I move amendment 1:—
Section 1, sub-section (2). To delete the sub-section.
Moneylenders (No. 2) Bill, 1933—Committee.
SECTION 1.
Amendments 1 to 6 are consequential. They are being introduced to meet the principle of an amendment accepted by the Dáil on the motion of Deputy Mulcahy. They all deal with the position with regard to nationals.
I am afraid that is hardly sufficient explanation. I cannot understand the consequential nature of this amendment. It proposes to delete sub-section (2) but what is that consequential upon?
The amendment moved by Deputy Mulcahy in the Dáil did not provide for companies. All these amendments are necessary to try and clear up the position with regard to companies.
[The Leas-Chathaoirleach took the Chair.]
I am not objecting.
Amendment agreed to.
Section 1, as amended, agreed to.
Mr. Robinson
I move amendment 2:—
New section. Before Section 2 to insert a new section as follows:—
2. Each of the following persons shall for the purposes of this Act be a national of Saorstát Eireann, that is to say:—
(a) a person born in Saorstát Eireann or in the area now comprised in Saorstát Eireann;
(b) a person born outside Saorstát Eireann or the area now comprised in Saorstát Eireann whose mother at the time of his birth was ordinarily resident in Saorstát Eireann or such area;
(c) a person who at the relevant time is and for not less than five consecutive years immediately preceding that time has been ordinarily resident in Saorstát Eireann.
This also is consequential.
Amendment agreed to.
Mr. Robinson
I move amendment 3:—
New section. Before Section 2 to insert a new section as follows:—
2.—(1) In this Act the expression "Irish-owned body corporate" means a body corporate, constituted within Saorstát Eireann, the issued shares of which are at the relevant time to an extent exceeding one-half (in nominal value) thereof in the beneficial ownership of a person who is or of two or more persons each of whom is at that time either a national of Saorstát Eireann or a body corporate, constituted within Saorstát Eireann, the issued shares of which are at that time to an extent exceeding one-half (in nominal value) thereof in the beneficial ownership of nationals in Saorstát Eireann.
(2) For the purposes of the immediately preceding sub-section, but not further or otherwise, the following provisions shall have effect, that is to say:—
(a) where a national of Saorstát Eireann dies and is at the time of his death the beneficial owner of any shares in a body corporate, such shares shall, until the grant of probate of his will or letters of administration of his personal estate, be deemed to continue in the beneficial ownership of a national of Saorstát Eireann, and upon the grant of such probate or letters of administration the personal representative for the time being of such national shall, so long as he is entitled to such shares in his representative capacity, be deemed to be the beneficial owner of such shares and, if he is not a national of Saorstát Eireann, to be a national of Saorstát Eireann; and
(b) where a national of Saorstát Eireann becomes a bankrupt or carries an arrangement with his creditors and such national was at the time of his bankruptcy or arrangement the beneficial owner of any shares in a body corporate, and his interest in such shares becomes vested in his assignee in bankruptcy or a trustee of the estate of such national as an arranging debtor, such shares shall be deemed, so long as such interest remains so vested, to be in the beneficial ownership of such assignee or trustee, and such assignee or trustee shall, so long as such interest remains so vested, be deemed, if he is not a national of Saorstát Eireann, to be a national of Saorstát Eireann; and
(c) where a person is for the time being entitled to the income arising from any shares in a body corporate held by a trustee, such person shall, so long as he continues to be entitled to such income, be deemed to be the beneficial owner of such shares; and
(d) where two or more persons are each for the time being entitled to a proportionate part of the income arising from shares in a particular body corporate or from such shares and other property held by a trustee, each of such persons, so long as he continues to be entitled to a proportion of such income, shall be deemed to be the beneficial owner of a corresponding proportion of such shares; and
(e) where the issued shares of a body corporate are transferred to a bank, being a body corporate, by way of security for an advance and such bank is registered as the owner of such shares in the register of shareholders of such first-mentioned body corporate, such transfer and registration shall be deemed not to operate to transfer the ownership of such shares to such bank.
This is a consequential drafting amendment.
Amendment agreed to.
Section 2, as amended, agreed to.
Section 3 agreed to.
SECTION 4.
(3) A certificate under this section shall not be granted in respect of a person who is not a national of Saorstát Eireann.
(8) A certificate shall not be refused except on some one or more of the following grounds:—
(a) 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 thereof.
I move amendment 4:—
Section 4, sub-section (3). To delete the sub-section and to substitute therefor a new sub-section as follows:—
(3) A certificate under this section shall not be granted to any applicant unless such applicant produces satisfactory evidence that such applicant, if an individual, is at the date of the application a national of Saorstát Eireann or, if a company, is at the said date an Irish-owned body corporate.
Again, I am not objecting, but I would like to have some light on the question whether this really makes any essential change. If the body corporate is a body corporate with a very small capital, say of £100, and that £51 is owned in the Free State and £49 is owned outside, but that in actual fact the working capital of the moneylender is lent from outside, what is the essential value of this amendment regarding bodies corporate?
