§ Read 3a (according to Order).
§ Clause 3:
§ Courts to which proceedings on money-lending transactions are to be taken.
§ 3.—(1) His Majesty may by Order in Council direct that proceedings by a moneylender for the recovery of money lent by him or for enforcing any agreement or security relating to any such money, or any class of such proceedings, may be brought, in any court specified in the Order, notwithstanding any limit imposed by statute on the jurisdiction of that court, and that such proceedings, or any class of such proceedings, shall be excluded from the jurisdiction of any court in which they might otherwise have been brought, and any such Order may contain such, provisions as appear to His Majesty expedient with respect to the making of rules of court for regulating the procedure to be followed in the case of any such proceedings.479
§ (2) Before any Order in Council is made under this section a draft thereof shall be laid before each House of Parliament for a period of not less than forty days during the session of Parliament, and if either House before the expiration of the said period presents an address to His Majesty against the draft or any part thereof, no further proceedings shall be taken thereon, but without prejudice to the- making of a new draft Order.
§ LORD MUIR MACKENZIE moved to leave out Clause 3 and insert the following clause:
§ Courts to which proceedings on money-lending transactions are to be taken.
§ "3.—(1) Proceedings by a moneylender for the recovery of money lent by him or for enforcing any payment or security relating to any such money shall, where the debt or demand claimed is not more than three hundred pounds, be brought by action in a county court, and notwithstanding any limit imposed by statute on the jurisdiction of a county court, the court shall have jurisdiction to try any such action as aforesaid.
§ (2) The Lord Chancellor may from time to time by order direct that this section shall apply with respect to any other inferior court of civil jurisdiction in like manner as it applies with respect to a county court, and any such order may contain any such provisions as appear to the Lord Chancellor to be expedient with respect to the making of rules of court for regulating the procedure to be followed in the case of proceedings brought under this section in any such court.
§ (3) All orders made under this section and any rules of court made under any such order shall be laid before each House of Parliament as soon as may be after they are made."
§ The noble Lord said: My Lords, I have put down this Amendment in order to modify the Amendment of which I gave Notice on the last stage of the Bill. The House will recollect that what I was most anxious to provide for was that the jurisdiction of the Court should be laid down in Parliament and not be left to be arranged in any Department outside. I look upon this as a matter of great importance, and I should be very sorry if your Lordships were to leave this clause in the Bill as it now stands, because it removes from the House control over the question of the jurisdiction of the Court. The proposal which I submitted to your Lordships was that all these cases should go to the county court. I think that in making that proposal I had the full assent of the noble and learned Lord who brought in the Bill. But the noble and learned Viscount on the Woolsack said that he thought the Amendment went too 480 far and that the effect might be to overwhelm the county courts with additional business, of which they had sufficient already. I felt bound to submit to that view, taken by the highest authority, and the Lord Chancellor was good enough to say that if I withdrew the Amendment he would consult with me and arrive at an Amendment to which he could give his assent. The result is the clause which I have now placed upon the Paper.
§ Again, as on the former occasion, my chief object is to have the jurisdiction on the face of the Bill; that is to say, that it shall be with the county court. But I do see the force, and have accordingly recognised it in the Amendment, about the difficulty of throwing too great a burden upon the county court. There fore, as your Lordships will see, a limit of £300 is proposed. As I read the Amendment £300 means the original loan and not the debt as heaped up by oppressive means of which we have heard a good deal from the noble and learned Lord. in my humble judgment the Amendment as it now stands is satisfactory. An attempt is made to hold the balance between the knave and the fool, but in attempting to do that we must not run any risk of throwing the administration of justice into confusion.
Page 4, leave out Clause 3 and insert the said new clause.—(Lord Muir Mackenzie.)
§ LORD CARSON
My Lords, so far as I am personally concerned I feel very sorry that this limiting Amendment should be put into the Bill. One of the matters which, when I introduced the Bill, I put in the very foreground as one of the most useful proposals, was a cheap method of defending which should be given to persons who were in the terrible straits which people who borrow money from moneylenders always are. To tell any one who has had to borrow at, say, 100 or 150 per cent, and has got into the toils of moneylenders that he can raise his defence under this Bill in the Supreme Court seems to me a denial of justice. What takes place? The moneylender serves a writ upon the unfortunate borrower and if this man, who has not been able to raise a shilling except at 150 per cent., enters an appearance, which means a comparatively trifling sum, in the Supreme Court he will find thereupon that there is a summary procedure which the moneylender can adopt.
