Page images
PDF
EPUB

THE BANK OF ENGLAND.

England, 63 banks. All these are enormous concerns, almost all of them in 1920 (the year of those figures) holding individually over 300 millions deposits against the Bank of England's 125 millions. The Midland Bank, indeed, is now announcing by way of advertisement that its present resources are 400 millions. The Bank of England, therefore, has lost some of its pristine glory, and its officials (whose communications have invariably the civility of an Act of Parliament) have less reason than formerly to knock their sublime heads against the stars when approached on the Bank's business.

It will be readily admitted that there is something steadying in the contemplation of an institution which does not perceptibly yield to change, for few things in human experience do not sooner or later succumb to that all-devouring element. "The old order changeth, yielding place to new" is as true as ever. Everything passes or alters with the certainty of inevitability—that is, nearly everything. For the institution whose name heads this paper appears in its dealings to retain from decade to decade its known character of inflexibility. It is true it is but the creature The writer, acting on behalf of trustees, had of yesterday compared with the Great Pyramid lately a tiny transaction in 5 per cent. War of Ghizeh, but in its time its methods have Stock. The stock was bought by them a year probably varied as little as has that renowned or two ago and stood in the names of three monument in appearance from the desert gentlemen, the certificate issued by the Bank sandstorms. One cannot therefore refrain bearing that they were trustees for a lady from a certain meed of admiration for its en- named. Part of the money being required for during character amidst so much that is a trust purpose, so much of the stock was sold evanescent and perishing. But if one might and transfer was made out in the three trustees' dare animadvert-even in a quiet way-on names as granters, but it turned out that one some of its characteristics, it may appear to of the trustees (unknown to the agent) had gone reflective and not unfriendly minds that some abroad, and the signature of the other twochanges would neither be prejudicial to itself the majority-could only be got. This was nor injurious to the country at large. explained to the Bank, as was also the fact The Bank came into being in the year 1694, that the trust deed contains a clause specially when William III. was King. His Government authorising a majority of those acting and needed a loan of £1,200,000, and this was sub-resident in Great Britain to transact all trust scribed in about ten days, the subscribers business. The provision in the Trust Act of nominating a Governor and Deputy Governor, and the first twenty-four Directors, who were men of high mercantile standing, were elected immediately thereafter. After some transitions the foundation-stone of the existing building was laid in 1732, and, in fine consonance, the Bank has continued on the same site ever since, though the building has of course been extended and enlarged, its existing shape having been evolved somewhere about the beginning of last century. Having been entrusted with the management of the National Debt and made the Government banker, the Bank soon attained a remarkable pre-eminence. Restrictions against starting other banks were enacted, and these were only tardily if gradually relaxed. Latterly, the tendency has been towards huge amalgamations of banks. For example, the London County Westminster and Parr's Bank Ltd. (now known simply as "The Westminster Bank"), which was started in 1834-6, now represents with affiliations some 60 banks; the London Joint Stock City and Midland Bank Ltd. (now more simply known as "The Midland Bank "), established in 1836, 65 banks; Lloyd's Bank Ltd., originating about 1765 but incorporated in 1865, 119 banks; Barclay's Bank, becoming incorporated in 1896, 102 banks; and the National Provincial and Union Bank of

1921 (section 7), authorising trustees to act by a quorum, was also quoted. But all in vain. The answer, like an edict, came : "Transfers of British Government Securities inscribed or registered in the books of the Bank of England are governed by the National Debt Act, 1870, and Acts amending that Act and Regulations made thereunder. The Bank are. aware of the terms of the Trusts (Scotland) Act, 1921, but the provisions of that Act do not override the provisions of the National Debt Act, 1870, and amending Acts.

[ocr errors]

The Bank are, however, authorised under section 4 of the Government Stock Regulations, 1918, made under the Finance Act, 1917, to permit stockholders to act by a majority in transferring stock, but before they can act on a transfer deed signed by a majority of holders they must first be furnished with a request made on the prescribed form under the signatures of all the stockholders in the account.

[ocr errors]

So far as the Bank are concerned, the holding in question stands in the joint names of (naming the three gentlemen) in their individual capacities. It is true that they are described in the account as testamentary trustees of Mrs Blank, but in this connection I would refer you to section 37 (2) (b) of the Act 7 & 8 Geo. V. cap. 31."

