§ Mr. Green moved the second reading of this bill. He remarked on the opposition that had been shown to the bill, founded on the most absurd and unfounded rumours; in illustration of which he would just observe, that he had been gravely asked, whether the company did not derive its name from an hon. member, Mr. Pascoe Grenfell. In his opinion, the House had no right to take upon itself to prevent the citizens of London or the people of England, from disposing of their money in any way they might please; and he therefore hoped that no hon. member would feel it his duty to oppose the measure. The company had the authority of no less a man than M. Humboldt for believing all they proposed to do practicable.
Mr. Hobhousesaid, he was sorry, that although it was but a private bill, he should be obliged to enter more fully upon it than might be agreeable to the House. It was the first opportunity that had offered for his making any observations on the spirit of gambling that now existed in the city. The hon. gentleman who had just spoken had asked, what right any member had to interfere in what was a private question? But, he thought that, as soon as the company came to that House to ask for a bill, it gave a right to every member of it to offer his opinion on the subject; for the object in obtaining that bill was, that it should be generally understood that the Pasco Peruvian company was acting under the authority and sanction of the parliament of the kingdom. The effect that these schemes had was monstrous. He knew of many instances where the hard earnings of years bad been 1049 disposed of in those plans which, he had no doubt, would, in the end, come to nothing. The task that he had under-taken was, he knew, a most difficult one. He did not intend to mention any names; but he would just throw out the hint, that both private and public means had been taken to intimidate him from opposing the bill. He would now turn to the scheme itself. The capital of the company was a million; and the shares being divided among fifty gentlemen, who held each of them two hundred shares, for which they paid 5l. a piece, they were put into the market, and were declared to be at 16l. premium. Now, suppose the projectors amounted to fifty, then, according to their prospectus, if they divided the shares amongst themselves, each projector took 200 shares; the deposit being only 5l. on each share, each projector advanced 1,000l. Now, immediately on issuing the prospectus, according to contrivances well known on the stock exchange, those who applied for shares were told that the shares were risen from 5l. to 16l. At this rate each of the projectors, by selling only 66 of such shares, would raise 1,056l., and thus not only receive his original deposit of 1,000l. but retain 134l shares to make money of, without the risk of a farthing. If he got only 16l. for each of these shares, he would pocket 2,144l.; but these shares had, by puffing and other means, been as high, as 50l.; so that, if any original shareholder realised all his 134 shares, he would make a nett sum of 6,700l. Supposing, however, these shares should rise, as others had risen, to 500l. or 700l. per share, and which would be the case, perhaps, if this bill passed, then each proprietor might put into his pocket between 80,000l., and 90,000l. without ever having, in fact, put a shilling of his money into any peril; or, it might be said, advancing a single shilling of his money. In this calculation he had supposed that the original projectors were fifty in number. Probably they were not twenty-five in number. In that case, of course, the profit would be double what he had stated, and the risk the same; that was, none at all. He trusted the House would never suffer such a bubble to take place under their sanction. With respect to the legality of these sorts of schemes, he would read the opinion lately delivered by chief-justice Abbott, in the case of Joseph v. Pebrer, which went clearly to shew, that, at least, in the opinion of that Judge, such schemes were illegal. "The 1050 language of 6 Geo. I. c 18, is not very explicit; but in the 18th and 19th sections two marks and symbols are pointed out as characterising the Societies which the legislature intended to prohibit—the dividing stock into transferable shares, and the assumption of the powers of a corporate body; and, upon the evidence, both of these symbols belong to the company before us. The certificates produced purport to be to give to 'the holder,' whoever he may he, the right to certain shares; so that they are transferable without limit, and without control. The prospectus, without which it would not appear whether any thing and what was the subject of contract, requires the subscribers to submit to the orders of the committee; and thus the society assume to act as a corporation, delegating to a select body the power to make by-laws to bind the others. Thus, then, the company is within the words of the statute; and is it not clearly within the mischiefs which it was intended to remedy? These very shares of 50l. each, were sold at a premium of 5l. 10s. each; and the society, professing to have a capital of 2,000,000l, really had a capital advanced of only 40,000l. We cannot shut our eyes to what is passing in the world around us; and unless we do we must observe, that not only this, but many other societies, have sprung up, promising prospective and contingent benefits, sanctioned by no charter, and unprotected by act of parliament; and that a dealing and traffic in their shares has arisen, never exceeded at any period, except, possibly at that time when the legislature was obliged to interpose by the statute to which reference has been made. The effect of these companies is, to give opportunity and scope to gaming and rash speculation, which necessarily lead to misery and ruin; for in gaming and rash speculation, if one man gains, another must lose in proportion; whereas in commerce, fairly and honourably conducted, both the buyer and seller receive benefit. Taking this view of the tendency of this society, and thinking it characterized by two of the marks which the legislature has pointed out as distinguishing illegal companies, I feel bound to declare this dealing and traffic in its shares—for I need go no fur-ther—contrary to law."—After such an opinion had been delivered by the lord chief justice, he would ask, whether it became parliament, in the teeth of that opinion, to sanction the gambling and 1051 rash speculation in which the Pasco shareholders had embarked?