481 The moneylender may make a motion to get judgment summarily without any trial. Thereupon the borrower, who has not got a shilling, if he wants to get leave to defend and raise his defence, has to employ a solicitor and counsel to contest this summary procedure on the part of the moneylender. Then, having had the matter argued, he may or may not, according to the view that the Judge takes of this summary application, have liberty to defend. If he does not get liberty to defend, he never has the right of a proper viva voce examination of witnesses and particularly of the moneylender. He has no opportunity of raising a defence at all. If he does get liberty to defend, then you have all the expensive procedure of the Supreme Court, with all the masses of interrogatories and affidavits, pleadings, statements of claim, statements of defence and the rest of it, until you eventually come to a trial before a jury or, if the moneylender likes, a special jury. All this is what we call giving a chance to the borrower of raising his defence under the Act. For my own part I think that in the majority of cases it will amount to a denial of justice.
When last we had this matter before the House we inserted a provision in the Bill, to which the Scottish Office assented:—Notwithstanding anything to the contrary in any Act contained, summary execution or diligence shall not be competent upon any bill of exchange or promissory note or upon my bond or obligation registered in the books of any court, where such bill, promissory note, bond or obligation has been granted to or in favour of a moneylender.Now, if this Amendment is carried you are going to set up summary procedure in this country in which the borrower will not have the slightest chance of ever asserting his defence, because he cannot afford to, under this Bill. It may be said that it is unusual to send large claims to the county courts. Whether this is a good thing or a bad thing as a. general rule, this is not the proper time to discuss—though I have some very strong views on the subject myself—but surely in a case of this kind, where you are dealing with a person who has not the least opportunity of defending himself otherwise, there is nothing unreasonable in claiming that the matter should go to the County Court Judge. May I remind your Lordships, in relation to the 482 Amendment made as regards Scotland the other day, that in the corresponding Court (the Sheriff Court) in Scotland there is unlimited jurisdiction. At the present moment you could bring in the Sheriff Court the whole of these cases to any amount in the case of a moneylender, but here you are going to enact by this Amendment that a case is only to be brought, or only necessarily need be brought, in the Sheriff Court if the sum is only £300.
I should have liked the Bill to stand in the form in which I introduced it and as it left the last stage in your Lordships' House. The Joint Select Committee to which the Bill was referred put in the clause as it now stands in the Bill and I hoped that this clause on investigation by the Government, who would naturally have the power to find out what would be the real justice of the matter, would be left as it stood and that the Government might come to a conclusion as to how justice could be best done. I agree with the noble Lord who moved the Amendment in preferring to see the county courts selected rather than to leave the matter at large, but with this restriction that stereotypes the sum at £300 it seems to me that you are really taking away one of the provisions of the Bill most calculated to procure some kind of justice in these very complicated dealings between a moneylender and a borrower.
At the same time, if the Lord Chancellor, who represents the Government in this House, is of opinion that this is a proper way to deal with the point, though this would take away much of my interest in the Bill, I must of course give way. The House can take any course that it likes, because it is perfectly plain that a Bill of this importance making such great changes in the law could not possibly be conducted through the House of Commons without the assistance of the Government and of the Law Officers in a Standing Committee. Accordingly, the matter rests entirely with the Government. All that we, as private members, can do, with the best experience that we have and such knowledge as we have gained of these transactions in the course either of our professional or our personal experience, is to put the matter before the House and to offer the Bill as a suggestion to the Government. It rests 483 in the last resort with the Government and if this Amendment meets the view of the Lord Chancellor—I am sorry that I have not had an opportunity of seeing him since the last stage—I am not in a position to say that I would care to divide the House upon the subject.
§ THE LORD CHANCELLOR (VISCOUNT CAVE)
My Lords, I confess that the line taken by my noble and learned friend rather surprised me and I do not feel quite disposed to accept the position in which he seeks to place the Government. This Bill is his Bill founded upon the Report of the Select Committee. That Committee recommended the clause as it stands and the noble Lord introduced his Bill with the clause as it stands. I am quite content with the clause as it stands; indeed, I like it best; but on the last occasion the noble and learned Lord, Lord Muir Mackenzie, moved an Amendment sending all moneylending cases to the county court. The noble and learned Lord, Lord Carson, said that he would accept that Amendment. I then pointed out that this was a serious thing to do. Our county courts are not in the habit of trying large claims for £1,000 or £ 10,000 or £20,000, and they are not a proper tribunal to which to send heavy claims of that kind.