[ocr errors]
[ocr errors]
[ocr errors]

A few observations will now be offered on the remainder of the Bank's deliverance.

Government stock, be affected with notice of any trust, or of the fiduciary character of any stockholder or of any fiduciary obligation attaching to the holding of any Government stock."

66

[ocr errors]

66

The middle paragraph may first be noticed. The Act of 1917 does certainly allow stockholders whether or not trustees to act by a majority provided a request" in the prescribed manner is made by all of them. An appropriate form it is understood may be had from The above provisions are contradictory. the Bank on application. But who in Scotland Thus by (a) trustees who hold Government is likely to know about this, unless a special stock are debarred from acting otherwise necessity emerges as in the case under remark? than in accordance with the rules of law applyThe will and our Scottish Trust Act of 1921 ing to the trust and the terms of the instrusay emphatically that a majority of trustees ment constituting the trust." Now, when they may act for the whole in all trust matters, propose to act in accordance with their trust, but the Bank officials say-not in the stocks .e. to operate by a quorum, the Bank demur, with which it has to do, without some further though it has accepted the trustees as stockformula. This, to say the least, seems as holders, and takes refuge in (b), which upsets hypercritical as it is tantalising. In the case (a), by declaring that the Bank is not to be in question, the amount involved was trifling, affected with notice of any trust. It is altoand the difficulty can otherwise be easily over-gether a pretty muddle and naturally calls for come; but, if the transaction had been large, regulation or revocation. Now, were there the consequences of the Bank's refusal to not during the War frequent urgent appeals recognise one of the fundamental rights of a to trustees to put every penny of their funds Scottish trust might have been serious. The into Government stock, circulars even accominterjection of such a silly embargo on statutory paying the dividend warrants urging the rights of trustees provokes resentment, and as desirability of sinking these in stock instead of it serves no useful purpose should be instantly lifting them? The Government indeed went withdrawn or abandoned. the extraordinary length of empowering trustees, notwithstanding the terms of the trust deed (subject to certain notice to beneficiaries interested in the income (section 35 of the same Act)), to borrow on the investments held by them and invest the money so raised in any Government loan, which authority was accompanied by a drastic indemnity clause keeping the trustees free from responsibility for any loss the trust might thereby sustain. That, to say the least, looked like an open invitation to break the law, or commit a breach of trust. The writer never heard of any trustees who availed themselves of that power, but it shews the encouragement trustees had to invest in Government stocks, and have their names as such entered or inscribed in the Bank of England; and now to be coolly told by that institution that it is not affected with notice of any trust rather uproots confidence in Government dealings. One indeed sometimes wonders whether our Scottish members of Parliament, and especially our law officers, take any adequate interest or any real interest at all in the adjusting of the legal measures promoted for Scotland, so much of these in recent times being turgid, obscure, ambiguous, and even contradictory in terms. The Bank, as will have been noticed, refers also for authority to an Act of 1870, a modest period of fifty years back or so, and the actual perusal of that Act, the writer hastens to say, as it was contrary to his expectations, has been quite refreshing. It contains seventyfour sections, many of which are only two lines in length and none are long, and the diction generally is sun-clear. Why cannot we have

[ocr errors]

In days past, the Bank did not recognise trustees, stockholders being entered in the Bank's books as individuals. By the Act referred to in the concluding paragraph of the letter (7 & 8 Geo. V. cap. 31, section 37), the Treasury in conjunction with the Bank were empowered (subsection (1)) to make regulations facilitating dealings with Government stock and especially" for enabling stockholders to be described in the books of the Bank as trustees, and either as trustees of any particular trust or as trustees without qualification, and for authorising the Bank to act on powers of attorney granted by stockholders so described." This, unfortunately, is not a positive enactment in itself, but only an authority to make regulations," although by subsection (2) such regulations so made are declared to have effect as if enacted in the Act, provided that (a) nothing in any such regulations shall as between any trustees or as between any trustees and the beneficiaries under a trust be deemed to authorise the trustees to act otherwise than in accordance with the rules of law applying to the trust and the terms of the instrument constituting the trust, or affect the mutual rights of joint stockholders," and (b) (the Bank founds especially on this)" neither the Bank nor any persons acquiring any interest in any Government stock shall by reason only of any entry in the books of the Bank in relation to any Government stock or any stockholder, or of anvthing in any document relating to

[ocr errors]
[ocr errors]

66

such perspicuous Acts now? Is there no one left in the London office where Parliamentary Bills are framed who can write simple and intelligible English? If not, as Scotsmen fill many of the highest offices in the Church and State south of the Tweed, another should on the next vacancy be given a trial as Bill draftsman.

