HC Deb 29 March 1825 vol 12 cc1279-85
Mr. Peter Moore

, in pursuance of notice, rose to bring forward a proposition for defining and ascertaining the law relating to Joint-Stock Companies. He stated, that at present the law in respect to these companies was very obscure and ill-understood; the common law, from its antiquity, being but little applicable to them, and the statute known as the "Bubble Act" being so full of penalties and contradictory enactments, that it was, in fact, a dead letter. The necessity of settling a question of so much importance was placed beyond question, by the amount of capital which was daily investing in these speculations, and which be would be safe in estimating at upwards of 160 millions. This sum, large as it was, he hoped to see tripled and quadrupled; as the infallible result of so extended a spirit of commercial enterprise must be, to encourage industry and diffuse employment. Attempts were making to bring the companies into discredit, by stating that they came within the Bubble act. He denied that they did so; and with respect to the act itself, he knew that its authority was considered obsolete in the highest legal quarters. Besides, bubble schemes could not in these days be maintained; because, if the people did not approve of them they could not be supported. Hence, no legislative enactment was wanted for their suppression. He had himself the honour to belong to some of these companies, and he pledged himself that there was as much integrity in their views, as in those of the company of the Bank of England itself. He called upon the chancellor of the Exchequer to protect these companies; for they contributed a good deal to the revenue, as every transfer of stock was liable to a heavy stamp duty. It was not his wish to provoke a discussion at that stage of the bill; but he hoped the question would be fully gone into at the second reading; and any assistance which he could give in defining the law, he would gladly afford. At the same time, he had no hesitation in saying, that he courted the fullest inquiry into every speculation with which his name was connected, and he was authorised by the directors to state, that if any deception appeared in any part of their proceedings, they were willing to withdraw the scheme altogether. Upon all these grounds, he hoped no objection would be made to bringing in the bill; that the fair dealers might be distinguished from those who had improper views, and that a question might be settled, in which so many persons, and so much property, were interested. He concluded by moving, for leave to bring in a bill "to repeal the 6th of George the First, called the Bubble Act."

The Attorney-General,

having been called upon by several members, said, that the act which it was proposed to repeal, referred to a great variety of objects, Other than Joint-stock companies, to which the hon. member's bill was addressed. If he recollected rightly, the incorporated rights of two great commercial companies in the city of London were secured by that act. This subject, therefore, required much more consideration than the hon. member seemed disposed to give it; and he should, therefore, feel it his duty to oppose the motion.

Mr. Grenfell

said, he would support any motion for settling the law upon the subject of Joint-stock companies If there was an indisposition to concede the repeal of the whole of the Bubble act, why not repeal part of it? It was absolutely necessary, considering the amount of capital embarked in these speculations, and the anxiety prevailing as to the law, that some definite rule should be laid down. The Bubble act was a dead letter; since, from the severity of its penalties, it never could be put in force in the present state of the country. No one would have the boldness to propose the application of this act to the schemes that were now afloat. It was only last week that he saw the prospectus of a new speculation, to which the name of a prince of the blood was attached. He imputed nothing improper to this royal personage; but, would it be said, that he was a fit object for the application of the Bubble act? He had seen another prospectus, containing the name of a high individual, for whom he had the highest respect; namely, the archbishop of Canterbury, and he believed the whole bench of bishops were parties to the undertaking. He did not quarrel with these reverend persons for thus embarking in an adventure; but, who would think of attaching to them the pains and penalties of a premunire? He hoped, therefore, that the subject would be considered, and that the law would not be suffered to remain, which subjected the highest personages to such penalties. The public were already led to expect some alteration in the law from the highest authority in the country. He did not offer a word, as to the policy or impolicy of the Bubble act; but he thought it highly necessary that the law should be rendered intelligible.

Mr. Robertson

wished the subject to be set at rest for the sake of the public at large; who were quite as much entitled to protection, as any of the princes of the blood, or the archbishop of Canterbury.

Mr. Ellice

said, he had heard with satisfaction the proposition of his hon. colleague, for setting at rest the law affecting Joint stock companies. He did not pledge himself to go the whole length with him, of repealing the act of George 1st. but he should decidedly vote for bring- ing in the bill, that the question might be discussed, and some steps taken to define the law. For the Bubble act, he had no great respect; for the history of that measure was this—that it was made to support two great bubbles, and to suppress all others. He was anxious to elicit some legislative decision upon these companies; because, from the passive silence of parliament, a great deal of inconvenience was produced out of doors. There was evidently an indisposition on the part of ministers to entertain the subject: and they had even held the most liberal opinions in that House, stating that the public were at liberty to introduce whatever schemes they pleased, but that existing laws were sufficient to punish any frauds which might be committed. But, whilst this language was held in that House, an alarm was sounded elsewhere; and every opportunity was taken to warn the public against embarking in speculations, which he (Mr. E.) believed to be a more beneficial mode of employing the superabundant capital of the country, than in lending it to the sovereigns of Europe, who had so often become bankrupts. But, so it was, that the public were in a state of distraction between opinions so much at variance with each other, and both professing to come from authority. He recollected the same game being played, in the case of the Spanish colonies in South America; for whilst the independence of those states was treated in the speeches of the ministers in that House as partly recognized, the court of Chancery was labouring to warn all persons from embarking in any transactions connected with them. This was unfair treatment of the public; and, if persevered in, might have the worst effects. It was due to them to make something certainly known as to the law of the case. He therefore voted for the introduction of this bill, in the hope that the discussion upon it would lead to some beneficial result. Possibly, the right hon. president of the Board of Trade would then state, whether it was the intention of government to interfere; and the public would be in a condition to judge whether the Bubble act might not be wholly repealed, or at least considerably modified.