—He would now proceed to notice the first and second prospectus which had been put forth by the Pasco directors, and also a third production, in the shape of a very trumpery pamphlet; and if he did not completely expose these three documents, he would never ask the House to coincide in a single opinion of his as long as he lived. The first prospectus stated, that the company had secured a lease of the land, containing these mines, of a person of the name of Quiros. And, who did the House suppose this person was? Why, an expatriated patriot; a man who had actually been driven from the country, the viceroy Lecerna being in possession of Peru at the very time this prospectus was issued. This person was styled, in the prospectus, their agent in Peru, in order to induce people to believe that he was actually in that country. He was not, however, in Peru, but was only about to return to that country, to superintend the affairs of the company; which, he trusted, he would not be permitted to do, at least with the sanction of that House, after the exposure which he (Mr. H.) pledged himself to make that night, of their proceedings. The prospectus went on to describe, in the usual empyrical manner, the prospect of unbounded wealth which opened itself to the shareholders. The framers of that prospectus evidently proceeded upon the supposition, that there was an infinite fund of gullibility in the dupes to whom they addressed themselves. One of their assertions was at once impudent and picturesque; such was the exuberance of wealth in this country, said these gentlemen, that even the building stones of the small town of Mignapampa were rich with silver ore. A torrent of silver was to enrich the Pasco shareholders, and give increased vigour and activity to every species of enterprise. These projectors declared, in their pamphlet, that they did not think it necessary, when they came forward as miners, to possess any mines at all; and that they would be perfectly justified in establishing a company for working mines in Peru, even though they had not secured a contract for a single mine. The House would judge of the morality of the projectors from this declaration. That they had a legal right to establish a company under such circumstances he did not deny; but he trusted parliament would not give its sanction to such a specu- 1052 lation. He would now mention another curious circumstance. The prospectus spoke of the disposition of the government of Peru to countenance an enterprize of this nature; and stated, that one of the directors acted under the authority of that government. Now, if this had been true, the royalist government must have patronized the project; for no other government was in existence at the time the prospectus was issued. The House would be astonished to hear, however, that in another part of the prospectus they talked of the advantages which would result from the relation in which one of the governors stood to the independent authorities in Peru. At this time, there were no other independent authorities in Peru; the royalist government was the only established government there; so that here again the projectors calculated on the gullibility of the public. It was stated in the prospectus, that all engagements for the payment of money entered into on behalf of the company, were to be made with the trustees in their own names, and that the liability of the shareholders would not, in any case, exceed the amount of their instalments. Now, this the projectors knew to be illegal; they were perfectly aware that the shareholders were liableto the whole extent of their fortunes; and so, indeed, they were, in effect, declared to be in the bill before the House; for that bill contained a clause, declaring, that it should not be lawful for the company to contract or limit their own responsibility, or the responsibility of any individual member of it. In the prospectus, the shareholders were deceived in to the belief, that they would be liable only to the amount of their instalments; while, in the act of parliament, they were made liable to the full extent of their whole fortunes. The second prospectus was, if possible, a more extraordinary production than the first. It stated, that a contract for additional mines, in the district of Pasco, had been entered into, since the publication of the last prospectus. The district of Pasco was said, in the prospectus, to comprise upwards of 360 mines. Now, he held in his hand a little book, published by order of the viceroy of Lima, in 1796, from which it appeared, that in the districts, not only of Pasco, but of Huaranta, there were in all but ninety-nine silver mines; namely, 78 worked, and 21 not worked. It appeared, from other official statements, that there had been no great increase 1053 since the return made in 1796. But the pamphlet went a great deal further than the prospectus. It quoted the Lima Gazette as an authority for stating, that there were more than 3,000 mines in Pasco. Now, the whole population of Pasco amounted only to 5,000 individuals; so that, according to this calculation, there was about a man and a quarter for each mine. He knew what was meant by this attempt at delusion. It. might be said, that there were 3,000 shafts, as they were technically called; but persons who were acquainted with the country knew that there was nothing there which could be properly called a shaft. The prospectus talked also of fields of barley, at a height which was calculated by Humboldt to be 13,000 feet above the level of the sea; as if it were possible that barley could grow where there were frosts every night. Even in the torrid, the utmost height at which vegetation could go on, did not exceed 12,000 feet: and the real fact was, that the Pasco miners were supplied with maize from Lima, at three and four times the price at which it was sold at that place. Captain Cochrane, in his late publication, had stated, that at a much less elevation above the level of the sea, he met only with a single solitary shrub. The prospectus went on to state, that, the owner had undertaken to convey the whole of this property to the company, either in perpetuity or in any other manner, consistent with the law of Peru. Now, the pretended owner of this property was one Don Juan Vivez, who appeared, from the Lima Gazette, to have run away on account of a sentence of sequestration against this very property? The former owner, with whom the company dealt, was a runaway patriot, and this owner was a runaway royalist. The directors said that the sentence of sequestration had never been enforced. It was true, that the sentence had not been enforced; and the reason was, that the mines had never been worked. There was no property, therefore, against which to enforce the sequestration. It was said, that the mines produced abundance of coal; but this coal was not on the spot. The mines must be worked by means of steam-engines, and the coal could only be brought