I am afraid it is on the same lines as the other Bill that the Seanad had before it. It does not do in practice what some of us had hoped for.
Amendment agreed to.
I move amendment 5:—
Section 4, sub-section (8). Before paragraph (a) to insert a new paragraph as follows:—
(a) that the grant of the certificate to the applicant is prohibited by sub-section (3) of this section.
Amendment agreed to.
I move amendment 6:—
Section 4, sub-section (8). To delete paragraph (f).
Amendment agreed to.
[Senator O'Farrell took the Chair.]
I move amendment 6a:—
Section 4, sub-section (8). To add at the end of the sub-section a new paragraph as follows:—
(i) that the applicant's wife or husband, father or mother, son or daughter or brother or sister is the holder of a certificate under this section.
Sub-section (8) gives a list of the grounds upon which a certificate may be refused, and on no other grounds. In reading the evidence that was presented to the Select Committee that considered the Moneylenders Bill in 1929 one finds certain references to the evils that arise from a number of moneylenders, possibly or probably in collusion, acting together and, in effect, forcing loans upon a borrower, and using the same kind of related influences to press a borrower. It was found in some cases that a husband and wife were running two separate businesses from two separate addresses. My amendment seeks to make it a ground on which the authorities may object if one of a family has already got a certificate and if they think it desirable to object to granting one to another member of the same family, whether wife or husband, father or mother, son or daughter, brother or sister. This does not make it a condition that no member of the family should have a licence, but it makes it a possible ground of objection, and I think, in view of all the circumstances, it is not desirable that two members of the same family, particularly a wife and husband, should be trading from separate addresses and each of them have a moneylender's licence.
The Select Committee had evidence of such cases before them and they did not make any recommendation in the matter. The effect of the amendment would be that if one member of the family is in the moneylending business a brother, or a sister, or some other member of the family, who may be acting independently, could not get a licence. I think you are excluding other members of the family from going into the business if you accept the amendment. As the Committee did not make that recommendation I do not feel justified in accepting it.
This is not prohibition. It is only to allow this to be made an objection, if it is thought, in the circumstances undesirable that a wife should also have a licence, it being well known that the husband had already got one. If that is a state of things that is not desirable, then it should be a possible ground of objection. While I am prepared to admit that the case of a wife and husband is much more important to achieve the end I am seeking, I think also that in the case of a father and son, if they are both working and living and acting together in every possible respect, and if, for some reasons of their own they decide to run two businesses, objection might be made by the authorities, and if such an objection is made, then it might be a ground for refusing a licence. I think it would be wrong of the Seanad to be deterred by the argument of the Minister that, because the Committee of 1929 did not make a recommendation, which means that it did not bring in particular amendments to the Bill then before it, therefore we should not amend this Bill. If that argument were to be effective, then this Bill should not be before us, because the Bill which the Committee reported to the House is a very different Bill from this one.
So far as any changes made in the Bill are concerned they are really drafting changes. The recommendations of the Committee have been rigidly followed by us, at least that was the intention, and I cannot see any changes that were made, or any deviation from anything which the Committee recommended, except drafting changes.
I quite agree with the Minister and I would ask the Seanad not to accept the amendment. If a man has got a licence the Senator wants to prevent the wife, or the father, mother, son, daughter, brother or sister from holding a licence. That is really carrying it too far. In the case of moneylenders, two brothers may go into the business, or a brother may go into the business in one street and a sister, who may get married into business in another street. By allowing the greatest amplitude to the class of people who engage in the business you have more competition amongst the moneylenders and, consequently, a lower rate of interest. I quite agree with Senator Johnson that you might have a gentleman know as Solomon in one street, David in another, Jeremiah in a third, and Zacharia in a fourth. That is what the Senator has in mind. But you cannot legislate for that sort of business unless you legislate with great precision. Why did not the Senator bring in an amendment that no single person shall be allowed to carry on business in two places? If a man is carrying on a successful business in one street, why prevent his brother, who may be his deadly enemy, from starting business in the next street? I think Senator Johnson is actuated by the highest motives, but I do not think the amendment is practical. Certainly the Committee that considered this question did not recommend it. I shall vote against the amendment and I ask the Seanad to vote against it.
I have had experience of other forms of vice, but dealing with moneylenders is not one of them. This principle does not apply in any other business where licences are issued. It does not apply in the case of bookmaking or in the licensed trade. Why should it be applied in the case of moneylenders? It is not in operation in any other business requiring a licence that I know of.
Or any other business in the world.
Sub-section (9) of this section states:—
A superintendent of the Gárda Síochána of, or any resident in, the District Court area in which an application for a certificate is made should have the right to appear in court and to oppose the granting of a certificate on any one or more of the grounds mentioned in the last preceding sub-section.
If the superintendent is satisfied from knowledge of the circumstances that it is undesirable that M. Mofsovitz, of 7 Trinity Street, Dublin, and S. Mofsovitz, of 34 Exchequer Street, Dublin, should both have a licence on the ground that one is the wife of the other, I think that it ought to be competent to refuse one of them a licence.
