have placed an Amendment on the Paper. This clause provides that any division of the Court of Appeal may, with the consent of the Lord Chancellor, consist of two Judges sitting together. The Amendment on the Paper provides that this consent is "to be given only for special cause." Since putting it down it has occurred to me that that might leave the jurisdiction open, because it might be said that the Lord Chancellor's consent did not rule the question whether or not there was special cause. I think it ought to be left to the Lord Chancellor to say whether there is special cause or not, and, with your Lordships' permission, I propose to amend the Amendment by providing that it shall be with the consent of the Lord Chancellor, "to be given only if he is satisfied that there is special cause." I move the insertion of these words to reassure those who may be anxious on the subject.
Amendment moved—
"In page 1, line 6, after the word 'Chancellor' to insert the words 'to be given only if he is satisfied that there is special cause' "—(The Lord Chancellor.)
On Question, Amendment agreed to.
Clause 1, as amended, agreed to.
Remaining clauses agreed to. Standing Committee negatived; the Report of Amendment to be received on Monday next; and Bill be printed as amended. (No. 17.)

AGRICULTURAL HOLDINGS ACT.
THE EARL OF CAMPERDOWN: My Lords, I rise to ask the President of the Board of Agriculture whether he is in a position to make any statement as to the reasons which have led the Lord

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Egerton of Tatton to serve notices to quit on his tenants in Cheshire in consequence of the passing of the Agricultural Holdings Act of last session.
This question is occasioned by a hasty, and, as I believe, entirely undeserved attack which has been made in another place upon a much respected Member of your Lordships' House. Early in the present year Lord Egerton of Tatton appears to have written a letter to his agricultural tenants pointing out to them that it would be necessary to make a new agreement in consequence of the Agricultural Holdings Act. No less than three Members of the House of Commons, without apparently instituting any inquiry, assumed that this was an evasion of the Act, and put Questions to the Government in that sense. The step which Lord Egerton appears to have taken, so far as his letter goes, is one of ordinary prudence. As your Lordships know, the Act of last year invalidates every agreement in England, Wales, and Scotland, so far as cultivation is concerned, and therefore it will be the duty, not only of Lord Egerton and other Members of your Lordships' House, but of every landowner, to consider present agreements with a view to making new ones. I cannot help believing that that was the only reason which prompted Lord Egerton to take the course he did; and if my noble friend is able to tell me, as I think he will be, that such was the reason, then I would suggest whether gentlemen in another place, before attacking a Member of this House, might not endeavour to infuse a little discretion into their zeal. I beg to ask the Question standing in my name.
THE PRESIDENT OF THE BOARD OF AGRICULTURE AND FISHERIES (EARL CARRINGTON): My Lords, in answer to the noble Earl, I have to say that on 18th February a Question was asked in the other House of Parliament by Mr. Montagu on the subject that has been mentioned by the noble Earl.
THE EARL OF CAMPERDOWN: And by two others.
EARL CARRINGTON: Yes, consequential questions. I at once thought it my duty to communicate with Lord Egerton, calling his attention to the Question, and asking him if he wished to
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say anything on the subject. The noble Lord was travelling at the time, and he replied as follows in a letter dated Cairo, 26th February:
"DEAR LORD CARRINGTON
"I am glad of the opportunity (given me by your letter of 15th February, which I have just received) of contradicting the assumption made by Mr. Fullerton in his Question on the Paper of the House of Commons. I had no intention in giving formal notice to my tenants (on2nd February, the first legal day in the North of England) to defeat the measure intended for the benefit of tenant farmers. If I had intended to defeat a measure, which, speaking generally, carries out the long-established practice of my estate, I should not have written a circular to my tenants that it was necessary under the new Agricultural Holdings Act to cancel the existing agreement, which was out of date, and to substitute for it a simpler form 'in harmony with recent legislation.' My tenants know well that I am as anxious as ever to maintain the cordial relations which have long existed between us, and which will not in any way be affected by the recent Act. I shall be glad if you will give the same publicity to this letter as has been given to the question before the House of Commons.
