§ MR. ADDERLEY
having moved the Second Reading of the Sheffield, Buxton, Leek, Potteries, and Crewe Railway Bill,
§ VISCOUNT SANDON
said: Sir, I gave notice on Friday last that I would, at an early hour this evening, ask a question of the right hon. Baronet at the head of Her Majesty's Government, relating to the advice which he may be inclined to give to Parliament as to the manner of treating Railway Bills, with the view of postponing the passing of any considerable number this Session. The Motion of my hon. Friend will, however, perhaps, furnish a more convenient opportunity for raising that question. There is no doubt, Sir, that the state of things is this. It cannot be doubted that the present condition of the money market is very different from what it was when these companies first came forward, and there is now a great desire on the part of those who have embarked in these projects to withdraw from them; but, notwithstanding this desire, it is a question whether, by the rules of Parliament, and by the law as it now stands, they are enabled to fulfil their wishes. This, Sir, is a question in which all parties in this country are deeply interested. It is not only of importance to the 591 shareholders concerned, but every one, however unconnected himself with railways, is either directly or indirectly concerned; for there is no branch of trade or industry which is not affected by it. In the first place, there is injury from the mere blocking up of the deposits; in the next place, there is the apprehension of success, for success is no longer wished for; and in the next place, the whole of the railway projects which have already received the sanction of Parliament are affected, for the directors dare not make calls for their completion whilst the market remains in its present condition. There is, as I have said, no branch of trade which is not affected by the apprehensions caused by this state of things. I do not wish to rest my case upon assertions altogether my own; and I have procured some of the mercantile circulars of the most eminent firms which confirm my own opinions. Messrs. Collman and Stolterfoht, a most respectable firm in Liverpool, speak of the stagnation in every branch of trade attributable to these circumstances:—We have still to repeat our former reports of a languid business, and of an uneasy feeling in the mercantile world, as a consequence of the late excessive railroad speculation, and from the dread of the serious effects which must arise if the numerous projects for the further construction of railroads, which are now seeking the sanction of the Legislature, be persevered in. It is easily to be understood, that if the railroads now in the course of construction will require about 20,000,000l. per annum for the next three years, and will thus absorb most of the available capital of the country which can be spared from other pursuits, an additional demand of about 40,000,000l. per annum, which the new projects would require, must be fraught with the most ruinous consequences; for it is utterly impossible that so rapid a conversion of floating into fixed capital, and a diversion of such immense sums from the industrial pursuits of the country, should not deprive them of their very life-blood. It is yet to be hoped that when the consequences come to be more fully understood, a vast number of these projects will be abandoned for the present, and the loss of all the preliminary expenses, however severe that may be, will be a saving to the community, and even to the projectors themselves The money market is easier, that is to say, money is readily obtained by the higher mercantile classes; but the inferior, the tradesmen and the shopkeepers, are seriously embarrassed from the difficulty they experience in getting their last year's bills paid, as too many private families have become victims to the late speculative mania. This has necessarily an unfavourable effect upon the retail trade, which reacts upon the wholesale commerce.These statements are confirmed by those of Messrs. Trueman and Cook, who have 592 the highest authority in the mercantile world:—The various branches of commerce are severely depressed; there is not only a continual fall in prices, but great difficulty in realizing goods at any sacrifice. The India and China trade is particularly suffering. Tea, indigo, silk, cotton, &c., forming the principal imports from thence, have all been reduced to a scale of prices unusually low. In the manufacturing districts stocks of goods are accumulating, and a general absence of all enterprise in trade is evident. Several causes might be instanced as having tended to bring about this stagnation; but a principal one unquestionably is the enormous amount of railway undertakings, which are gradually absorbing a large portion of the capital of the country hitherto devoted to trading purposes. This evil is already very severe; but if it be increased by the success of many of the numerous projects now before Parliament, the inevitable embarrassment which must ensue can hardly be magnified. Public attention has recently become more awakened to this important subject; and Government has been urgently called upon to