The wife might be separated from the husband.
I am not saying that the licence should be refused. Unless there is some such clause as this there will be no right to refuse a licence. I am guided in this by the evidence before the Committee which will be found from question 1599 onwards and is as follows:—
"Chairman.—Are you in the employment of M. Mofsovitz, 7 Trinity Street, Dublin?—Witness— No.
What firm do you represent?—S. Mofsovitz of 34 Exchequer Street, Dublin.
Is there any relationship between S. Mofsovitz of 34 Exchequer Street, and M. Mofsovitz, of 7 Trinity Street? —Am I supposed to deal with 7 Trinity Street? I do not belong to there.
We will not press you to answer. If you were sent here to refuse to answer questions you can retire. You can decline to answer questions if you wish. Your evidence is absolutely voluntary. If your instructions are to refuse to answer you are quite right to carry them out?—I belong to 34 Exchequer Street, and I have nothing to do with Trinity Street.
Is there any relationship between S. Mofsovitz and M. Mofsovitz?—I believe there is a relationship.
Tell the Committee what it is, or is it so mysterious that it is not to be divulged?—I think they are husband and wife.
You are not quite sure that they are in fact married?—I know they are husband and wife.
Are you with the husband or the wife?—With S. Mofsovitz, the husband.
And they carry on business as two separate establishments in two separate streets?—Yes."
It is obvious from that illustration that there is some purpose not entirely open, free and above board in the carrying on of these separate businesses. Two members of the same family, husband and wife living together, and carrying on two business under two separate licences—that may be perfectly honourable, but it may not be. It may be considered by the superintendent of the Gárda Síochána that it may be undesirable. All I am seeking is that that should be a possible ground for refusal. People may object on the ground that married women have equal rights with men and that there should be no differentiation between their rights. That is, perhaps, a sensible objection, but I think it is desirable that there should be the right to refuse a certificate on the grounds of close relationship if it is thought undesirable that two members of the same family should have a moneylender's licence.
That evidence was before the Committee and, notwithstanding that evidence, the Committee did not think it was proper to refuse a person a licence because some remote relative of his also had a licence. I think the Committee were right and for this reason: that if M. Mofsovitz and S. Mofsovitz were engaged in a conspiracy to defraud the public, M. Mofsovitz would call himself Moses, but he did not. There was no deception; there is no fraud. That is the reason the Committee came to the conclusion that it was better to encourage these moneylenders to be honest. There is no necessity for the amendment whatever. Certainly in the evidence before the Committee it is shown that in that particular case there was no necessity for it, because if any person went for a loan of money to M. Mofsovitz and was refused, he would go to some person with some other name. It is a rather peculiar name. That is the first time I ever heard of that name. It is a very unusual name. Anybody going to a moneylender to look for money and expecting to get it I imagine would know his way about Dublin. If he is refused by one Mofsovitz he is not likely to go to the other. If the other Mofsovitz called himself Moses, or Jacob or Isaacs, he might go to him believing he was a different person. It is on that principle that I am opposing the amendment. Why should not a wife, if she has money of her own, be entitled to engage in any business she likes, or why should not the brother or sister of a successful moneylender be entitled to start a business, just as publicans, lawyers, and doctors do? One brother succeeds another and takes some of the business, perhaps, that is there. While I have the greatest respect for the underlying sentiments of Senator Johnson, I think it is unreasonable and unwise for him to insist on this amendment.
Amendment put and declared lost.
Sections 6, 7 and 8 agreed to.
SECTION 9.
(1) No contract for the repayment by a borrower of money lent to him or to any agent on his behalf by a moneylender after the commencement of this Act or for the payment by him of interest on money so lent and no security given by the borrower or by any such agent as aforesaid in respect of any such contract shall be enforceable, unless before the money was lent or before the security was given, as the case may be, a note or memorandum in writing of the contract be made and signed personally by the borrower, or, where the borrower is a married woman totally dependent on her husband, by the borrower and her husband, and unless a copy thereof be delivered or sent to the borrower within seven days of the making of the contract.
I move amendment 6b:—
Section 9, sub-section (1). To delete in lines 64-65 the words "totally dependent on" and to substitute therefor the words "not living apart from."
This section provides that no contract for repayment by a borrower of money lent to him shall be enforceable, unless, before the money was lent, a note or memorandum in writing of the contract be made and signed personally by the borrower, or, where the borrower is a married woman totally dependent on her husband, by the borrower and her husband, and unless a copy is sent to the borrower within seven days of the making of the contract. I am not sure whether the House is sufficiently concerned with this very important problem. It is extremely important and the House should not let this Bill pass without considering it. The question of a married woman getting loans without the knowledge of her husband has caused a very great deal of trouble in this city, and in most towns, and was subjected to a great deal of attention by our committee and by the committee that preceded the passing of the British Act. It was decided here that where the borrower is a married woman totally dependent on her husband, both borrower and husband must sign the document. It seems to me that the purpose aimed at will be destroyed if we use there words "totally dependent on her husband."
