Evidences, 1882: Mr. Henry Longley

THIRD DAY. Wednesday, 22nd March 1882.

Present:

The Right Honourable the EARL of DERBY, Chairman.

His Grace the Duke of Bedford, K.G.

The Right Hon. Lord Coleridge.

The Right Hon. Sir Richard Assheton Cross, G.C.B., M.P.

Sir Nathaniel M. De Rothschild, Bart., M.P.

Sir Sydney H. Waterlow, Bart., M.P.

Mr. Walter H. James, M.P.

Mr. Pell, M.P.

Mr. Thomas Burt, M.P.

Mr. H. D. Warr, Secretary.

Mr. Henry Longley called in and examined.

Mr. H. Longley. 22 March 1882.

299. (The Chairman.) I need hardly ask you whether you are a Charity Commissioner?—I am.

300. How many years have you held office ?—Nearly eight years; I was appointed in 1874.

301. You have, in your official capacity, had dealings with various amongst the City Companies?—With some.

302. We understand the Companies are bound, under an Act of Parliament, to submit an account of their expenditure on charitable purposes yearly to the Charity Commissioners?—They are.

303. Has that Act been complied with?—Yes, it has with more regularity than is the case in most other charities. I have got a paper here which shows the dates of the latest accounts which we have received from the Companies, which will show that they are not far behindhand. The accounts appear to have been all rendered for the year 1880, with only two or three exceptions, and a considerable number for the year 1881; and when I say that they have been rendered for the year 1881, that is really more than they are bound to do, because they are not bound to return the accounts till the 25th of March 1882, so that this is what we should consider a very good state of accounts.

304. On the whole you consider that they have discharged their duty under the Act in a satisfactory manner?—So far as rendering accounts is concerned.

305. Do you require the production of vouchers, or do you in any way verify the statements which they make to you?—No, we do not. I should be glad to read a passage or two from the earlier reports of the Commissioners upon that subject, because there has been a good deal of misapprehension in the public mind as to the duty of the Commissioners in that respect. In the 14th Report of the Commissioners, for the year 1866, we say that certain advantages which have been stated are all "secured without any general examination or central audit of all the accounts in our office. The Charitable Trusts Acts do not prescribe, nor as we think contemplate such a gigantic operation, for which, moreover, the existing establishment and machinery of our office would be utterly inadequate. In all necessary cases, however, the accounts are subjected to a rigid examination under our direction." I cannot answer your Lordship's question better than by quoting that.

306. I understand it to mean that you do not insist upon the production of vouchers or go into the question of accounts in general, but that you would do so if you thought there were special reasons calling upon you to do so in any particular case?—Yes; and I should be glad to add that we do not institute an examination of all the accounts that come to the office by any means. A Bill was before Parliament last year for enabling us to institute an effectual audit of those accounts, which Bill did not become law.

307. Taking such a case as that of a school or any building for charitable purposes being erected by a Company, in compliance with a charitable bequest, out of trust money, would you be bound to satisfy yourselves that all the trust money authorised to be spent upon the building had been so spent, or would you take the statement as you received it?—I had better describe our practice in that matter. The Companies, like other trustees of charities, have no power to expend capital without our sanction; they must come for our sanction for the expenditure of capital, and we should require certificates from the architect that the amount was required. So far as the capital was in the hands of the Company, unless our attention was specially directed to any suspicion of anything being wrong, we should take it as your Lordship puts it.

308. In cases where the charity takes the form of pensions or gifts, I presume you have no power to satisfy yourselves that the persons receiving those gifts are in a condition to require them?—If we were informed or had reason to believe that the Company were not fulfilling their trust, we could send an inspector and inspect the mode of administering it; and if after inquiry it appeared to us that the Company were not discharging their trust, we could ask them to apply to us for a scheme, and if they did not do so, we should certify a case to the AttorneyGeneral, who would bring it before the Court of Chancery in order that a scheme might be made compelling strict adherence to the trust.

309. But you would require to be set in motion by some complaint or appeal made to you?—Yes; we have no means of ascertaining more than that. The charities of the country are too numerous for us to be always inquiring into them; our attention is directed in a great many different ways to abuses in charities.

310. Are you aware of any cases in which a Company having trust money in its possession has diminished in numbers and finally broken up?—I am not aware except from reading papers furnished to me by the secretary of the Commission. We have no information as to Companies other than as trustees of charities.

311. Then it would be a purely hypothetical question to ask you what means you would adopt for the protection of a trust estate in such a case?—I have no experience.

312. It is a case which has never arisen?—It is a case which has never arisen. The small Companies have in some cases no trust estates; it is usually the large Companies that we have to do with.

313. Are you aware that the trust estates and corporate estates of a Company are very closely connected?—Yes, they are no doubt.

314. In many cases we have been given to understand that the charities which are trusts are rentcharges upon lands which are the property of the Corporation?—Very frequently.

315. In such a case would you have any power to interfere to prevent the land being sold?—No. The land in such a case would be vested in the Company subject to the charitable trust affecting the whole land, that is subject to a rentcharge in the way in which any land may be subject to a rentcharge.

316. Then if the land were sold the rentcharge would remain upon the estate?—Yes; if the land were sold the rentcharge would remain upon the estate. Of course there is a great risk of a rentcharge being lost in such a case, and numberless cases come before us in which rentcharges have been lost. It is a most precarious kind of charitable property, and one which we try to get commuted into capital.

317. Can you state of your own knowledge whether it has happened that when money has been left to Companies in early times, to be invested in land for charitable purposes, the Companies have not been able to point out to the Commissioners the land so purchased, or to show that the trust to buy land had ever been executed?—I believe that to be the case. I have not in my mind any particular case, but I have a strong impression that cases of that kind can be found.