interpose by an unflinching determination to defer for a time most of the schemes now before Parliament. It has been urged, however, that the subscribers themselves have the power of withdrawing the undertakings if they find them beyond their means, and this is certainly true; but although many would gladly exercise the power, it would be difficult to procure a general consent to do so, while a Parliamentary interference to relieve what is now admitted to be a serious impending difficulty, would be hailed with universal satisfaction. The little progress made with the important measures now before Parliament excites much anxiety, and aggravates the depression under which trade lingers. Almost any decision would be better than suspense; and when it is considered that the extent of the commerce of the year is materially dependent upon the early commencement of operations, it will be seen how detrimental that state of uncertainty is which interrupts the spring trade.The suggestion that the projectors should have the power to withdraw from the undertaking, is well worthy of attention. I believe the fact to be undoubted, that a large body of shareholders are anxious to withdraw from the further risk of prosecutting these Bills, but that there is a question among lawyers how far they can do so. If that power, however, do not exist, we ought to take care that it does; for it is surely intolerable, that persons desiring to withdraw should be compelled to see their property employed in prosecuting undertakings against their will and to their ruin; and that while the general interest at the same time coincides with their private interest and wishes, that they should be enabled to withdraw. For my part, I would not permit any Railway Bill to proceed without a further assurance on the part of the subscribers that they were desirous of proceeding. But this proposal, I 593 am told, is too strong. None, however, I believe, will object to a modification which would permit petitions to be allowed to be withdrawn, to be presented, and give assurance, that if such petitions were of sufficient proportion as to shares, they will be listened to by Parliament. As the law now stands, I apprehend that even in case a majority of the shareholders and directors should decide upon withdrawing a Bill, they have great difficulty in doing so. I believe that if the directors themselves withdraw a Bill, they lose all hold over those who have signed the deed, or taken shares, for the expenses incurred; because, as I am told, the deed is only good against the shareholders if the directors perform their part of the undertaking by pursuing their object before Parliament; and that the shareholders may refuse to perform their part of the engagement, if the directors do not perform theirs. I understand that the opposition of a single shareholder is sufficient to prevent the withdrawal of a Bill. On the other hand, if the Bill is pushed, and Parliament reject it, the directors have the power of recovering from those who hold scrip, or who have taken shares, the expenses they have properly incurred before Parliament. [The ATTORNEY GENERAL: Not so.] The legal Gentlemen in this House will be able to explain the law better than I can. At any rate the shareholders and directors have difficulty in carrying out such an object; and as the matter is of the highest importance, not only to those directly interested in railroads, but to all other parties who are connected with the trade and commerce of the country, I hope that Her Majesty's Government have considered this question, and that having conferred with the proper legal authorities, they will be able to state the course which it is desirable for the House to take; and I will therefore leave it in their hands.
§ SIR R. PEEL
Sir, I think every person in this House witnessed the extent of railway speculation which took place last winter and the preceding autumn with great regret. We then saw railroads proposed not for any legitimate purpose of speculation, and not for the purpose of constructing works of public utility in the vicinity of those who were engaged in the speculation, but in a fit of one of those speculative fevers, from which the country has in many instances suffered so severely. We have before seen investments made in South American Bonds, and various speculations of the kind; and I should have thought 594 that the result of these speculations would have read a useful lesson to those now engaged in speculation; but the extent of the railway mania has shown that such anticipations of instructions from former losses have not been received; and I do not see any reason to suppose that individual sufferings of any extent or kind will prevent the periodical recurrence of this fever of speculation. Still, I know that there is a very great objection to any interference on the part of Parliament for the purpose of averting such evils. The presumption is, that every one is the best judge of his own concerns, and that the prospects of private loss are the best checks upon ordinary commercial speculation. Still the House has, to a considerable extent, a large power over railways to making which they are in some measure