It was for this reason that I advised the House not to accept the Amendment in the shape in which it then stood. I said that if my noble and learned friend Lord Muir Mackenzie would confer with me I should be very glad to see whether some arrangement might not be made. This Amendment is not the Government's Amendment. It is the Amendment of Lord Muir Mackenzie, modified in order to meet my objections, and if he moves the Amendment and if the noble and learned Lord on the other side of the House accepts it, I am quite satisfied. But I must not be asked to take the whole responsibility of the Bill because I objected to the Amendment at a previous stage or accepted it at this stage. It must be the noble and learned Lord's own responsibility as to whether he accepts this Amendment or not. If he does accept it I am quite prepared to accept it, too.
§ LORD CARSON
My Lords, perhaps the House will allow me to make one or two further observations. I had not seen 484 this Amendment until to-day and I have had no opportunity of talking about it to the Lord Chancellor. I thought that in the circumstances in which it was put down it would probably meet with the concurrence of the Government. I may have been entirely wrong in that. It is true that on the last occasion I was willing, so far as I was concerned, to accept the Amendment which would send all these cases to the county court because that was exactly the provision that was in the Bill when I originally introduced it into this House and is, in my opinion, the proper provision to make. But in the circumstances, so far as I am concerned, if I am to express a view, as the Lord Chancellor has suggested, I had much, rather that the Amendment were not accepted and that the Bill remained as it stands at present and in accordance with the view of the Select Committee.
§ LORD DARLING
My Lords, I may possibly be thought to have some sort of responsibility in this matter, though it is not an extreme one, for as the Bill was introduced by my noble and learned friend Lord Carson, all these cases in which moneylenders sue would have had to go to the county court, and I am sure the Committee felt, as the Lord Chancellor has suggested, that so drastic a change would not be assented to. Some of those actions may be for very large sums of money and may be very complicated in their incidence. Accordingly Clause 3 was drawn, and I. must say that I think it is a good clause. It would enable the very thing to be done, if I understand this clause rightly, that the noble and learned Lord opposite desires to achieve by the Amendment. It says:His Majesty may by Order in Council direct that proceedings by a money lender for the recovery of money lent by him or for enforcing any agreement or security relating to any such money, or any class of such proceedings, may be brought in any court specified in the Order.Then it goes on to say that this may be done notwithstanding that the jurisdiction of that court is limited.
One thing that was desired by the Amendment was to put an end to a particular court which exists in the Midlands, the existence of which is not widely known, which has an ancient procedure of a most embarrassing character—all of which is thoroughly appreciated by moneylenders up and down the 485 country—and, when proceedings are brought in that court, you cannot find a solicitor employed in any other town than that in which the court occasionally sits who knows what the procedure is. Defence cannot be entered and judgments are given without any kind of chance of the defendants being heard. No doubt the effect of this clause as it stands would be to give the Lord Chancellor, who is the official who would deal with the matter, the opportunity of drafting an Order which would become the Order in Council, as provided by the second part of the clause. This would extinguish that court and, as I read this clause, the Lord Chancellor could do what he thought best with regard to the county courts. He could give them jurisdiction up to £500, or perhaps up to £300, in moneylending cases, or, if he chose, he could do that which the noble and learned Lord who introduced the Bill intended. He could say that these cases must all be commenced in the county court, provided the amount claimed is what might satisfy my noble friend, and he might do what I think would be better and fix the limit higher, say, £500. I myself would much prefer, and I think the Committee if they had the chance of being asked their opinion would prefer to leave the matter absolutely in the hands of the Lord Chancellor controlled, as he would be, by the ordinary process relating to Orders in Council, which require that an Order must lie on the Table of both Houses for a certain time. Therefore, if I have an opportunity of choosing between the Amendment and the provision in the Hill I prefer the provision in the Bill.
§ LORD MUIR MACKENZIE
My Lords, it appears to me that the noble and learned Lord in charge of the Bill is not content with the clause as it stands and when I moved the clause on a former occasion I said that I desired, if I could and as I believed at the moment I had succeeded in doing, to act in the same direction, as the noble and learned Lord desired. I also said that I desired not to be in conflict with the Joint Committee which had settled the Bill. As I now find that I cannot get agreement from either of the noble Lords opposite I will ask leave to withdraw my Amendment.