Attention called to the fact that a quorum was not present.
House counted, and a quorum being found present.
In this case where a married woman is seeking a loan from a moneylender, if totally dependent on her husband, the husband must be required to sign the document. The words "totally dependent on" her husband would remove the onus and enable the husband to know nothing about the loan if she had 2/6 a week from any source whatever. She would not then be "totally dependent on" her husband. The purpose of the section would be destroyed by the use of these words. I am seeking to amend it by inserting the words "not living apart from" her husband. That is to say, where the husband and wife are living together, and the woman seeks a loan from a moneylender, she must inform her husband. That is the meaning of the amendment and that was the intention of the section.
The only question is whether it is desirable to retain in the section these limiting words "totally dependent on her husband," or getting the purpose of the section actually secured, by requiring that the double signature shall apply when husband and wife are living together. I do not think there is any question of the desirability of preventing a moneylender getting the signature of a married woman to a promissory note, without the husband's knowledge. If the person happened to be an aged person, with the old-age pension she would not be "totally dependent on her husband," and, therefore, in these circumstances, the purposes of the section itself would be destroyed.
I submit to the Minister that the amendment is very well worthy of consideration. If it is not accepted it might be said that Section 9 (1) has no effect whatever. The Senator stated that if a woman was in receipt of the old age pension she would not be totally dependent on her husband. Presumably she would be 70 years of age and would be scarcely likely to go to a moneylender for a loan. Take the case of a charwoman who earns 2/6. She would not be totally dependent on her husband. That is just the class of woman who would go to small moneylenders around the city. Senator Johnson's submission is well worthy of consideration if this section is to have any effect. In regard to moneylenders, I think the great evil in connection with this question is that wives have been able to borrow money unknown to their husbands. That has caused a great deal of domestic tragedies. I have no sympathy with the heir who goes to moneylenders and borrows money at 25 per cent. or 30 per cent., and I have no sympathy with "the man about town" who borrows £50 or £100 to go to the Curragh races, and who pays an exorbitant rate of interest. What ought to be guarded against by the Minister, and what is deserving of consideration, is that a good many of these monetary transactions on the part of wives are at the bottom of a great amount of domestic unhappiness, things that are never heard of and that never appear in the Press. These wives borrow money without the knowledge or consent of their husbands. That leads to domestic unhappiness. For that reason I submit that the amendment of Senator Johnson is a very wise one, and that it, or some modification of it which the Minister thought proper, is necessary. If an amendment something like it is not introduced, the section is a mockery and a delusion.
The position is that the Select Committee dealt with this matter. They had evidence before them with regard to it and they turned it down. I understand one of the reasons that actuated them was that there might be cases of married women living with their husbands who were carrying on business, independent of their husbands, and that in such cases—they might be extreme cases—the husbands might compel their wives to give them a greater measure of support from the business that was being carried on independently, by having to get the husband's signatures to documents if negotiating loans for the purposes of the business. I think that was the main ground on which the committee turned it down. The committee had all the evidence before them, but of course that has no compelling effect on the Seanad. Senator Johnson said that I was suggesting something like that before. I was not. The Seanad is free to decide what it wishes. In getting the Bill drafted I kept it down to the evidence that the committee had before them as they went into the consideration of it. I do not feel justified in departing from their recommendation. They decided definitely on this and I understand turned down the other proposal unanimously.
The Minister says that the committee appointed made this recommendation and with his usual loyalty he has had adhered exactly to the findings of the committee. I think in the Seanad we are entitled to appeal from that decision. The Minister has great experience, and I would take his opinion on a question like that before I would accept the opinion of most committees. I do not know the names of the members of this committee. The Minister put the case of a married woman who might be carrying on business, who might have occasion to resort to moneylenders, and that her husband extract from her a contribution as consideration for signing a bill. I ask the Minister if in his great legal experience he has ever come across a case like that. I venture to say he did not. I never came across such a case. Suppose a poor woman carrying on a business, with a husband who was no good in the kitchen, and a child in her arms, had to go to a moneylender, do you think she would lose? The Minister followed the recommendation of the committee, which rather shows me that perhaps members of the Committee had never experienced any of the real hardships of life. I still urge on the Minister to accept without a division the proposal of Senator Johnson.
There is something to be said for the view put forward by the Minister, but something has also to be said for this point of view. I know conditions in the city fairly well. There is a tremendous number of married women who carry on small businesses apart from their husbands. These are only side lines, but I think that the husbands of women circumstanced such as they are ought to get some protection in a measure of this kind. I have had some experience of the ramifications of moneylenders in this city, and my experience tells me, we cannot be too drastic in the methods we adopt to curb the activities of some of the people who are carrying on this business. They have brought more unhappiness into decent homes in Dublin than anything else I know of. I think that in all the circumstances the Minister ought to agree to the proposal of Senator Johnson notwithstanding the fact that the Committee made a somewhat different recommendation. I am not passing any comments on the view of the Committee but, speaking from my own experience in these matters in the City of Dublin, I think the Minister ought to accept the amendment suggested by Senator Johnson.