parties. Speculation in them is different from ordinary commercial speculation in this respect — the Legislature is called upon to give extensive powers to railway companies, and it enables the parties to take the private property of individuals, and to apply it for public purposes, and for the public good; and it is, therefore, in the power of either House of Parliament to check speculations of this specific character. As far as individual speculators are concerned, I confess that I do not feel any great pity for them; and I should not be disposed to relieve them from the consequences of their own conduct, if their case were to be alone considered. Sir, we shall never get rid of speculation except by means of personal suffering. Not only have speculations in railways diverted money from the ordinary operations of trade, but they have diverted also the attention of many from those sources of industry on which they and their families have been dependent; and I say, with every feeling for the sufferings of these interested parties—who are suffering from acts of their own—I should deprecate any interference if it were merely for the purpose of affording them relief. But, Sir, at an earlier period of the Session, speaking for Her Majesty's Government, I did offer an opinion to the House which gave an implied sanction to an interference for the purpose of checking the number of railways. At the same time I spoke with great hesitation, and I was aware of the general impression in the House that we might be interfering with speculations to a serious and undue extent. I am aware also that many were of opinion that we might thereby check the application 595 of capital to its legitimate end. I believe, Sir, that this subject has since undergone the consideration of a Committee composed of the most eminent men in this House; and I believe that their opinion was adverse to any direct interference for the purpose of applying a check. That, I think, was the general opinion of the Committee; and it would, in my opinion, be unwise in the Government to interfere unless it was certain of meeting with the general support of the House. The difficulty of so doing is very great. If we say that we will only sanction a certain number of railroads, or that we will only permit the application of a certain amount of capital, without having the means of ascertaining which of the different schemes are of intrinsic value and importance, I can see only great difficulty in applying any such direct check. I am not surprised, therefore, that the Committee should have come to the determination that we ought not to interfere with the ordinary application of capital. My noble Friend the Member for Liverpool has called the attention of the House, and of Parliament, to particular cases, which are well deserving the consideration of the House. The question does arise, whether, without taking upon ourselves the invidious and difficult application of any general rule as to the limitation of the number of schemes we will sanction, or the amount of capital we will permit to be invested, we shall not afford means to the individual speculators themselves to limit the amount of capital embarked in such speculations. There is a vast number of railway schemes under the consideration of the House, and there has been a great change of circumstances since those schemes were concocted. The parties now find the competition to be greater than they expected; they discover the prospect of profit to be less, and the difficulty of raising money to be very much increased. Many of those who calculated upon raising loans at 2½ per cent, when the prosperity was at a fever height, find that they cannot now raise money under 5 per cent. These circumstances have acted as a febrifuge, and have had a powerful effect in lowering the fever, and lessening the appetite for speculation. Now, the case of many of the schemes introduced for the consideration of the Legislature is, I apprehend, exactly this. There are parties in this country who have taken shares, who hold scrip, who have appointed directors; but a great change has taken place in their opinions as to obtaining profit on their outlay 596 should the railway be formed. The directors, and the majority of shareholders, therefore, are desirous of stopping the undertaking and dissolving the company; and unless the undertaking be profitable, it will not be for the public interest that it should be carried out. If for any reason, or upon any subsequent consideration, it shall appear likely to cause a decided loss, and those who established propose to break up the company, I see no reason why the Legislature should not lend its sanction to such a proceeding. What can we take as a test of the probable profitableness of the company? I should say the opinion of the subscribers. We must not act upon any arbitrary notions of what number of schemes there should be; but if a majority of the subscribers to any one shall come to us and declare that their plan will not answer, or that there is no prospect of remuneration, the House may well resolve that it will not give a legislative sanction to such a scheme. I will state one or two cases which have come within my