MONEYLENDERS BILL. [H.L.]

HL Deb 23 February 1926 vol 63 cc233-59

Order of the Day for the House to be put into Committee read.

Moved, That the House do now resolve itself into Committee.—(Lord Carson.)

On Question, Motion agreed to.

House in Committee accordingly:

[The EARL OF DONOUGHMORE in Chair.]

Clause 1 agreed to.

Clause 2:

Certificate required for grant of moneylender's excise licence.

2.—(1) A moneylender's excise licence shall not be granted except to a person who holds a certificate granted in accordance with the provision of this section authorising the grant of the licence to that person, and any moneylender's excise licence granted in contravention of this section shall be void.

(2) Certificates under this section (in this section referred to as "certificates") shall be granted by the petty sessional court having jurisdiction in the place in which the moneylender's business is to be carried on.

(3) A Secretary of State shall make rules with respect to the procedure to be followed in making applications for certificates (including the notices to be given of intention to make such an application), and certificates shall be in such form as may be prescribed by rules so made.

(4) An application for a certificate shall not be refused except on the following grounds, or some one of them—

1. (i) that the person on whose behalf a certificate is sought has failed to produce satisfactory evidence of good character;
2. (ii) that the person on whose behalf a certificate is sought is by order of a court disqualified for holding a certificate; or
3. (iii) that the person on whose behalf a certificate is sought has within ten years been convicted of an offence under this Act or under the Moneylenders Acts. 1900 and 1911; or
4. (iv) that the person on whose behalf a certificate is sought has not complied with the provisions of any rules made under this section with respect to applications for certificates.

Where a certificate is sought on behalf of a body corporate, regard may for the purposes of this subsection be had to the character of the persons responsible for the management of that body.

(5) Where any person, being the holder of a certificate, is convicted of any offence under this Act or under the Moneylenders Acts, 1900 and 1911, the court—

1. (a) may order that any certificates held by that person shall either be suspended for such time as the court thinks fit, or shall be forfeited, and also, if the court thinks fit, may declare that person disqualified for obtaining a certificate for such further time after the expiration of the certificates as the court thinks fit; and
2. (b) shall cause particulars of the conviction and of any order made by the court under this subsection to be endorsed on every certificate held by the person convicted, and shall cause a copy of those particulars to be sent to the authority by whom any certificate so endorsed was granted.

LORD DESBOROUGH moved, after subsection (2), to insert, "(3) No certificate shall be in force for more than one year from its date." The noble Lord said: The object of this Amendment is to bring the clause into line with the Pawnbrokers Act, which contains a similar provision, and I imagine that my noble and learned friend behind me will not object to this. While the certificate of a moneylender may not be endorsed, there may yet be very good reasons why he should not be granted a new one and the certificate would, under this Amendment, allow him to continue only for a year.

Amendment moved—

Page 2, line 39, at end insert: ("(3) No certificate shall be in force for more than one year from its date.")—(Lord Desborough.)

LORD CARSON

I agree with my noble friend that it is well to keep this certificate on the same basis as the certificate of the pawnbroker and I think this Amendment is an improvement in the Bill.

On Question, Amendment agreed to.

LORD MARSHALL OF CHIPSTEAD moved, in subsection (3), after the first "in," to insert "and the fees to be paid upon." The noble Lord said: The object of this Amendment is to make the fees payable on application for a moneylender's certificate more adequate to the work involved as indicated by subsection (4) of Clause 2, which sets out the grounds upon which a certificate may be refused. It will be seen from this clause that inquiries have to be made as to character, as to certain orders of a court, as to convictions under this and other Acts and as to compliance with rules regarding applications for certificates. Subsection (2) of Clause 2 provides that certificates shall be granted by petty sessional courts. These courts have scales of fees made under the Summary Jurisdiction Act, 1848, and in the City of London the fee specified for a certificate is 1s. This is thought by the magistrates sitting in the City to be quite insufficient for the present purpose. It is, however, unnecessary at this stage to discuss the amount of the fees because the Amendment that I propose leaves the matter to the decision of the Home Secretary. I understand that the noble and learned Lord in charge of the Bill does not disapprove of this Amendment

Amendment moved— Page 2, line 41, after ("in") insert ("and the fees to be paid upon").—(Lord Marshall of Chipstead.)

LORD DESBOROUGH

On behalf of the Home Office I am sorry to tell my noble friend that they do not approve of his Amendment, which they consider to be unnecessary and undesirable. Section 6 of the Criminal Justice Administration Act, 1914, provides for a uniform table of court fees which has effect in all courts of summary jurisdiction and under subsection (3) of that section the Secretary of State is empowered to vary the table and meet any additional duties imposed on courts of summary jurisdiction. In these circumstances the matter is already provided for and it would be undesirable to introduce a new principle, as in that case this Bill would have special provisions which, in the view of the Home Office, are not necessary.

LORD MARSHALL OF CHIPSTEAD

I understand from the noble Lord that magistrates can make special orders for these certificates. If that be so I would ask the leave of the House to withdraw the Amendment since the matter is already provided for.

LORD DESBOROUGH

It is provided for.

LORD CARSON

When my noble friend opposite mentioned this Amendment to me I certainly told him that so far as I was concerned I had no objection to it, but at the time I was not aware of the terms of Section 6 (3) of the Criminal Justice Administration Act, 1914, which gives the Secretary of State in the event of new or additional duties being imposed on courts of summary jurisdiction or clerks to justices, or for other sufficient reasons, by order to make such variations in the said table of fees as may seem to him to be proper. As there are other special provisions as regards courts of summary jurisdiction I think it would be a pity to make a distinction in the case of this one matter. In fact, I should think the section in that Act of Parliament was meant to meet any cases that might arise under fresh legislation such as we propose.

