§ LORD REDESDALEsaid, that the London, Brighton, and South Coast Railway 1423 Bill would be reported that day, and as some of the provisions were peculiar and important, he wished to take that opportunity of calling their Lordships' attention to what had been done, in order that they might see whether there was any objection to the course proposed, The Bill had come up from the House of Commons as an unopposed Bill, and therefore came under his notice as Chairman of their Lordships' Committees. The company being very much in want of funds proposed to raise money by the issue of preference stock; but being unable to raise the amount required by such means, they now sought to issue ordinary stock at a discount. He (Lord Redesdale) confessed that was an objectionable course, but he thought it far less objectionable than the creation of pre-preference stock, and he therefore felt disposed, under the circumstances, to allow the company to issue stock at a discount. The Bill had come before him as an unopposed Bill, and the parties were anxious to make progress withit; but, as no inquiry had taken place into its provisions, he thought that he ought to call the attention of their Lordships to the subject.
§ LORD ROMILLYsaid, the proposal was perfectly new, and the noble Lord had only been able to recommend it on the ground that though it was a bad thing it was not so bad as another course which might have been adopted had the company been able to put it into execution. He hoped the House would have ample notice of the next stage of the Bill, in order that it might be fully discussed.
THE DUKE OF MONTROSEsaid, that the course proposed would be ruinous to the company if allowed, for it entirely destroyed the chances of the original shareholders of any return for their investment. The noble Lord allowed this Bill to go forward, although he said that he saw the objections to it; but he had refused to allow Bills creating pre-preference stock to go forward until they had been sent before a Select Committee and reported upon. This Bill should at least be put in the same position with those measures.
EARL GREYsaid, he thought the system of allowing stock to be issued at a discount better than the system of pre-preference stock, which was not only unjust in itself, but was calculated to injure other railways, besides the particular undertaking thus treated. When a railway company was in difficulties it was the interest of all parties that money to carry it 1424 on should be raised in some way; and he did not see how this could be done so fairly to all parties as by issuing fresh stock at the fair market rate. Such a course did not infringe the rights of any person but seemed to be the natural resource of railways in want of money. In his opinion, therefore, the noble Lord (Lord Redesdale) was wise in approving this plan as a lesser evil to the issue of pre-preference stock. At the same time, he thought it would be well that the Bill should stand over until the subject could be considered by their Lordships.
§ LORD REDESDALEsaid, that where the preference shareholders consented to the creation of pre-preference stock, there could be no objection to that plan of raising money. Volenti non fit injuria. But to allow a company to take that course where such consent was withheld would destroy public confidence in railway investments, and inflict, even on solvent undertakings, a permanent injury.
§ EARL GRANVILLEsaid, the subject was one of great importance, and it would be desirable to know on what day the Bill would be before the House. It would be also desirable that their Lordships should then know the opinion of the Government upon so important a question.
§ LORD REDESDALEsaid, the next stage of the Bill would be the third reading, and it would then be competent for any one of their Lordships to move that the Bill be re-committed. He did not see, however, that any advantage was to be gained by re-committing the Bill, for the question was one of principle. At the same time if their Lordships thought it desirable that inquiry should take place before a Committee he should be happy to concur. He had done what he thought right in calling their Lordships' attention to the matter, and he left it in their hands.