SUBJECT AND CONDITIONS FOR PRIZE ESSAY.

SESSION 1882-83.

THE following is the title of the Essay to which a First Prize of £20 and a Second Prize of £10 will be awarded at the October meeting of the Institute, 1883. The Essays must be lodged with the Secretary on or before the 30th June, 1883:—

"ON POSSIBLE IMPROVEMENTS IN THE PRACTICAL DETAILS OF BANKING BUSINESS, DIRECTED EITHER TO SIMPLIFY TRANSACTIONS BETWEEN BANKERS AND BANKERS, OR BETWEEN BANKERS AND THEIR CUSTOMERS."

The following are the conditions :—

Each Essay to bear a motto, and be accompanied by a sealed letter, marked with the like motto, and containing the name and address of the author; such letter not to be opened, except in the case of the successful Essay.

No Essay to exceed in length 75 pages (8vo.) of this publication, and distinct references should be made to such authorities as may be quoted or referred to.

The Council shall, if they see fit, cause the successful Essays, or abridgments thereof, to be read at a meeting of the Institute of Bankers, and shall have the right of publishing the Essays in their journal one month before their appearance in any separate independent form; this right of publication to continue till six months after the award of the Prizes.

Competition for the above Prizes shall be limited to the Associates and Members of the Institute of Bankers.

The Council shall not award the Prizes, except to the authors of Essays, in their cpinion, of a sufficient standard of merit.

The Essays must be legibly written and on one side of the paper only.

If further explanation is required, it may be obtained from the Secretary, at the Offices of the Institute, 11 and 12, Clement's Lane, E.C.

October 18th, 1882.

JOURNAL OF THE INSTITUTE OF BANKERS.

Sir JOHN LUBBOCK, Bart., M.P., President, in the Chair.

NOTES ON THE BILLS OF EXCHANGE ACT, 1882. BY M. D. CHALMERS, Esq., M.A., Barrister-at-Law.

[Read before the Bankers' Institute, Wednesday, November 15th, 1882.]

LAST February I had the honour of reading before you some notes on the Bills of Exchange Bill, 1882, which had just been introduced into the House of Commons by your president, Sir John Lubbock. Since then, your protégé has been formally received into the family of statutes and christened by the name of the Bills of Exchange Act, 1882.

I do not propose to offer any comments on the provisions of the Act itself. In the first place, the draftsman is always said to be the worst person to construe his own workmanship. He knows, or ought to know, what he intended to provide ; but it does not follow that the phrases he has used express his intentions. In the second place, I have already published what comments have occurred to me.

What I propose to do this evening is to trace the parliamentary history of the measure in its progress through tho two Houses. The Act, consciously at any rate, effects but few direct changes in the law, and none of those are of any great importance. In its direct operation as a piece of legislation, there is not much in the Act of general concern; but incidentally it has a wider interest. It so happens that the Act is the first piece of codification that has safely reached the harbour of the statute book. For good or for evil, the first step in the codification of our law has been taken, and it is

the Institute of Bankers, acting in conjunction with the Associated Chambers of Commerce, that have taken that first step. While professors of jurisprudence, and congresses of divers kinds have been discussing the possibility of codification, and its theoretical aspects, the Institute has taken the matter practically in hand, and has answered their philosophic doubts in the academic phrase solvitur ambulando. Since, then, the Institute of Bankers has successfully steered its measure through all the parliamentary shoals and quicksands, while the measures of others have hitherto met with shipwreck, it may be worth while to examine into the conditions of its success and to put them on record for the benefit of future adventures. I believe your council were very wise in not attempting too much. They recognized that there were many defects in the law relating to bills of exchange; but they thought that a codification of the existing law, even with all its defects, would be a long step in the right direction. When they did me the honour of entrusting to my hands the drafting of the Bill, they instructed me to reproduce as exactly and faithfully as possible the existing law in a codified form. All amendments were to be left to a later stage. The council, as you know, drew up a list of twenty suggested amendments in the law. These were brought forward in the select committee, and out of the twenty suggestions, eleven, in one shape or another, have found their way into the Act. If the suggested amendments had been inserted in the Bill before it was introduced in the House, the probable result would have been that the measure would still have been awaiting its second reading in the Commons. As it was, however, Sir John Lubbock was able to tell the House that the Bill merely represented the existing law in a definite and accessible form. There could, therefore, be no opposition to the Bill on any question of principle. No one could say it was a bankers' Bill, intended to promote the interests of bankers at the expense of other people. The only objections that could be raised to it were objections on points of detail. A select committee, and not the whole House, was clearly the proper body to deal with such questions. The Bill met with no opposition in the Commons. Sir John Lubbock, who took charge of the Bill, introduced it early in the session. It was read a second time at the end of February, and then referred to a strong select committee of nineteen members. The Solicitor-General (Sir Farrer Herschell) was elected chairman of the committee. Among the others members of the committee were Mr Gibson (the late Attorney-General for Ireland), Mr. Asher (the Solicitor-General for Scotland), Sir John Lubbock, Mr. T. C. Baring, Mr. R. B. Martin, Mr. Arthur Cohen, Q.C., Mr. Lewis Fry, Mr. Whitley, Mr. Alderman Fowler, Sir Edmund Lechmere, Mr. Williamson and Mr. R. T. Reid. The committee was, I should think, as representative a body as could be selected; indeed, it is difficult to know how its composition could have been strengthened. It included bankers,

