HC Deb 03 July 1844 vol 76 cc273-82

On the Motion that the Order of the Day for going into a Committee upon the Joint-Stock Companies Registration and Regulation Bill be read,

Mr. Hawes

believed the Bill was imperfectly understood, and it was not known that the Bill would be proceeded with so soon. From communications which he had had with several persons, he found that the provisions of the Bill were not known to Joint-Stock Companies. The provisions of the Bill were not merely applicable to future Railway Companies, but to existing Railway Companies. They were of such a nature, and went into such minute details, that the Bill, if passed, would throw the greatest possible obstruction in the way of Joint-Stock Companies, present and future. It seemed to be the object of Her Majesty's present Government to interfere with everything and to settle nothing. The great object of the Committee which sat on this subject was to prevent the formation of fraudulent companies. But this Bill would not prevent the formation of fraudulent railway companies. It was an attempt to grasp at power which was perfectly unprecedented. There was no kind of petty legislation which this Bill did not embrace. He thought they had a right to know what was the opinion of Her Majesty's Ministers generally. The right hon. Gentleman (Mr. Gladstone) seemed remarkably hostile to the employment of capital in those great undertakings to which this country was so largely indebted. From beginning to end Joint Stock Companies were to be placed under the control of the Board of Trade. The Bill had been materially altered since it was first printed, and very extensive powers had been given to the Board of Trade in reference to Railway Companies—[dissent from Mr. Gladstone]—and Insurance Companies. He would join issue with the right hon. Gentleman in reference to Railway Companies. The right hon. Gentleman intimated that the Bill did not apply to them. Now in Clause 76—

The Speaker

The hon. Gentleman, until the Order of the Day be read, cannot discuss the Clauses of the Bill.

The Order of the Day read.

On the Motion that the Speaker do leave the Chair,

Mr. Hawes

said, the right hon. Gentleman had intimated that the Bill did not apply to Railways. ["Mr. Gladstone: No."] Then he would assume that it did apply to them; and indeed, he could conceive of no company to which it did not apply. The Insurance Companies had been included recently, and he thought they ought to have had notice. His great object was to elicit a clear exposition of the principles and intentions of the Government. To the Bill itself he entertained three objections—first, that the interference took place without sufficient notice to the several companies; secondly, that the interference was minute to a degree, which would be destructive of the proper management of the companies; and, thirdly, that the Bill gave to the Board of Trade a degree of power in reference to Joint-Stock Companies which it ought not to possess. He would be glad to know what necessity there was for a measure like this. Had there been that extent of fraud and deception in the formation and management of Joint-Stock Companies, which alone could justify such an interference? He maintained that there had not. The evidence taken before the Committee on this subject was of the most unsatisfactory character. The hon. Member concluded by moving, that the House should resolve itself into Committee on the Railways Bill on that day six months.

Mr. Hayter

seconded the Motion. The Bill was one for giving to the Board of Trade unlimited control over all Joint-Stock Companies. Every document even connected with the companies was to be sent to the Board of Trade. The Board of Trade by this measure was assuming to itself all those powers for the purpose of making itself an irresponsible tribunal, and enabling it to throw a net over every company, from which they could not escape. That was the real object of the Bill. Every penalty fixed by the Bill was, he would venture to say, unknown to the Constitution, enormous in amount, and unexampled in all times. Under such circumstances, he felt bound to support the Amendment of his hon. Friend the Member for Lambeth.