in small loads on the backs of mules and other animals. The directors stated, that the present owner had realized 100,000 dollars from a single mine. Now, it was a new mode of estimating the value of 1054 any property, to inquire of the seller how: much it was worth, and to take his representation of it without any further inquiry. But, what was the fact, as stated in their own document, the Lima Gazette? The sum which had been realized was not 100,000, but 50,000 dollars; and this was the produce not of one, but of four mines. The whole property had only been sold for a sum between 300,000 and 400,000dollars; so that the exaggerated account in the prospectus of what it had produced was perfectly ridiculous. M. Humboldt had calculated, that the whole of the Pasco mines might produce 2,000,000 dollars annually. According to this calculation, the portion of them contracted for by the Pasco company, supposing them ever to get possession of the property, would produce about 40,000l. He had made allowance for the expenses; and when these were taken into calculation, he would ask, whether the shareholders were likely to derive any profit from this scheme? He had stated, on a former evening, that a similar project had failed before in the district of Pasco; and he would enter somewhat more into detail with respect to this part of the subject. This same individual, Vives, engaged, in 1814, with three individuals, Arismenda, Abradia, and Uville, who undertook to drain a certain portion of his mines for him, and who entered into similar engagements with the Pasco shareholders. M. Uville came to England, and entered into contracts with the commercial houses of Messrs. Dubois and others, who advanced money for the purchase of steam- engines. The drainers and miners had every possible assistance; they were patronized by the government, and the principal persons of Lima formed part of the Association. After several years, two of the steam-engines were brought to work, and the local judges in their report to the governor, Tarma, spoke of the Draining Company as follows:—"It would be doing little on our part, and that of the whole body of miners, to erect a monument to them (the company), which should transmit to the latest posterity the record of this great and patriotic undertaking, a torrent of silver, which will give energy to all our operations, and be the means of diffusing wealth-and happiness throughout the kingdom" Such were the magnificent promises of the Peruvian authorities—of persons who being on the spot, might be supposed to know the truth. Now, what was the 1055 event? The miner had, indeed, to erect a monument to the company, for all the English miners, except one, died. The Draining Company, having spent 600,000 dollars, or 170,000l, totally tailed. They were to receive 15 per cent, of the whole-produce of some mines, and 20 per cent. of others; but they lost all their property. Aresminda, the first partner in the concern, was outlawed; Mr. Vivez was banished from South America, and his property confiscated. The shares of Messrs. Dubois and company, on which 400 dollars, or 90l. had been paid, and which had actually been bought by thoughtless speculators, in 1814, for the enormous sum of 1,500l. each, turned out not worth a farthing. To complete the catastrophe, the dwelling-house and effects of Abadia, the managing master of the mines, was sold on the spot; and, for a final consummation of this hopeful project, the English merchants, Messrs. Dubois and Co, never received even a ratification of any of their agreements with the Peruvian Draining Company. So much for the first Pasco project. There was another important view of this subject. If the Pasco mines belonged to any body, they belonged to the representatives of this old company; and there could be no doubt that these representatives would not allow the new company to establish themselves on their property. He knew that one of the original shares had actually been twice sold in the market at a considerable price since the establishment of the new company. Vives had been outlawed; but it was said by the directors, that his property was protected by his son. Now, by the laws of Spain, a son could not protect the property of the father, though a father might protect the property of the son. If those mines were to be worked at all, it could not be done, as the prospectus stated, by means of Europeans; and to enable the House to form an estimate of the practicability of such an undertaking, he would refer the House to a book which he had in his hand, written by Mr. Helms. And, what said, this gentleman? Why, that no European, nor even a negro, could endure the effects of that climate, and work in the mines for the space of one year; and yet the reward of their toil was a scarcely sufficient pittance of potatoes and maize for their food. The hon. member referred to another authority, to prove that the alternations of heat and cold were so great 1056 as that he could not stoop to tye his shoestrings. The distance from Pasco to Lima was only 56 leagues; and yet, how long did the House suppose it required to perform the journey? He found that it took 16 days to go up, and 13 to come down. There had been a statement in the papers, that a body of soldiers had marched down in six days. The fact was barely possible; but there was a great difference between going up and coming down, where mountains were concerned; and be it remarked, that the mules could carry no more than seventy pounds weight.—Another difficulty with which the company would have to struggle, would be that of procuring the assistance of the native Indians. These were no longer looked upon as slaves; and all future operations in that country must be carried on by means of free labour. In Mexico the labourers were paid two dollars a day. Was it considered what an immense drawback this would be on the profits of the speculation? He had heard it urged, that Spain had derived large revenues from the working of those mines. He admitted she had; because government took its one-fifth of the gross produce, without any consideration of how many were ruined by the attempts at working them; but the House would not, he hoped, allow persons in this country to be ruined in a similar manner. If the directors meant to act bona fide, let them go on for a year or two with their operations without a bill. Let them prove the thing practicable; and then he would have no objection to granting them the privilege of suing and being sued in the name of their secretary; but, at present, he thought the bill would only have the effect of keeping up what he considered a delusion. He would therefore move, as an amendment, "That the bill be read a second time that day six months."