Mr. J. P. Grant

thought that, under the terms of the hon. member's motion, nothing short of a repeal of the 6th of George the First could be now introduced. If his object was to amend and alter parts of that act, it should be made the subject of a motion distinct from this. It was, however, a question of the greatest delicacy and importance; and, even if the Bubble act were repealed, he was not prepared to say, how far the subject would be affected by the common law. The act in question was very loosely worded; and, from the circumstance of the infrequency of its application, it had not received much interpretation from courts of law. But he believed it was quite clear, that the act referred to many other objects than those to which this motion extended; and, under such circumstances, he would recommend his hon. friend to withdraw this motion, and wait for some other opportunity. At the same time, he was bound to hint to him, that the subject which he had undertaken was more extensive than he perhaps imagined, and that from the number of subjects which would necessarily be implicated in it, he would find it difficult to frame such a bill as would meet his views, and not violate any interest.

Mr. Secretary Peel

said, that the Bubble act contained twenty-nine clauses, the first seventeen of which had no reference whatever to Joint-stock companies. Did he understand the hon. member, then, to call upon the House to repeal those clauses? He was at a loss to see what benefit could be derived, even if this motion was acceded to. It was quite impossible, in a bill, brought in for the purpose of repealing an act of parliament, that seventeen clauses should be left untouched, as they necessarily must, since they had no relation to the subject. He would advise the hon. member to withdraw his motion.

Mr. Hudson Gurney

regretted, that this measure had not been brought forward by government, as the state of the law, as regarding Joint-stock companies, was such as obviously required alteration. He wished the right hon. gentleman opposite, the president of the Board of Trade, could be prevailed upon to take the task of legislation into his own hands. It was impossible that the common law, originating in another state of society, could meet all the exigencies of the present commercial situation of the country; and the Bubble act, which the hon. gentleman now moved for leave to bring in a bill to repeal, not only left the law in great uncertainty, but contained provisions which it was impossible ever could be acted upon. Something, certainly, ought to be done—whether by merely introducing a system of registration, and thus enabling every one to judge of the parties he trusted; or by introducing the continental system of authorizing parties, on actual deposits so registered, to limit their responsibility, he was unable to say; but he was much inclined to think, that the latter would be of very useful adoption. It had been argued, that the great and increasing capital of the country had forced men into the species of speculation now afloat, for its investment; but, the fact was, that the greater number of these schemes were projected by persons having no capital whatever, who carried their shares immediately into the Bubble-market, the first instalment to be paid bearing little proportion to the nominal capital—speculating on selling, on the first rise of price, to those who will allow themselves to be cheated; advertising their projects under the names of known persons, as trustees and directors; and, having themselves advanced next to nothing, looking to realize on an amount which was purely fictitious, at the expense of the public.

Mr. Peter Moore

said, he should be extremely glad if his majesty's ministers would take the affair out of his hands. He had been waiting in expectation that the matter would be taken up by high authority. If a bill respecting it were brought forward in any shape, he should be most happy. But, as things were, the various Companies, possessing, a capital of 250 millions, were left at sea, without rudder or compass, not knowing whether they were acting right or wrong. What they wanted was, to act right. Upon his honour, he believed that not one of the Stock Companies, with which he was connected, had less probity or less stability than the bank of England itself. He would never connect himself with any one of which he did not entertain that opinion. What they wanted was, to understand the law. It was said, that the Bubble act did not apply to them, yet they had been threatened with its operation; and that threat had operated upon them most injuriously. Full discussion was what he wished for. Might he be allowed to change the word "repeal" the act, for the words "amend and alter" it? In a case in which so much property was afloat, let the matter be settled. Could the two clauses of the act which affected that property be alone considered? He believed that the whole act had been declared by high authority to be obsolete and a dead letter, and that it had been declared, by still higher authority, that it could not be carried into execution. He would propose to amend his motion by substituting the words "alter and amend", for the words "repeal."

Mr. Hume

asked seriously, whether it was intended to leave the law in its present unsettled state, and what objection could there be to altering and amending such parts of the act as were objectionable? The lord chancellor had promised to bring forward some measure but, in what time could such a measure be looked for? At the end of next session the learned lord would begin to doubt; and when his doubtings would end, no man could say. In the mean time, property would be wasted in legal disputes, and uncertainty and anxiety must be every where prevalent.

Mr. Huskisson

asked whether, under the terms of this notice to repeal an act, a motion could be now made to alter and amend it? The hon. member who brought it forward had confessed that he was unable to point out any specific remedy for this alleged inconvenience of the law. He should say, that the hon. member would have treated the House with greater respect, if he had prepared himself better, and enabled himself to make some substantive proposition on the subject.

Mr. P. Moore

said, he had no objection to withdraw the motion for the present; but he would bring it forward again after the holy days.