I do not think there will be very many cases where women who are not dependent on their husbands are carrying on business. If they are carrying on a business and are independent of their husbands they do not require to go to moneylenders at all. There are several married women, no doubt, who are very energetic and enterprising, hard-working women, who have made a great struggle and carried on a very successful business on their own, but that type of woman will not need to be protected from the moneylenders. They are quite able to protect themselves. Any woman who is able to carry on a business of that kind is independent of the earnings of her husband, and I do not think this Bill will apply at all to her. I do say, however, that there are thousands of women in the city here, and in other parts of the country who are carrying on small businesses only as a side-line. They are wholly dependent on their husbands in reality because the amount of their earnings is very small in proportion to the family budget requirements. A tremendous amount of unhappiness has been caused by moneylenders going about canvassing such people and inducing them by every means to accept loans. I think the amendment might be accepted by the Minister.
I leave the matter to the House.
I would just like to say that I quite appreciate the importance of the point the Minister has made, that it may be that a woman has a worthless husband and so does not want to have to divulge to that worthless husband the fact that she is receiving any money from the moneylender, not because he would have any moral objection, or would want to take charge of the house itself, but he might probably "sponge" on her. I quite appreciate that point, but for one case of that kind there are 200 or 2,000 of the kind where moneylenders in the past have been lending money to married women and tragedy upon tragedy has occurred because the husband knew nothing about it. I think this "totally dependent" proviso would largely nullify the whole intention of the section.
Amendment put and declared carried.
Section 9, as amended, ordered to stand part of the Bill.
I move amendment No. 6c:—
New section. Before Section 10 to insert a new section as follows:—
10. Under any contract for the repayment by a borrower of money lent to him or to any agent on his behalf by a moneylender after the commencement of this Act or for the payment by him of interest on money so lent, it shall not be lawful for any interest to be charged at a rate exceeding 60 per cent. per annum or the corresponding rate in respect of any other period, whether such rate is expressed as payable by the terms of the contract or becomes directly or indirectly chargeable thereunder.
This raises a matter of importance and it is distinctly related to other sections in the Bill. Those who have been following this question will have known that there have been demands for a restriction of the rate of interest which moneylenders may be allowed to recover. It is extraordinary, it is almost inconceivable, the rates of interest that in fact have been current under moneylenders' agreements. Section 13 of the Bill, as it stands, makes a certain reference to 39 per cent. That is a provision which I am seeking to amend by a later amendment by reducing the rate to 25, but that is not the maximum rate of interest. If the question is brought to the court, and if there is an excess over 39 per cent., it will be presumed by the court that the charge is unconscionable and harsh. The onus of proof that it is not so lies on the moneylender. My proposal in this new section is to make a 60 per cent. rate the maximum which may be recovered. The effect of the amendment is that if any contract be made after the passing of the Act it shall not be lawful to charge more than 60 per cent. per annum interest. That is not a very wide or extravagant claim. In fact, to very many people it will seem to be an extension of the provisions of the Bill and that it would allow moneylenders to charge more than they are at present allowed to charge.
I am raising the matter in this form for the purpose of getting an expression of opinion from the Seanad as to whether a maximum rate of interest should be put into the Act. If it is thought that 60 per cent. is too high, at a later stage it can be amended. I am putting down 60 per cent. because that is the figure that has run through discussions here and in England as a rate which would allow moneylenders to carry on their business, where they lend money without security, and which would allow them a sufficient rate to make provision for bad debts, for the expenses they incur at the present time and still leave them a very considerable margin of profit.
I am prepared to go into the question as to whether the figure is too high or too low, but the purpose at the present time is too fix a maximum which the court would not be allowed to exceed in making a final ruling. It has been said—in fact that there has been a judgment in the British courts to the effect—that even 100 per cent. was allowed in the case of a disputed claim and even 100 per cent. was held to be not harsh and unconscionable even when the Moneylenders Act of 1900 was pleaded. As I understand, and as I am advised, the Bill as it stands at present does not make any figure the maximum. It simply throws the onus of proof that the charge of 39 per cent. is not harsh or unconscionable, on the moneylender. I want at a later stage to throw that onus on the moneylender even when he charges more than 25 per cent. but the purpose of the present amendment is that, even though the justice may decide that more than 25 per cent. should be allowed in all the circumstances, he should not be allowed to give judgment for more than 60 per cent. The essential feature of it is that it is intended to fix the maximum that even the courts would be allowed to award to a moneylender and that that maximum should be stated in the Bill. As I have said if the Seanad thinks that 60 per cent. is too high to allow as a maximum, I would be prepared to agree on Report Stage to reduce that figure. I put down 60 because it is the figure which moneylenders themselves, particularly in the English inquiry, had indicated as a figure which will allow them to carry on business, to lend money to unsecured borrowers, and still pay expenses and make provision for bad debts.