318. I presume that that would only apply to trusts where the money had been left at a very remote period?—Yes, I think so. Trusts in the last century there would not be much difficulty in tracing, as far as my recollection goes.

319. I will put a more general question to you. Can you state your impression of the manner in which the Companies, generally speaking, have discharged their duties as trustees?—I have only experience of a limited number of Companies; and in regard to those Companies I should say that they have been exceedingly liberal in their administration of the trusts, and in many cases, which are already known to the Commission, they have subsidised the trust funds, in many instances very largely, out of their corporate income. On the other hand, our experience is that their administration of the trusts has been on a very generous scale as regards expenses, almost lavish in some cases.

320. They have been liberal in increasing the trust funds where they were deficient, but they have not been very economical in their administration of them? —No, not in the management.

321. Have any questions arisen with regard to the Companies' trust estates; questions affecting the proprietary right between the Company and the trust?— Very frequently.

322. Are you of opinion that in such cases loss of trust funds has been caused by such legal difficulties as you have referred to?—I have a case here which I think the Commissioners are aware of, but it is stated in a very compendious form in the Report of the Schools Inquiry Commission, in which it is obvious that a very considerable loss had been sustained in consequence of a particular view, which ultimately turned out to be the right one, not having been taken by the Company. (fn. 1) It is the case of the Drapers' Company, Howell's Charity; the reference is the 20th volume of the Schools Inquiry Commission Reports, page 154, and there it is stated that the charity was founded by Thomas Howell in 1540, who left to the Drapers' Company 12,000 ducats for providing certain yearly portions and so forth; and in 1559 the Court of Chancery ordered the Company, the income being 105l. a year, to deduct 21l. for expenses, and to pay the remaining 84l. to the four orphans, whose connexion with the founder was to be ascertained by the Bishop of Llandaff. "No further directions being given concerning the amount of payments to be made, the Company paid the specific sum of 84l. a year for the purposes of the charity, and carried the rest of the income to the account of the Company until the year 1845, when the Master of the Rolls declared the whole of the funds in hand and the rents of the land to be applicable to the purposes of the charity, and directed that application should be made to Parliament for powers to extend the charity." I believe that the income of the charity is now 6,400l. a year.

323. (Sir Richard Cross.) I believe you have inquired into the details of this case of Howell's Charity?—Yes. A scheme for the alteration of the charity is now before us. It was delayed in consequence of the appointment of a Committee the year before last to inquire into higher education in Wales.

324. Do I understand that they got into this difficulty by paying over what they thought they were bound to do, and having a great surplus, which they used for other purposes?—They read a decree of the Court of Chancery, which was made in the 16th century, as obliging them only to devote to that purpose 84l. a year. When the case came before the Court of Chancery again in the 19th century the Court said that they ought to have devoted the whole income to the charity.

325. (The Chairman.) I understand that in that case the Company considered that the properly was their own, subject to a fixed charge for charitable purposes?—That is so.

326. And it was ultimately determined by the Court of Chancery that the whole property was trust property?—Yes.

327. (Sir Richard Cross.) How do you distinguish on the Charity Commission? Have you any broad line of distinction between trust property and corporate property?—We have nothing to do with corporate property.

328. Do you inquire whether certain property is corporate property or trust property?—Yes. When a case is brought before us we get the fullest information we can, and sometimes we find it necessary, as in the Wax Chandlers' case, to send to the Court of Chancery.

329. Can you draw a distinction between one and the other?—Yes, whenever there is a trust declared by an instrument of the founder for a charitable purpose.

330. If there was money left to a Company, to the Wax Chandlers' Company or the Goldsmiths' Company, or any other Company, simply in the name of the Company, without any trust attached, you would not consider it was trust property at all?—No.

331. You would not consider that the mere fact of such a body as one of these Companies having money left to them would imply a trust for public uses?— No; we should look and see if it was a trust to charitable uses within the intention of the Statute of Charitable Uses, which is our guide.

332. You would not take it that there was an implied trust from the fact of the money being left to the Company, but you would look to the specific trust in which it was left?—Yes; a charitable trust, of course, may be inferred from expressions and so on.

333. The mere fact of a Company having money left to them does not imply a trust?—No; that is my opinion.

334. (Mr. James.) It has been represented to us that there is no power at present to prevent any of those Companies (assuming that legislation was defective, and that the Company should be dissolved,) from appropriating and dividing amongst themselves the property; assuming that the dissolution of the Company took place, what would become of the trust property?—It would still remain affected by the charitable trust, and it would be our duty to see that trustees were appointed.

335. You would appoint trustees?—We cannot appoint trustees without proper application, and if we could not get trustees appointed in any other way, we should ask the Attorney-General to bring the matter before the Chancery Division for its decision.

336. At the time of the passing of the Municipal Act in 1835, there were many of these guilds in provincial towns?—Yes.

337. And in some of those cases there were small trusts attached to those guilds?—Yes.

338. Are you aware whether any of them were extinguished at that time?—I have not been able to find any trace of that. I had an intimation that I might be asked such a question, and I made inquiries in our office, and I find that though we are aware of the existence of some of the country guilds as trustees of charities, we have nothing to show that any have failed. We have eight or ten as trustees of charities.

339. Are they trustees that you appointed yourselves?—No; they are trustees appointed by ancient founders of certain charities, some of them very ancient; the Merchant Venturers of Bristol and the Keelmen of Newcastle are two specimens.