§ Mr. Fowell Buxtonsaid, that as some highly respectable friends of his were connected with this company, he felt it his duty to take that early opportunity of doing justice to them, by putting this question on its fair footing before the House. He would admit a great deal of what the hon. member for Wesminster had said. He concurred with him fully, that if any set of men, no matter who, associated themselves as a company, with intent to delude the public, they ought to beheld up to public reprobation, and their proceedings ought to be arrested. But, 1057 was that the case here? Had it been proved that any such attempt had been made? The hon. member had gone into a variety of topics, which really had nothing to do with the merits of the bill before them, and into which he would not fallow him. The question was, was this a delusive scheme, or was it a bona fide and practicable enterprise? It had been called a deep-laid scheme but the fact was, the opposition which was now made originated in a deep-laid scheme to depress the market, and reduce the price of shares. When he said this, he, of course, fully acquitted the hon. member for Westminster of any participation in, or knowledge of, such scheme. He admitted the hon. member's views to be most upright and honourable; but he could not refrain from expressing his conviction, that the calumnies which had been heaped upon this company, and the misinformation which had been impressed on the hon. member's mind, with respect to the company, originated in a deep-laid scheme to reduce the price of shares; and, if it was unfair to raise them by improper means on one hand (but he did not admit that this was the case with the company), it was also unfair to depress them by calumnies on the other. It was alleged, that this project was impracticable—that it was visionary—and that no such mines existed. Now, let the House refer to what had been said with respect to the mines by that illustrious traveller Humboldt. He stated, "The mines of Pasco, which are worse worked than any other in Spanish America, were first discovered by the Indian Huari Cupca in 1630. They yield annually nearly two millions of dollars. In order to form a just idea of the enormous mass of silver which nature has deposited in the bosom of these calcareous mountains, at the height of more than 4,000 metres above the level of the ocean, it should be remembered, that the bed of argentiferous oxide of iron in Gauricocha has been worked without interruption from the commencement of the seventeenth century, and that during the last twenty years more than 5,000,000 marks of silver, (equal to 40,000,000 dollars) have been extracted." Would this statement of Humboldt's be also called delusive? But, the fact did not rest on the authortiy of Humboldt alone. It was confirmed by several able and intelligent travellers, and was stated with a confidence of its truth by the intelligent gentleman who was secre- 1058 tary to the Mexican embassy. He would, in corroboration of the statement, read an extract of a letter written by the son of the gallant member for Southwark (sit R. Wilson), who was at present aide-decamp to general Bolivar, and with him in that country. In that letter he says, "It is very surprising to me, but nevertheless it is strictly true, that silver is in such plenty, that the meanest utensils are made of that metal. I could for a few knives, or other articles of iron work, procure several pounds of it; but this abundance is comparatively of very little value, in consequence of the difficulty of conveyance." He read this extract by permission of the gallant member for South-wark, who at the same time requested him to state to the House, that he was in no way connected with any of those mining companies, and had never speculated in them. This statement, then, so fully corroborative of what had been already mentioned by Humboldt, could leave no doubt on the mind of any man, of the great abundance of silver in those countries. In addition to these, he had the testimony of an officer who commanded a part of the independent troops in 1821, that silver was extracted in large quantities at that time, by means of the steam-engines sent out from England. It was further proved, that there had been discovered, within a short distance of the mines, a valuable coal-pit, which afforded abundant fuel for all the purposes of mining. The hon. member for Westminster had spoken of this as if it were a considerable distance from the mines; but the fact was, and he had it from one who was on the spot, that it was not more distant than a league from the mines. With such advantages, then, how could the company be called a delusion? But, it semed that the company had not a good title. He had seen the documents on which that title was founded, and he had not the slightest doubt that it was one which would be recognized by the government of Peru. He did not think the hon. member for Westminster dealt fairly with the company, in the interpretation which he had put upon that part of their regulations, in which it was stated, "that all engagements entered into on behalf of the company were to be made by trustees, and in their own names, and in such manner that the liability of the shareholders shall not, in any case, exceed the amount of the instalments remaining unpaid on their re- 1059 spective shares." Now, he thought that the fair and natural interpretation of that was, that the engagements would be conducted with such attention and economy, that the shareholders would be protected from the risk of being called on for any thing beyond the amount of their instalments. Having thus said a word on one side of the question, he would call the attention of the House to another, and would give them some information as to the cause of all the calumnies which, in public and in private, had been circulated against this company. When it was first established, a person, named Dubois, wished to be concerned in it, and to obtain some shares; but the directors, for reasons which it was unnecessary for him to state, refused to have any connexion with that person. Immediately after, they were attacked, their intentions grossly misrepresented, and their object described to be nothing but a delusion on the public, for the purpose of putting money into their own pockets. Yet, after this, the same Mr. James Dubois came to some of the directors a few days ago, and, in the presence of two or three respectable individuals, one of whom was an officer of rank, said "I am the author of all the attacks which have appeared against you. I have originated and given circulation to the reports which have been spread to your disadvantage; but, if you will now give me twenty shares, I will go and recant all I have hitherto said. I will tell the whole truth, and be the means of raising the shares in the market 20 per cent." This base offer was very properly rejected with indignation; but, notwithstanding that, he had come yesterday morning, and repeated the application, lowering his demand to ten shares. This was also refused; and, of course, the company were to expect a continuance of that person's hostility. But, would the House, by rejecting the bill before them, sanction such a base attempt as this? He trusted they would not; but that, by giving leave to have the bill sent to a committee, they would afford the company an opportunity of showing the fallacy of the statements which had been circulated against them. He would not trouble the House by following in detail the hon. member's lengthened statements about mules and mulattoes, and the other topics he had introduced, which were really wide of the merits of the question. He would say to the hon. member, "Let the bill go to a 1060 committee, and if you can there prove any of the attempts at fraud or delusion to which you have adverted, you may rest assured that I will not be the man to screen any parties who may be found guilty of any such attempt." It was only in the committee that the merits of the whole plan could be fully entered into. Upon these merits he was ready to meet the hon. member; and he would undertake to prove, to the satisfaction of the committee, that the person he had named was the author of all the calumnies which had been circulated against the company, and he would clearly establish the base objects for which those calumnies had been invented.