LORD MARSHALL OF CHIPSTEAD

I am much obliged to the noble and learned Lord, and I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

LORD DESBOROUGH moved to leave out subsection (4) and to insert:— (4) A certificate shall not be granted to any body corporate (in this section referred to as a company) of which the name includes the word 'bank' or otherwise implies that the company carries on banking business; but save as aforesaid a certificate shall not be refused except on some one or more of the following grounds—

1. "(i) that satisfactory evidence has not been produced of the good character of the applicant, and in the case of a company of the persons responsible for the management of the company;
2. "(ii) that the applicant, or, in the case of a company, any person responsible for the management of the company, is by order of the court disqualified for holding a certificate;
3. "(iii) that the applicant, or, in the case of a company, any person responsible for the management of the company, has within ten years been convicted of an offence under this Act or under the Moneylenders Acts, 1900 and 1911, or was a partner in a firm or a person responsible for the management of a company at a time when the firm or company was so convicted within that period:
4. "(iv) that the applicant has not complied with the provisions of any rules made under this section with respect to applications for certificates.

(5) Any person aggrieved by the refusal of a petty sessional court to grant a certificate may appeal to a court of quarter sessions in manner provided by the Summary Jurisdiction Acts.

The noble Lord said: This Amendment seeks to effect three things. The first is to prevent the moneylender implying in his circulars or otherwise that he is carrying on a banking business. Further, an individual moneylender must take out a licence in his own name and it seems desirable to maintain the existing prohibition as regards companies. The Amendment also makes it clear that the court may refuse an application for a certificate in the case of a company not only where the company itself is disqualified but where any person responsible for the management of the company is disqualified for holding a certificate. The court may also refuse an application either by an individual or a company, where the applicant or any person responsible for the management of the company has been a partner in a firm which has been convicted. An applicant who has been refused a certificate has the right of appeal to a court of Quarter Sessions. This last is a new point in this Bill, but I think it is only fair since a similar right is given to pawnbrokers by Section 52 of the Pawnbrokers Act, 1872, and I hope that my noble and learned friend will agree to it.

Amendment moved— Page 3, lines 1 to 22, leave out subsection (4) and insert the said new subsections.—(Lord Desborough.)

LORD CARSON

So far as I am concerned, I think the Amendment is an improvement upon the Bill, and I am glad to think that the Home Office have gone so carefully into the matter. It is quite necessary, I think, that the Bill should be made applicable to companies, as is proposed in the Amendment, and I think also that, as there is a right of appeal in the case of a refusal of a pawnbroker's licence, there is no reason why the same right should not exist in the case of a licence for a moneylender. I approve of the Amendment moved by my noble friend.

LORD WITTENHAM

Before the Amendment is put, is there not a verbal error, on the Marshalled List of Amendments, is the printing of the figure "5" in Roman type?

THE LORD CHANCELLOR

I do not think that my noble friend is right. It seems to me that the Amendment is properly drafted.

On Question, Amendment agreed to.

LORD DESBOROUGH moved, in paragraph (a) of subsection (5), after "person," where that word secondly occurs, to insert "and in the case of a company, any person responsible for the management of the company to be." The noble Lord said: The object of this Amendment is to enable the Court, on conviction of a company, to disqualify, if it thinks fit, the person who is really responsible.

Amendment moved— Page 3, line 30, after ("person") insert ("and in the case of a company, any person responsible for the management of the company to be").—(Lord Desborough.)

On Question, Amendment agreed to.

LORD DESBOROUGH moved to add to subsection (5):— ("Provided that where upon the conviction of a company a person alleged to be responsible for the management of the company is disqualified by order of the court for obtaining a certificate, be may appeal against the order as if he had been the person convicted.") The noble Lord said: The object of this Amendment is to provide for an appeal, where a person it disqualified on the conviction of a company although not him-self convicted personally.

Amendment moved— Page 3, line 39, insert the said proviso.—(Lord Desborough.)

On Question, Amendment agreed to.

Clause 2, as amended, agreed to.

Clause 3: [Courts to which proceedings on money-lending transactions are to be taken]:

LORD CARSON

The manuscript Amendment to this clause which I have handed in is, I think, of considerable importance. It relates to certain proceedings which may be taken in Scotland. Since handing in the Amendment I have been in communication with the Scottish Office, and they ask to be allowed to consider the matter further. I propose, therefore, not to move it now, but unless there is some good reason to the contrary I shall certainly put it down for the Report stage.

Clause 3 agreed to.

Clause 4 [Prohibition of money-lending circulars, etc.]

VISCOUNT BERTIE OF THAME

I beg to move, at the end of the clause, to insert the following new subsection:— () A moneylender shall clearly state in all advertisements, circulars or other documents issued by him in the course of his business as a moneylender under what, if any, other name or names than his own he has carried on the business of a moneylender before the passing of this Act. The object of this Amendment is that intending borrowers may know the type of lender from which they think of borrowing.

Amendment moved— Page 6, line 9, at end insert the said new subsection.—(Viscount Bertie of Thame.)

LORD DESBOROUGH

I do not know whether Lord Marshall of Chipstead will move the Amendment standing in his name at the same time. As I understand, both Amendments have the same object—namely, that moneylenders shall disclose all the names under which they have lent money before.

LORD MARSHALL OF CHIPSTEAD

I do not know that my Amendment is exactly the same as that of the noble Viscount. My Amendment is to the effect that moneylenders, in their circulars and other notices, frequently print their trade names in large letters, and their actual moneylenders' names in much smaller and much less noticeable characters. I want to move that the registered names shall be at least as prominent as any other name on the circular, and I venture to submit that in a Bill of this sort it is a very important matter.