Mr. Gladstone

was surprised that a measure like the present should have been met in the manner it had been by the hon. Member for Lambeth. The hon. Member made the measure a source of accusation against Her Majesty's Government. Thinking that such an accusation was unworthy of the hon. Member, and totally uncalled for by the provisions of the Bill, he should take no further notice of it, but go at once into the discussion of the objection that the hon. Member had raised. It must be recollected that the hon. Member for Lambeth was a Member of that Committee upon the resolutions of which the present Bill was founded—and if he (Mr. Gladstone) was not mistaken, that hon. Member agreed in every word of that Committee's Report. Whether the provisions of the Bill were meritorious or not Her Majesty's Government were not to blame. It was the act of the Committee, and the Committee alone, and the Bill was founded upon the resolutions they had come to. If there were details in the Bill that were objectionable, why should not the House go into Committee in order to amend them? The resolutions of the Committee had been printed no less than four months, and he challenged the hon. Member for Lambeth to state that any serious objection had been taken to the Bill during that period. Added to this, not a single Member of Parliament had given notice of any amendment to the measure. The principal object of the Bill was, that there should be established a public office, to which all parties soliciting to take part in Joint Stock Companies might repair, in order to know the real history of these companies. That was the groundwork of the Bill, and could any hon. Member doubt that it was most important that the Legislature should put a stop to the system that had been so long carried on of attaching the names of hon. Members, and men of importance and property, to schemes in order to entrap the unwary. The principle of the Bill was prospective legislation, and its provisions were to be applied to future companies. The registration required by the Bill for present companies consisted of a few and simple particulars, every one of which was recommended by the Committee, and assented to by the hon. Member for Lambeth. [Mr. Hawes: "No, no."] The twentieth resolution required that the registration should take place, and who was an assenting party to this resolution in the Committee? Why the hon. Member for Lambeth himself. How that hon. Gentleman could now come down to the House and make the large and general statement he had done—how he could assert in so sweeping a manner that this Bill was to apply not only to all future but to existing companies, was to him (Mr. Gladstone) a matter of so much surprise, that he could only account for it by supposing that he must recently have drunk very deeply of the waters of oblivion. But if there were all those evils really attached to the Bill which were asserted to be attached to it, let them get into Committee at once, and prune them out. The hon. Gentleman said the Bill would bring all future companies under its operation. He should meet that allegation as he had met the preceding one, by plainly asserting that it did not bring all future companies under its operation. This was not a point of law. Were it so he should not presume to say one word upon it, for he was no lawyer. It was simply a point of fact; and as a point of fact he contradicted the view taken of the provisions of the measure by the hon. Gentleman. But it was charged upon him (Mr. Gladstone) that the great object he had in view was to increase the power, the patronage, and the emoluments of the Board of Trade. By an Act, already in existence, the Board of Trade, in conjunction with Her Majesty in Council, could now exercise every privilege that the Bill now before the House gave, and many more privileges besides. The express object of this Bill was to get rid of the discretionary powers already vested in the Board of Trade—powers which caused him and all connected with him in his office very great anxiety and uneasiness. He could assure the House that when he was sitting in the Board of Trade with others about him, attending, to the best of his ability, to his duties, there was nothing gave the Board so much uneasiness and annoyance as the exercise of the discretionary powers already vested in them as to the management of commercial matters. He repeated the object of this Bill was first to limit these ungracious powers, and then to get rid of them altogether. As to the discretionary power which this Bill was to give with respect to joint-stock banks, it would give the power to make them a statutory body. But even this discretionary power was not a new one, but one rather of a relaxing than of a stringent character. Joint Stock Companies at present could not be formed with any privilege such as that of suing and being sued, except by coming to Her Majesty in Council, or by applying to Parliament. What was one of the main principles of this Bill? That under it they could be formed entirely irrespective of the Board of Trade, and they would be subject to that department only as to certain forms of construction and regulation. Under this Bill, there would be a power, for the first time, for persons to associate themselves in companies, for the purpose of commercial pursuits, without the fear of interference from any human being whatever. So that this Bill was, in fact, a limitation of the powers of the Board of Control, and not an extension, as had been asserted. But the most ridiculous of all suppositions was that the Bill was conceived in a spirit adverse to Joint-Stock Companies. Why he stood there as the organ of the Committee on whose resolution it was founded, rather than as a Member of the Government. And all that the Bill, in fact, proposed was to establish publicity as to Joint-Stock Companies, and a certain degree of regularity in their proceedings. For his part he could not conceive anything more extraordinary than that a Bill should be framed on the Resolutions of a Committee—that it should be passed without opposition in its early stages—and that it should afterwards be combated by one of the very Members who assisted in passing those Resolutions. But the hon. Gentleman (Mr. Hawes) said alterations had been made in the Bill within the last twenty-four hours. So there had been, as far as regarded Insurance Offices. They were to be not exempted, but excluded from this Bill. But this had been agreed to simply and solely on the condition that they were to be regulated separately hereafter. Even here, however, there was surely no extension of the powers of the Board of Trade. Then, as to railway schemes—what was the specific effect of this Bill? This—to cut away the encouragement which the present system gave to jobbers in scrip.—men who had no real or permanent interest in the undertakings whose shares they sought for. This Bill certainly struck a very severe blow at those persons, and he was sure neither of the hon. Gentlemen opposite would disapprove of this. But whatever they did disapprove of would be best discussed and best settled or re- medied when the House got into Committee.

