§ LORD CHANCELLOR (VISCOUNT HALDANE)My Lords, I have taken the responsibility of summoning your Lordships to attend to-day, the reason being that a Bill may be passed which the noble Marquess who leads the House will explain. I have only risen to inform your Lordships that the House is duly constituted, notwithstanding the Resolution passed on Thursday last that the House, except for Judicial business, should stand adjourned until to-morrow. There was a Judicial sitting to transact legal business this morning, and the present sitting is by way of a continuation of that sitting.
*THE LORD PRIVY SEAL AND SECRETARY OF STATE FOR INDIA (The MARQUESS OF CREWE)My Lords, the noble and learned Viscount on the Woolsack has pointed out the fact that the House as we now meet is formally constituted, although irregularly convened according to our usual procedure. But although the circumstances are altogether without precedent, the procedure proposed to be followed is not. I may remind your Lordships that in the year 1883 it was thought necessary to pass through both Houses of Parliament with the least possible delay the Explosive Substances Bill, and the procedure then adopted in this House was precisely that which I propose, with the leave of the House, to adopt now. On that occasion Lord Kimberley moved "That Standing Order No. LIV 'That no Motion for making or dispensing with a Standing Order be made without notice' be now read"; and the Order was read accordingly. It was then moved "That Standing Order No. XXXIX 'That no two stages of a Bill be taken on one day' be now read"; and it was read accordingly. Then the Leader of the House moved to resolve "That it is the opinion of this House that it is essentially necessary for the public safety that the Bill this day brought from the House of Commons intituled 'An Act to amend the law relating to explosive substances' should forthwith be proceeded in with all possible despatch, and that notwithstanding Standing Orders Nos. LIV and XXXIX, the Lord Chancellor ought forthwith to put the question upon every stage of the said Bill in which this House shall think it necessary for the public safety to proceed therein"; and that Motion was agreed to and the Bill was passed through all its stages. That is the procedure which I am going to ask the House to adopt on this occasion. But it will be, I think, for the general convenience if, before making the first of those Motions, I state the reasons for which the Motion is made.
The Bill which I shall have the honour shortly to ask your Lordships, when the Standing Orders have been dealt with, to read a first time, is a Bill to authorise His Majesty, by Proclamation, to suspend temporarily the payment of bills of exchange and payments in respect of other obligations, and its short title is the Postponement of Payments Bill. Your Lordships have all been aware, from what you have seen, of the extent to which the unprece- 313 dented circumstances in Europe have dislocated the business of the City of London. I need not attempt to describe the circumstances, which are as familiar to most of the House as they can be to myself. This particular measure is framed to deal with one special and urgent difficulty with which we are faced. In all the confusion which has occurred in the City nothing has been more marked than the absolute dislocation of the Discount Market. The great houses who are in the habit of accepting bills sometimes of enormous outstanding amounts have to meet those bills, of course, as they mature. They are maturing daily, and the acceptor, in almost all cases, has no means of meeting his liability. There are a number of firms of the greatest importance and of the most complete actual stability who at this moment are unable to obtain either remittances from abroad or any kind of accommodation at home. They are therefore without the means of meeting those acceptances as they mature. The securities which they might in ordinary circumstances sell to meet those liabilities are, if not diminished in real value, for the time being altogether unsaleable, and it is equally impossible for them to obtain advances from the banks against all or any of their securities, no matter how stable or how valuable they may be. In these circumstances the accepting houses are, as I have said, completely at a loss and unable to meet their liabilities.