LORD DESBOROUGH

With regard to the Amendment in the name of Lord Bertie, the Home Office, on whose behalf I am speaking, have no objection to it, although in their view there are minor points which seem to call for consideration. Perhaps the intention of the noble Viscount will be sufficiently met if moneylenders are required to state in documents issued by them any registered names in which they have carried on business during the last twenty-six years, that is, since the passage of the last Bill in 1900, prior to which date there was no registration of moneylenders. Perhaps it will not be considered necessary to force moneylenders to state the names under which they carried on business prior to that date, because it is possible that they may have forgotten some of those names, and if they omit them they will be liable to pay a fine of £100, and also to imprisonment for three months. I do not know whether the noble Viscount would be willing to accept such an Amendment.

LORD CARSON

So far as I am concerned I have no objection to the Amendment. I think there ought to be some limitation such as is suggested, as regards the period covered, in order to make it a really practicable Amendment. Whether it will have any real effect I do not know, but I am not prepared to oppose the Amendment.

LORD DESBOROUGH

Might I also make the suggestion that it might be possible to incorporate part of Lord Marshall's Amendment, and reduce the penalty to a fine not exceeding £20? A fine of £100, or three months' imprisonment, appears to be rather an excessive penalty. The Home Office are only anxious to make the Bill as perfect as possible and to get something done.

LORD BANBURY OF SOUTHAM

May I ask what would happen if a moneylender forgot that twenty-six years ago he carried on business as Mr. Smith, and did not put that name on his circular?

LOUD DESBOROUGH

If Lord Marshall's Amendment were accepted the penalty would be a fine of £20.

LORD BAXBURY OF SOUTHAM

We can only deal with one Amendment at a time. This Amendment of the noble Viscount has no penalty in it at all.

LORD DESBOROUGH

I was rather putting forward the suggested Amendments with a view to getting the matter adjourned, so that it might be brought up again at a later stage, and the two Amendments considered together.

Amendment, by leave, withdrawn.

Clause 4 agreed to.

Clause 5 agreed to.

Clause 6:

Restriction on rate of interest to be charged.

6.—(1) Where proceedings are taken by a moneylender for the recovery of any money lent after the commencement of this Act or for the enforcement of any agreement or security made or taken after the commencement of this Act in respect of money lent either before or after the commencement of this Act, and the interest charged in respect of the sum actually lent or any part thereof remaining unpaid exceeds the rate of four per centum per month, or the corresponding rate in respect of any other period, the court shall, unless the contrary is proved, presume that the interest charged is excessive and that the transaction is harsh and unconscionable within the meaning of subsection (1) of section one of the Moneylenders Act, 1900.

LORD DESBOROUGH moved, in subsection (1), to leave out "four per centum per month" and insert "one per cent. per week". The noble Lord said: I am afraid that this Amendment is not much smiled upon by my noble and learned friend, but the Home Office make the suggestion that a month means a calendar month and calendar months vary considerably in length, I am sorry to say, and it would make it rather difficult in calculating the interest when yon come down to days. My Amendment will raise the interest from 48 per cent. to 52 per cent. per annum, and I know that my noble and learned friend thinks that the rate is high enough already.

Amendment moved— Page 6, line 32, leave out ("four per centum per month") and insert "one per cent. per week").—(Lord Desborough.)

LORD HUNSDON OF HUNSDON

I am afraid that I cannot accept this Amendment any more than my noble and learned friend Lord Carson. The reason is that in my opinion 4 per cent. per month is much too high, and that 1 per cent. per week, or 52 per cent. per annum, is still higher. Of course, as it works out 1 per cent. per week is really much more than 52 per cent. per annum, because the payments are made weekly and so the moneylender earns an enormous rate of interest upon his money. I dratted an Amendment to this clause, but I felt that, as the Bill represents the considered opinion of a Joint Select Committee, it would be presumptuous of me and—what is far more important—quite useless to put substantial Amendments before this House unless I received the support of my noble friend who speaks for the Home Office, or some other noble Lord who has more authority than I have.

I should like to refer to the whole clause, because it is rather difficult to speak to the Amendment without doing so. The clause enacts that if the rate of interest exceeds 4 per cent. a month it shall be presumed, unless proved otherwise, to be harsh and unconscionable; and one effect of that statement is that it implies that, if the rate of interest is 4 per cent. a month or less, it is reasonable and conscionable. I want to suggest that there is no reason, from the rate of interest, for either presumption. Nobody can possibly tell, from the rate of interest by itself, whether or not the rate is conscionable or otherwise. If, for instance, 4 per cent. a month, or 1 per cent. a week, as my noble friend suggests, were charged to a man of good character and in a stable occupation, such as the Government service, it would undoubtedly be harsh and unconscionable. On the other hand, there must be plenty of borrowers to whom 10 per cent. a month would be a perfectly proper charge in view of their character and position: and, indeed, there are certain people to whom nobody in his senses would lend at all. As a learned Judge once remarked—and the dictum was aptly quoted by my noble friend who presided over the Joint Committee—no one would lend a mutton chop to a starving dog.

I suggest that this Bill is excellent so far as it protects, or tries to protect, the poor and ignorant. But when you try to protect the more educated classes I really think that, whatever precedents there may be to the contrary, it is not the province of the Legislature to protect people from the consequences of their own folly. But the Legislature is, to my mind, justified in stepping in because one of the consequences of that particular form of folly is crime, that is to say, robbing tills and various forms of dishonesty, and the Legislature is perfectly justified in stepping in to protect innocent people from those crimes. Therefore I should not mention in the Bill whether the rate of interest was harsh or unconscionable; all I should do would be to fix a rate of interest beyond which it is not in the public interest to go, as being ruinous and productive of crime.