own knowledge. I know a case in Scotland where the shareholders, so far from viewing with any pleasure the prospects of success, were greatly alarmed when the case for the Bill was established before the Standing Orders Committee; and they thereupon held a meeting of the Members, and came to the resolution that the company should be dissolved. But there is a stronger case still. I know a railway in which the preliminary amount subscribed reached 100,000l.; there was 10,000l. expended in the preliminary proceedings; the remaining 90,000l. was invested in Exchequer bills. The directors and a vast majority of shareholders were convinced that the scheme could not answer, and were desirous of winding up the company. The engineer had failed to comply with the Standing Orders, and Parliament has therefore rejected the Bill. The remainder of the 90,000l. is invested in the public securities. The directors want to dissolve the company, but any small shareholder can restrain them; and it appears that two shareholders, or even one shareholder, might effectually oppose the dissolution; because the directors had entered into an unlimited engagement to do their utmost to pass this Bill. Their engagements are not, I believe, limited to any one year; and if they fail before the Standing Orders Committee, or in any other requisite during the present Session, they will not, as I understand, be relieved from their 597 part of the obligation. If in the terms of the subscription-deed power has been reserved to the directors of dissolving the company, they can dissolve it. But I am not aware that Parliament has the power of relieving the directors from their obligations; and therefore, where parties having failed before the Standing Orders Committee, and having got 90,000l. in the funds, there being no prospect of passing their Bill this year, the shareholders and subscribers being almost unanimous that it is better for the public, as well as their own individual interests, to return to each individual subscriber his share of the 90,000l., which is invested in the public funds; and when I find a single shareholder may step in and say, "I hold you to your engagement, and will file a bill in Chancery against you"—I must say, that something should be done to enable the majority of that company to dissolve it. I have given to this subject as much consideration as I could, and I think it would be for the public advantage to pass, with as little delay as possible, a Bill limited to this object, viz., that where a certain number—I will not bind myself to any particular number—but where the majority of the shareholders, the persons holding more than one-half the amount of stock, represent to Parliament that they are not desirous of proceeding with their schemes, I think there should be full opportunity on their part of making that statement to either branch of the Legislature: and that in that case the Legislature should decline to sanction their scheme. I propose, also, in order to prevent any possibility of affecting the interests of creditors, that the parties who were the original parties to the engagement should remain with all their responsibility to any creditors for any expenditure actually incurred; and that thus, therefore, there should be a full assurance of every debt being paid, and of every engagement entered into with engineers and others being strictly fulfilled. Perhaps it might be desirable to have some officer, such as an official assignee or trustee, to take possession of the property, and to appropriate it to those who have claim upon it. But, if the House should sanction the principle of the measure I have shadowed out, in that case we shall not impose upon parties the compulsion of proceeding at the instance of a small minority, nor subject the majority, at very great inconvenience, to the liability of proceeding with an undertaking which can be of no possible advantage; 598 and we shall do no injustice to any one. I propose, therefore, that a Bill should pass without delay; but, considering the state of public business in this House, I hope my noble Friend in the other House will undertake to bring it in. I think you ought to allow a certain proportion of subscribers, in point of number and amount of shares, to be taken as a full and fair representation of the opinions of the subscribers at large, and that you ought to permit them to present to Parliament a petition, stating their willingness not to proceed in Parliament, and then Parliament might, by not reading the Bill a third time, for a limited period, give full effect to their proposition. I think by that means many schemes not likely to be successful would fall to the ground in a legitimate manner by the signification of the wish of the majority of the shareholders not to proceed with them. There would thus be no necessity for selection or violent interference; but I believe that such a course would have the effect of greatly relieving the money market, in addition to the other advantages. The Bill cannot pass before the Easter recess; but I hope that, in the course of to-morrow, there will be given, in another place, a more full explanation of such a measure than I can give now.