Sir W. Clay

thought the Bill called for by the necessity of the case though some of its provisions might be susceptible of improvement, ft fairly carried out the Resolutions of the Committee, of which he was a Member. As to the effect of the Bill on Joint-Stock Companies, if there was anything on which the public mind was made up, it was on the necessity of some change in the mode of forming Joint-Stock Companies. The object of the Bill, by one general enactment, was to give all Joint-Stock Companies those advantages which they now sought by separate Acts. He should support the Motion for going into Committee.

Mr. Godson

, instead of the Bill going too far, he thought it did not go far enough. One object of the Bill was to register existing companies, in order that they might be known. The Bill merely regulated the great discretionary powers already vested in the Board of Trade. Its object was to prevent the imitation of good companies by bad ones.

Lord Seymour

could not suppose that the Board of Trade, was actuated by any hostility to Joint-Stock Companies. But he would suggest the propriety of excluding Railway Companies from the operations of the Bill.

Mr. Parker

agreed that great harm had been done by the abuse of the principle of Joint-Stock Companies; but he considered that the advantages which had arisen from them more than preponderated, and they should be careful while legislating against the dangers, that they did not destroy the advantages also. One great principle distinguishing this country from others was, the non-interference of the Government with the regulations of trade. The right hon. Gentleman had accused them of being actuated by party spirit, because they alluded to the manner in which the Bill had been drawn up, and on the late period of the Session at which it had been introduced. Now, he recollected when the right hon. Gentleman would have been eloquent against any Bill of ninety-one Clauses, with every Clause ill-drawn, which should have been introduced on the 2nd of July. One great advantage they were promised from the change of Ministry was, that they were to have no ill-drawn Bills. Every measure was to be carefully considered, everything was to be well done; and now the right hon. Gentleman accused them of being actuated by party-spirit, because they objected to an ill-drawn Bill. He thought the Bill would confer very great patronage on a certain office in Whitehall. He objected to any preliminary interference being thrown in the way of companies, and he thought the right hon. Gentleman would do better if he had entirely confined himself to that class of Joint-Stock Companies not yet incorporated under Act of Parliament. He thought it would be better to separate the two classes which the right hon. Gentleman proposed to unite. He would not object to going into Committee if the right hon. Gentleman consented that no preliminary difficulties should be thrown in the way of persons coming to Parliament for Acts.

Mr. Hodgson

was opposed to the Bill, not so much because it interfered with Joint-Stock Companies, as because it interfered with Railway Companies; but he would not object to going into Committee, because he could in Committee propose those alterations he thought advisable.

Sir G. Strickland

had never held a railway share in his life, and he believed that he never should. Therefore anything which he might say would not be open to the objection that he was an interested party. He was surprised that the right hon. Gentleman should have thrown something like a slur upon those Gentlemen who had given the sanction of their names to the projected railway from London to York. He himself was one of those individuals; and his sole object had been to provide a check against the existing monopoly. Notwithstanding what the right hon. Gentleman had said, he was still of opinion that not only additional, but very great powers, were given to the Board of Trade with respect to the formation of new Railway Companies. The twenty-seventh Clause declared that it should not be lawful for the officers of the Company to exercise the powers given to them by Act of Parliament without the consent of the Committee of the Privy Council.

Mr. Gladstone

proposed that they should go through the provisions of the Bill generally, and that it should then be open to any Gentleman to propose that railways should be excepted in certain particulars.