310. You say that you find that the Companies were rather liberal and lavish as regards the management of trust property; that would not apply to all the trust property in the hands of the official trustee, because over that they have no control?—They have absolute control over the income. The official trustee is merely the custodian of the capital; it is the duty of the official trustee, and he is bound by the Act by which he is constituted, to remit the dividends to the acting trustees.

341. But by the appointment of official trustees, where the trust funds have been transferred to an official trustee, there has been an enormous saving in the charge and expenses to the Company?—A very considerable saving, because it saves all transfers in the first place.

342. Do you know the exact amount of trust property at present invested in the hands of official trustees, which belongs to the guilds?—No; but I can furnish the Commission with that information. I should say that it is a very small amount, and they have not been at all willing to avail themselves of what we consider the advantages of the official trustees.

343. Can you account for that unwillingness?— It is a reluctance among many trustees; they prefer to have the custody of the capital of their funds; while we, on the other hand, maintain and think we are warranted in maintaining that they are trustees to spend the income, and they can only spend the capital either by the sanction of the Court or our Board.

344. But they think, I suppose, that they are better custodians?—Yes.

345. (Mr. Burt.) I understand you to say that the Companies generally have complied with the law in rendering their accounts?—Yes.

346. There are exceptions, I suppose?—All the Companies, I think, have rendered the accounts. The paper that I have in my hand shows that every Company has rendered the accounts. The Bowyers' Company appears to be behindhand, and the Wool Winders; but it is doubtful whether they have more than one charity each.

347. I understood you to say that there were one or two exceptions?—The exceptions are these, that in a few instances we have not the accounts of 1880, but the 1879 accounts were the latest accounts.

348. They are not due yet for 1880, are they?— They are due for 1880, but not for 1881; though in some instances we have them for 1881, they are not due till the 25th of this month; but in a great many cases, nearly one-third of the cases, we have them for 1881. The accounts, I should say, are as a rule sent with very fair punctuality, and in the case of the Companies that I have to do with personally, they are exceedingly well made out.

349. You have power, I suppose, to compel the Companies to send them in?—Yes.

350. (Lord Coleridge.) There are two questions which I should like to ask you. One is this: has it ever been decided, and, if so, can you tell me where, that the charters constitute no trust? ( (fn. 2) ) ( (fn. 3) )—I had occasion to look into a question analogous to that last year, and I have brought some notes which I made then. There are two cases I think which are generally cited. One is that of the Attorney-General v. the Corporation of Carmarthen, which is reported in Cooper, page 30; and the note which I have of that is that a court of equity will not interfere to prevent misapplication of corporate funds, as distinct from funds held by the Corporation, on express charitable trust.

The next case that I have is the Mayor of Colchester v. Lonten, 2 Vesey and Beavan, page 226. In that case it was held that the "court of equity does not attach the doctrine of trust, as applied under the words 'corporate purposes,' to alienation of their property by a civil corporation." There, Lord Eldon refused to interfere to prevent the alienation of corporate property not affected by the charitable trust.

351. That does not quite answer my question; those are municipal corporations. I am supposing the case of a corporation created by charter for a particular purpose, not invested with municipal authority, or a municipal corporation; but a corporation with a special object; has it ever been decided that the charter so creating them and pointing out to them that object create no trust?—I have not been able to find any case. Last year I took pains to try for a case, and I asked Sir Arthur Hobhouse to be good enough to help me, and he furnished me with most of the cases that I have here, all of which are on municipal corporations.

352. You see that there is a broad distinction in point of law?—Yes. I searched as closely as I could for such a case.

353. As far as you can judge, is there any principle of equity which should prevent the High Court from enforcing, if it could find it out, the obligation imposed upon the corporation by its charter?—I am not aware of any authority upon the subject. The only distinction which I thought I saw was that these charters were granted not directly for a public use.

354. That is rather what I am suggesting. Supposing it was granted for a specific purpose, is not the very ground upon which you enforce trusts that the money is entrusted to the corporation for a specified and distinct purpose, and not entrusted to it for its general objects?—Yes, no doubt.

355. Would it not be carrying a little further the same principle, where the corporation itself has a special object and not a general public object, and that object I will assume for the purpose of my question, capable of being ascertained from the charter, that it should be capable of being enforced?—I really am not aware of any authority upon the point.

356. It has never been decided to the contrary?— It has never been decided to the contrary, and I was very much pressed by the same question last year; I forget how it arose, but I took pains to ascertain how it was.

357. When was it first decided that a charity is not entitled to the equivalent of the whole bequest? Do I express myself clearly to you? I will assume that lands were bequeathed to the Goldsmiths' Company, we will say, then being worth 30l. a year, for the purpose of maintaining some poor scholars, and that 20l. a year was to go to the specified object, and the remaining 10l. was left unspecified, and would, therefore, pass to the general funds of the corporation. When was it first decided that when that 30l. becomes 3,000l., the 20l. only should remain allocated to the charity, and the whole of the rest of the increment go to the private funds of the corporation?—It has been so decided from ancient times, certainly.

358. What is the principle upon which they should not be entitled to the proportion? I quite understand that, if the thing goes on increasing, the Corporation are to benefit in the increment as well as the charity; but why is the charity not to benefit at all; upon what principle was that ever decided?—It depends very much upon the terms of the gift; that is fully explained in Lord Cairns' judgment in the Wax Chandlers' case. He draws the distinction very clearly there. I should wish to refer to that and also to Lord Cranworth's judgment in the case of the Attorney-General v. the Dean and Canons of Windsor, in 8, House of Lords' Cases, page 369.