§ Mr. Hudson Gurneysaid, be could not follow the two last speakers, without remarking on the inconvenient course which the House appeared to be pursuing—One member crying down, and another crying up, the probabilities of success in a commercial adventure—as instructed by parties interested in the rise or fall of shares in the market; and gambling, perhaps, for the next morning, on the effect that their speeches might produce there. In fact, instead of bills in numerable—that was, bills of exception from the operation of the law of the land, in favour of certain parties applying for them, there ought to be one general law for the formation and regulation of all joint-stock companies.—Whether the introduction of a law of registration of partnerships, with limited responsibility, as in France, and many other states of the continent, he was not competent to say; but some general act ought to be brought in; and by the government. He hoped the right hon. the president of the Board of Trade, would take the matter into his own hands; it could not be in better; and it was not a question any private individual could satisfactorily deal with. The common law was what grew up in an entirely different state of society, when there was little or no commerce; and the Bubble act was passed in a moment of national phrenzy—assuredly, when there was no wisdom.—As to the bill applied for, it was merely for the privilege to sue and be sued; and if granted to others, he saw no reason why it should be denied to this company—and, on that ground, he should certainly think it his duty to give his vote for the second reading.
§ Mr. Thomas Wilsonsaid, he wished to 1061 make one or two observations, as he happened to be connected with the bringing in of this bill. The hon. member for Westminster seemed to be little acquainted with the real nature of the transaction, and has distorted the facts in the most ungracious manner. He had examined the objections urged by the hon. member, and put by others out of doors, and he could state his perfect conviction that they were unfounded. He thought the charge which the hon. member had made respecting the whole of the shares being divided among 25 or 50 persons was most ungracious. The fact was, that a very large portion of the shares when they came out were distributed among the public—to those who had applied for them, by themselves or their friends. He had written for some, believing, as still he did, that the speculation would be a profitable mode of employing capital, and the directors had set his name down for five shares. so that his interest was but very small in the concern. He had just seen one of the directors in the lobby, and had been informed that each of the directors was compelled to retain 100 shares. And then the hon. member said "Look at the avidity of those men who retain all these shares for their own profit without a risk." But he said "No." For their profit if, you will, but at their risk. The directors were bound to retain 100 shares each, and if the statement of the hon. member was correct, they would be practising a delusion on themselves, and not on the public. As to the critique which the hon. member had made upon that part of the directors' statement, "that they conceived they should have been justified in establishing a company for working mines in Peru, even if they had not, at the time of forming such company, secured a contract for a single mine," he thought it was not very candid or liberal. He conceived the directors would have been fully justified in forming a company, without a contract for a single mine. Why, there was already a most respectable company formed in London, who were about to send out persons to Mexico, for the purpose of contracting for the working of mines there; and they had been formed without having possession of a single mine. The company had, he thought, been treated disingenuously. There was only one objection which the hon. member had urged which had any weight with him. It was, that the climate was very unhealthy. But, 1062 be it recollected, that it was not intended to send out whole corps of English miners to work those mines. They would still be worked by the natives, but under the direction and superintendence of a few English miners, who would carry with them that skill and knowledge by which mines might be worked to the greatest advantage, in which the native miners were so deficient. Looking at all the circumstances, he felt convinced that this was a fair and bona fide speculation, and that it would be pursued with advantage. He could mention the names of most respectable individuals well acquainted with mining transactions, and who were in no way connected with the directors of the company, who had purchased 100 shares; which they still retained, believing it a very advantageous mode of investing capital.
Sir F. Burdettsaid, that the fact that persons were first led to enter into this company by being told that they would only be liable to the amount of their shares, and that they were afterwards informed that their responsibility would extend to the whole of their fortunes, was a sufficient reason to induce the House to throw out this bill. It appeared to him, that of all the projects which he had ever heard or read of, this scheme most deserved the name of a bubble. He believed that the directors were honest dupes to the information which had been transmitted to them; but he thought that on that account, as much as on any other, the House was bound to interfere, and protect them from the consequences of their own credulity.
§ Mr. Lockhartsaid, that if the House gave to this company the power of suing and being sued by their secretary it would go out to the public that the project itself had met with its approbation. They could not be too cautious how they invested any company with such a privilege. He desired them to remember, that if schemes like the present should end in ruining the fortunes of private individuals, members would not only have to bear in their collective capacity the blame of want of judgment, but also in their private capacity the blame of having leagued together to promote their private interests. Supposing this country to be in possession of all the mines of South America, it was a great mistake to infer that it would be the richer. Look to Spain. Was that country enriched by the possession of her 1063 mines? No country was rich, but that which relied on its talents and industry. He should, therefore, oppose the bill.
