The Sun.
London, England, 1857-06-09 00:00:00

JOINT STOCK COMPANIES BILL.

The bill passed through committee, the elaatms being
agreed to without dihension.
FRAUDULENT TRU3TEES, &c., DILL.

Oa the order of the day for the second readirg of this
bill, . _ _

-- •
Mr. S:rgeant KINGL A.KE said it was not his inten-
tion in ary way to impede the progress of the bll ; on
the contrary, he earnestly cleired to give it his tu lest
support. There was no doubt that in its general com-
pleticn the bill was a goad one ; at the same time, from
one or two of its provisions he hl-, bound to dissent. Tte
clause in the bill to which primarily he wished to direct
attention was that which dealt for the first time
what were termed ordinary breaches of trust, not
breaches of trust en the part of bankers, but of ordinary
trustees, with respect to the management of property,
He might state as a fact, that there were nothing so
varied in their aspect as breaches of trust. A trustee,
for r xample, might commit a breach of trust by lending
money to his own ee.stui que trust, although no loss might
u tiinately accrue to the estate. Now, that was a breach
of trust ‘s hich the House of Commons would be but
little inclined to punish. Again, a trustee might com-
mit a bleach of trust by using tomes, far his individual
purposes, although in the result the property might not
suffer. That, too, was a species of breach of trust which
the house would be rather indisposed to punish. Oa
the other hand, there was the case of a trustee using
money for his own purposes that might inadvertantly
bring down ruin and distress upon the person whom he
ought to have protected. Now his principal cause of
complaint against the present bill was, that while it at-
tacked the fraud it did not attempt to interdict the act
which the source and origin of that fraud. He would,
therefore, ask would it not he wise to insert a clause in
the bill declaring that where a trustee employed monies
for his own advantage, and it should turn out the estate
lost by the transaction in case he was not able to make
good the deficiency, that then he should be sub
jetted to the criminal law of the country. For years
past he had been familiar with the administration of
the criminal law of the country, and he knew well
therefore, how difficult it was to define what was
meant by the term with intent to commit a fraud.
But that very want of preciseness would hang in
terror over trustees, and the result would be that
every sensitive man in the country would throw up his
trusts. Under the 12th clause of the bill no prosecution
could be undertaken without the sanction of one of the
judges of the superior courts of common law or equity,
or that of the learned Attorney General. Now that was
a provision which he thought most objectionable. He
did not know whether the judges themselves had been
consulted on the point ; but be had, at all events, strong
reasons for thinking that the great majority of them
would be very strongly disinclined to have such a task
put upon them. A judge must not be a judge in his own
mind without prejudice, but in the eyes of his country
he must be above suspicion. He ventured to offer those
views as suggestions to the Attorney General. He hoped
that his hon. and learned friend would introduce a clause
preventing trustees from using the funds of the cestui
que trusts, so that in the . event of any losses being in-
curred, which could not bo made up, the parties should
be made liable to punishment. There was no duty, how-
ever onerous, connected with the functions of our judges
which they were not anxious to discharge. It would,
he thought, be very hard to impose such a duty as this
measure involved upon them. (Hear.)
Mr. NEATE said he could not understand why the
members of the house, forming the bank committee,
should be precluded from entering into the question of
private trusts. It was much better to prevent those
crimes from being committed, than to punish them after
they bad been committed. He would suggest to the
bank committee, whether they ought not to recommend
all bank directors to keep their accounts in such a way
as to render them open and intelligible to all whom they
concerned.

Mr. ROLT said the bill dealt with several &asses
of offences—offences by bankers, brokers, and other
agents, and offences by joint-stock companies.
Re wished to illustrate the objections he enter-
tained to the measure in reference to that part
which proposed to deal with offences of trustees. He
thought that as the measure was, it would infallibly
lead to the preventing of gentlemen of character and sta-
tion from accepting the duties of complicated trusts, and
it would, therefore, be throwing those offices upon per-
eons of an inferior station, or of some legal tribunal, or
of some eepartment of the government, and which of
those alternatives was the worst he did not pretend to
say. The gist of the offences on the part of trustees was
this—the appropriation of money or other property by
%ny person who merely held such property for the bene-
fit of other parties. No a', it should be observed that
there was not one case out cf 100 in which this appro-
priation did not take place with the hope of the (fiend-
tog party being able to replace the money taken on the
.sorrow—in a week, a month, or some other fixed time.l

