City of London Livery Companies Commission. Report; Volume 1. Originally published by Eyre and Spottiswoode, London, 1884.
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Suggestions as to Reform.
The fifth and last part of Your Majesty's Commission empowers us to make recommendations to Your Majesty with respect to the improvement of the constitution of the Companies of London and the better application of their revenues. Its text is as follows: "To report what we shall find touching or concerning the premises upon such inquiry as aforesaid, and also to consider and report what measures (if any) are in our judgment expedient and necessary for improving or altering the constitution of such Companies, or the appropriation or administration of the property or the revenues thereof."
A great authority, the Lord Chancellor, in the course of a statement made by his lordship before us with reference to the City and Guilds of London Technical Institute, while admitting that the Companies are under a greater moral responsibility to the public with respect to their corporate expenditure than private individuals, stated his belief that the Companies were "at law absolute and perfect masters of their" corporate "property" and "declined to contemplate" any "redistribution" of the Companies' corporate incomes by the State( (fn. 1) ). The Companies themselves, in the protests with which their returns have been commonly accompanied—protests, that is, against the legality of that portion of the inquiry which related to property of the Companies not proved to be subject to any trust—have taken up the same position. Those of Your Majesty's Commissioners who sign this report are unable to acquiesce in this view. It appears to us obvious that the State has a right at any time to disestablish and disendow the Companies of London, provided the just claims of existing members to compensation be allowed. We do not, however, recommend this course to Your Majesty's Government. We are of opinion that the State should intervene, but only for the purposes of (1) preventing the alienation of the property of the Companies of London, (2) securing the permanent application of a considerable portion of the corporate income thence arising to useful purposes, (3) declaring new trusts in cases in which a better application of the trust income of the Companies has become desirable.
The propriety of State intervention as regards the corporate estate of the Companies appears to us to be proved by the following considerations as herein-before mentioned, (1) that the Companies were originally a Municipal Committee of trade and manufactures ( (fn. 2) ); (2) that on their incorporation by the Plantagenet monarchs they became a State Department for the superintendence of the trade and manufactures of London ( (fn. 3) ); (3) that from the period of their incorporation till the year 1835 it was necessary to obtain the freedom of a Company in order to become a citizen of London, and that at the present day municipal privileges are enjoyed by the members of the Companies ( (fn. 4) ); (4) that much of the real property acquired by the Companies during the pre-Reformation period was acquired for the promotion of religious or benevolent objects ( (fn. 5) ); (5) that their lands which were confiscated at the Reformation as being held to superstitious uses were suffered to be redeemed only upon a representation that the rents were required for the relief of poverty and the promotion of education ( (fn. 6) ); (6) that it is not improbable that certain of the Companies' title deeds which were destroyed in the Fire would, if preserved, have disclosed trusts ( (fn. 7) ); (7) that the law of trusts in its application to the increment of the Companies' city house property appears to have promoted the increase of the Companies' corporate estate at the expense of their trust estate (fn. 8); (8) that in certain cases trusts to convert charitable bequests of money into land have not been executed by the Companies, and that such neglect has been injurious to the Companies' trust estate (fn. 9); (9) that the Companies are public bodies, holding realty (a) under licences in mortmain, (b) by virtue of a custom of the City of London which has enabled them to acquire land therein, in excess of such licences, and are, therefore, trustees of their corporate estate for public purposes (fn. 10).
As regards the trust estate of the Companies the facts that several of the numerous charities of which it consists date from the fourteenth century, and that nearly all were founded more than 50 years since, prove, in our opinion, the necessity for a revision of the trusts.
1. We think that the Companies should be placed by Act of Parliament under such restrictions as regards the alienation of their real and personal estate as would remove all danger of the loss of any portion of their property, and for this purpose we propose that the provisions of section 94 of the Municipal Corporations Act, 1835 (5 & 6 Wm. IV. c. 76.) should, with whatever necessary modifications, be applied to the Companies, and that the Lords Commissioners of Your Majesty's Treasury should be constituted the restraining authority. We think, however, that such restraint of alienation should not apply to any land or investment bought or made within 50 years before the date of such Act out of monies contributed by then existing members not being trust monies.