359. I know the fact is so, but I want to know the history of it?—Those cases will explain it in a great measure.

360. (Sir Richard Cross.) Will you give us shortly what that case to which you refer was?—It was an information by the Attorney-General against the Dean and Canons of Windsor, at the instigation of the Military Knights of Windsor, seeking to establish that they were entitled to a proportion of the increased value of certain property which the dean and chapter held, and it was eventually determined (and it is the only case in recent years in which the AttorneyGeneral has been defeated) that the Military Knights were not entitled, and that the dean and chapter were entitled to hold it subject to a fixed charge.

361. (Sir Nathaniel de Rothschild.) You say that the Companies do not care to make use of the official trustees; is that on account of the different investments that are made, or do they invest generally in consols?—In consols almost exclusively.

362. And they do not choose other investments?— I do not think that the Companies, as trustees of charities, are so fond of other investments as other trustees are. I think the Companies have great belief in consols, and in the general management of consols.

363. (The Chairman.) With regard to the application of the Companies' charities, are you aware how their trust income can be spent; have you got the figures before you?—Yes, I have the figures.

364. Should we be accurate in taking it at 75,000l. for the relief of poor members, 75,000l. more for education, and 50,000l. for miscellaneous charitable objects, making 200,000l. in all?—I am afraid I cannot verify those figures. I asked our Registrar of Accounts when I heard that I was to be examined, whether he could get out the figures, but he said it would take a very long time. I have no doubt that this information is quite as correct as any that we could furnish.

365. Have you any knowledge of the details of that expenditure; would it come before you?—Yes, we have all the accounts; we can see how it is all spent if we refer to the accounts; and in the cases with which I have had personally to do I am aware of a good deal of the detail.

366. First of all, with regard to the relief of the poor members, how is it administered; are there almshouses and pensions, or in what other form is it administered?—I am not aware of any form other than almshouses and pensions in which it is administered, except that money grants are made in some cases, but a very large proportion of it is administered in almshouses, and a very large sum in pensions.

367. Do you consider that that system has worked satisfactorily upon the whole?—I have had no means of ascertaining how far it has met the wants of the poor of the Companies, because I do not know how many poor there are in each Company; we hear hardly any complaints on that score; the Companies are generally anxious that their almspeople should have sufficient stipends; and in many cases they have made up the payment from their own corporate funds.

368. We have had it stated that to the 200,000l. which I mentioned just now they add out of their corporate income 140,000l. more?—That I have no personal knowledge of, and if the accounts would not show it, we should have no means of verifying it; they might, but the Companies are not bound to tell us all that.

369. With reference to the educational endowments, are you acquainted with the Mercers' Company?—Yes; I have had a good deal to do with some of the charities of the Mercers' Company.

370. They are trustees of St. Paul's School, and also of the Mercers' School?—They are.

371. Are those schools largely endowed?—Very largely. St. Paul's School has an income of about 12,000l. a year, which is now administered by a scheme made by the Endowed School Commissioners, about the year 1874 or 1875, which has since been amended in some details by the Charity Commission.

372. Have you had an opportunity of examining those schemes in detail?—Yes, I have; I have got the scheme here, and I have got the details.

373. Do you consider that the endowment is properly expended for the purpose for which it is intended? —Perhaps I had better state a few figures; the income being 12,000l. a year, the scheme requires them to maintain a school, or rather two departments of a school, for 1,000 boys, and a school for 400 girls, both of which are to be maintained within a short distance of London. The annual charges prescribed by the scheme, that is to say, for the payment of the masters for the free boys, and exhibitions for the girls, and for repairs, are 6,340l.; besides that, the income would have to bear the expense of examinations, management, and other expenses; then they have to buy sites for these two schools, and to build the schools, which would involve a very large appropriation of capital. Nothing has yet been done in respect of the school for girls, because the governors are employed now in establishing the school for boys. I should say that the school is subject to two governing bodies; the Mercers' Company are the estate trustees, and manage the property, and pay over the income to the governing body, specially appointed under the scheme. The Charity Commissioners have sanctioned the expenditure of 41,000l. upon a site near Hammersmith, close to the Metropolitan District Railway, and they have sanctioned an expenditure of 91,000l. upon the school buildings, and those buildings have been in progress about a year, and pending the establishment of that school we understand that the governors do not propose to do anything in respect of the girls' schools; they are meeting this expenditure as far as they can out of the income of the school; but they will not be able to meet it all. So that the endowment, so far as we are aware, is very judiciously applied at present in carrying out the scheme, and probably, after the deductions of capital are made which are necessary to give full effect to the scheme, there will not be any large surplus.

374. Are you also acquainted with the Mercers' School?—No, I have had no dealings with it.

375. Then you are not in a position to give an opinion as to its usefulness?—No, I am not. I believe that a scheme for an endowment connected with it is either now in progress or will shortly be taken in hand.

376. Now with regard to the miscellaneous and charitable objects, we know nothing of them beyond their names; taking the Mercers' Company as a type, can you tell us at all what they are?—I think they are very largely almshouses and pensions, and small charities or doles, and of course education, with which we have dealt already. The Mercers' Company have very large pension charities and almshouse charities. One of the largest is Trinity Hospital, Greenwich, which was the subject of a scheme made by the Charity Commissioners five or six years ago, in which there was a very large surplus income indeed, which has been provided for by a scheme.

377. I take it from what you have said that in a considerable number of those cases the charities of the Companies have been examined by the Charity Commissioners, and schemes framed, and that they have been put in order?—I should think that a great many of the more important ones have been, but by no means the larger proportion, if you take them numerically, but the more important ones have. There is one very important charity of the Mercers' Company not taken in hand, that is Sir Richard Whittington's Hospital, which is a case which calls for a scheme very loudly.