The question arises: What rate should be charged? My opinion is that it is contrary to the public interest that any one whose character and position justifies the moneylender in charging more than ¾ per cent. a week should be allowed to borrow at all. Your Lordships may reasonably reply that this is not a Bill to put moneylenders out of business, and who could carry on as a moneylender at ¾ per cent. per week? I will refer very shortly to the evidence before the Joint Committee. The Joint Committee examined fifteen moneylenders and one chartered accountant, whose clientèle was apparently chiefly or largely composed of moneylenders. The Committee put to them this question: "What rate of interest would be reasonable?" There were a few towards the end whom they did not ask, and there were a few who evaded the question, but, out of those fifteen, nine unanimously stated that 60 per cent. was the lowest rate at which unsecured money-lending business could be carried on successfully, and the chartered accountant said exactly the same thing. That is very strong evidence, first, that they had all got together beforehand and agreed on the rate; and, secondly, that that was the rate they wanted; but beyond that I do not think the evidence proves anything.

Now, I should like to call your attention to some of the impartial evidence that was taken. I will take two instances of moneylenders who are acting either for a council of social welfare or for a friendly society. Mr. Astbury, secretary of the Chester Council of Social Welfare, explained to the Committee that they have been experimenting in moneylending, and he added: — After a great deal of experience of our own charitable loan fund work we are of opinion that where the security taken is adequate, such as a bill of sale, the rate of interest should not exceed 15 per cent., but where the security is inadequate, or no security is given, the rate of interest should not exceed 40 per cent. That is the rate which I suggested—roughly ¾ per cent. a week. Even more interesting evidence was given by Mr. Bagwell, the secretary of the Leicester Permanent Money Society, which was registered under the Friendly Societies Acts, and was founded in 1903, so that they have had 23 years' experience, with a view to lending money at relatively small interest to keep people from going to registered moneylenders.

Mr. Bagwell said that they often paid off moneylenders where the borrowers were paying 60 per cent. per annum, and they had never charged move than 20 per cent. per annum, except in about two cases, where they had charged 25 per cent. The witness was arguing against the limit which the noble and learned Lord, Lord Carson, put in his draft Bill, a limit of 15 per cent. per annum. This witness says that the average charge of 20 per cent. interest had just enabled his society to pay a reasonable dividend, so he respectfully suggested that the limit of 15 per cent. which was in Lord Carson's Bill was not sufficient. I should say that this last witness did not specifically state that he advanced money on no security, but, as he took over these loans from the moneylenders at 60 per cent. per annum, I presume that there was no security.

Of course, your Lordships will say that moneylenders are not friendly societies, and, moreover, they probably do not undertake that extraordinarily unpleasant business for their health, as we say in the City. But I have doubled the rate which this witness suggested. He put the figure at 20 per cent., and I have suggested a limit of 40 per cent., and I have also fixed on the exact amount which the other witness says the rate of interest should not exceed. If this Amendment of my noble friend is passed it will altogether stop any further consideration of this question, and therefore I would ask him if he could see his way to postpone the Amendment until a later stage of the Bill, in order that he may have time to consider the points which I have raised, and particularly to consider whether the evidence before the Joint Select Committee does not go some way to support my views.

LORD DARLING

I am not anxious to interpose at this moment, but the noble Lord really suggests that your Lordships should reconsider the evidence given before the Select Committee and should go back upon it. This raises a most difficult question. A great deal more evidence than the noble Lord has read to your Lordships was given before the Committee and most carefully considered by them. The Committee arrived at this conclusion after, of course, discussing the matter among themselves.

There appears to be some misapprehension as to what is done exactly by Clause 6 of the Bill. It does not fix the rate of interest absolutely. It fixes a rate of four per cent. per month which, I suppose, is about 48 per cent. per annum. That is a very different thing from what was advocated by those who wanted a very low rate of interest in order really to wipe out moneylenders and what was advocated by some of the moneylenders themselves. It was an amount which, having regard to the expenses of the business and the way in which the expenses of the business would be cut down by the prohibition of circularising and so on, the Committee thought was, on the whole, a fair and remunerative amount of interest in ordinary circumstances. But a difficulty comes in here which I have often had to discuss and which was referred to by my noble friend Lord Hunsdon; that is to say, when a moneylender brings an action and the defendant defends it, the latter may plead that the transaction was exacting and the interest harsh and unconscionable.

No more difficult question could be put to a Judge than to decide what was harsh and unconscionable in any particular circumstances. My noble friend Lord Hunsdon very properly says that you cannot decide it upon the rate of interest alone; you must take into consideration who is lending and who is borrowing, what are the prospects that anything will be paid, what can the man who is borrowing reasonably be expected to pay, and what can the man who is lending reasonably be expected to take and yet carry on his business at a profit. All those questions had to be considered by a Judge without any kind of guidance to help him in arriving at a proper conclusion. So the Committee came to the conclusion that if you said four per cent. a month, which is 48 per cent. a year, it would be some guidance, because the clause would enact that if the amount of interest exceeds the rate of four per cent. per month or the corresponding rate in respect of any other period "the court shall, unless the contrary is proved,"—unless the contrary is proved—"presume that the interest charged is excessive." That does not bind the court. The court might presume that with regard to any rate of interest, but that guidance is given by the clause, and if the evidence shows that the amount is more than four per cent. per month then that presumption comes in. But it is not a presumption of law. It is only a presumption of fact, and it may be displaced by evidence.

It may be displaced, in the opinion of the court, by the least possible evidence and the court might award 1,000 per cent. and there is nothing to prevent it. There is only this, that if it appears that more than four per cent. per month is being asked for a presumption is raised that the transaction is unfair or, in the consecrated words of the Statute, is "harsh and unconscionable." Then the court will say: "That being the presumption, is there anything to displace it?" There may be plenty to displace it. It may be absolutely displaced. This provision simply acts as a kind of guidance to the court. I do not exactly understand why my noble friend Lord Hunsdon does not altogether disagree with this Amendment which has been moved by the noble Lord, Lord Desborough, on behalf of the Home Office with the object of leaving out the words "four per centum per month" and inserting "one per cent. per week." I am bound to say that never was considered by the Committee, as far as I remember. No one on the Committee ever proposed such an Amendment and it seems to me—I only express my own opinion—that it would be a very inadvisable provision. To calculate, it may be on a large or small sum of money, how much the interest is per week is a difficult thing and it is not the way in which people commonly think.