§ Amendment, by leave, withdrawn.486
§ LORD DANESFORT had given Notice to move, after Clause 8, to insert the following new clauses:—
§ "9. After the commencement of this Act a contract of moneylending made by a moneylender shall not be enforceable unless it is in writing, signed by both parties, and unless a counterpart thereof shall have been delivered to the borrower at the time of the making of the contract."
§ "10. A contract of moneylending made by a married woman with a moneylender alter the commencement of this Act shall not be enforceable against the husband of the borrower unless the husband has in writing signed by him authorised the making, of the contract."
§ The noble Lord said: My Lords, the suggested clauses which stand in my name are really intended for the protection of the poorer classes of borrower. They were suggested to me through a committee which had for some time been sitting and examining into questions affecting the poorer classes of the community. The opinion of that committee certainly is that these clauses are necessary for the protection of these classes. May I apologise at once to the House and to the noble and learned Lord in charge of the Bill for not having brought forward these clauses at an earlier stage? I see the inconvenience of bringing them forward so late, but my excuse must be that they were not brought to my notice at an earlier stage.
The first clause reads thus:—
After the commencement of this Act a contract of moneylending made by a moneylender shall not be enforceable unless it is in writing, signed by both parties, and unless a counterpart thereof shall have been delivered to the borrower at the time of the making of the contract.
The object of that is obvious. It is to avoid the uncertainty which always is incidental more or lees to verbal contracts. Such uncertainty is apt to affect the poorer man, who acts very often without due consideration and makes a verbal contract without knowing exactly what it is. Now, if this clause is accepted there will be two beneficial results. In the first place, the borrower will know what he is doing and will have an opportunity of making the bargain or not. The second result, I think, will be that if the borrower is sued he will avoid all the uncertainty and unsatisfactory character of verbal evidence to show what the nature of the contract was. The contract in writing speaks for itself, and expense and difficulty would
be avoided. If these contracts are left to be proved verbally, probably you will have the plaintiff proving one contract and the defendant another. That will involve very considerable expense, and cause much difficulty to the Judge who tries the case. I venture to think that this clause would be advantageous, especially to the class of people to whom I refer.
§ May I call the attention of the House to the fact that Clause 14 says that where the amount of the loan is less than £3 no proceedings shall lie for the recovery of the money lent, or of any interest upon it, but there are many contracts above £3—say, £5 or £10—where the borrower undoubtedly is a man of the poorer class, and perhaps not very intelligent, or cautious as to what he is doing. I understand that the Home Office are willing to accept this clause—at all events I have hoard of no objection on their part to it—and if the noble and learned Lord in charge of the Bill sees no objection, I hope I may appeal to him to adopt at any rate an attitude of benevolent neutrality, and not to offer any opposition to what appears to me to be a very harmless and sensible proposal. I beg to move.
After Clause 8, page 8, line 9, at end, insert the said new Clause 9.—(Lord Danesfort.)
§ LORD CARSON
My Lords, the difficulty I feel about this Amendment is this. A Select Committee sat to inquire into the whole of this subject, and took evidence for very many days. They made a great many Amendments in the Bill, and put in or passed certain clauses, to which I will refer in a moment, as regards documents. They never suggested, nor do I know that if was ever suggested in evidence—although philanthropic societies and other people who are brought in contact with money-lending amongst the poor were present—that anything of the sort should be put in the Bill. After all that has happened this Amendment, at the last moment, is put down, and I have no opportunity of finding out how such people as those who gave evidence—particularly as regards Liverpool, where there is a very large amount of money-lending amongst very poor people, and of lending small sums—would view this proposal or how it would operate.
488 I should like to point out that as regards small loans of under £3, as has already been pointed out to your Lordships, you cannot recover, and therefore in those very small cases there would be no reason for having a written document at all. As regards loans in excess of that sum, where recovery can be made, there, is in Clause 9 of the Bill power in the borrower, upon payment of the sum of 1s., to require the moneylender tosupply 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—If he does not do that he cannot sue for the money so long as he is in default in that respect. That really gives an opportunity of getting a full statement of the matter. I am not prepared to say that I approve of this Amendment or that I accept it, because I really do not know how it would operate, whether beneficially or not, in those classes of case where there may be perfectly legitimate dealing as between poor persons and moneylenders. If the Amendment is to be made I am afraid I must put it upon the House, as I think it would be really legislating in the dark, seeing that none of the other opportunities of putting the matter forward have been availed of by those who want to have this Amendment inserted.