378. What is the case of that hospital; can you give us any account of it?—The income is over 10,000l. a year. The original foundation was by Sir Richard Whittington for an almshouse. The Company expend 2,600l. upon the college, as it is called, and 4,550l. for 130 out-pensioners; and they spend in compassionate allowances to about 60 persons close upon 3,000l. a year. I should say that there is no express trust for anything but the inmates of the hospital; therefore it is essentially a case requiring a scheme, because, as it has been often held by the Court of Chancery, the trustees have no power to employ any of their funds, except in strict accordance with the trust, however desirable it may be. I had the case of this very charity before me the other day, in which property in King's Arms Yard in the City, previously let at 2,292l. a year, was relet at 7,000l. a year, the lessee covenanting to expend 50,000l. upon the property; that is the largest transaction of the sort that I have had to do with.

379. (Sir Richard Cross.) With regard to these schemes, Lord Derby asked you whether there were many schemes relating to these Companies which have gone through the hands of the Commissioners, and you said there were a good many numerically, but nothing in proportion to the whole number ?— Yes; there have been from time to time several schemes. I have not any list of them; we almost always have some in hand.

380. You have no power to originate a scheme ?— No; we can only move in the case of a charity over 50l. a year, upon the application of the majority of the trustees; and in the case of a charity under 50l., upon an application of one trustee.

381. Would many of these charities be under 50l. a year?—Yes.

382. In those cases you have certain powers?— Yes, we require to be set in motion in every case; but an application in the case of a charity which is under 50l. a year may be by one trustee, or by two inhabitants of the place in which it is administered (that is a condition which it would not be easy to fulfil, because the charities are for the benefit of the members of the Company), or by any person administering the affairs of the charity, even if he is not a trustee, or by the Attorney-General.

383. Have you had many applications made by the members of a Company ?—Very few.

384. Not any of the small ones?—No; we hear very little of the smaller charities; it is cases like Trinity Hospital and the larger almshouses that we hear of.

385. Have you had applications by letter ?—No; we are moved from without very little in the case of the City Companies' charities; in the case of other charities we often get complaints from people outside.

386. Have you had any complaints from the other Companies against the courts of members of the Companies?—I do not remember one in my experience.

387. (Mr. Pell.) Do you consider that the distribution of these large funds in pensions to poor members, in education, and miscellaneous charitable objects serve any good purpose ?—So far as the Companies are concerned, I have no knowledge; I should not think they serve any better purpose than almshouses for any class of poor; almshouses for the poor are beneficial, no doubt. If those poor persons are proper inmates of almshouses, I suppose they have been doing good.

388. With reference to so much as goes to education, does your experience of the distribution upon that object lead you to believe that it is serving a useful purpose?—I think in a great many cases it is being made to serve a very useful purpose by schemes that have been made; the former administration, in many cases, was not the best that could be devised.

389. With respect to St. Paul's Schools, is not that a case in which it may be said that the endowment is excessive?—I think it could hardly be said so under the new scheme; it probably was excessive when it only maintained 153 boys, as was the case before it was taken in hand; now it will educate at least 1,400 children.

390. The Charity Commissioners never originate schemes; they have ceased to originate them?—We never had power to originate them.

391. I thought that after the Charity Commission was first established, for the first two years, they introduced schemes of their own motion into Parliament ?—Yes, into Parliament we did; we never do that now.

392. That has ceased now ?—It has ceased. The reason for it has been clearly stated by Lord Sherbrooke in the evidence that he gave before the Schools Inquiry Commission.

393. Do you think if that power could be conferred, and that you could exercise it more rapidly and with less impediment, it would be a useful one as regards the charities?—Yes, I think it would. There was a bill before Parliament for that object last year.

394. With regard to the benefits which these corporations receive from the Charity Commission, of course if the legal estate was vested very generally in official trustees, there would be a very large saving effected to the Company or the corporation, inasmuch as there would be no transfer, no stamps, and probably less legal expenses ?—I was wrong in answering in the affirmative the question put to me just now as to saving expense on transfers; in this case there is no saving of expense in transfers, because the Company are incorporated, and if the funds stand in their corporate name, then one of the arguments for transfer to official trustees does not exist.

395. I suppose the Charity Commission is really doing now a great deal of work, at the cost of the country, for the charitable trusts of these Companies? —A great deal.

396. The Companies contribute nothing whatever to the cost of the Commission, do they ?—No.

397. You take no fees?—No; the stamps are affixed at a certain rate; the appointment of trustees has a 10s. stamp.

398. Does that come into the revenue of the Commission?—No; it goes to the Inland Revenue Office.

399. It can hardly be said that the charities are so poor that they should be exonerated from contributing to the cost of the good work which they get at your hands ?—They are not poorer than a good many other charities.

400. They pay no income tax ?—They are entitled to exemption from income tax; all funds affected by charitable trusts are.

401. A corporate property of 140,000l. would contribute, I suppose, to income tax ?—Yes.

402. All the property of the Companies or the guilds, except that which is trust property, would pay ?—Do not understand me as saying that as a matter of fact the trust property of charities does not pay income tax, but that they are entitled to the exemption if they claim it, but all over the country trustees omit to claim the exemption.

403. But by law they are not required to pay ?— No.

404. (Mr. James.) You were a poor-law inspector for many years ?—Yes.

405. Were you a poor-law inspector in the metropolis ?—Yes.

406. Have you any experience as to the effect upon the poor rates where these almshouses existed, and where these charities were extensively distributed ?— No, I do not think I can say that I have.