I do not think that Senator Johnson was ever in what we call temporary necessity, because if he were he would see that in this section, which has a great deal to recommend it, there are some things which he has not considered. Let us take the case of a man who may want £100 for a week. He may have plenty of resources but he may want £100 just for one week. He may be inclined to pay £7, £8, or £10 for the use of that £100 for the week. That would be more than 60 per cent. per annum. I wonder whether Senator Johnson would consider limiting his amendment to cases where that high percentage is demanded on a Bill of say three months or six months? There are very serious necessities, very urgent necessities of substantial people from time to time. It is only in the Minister's walk of life or in my walk of life as a solicitor or a barrister that these cases come to one's notice. I have had several such cases brought to my notice. I know several occasions on which substantial men were in the most extreme need of money for a week or so and these men would no more think of asking you or me to sign a bill for them than they would think of burning their right hand. They would much rather go to a moneylender and say: "What about giving me £100 for a week?" A man would frequently much prefer to pay a £5 or a £10 note rather than let anybody know he was in need of £100. If we are to allow these people to go on at all, we must allow that freedom in commercial intercourse which is necessary, provided, of course, that we protect the people who are in need of protection. I would say that for a three months or a six months bill 60 per cent. is too high but what about the bill for a month or for a week? Would you limit a man to 60 per cent. on a bill for a week? That is only £1 and a moneylender will not lend £100 for a week for £1. He might say: "If you give me £5 I will give you £100 for a week." That is the difficulty in the amendment proposed by Senator Johnson and that is the reason why I think the per annum requirement there and the absence of any limitation as to the time during which the money is to be lent is, I think, defective. Senator Johnson, of course, has considered it but it does not appeal to me at all unless the short-term loans are excluded from this section.
Senator Comyn suggests, and I should be inclined to agree with him, that there are very few people here, with the exception possibly of himself and the Minister, who can really appreciate the various aspects of this Bill. It brought my attention to the fact that the people on the opposite benches, on which we usually have a number of bankers and people interested in the banks and the moneylending business who could be of considerable use to us in connection with this Bill, are not here at all this evening. When it is a question of dealing with financial matters relative to the moneyed interests of this country we have full benches on the opposite side of the House. They are all here to offer advice to the Minister and to the rest of us as to what should be done if there is any suggestion of putting a little bit extra on income tax or anything of the kind, but when it is a question of protecting the, comparatively speaking, poor people of the country from the moneylenders, from the wolves, they are not here and they are not interested. I say that it should not go unnoticed that the people who could be of the greatest possible benefit because of their experience walked out of the House this evening and left us here to discuss this matter in which the poor people of the country are very much concerned. I think it very regrettable that they should not be here this evening above every other evening and for this Bill above any other Bill to help us to put the brakes on the moneylenders of this country.
Under Section 13 as it stands while this 39 per cent. is not stated as the maximum rate of interest, it is the maximum rate. The section says:
(1) Where, in any proceedings in respect of any money lent by a moneylender after the commencement of this Act or in respect 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, it is found that the interest charged exceeds the rate of 39 per cent. per annum, or the corresponding rate in respect of any other period, the court shall presume for the purposes of Section 1 of the Moneylenders Act, 1900, that the interest charged is excessive, and that the transaction is harsh and unconscionable, but this provision shall be without prejudice to the powers of the court under that section where the court is satisfied that the interest charged, although not exceeding 39 per cent. per annum, is excessive.
The effect of that section is that in any proceedings taken in court—and, of course, if people are charged more than 39 per cent. they will allow proceedings to go to court the moment they know that this is the position— without any evidence whatever being tendered, the court is bound to presume that any interest charged in excess of 39 per cent. is excessive. There is no question of giving any evidence or of pointing out the circumstances of the loan or anything else. The court is bound to take notice of it and bound to regard that as excessive, so that while it is not stated as being the maximum rate, the effect of the section is to make it the maximum rate. There is no question of the rate being 40 per cent., 50 per cent., or 60 per cent. The 39 per cent. is final and maximum in its effect. The court must presume when the interest is in excess of 39 per cent. that the interest is excessive and is harsh and unconscionable. Senator Johnson referred to decisions under the 1900 Act. There have been numerous decisions under that Act but, in that Act, there was no idea given to the court as to what rate of interest would be excessive or considered harsh or unconscionable. There was no guide given to them, but this Bill, which follows the British Act of 1927 and a similar measure passed by the Northern Parliament in which the rate is set out at 48 per cent., sets out the rate as 39 per cent. No decision under the 1927 Act has been brought to my notice, but, since 1927, the Senator, I am sure, will find, if the decisions are looked up, that the court has been guided by that 48 per cent. The Bill provides that where any interest is charged in excess of 39 per cent. the court must presume that it is harsh and unconscionable.
[The Cathaoirleach resumed the Chair.]