I suppose that the argument used in its favour is this and, perhaps, Lord Desborough will tell me if I am right. Months vary. One month has twenty-nine days once in four years, though usually it has only twenty-eight. Some months have thirty and others have thirty-one days. What is thought is, I suppose, that there might be a difficulty in calculating the amount of interest per month, but that all weeks have only seven days. I am bound to say that some of them have seemed to me much longer and to have eight or nine days in them. Still, according to the calendar they have only seven. Before addressing your Lordships upon this point I thought it well to consult one of the right rev. Prelates, because I was of opinion that we owed some of these discrepancies to the interference of Gregory the Great. But I am told that the mischief done, if it be a mischief, regarding these unequal periods, was due in part to Gregory the Great and in part to Julius Cæsar. It appears to me to be rather much to ask in connection with a Moneylenders Bill that your Lordships should rectify the error of two people who lived so long ago.

To whatever they may be due, there are these unequal periods. There is a leap year which is due to Julius Cæsar and other things which are due to Gregory the Great. But people who do not regulate their business by either of those authorities have a custom of reckoning their percentage at so much per annum and not according to whether a month has twenty-nine, thirty or thirty-one days. It seems to me it is asking people to go into minutiæ which are only puzzling if it is demanded of us that we should put into this Bill something which never occurred to anybody on the Committee or to any of the witnesses who came before it—that the percentage of interest should be calculated by the week.

LORD CARSON

I hope my noble friend will not press the Amendment, at all events at the present stage, without further consideration. This is the most difficult subject in the Bill. As I originally introduced the Bill I put in interest at the rate of 15 per cent. per annum, and I am still of opinion that that rate of interest is quite sufficient. On the other hand, the Joint Select Committee of the two Houses, having heard all the evidence as to the expense that would be incurred in working out these matters, even in cases in which it was not moneylenders who were concerned but semi-philanthropic or philanthropic societies, came to the conclusion that if we were to have money-lending business at all 4 per cent. per month was not too high a rate of interest, as a sort of basic figure, and that primâ facie anything above it was excessive interest, and the transaction then became harsh and unconscionable. I think in a matter of this kind we ought to hesitate before altering the decision of the Select Committee.

I doubt very much whither, upon reflection, the reasons given by the Home Office will be found sufficiently substantial. What they say is that if you put in four per cent. per month there may be difficulty, because some months have thirty days, some thirty-one days, and one month sometimes twenty-eight days and sometimes twenty-nine days, though I think that is a matter of such small account that it might be left out of consideration. After all, if there is one day more or one day less in a month, I do not think it matters when you are dealing with moneylenders who are charging 48 per cent. per annum, or whatever four per cent. per month amounts to. I believe myself that it is a good deal more than 48 per cent. per annum, and I do not think there is any need for us to regard one day as being either here or there. People often take a house by the month, and nobody has ever said that they should pay more or less rent per month according as the month had 31 days or 30 days or 28 days in it. Upon the whole, therefore, I hope the Home Office will not insist at the present moment upon this Amendment. We might have a further conversation upon it before the next stage of the Bill.

As my noble friend Lord Darling has already done, I would very much like to correct an impression that can easily arise in the minds of laymen as distinguished from lawyers upon the meaning of this clause. I would like to point out that we are not here fixing four per cent. per month as a sum that necessarily establishes a transaction as harsh and unconscionable. There will still be power under the Act of 1900 to say that a much less sum than four per cent. per month may, in certain circumstances, be harsh and unconscionable. All this does is to lay down a certain limiting line at which, without further evidence, the court will assume that the interest charged is harsh and unconscionable. In this way we give a sort of datum line. However, lest there should exist any doubt as to the construction of the Clause in that respect, I will consider before Report stage whether or not I ought to put in at the end some statement to the effect that this is not to interfere with the rights of the courts. I think that it is quite clear under the Act of 1900 that in cases where the interest is under four per cent. per month it is possible to re-open the transaction, and inquire whether or not the interest charged is harsh and unconscionable.

I object to the one per cent. per week not merely because it raises the interest from 48 per cent. to 52 per cent. per annum—though I think that is a very great objection to it—but because I do not like a weekly percentage. I think it would be very misleading in the case of ignorant people who, when you talked of one per cent. per week, might have an idea that the interest was something almost negligible. Moreover, in my view, this is an unusual way of dealing with these matters. As far as I can gather from reading the evidence, one of the reasons that induced the Committee to adopt the monthly period was that there were so many cases of monthly instalments. If the Home Office will examine the matter a little further I am not sure that they will not come to the conclusion that it is better to leave it as the Committee left it. If my noble friend will comply with my request, and not press this matter at the present moment, I think that probably we may be able to convince the Home Office that it is better to leave it as it is.

LORD DESBOROUGH

I should very much like to enter into a discussion upon the variations in the calendar, but I am afraid there is very little time in which to do so. The Home Office do not in the least wish to press this Amendment. They merely throw it out as a suggestion. The rate of interest is about the same, but it is calculated according to a definite period—namely, seven days instead of a month. The monthly period certainly does vary, and in a, great many of these eases of repayment by instalments the rate of interest has to be calculated by the day, so that if you merely mention the word "month" it is rather difficult to calculate it, as the days in each month vary. My noble and learned friend went on to say that this is not a hard and fixed limit, either of 48 or 52 per cent. per annum, but is merely a guide. If my noble and learned friend does not wish to accept the Amendment I certainly will not press it.

Amendment, by leave, withdrawn.

Clause 6 agreed to.

Clause 7:

Form of loan document.