Mr. Baringcommenced his observations by declaring, that he had no interest in the fate of this bill either one way or the other. As long as his hon. friend, the member for Westminster, confined himself to general remarks upon the gambling speculations which were now so prevalent, he fully concurred with him in every thing he had said; but as soon as he began to apply his observations to this particular case, he was obliged to express his dissent from him. It was deplorable to see the gambling mania that was at present abroad; it had seized upon all classes, and was spreading itself in all parts of the country. If it was to be lamented that men of the first rank and family in the country haunted gaming-houses at the west-end of the town, it was still more to be lamented, that merchants at the east-end of it should imitate their example, and make a gaming-house of the Royal Exchange. He saw no difference between the gambling of the nobleman in the hells of St. James's-street, and the gambling of the merchant on the Royal Exchange; except that the latter kept earlier hours and more respectable company than the former. The evil was certainly one which deserved to be checked; though he hardly knew how the check could be applied. The remedy would be worse than the disease, if, in putting a stop to this evil, they put a stop to the spirit of enterprise. That spirit was productive of so much benefit to the community, that he should be sorry to see any person drawing a line, discriminating between fair enterprise and extravagant speculation. Nothing that had fallen from the hon. member for Westminster had induced him to think that it would be improper to read this bill a second time. He believed that all the mining speculations would turn out to be delusions, and that many innocent persons, who had embarked their little capital in them, with the expectation of realising large fortunes, would be awakened some day unpleasantly from their dreams of grandeur, by the intelligence that their all was lost. The great mistake under which the uninformed part of the public laboured was this—that their interference in the Spanish mines would render them much more productive than they had formerly been. He believed that the skill with which those 1064 mines were worked was little understood by the public. Under the Austrian government, heavy and stupid as it was, the gold mines of Hungary were worked with a science and skill which could not be exceeded. The same, he had reason to believe, had been the case with the mines of Spain. He expected that the Cornish miners, experienced as they were, would carry as much presumption as skill to the new task in which they were going to engage. At the same time that he said this, he thought it only right to add, that no mining scheme which he had seen made a better show upon paper than this Pasco Peruvian scheme. He thought that the failure to work them in 1814 was attributable more to the disturbed and agitated state of the country, than to the impracticability of rendering them available. He could have wished that the president of the board of trade had taken the subject of acts like the present into his consideration, and had come down to the House prepared to recommend one general rule to be applied to the whole of them. He did not see any reason why the House should pass all these bills for creating joint-stock-companies without examination. He thought, however, that as they had passed so many without discussion, they would be acting unjustly, if they made a stand upon the present bill, and said, "we will stop here." It was ridiculous to see the objects for which joint-stock-companies were forming every day. We heard first of a milk company—then of a bread company—then of a brick-bat company, and last of all a lime company, which was to have a joint stock of 150,000l., to work eleven acres of chalk. What to do with these companies he knew not; but that something should be done was quite indispensable. On the first day of the session, a learned person of great influence in the cabinet had given notice that he would apply his mind to the invention of a remedy for this evil; but he was afraid that the remedy would be matter of doubt with the personage to whom he alluded, until the disease had either carried off the patient, or had been cured by the effort of nature. He trusted, that before long, some general rule would be brought forward, applicable to all cases like the present, and that the House would not be called upon to specialize in each particular instance.
Mr. Calcrqftsaid, that the argument of his hon. friend, that they were to sanction 1065 this bill which they had investigated, because they had sanctioned other bills which they had not investigated, was so inconsistent with common sense, as to need no other refutation than the mere repetition of it. His hon. friend's speech, in support of the bill, would do more than the speeches of many gentlemen against it, to throw cold water upon the speculations of this company. He considered ail bills of this nature in the light of a bonus to the shareholders. They were often brought into parliament for no other reason than to increase the price of shares in the market. If this company were really sincere in their intention of prosecuting the design they had announced, they could do it as well without a bill as with it. He believed that the parties most interested in it only wanted to sell their shares, and either cared not a straw about the mines, or were willing to leave it to others to work them. He considered this speculation to be rather a specimen of parliamentary mining than of fair commerce. He thought the hon. member for Westminster had made out a case which ought to convince parliament, that it would be doing wrong in sanctioning this measure. He recommended that trade should be left to its natural and legitimate course, instead of being bolstered up by so many artificial projects as were at present in existence. He was sorry to see from a list that had been published, that more than twenty-eight members of parliament were either chairmen or directors of more than three Associations each. He thought that such Associations would not add either to the wealth, or to the interest, or to the honour of the nation; and, of the many schemes which they had put forth, he thought the Pasco Peruvian mining scheme was by far the most delusive.
§ Mr. Ellicesaid, that, in the first prospectus which this company issued, the projectors had placed their names amongst those of the directors, without making any previous communication to him of their design. He had, however, desired it to be withdrawn; as he did not consider the speculation a prudent one. His reason for so thinking was, that it was proposed to work mines in a country, which had no settled government, and where it was uncertain whether a new law, or the old Spanish law, would prevail with regard to mining contracts. In Mexico and Colombia the case was somewhat different. New governments had been framed, and new 1066 laws had been formed, abrogating the old ones respecting mining contracts. In the latter case, the law was settled and definite; in the former, liable to change and indefinite. Under these circumstances as he did not think the scheme a prudent one, he had desired that his name as a director, should be withdrawn, lest it should lead some persons into the scheme, who would not otherwise have joined in it. He trusted that his hon. friend, the member for Westminster, would withdraw his opposition to the bill in its present stage, in order to give those who were interested in it the means of contradicting his statements if they could, All the other companies had been allowed to proceed upon the same machinery which this bill asked for. He could say from a personal knowledge of the characters of the directors of this company, that they would be the last men in the world to lend their support to that which they believed to be a delusion. In conclusion he condemned the spirit of gambling that was now abroad. There might be great prizes in the lottery which was thus opened; but none sufficiently great to compensate for the credulity of those who entered into such speculations.