407. You cannot speak from your knowledge that where almshouses existed, or where there were large charitable distributions, it had the effect of drawing into these parishes poor persons, and thus largely burdening particular districts with poor rates ?—I think that is the very common result of dole charities, but there are very few dole charities under the City Companies, and these almshouses and pensions are so frequently for the poor members of the Company that I doubt whether they would exercise much influence upon a London parish.

408. Is it the case that there are few dole charities under the City Companies ?— Very few; the amount in our digest is exceedingly small.

409. Is it not the case that in connection with the City parochial charities there are an immense number of small sums distributed to the City parishes by the Companies themselves ?—Yes.

410. Are they not very much in the nature of doles?—I am not prepared to say. Of course the Companies have nothing whatever to do with them when they have once paid them over. I was not including that. In our digest we deduct all the payments that they make to other parishes because they are not doles administered by the Companies. It is quite true that the Companies make considerable payments to City parishes, and I have no doubt that a good many ought to be applied in doles if you could find people to receive them.

411. They might be entrusted to the parish officers to distribute as doles ?—Yes.

412. Have you any experience with regard to pensions ?—No.

413. It is not your business as Charity Commissioner to know persons who are in receipt of pensions ? —No.

414. I should like to ask you with reference to the schools—because you have had great experience of these schools—what class of children are they generally who are educated at the larger schools which are under the administration of the Company of Merchant Taylors, the Mercers' School, the Tonbridge School, or St. Paul's School ?—Tonbridge School, St. Paul's School, and the Merchant Taylors' School are public schools in fact, and I fancy they have very much the same class of boys as go to Charter House or Winchester.

415. In the scheme that you have framed in the case of the Tonbridge School have you taken merely children of parents of humble circumstances ?—We have always tried to provide in those schemes for giving facilities for children of the lower grade to come to the higher grade school.

416. Do you find a desire on the part of the Companies to carry out that idea ?—In the case of the Skinners' Company as to Tonbridge School, and of the Mercers' Company as to St. Paul's School, there is.

417. As to the Tonbridge School, I believe at the time of the scheme there were large contributions made by independent persons, not made by the Company ?—I do not know how that is; in that case the Company made large additions themselves to the funds as well.

418. Do you not think with regard to schools connected with the Companies that the class of school which is more needed is a school which is between the grammar school and the elementary school, a sort of superior elementary school?—A school of what we should call the second or third grade, is that which is wanted all over London; you could scarcely establish too many of them.

419. Is it the fact that the Companies have been slow to propose schemes for schools of that class ?—I do not think they have engaged themselves in promoting schemes until the passing of the Endowed Schools Act.

420. Do you know any one case in which a school of that kind was established ?—No, I do not, but my connection with the Charity Commission is since the passing of the Endowed Schools Act. I cannot say what the Companies did before that.

421. With regard to the Cooper Street schools, Mr. Rogers' schools, I do not think they are connected with the Companies at all ?—No.

422. Is that the class of school that you desire to see established ?—Yes, that is the class of school that we desire to see established in London, and the class that we are establishing.

423. And you think that there is great need in London for the establishment of schools of that kind ? —Very great indeed.

424. With regard to miscellaneous objects I have here a return of the London School Board, with which you are acquainted; taking one of the Companies as a type, I see in the case of the Mercers' Company, at page 228, an item of "Lectures 157l.;" do you know what the subject of the lectures was ?—I take it that is the Gresham lectureship.

425. Attached to the Mercers' Company? — The Gresham lectureship is attached to the Mercers' Company; it is a case which we have always been anxious to deal with, but have been unable to do so.

426. Why have you been unable to deal with it?— There has been no application.

427. Why has there been no application ?—We cannot move without an application; it is a case that has always been present to the mind of the Commissioners for many years.

428. Here is another miscellaneous object, "Sermons 417l." Do you know what sermons there are attached to the Mercers' Company ?—No; there are a great many charities all over London for sermons, small sums given for afternoon service, for preaching on Good Friday or Christmas Day.

429. The services are hardly ever attended, I suppose ?—That I do not know. We have had cases brought before us in which the gift was conditional upon preaching a sermon, and the sermon has ceased because there has been no congregation.

430. Would it not be a great public advantage if you had certain powers by which you were able to consolidate many of these indiscriminate objects and use them for some purpose, such as the establishment of such schools as those to which I have just been alluding ?—No doubt more could be done.

431. Could you in a few words state to the Commission what additional powers the Charity Commissioners would require to enable them to take up schemes of that kind ?—In order to make a scheme under the Endowed Schools Act for dole charities or charities which have failed in their objects there would be required a repeal of the provisions in section 30, which require the consent of the trustees to such a diversion of the funds.

432. That was the proposal in the Charitable Trusts Act of last year, was it not ?—No, not that; there was no amendment of the Endowed Schools Act proposed. You speak of the diversion of funds to education; there was no dealing with the education question in the Act of last year specifically, but if that condition were removed we could make schemes for any of these charities.

433. It is hardly necessary for me to ask you whether you have found in all your dealings with the Companies that the corporate trustees are admirable men of business ?—Yes.

434. Do you think there is any guarantee under the present constitution of the court that the high business capacity of these gentlemen would be sustained ?—I am very little aware of the present constitution, it has not come before me in any way.

435. Are you aware that in many cases the Livery Companies consist of members of particular families ? —I have seen it stated in a paper which the secretary of the Commission has been good enough to furnish me with.