We all know that the City of London is the chief centre of the credit of the world, but in this particular business of discounting bills there has of late years been an enlargement which tends to introduce further complications and to increase the difficulty. The rules of the Bank of England with regard to bills are that they are not discounted unless they have at the back two sound British names; but, as we all know, there are a great number of important foreign banking houses in London, and in some cases those houses have dispensed with this particular rule in favour of bills, absolutely sound, and bearing names which are in themselves a perfectly good moral guarantee, but they do not bring the bills within this particular rule. That, of course, has led to a great enlargement of business, and it naturally adds to the complexity of the existing situation. Your Lordships will have seen in the newspapers this morning a Proclamation [†] relating to bills of exchange. That Proclamation, issued by His Majesty in 314 Council, provides that on the presentation for payment of a bill of exchange, but not a cheque or a bill on demand, the acceptor can re-accept the bill for a month, becoming liable for interest at the bank rate at the time for which he re-accepts. That is the simple description of what it is proposed to do at this moment.
The Bill is more widely drawn. The Bill provides that His Majesty may, by Proclamation—
authorise the postponement of the payment of any bill of exchange, or of any negotiable instrument, or any other payment in pursuance of any contract, to such extent, for such time, and subject to such conditions or other provisions as may be specified in the Proclamation.The Bill then goes on to provide that no additional stamp duty shall be payable; and it provides that a Proclamation may be varied, extended, or revoked by any subsequent Proclamation. The House might be tempted to regard this as being[†] The Royal Proclamation referred to by the MARQUESS OF CREWE was as follows:
§ SUNDAY, 2 AUGUST, 1914.
§ BY THE KING.
§ A PROCLAMATION
§ FOR POSTPONING THE PAYMENT OF CERTAIN BILLS OF EXCHANGE.
§ GEORGE R.I.
§
WHEREAS in view of the critical situation in Europe and the financial difficulties caused thereby it is expedient that the payment of certain bills of exchange should be postponed as appears in this Proclamation:
NOW, THEREFORE, WE have thought fit, by and with the advice of Our Privy Council, to issue this Our Royal Proclamation, and We do hereby proclaim, direct, and ordain as follows:—
If on the presentation for payment of a bill of exchange, other than a cheque or bill on demand, which has been accepted before the beginning of the fourth day of August, nineteen hundred and fourteen, the acceptor re-accepts the bill by a declaration on the face of the bill in the form set out hereunder, that bill shall, for all purposes, including the liability of any drawer or indorser or any other party thereto, be deemed to be duo and be payable on a date one calendar month after the date of its original maturity instead of on the date of its original maturity, and to be a bill for the original amount thereof increased by the amount of interest thereon calculated from the date of re-acceptance to the new date of payment at the Bank of England rate current on the date of the re-acceptance of the Bill.
§ Form of Re-Acceptance.
§ Re-accepted under Proclamation for £ (insert increased sum).
§ Signature—
§ Date—
§ Given at Our Court at Buckingham Palace, this second day of August, in the year of our Lord one thousand nine hundred and fourteen, and in the Fifth year of Our Reign.
§ GOD SAVE THE KING.
315§ drawn in somewhat excessively wide terms. It is well known that there are not a few who would like to see a greater liberty given than it has been found possible to give by this Proclamation. There are not a few, I dare say, who would like to see cheques and bills payable on demand included in this Moratorium, as it is technically described. We have not thought it possible to include securities of that kind in this Proclamation.
§ It would not do for me to anticipate in any way the statement of a more general character which my colleague the Chancellor of the Exchequer will make, I suppose, later this evening in another place on the financial situation generally and the methods to be employed for dealing with it. But this much I may say, that apart from this grant of delay to bankers and to others who are in the habit of dealing with securities payable on demand, there are a great number of other methods by which they may be safeguarded and in which they can be protected from any results similar to those from which the accepting houses of bills of longer date are being saved by this measure which I am asking your Lordships to pass to-day. And as regards the wide terms in which the Bill is drafted, I think the House will agree that there is not only no prospect but no practical possibility of these powers being abused. The Government of course acts, as it is bound to act, in concert with the best judgments and the clearest heads in the City of London, and it is quite evident that every Government placed in such a situation would have to act in a similar manner, and therefore I think your Lordships, without the faintest qualms of uneasiness, can pass the Bill in its widely-drawn form without fear that the powers will be abused by the Government of the day. Otherwise any small alteration which might be found necessary in the terms of the actual Proclamation as issued could not be varied by an amending Proclamation, but the change would have to go through the whole process of a Bill being passed through all its stages in another place; and in those circumstances, knowing as I do that your Lordships recognise the immense importance of the occasion and its absolutely unique character, I venture to hope that you will not stand in the way of allowing it to pass through all its stages.