Mr. Attwooodsaid, that the view which had been taken of the subject before the House, by his hon. friend, the member for Newton (Mr. H. Gurney), was perfectly just; and that the greater part of what had been advanced on either side, by other gentlemen, was wholly irrelevant to the real question. With the quality of these mines, the validity of the leases of the company, or the value of their shares, the House had nothing whatever to do. Here were a body of men, who had formed themselves into a partnership, and prepared to embark their money, in the working of certain mines in some part of Peru. They found, that as the law stood, a partnership, such as theirs, consisting of a great number of persons, was placed in this absurd position, that they could neither sue successfully at law, for any debts due to them, nor could their creditors sue them. They applied, therefore, for an act to remedy this inconvenience. An act, as it was called, to sue and be sued. This was the simple character of the act applied for; and the time of the House had been occupied for hours, with trumpery investigations respecting the prospects of gain or loss of those parties; whether the title to their leases was perfectly valid, and would hold good, the 1067 quality of their ores, their coals; whether some of their partners or shareholders had not given too much or too little for their shares, as between one another, and other such considerations, perfectly derogatory to the importance of the proceedings of parliament, and which were for the judgment of the parties themselves who adventured their money, and for them only. Suppose the House having taken on itself to discuss these subjects, should form an opinion upon them, different from that of the parties themselves, and should come to the absurd resolution of rejecting their bill. What then would ensue? The parties would proceed in working their mines, just as effectually without the bill as with it. They would act on their own judgment and information. The House had no power to obstruct nor forward, the objects of the parties, as to risking their money or working their mines. All they could do was, to decide whether they should or should not be legally liable to their creditors. The hon. member for Wareham, indeed said, that the effect of passing the act would be, to induce persons to buy shares in the company at a higher price than otherwise, and that therefore it was to be rejected- But the act applied for, would neither make their shares in reality more or less valuable; and if people were ignorant enough to believe the contrary, it was perfectly idle for the House to guide its proceedings by their want of information in the conduct of their own affairs; and which ignorance he did not believe existed. That state of the law, indeed, which had caused those parties to apply for an act of parliament, was a subject of grave consideration. It was a very important circumstance which was thus brought before them; that whenever any considerable number of persons were engaged in a mercantile partnership, or, in other words, in a joint-stock company, the state of the law was (owing to a technical defect, which was found to apply in the course of legal proceedings), that such partnership was incapable of recovering any debt by law; and that no creditor of such partnership was able to recover by law, any debt due from them. The number of extended partnerships, or of joint-stock companies in existence, were, as was well known, exceedingly numerous; many of them had procured acts of parliament to remove this evil; but many others again, pro- 1068 ceeded, and had long proceeded, without such acts. A great part of the alarm which had been expressed recently, in different places with respect to companies of this kind, had arisen from this state of the law. Lawyers, viewing these undertakings as connected with the defective state of the law which applied to them, had endeavoured to excite the apprehensions of those who were embarked in such concerns; but those individuals would have better consulted their own character, and have rendered better service to the country, if, instead of attempting to influence the conduct of mercantile operations, of which they knew nothing, they had applied themselves to remedy the absurd and disgraceful state of the law itself, which fell within their own province. The interests to which this disgraceful state of the law applied, were of enormous magnitude. Associations very numerous, of long standing, of great capital and importance, were situated as he had described. The greater number of those useful institutions, the insurance offices, were so circumstanced. Millions of capital, hundreds, perhaps, of millions, were employed in this country by those associations, honourably, profitably, usefully to the country; and were totally without the pale or protection of the law. The parties were a law for themselves, their character was their law, they arranged their proceedings so as to guard against, and provide for, as well as they could, the vices of the law. It was fit that such a correction of this legal absurdity should take place as would give, not to this company only, but to all others similarly circumstanced, the same power which the present bill proposed.—As he had been led to say thus much on the more general question, he would offer some remarks on the character of that clamour which had lately been raised against joint-stock companies, and which had formed a material feature of the present debate. It was proper to call to their recollection, what were the advantages which the country derived from associations of this nature; and that they formed a means for the beneficial employment of a considerable portion of the national capital. Listening to what had been said on the subject, it might be believed that those associations presented one great and enormous abuse, which it was necessary to repress and destroy in whatever form offered. But gentlemen 1069 would do well to consider, that it was to such associations that the country was indebted for every public work which it possessed, having for its object the promotion of wealth. What had been the origin of all canals, docks, aqueducts, bridges, and similar commercial works? They were beyond the power of individual enterprise; the government was incompetent to such undertakings, but they yet existed in every direction. They were the work of those joint-stock companies, which had been the subject of so much indiscriminate and prejudiced abuse. There existed, in fact, in the country, no power or means whatever of executing such works, except by means of those combinations called joint-stock companies. The government was not only inefficient for such purposes, but might be said to be the most inefficient of any government which then existed, or which almost ever had existed. In other countries were to be seen great public works executed by the government. In France great canals; in Holland; in China, even, canals of a magnitude unknown elsewhere, all the work of the government, but in this country nothing of the kind was to be seen. An hon. gentleman said, the Caledonian canal. The Caledonian canal was undertaken for some purpose of employing or curbing the highlanders, and there was, indeed, a road through Wales, for a speedy communication with Dublin. But those had political objects in view. There was no want of such works on the part of the government, as fortifications, military and naval, and harbours for ships of war; but, of public works of a commercial character, having for their object the promotion of wealth, there existed nothing of the kind throughout the country, which had been the work of the government. This was no reproach to the government. It was to its praise, that it had no character of needless interference with the affairs of the country, but left the people to the free employment of their capital, and the development of their resources. But the state of things he had described was one not to be lost sight of, when the character of these associations was considered. They found, indeed, a very extraordinary power, peculiar in a great degree to this country, and existing, except partially, nowhere