- (a) the amount actually lent to the borrower and the rate of interest charged thereon; and
- (b) the amount of principal outstanding and the amount of interest accrued, due and unpaid, or, where the loan is repayable by instalment, the amount of every instalment paid. …"
§ LORD DESBOROUGH
My Lords, with regard to the attitude of the Home Office, I may say that if my noble and learned friend wishes to accept this Amendment they have no objection to offer, but they leave it an open matter. They do not object to it, except to this extent, that there are certain parts of it which later on might be made a little clearer in another place, but they are very small and trivial matters.
§ LORD DANESFORT
My Lords, my noble and learned friend said in the first instance that he did not know how this would operate. I should have thought that it did not require any select 489 committee to show how it would operate. It simply says that if a man is borrowing money he shall have put into writing the terms on which he is borrowing. The law has already provided by the Statute of Frauds that if you are buying goods over a certain amount the terms of purchase must be in writing. It is no very great extension of that Statute to say that when a man is borrowing money and there are doubts as to the terms on which the man is borrowing, those terms shall be put down in writing so that the borrower may know what he is doing. There is no new principle in this proposal, which would really be an advantage to the borrower and no disadvantage to any one else. The only other objection that my noble and learned friend made was that there is already a clause, Clause 9—
§ THE MARQUESS OF SALISBURY
Of course, your Lordships are always very willing, to hear full explanations, but I do not think it is right to have a second speech.
§ LORD DARLING
My Lords, I must Say I feel certain obligations of loyalty to this Committee, who took very great pains and considered a large number of Amendments and suggestions before deciding on any clause. In reference to this Amendment the noble Lord who represents the Home Office said that the Home Office themselves would only refrain from objecting to the Amendment provided it were altered when it goes to the other House of Parliament. But it seems, to me there is something in it as it stands which is objectionable to the Home Office. I have no means of guessing what that is and the noble Lord—as we have just been told—must not speak again, so I cannot possibly find out in this House, nor can your Lordships. I do not know at present whether to accept this Amendment or not, but, as I said, I feel very strongly, out of loyalty to the Committee, that at this late stage it is rather hard on those who gave a great deal of attention to this Bill that fundamental changes should be made in it. There are those who would chastise moneylenders with whips and there are those who at this very late period would chastise them with scorpions, but I would rather it were done in the other House and not here.
§ LORD DANESFORT
After what my noble and learned friend has said I do not wish to put the Committee in any embarrassing position and therefore it would probably be better to have the matter dealt with in the other House. I beg leave to withdraw.
§ Amendment, by leave, withdrawn.
§ LORD DANESFORT moved, after Clause 8, to insert the second of the clauses which he had placed on the Paper. The noble Lord said: My Lords, this is designed to protect a husband whose wife borrows money without his authority and1, it may be, misuses the money. I would put before the House not only what might happen but what does happen under the existing law. A married woman goes to a moneylender behind her husband's back and borrows money. She may tell him that it is for household purposes or for other necessaries, and she spends it on any purpose that she likes. The money is not repaid. The husband who, in many cases, is quite a poor man and unable to get proper legal advice, is sued upon the footing that he is liable to provide necessaries for the wife and therefore that he is bound to repay this money. In many cases he cannot afford legal advice to ascertain exactly what the position is and an order is made against him for payment of the money. It may be that he has quite a good defence, but he may not have; either money to get proper advice or intelligence to put up a defence himself and an order may be made against him. What is more, if he does not comply with the order for payment he can be sent to prison.
§ The object of this clause is to prevent such a thing happening. It may be said that it involves a change in the law. It does—a relatively small change in the law; but, as we know, the changes in the law which are contained in this Bill are very large and extensive, and I do not think the fact that this Amendment involves a small change should necessarily be fatal to it. The only change that is involved is that, instead of relying on the implied authority of the husband, we say that the husband shall not be sued unless he has given a written authority. For these reasons, and as a reasonable protection for husbands, who in these days are not without their right to reasonable protection, I move the clause that stands in my name.491
After Clause 8, insert the said new clause.—(Lord Danesfort.)
