Suggestions as to Reform.
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."
Evidence of the Lord Chancellor.; Protests of the Companies.; Right of State to intervene.
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.
Propriety of State intervention as regards (1) the corporate estate.
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 (2) the trust estate.
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
Proposals as to State intervention Restraint of alienation.
We accordingly humbly submit the following recommendations for Your Majesty's
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.
Publication of accounts.
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.
Abolition of Parliamentary franchise of liverymen.
3. We think that no future admission to the livery of a Company should confer the
Parliamentary franchise, and that such Act should contain a provision to this effect.
Appointment of a Commission to undertake the redistribution of the revenues of the Companies and their reorganization.
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.
Proportion of corporate income to be devoted to objects of acknowledged public utility.
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.
Application of doctrine against perpetuities to the Companies' charities.
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.
Reorganization of the Companies. Courts.
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.
Definition of objects of acknowledged public utility.
5. We are of opinion that by the terms of such Act "objects of acknowledged
public utility" should be defined as follows:—
(1.) Scholastic and scientific objects, i.e., elementary education, secondary education,
classical education, technical education, scientific research.
(2.) General public purposes, e.g., hospitals, picture galleries, museums, public
libraries, public baths, parks, and open spaces.
(3.) The improvement of workmen's dwellings, and, where the companies represent
trades, subsidies to the benefit societies of such trades.
Such objects to be mainly metropolitan, but in some cases provincial.
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.
Time for which Commission to be appointed.
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.
8. We also think that any members of the Companies who may be injuriously
affected by the reforms contained in the schemes sanctioned by the Commissioners
should receive moderate compensation.
We make no suggestion as to the question of the "Common Hall," as the municipal
government of London is a matter at present under the consideration of Your Majesty's
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
Claims for endowment.
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
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.
SYDNEY H. WATERLOW.
WALTER H. JAMES.
JOSEPH F. B. FIRTH. (fn. 12)
THOS. BURT. (fn. 13)
H. D. WARR, Secretary,
May 28th, 1884.