I have been advised that the contrary is the case. I am not able to decide between conflicting lawyers, but I looked up the British Act of 1927, and I find that the whole drafting of Section 10 of that Act is the same as this proposed Section 13 except for the rate of 48 per cent. and these words, which are omitted in our draft: "unless the contrary is proved". That is to say, if it is found that the interest charged exceeds a rate of 48 per cent. per annum or a corresponding rate in respect of any other period the court shall, unless the contrary is proved, presume for the purposes of Section 1 of the Moneylenders Act that the interest is excessive. The absence of these words: "unless the contrary is proved" suggested to me that the very removal of them made our draft the maximum, but I was advised that that is not so and that, in fact, our draft leaves the position thus: a moneylender goes to a court to recover his debt and is met with the assertion that the rate of interest is more than 39 per cent. or 48 per cent., as the case may be, and the presumption shall be that the rate is harsh and unconscionable, but it does not close the question. The plaintiff, that is, the moneylender, can then bring evidence to show that it is not harsh and unconscionable, that the risks were great and that the rate of interest, even if it were 60, 70 or 80 per cent., was reasonable. What happens then is that the court may reopen the proceedings, and even if there have been payments made above the amount which would be reasonable and equitable, may make a new account. I should like to be convinced that the Minister's reading is watertight, because that would be quite enough to satisfy me that there is no need to move this amendment. In fact, it would be very much better than my amendment, but I am not yet assured that his reading is right, and unless I can be satisfied between now and Report Stage that it is, I should like to press this amendment or some modified form of it. If I were allowed to withdraw this amendment at this stage with a view to looking into the watertightness of the present section, I would do so.
Cathaoirleach
I think that is a very reasonable suggestion.
Amendment, by leave, withdrawn.
Sections 10, 11 and 12 agreed to.
SECTION 13.
(1) Where, in any proceedings in respect of any money lent by a moneylender after the commencement of this Act or in respect 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, it is found that the interest charged exceeds the rate of 39 per cent. per annum, or the corresponding rate in respect of any other period, the court shall presume for the purposes of Section 1 of the Moneylenders Act, 1900, that the interest charged is excessive and that the transaction is harsh and unconscionable, but this provision shall be without prejudice to the powers of the court under that section where the court is satisfied that the interest charged, although not exceeding 39 per cent. per annum, is excessive.
(2) Where a court reopens a transaction of a moneylender under the said Section 1 of the Moneylenders Act, 1900, as amended by this Act, the court may require the moneylender to produce any certificate granted to him in accordance with the provisions of this Act, and may cause such particulars as the court thinks desirable to be endorsed on any such certificate, and a copy of the particulars to be sent to the authority by whom the certificate was granted.
I move amendment 7:
Section 13, sub-section (1). After the word "moneylender" in line 23 to insert the words "either before or"
I want to presume for the time being that the 39 per cent. rate remains in this section and that, as the Minister says, it is watertight—that it becomes the maximum rate of interest that may be allowed. Although this Bill has been before the House in one form or another for four years, as it stands any money borrowed up to the date of the commencement of this Act would be subject to the rate of interest stated in the agreement in connection with the promissory note and the Act of 1900 would apply, that is to say, there would be no maximum and, in fact, there would be no governing rate of interest allowable. I want, by this amendment, to make the provisions of Section 13 (1) apply in respect to a loan made before the passing of the Act as well as to a loan which succeeds the passing of the Act. It may be objected that this has some retrospective effect and that if a man made a contract to pay 166 per cent., which, by the way, appears to be the ruling rate per annum, according to one expert moneylender witness, and if the promissory note were signed embodying a rate of that kind, even though it were made since this Bill was drafted and since it came into the region of the legislature, the obligations of the borrower would not be affected in the least by this section unless it is amended in the way I desire. It is because I desire to bring under the protection of the section moneylending agreements undertaken before the passing of the Act that I move the amendment.
This amendment of Senator Johnson's goes very far indeed in principle because it means that contracts, already made, are to be broken. It is much worse than retrospective legislation. It is legislation that breaks contracts already made on the faith of a statute passed in the year 1900. That is a rather serious thing. I do not think there have been any complaints sufficient to justify the Minister in adopting such a drastic course as that. I would not like to see legislation of that kind, not merely retrospective but destroying the faith of contracts, introduced into this measure. Now if the measure was very urgent a little might be said for it, but so long as I have been a member of the House we have been talking about a Moneylenders Bill and there has been considerable delay. If the matter was very urgent the late Government or this Government might have proceeded more rapidly. The Senator has not pointed out any glaring cases of injustice that could not be covered, and reasonably dealt with, by the Act of 1900. After all, we are dealing with fairly small matters here, and therefore why introduce a principle that would be destructive of confidence in other matters? Here is an amendment by which it is proposed to break contracts already in existence. I am very glad that Senator Jameson, who knows so much about matters of this kind, is in the House. I recommend the Seanad not to accept this amendment.
The objection that I have to the amendment is very similar to what Senator Comyn has stated. It will be urged from the moneylenders' point of view at any rate that risks were taken, when there was no such basis as this 39 per cent. in lending money, risks that will not be undertaken when this Bill becomes law and that contracts have been entered into. The effect of this amendment would be to give these retrospective effect, and in that way to nullify, to a considerable extent perhaps, many existing contracts that were entered into before this Bill became law, and perhaps long before this measure was contemplated. For these reasons I could not accept the amendment.