2. We think that accounts of the annual expenditure of the Companies, both corporate and trust, duly certified and signed by the masters or prime wardens should be deposited with some public department, and should be open to public inspection, and that such Act should contain a provision to this effect.
4. We recommend the appointment by such Act of Parliament of a Commission, which shall undertake, pursuant to the terms of such Act, (1) the allocation of a portion of the corporate incomes of the Companies respectively to objects of acknowledged public utility, (2) the better application of the trust incomes of the Companies, (3) should it prove practicable, the reorganization of the constitution of the Companies.
As to (1) the proportion of the corporate income at present allocated to the support of public or benevolent objects varies extremely, as the returns show, in the different Companies. We are of opinion that in every case in which the present members or present governing body of a Company can be shown to have inherited a considerable income, not subject to a trust or trusts enforceable at law, such Company should be compelled by such commission to allocate a considerable proportion of such income to the support of objects of acknowledged public utility. The percentage or percentages of which such considerable proportion should consist in the cases of the Companies respectively we are not ourselves prepared to define, as there is great disparity in the incomes of the Companies, and also in the proportions in which such incomes consist of trust monies.
As to (2) we think that the legal doctrine which prohibits perpetuities should be applied, in a modified form, to the charities administered by the Companies, and that such Act of Parliament should contain a provision whereby in the case of any benefaction under a will or other instrument of foundation of a date earlier than 50 years before the date of such Act, it shall be competent to the Commission thereby appointed, to direct the application of the funds to objects of acknowledged public utility without of necessity paying regard to the intentions of the founder.
As to (3) the question how far it would be possible to improve the present constitution of the Companies without in effect destroying them, appears to us to present considerable difficulty. We can only say that (1) though Your Majesty's Inspectors of Charities frequently express a favourable opinion of the way in which the courts of the Companies administer the charities of which the Companies are trustees, we consider that many of the courts are too numerous for purposes of business, and that as the effect of such Act will be largely to increase the trust incomes of such Companies, and so to create an additional necessity for more perfect boards of administration, the Commissioners should endeavour to render the courts as efficient as possible; (2) that colourable apprenticeship should in our opinion cease to be a qualification for membership of a Company; (3) that some of our number regard patrimony as an antiquated and unsatisfactory qualification for membership; (4) that we all regard the sums at present spent by many of the Companies on entertainments, "maintenance," and the relief of poor members as excessive.
6. We are of opinion that having regard to the facts that (1) the Companies are connected with the municipality of London, (2) their wealth is in the main the result of the remarkable progress of London, the objects of acknowledged public utility to be promoted should be mainly metropolitan objects, but that, in cases in which a trade formerly carried on in London has established itself elsewhere, similar objects connected with the present place of the trade may properly be included.
7. We suggest that such Commission should be appointed for a period not exceeding five years, that the courts of the Companies should be allowed three years during which themselves to frame schemes in accordance with such Act, under the supervision of the Commissioners, and that the Commissioners should have, if necessary, the remaining period in which themselves to frame schemes for any Companies which may have made default.
We make no suggestion as to the evidence given by the above-mentioned deputation from the Ulster estates of the Companies, inasmuch as such evidence was mainly addressed to the subject of the desirability of further legislation with respect to the tenure of agricultural land in Ireland, a matter not within the scope of Your Majesty's Commission.
The claims of the City and Guilds of London Technical Institute, and those of University and King's Colleges, London, and the other learned bodies which came before us as candidates for endowment in the event of our recommending a redistribution of the Companies' revenues, we leave to be dealt with, should it seem desirable, by the Commission the appointment of which we have humbly recommended to Your Majesty.
One of our number ( (fn. 11) ) desires to have it recorded that some of the Companies have stated in their returns that they would be willing to pay Succession Duty. We think, however, that the State would not be justified in singling out the Companies for special legislation in this respect.