SECOND READING. (Hansard, 15 August 1867)

§ THE DUKE OF RICHMOND
, in moving the second reading of this Bill, said, that it had been brought into the other House of Parliament in consequence of the Resolutions to which a Select Committee appointed to inquire into the working of the Act of 1862 had come. His right hon. Friend the Vice President of the Board of Trade had the conduct of the Bill in the other House. On its first appearance there certain objections were taken to some of the provisions, and as he believed with great justice, by Sir Roundell Palmer. That hon. and learned Gentleman proposed the insertion of some clauses, the omission of others, and certain other Amendments to be made; and the result was the Bill in its present shape. One object of the Bill was to allow companies to reduce the amount of their capital and subdivide their shares, due provision being made for the protection of creditors. Again, companies formed for purposes of charity might be registered under the Act without adopting the word "limited." It was said that if companies wished to alter the amount of their nominal capital they ought to wind up their affairs and begin again de novo. But such a course in the case of 1545 banks would be productive of great inconvenience. They might lose their connection; and a certain amount of discredit attached to such a proceeding. By giving to companies the facilities proposed by the Bill, no persons need be injured; the rights of creditors were most strictly protected; and the measure altogether was one which greatly interested the banking and commercial world, and which they were very desirous should pass in the course of the present Session.

§ LORD REDESDALE
said, all would admit that this was a Bill of the greatest importance, yet their Lordships were asked to pass it without knowing its contents—so that it was not really to be the legislation of both Houses of Parliament—it was to be the legislation of one. He had asked for the Bill in the House this morning, and it was not then delivered, and he had not been able to obtain a copy until the afternoon. How, then, could their Lordships be asked now to read it a second time? It was proposed to allow a company which had been established without any provision for the reduction of its capital to make such a reduction upon a resolution passed to that effect. Such a proposal demanded grave consideration, and also, he thought, more safeguards than were provided in the Bill. As far as he could judge, such a power given to companies would subject their creditors to the same inconvenience and trouble as if they became bankrupt. For example, a creditor was obliged to object before the Court, or, if he could show that he had had no notice, he had a remedy against the shareholders, according to the extent to which each would have been liable for that particular debt if the capital had not been reduced. With regard to associations which were not established for purposes of profit, he did not see why they should object to the use of the word "limited." It must be remembered that such associations entered into engagements and had creditors. The Bill appeared to him to be framed in order to enable companies to do anything, and he believed that if passed it would throw joint-stock companies into great confusion and uncertainty. Their Lordships ought not to be called upon to pass a measure which hardly any Member of the House could have had an opportunity of considering. He had barely had time to look into 1546 the Bill himself; but it was one that demanded serious consideration, and it would be highly imprudent to proceed with it at that period of the Session.

§ THE EARL OF HARROWBY
said, that his attention had been called to the Bill by a letter he had received from Liverpool, which represented the urgency of the case. The Bill had passed the ordeal of a very intelligent Committee of the House of Commons; that pains had been taken to secure the rights of all parties concerned; and urged the very great importance of giving something like stability to joint-stock companies. Great discredit had been thrown on these undertakings, and public confidence in them had been shaken by the disparity which had been found to exist between real and nominal capital; and it was highly desirable, if possible, by removing that disparity, to give solidity to property of this nature. Due attention had been paid to the interests of creditors, whose position would be as little altered as possible. He did not pretend to be master of all the details of the Bill, and possibly it might be amended in Committee; but at the same time, considering the extreme urgency of the case and its public importance, he hoped their Lordships would consent to the second reading.

§ LORD REDESDALE
asked what time there would be, if Amendments were proposed, for their discussion, the Report, and the third reading? He asserted that the passing of a Bill of this sort, when their Lordships had not time to do anything with it, would be a most dangerous proceeding.