§ On the Order of the day for the further consideration of the Report of the Companies' Clauses Consolidation Bill,
§ Mr. Hawesreminded the noble Lord (Lord G. Somerset) of his promise last Tuesday, to state to-day the course he would pursue with respect to the power of the Committee of the Board of Trade, relative to the jurisdiction the Committee had in railway matters. He then had stated, that he had strong objections to 47 the very extensive powers given them over private property, and expressed his willingness to take the discussion as to the propriety of investing them with such powers, either on the 47th Clause, which confirmed these powers to the Committee, or upon the bringing up the Report. Still, he thought, the subject was of such importance, that it was highly desirable that clause should be argued in a full House, when the leaders of both parties being present might state their opinion in debate.
§ Lord G. Somersetsaid, though he was not inclined to precipitate the passing of the Bill, he must recommend to the Committee not to throw any unnecessary delay in the way. He would also undertake that full opportunity should be given to all who entertained doubts as to the propriety of investing the Committee of the Board of Trade with these important powers to express those opinions, and take, if they thought proper, the sense of the House on the clause. He begged, as there were now pending in full House many important financial and commercial propositions, which precluded the possibility of affording time for the discussion of this important subject in full House, that they would permit him to go through the clauses seriatim, and take the discussion of this subject, not on the 47th Clause, but upon his bringing up the Report upon the Bill.
§ Mr. F. Mauleassured the noble Lord he had no inclination to throw any obstacles in the way of speedily passing the Railway Clauses' Consolidation Bill. He, nevertheless felt there were substantial grounds of objection to the extensive powers given by this Bill, particularly by the 47th Clause, to an irresponsible body. There was the greater necessity for an immediate decision of the House of Commons upon the propriety of reposing these extraordinary powers in the Committee, because, should these powers be refused them when they came to the latter clauses of the Bill, they would have their labour in vain, for the clauses, in many instances, must of course be remodelled. It behoved them, therefore, to decide upon the principle as quickly as possible.
§ Mr. Aglionbythought that that objection was merely technical. It was decided there must be some tribunal, and the only question was what that tribunal should be. If the House determined it should not be the Board of Trade, it would only be necessary to go formally through the clauses to alter the name of the tribunal.
§ Lord G. Somersetbegged to assure hon. Members opposite, that his hon. Friend the Vice-President of the Board of Trade had bestowed great attention on the Alterations and Amendments suggested; but they were all of a technical character, and could, therefore, be easily disposed of on the Report being brought up. With regard to the clause affecting officers refusing to make up their accounts, &c., he (Lord G. Somerset) proposed that bail might be taken by the magistrates. With respect to Clause 120, on the subject of dividends, he had found that it admitted of no doubt in its construction, and, therefore, need not be altered.
§ Mr. Hawesobjected to the clause. He wanted to know how capital stock was defined, and how under certain circumstances the dividends were to be paid if this clause passed as it stood. Much practical inconvenience would arise from it, because parties now paid up their capital by instalments, and received interest upon it pending the construction. There were cases in which it was advantageous to pay a dividend out of the capital stock. Besides, what one company called capital stock, another did not. There were different modes of keeping the accounts in this respect, and great practical difficulty would be imposed upon the companies unless it were defined what capital stock was. He should move as an Amendment to leave out the word "scheme."
§ Mr. Hayterbelieved the noble Lord did not propose to prohibit companies from applying a part of their capital to payment of dividends. If the present clause were construed by that immediately preceding, he did not think any such prohibition existed; but, taking this clause by itself, it might be differently construed. The introduction of the word "such" before dividends would obviate the difficulty, by thus making it necessary to interpret the present by the preceding clause. Then it would stand so that there would be no prohibition against companies to pay part of their dividends from capital pending the construction.
§ Lord G. Somersetsaid, it was not the object of the clause to prevent the payment of dividends from the interest of capital, for that he thought was legitimate; but to prevent the payment of dividends out of the capital stock after the works were completed, and when no profits had been obtained. It was well known that many companies had gone on paying dividends out of their capital stock, as if they were in a most flourishing condition. He did 49 not mean to say that there might not be some special cases; but there would be in the several Acts out of which those arose special provisions for them, and he did not think that the words should be struck out on that account. His object was, to prevent the practice which had been adopted by the companies to whom he had alluded, who went on paying dividends, when in fact they had realized no profits, until their capital no longer existed.
§ Mr. Aglionbysaid, that he quite understood the noble Lord meant the clause to apply to fictitious profits. But the cases which he had put the other day had not yet been met. The first was the case of a coal company—whether they should consider the coal as part of the capital stock of the company: the other, that of a land company, who, supposing they laid out 100,000l. in the purchase of 100,000 acres, and they had sold 10,000 of those acres for 20,000l.; was one-half of that sum to be divided as a bonus, or was it to be considered as part of the capital stock of the company?
Mr. Gladstonesaid, that if any difficulty existed in the apprehension of the clause, it would be better to obviate it by the introduction of some other words. But it must be recollected that this was a general Act, and intended only to regulate other special Acts to be introduced hereafter. Those special Acts would provide for their own peculiar exigencies; and he did not think that there was any difficulty in this clause which might not be readily adjudicated by a legal tribunal. He did not think there was more difficulty to be encountered in dealing with this clause than any other involving questions of commercial legislation; and it should be recollected that it had the sanction of long-continued precedent for its present shape.
§ Amendment withdrawn.
§ Mr. Spoonersaid, it would be a great hardship to give the creditor of the railway the power of distraining the goods of the treasurer for the debt of the company. He would have no objection that there should be a power to distrain for the amount of the balance in the hands of the treasurer belonging to the company.
§ Lord G. Somersetadmitted that there was a seeming hardship to allow distraint upon the treasurer of an insolvent or bankrupt company. But the treasurer could at any time relieve himself by resigning his office, when the creditors would know what balance really existed. At present, the 50 creditors were frequently evaded by the treasurer's denying the possession of a balance.
§ Mr. Aglionbysaid, that the clause would go in direct opposition to the policy of all the Acts which had been passed of late years; which policy was, to give creditors a full remedy against the company, and, at the same time, to protect the officers. The Act, the 7th Victoria, was passed to enable companies to wind up their affairs, or to enable the creditors to compel them to wind up; so that there was no reason for the introduction of so stringent a clause as the present. He approved, therefore, of the Amendment proposed by the hon. Member for Birmingham.
§ Mr. Hawessaid, that the treasurer ought not to be made responsible for the whole of the debts of the company, whereas he knew nothing of their assets beyond the book account. The effect of the clause as it stood would be, to deter from accepting the office of treasurer the class of persons whom it was most desirable to have placed in that office.
§ Lord G. Somersetsaid, he would take time to consider the clause before the third reading. For the present, he would withdraw it.
§ The remaining clauses were agreed to.
§ Bill to be read a third time.