§ Moved, "That Standing Order No. LIV 'That no Motion for making or dispensing 316 with a Standing Order be made without notice' be now read."—(The Marquess of Crewe.)
§ On Question, Motion agreed to, and the Standing Order read accordingly.
§ Moved, "That Standing Order No. XXXIX 'That no two stages of a Bill be taken on one day' be now read."—(The Marquess of Crewe.)
§ On Question, Motion agreed to, and the Standing Order read accordingly.
§ Moved to resolve, "That it is the opinion of this House that it is essentially necessary for the public security that the Bill this day brought from the House of Commons intituled 'An Act to authorise His Majesty by Proclamation to suspend temporarily the payment of bills of exchange and payments in pursuance of other obligations' should forthwith be proceeded in with all possible despatch, and that notwithstanding Standing Orders Nos. LIV and XXXIX, the Lord Chancellor ought forthwith to put the question upon every stage of the said Bill in which this House shall think it necessary for the public security to proceed therein."—(The Marquess of Crewe.)
§ *THE MARQUESS OF LANSDOWNEMy Lords, both the noble and learned Viscount on the Woolsack and the noble Marquess who leads the House have said something this evening as to the question of the procedure which we are invited to follow with regard to this Bill. Many of us were certainly under the impression that in view of the fact that your Lordships' House had adjourned until to-morrow there would be some difficulty in taking important business this evening, but the noble and learned Viscount tells us that he has looked into this matter and that he is satisfied that the House as we see it now is properly constituted. We are ready to take that on the authority of the noble and learned Viscount.
With regard to the proposal that the Standing Orders should be suspended and the Bill passed through the whole of its stages to-day, the noble Marquess was good enough to cite the precedent of the Explosive Substances Bill in the year 1883. So far as I was able to follow it, the precedent 317 is one which may fairly be quoted in support of the noble Marquess's proposal. But I will take upon myself to say that, in view of the great gravity of the case, even if the noble Marquess had not been able to produce so relevant a precedent, your Lordships' House would have been inclined not to stand upon your rights but to facilitate the passage of the Bill on the strong recommendation of the Government.
As to the merits of the Bill, I shall certainly not take up your Lordships' time by any observations of my own. The Bill deals with matters with which only a few of your Lordships are conversant, but to this extent we are able to form an opinion, that we are aware of the extremely serious condition of affairs which prevails at this moment in business circles. We are aware of the dislocation of business which has already taken place, and which may, I am afraid, proceed much further. We recognise that it is the duty of the Government to take whatever steps are in their power to relieve the stress to which the City has been and may be subjected. We understand that the noble Marquess and his colleagues have consulted the best authorities available, and that they are advised that this particular measure is the appropriate mode of dealing with the difficulty. That being so, although we of course cannot assume any responsibility for the details of the Bill, we do desire to offer to His Majesty's Government that support which we are ready to accord to them riot only in this particular matter, but in all other difficulties which they may have to encounter during the very critical times through which we are passing.
§ On Question, Motion agreed to, and resolved accordingly.
§ Bill read 1ª, and to be printed. Moved, "That the Bill be now read 2ª"; on Question, resolved in the affirmative: Bill read 2ª accordingly. Then it was moved, "That the Bill be committed"; on Question, resolved in the negative. Then it was moved "That the Bill be now read 3ª"; on Question, resolved in the affirmative: Bill read 3ª accordingly. Then it was moved, "That the Bill do pass"; on Question, resolved in the affirmative: Bill passed accordingly, and a Message sent to the Commons to acquaint them therewith.