§ MR. LABOUCHERE
said, the question which the noble Lord the Member for Liverpool had brought before the House was of the utmost importance, and one upon which the attention of the mercantile, manufacturing, and other interests was, at the present moment, fixed with the greatest anxiety. He was glad to find that the Government had now taken it into their serious consideration. He had never varied from the opinion which he expressed at the beginning of the Session on the appointment of the Committee, that any proposition with regard to this question ought to proceed from the Government—that it could not properly emanate from any Committee except upon the proposal and under the guidance of the Government; and he was sure that the right hon. Baronet the Vice President of the Board of Trade would agree in the accuracy of what he now stated. When the Committee first met, he was disappointed to find that all that the Government did was to present them with a list of the railway schemes under six different heads; but when the Committee came to consider them, they found them in so confused a state that it 599 was impossible to come to any definite plan respecting them. The Committee were of opinion that any proposal of this kind ought to proceed from the Government; but no such proposal having been made by the Government, the Committee did not go into that part of the subject. With regard to the plan of the right hon. Baronet, as far as it went, he thought it must receive the unanimous approbation of that House. It must be quite clear to any one who had the least knowledge of what was going on in the country, that it would be desirable to give to the subscribers of these railway schemes facilities of getting out of the scrapes they had fallen into; but his fear was, that it would not operate so far as the right hon. Baronet supposed. The right hon. Baronet said they were to proceed with these Bills until the majority of the subscribers should step in and ask the House to withhold their assent; but he thought the right hon. Baronet might have gone further, and proposed that the House should say to the shareholders, "We will not pass these Bills unless you tell us you are desirous they should pass." He had had communication with many persons engaged in railways, and they told him that the shareholders were in general very much dispersed and very much in the hands of the lawyers, provisional directors, and engineers, persons who had an interest in the expenditure of the proceeding; and if they threw upon them the task of originating a proposal, it would be very difficult to get them to undertake it. But, whatever mode they adopted of getting the shareholders out of the scrape, it would meet with almost unanimous assent. He could not see the distinction which he had heard the right hon. Baronet insist upon that evening, as upon a former occasion, that in consequence of railways requiring an Act of Parliament, there was a difference as to the interference of Parliament between them and those cases in which no Act of Parliament was required. It seemed to him, that if they rejected a Bill not because the scheme was bad or objectionable in any particular, but because it was not desirable that capital should be applied in that particular manner, they did in effect, though not directly, interfere with such a scheme; at the same time he must say that he was not so pedantic in his adherence to any abstract and general rules, that if he believed any evil was impending over the country, and the Government came forward and said, that upon their 600 responsibility they had interfered and arrested that evil, he should decline to adopt such a course. However, he did not blame them for that; but he said it was for them to consider the whole case, and to make a proposal upon this part of the subject. He heard the right hon. Baronet the Vice President of the Board of Trade, on a former occasion, say that when the Committee met, it was intended to have proposed some plan to the Committee; but that the case was altered as the inquiry proceeded, and that then much fewer railway schemes went before the Committee of the House of Commons than was anticipated. He heard that declaration with great astonishment, because any one who had attended to the private business of that House, in the present Session, must see that the necessity of passing the Standing Orders' Committee and other impediments to petitions presented to the House on railways, had much less restricted railway schemes than was anticipated, and that the schemes that actually went before Committees were more numerous than was expected at the beginning of the Session. He was very glad his noble Friend had brought this subject forward; and he thought the plan of the right hon. Baronet was very judicious as far as it went; but he wished it had gone a little further. He was sure that effect must be beneficial, but not so great as the right hon. Gentleman seemed to anticipate.
§ SIR G. CLERK
said, it was perfectly true that there was no formal scheme proposed to the Committee, having for its object the amount of capital which it might be considered expedient to direct in any one Session to railways. He had stated, on the appointment of the Committee, that owing to the immense number of schemes deposited with the Board of Trade, it appeared to the Government that it might be necessary that some means should be taken to limit the number of railway schemes to be passed this Session; but at the time the Committee made their final report, the case presented a very different aspect from that which it bore in December last; and he felt that nothing but a case of the extremest necessity could justify interference on the part of the House; and that any such interference, unless recommended by the unanimous assent of the Committee, would have a most prejudicial effect. Now, however, the case stood in a very different position. They found, that in different parts of the country, persons had, in the course of last autumn, rashly embarked in these 601 schemes; but that it was now considered that it was not for the public advantage that many of these schemes should be proceeded with, and that therefore it was desirable that facilities should be given to those persons to relieve themselves from prosecuting those schemes, care being taken that all the engagements into which they had entered, and all the expenses they had actually incurred, should be discharged, and that nothing should be done to relieve them from their pecuniary responsibilities already contracted. He trusted, therefore, that the measure to which his right hon. Friend had referred, would be of such a nature as to meet the object the petitioners had in view, and that at the same time no injustice would be done.