436. For instance, in the Mercers' Company there are ten bear the name of Watney, nine Walker, seven Collier, seven Hodgson, seven Smith, five Parker, five Sutton, and three Watson; does not that rather convey that the Companies, although essentially public bodies, are composed to a great extent of a limited number of private individuals,—clans ?—I should infer it from that statement in the case of the Mercers' Company; but the Mercers' Company is admirably administered.

437. While such a state of things prevails, would you have any guarantee for the maintenance of that high business capacity for which the Companies are very justly conspicuous in many cases ?—I suppose there is no special guarantee, except that it has been so.

438. (Mr. Burt.) Do you think the money spent for educational purposes by the Companies is, on the whole, wisely expended?—I think where it is expended under modern schemes it is very well expended; but where the funds have not been dealt with by schemes, probably the expenditure is very large in proportion to the benefits conferred.

439. Have many of them been dealt with by your schemes ?—Yes, a good many. The most important one now being dealt with is the Bancroft School under the Drapers' Company. There the expenditure was very large in proportion to the results; but the Drapers' Company are going to make a large addition to their school, and it will be expended in the same manner as St. Paul's School.

440. Did the Commission take the initiative in forming the scheme ?—In forming schemes under the Endowed Schools Act the Commission take the initiative, except in a certain case under section 30, which provides for the diversion of non-educational funds to educational purposes; there they can only act under the powers of the trustees.

441. Have you known any cases of Companies selling their corporate property, and dividing the proceeds?—No, I have no experience of that.

442. You do not know of any case ?—No, I think not.

443. (The Chairman.) I understand you to say that you have no special knowledge of corporate property ? —No.

444. (Lord Coleridge.) With regard to these schemes and the contributions that have been made by the Companies, has there been any inclination upon their part to maintain control over the elections and the disposition of the educational endowments ?—I should say that there has been a very strong disposition to retain control over the management of the estates; but the Companies have not always objected to have other persons associated with them as governors of the schools. In the case of St. Paul's School the Mercers' Company are the trustees of the estate, and the governing body of the school—the body which administers the school—is a mixed body.

445. I do not refer to that. Has there been any disposition upon the part of the Companies to control the educational part and to interfere in the management of the school ? I will put an example: Take such a case as this which has come before me; I should like to know whether it is a common thing for a Company to offer to a school two scholarships on condition that the Company should select the best of four names to be sent up to them ?—I cannot remember an instance of that kind.

446. I refer to control over the intellectual results of their benefaction ?—Yes. I may say in the case of the Drapers' Company, there was a great deal of discussion between the Company and the Commissioners as to the number of places which should be left to the Company's nomination. They were anxious to have in return, so to speak, for the large additional money endowment, a large number of free places at their disposal by nomination. We have reduced the number considerably, and it has been a subject of agreement with us. The school was about to receive a very large sum from them.

447. The result of that would probably be, if the whole intellectual rate of the school were taken together, to lower it ?—Yes; that is why we set our faces as far as possible against it. I should say that the Drapers' Company now nominate every boy in the school.

448. (The Chairman.) Supposing that any proposal were made to require the consent of the Charity Commissioners before the Companies could buy or sell land or stocks, would you consider that that came fairly within the legitimate scope of your duties ?— I should scarcely think so, as our duties are at present defined. It would be analogous rather to the power of the Treasury in sanctioning the alienation of the property of municipal corporations.

449. And in the event of a Company being required to publish their accounts, would that be a matter with which you would have anything to do ?—Not as we are at present constituted. We know of no subjectmatter of our jurisdiction outside the Statute of Elizabeth, which defines charitable uses.

450. (Sir Sydney Waterlow.) You were asked whether the Companies, as far as you can judge, were generally favourable to the establishment of superior elementary schools,—something between an elementary and a classical school. You mentioned that there are two; are you aware that the Haberdashers' Company have had a school recently established of that kind at Hoxton ?—Yes; Aske's Charity.

451. Is that school, or not, now working very satisfactorily ?—I believe it is.

452. Do you know anything of a similar school established by the Brewers' Company ?—Yes.

453 Is not that of the character referred to ?—I was under the impression that that was a school of a higher grade; but neither of those cases have been under my personal cognisance.

454. Do you know that there is a superior elementary school established by the Grocers' Company at Hackney ?—Yes; that is a very flourishing school.

455. And doing great educational work amongst a large and new population ?—Yes.

456. Do you know anything of the Stationers' School in Fleet Street, and that when some years ago there was an inquiry into these schools the Commissioners said it was one of the best schools of the kind in the City of London, not excepting the City of London School itself ?—No; I do not know anything of that school. I have nothing to do with the Stationers' Company.

457. You do know something of Bancroft's School for girls and boys ?—Yes.

458. Have the schools been, during the last ten years, very considerably enlarged ?—Yes.

459. By a large legacy left by one of the court of the Drapers' Company ?—I was not aware how it was.

460. You told the Commission that the Company had themselves supplemented that and all previous endowments by a very large grant from their corporate income ?—Yes, they have.

461. Can you tell the Commission how the boys are nominated ? They are not nominated by the Company direct, are they ?—I can tell you how it is proposed; the scheme is not ripe yet. There are to be 100 scholarships of 50l., to be awarded on competition by boys who have been for three years in any public elementary school of the metropolis, and 20 of these scholarships are to be awarded to poor boys to be nominated by the governors.

462. Are the governors all drapers ?—Yes; and the remaining 30 scholarships are to be awarded to boys to be nominated by the governors, but they are to pay fees, that is, a class of paying boys; the other 70 are to pay nothing.

463. Have those boys that are to pay to pay hospital fees and tuition fees ?—It is to be a fixed sum, and to be at the rate of not less than 20l. a year for each boy.