Another regulation of the Bank for the attestation of documents runs thus: "A 'credible witness' is required to each signature, who must state his Quality, Profession, or Occupation, and give a permanent address. He should be a person of known position, such as a Magistrate, Justice of the Peace, Solicitor, Clergyman, or Registered Medical Practitioner; or failing that, a householder."

[ocr errors]

66

[ocr errors]

The capitals and the English are the Bank's. The witness "must" evidently be a male, and "of known position," the very lowest qualification being a householder." Now, for every attestation made by a male, it is thought there cannot be less than three made by females, widows, spinsters, typists, clerkesses, shop assistants, servants,-all non-householders more frequently than men playing the part of "" credible witnesses, and mirabile dictu the Bank accepts their signatures as sufficient in actual practice. It is all very amusing if it were not so irritating to stockholders in country districts and elsewhere, who rush here and there and often far afield for the signature of a "male person of known position." The injunction being a dead letter, the Bank ought to cancel it, as also the prohibition against a husband or wife of a stockholder being a competent witness. A wife in Scotland may competently act, and she often does act, as a witness to her husband's signature; and, if she is not benefiting under the document, it is difficult to see why her signature should not be held sufficient.

[ocr errors]

While the suggestions above made if carried out would be a great convenience and comfort to the public and the legal profession, the writer can have no hope of these being given effect to, unless the Law Societies become interested and bring pressure to bear at the proper time on our legislators. The Bank is so entrenched in Use and Wont, so conservative and unyielding in its attitude, that ordinary appeals for relaxation of formalities resemble in their futility the famous Spanish Don's "tilting at windmills." It would be a brighter day for "puir auld Scotland" if this overweening Bank would recognise that it is not so much" The Bank of England" as "The Bank of Great Britain.'

D. M. G.

THE LAW COURTS OF ANCIENT EGYPT.

By AN UNADMITTED MEMBER OF THE CONSTANTINOPLE BAR.

Wonderful light is now being cast upon ancient customs among the Egyptians in the times of Tutankhamen by the recent discovery of His Heavenly Excellency's tomb with all its records of contemporary life in stone, metal, and wood. Through the courtesy of one of the talented members of the Byzantine school of archeologists, some studies, in particular of the legal life of Thebes, can be usefully reconstructed. Verily, little is new under the sun!

It seems that the Egyptians had many activities in trade and otherwise, not only among themselves but with the other peoples of Africa and with Asiatic nations as well as with Greece and the Levant. A system of law was early developed. The Supreme Courts of Egypt, which sat under the Old Empire in Memphis and in later days in Thebes, occupied the services of some twenty judges. Just as in modern countries, there were judges of first instance and then benches of appellate judges. All the judges appear to have been, more or less, profound lawyers. Some of them were really magnificent jurists. Their sphinx-like portraits indicate the dead silence with which they listened to arguments. No one could enter their Courts and find, as one might do to-day in France, that the only one not speaking was the man apparently addressing the Court, while all the other members of the Bench and of the Bar engaged in the debate before them were indulging in a sort of "cross-country" conversation. Judicial

66

[ocr errors]

bear gardens" were unknown, it would seem, in ancient Egypt. It is rather interesting, again, to see from these drawings the heavy "falls" of the judges as worn wig-fashion. The originator of the occidental full-bottom wig must have got his idea from these dignified "creations of the Egyptian "Ravenscrofts." It is equally clear from some of the pictorial representations of Court scenes that the Bar of those days was composed of very fine men, classic in bearing, and skilled in all the arts and artifices of advocacy. The use of mere Old Bailey trickery of Victorian days seems, however, to have been scorned. But one gathers that jury counsel, particularly those endowed

with wit, made enormous incomes. In the hands of such pleaders juries were as reeds. So much was this the case that the judges found no little difficulty in charging for right verdicts. From an entire absence of women in any bas-relief or other presentations of trials, it is evident that

the judges must have suffered a lack of assistance employer, or client, and that all bargains, by their exclusion from the jury box. Their dating from that period, tainted, be it ever so views of life and their sensible ways of pressing little, with any such oleaginous matter should them were just as sane then as they are now. With their participation, British jury trials have been rescued in our day from the contempt into which they were fast falling before the advent of sex equality reforms. My faith asserts the pre-eminence of men ("The

Koran," c. iv.).

