§ [SECOND READING.]
§ Order of the Day for the Second Reading read.
§ THE LORD CHANCELLOR
My Lords, the object of this Bill is one in which the business world concurs. It is to make certain amendments in the Bills of Exchange Act, 1882, which are in themselves very desirable, and which have this further advantage, that they bring our law into accord with the Uniform Regulation on Bills of Exchange which has now been assented to by more than thirty foreign countries. These proposals were brought forward by our own delegates at the last Hague Conference in 1912. The amendments have been approved by the 240 Bank of England, the Institute of Bankers, the Incorporated Law Society, and the various Chambers of Commerce and other expert bodies to whom they were submitted for consideration. I therefore hope that your Lordships will give the Bill a Second Reading.
§ Moved, That the Bill be now read 2ª.—(The Lord Chancellor.)
§ *LORD FABER
My Lords, I listened with interest to what the Lord Chancellor said, and I agree that this Bill is entirely non-contentious and has been approved by high financial authorities in the City. But there are one or two provisions in the Bill to which I should like to call your Lordships' attention, and which I hope the Lord Chancellor will be so good as to consider. The object of this Bill is to bring our law on the subject of bills of exchange into line with that of foreign countries. At present there are different regulations applying to bills of exchange in Europe, in America, and in England. This Bill will remedy some of those differences, but not all.
Clause 2 provides that where a bill falls due on a non-business day it shall be deemed to be due and shall be payable on the next succeeding business day. That is a very necessary provision, because at present we are in this curious position. If a bill falls due on a Sunday, on a Good Friday, or on Christmas Day, it is payable on the day before; but if a bill falls due on a Bank Holiday it is payable on the day after, and that leads to confusion especially in foreign countries when sending bills here for payment. Therefore it is proposed in this clause to make the law uniform, so that all these bills in such cases shall be payable the day after. Clause 3 provides that if a man writes his name on the face of a bill he accepts that bill. At present it is not quite certain what happens if he writes his name on the back of the bill. It might be only an endorsement. It is decided by this clause that if he writes his name on the face of a bill he accepts that bill.
Clause 6 provides that, notwithstanding any enactment to the contrary, a bill of exchange which is presented for acceptance or accepted or payable outside the United Kingdom shall not be invalid by reason only that it is not stamped in accordance 241 with the law for the time being in force relating to stamp duties. I should like to see that law applied to bills that are payable in this country, my contention being that a bill should not be invalid by reason only of its not being stamped so long as the penalty for non-stamping is made sufficiently heavy. I know I shall be told that the Chancellor of the Exchequer might lose money in this way, and that he fears that people would not stamp bills of exchange at all; but I think that if the penalty were made sufficiently high that need not interfere with my proposal. I know that it may be said that this clause is a money clause and that we have no I jurisdiction in this House over it. That I might, of course, interfere with my desire to get the clause altered so as to apply it to bills in this country as well as to those payable abroad, but I cannot say whether that is so. At present, as regards bills of exchange payable in this country, we always take three days of grace after the bill is due. That is not done in any Continental country and is done in only a very few of the States of America, and I should like to suggest to the Lord Chancellor that the three days grace now given in this country should be done away with.
When the Committee stage arrives I should like to move two Amendments. They are not important and are not contrary to the Hague Conference, but they would be very valuable indeed to bankers. The first of those Amendments refers to forged endorsements on so-called cheques, which so-called cheques have not the protection of ordinary cheques as regards endorsement. At present when a cheque is produced to a banker it is the banker's duty to know the signature of the drawer, and if he does not know the signature and passes a forgery the banker has to pay; but as regards the endorsement on the cheque, as long as it is purported to be signed by the payee the banker has nothing to do with it. How can he know, when a cheque is payable, say, to John Brown or Tom Jones, that the John Brown or Tom Jones who has endorsed the cheque on the back is the genuine John Brown or Tom Jones? There is an Act which says that the banker is not liable for the endorsement on that cheque. But in the last few years there has grown up a new kind of document, issued chiefly by local government boards and so on, 242 which has attached to the cheque a receipt, and the receipt has to be signed and no endorsement is required. That does not come under the cheque law. Consequently a banker is liable for the receipt on these forms being a genuine receipt, which seems to me to be unfair, because it is quite impossible for the banker to know whether or not the receipt is genuine. Therefore we want by one Amendment which I shall move in Committee to include these documents within the law applying to cheques. The other Amendment which I shall move is a short one which would enable people to cross documents of this kind and to get thereby the protection of a crossing which at present they cannot enjoy. Those are all the remarks I have to make on this Bill. I think it is a very good Bill and should certainly go through. In days to come we shall hope to get even nearer to foreign nations than we are now, but at present this is a good beginning, and all the City authorities will be glad to see this Bill passed into law.
§ On Question, Bill read 2—, and committed to a Committee of the Whole House on Wednesday next.