Mr. Gill

thought the right hon. Gentleman the President of the Board of Trade was not justified in introducing some of the Clauses he had done into this Bill, with respect to railways. It was surely not the duty of the Board of Trade to throw obstacles in the way of measures of this description. All that the Board of Trade was called on to do, was to put an end to fraud; and if the right hon. Gentleman would only bring in a Bill for that purpose, he had no doubt it would receive the support of every Member. No statement had been made why railways were included in this Bill. He was glad to hear the right hon. Gentleman intended to take this measure into his further consideration.

Mr. Entwisle

said, there was now sought in this Bill a power to regulate railway companies in their proceedings, even before coming to that House for their Act. This was a power which might be exercised in a very dangerous manner, and which, therefore, he should strongly warn the House to be careful of conceding. The Bill gave the power to receive the deposits of shareholders—a thing unheard of before. Again, it was proposed to invest in the Board of Trade a power to purchase hereafter such railways as might now or at any future period be contemplated and formed. These things, he must really suggest, were eminently worthy of the reconsideration of the right hon. President of the Board of Trade.

Mr. Brotherton

thought there had been a good many railway schemes brought forward in connexion with which there had been more fraud and felony than ever he had heard of before in connexion with public matters. Many persons were extremely anxious to have railway matters excluded from the operation of this Bill; but, though he was aware it was an unpopular opinion, he felt bound to say they ought not to be excluded. There were constantly bubble schemes going forward to derange the market, and injure the honest bonâ fide speculator, that, under the provisions of this Bill would never see the light at all. Let them go into Committee, and then they might be able to correct the defects of the Bill, and send it forth to the world a useful and valuable measure for the protection of the community.

Mr. Walter James

thought the Bill a most useful measure, encouraging, as it did, the trade of the country on the one hand, and discouraging bubble companies on the other. He approved of the preliminary investigation which had been objected to by the Member for Sheffield. A preliminary investigation was insisted on in all cases in which companies came to Parliament for a Bill, and he thought such an investigation ought to take place in all cases.

Mr. M. Phillips

had come down to the House entertaining considerable prejudice against the Bill, but the course which the debate had taken had convinced him of the propriety of going into Committee. He certainly, with regard to railways, thought considerable caution ought to be exercised to prevent companies making an improper use of names. He himself had been asked some time ago by an hon. Member to put his name on the back of the Carlisle and Glasgow Railway Bill, and considering that a direct communication between Manchester and Glasgow would be advantageous, he had consented to do so. To his surprise, a few days afterwards he had seen his name in the newspapers as a member of a provisional committee of a railroad in embryo. He of course took measures immediately to rectify the mistake.

Mr. James S. Wortley

hoped that, while excluding Railroad Companies from the operations of the Bill, they would not exclude sham railroad companies. One of the grossest frauds ever perpetrated had been called a railroad company. He thought the Clause making those who lent the guarantee of their names liable to a most wholesome enactment. He had no pity for those persons who thus lent their names and induced others to risk their property in undertakings of this nature. He thought the word "promoter" ought to be more clearly defined. He had himself, before he had the honour of a seat in that House, been a promoter of a Railway Bill before a Committee. He thought the words of the Clause ought to be so defined as not to include those who were professionally employed in promoting Bills before Committees. The hon. Member for Lambeth had agreed to the whole of the resolutions of the Committee on which the Bill was founded with one exception, a point on which he divided the Committee. If the resolutions were compared with the Bill, they would be found closely to resemble each other.

Mr. Roebuck

objected to part of the principle of the Bill, and stated also that within a very few hours a most important Clause had been introduced into the Bill. He did not see any objection to including Joint Stock Companies and the formation of railways in the Bill. If it was to prevent fraud, it was as proper to prevent frauds in railway companies as in any other. He complained that the Solicitor General was not present on an occasion of discussing a Bill so important as the present one, and objected to the power under the Act given to the Judicial Committee of the Privy Council, which was no less than that of preventing parties from coming before Parliament for Bills. This was a distinct principle, and as it had not been discussed sufficiently, he hoped the Committee would not be pressed.

Amendment withdrawn.

House in Committee.

Some Clauses agreed to. House resumed. Committee to sit again.

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