7. Every acknowledgment, bill of exchange, promissory note, bill of sale or other security given by a borrower to a moneylender after the commencement of this Act shall state the amount actually lent to the borrower and the amount to be charged by way of interest thereon, and shall not be enforceable against the borrower for any higher sum than the amount actually lent with interest as aforesaid.

LORD DESBOROUGH moved to leave out Clause 7 and insert the following new clause:

Form of loan document.

".—(1) Every bill of exchange, promissory note, bill of sale or other document given by a borrower to a moneylender after the commencement of this Act shall state the amount actually lent to the borrower and the rate of interest to be charged there on, and where any instalment is to be paid to the moneylender in respect of the loan shall state the amount of every such instalment and the date on which it is payable, showing what part thereof is to be appropriated to principal and what part is to be appropriated to interest in accordance with the provisions of this Act.

"(2) No such bill of exchange, promissory note, bill of sale or other document shall be enforceable for any higher sum than the amount actually lent with interest at the rate required by this Act to be stated therein."

The noble Lord said: The main objects of this Amendment are three in number. The word "document" is included in the clause as it stands, and as your Lordships will be aware the word "document" includes almost every form of paper. It is suggested, therefore, that there should be an amendment to specify what is meant by "document." The second reason is that the rate of interest is put in instead of the amount of interest. The "rate of interest" is a very much easier term to deal with than the "amount of interest". It is difficult to specify the amount in cases which may vary. The third reason is that the clause as it stands in the Bill would leave the position somewhat obscure with regard to loan documents providing for repayment by instalment. The new clause is designed to make this point clear, and also to secure that contracts for repayment by instalment shall apportion principal and interest in accordance with Clause 14. I beg to move.

Amendment moved— Page 7, lines 8 to 15, leave out Clause 7 and insert the said new clause.—(Lord Desborough.)

LORD CARSON

I think this is an improvement in the drafting of the Bill. I do not think it alters any principle that is in the Bill, and I am very much obliged to my noble friend for having had the matter gone into so thoroughly by his expert advisers. So far as I am concerned, I hope the House will accept the Amendment.

On Question, Amendment agreed to.

Clause 8:

Obligation of moneylender to supply information as to state, of loan.

8.—(1) In respect of contracts of money-lending entered into with a moneylender before or after the commencement of this Act the moneylender shall, on any reasonable demand being made by the borrower and on payment by the borrower of the sum of one shilling, supply to the borrower or, if the borrower so requires, to any person specified in that behalf in the demand at any time during the continuance of the contract of money-lending a statement signed by the moneylender or his agent showing:—

1. (a) The amount actually paid to the borrower:
2. (b) The rate of interest chargeable and the amount of the interest accrued due and paid:
3. (c) The amount paid off in respect of the principal and interest.

LORD DESBOROUGH moved to omit paragraphs (a) (b) and (c) from subsection (1) and insert:

1. "(a) the amount actually lent to borrower and the rate of interest charged thereon; and
2. "(b) the amount of principal outstanding and the amount of interest accrued due and unpaid, or, where the loan is repayable by instalments, the amount of every instalment paid and the date on which it was paid, and the amount of every instalment outstanding and the date on which it will become payable, the amount of every such instalment being apportioned between principal and interest in accordance with the provisions of this Act."

The noble Lord said: This Amendment does introduce a matter that is somewhat new, but it is also partly consequential on the redrafting of Clause 7. The Amendment is designed to ensure that the borrower shall obtain a full statement of his account. The particulars at present required to be supplied do not include the dates of payment, and seem, therefore, to be incomplete. I make this suggestion and move the amendment.

Amendment moved— Page 7, leave out lines 26 to 30 and insert the said paragraphs.—(Lord Desborough.)

On Question, Amendment agreed to.

Clause 8, as amended, agreed to.

Clause 9:

Provision in case of default in payment of instalment.

9. Where by any contract for the loan of money entered into between any person and a moneylender it is provided that the loan shall be repayable by instalments and the borrower fails to make in accordance with the terms of the contract due payment of any instalment, then notwithstanding anything in the contract the moneylender shall not be entitled to recover any greater sum than the amount actually lent together with interest thereon up to the date of payment at the rate properly chargeable.

LORD DESBOROUGH moved to leave out all words after the first "to" and insert: "any greater sum than the amount actually lent together with interest thereon up to the date of payment at such rate as would in accordance with the provisions of this Act have been payable under the contract if no default had been made in the payment of any instalment." The noble Lord said: This is a drafting Amendment.

Amendment moved— Page 8, line 3, leave out from ("to") to the end of the clause and insert the said wards.—(Lord Desborough.)

On Question, Amendment agreed to.

Clause 9, as amended, agreed to.

Clause 10:

Proceedings in bankruptcy for money-lenders' loan not to be taken except after application to court having jurisdiction.

(2)Where a debt due to a moneylender in respect of a loan made by him after the commencement of this Act includes interest or any pecuniary consideration in lieu of interest, that interest or consideration shall, for the purposes of the provisions of the Bankruptcy Act, 1914, relating to the presentation of a bankruptcy petition, voting at meetings, compositions and schemes of arrangement and dividend, be calculated at a rate not exceeding 5 per cent. Per annum, but nothing in the foregoing provision shall prejudice the right of the creditor to receive out of the estate, after all the debts proved in the estate have been paid in full, any higher rate of interest to which he may be entitled.

The provisions of this subsection shall, in relation to such a debt as aforesaid, have effect in substitution for the provisions of subsection (1) of section sixty-six of the Bankruptcy Act, 1914.

(3) No proof of a debt due to a money-lender in respect of a loan made by him shall be admitted for any of the purposes of the Bankruptcy Act, 1914, unless the affidavit verifying the debt is accompanied by a statement showing in detail—

1. (b) the amount of the balance remaining unpaid, all interest in respect of the loan being calculated in accordance with the provisions of the last preceding subsection of this section.