[ocr errors]
[ocr errors]

66

[ocr errors]

Now here the bas-reliefs in the

be held as void. This Edict had splendid results. The Egyptians of all classes, or practically all, became known as the most scrupulously honourable people in the Old Even their cooks were World. good in other than the merely church-going sense of a great modern caricaturist. Consequently, in To return to the drawings, it is singularly domestic and other spheres, prices of comimpressive to see the alert figures that surround modities were reasonably low. To stand by the barristers. From the bundles or scrolls the same illustration, chefs resented any of papyri in their hands or under their armpits, attempt at "loading" the accounts of their it is easy to see that these are solicitors and not masters, whether attached to the Pharaonic of the capital. Knowing the history of the House or not. But somehow or other, men last days of the Empire, you can tell the of the law, agents, doers, factors, or solicitors, Metropolitan solicitor. The Theban attorney as they variously styled themselves, and men then developed a go-as-you-please style of dress otherwise of very high principle, said this that would not be tolerated to-day in Lincoln's Edict could not apply to them in view Inn Fields, Chancery Lane, or the City, or of the very special privilege extended to even in the famous Parliament House of them of old time and not thereby expressly Modern Athens. The men from cities such recalled. So they appear to have been the as Coptos or Pelusium are evidently very only class maintaining their right to stand prosperous. Their dash and cut shew that outside it. Naturally, every other class they are big men. It appears from Phylli- wondered. more's "Ancient Attorneys" that the pro- antechamber of Tutankhamen's sarcophagus vincial solicitors of Egypt, through association appear to us very striking in their subtle with some of the Israelites, had become very depiction of a final adjustment of accounts in astute. In the reign of a somewhat "soft" but former reigns between lawyers practising in the "good God," and, demotically considered, well- Supreme or High Court, or, as we would say beloved predecessor of Tutankhamen, they had in Stamboul, their country correspondents. prevailed upon his young but brilliant vizier The pictures even as drawings are, indeed, of or attorney-general to grant them the privilege telling beauty. The beaming client is seen "royal and honourable"-so ran the grant receiving with fine complacency an oyster of sharing fees" with their Theban corre- shell of apparently "ripping or, to spondents. Translated into prosaic English, a phrase current in English novels, "pricethis seems to have involved something in the less " value. But what the simple-minded nature of secret commissions or, as we say in client does not seemingly see, is the chain the East, "baksheesh." In England to-day, of golden coins passing behind his back London attorneys and their provincial corre- and that of the Theban solicitor to his prospondents pool " their fees. Whether this vincial friend with a check or tally in curious be a good or a bad practice, every client knows hieroglyphics to the effect that this is the sum of it and he does not suffer by it. Turkey of a secret commission allowed by law." will not always be unregenerate in this respect. The old records of Egypt, as scathingly noticed In Scotland, it is understood, that even by Herodotus in one of his little-known this practice, consulting Phyllimore's "Law of essays, remind us that some legally corrupt Solicitors," his last work, vide p. 382, is altogether practice reduced the lawyers of Thebes to the unknown. To our modern eyes, and speaking helot position of mere hewers of wood and as one not a little in touch with bankers, apart drawers of water, and that, in the reign of the from an overdraft, such a practice as was in notorious Sebek-hotep V., they got the name of vogue in ancient Egypt seems very strange. Assouaned conduit pipes," as mere channels Tutankhamen himself, advised thereto by for the conveyance of truth and fiction from, and his vizier, the learned and quaintly Frie, | to, men at the Theban Bar. There can be no published an Edict in the fifth year of doubt now that this must have been the sinister his reign to the effect that from and after practice Herodotus had in his mind. It is true the second month of the Inundation, being that long after Tutankhamen was gathered to his season of Spring, no one in all the fathers in the Valley of the Kings, an agitation Royal Dominion should take or offer bribes, arose among the provincial lawyers themselves tips, or even "oil" of any kind, palm "for the removal of this blot on their otherwise or other, behind the back of the master, stainless profession and honour. A contemporary

our

[ocr errors]