464. Is that education and board ?—Yes, and also for tuition at the school.

465. As regards the control of these lower intermediate schools, from the opportunity you have had of inquiring about them, do you think that they are well managed and that they are accomplishing the objects for which they were intended ?—So far as I know they are, but the schemes have so recently come into operation that some of them have hardly started yet. The Grocers' School, I know, is well managed, and the Aske School at Hoxton is going on successfully. Some of the others are hardly started yet.

466. May the Commission understand from your answer that there has been and is now an increasing attempt on the part of the Companies to establish these schools, some of them not having been yet started ?—No, I should not say that there has been an increasing attempt upon the part of the Companies; there has been an increasing attempt on the part of the Charity Commission. (fn. 4)

467. Did not you tell us that the Drapers' Company had largely supplemented the funds under the control of the Charity Commission ?—I have no doubt that that is so.

468. Therefore are they not to have some credit ? —Certainly; but the schemes are originated for the most part by our Commission, which takes the cases in hand. In the Drapers' case I am not sure how it was, whether we came to them or they came to us.

469. I must ask you whether it was not the fact that the Drapers' Company applied to have a new scheme under the old charity, and under the legacy left by Mr. Deputy Corney ?—Yes, I find that in 1870 the Company submitted a draft scheme to the Endowed School Commission, after the Endowed Schools Act was passed.

470. In that case the initiative was taken by the Company ?—Yes; there was a special reason for taking the initiative then; under the Endowed Schools Act the governing bodies of endowments above 1,000l. a year, I think, had a certain time allowed them to submit draft schemes, and I have very little doubt that that was the reason why it was submitted. Christ's Hospital and others during 1870 were allowed to submit draft schemes, and if they had not submitted draft schemes then the schemes would have had to come from the Endowed Schools Commission.

471. Could you explain more in detail in what way you think a greater power could be given to your Board to consolidate small charities belonging to Companies?—By rendering application unnecessary; by enabling us to act of our own motion, as the Endowed Schools Act of 1874 puts it.

472. You mean by enabling you to draw a scheme irrespective of any application from the trustees of small charities ?—Yes, that would be the most complete way of doing it.

473. Did I understand you to say that you thought, looking at the composition of the courts of the Companies, that the properties, either corporate or trust, were managed in a business-like way ?—As far as the accounts come before me they certainly are.

474. May I ask from your experience, which extends over a great number of years, whether, as a fact, they have not been so managed that the funds have very largely increased ?—Yes, the funds have very largely increased.

475. One of the members of the Commission asked whether you thought that was likely to continue owing to there being so many Watneys and Parkers on the Mercers' Company; is it not the fact that there are Watneys and Parkers of great eminence both in the Mercers' Company and out of it ?— I suppose so.

476. May I take it that, generally, you as a member of the Charity Commission find no fault with the way in which the Companies have managed their educational endowments ? (fn. 5) —I think the administration by the Companies of all their charities has been on rather a lavish scale. I give as the result of my experience that there is more spent in the management of the charities than is desirable or reasonable.

477. Have they not generally subsidised the expenditure out of their corporate funds ?—They have.

478. (Lord Coleridge.) Can you tell me as to the extent of the bequest of Mr. Corney ?—I think it was 30,000l.

479. Was it appropriated by Mr. Corney's will to this object ?—I have not the particulars here, though it could be easily found out.

480. You do not know to what extent they supplemented it ?—The Drapers' Company have offered to give 50,000l.

481. To the 30,000l. ?—To the existing endowment. In 1870 the income was 4,600l. a year.

482. Then practically, upon the creation of these hundred scholarships, fifty are to go by examination and fifty by nomination by themselves ?—Yes; it has been the result of long negotiation between us and the Company; the Company came with 50,000l. in their hands; we should have preferred that they should have had fewer absolute nominations.

483. (Sir Sydney Waterlow.) You spoke of the expenses and lavish management by the Companies; is it not a fact that as a rule the Companies pay for the management of their trust property out of their corporate income ?—It is not my experience.

484. Take the Drapers' Company, is it not the fact with regard to them that they do so ?—I have no personal knowledge of the Drapers' Company charities, but in the Trinity Hospital, Greenwich, the expenditure has been very large out of the trust income.

485. Have you any experience of what is done by the Haberdashers' Company ?—No.

486. Nor the Merchant Taylors'?—Yes, I have seen something of the Merchant Taylors' charities, but not much; I cannot speak positively about them.

487. Or the Clothworkers' ? — Yes, I have seen something of the Clothworkers', but the case of the Trinity Hospital, Greenwich, is the case that I have chiefly in my mind, because it passed through my hands.

488. As you see a good many of the accounts of the Charity Commission, may I ask you whether it is not the fact that the Clothworkers' Company do not take the 3 per cent. which is allowed by the Chancery Court out of their trust towards the management of their property ?—I do not know that.

489. (Mr. James.) Has it ever come to your knowledge, as has been sometimes stated, that members of the Court in the management of the Company's property take leases to themselves at low rates and then sublet at high rates; have cases of that kind ever come to your knowledge ?—No, I have never heard of a case of that sort.

490. Has it come to your knowledge that pensions are paid to members of the Court or members of the Livery ?—No, I am not aware otherwise than that I have seen it so stated in the paper handed to me by the Secretary of the Commission.

491. (Sir Sydney Waterlow.) Are you aware that when a member takes a pension he resigns his position as a member of the Company ?—I saw that stated in the same paper.

The witness withdrew.

Adjourned to Wednesday next at 4 o'clock.