"Believe me, yours sincerely,
"EGERTON OF TATTON".
I was glad to receive this letter, although I knew what the answer would be, and I can inform the noble Earl that it will be read in the House of Commons in reply to a Question which will be put by my hon. friend Mr. Montague, and I hope the publicity which Lord Egerton naturally desires will be given to his letter. I trust the House will forgive me if for one moment I refer, with perhaps pardonable pride, to a sentence in Lord Egerton's letter. It is very pleasant to me, personally, and to the Government of which I am a humble member, to have the acknowledgment in this letter that the Agricultural Holdings Act of last session was intended for the benefit of the tenant farmers, and that, speaking generally, it carries out the long-established practice on Lord Egerton's estate.
There has undoubtedly, and not unnaturally, been some disquiet occasioned by the use of the words "notice to quit" in connection with the Act. I should like on this matter to quote the opinion of a body of practical men, who I cannot say were very favourable to the Bill when it was introduced. I refer to the Surveyors' Institute. At the Surveyors' Institute the Secretary of the Farmers'

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Club, a well-known land agent, said that he for one, and he thought the general body of members would agree with him, would not dream of giving all the tenants notice to quit, and he added that in his opinion very grave responsibility would rest on the agent who advised his employer to take such a course. Mr. Aubrey Spencer, who read a paper on the Act at the same meeting of the Surveyors' Institute, and who is one of the best authorities on agricultural legislation, said that he would not like it to go out that he had advised that notices to quit should be given on every estate in the country, and that it would only be in exceptional cases that such a course would be desirable.
I have received a letter from a Yorkshire land agent in large practice stating that he disapproves the course of giving notice very strongly as disturbing to tenants and naturally making them suspicious. He adds that he has never found any difficulty in dealing with agreements thirty or forty years old which were never altered to meet the provisions of the Agricultural Holdings Acts of 1883 and 1890.
The noble Earl was, I think, a little too hard on the Members of the House of Commons in representing the questions they asked as a personal attack on Lord Egerton of Tatton. I see nothing of that sort in the Questions themselves. There have been articles in the Land Agent's Record—a journal which is very widely read—on the subject of contracting out of the Act, with an intimation that they were written in response to numerous applications for some light on the practical method of taking away from the Act its compulsory character. In the circumstances there is no cause for surprise if there is a certain uneasiness as to what may be the action of some landlords in regard to the Act. I do not for one moment think landlords will be guided by over-zealous agents or ingenious young barristers; I believe they will accept the Act as loyally as Lord Egerton of Tatton. If the Act is applied in a reasonable way on either side and interpreted with common sense it cannot fail to be of benefit to the agricultural community.
THE MARQUESS OF LONDONDERRY: My Lords, I have listened with satisfaction to the noble Earl's approval of the
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letter he has read, a letter such as was to be expected from Lord Egerton of Tatton. While I cordially agree with all that fell from the noble Earl with regard to Lord Egerton's letter, there were certain remarks towards the latter part of the noble Earl's speech on which I should like to say a word. The noble Earl seemed to think that landlords had no right to make any alteration in the relations between themselves and their tenants in the interval between their passing of the Act and its coming into operation. What was the object of postponing the date of the Act's coming into force unless it was to enable landlords and tenants to consider their relative positions? In the interests of agriculture as a whole, it is necessary for landlords to consider their position. There is such a thing as the rotation of crops, established by experience of the land; and a bad tenant, taking advantage of the new power of cropping, might do great harm to the land. That is why landlords are carefully considering this question. The noble Earl talked as if landlords were giving wholesale notices to their tenants. The idea is a figment of the imagination conjured in the minds of some supporters of the Government in the House of Commons who wish to create ill-feeling between landlord and tenant. When the noble Earl comes to giving advice to landlords as to what they should do, I must remind him that landlords have a right to consider their own interests without advice from the Front Bench. If the powers of landlords are unfair, let Parliament alter them; but I object to dictation from the noble Earl or anyone in his position.