66

66

66

66

66

[ocr errors]
[ocr errors]
[ocr errors]
[ocr errors]

use

[ocr errors]

of Cyrus issued his royal proclamation that all lawyers had surrendered their exclusive right to secret" commissions. All over the country the profession of the law rose at once in the confidence of all the people. It was regarded as particularly fine that such a pestiferous evil had been removed by the insistent voice of front-rank lawyers and men of honour and leading in the great provincial cities. Some of these neither asked nor accepted at any time "legal" bribes for the introduction of their clients' business. The Theban solicitors themselves breathed a purer air. Not a few of them had never bowed the knee to Baal. To signalise the event, a brilliant shower of decorations was bestowed on such as were disappointed in being bereft, against their will, of so ancient a privilege. The lawyers who actively procured its abolition shone, and still shine, as the stars in the Egyptian firmament. They needed no decoration. For their whole body aggregate, the right was earned to use for all time some mystic letters after their names denoting their membership of the Faculty of Holy Scribes. It is sad to find from a Coptic writer that their excellent library was burned by the same fire that in 47 B.C. destroyed the famous and first Alexandrine Library. EFFENDI FAIK.

[The works attributed by this writer to the authors mentioned by him in the article cannot be found in any British library of reference. The reader must draw his own inference as to their authenticity. His historical oriental and occidental accuracy is also doubtful, ED. S.L.T.]

TAX DECISIONS AND LIFERENTERS'

RIGHTS.

Two very recent decisions regarding supertax deserve consideration for the bearing which they may have upon the rights of liferenters of trust funds. It is true that no question between liferenter and fiar arose in either case, but in both cases the issue was income or capital. The cases are Inland Revenue V. Forrest in the Second Division of the Court of Session, decided on 26th February last and reported in 1924 "Scots Law Times" 356, and Inland Revenue v. Burrell in the English Court of Appeal, decided on 4th April last and reported in 40 Times Law Reports 562. The Scottish case related to apportionment when stocks are purchased cum div. The English case related to a company's undistributed profits existing at the date of liquidation, carried into the general fund, and distributed by the liquidator in the form of "dividends upon the shares. These are just the kinds of circumstances in which troublesome questions are apt to arise in the administration of trust

[ocr errors]

estates as regards the substantial rights of a liferenter or liferentrix.

The

In. Forrest's case the subject of sale was 100 £10 shares in a company whose practice was to make up accounts to 28th February in each year and to declare and pay a dividend on 13th May of the same year for the year to 28th February preceding. The sale was made on 25th November 25th November 1919. The price was £1050, and the missives expressly bore, "the odd £50 being to cover the portion of dividend accrued to date"; that is to say, the one-half, corresponding to the period between 28th February and 25th November 1919, of a 10 per cent. dividend, free of tax, for the company's financial year ending 28th February 1920, which it was expected would be declared and paid in May 1920. That expectation was realised. A dividend of 10 per cent. on the £1000 is £100, and £100 free of tax, when tax is 6s., is approximately equal to £142 gross, and it was so taken in the case. Accordingly that makes the £50 equal to £71 gross. purchaser received the full year's dividend in May 1920, and the question was whether he was bound to bring into his super-tax account for 1921-22 the whole £142 or only £71. He claimed that he should bring in only £71, being in effect the part of the dividend accruing between the date of his purchase and the close of the company's financial year. He maintained that he was entitled to exclude the £71 corresponding to the first half of that financial year, on the ground that to that extent the dividend had been purchased by him with his capital, and that to the same extent it was accordingly capital and not income in his person. These arguments were sustained by the Special Commissioners, but their determination was reversed by the Second Division. The grounds of reversal were practically just the arguments used by the Crown, namely, that the dividend was not purchased, as there was not in fact at the date of the purchase any dividend declared which could be purchased; that what was purchased was the shares themselves, these being valued by the parties above par on account of the possibility of a dividend being declared; and that the whole transaction was simply a capital transaction.

There was agreement that the special reference in the missives to "the odd £50" did not affect the merits of the case. The following quotations from the opinions are important and sufficient. The Lord Justice-Clerk said:

The respondent's contention involves that the sum payable by way of dividend in May 1920 upon these shares, a sum prima facie consisting of the income upon the shares, changes its character as by the touch of a conjurer's wand and becomes capital, simply and solely because of the enhanced price

« PreviousContinue »