But it was not intended by the government that the re-
storation of the property slu,ul,l remove the offence, if it
coil Ibe ever proved. L t them I,ut cons der the cases
to which this bill wont I apply. The effemees t f arpro-
pri:qing the money of an, Cher to ocr own u,e, and that
of appropliating stock or chattel property, an quite

. . _
r :Tit in their character. If in the fir,t instance the party
become unable to repay it he became criminally insolvent;
and the law was strong enough to punish him. He ob.
jected to take such cases out of the category of those of-
fences that were already dealt with in a epecial manner.
He would take the case of a trustee whose duty it was
to collect money, and whose further duty was not to in-
vest it until be obtained a certain amount, or until upon
a given day. Well, then, that person lodges such money
in the bank as he was bound to do. In the outset be Would

say that in 99 cases out of every 100, the most innocent
person would place such money with his own in the bank.
There would, morally speaking, be no criminality in
that, and yet by this bill it would be considered a breach
of trust. The next step that would follow would be
this—he 'draws upon the banker and appl es that money
to his own purposes, expecting to be able to replace
it in a few days by certain securities which he holds.
The securities fail—he becomes a grossly criminal insol-
vent. But how venial was the offence of such a man
compared to the individual who rashly speculates or
gambles with the money of another party ? He would
would take another case. A man engaged in trade
makes his will with the full expectation that his pro-
perty w;11 be realised. His theeth happens earlier than
usual. The trust is that the assets should be realised
and divided between the adult and younger members of
his family. Those adults were also the trustees, who
feel that if they deal with the property literally as they
were told, it would only realise a few hundreds, whereas
if they carry on the trade some time longer it would r
thousands. But this bill would treat those part es
as offenders guilty of a breach of trust. Now he (Kr.
R.) asked what sensible man, under such circumstances,
wou'd take a trust with such a charge hanging over
him ? On the whole it appeared to him that the mea-
snre required anxious and careful consideration. If those
objectionable features be not remedied in committee he
was satisfied that it would lead to some general trust
board being established ; perhaps the Board of Trade
might take cognisance of those duties. (Laughter.) He
would be glad to assist in rendering it as perfect a mea•
sure as possible, so that it would really have the effect of
preventing fraudulent persons from enjoying the fruits of
their offences. (Hear, hear )
The ATTORNEY-GENERAL admitted that a bill
of this importance required the most scrupulous and
careful consideration. Although be was willing to ad-
mit the great eloquence of his hon. and learned friend,
he confessed he was quite unable to comprehend his
meaning. The learned sergeant had lectured them
upon a somewhat fan.iliar text, that prevention was
better than cure ; and said that they should inter-
dict the sources of crime. Now he (the Attorney-
General) could not exactly understand the word.
He could not see how they were to interdict the sources
of crimes of this nature except by putting altogether a
stop to the relations between a trustee and a ccstui sue
trust. So long as there were guardians, there must be
trustees. So long as a dying man commits to some rela-
tion the trust of his children, and with them his pro-
perty—so long of necessity there must be those
relations and connections. Now, if the learned serjeant
would only try his hand at legislation on this subject
himself, and would embody in his measure his interdict
of the sources of crime, he (the Attorney-General) would
be most happy to cinsider well its details, and if he suc-
ceeded in his abject the world at large would treat him
as a great benefactor (Laughter.) The house would re-
member in how many statutes it had been provided that
the sanction of one of the judges or one of the law offi-
cers of the Crown should be given as a preliminary to
the institution of any criminal proceedings. The hon.
and learned member had spoken of the bill as brought
in on the spur of the moment, under the influence of
recent events. But this blot on our jurisprudence had
long engaged attention ; and that this bill did not owe
its origin to present events was clear from the fact that
the existing law had proved sufficient to meat the cases
which had lately created so much scandal. He ad-
mitted the difficulties of the subject ; but the evil which
existed was one for the removal of which there was the
mist pressing need, and he did hope that they would
not be deterred from an attempt i,to legislate by' the
mere presence of difficulties. He admitted that the
language, or even the provisions, of the hill, might re-
quire amendment in committee, but he trusted that it
would eventually leave that house one worthy to be

added to the legislation of the country, and an eff,ctive
mode of redressing a great and oppressive evil, and a
great opprobrium to the jurisprudence of the country.
(C heers.)
The bia was then read a second time, and ordered to
be committed on Friday.
GENERAL BOARD OF HEALTH BILL.
This bill was read a second time.
SAVINGS' BANKS BILL.