LORD DESBOROUGH moved, in subsection (2), to omit the words "or any pecuniary consideration in lieu of interest, that interest or consideration," and insert "that interest." The noble Lord said: This is a drafting Amendment.

Amendment moved— Page 8, line 19, leave out from ("interest") to ("shall") in line 20, and insert ("that interest").—(Lord Desborough.)

On Question. Amendment agreed to.

LORD DESBOROUGH moved, in paragraph (b) of subsection (3), to leave out all words after (b) the amount of the balance" and insert "which, all interest in respect of the loan being calculated at a rate not exceeding five per cent. per annum, remains unpaid." The noble Lord said: This is purely a drafting Amendment. It is an improvement on the words which were inserted in the Bill on the last occasion at the request of the Home Office.

Amendment moved— Page 9 line 1, leave out from ("balance") to the end of the subsection and insert ("which, all interest in respect of the loan being calculated at a rate not exceeding five per cent. per annum, remains unpaid").—(Lord Desborough.)

On Question, Amendment agreed to.

Clause 10, as amended, agreed to.

LORD DESBOROUGH moved, after Clause 10, to insert the following new clause:

Reopening of transaction of moneylender at instance of trustee in bankruptcy.

". The power of a court under subsection (2) of section one of the Moneylenders Act, 1900 (which enables a court at the instance of the borrower. surety, or other person liable, to exercise its powers under that section with respect to the reopening of the transactions of moneylenders, although no proceedings are taken for the recovery of the money lent, and notwithstanding that the time for repayment may not have arrived), may in the event of the bankruptcy of the borrower be exercised at the instance of the trustee in bankruptcy, notwithstanding that he may not be a person liable in respect of the transaction." The noble Lord said: This Amendment is inserted at the request, of the Board of Trade, and I think the noble and learned Lord is prepared to accept it.

Amendment moved— Page 9, line 8, after Clause 10 insert the said new clause.—(Lord Desborough.)

LORD CARSON

As I understand it this is really to give a trustee in bankruptcy the right to have a money-lending transaction opened up just as if it had gone into the court. That seems to me to be an improvement.

On Question, Amendment agreed to.

Clauses 11 and 12 agreed to.

Clause 13:

Prohibition of assignment of debt due to moneyleader.

13. Any assignment (not being an assignment made by a deed of arrangement to which the Deeds of Arrangement Act, 1914, applies or to a trustee under or in pursuance of a composition or scheme of arrangement approved under Section sixteen of the Bankruptcy Act, 1914, or to a trustee in bankruptcy) by a moneylender of a debt due to him in respect of money lent by him or in respect of interest thereon, or the benefit of any agreement made or security taken in respect thereof, shall be void.

LORD DESBOROUGH moved to leave out the words in parenthesis and insert at the end of the clause— unless it is proved that the assignment was made by the moneylender bona fide for the purpose of transferring the whole of the business carried on by him as a moneylender or the whole of the business so carried on by him in any place in respect of which he is or has been licensed, to the assignee. (2) In this section the expression 'assignment' means any assignment inter vivos, other than an assignment by operation of law or an assignment made by a deed of arrangement to which the Deeds of Arrangement Act. 1914, applies, or to a trustee under or in pursuance of a composition or scheme of arrangement approved under section sixteen of the Bankruptcy Act, 1914.

The noble Lord said: The object of this Amendment is to allow a moneylender to sell his business, or a branch of his business carried on in any particular locality, and also to make clear that bequests by will are not voidable. This seems to be only fair.

Amendment moved— Page 10, line 14, leave out from the first ("assignment") to ("by") in line 19, and at the end of the clause insert the said new words.—(Lord Desborough.)

LORD CARSON

I agree.

On Question, Amendment agreed to.

Clause 13, as amended, agreed to.

Clause 14:

Calculation interest where loan repayable by instilments.

14. In calculating for the purposes of this Act the rate of interest on any loan in respect of which any instalment is agreed to be paid by the borrower, the amount of any instalment shall be appropriated to principal and interest in the proportion that the sum actually lent bears to the amount by which the total sum to be paid to the lender exceeds the sum actually lent.

In this section the expression "instalment" includes any bonus or other payment forming part of the consideration for a loan.

LORD DESBOROUGH moved to leave out all words from the beginning of clause down to and including "borrower, the," and insert:—

Appropriation to principal and interest of sums payable to moneylender in respect of loan. .—(1)For the Purposes of this Act the principal of a loan shall be taken to be the amount actually lent to the borrower, and any amount paid or payable to the moneylender in respect of the loan in excess of the principal shall be reckoned as interest. (2) In determining for the purposes of this Act what part of any instalment paid or payable by a borrower in respect of any loan is to be appropriated to principal and what part there of is to be appropriated to interest, the".

The noble Lord said: This clause was inserted at the instance of the Government last Session. It adopts the principle already adopted by the Bankruptcy Act, 1914, that where a loan is repayable by instalments the instalments are to be appropriated to principal and interest respectively in the proportion that the sum lent bears to the additional sum payable, to the lender. The Amendment now proposed is mainly a drafting Amendment designed to make the purpose of the clause clearer.

Amendment moved— Page 10, leave out from the beginning of line 24 to the end of line 26, and insert the said Amendment.—(Lord Desborough.)

On Question, Amendment agreed to.

LORD RAGLAN moved, after the first paragraph, to insert "provided that if an instalment is paid after the date on which it falls due, the accrued interest shall be deducted from the amount appropriated to repayment of principal." The noble Lord said: I am not sure that I am right in regard to this, but there appeals to me to be a discrepancy between Clause 9 and Clause 14. Clause 9 allows a moneylender to charge interest on overdue instalments but Clause 14, so far as I can see, forbids him to do so. Let me take an example. If a man has an instalment of £100 due on January 1, of which £90 is to rank as principal and £10 as interest, and he fails to pay this instalment until April 1, a moneylender might say under Clause 9 that he was entitled to charge interest, and therefore he would charge £80 as capital and £20 as interest. But Clause 14 directs him to treat the transaction exactly as he would have treated it if it had been paid on January 1.

