Oral Answers to Questions — McGRIGOR'S BANK.

– in the House of Commons on 24th November 1922.

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Photo of Hon. Aubrey Herbert Hon. Aubrey Herbert , Yeovil

(by Private Notice)

asked the Under-Secretary of State for War whether any compensation will be paid from public funds to the sufferers in the McGrigor Bank failure; and what steps are being taken to prevent any further trouble of this kind in the future?

The UNDER-SECRETARY of STATE for WAR (Lieut.-Colonel Guinness):

The War Office have no legal liability whatever for any banking business conducted by Army agents, nor are they In any way responsible for such business. The Government, however, recognises a moral claim on behalf of those whose accounts directly originated through Army connection with the firm as agents, and a supplementary Estimate will be laid with the object of giving them substantial relief, estimated at 10s. in the £ in addition to the existing assets. No guarantee of the stability of Army agents as bankers could be given by the War Office without extensive powers of control, and such guarantee and control would, in the opinion of the Army Council, be contrary to the public interest. The two existing Army agents— Messrs. Cox and Messrs. Holt—both publish audited balance sheets from which the public can judge the strength of their position. The Army Council see no reason whatsoever for departing from their custom of employing these firms as their agents. I should be glad if my Hon. Friend would repeat the second part of his Question to the Chancellor of the Exchequer early next week.

Photo of Mr James Remnant Mr James Remnant , Holborn

May I ask the hon. and gallant Gentleman whether he can tell the House how much it is expected to realise from the assets of this firm, and whether, in the event of their not being sufficient to pay, together with the Government proposal, the full 20s. in the £, as an act of justice to those who, by direction of the War Office employed this firm as their bankers especially during the War, he cannot see his way to recommend the Government to make up the amount, so that they shall not suffer any loss?

Lieut.-Colonel GUINNESS:

The liquidation of this firm is not sufficiently advanced for a final figure to be given, but it is estimated that the assets will enable a dividend of something more than 5s. in the £ to be paid. With regard to the latter part of the hon. and gallant Gentleman's question, he is under a misapprehension in suggesting that there was any compulsion on Army officers to bank with these agents who were responsible for their pay and the provision which the Government wish to recommend to the House in this matter must be looked upon as an ex gratia payment.

Photo of Mr Jack Lawson Mr Jack Lawson , Chester-le-Street

May I ask the hon. and gallant Gentleman if he is aware that the Government refused to give any relief to working class depositors in Farrow's Bank and whether, after the decision of the War Office in this case, he will use his influence with the Government for the purpose of gaining some relief for those working-class depositors?

Lieut.-Colonel GUINNESS:

The example of Farrow's Bank is in no way relevant to this case. The Government do not propose to make any grant to those depositors who had an account at McGrigor's Bank without any Army connection.

Photo of Mr Fredric Wise Mr Fredric Wise , Ilford

May I ask who are the auditors of McGrigor's bank and whether the accounts were audited at all?

Lieut.-Colonel GUINNESS:

If the hon. Member will look at my answer he will see I made it plain that the War Office were in no way responsible for the finances of this bank. The legal responsibility of the War Office ceased when public money was paid by the bank to the account of the payee, either in this bank or wherever they may be directed to pay the money.

Photo of Mr Neil Maclean Mr Neil Maclean , Glasgow Govan

Can the hon. and gallant Gentleman say whether it is the ease that the money that was paid into this bank was paid only after instructions had been received by the War Office from individual officers in whose name it was to be paid, and, if that be so, will ho explain why the Government are taking this attitude with regard to people and banks for whom they are not responsible and are neglecting other banks where working-class depositors have suffered?

Lieut.-Colonel GUINNESS:

As I explained, there is no legal liability. In view of the fact that these Army agents carry out this work without any grant from the public funds to enable them to do so, the State during the War made a large profit out of the transaction, and the amount saved to the public by Army agents carrying out this work on behalf of the officers far exceeded the total amount which it is proposed to recommend be granted in this case.

Photo of Mr William Pringle Mr William Pringle , Penistone

Can the hon. and gallant Gentleman say the amount that this concession to depositors in McGrigor's Bank will cost the Treasury?

Lieut.-Colonel GUINNESS:

It is impossible to give a final figure, as the accounts have, to be examined with a view to dis- tinguishing between those of Army officers and those which went to McGrigor's in the ordinary way of business.

Photo of Mr William Pringle Mr William Pringle , Penistone

Has no estimate been made?

Photo of Mr Joseph Sullivan Mr Joseph Sullivan , Lanarkshire Northern

Can the hon. and gallant Gentleman tell us that he will use his influence with the Government to return to the miners some of the profits they made out of the mines, seeing that they are using profits as an argument why they should stand behind this bank.

Photo of Mr John Whitley Mr John Whitley , Halifax

The hon. Member had better put that question on the Paper.