On the motion that this bid be read a second time,
Mr. A. TURNER said that the bill was of so much
importance to Manchester that he wished to offer a few
observations upon it. The -establishment of favings
banks had been a great advantage to the industrious
class-s, and be thought that the security of Government

should be extended to all depositors in them. There
was a mutual obligation existing between Government
' and ravings banks ; for if the one gave the benefit of se•
curity, the other afforded a fund of 35,000,000 i. or
36,000,0001., which placed an immense financial power
in the hands of the Government, which they had not
hesitated to use. The Government was about to give
additional security to ravings banke, and it was neces-
sary that they should have some power of inspection
over them. But they might go too far, and unnecessa-
rily interfere with well ordered banks. Re might in-
stance the cases of the Dublin and Rochdale Banks, in
which the Government officers ought to have found out
the deficiencies which existed much sooner than they
had. In the instance of the I.lanchester Savings Bank,
its affairs were administered in a matter quite satisfac-
tory to the depositors ; and in such cases there should
not be any unnecessary interf. rence on the part of Go-
vernment (aeon,. He knew that the present Chancellor
of the Exchequer, and the present Comptroller-General,
did not wish to interfere unnecessarily in the manage-
ment of savings banks ; but there were clauses in this bill
which gave large powers, and which future'Ciiaticellors
of the Exchequer and future Comptrollers General
might use unnecessarily. He should have wished that
the bill had been referred to a select committee, but he
should not oppose tbe second reading. He wished that the
Chancellor of the Exchequer would give xpression pub-
licly, as he had in private, that it was not his intention
to interfere with well-managed savings banks.
Mr. GROGAN was gl td that the important subject of
savings banks had been seriously taken in band by Go-
vernment. The depositors would now have the seam ity
ofbe Government for the repayment of their deposits,
but be trusted there would be no unnecessary interfer-
ence on the part of the Government with the managers
of these institutions. The Government ought to ar-
range a scale of salaries and a rate of interest, but be-
yond that they ought not to go, (Hear.)
Mr. MAGUIRE said the bill was popu!ar in Ireland.
For his own part, he was willing to allow the Govern-
ment a little tyranny if it would only preserve the pro-
per'y of honest labour from the hands of rascaely
officials. (Hear )
The CHANCELLOR of the EXCHEQUER, had
had no other object but to promote the interests of the
depositors. (hear, hear.) It was admitted on all hands
that the present state of the law with reference to sav-
ings banks was unsatisfactory, for the responsibllity of
managers and trustees which once t xieted bad been re-
moved, and no substitute had as yet been provided for it.
(Hear, hear.) Unquestionably he (Sir G. Lewis) had
not thought of interfering with the legitimate influence
of the managers and trustees, or to diminish their useful
labours. All that he had wished was to guard the in-
terests of the public exchequer; with that view he had
felt it his duty to propose a certain control over paid
officers. That control they would find set forth in the
first and second deuces, and they would see that it was
barely sufficient for that purpose. The hon. gentleman the
member for the Tower Hamlets said that the Government
wished to introduce a number of stipendary officers who
would be under their absolute control. Tuat was a
mistake ; the only stipendaries that would be appointed
by the Government would be merely the inspectors
and auditors, who could not be local officers. (Hear,
hear) Moreover, the fact bad been overlooked that the
bill would not be compul ory ; but that it would be com-
petent for any bank to continue on its present footing. '
With regard to the saviogs bank account, if the bill be-
came law he should be prepared to lay upon the table
full information on that subject, and even to submit the
whole management of the money to the investigation of
a select committee. (Hear, bear.) The chief part of
the deficiency bad arisen from money being over credited
to the banks—that was to say, it bad arisen from the
banks having received back more money than they had
paid in, and not from varying the securities by different
governments. He did not know how the hon. gentle.
man arrived at the conclusion tiat a million of money
had been lost by varying the securities ; but he should
think that less than half a million would be nearer the
amount. (Hear, hear.) With" regard to the proposed
regulations, he (Sir G. Lewis) had neither acted blindly
nor was he prepared to lay them on the table. It bad
been his wish to be guided by the most experienced offi-
cers, but it was impossible to frame a code that would
suit large banks and small ones, well conducted banks
and ill conducted ones. (Hear, hear.)
The bill was then read a second time.
JOINT STOCK COMPANIES ACT AMENDMENT