*THE EARL OF CREWE: My Lords, I desire to say a word, not so much as a Member of the Government, but as a brother landlord of Lord Egerton in Cheshire. All of us who live in that county know how admirably the noble Lord's estate is managed—Icould not name a better anywhere—and all who know him would be aware from the first that any step he took in relation to the new Act would be for the advantage of the estate and of the tenants. The noble Marquess who has just sat down alluded to the time of grace, so to speak, given before the Act came into operation. But I am bound to remind him that, while that time of grace was, it is perfectly

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true, given to enable people to make arrangements, it certainly was not given, nor do I know that it ever was claimed to be given, to enable people to evade the provisions of the Act, or in any sense to contract out of it. No such claim during all the debates that passed was ever made on the other side of the House. The only claim made was that time should be given to enable people to make the necessary arrangements, but not arrangements contrary to the provisions or even to the spirit of the Act. As regards the question of giving general notice, of course I do not know what the particular circumstances of my noble friend Lord Egerton's estate may have been; but, speaking generally, it does seem to me an unnecessary and rather startling act to give a general notice to all the tenants on one's estate. If a landlord desires to reconstruct his form of agreement in consequence of the provisions in this Act, it would be by no means a difficult matter to carry that purpose out gradually in the course of two or three years instead of in the somewhat dramatic manner of a general notice. We all know that Lord Egerton had no malign intention whatever in the matter; but to those who are not acquainted with the particular circumstances it certainly would seem that a landlord who gave all his tenants notice to quit on the passing of a particular Act, might have in view some object not consonant with the spirit of the Act. Therefore, speaking generally, I should be inclined, like my noble friend behind me, to deprecate the practice of giving general notice.
THE MARQUESS OF LANSDOWNE: My Lords, none of us differ from the noble Earl when he says that the period of grace allowed under the Act of last year was not intended as offering an opportunity for a wholesale evasion of the letter or the spirit of the Act. But what I wish to draw your Lordships' attention to is this—that, as I understand the matter, these charges were brought against Lord Egerton with the deliberate object of suggesting that he had attempted to evade the provisions of the Act.
THE EARL OF CAMPERDOWN: It was stated in terms that he was evading the Act.
THE MARQUESS OF LANSDOWNE: This discussion has been sufficient to show that nothing could be further from the truth than that charge. Whether it was necessary to take this particular means of adjusting the estate agreements to the new order of things created by the Act of last year I cannot say; but it is quite clear that the Act did so fundamentally alter the relations of the landlord and tenant that it must have become necessary on some estates that those relations should be formally readjusted, not with the idea of depriving the tenants of anything the Act gave them, but of adapting the old order of things to the new, and that, I think, is really all that has happened on Lord Egerton's estate.
LORD HENEAGE: My Lords, I would remind the noble Earl the President of the Board of Agriculture that when the Agricultural Holdings Act of 1883 came into force, fresh agreements were entered into on nearly every estate. The Minister for Agriculture has referred to the Institute of Surveyors as very learned in this matter. I understand from them that they are not at all certain whether the present agreements as they stand would be legal at the end of the two years, and whether it will not be absolutely necessary even for those who desire to give the fullest scope to the Act to make fresh agreements to comply with it. I do not see how you can legally bring fresh agreements into force without some formal notice to the tenants that there will be new agreements substituted for those at present in existence. Therefore I think that such an accusation as that which has been made against Lord Egerton is rather hard indeed. In Lincolnshire, the county with which I am more closely connected, nearly the whole of the present agreements are based on the Lincolnshire custom. That custom has been practically abolished by the Act of last year, and we shall have to see how far our agreements are waste paper and substitute others for them; but I understand that cannot be legally done with-but first giving formal notice to quit, whatever one may intend to do afterwards.
House adjourned at Six o'clock, to Monday next, a quarter before Eleven o'clock.