Amendment moved— Page 10, line 31, at end insert ("Provided that if an instalment is paid after the date on which it falls due, the accrued interest shall be deducted from the amount appropriated to repayment of principal").—(Lord Raglan.)

LORD DESBOROUGH

The Government are opposed to this Amendment. I am not quite sure that I understand it, but Clauses 6, 7 and 9, govern all the actual transactions, and there seems to the Home Office no need to complicate Clause 14.

LORD CARSON

I am bound to say that I do not quite see the necessity for this Amendment having regard to the other provisions of the Bill. Perhaps the noble Lord will withdraw it now and I will go thoroughly into it. He can then put it down for Report stage if he wishes.

Amendment, by leave, withdrawn.

LORD DESBOROUGH moved to leave out "section" and insert "Act." The noble Lord said: This is a purely drafting Amendment.

Amendment moved— Page 10, line 32, leave out ("section") and insert ("Act").—(Lord Desborough.)

On Question, Amendment agreed to.

Clause 14, as amended, agreed to.

Clause 15 agreed to.

Clause 16:

Application to Scotland.

16. In the application of this Act to Scotland the sheriffs court shall be substituted for the county court and the sheriff for the registrar of the county court.

THE PAYMASTER-GENERAL (THE DUKE OF SUTHERLAND) moved to leave out Clause 16 and insert the following new clause:— . This Act shall apply to Scotland subject to the following modifications—

1. (1) References to the commencement of proceedings in bankruptcy or to the presentation of a bankruptcy petition shall be construed as references to the presentation of a petition for sequestration; ' scheme of arrangement ' shall mean deed of arrangement; references to the proving of debts or to the admission of proof of debts shall be construed as references to the ranking of claims or debts; and 'affidavit' shall mean oath.
2. (2) The Bankruptcy (Scotland) Act, 1913, and Section forty-eight thereof shall be substituted for the Bankruptcy Act, 1914, and subsection (1) of Section sixty-six thereof respectively; for the reference to Section sixteen of the last-mentioned Act there shall be substituted a reference to Section thirty-seven and Section one hundred and thirty-five of the said Act of 1913; and Act of Sederunt under Section one hundred and ninety of that Act shall be substituted for general rules under Section one hundred and thirty-two of the said Act of 1914.
3. (3) Certificates under Section two of this Act shall be granted, by the burgh or police court having jurisdiction in the place in which the moneylender's business is to be carried on, or if no burgh or police court has jurisdiction in such place, by the justice of the peace court having jurisdiction therein.
4. (4) Section six of this Act shall apply with the substitution of references to the sheriff for references to the registrar of the county court."

The noble Duke said: This Amendment introduces certain modifications in order to bring the Bill into conformity with Scottish law and methods. In a way it is only a drafting Amendment and I understand the noble and learned Lord in charge of the Bill approves of it.

Amendment moved— Clause 16, page 10, lines 40 to 42, leave out Clause 16 and insert the said new clause.—(The Duke of Sutherland.)

LORD CARSON

This Amendment is absolutely necessary. It was an oversight so far as I was concerned, and I dare say the Joint Committee did not have their attention drawn to the fact that certain Acts in Scotland do not correspond to the Acts in England. The object of the Amendment is to make the Bill conform to Scottish law as well as English law. I would like to thank the Parliamentary Bills Committee of the Faculty of Procurators in Glasgow who have most carefully considered and reported on this Bill, and who have, amongst other things, pointed out the necessity for this Amendment. I am glad to say that they have reported an approval of the Bill and the drafting of it generally.

On Question, Amendment agreed to.

Clause 17 agreed to.

SCHEDULE:

ENACTMENTS REPEALED.
Session and Chapter.	Short Title.	Extent of Repeal.
63 & 64 Vict. c. 5.	The Moneylenders Act, 1900.	Paragraphs (a), (b) and (c) of subsection (1) of section two in subjection (2) of the said section the words from "fails to register himself" to "address or," and subsection (3) of the said section: section three, in paragraph (e) of section six the words "registration under"

LORD DESBOROUGH moved, after "or" in column 3, to insert "and the word 'other'." The noble Lord said: This is proposed in order to make Section 2 (2) of the Moneylenders Act, 1900, read grammatically. It is a drafting Amendment.

Amendment moved— Page 12, line 10, after ("or") insert ("and the word 'other'").—(Lord Desborough.)

LORD DARLING

This is, I fancy, the last opportunity that I shall have of saying a word upon this Bill. Naturally I do not rise to object to the word "other" following the word "or," but only to say that, having been Chairman of the Joint Committee, I have observed with pleasure the benevolent interest in the Bill that has been taken by the noble Lord representing His Majesty's Government. I only hope that this means that when the, Bill comes on in its other stages the Government will extend to it the same benevolent interest that has been shown by the noble Lord in the, course, of its passage through its stages in this House, because nothing is more discouraging than to have sat for a long time, as my friends and I did, to have heard a great deal of evidence, and then to find that it is "Love's labour's lost."

LORD CARSON

I also should like to express my gratitude to the Home Office for the consideration that they have given to the Bill, and it leads me to hope that they are really going seriously to try to make the Bill law. This Bill has really been very seriously considered, not merely in this House but by the Joint Select Committee so ably presided over by the noble and learned Lord who has just spoken, and I desire to thank him also because he was good enough yesterday, after we had both been sifting in our judicial capacity in your Lordships' House, to join me in going through these Amendments with the Home Office in order that we might thoroughly understand and discuss them. We have done our best to meet the Government in every way and we hope that the Government will help us to have this Bill passed into law.

On Question, Amendment agreed to.

Schedule, as amended, agreed to.