The Minister has not adverted to the fact that if these contracts were entered into they were entered into since 1929 when a Select Committee, having made inquiry and having had numerous moneylenders before it, representative and unrepresentative, put this 39 per cent. provision into the Bill. The Bill was accepted by the Ministry of the time. It has been simply delayed, one way and another, until it is now before us as No. 2 Bill, 1933. These limitations, I would point out, were before the moneylenders all those years. I think it is not reasonable to say that they should be free, even after the passing of this Bill, to charge rates of interest that may be said to be normal and, therefore, not unconscionable, the normality amounting to 166 per cent. according to the witnesses who appeared before the Select Committee, and, in some cases, to 1,000 per cent., I think, that those people who got themselves into the net of moneylenders prior to the passing of this Bill ought to get some relief from the Bill. I am afraid, however, from what the Minister and Senator Comyn have said that thousands of men, some of them in a deplorable position at the present moment because of the toils that they have got into, are not going to get any relief whatever from the passing of this Act.
Amendment declared lost on a show of hands.
Amendment 7a not moved.
Amendments 8 and 9 (Senator Johnson) adjourned for Report Stage.
I move amendment 9a:
Section 13, sub-section (2). To insert before the sub-section a new sub-section as follows—
(2) For the purposes of this section, where the interest charged on a loan is not expressed in terms of a rate, the rate of interest shall be calculated in accordance with the provisions of the First Schedule to this Act.
I think this amendment ought to be acceptable because there is prescribed in the Schedule a method of calculating the rate of interest where the interest charged on a loan is not expressed in terms of a rate. It should be of interest to those members of the House who have not concerned themselves with this problem to know that it is very seldom indeed, in the course of the ordinary business of moneylending, to declare a rate of interest on a loan. A person seeks a loan of £10. He gets £7 10s. and signs a promissory note for £10. That is considered to be a loan of £10, and he binds himself to pay, say £1 per month for ten months. No rate of interest, therefore, is noted on the promissory note, or on any other agreement. The Schedule indicates a method of arriving at a rate of interest where no rate of interest is expressed in the agreement. In Section 9 of the Bill it is provided that in such a case the method of calculation described in the First Schedule is to be applied, but there is no direction as to how this 39 per cent. is to be calculated. It is for that reason that I am seeking to insert this amendment in the Bill. It directs that in arriving at the 39 per cent., where no rate of interest has been indicated in the agreement, the method of calculation shall be that contained in the First Schedule.
I think Section 2 covers the point that the Senator has in mind.
I accept that.
Amendment, by leave, withdrawn.
Sections 13 to 16 inclusive agreed to.
SECTION 17.
No person shall carry on business as a moneylender on Sunday, Christmas Day, Good Friday, or Saint Patrick's Day, and any moneylender who acts in contravention of this section shall be guilty of an offence under this section and shall be liable on summary conviction thereof to a fine not exceeding £20.
I move amendment 9b:—
Section 17. After the word "moneylenders" in line 46 to insert the words "whether personally or by his agent."
On the Second Reading I raised a point about the collecting of moneys by moneylenders, or their agents, on Sundays. The Minister pointed out that in his opinion the phrase "carrying on business as a moneylender" would cover the collection of moneys on Sundays, and therefore would be prohibited. I think there is some doubt as to whether the collection, as it is done, would always be construed as carrying on business, but there is this method that is sometimes applied and I think unless it were guarded against would certainly be applied because this collection on Sundays is a very favourable form of forcing collections and bringing a doubtful debtor to boot. A moneylender may appoint a collecting agent to do the collecting for him. If that were done I doubt whether that would be construed as "carrying on business" for a moneylender by the agent. It is for that reason that I want, by inserting in the Bill the words in the amendment, to guard against any risk. It is to make certain that the evil which the section seems to guard against should not be evaded that I am moving the amendment.
I think the amendment is unnecessary. Surely a moneylender who employs an agent to collect on Sundays or on any other day, just the same as when he employs a person in his office, is carrying on the business of a moneylender. One may assume that in most of these cases very many of the persons negotiating a loan would probably negotiate it with some assistant or some person in the office. Surely it could not be construed that that was not carrying on the business of a moneylender. In the same way, if the moneylender employs an agent to go out on Sundays I do not see where there is any loophole, and how that could not be construed as carrying on the business of moneylending. I may say that I do not see any objection to the amendment.
Let me put this case to the Minister. Suppose I employ Stubbs or Kemps or any of these other debt collecting agencies. If they broke the law would I be responsible? I employed them to collect my debts in a general way as agents. They may act in contravention of some provision of the law. I am very doubtful whether I could be made responsible for their offence under an Act of this kind. The Minister says that he sees no objection to the amendment.
I do not see any objection to it. The purpose of the section is to meet the position the Senator has in mind. If the Senator has any doubt about it, I do not see any objection to accepting the amendment.
Amendment agreed to.
Cathaoirleach
Might I interrupt the Committee Stage of this Bill for a moment or two?
Progress reported.