§ LORD DARLING
My Lords, I am not quite sure that my noble friend who has moved this Amendment appreciates exactly what it would do, because his speech seemed to me to differ from the words of the Amendment. The words of the Amendment are:A contract of moneylending made by a married woman with a moneylender after the commencement of this Act shall not be enforceable against the husband of the borrower unless the husband has in writing signed by him authorised the making of the contract.She might sign as the agent of her husband or as a. wife having the implied authority of the husband to borrow money for the purpose of buying necessaries for the house. She might be making a contract, simply on her own account and it might be necessary, as it often is, to join the husband in the writ or plaint of the action. I think it changes the law in a very material particular and I am not sure that it does not change it in more respects than my noble friend anticipates or, perhaps, desires.
§ LORD CARSON
My Lords, I should like to make the same observations and to direct the attention of the House to the observations I made on the last Amendment. To bring in an Amendment of this kind on Third Reading after the opportunities there have been for bringing it in earlier seems to me to be a very untimely way of legislating or attempting to legislate. This Amendment proposes to make a very serious change in the law, because it seeks to enact that even if a roan has authorised his wife to borrow money for household expenses he is not to be liable unless he has put that into writing. That seems to me to be a very serious change in the law. If the Amendment is made a husband might actually say to his wife: "I will come down and introduce you to Mr. Rosen who, before he started as a moneylender, was Mr. Rosenbaum, an old friend of mine. We want so much so as to go away for a holiday. You borrow a couple of hundred pounds from him. I am authorising you to do this." He signs nothing, and he and his wife can take a holiday and spend the money, but under my noble friend's Amendment the moneylender will have no right to sue the husband in the 492 circumstances. That is an alteration of the general law about agency which I think we ought not to contemplate in a case of this kind, especially at this stage of the proceedings on the Bill. The law is that the moneylender would have to prove authority in the various ways provided for the purpose, and if he proved the circumstances I have mentioned—namely, that the husband came to visit him with his wife or had shared with his wife the money that was lent—I do not think any one would have any particular hesitation in saying that he ought to bear his share in paying the money back to the moneylender. Therefore, as far as I am concerned, I am opposed to this Amendment.
§ LORD DANESFORT
In view of the objection of my noble and learned friend in charge of the Bill I beg leave to withdraw the Amendment in order that it may be brought forward in another place.
§ Amendment, by leave, withdrawn.
§ VISCOUNT HALDANE had given Notice to move, after Clause 17, to insert the following new clause:—
§ Exemption of licensed pawnbrokers as to advances over ten pounds.
§ ".—(1) Nothing in this Act or in the Moneylenders Act, 1900, shall apply to pawnbrokers duly licensed under the Pawnbrokers Art, 1872, in respect of advances of upwards of ten pounds made by them upon goods taken by them in pledge (which advances are not within the provisions of the Pawnbrokers Act, 1872), provided that the following conditions are complied with: —
- (i) The rate of interest charged upon any such advance shall not exceed the rate of ten pounds per centum per annum:
- (ii) No premium or bonus shall be charged by the pawnbroker in respect of any such advance by way of profit in addition to interest at the rate aforesaid;
- (iii) No charge shall be made for any cost, charges or expenses incidental to or relating to the negotiations for the advance or in respect of the granting thereof other than for the actual amount of the stamp duty or duties upon the document or documents relating thereto, and a sum not exceeding one shilling for every ten pounds or part of ten pounds advanced for the preparation of the contract, document or documents;
- (iv) Any charge which shall be made for rendering an account of the sale of the pledge shall not exceed five shillings;
- (v) Any sum charged for inspecting the pawnbroker's books shall not exceed one shilling;
- (vi) No charge shall be made by the pawnbroker for warehousing or storing any goods physically delivered in pledge to him unless such goods are "bulky goods" as hereinafter defined, in respect of which a reasonable charge may be made: Provided that nothing in this section shall apply to warehousing or storage charges payable to some person or persons other than, the pawnbroker in reject of a ay goods which, are not physically delivered in pledge to him pawnbroker but are pledged to him by means of a pledge of the document or documents of title thereto, such goods being at the time of. the transaction of pledge in a bonded warehouse or otherwise in the actual possession or custody of a warehouseman or wharfinger or of some other person or persons in whose charges for warehousing or storing the goods the pawnbroker has no interest;
- (vii) But nothing in this section shall prevent a pawnbroker from stipulating for and receiving in respect of advances over ten pounds in addition to the interest on the amount advanced interest at such a rate as may be agreed upon not exceeding interest at the rate of twenty per centum per annum on any moneys which may become lawfully due to the pawnbroker in respect of moneys lawfully expended by the pawnbroker after the date of the transaction of pledge in relation to the said goods.
