going to the registry to get your facts. It remains that the two forms of partnership remain side by side, outwardly indistinguishable, because you have to go to some other source to distinguish them. Another remark that was made was that the main objection to registration arises from the fact that some dishonest idea subsists in the persons objecting that they want to obtain credit from the public on the assumption by the public of a state of facts which does not exist. That is a point I have drawn attention to in my paper. I think I need not say anything more on that point. The gentleman who spoke last in the discussion-Mr. Nesbitt-and who gave us such a clear exposition of the system of partnership existing in France, stated, among other conditions of French partnerships, that it was required of a société anonyme that one-half of the capital should have been called up before the business of the company was commenced to be carried on. I should like to have given him an opportunity to say whether in France a method of evading that provision is practised in the way which is commonly used in England to evade a similar provision. As you know, railway companies are required to make preliminary deposits in this way; and I believe that provision is commonly evaded by borrowing the money. It is not the money of the company that is deposited; it is no real security. Supposing creditors come and say, "We claim this deposit," the answer will be, "Oh! no; this is money of some other person." That is a distinct evasion of the rule, and one which is said to be commonly practised by railway companies. This speaker also mentioned the French provision that first signers of a deed of partnership or memorandum of association remain liable until the whole capital has been subscribed. Since speaking he has told me that these first signers only remain liable in respect of the shares signed for. I think that that severe provision would almost be too great a deterrent to employing capital in such partnerships at all. If there is express legislation that first signers and their successors are to remain liable in this way, surely it would be difficult to find persons willing to undertake this indefinite liability, and that, of course, must be a great deterrent. I think those are all the points on which I have any remarks to offer in reply to what has been said during the discussion.

The PRESIDENT: I have to ask you to join me in thanking Mr. Malleson for the paper he has been good enough to read to us, which I am sure you will all do; I can only repeat it is a very interesting subject, and one which will have to engage the attention of the Institute on a future occasion. We will now adjourn the meeting to Wednesday, 16th January next, when a paper will be read by Mr. Henry C. Burdett, on "Local and Municipal Loans."

ИОГРО

THE NATIONAL DEBT ACT, 1883.

(Second Notice.)

In a previous memorandum (Vol. IV., p. 516) it was shown that the immediate effect of carrying out the provisions of this Act had been to cancel during the current year permanent annuities to the amount of £70,241,908

...

...

...

...

0 0

...

5,195,545 1 6

6,949,209 0 0

It was also shown that terminable annuities, the
major part expiring in 1885, had been can-
celled to the amount of
And that fresh terminable annuities of longer
date had been created to the amount of
Of the above amount of permanent annuities
cancelled, £40,000,000 belonged to the Pay-
master General, for the time being, on behalf
of the Court of Chancery, and £2,665,835 of
the fresh terminable annuities were created
in exchange for this stock. Under the pro-
visions of Section 9 of the Act, £1,465,835
of this annuity will be accumulated by the
purchase of permanent annuities to replace
those cancelled, and assuming, as is sufficient
for the purpose of this memorandum, that
these purchases will be effected at par, the
effect of this operation will be the withdrawal
from the Stock Market, by gradually increas-
ing half-yearly instalments, commencing in
the present year at £732,917, during the
next twenty years of an aggregate amount of
permanent annuities of
In the same manner, that portion (£2,692,743)
of the terminable annuities of £3,600,000,
held by the National Debt Commissioners on
account of Savings Banks, which is a repay-
ment of principal will be available for rein-
vestment; and, although not to the full
extent subject to the inflexible rule that is
applicable to the annuities belonging to the
Chancery Paymaster, the provisions in para-
graph 4 of Section 2 of the Act, will necessi-
tate the accumulation of very large amounts
of permanent annuities to provide for the
successive creations of fresh terminable
annuities, and this stock will most probably
be obtained by the periodical investment of
this portion of these annuities.

...

...

...

40,000,000 00

...