merchants, barristers and solicitors, and one of the solicitors had the additional advantage of having had many years' experience as a notary in a great commercial city. The committee held twelve sittings before they reported the Bill, and twice went through the measure most carefully clause by clause. As they went along various amendments were proposed and discussed; and the different suggestions from the public bodies who had been consulted were considered. Mr. R. B. Martin, I believe, took charge of the amendments that were suggested by the Institute of Bankers and brought them forward seriatim. Sir John Lubbock took the chair in committee on the two occasions when the Solicitor-General was unavoidedly absent. Memoranda on the Bill were received from the Scottish Bankers' Association, the Society of Notaries, the Incorporated Law Society, the Faculty of Advocates in Scotland, and the Writers to the Signet. Sir Jacob Behrens also sent in a memorandum, which was printed and circulated through the committee. Besides the work which was done in committee, Sir Farrer Herschell went through, in private, all the suggestions which were made for improving the Bill; and himself settled the Commons' amendments, other than those which were rendered necessary by the extension of the Bill to Scotland. As you see from the report of the select committee, there was no division, so that the course adopted as regards amendments seems to have been this if an amendment was agreed to unanimously it was inserted. If an amendment was seriously objected to, even by a small minority, it was not pressed. It was considered that if any amendment was introduced which any member would feel it his duty to oppose in committee of the whole house, it would be equivalent to throwing the Bill out for the session. As I have no doubt you know, when a Bill has been amended by a select committee, it nevertheless has to go through committee of the whole house, and be passed clause by clause. In the over-crowded state of the order book last session it would have been quite impossible for a Bill, in which even one or two clauses were opposed, to get through the Commons. The most important amendment made by the select committee was the extension of the Bill to Scotland. As the Bill was originally drafted it did not apply to Scotland, and for this reason on several small points Scotch law differed from English law, and therefore a Bill which was mere codification would not apply to both countries. The Scotch Banks thought it would be beneficial to have one and the same law for both countries. Mr. Dove Wilson, the Sheriff of Aberdeen, an eminent Scotch commercial lawyer, drew up a memorandum on the points of difference between English and Scotch law relating to bills. The memorandum was printed and circulated among the select committee. It was found that, with one or two exceptions, the differences were confined to small details. Mr. Dove Wilson attended before the committee, and gave evidence

strongly in favour of the extension of the Act to Scotland. On one or two points the Scotch rule has been adopted as being more convenient than the English. On other points the Scotch gave way. In one case alone has the divergence been kept up, namely, in Section 51. That section preserves for Scotland the old Scotch rule, that a bill of exchange operates as an assignment of funds in favour of the holder from the time when it is presented to the drawee. The English bankers and merchants were not prepared to accept this rule, even though its adoption was recommended by the Royal Commission of 1855. On this point, then, each nation retains its own rule; but otherwise there is now one and the same law as to bills, notes and cheques throughout the United Kingdom. The Solicitor-General for Scotland took charge of the amendments consequential on the extension of the Bill to Scotland, and, I believe, that in this he had the assistance of Mr. Dove Wilson. The extension of the measure to Scotland necessitated a good many changes of phraseology. It was found that several words used in the Bill which had no technical meaning in England had a technical meaning in Scotland different to their ordinary meaning in England For instance, it was found the expression "to charge a party" (e.g., drawer or indorser) had a technical meaning in Scotland; and therefore throughout the Bill the expression "to render liable" had to be substituted for the expression "to charge." Several other consequential changes of this kind had to be made. These changes, of course, have not improved the Act as a piece of drafting. Several words or a phrase have had to be introduced where one word formerly sufficed. But this is a very small matter as long as the language of the Act is intelligible. When the select committee had finished their labours, Sir Farrer Herschell made their report to the House, and Sir John Lubbock carried the Bill through the further stages of committee and report. I venture to think that the main reason why the Bill met with no opposition or adverse criticism was the confidence accorded by the House to a measure vouched for by Sir Farrer Herschell and Sir John Lubbock, and for which they made themselves responsible. Lord Bramwell took charge of the measure in the House of Lords. Lord Bramwell, who, as I have no doubt you know, was a great com. mercial lawyer and judge, began life as a banker, so that nopeer could have been better qualified to take the Bill in charge. On the second reading in the Lords the Bill met with an unexpected check. The Lord Chancellor did not think it right that so important a law Bill should pass through the Upper House without being carefully examined and scrutinized by the law lords. He accordingly proposed its reference to a second select committee. At that late period of the session this seemed equivalent to the loss of the Bill. It was represented to the Lord Chancellor that great labour had been bestowed on the Bill in the Commons, and that those who