§ (2) The expression "bulky goods" in this election means goods which by reason of their weight or size would not according to the regulations of the Post Office for the time being in force at the date of the transaction of pledge be received by the Post Office for transmission by Parcel Post.
§ The expression "goods" in this section means goods and chattels, and this section is applicable to pledges of goods by means of pledging the documents of title therein as well as to physical pledges of the goods themselves. The expression "document of title to goods" has the same meaning as it has in section one, subsection (4) of the Factors Act, 1889.
§ (3) What is a reasonable charge for the warehousing or storing of bulky goods with in the meaning of this section is a question of fact in the decision of which regard shall be had to the usual or customary charges made for warehousing and storing similar goods by warehousemen who are not pawnbrokers.494
§ (4) A pawnbroker shall not lose the benefit of the exemption conferred upon him by this section merely because it may be found that his charges for warehousing or storing bulky goods were unreasonably high unless it shall be further found against him as a fact that such charges were, so excessive as to be inconsistent with an honest intention on his part to comply with the provisions of this section as to the reasonableness of such charges."
§ The noble and learned Viscount said: My Lords, I had placed on the Paper an Amendment which I proposed to move and which I think would have averted certain inconveniences which had been overlooked in the Bill. To-day pawnbrokers are a class by themselves. They lend money, of course, but they lend it to a. limited amount and under great restrictions. They are under the Pawnbrokers Act and this Bill did not propose to interfere with thorn. It was directed against moneylenders who lend large sums of money mainly upon note of hand and not upon a corporeal security. But transactions of this class go on to-day. A lady wants a couple of hundred pounds urgently. She takes her jewels, not to a moneylender but to the nearest pawnbroker, who is likely to be a very respectable person. But, under the Pawnbrokers Act, he says to her: "Under the Pawnbrokers Act I cannot lend you more than £10, but I can lend you £10 upon sufficient security. These jewels are a security up to £100.' And he lends the money. He is called a pledge-broker and the business of pledge-broking is a very well known business all over the country, particularly in London. The pledge-broker is a perfectly harmless person because he is just a pawnbroker who, as a rule, lends at a, reasonable rate of interest.
§ Unfortunately, this Bill has been so framed as to sweep the pledge-broker into its operations. Pledge-brokers are very different people from the moneylenders about whom we all know. They are pawnbrokers carrying on the business of lending on security. But this Bill strikes at thorn and will make the carrying on of their business almost impossible. I placed this Amendment on the Paper after some consideration, and in consultation with my noble and learned friend Lord Carson I introduced a restriction that the rate of interest should be 10 per cent. That was done because we thought it was really a 495 business transaction and that the rate of interest should not be on the same scale as the rate for moneylenders, but on a much narrower scale. I have just learned, however, that the Home Office does not like this clause at all. The Home Office thinks that pledge-brokers, who are people who lend more than £10 at a time, ought to be treated as moneylenders and ought to be left to come under the Moneylenders Act, under which they may charge up to 48 per cent., but will have greater restrictions on their notices, advertisements and transactions regarding various things. All I can say is that a not unuseful class of people, the pawnbrokers, who lend money to people who come from round the corner and borrow on various forms of valuable security, will be somewhat prejudiced. But that is the view of the Government and all I can do is to leave this matter to be raised again in another place.
§ Why the pledge-brokers did not take earlier action I do not know. Had they done so they would have been able to show probably that they had a reasonable case. I do not remember their case being before the Select Committee though it may have been. Lord Darling will be able to tell us whether their case was put before the Committee or not. If it was, I do not know why some provision was not made for them, either under such restrictions as are put in this clause or otherwise. However, it has not been done, and as the Government object to this Amendment the matter must go to be considered elsewhere, if it is considered at all.
§ Privilege Amendments made.
§ Bill passed, and sent to the Commons.