The first series of these annuities, amounting to
£1,200,000, will expire in 1888, when an
annuity for fifteen years, of an amount
equivalent to the expiring annuities, with the
addition of a sum equal to the annual
interest on the perpetual annuities converted
into the new annuity, will have to be created.
Allowing interest at three per cent., and
taking the price of stock at par, the amount
of this annuity will be £1,875,696, and the
amount of perpetual annuities that will be
cancelled by the conversion will be...
In 1893, on the expiration of the second series
of annuities for £1,200,000, this operation
will be repeated: a second annuity for
fifteen years of £1,875,696 will be created,
and a second amount of permanent annuities
will be cancelled
In 1898, when the third series of annuities for
£1,200,000 will expire, the operation will be
again repeated, and a third annuity for
fifteen years of £1,875,696 will be created,
and a third amount of permanent annuities
will be cancelled
Finally, so far as the provisions of this Act
extend, there will be created in 1903, on the
expiration of the first annuity of £1,875,696,
another annuity for fifteen years of
£2,931,863, and permanent annuities will be
cancelled by this conversion to the amount
of

...

...

...

...

...

...

...

...

...

...

22,523,207 00

22,523,207 00

22,523,207 0 0

35,205,576 00 £102,775,197 0 0

Thus assuming the price of stock at par, and apart from any operations that may be necessary under the provisions of Section 4, to prevent loss or gain to the Commissioners of the National Debt or the Paymaster-General for Chancery, there will be cancelled under the provisions of this Act alone £173,017,105 permanent annuities, and of this sum upwards of £100,000,000 will have to be supplied in one form or other by the market during the next twenty years, in addition to the £40,000,000 mentioned above, that will be purchased on account of the Paymaster-General for Chancery during the same period.

It is further estimated (Parliamentary paper, No. 270, 23rd July, 1883) that about £50,000,000 of permanent annuities will be cancelled

C

during the same period by the action of the New Sinking Fund, and by means of the money paid for the purchase of Life Annuities, for the redemption of land tax and other purposes, and in this calculation no allowance has been made for the effect of any surpluses of income over expenditure constituting the Old Sinking Fund.

The following table shows the amount of the terminable annuities that will be held by the National Debt Commissioners for the Savings Banks during each epoch of the conversion with the proportion of such annuities that will be applicable as interest and for re-investment respectively :

Applicable as
Interest.
£

Repayment of
Principal appli-
cable for
re-investment.
£

Total of
Annuities.

£

There is one other, merely temporary, effect of the action under this Act that it may be useful to mention. The new terminable annuities that have been created do not all of them become due at the same dates, as the dividends and payments on the permanent and terminable annuities that they have replaced did. This has, to some extent,

altered the incidence of the permanent charge of the debt, and is the explanation of the decrease in this item in the published accounts of the public income and expenditure for the last month or two as compared with the corresponding period in 1882.

THE BANKRUPTCY ACT, 1883.

The following letter has been received from a Fellow of the Institute. The Council, considering the points raised therein of great importance to bankers, decided to take the opinion of counsel on the subject. The case, founded upon the letter, and the opinion of counsel thereon, are here given.

"I think that the attention of your Council should be called to a clause which was introduced into the Bankruptcy Bill at the instance of Mr. Cohen, Q.C., which will have a most important bearing upon the relations of bankers to their customers. I refer to the new act of bankruptcy created by sec. 4, sub-sec. h, by which it is enacted that if a debtor gives notice to any of his creditors that he has suspended, or is about to suspend payment, he is guilty of an act of bankruptcy. The effect of this clause upon the debtor himself is immaterial, but, as you are aware, any creditor who obtains security, or makes advances to a debtor after he has notice of an act of bankruptcy, will (if the debtor becomes bankrupt, or rather, if a receiving order is pronounced against him within three months of such act of bankruptcy) lose his security, and the debt, by sec. 37, sub-sec. 2, is declared to be not provable in the bankruptcy. Consequently, if a debtor says to his banker, or if he says to anyone else, and it comes to the knowledge of the banker, "I am going to suspend payment," and next day says that he has arranged his affairs, and that he is not going to suspend, the banker will forfeit any security which he may acquire, and will be debarred from proving

for

any debt which may be incurred within three months, if within that time the debtor becomes bankrupt. The notice need not be in writing, and according to Robson (page 470), a notice given to an agent of a corporate company will be held to be notice to the company itself, so that if such a notice is given to a branch manager of a bank, it will affect all the dealings of the bank at all its branches. The prospect of litigation as to whether such notice was given or not, and the injustice which may thereby be created is, to my mind, so alarming, that I think the matter is one which deserves serious consideration at the hands of your Council."