else. Their main origin was, he was convinced, in that integrity in the commercial character of the country, 1070 which guaranteed such undertakings from that fraud and abuse in their conduct, which had been ridiculously imputed to them. Oilier countries had seen the advantages of such combinations, and had endeavoured to establish them by efforts and encouragement. In France the government had, for many years, been occupied in endeavouring to establish these companies to construct canals, by bounties and encouragements of every kind; but, he believed, without effect; whilst here, with no assistance on the part of the government, but the subjects of ignorant reproach, had these joint-stock companies intersected and united all the main parts of the kingdom, with canal communication. But then it was said, there was much ignorance in the conduct of many of these associations, much imprudence, many operations undertaken not suited to be executed advantageously by such associations. There could be no doubt of it: It was not a pure and unmixed good. In every direction of any considerable branch of capital, there must be, of necessity, much of extravagance and its natural result. But of this he was convinced, that in the most extravagant and absurd of these undertakings, there could be found no ignorance so complete and perverse as had been exhibited in that and the other House of parliament in the discussions respecting them. Alarm had been felt, respecting the number and extent of those associations, but it was to be considered whether the present circumstances of the country were not such, as necessarily to direct a more than ordinary proportion of capital to such objects. If the present rate of interest, and value of money should continue, his conviction was, that the present extent to which joint-stock companies were carried was not their limit, but that they would be much further and beneficially extended. During the war, for a period of twenty years, the government came into the market for loans, to the annual amount of, perhaps, twenty millions. But what was the source from whence those loans were supplied? From the surplus revenue of individuals, desirous of converting it into capital, which would produce an annual return. At the close of the war, the government ceased to take off those accumulations of capital. But capital did not cease to accumulate on that account; and its natural and most beneficial direction, was to public works of a commercial character. Would gen- 1071 tlemen, who were kind enough to point out the danger which individuals incurred, in investing their money in shares of docks, canals, rail-roads, and other schemes now on foot, inform those individuals in what other manner they would recommend them to invest their money, so that it should be free from risk, and produce a satisfactory income? In 3 per cents at 95, or in loans to foreign governments? It was to avoid both these, that persons took shares in public companies. He had been somewhat surprised to hear his hon. friend, the member for Taunton, join in those terms of unfounded alarm. He had referred particularly, to those associations whose object was, to work mines in South America, and who calculated on introducing there, many improvements in the system of mining. The hon. member said, they would be deceived; that those expectations were delusive; that it was a vain opinion, which the miners of this country entertained, of their superiority to the miners of South America. He instanced the mines worked by the Austrian government which, ignorant and sluggish as that government was, were yet conducted with as much system and science as any mines here. Now, he would like to ask the hon. gentleman, whether he considered that the finances of the Austrian government were conducted as ably as its mines? In his humble opinion, when his hon. friend put himself at the head, of what was, in fact, neither more nor less than a joint-stock company, formed with the object of lending two millions to that beggarly, dishonest, and bankrupt government, and for the express purpose of enabling it to pay a composition of somewhere about half a crown in the pound on a just debt, he lent himself to an operation as full of delusion, and as likely to end in ruin, as any one of those projects the most absurd and extravagant, whether for working mines, or for selling chalk, or milk, which he had described, and of which no doubt many, sufficiently absurd were in existence. He did not defend the prudence of all the undertakings of these bodies, any more than he would of any great class of individuals. But it was not to be forgotten, that the same return, which some years back would have been looked on as unfortunate, would be advantageous under present circumstances. The prospect held out to the holders of stock was, a reduction of interest if peace should continue; 1072 a great loss of capital if war broke out-This was the motive which led to joint-stock companies. A dock, or a canal, which should now return five per cent, would be a profitable undertaking. One that returned four, three, or even two per cent would not be considered ruinous. The abuse, therefore, which had been so freely lavished on those undertakings was most preposterous. He had been led, however, at too great length, into that subject; with respect to the simple question before the House, of the particular company to which it referred, he knew nothing, neither of their prospects of advantage, or the value of their concern or their shares; nor did he desire to know. All this he left to the judgment of the parties themselves, whose concern it was; but that they ought to be made liable to be sued at law for their just debts, of that he was quite satisfied; and also, that they ought to be enabled to recover by law any debts justly due to them; and as the present bill gave them those powers and no other, he should willingly vote for it.
Mr. Baringbegged to be understood as applying his observations not to this company in particular, but to joint-stock-companies generally.
Mr. Robertsonwas of opinion, that the House ought to make a stand on the present occasion, and protect the public from the ruin with which they were threatened. All the speculations that were at present afloat, and more especially the mining speculations, afforded little chance of being successful. As to the introduction of the steam engine to work these South American mines, it was the greatest possible delusion. There was no fuel. In Mexico there was no coal; and near the mines under discussion there was no wood. They had been worked for many ages by able German miners, who were as likely to render them profitable as any persons. Nor was it probable that the Mexicans would sell them to their present proprietors, disadvantageously to themselves. There could be little doubt that whatever capital was embarked in these mining speculations would be wasted. He strongly impressed upon the House the necessity of endeavouring to put a stop to these speculations, by withdrawing the countenance of parliament from them. He regretted, that when a subject of so much importance was before the House, not a single minister was to be seen on the Treasury bench. The country was indebted to the 1073 lord chancellor for what he had stated on the subject. That learned lord seemed to be the only member of the government who was alive to the ruin that awaited the unthinking persons who embarked in these speculations.
§ Mr. Alderman Bridges, in reply to the hon. gentleman who had just spoken, declared, that in the neighbourhood of Real del Monte, there were coals enough to enable the steam-engines to work for many years. The hon. alderman vindicated the characters of the directors of this company, who were men of the highest honour, and possessed of great prudence and foresight. High as the shares at present stood in the market, many of the holders would not take double the current price for those which they had in their possession.
Mr. Hobhousesaid, he had applied his observations, not so much to the individual speculators, as to the speculation itself. He should not, however, press his amendment to a division.
§ The bill was then read a second time.