§ MR. WARD
thought that the right hon. Baronet was in the first instance exceedingly wise in abstaining from any direct interference in this matter; and that he was exceedingly wise now in opening a retreat to those who were engaged in railway schemes that were not likely to be of public advantage; and, with all deference to his right hon. Friend (Mr. Labouchere), he considered it was perfectly immaterial, in the present state of the public mind, whether they gave the majority of the shareholders an opportunity of applying to that House, and requesting them to withhold their assent, or refused to pass the Bills, unless the shareholders said they were desirous that they should be passed. It was desirable that facilities should be given to shareholders to free themselves from those schemes, and this was the only way in which an honourable retreat could be provided. His hon. Friend had spoken of provisional directors. As to that most unhappy class, he did not think that one of them would be alive three years hence. They had involved themselves in liabilities without the least knowledge of what they were about. He thought the plan of the right hon. Baronet would have a most beneficial effect for those who were engaged in these railway schemes, as well as upon those who were not connected with them.
§ MR. W. PATTEN
said, that the measure now proposed would not give the power of dissolving the company by a vote of the shareholders, and there was another difficulty in the case. A great many of these Bills were now under the consideration of the House, and others were before the Committees, and an enormous amount of expense had been incurred without the shareholders having 602 any vote at all in the expenditure. Now, well worthy, as the right hon. Baronet's plan was, of attention, it was also of great importance that it should be known, that if petitions were presented by the shareholders to that House requesting to withdraw their Bills, those petitions would be referred to the Committees, with whom they would have due weight. Some were not aware of the enormous amount of expense of passing Bills through that House; but he thought if it were known that due attention would be paid to those petitions, it would have a greater influence in stirring up the shareholders than the mere knowledge that such a Bill as the right hon. Baronet proposed would be passed, because there was no doubt of this, that in six weeks' time it would be no object to the shareholders, as the whole expense would then have been incurred. A deputation from Sheffield had waited upon him to state that a large number of shareholders in a particular line wanted to withdraw their Bill. Now, if they ascertained that such was the opinion of a majority of the shareholders, no Committee would proceed with the Bill, even although the measure of the right hon. Baronet should not pass. The railway interests, he conceived, were much indebted to the noble Lord (Lord Sandon), and to the right hon. Baronet.
§ MR. P. M. STEWART
said, the Government measure was a very different thing from that shadowed forth at the commencement of the Session, when it was proposed they should limit the amount of capital to be invested in these undertakings. The present was in his opinion a much wiser proceeding, for no parties could be offended by it, and all might be relieved The only thing he would suggest was, that it should be compulsory upon the scripholders to meet and express their opinion at a certain stage of the Bill, say before the third reading, whether it would be desirable to take any further proceedings upon it. So many obstacles might be thrown in the way, that if the Legislature left it merely optional with the scripholders to meet, they might be thwarted in their intentions. It could not be said to be an arbitrary proposal that they should be asked for their renewed opinion upon the propriety of proceeding with their undertaking. If it were a good scheme the scripholders would be desirous to go on; but if not, and four out of five were of that character, they would withdraw the Bill, and Parliament would 603 be relieved from the trouble of considering it. His only fear was that the present measure was adopted so late as to be almost inoperative; but its provisions were otherwise calculated to relieve the money-market to a great extent.
§ MR. F. T. BARING
said, he concurred with the hon. Member who had just spoken in thinking that the present proposal of the Government was much wiser than a measure to restrict the amount of capital to be invested in railways, such as had been talked of at the opening of the Session. He was one of the Committee appointed on this subject, after the speech of the right hon. Baronet (Sir R. Peel); and it was expected that some scheme for limiting the amount of capital embarked in railway speculations would be proposed to the Committee. But no such scheme was suggested; and he should have objected to any measure of that kind unless some good reason could have been adduced for such an interference. But for this very reason he now advocated the plan proposed by the right hon. Baronet. He thought the House was bound to give facilities to parties for reviewing their judgments, and he considered the proposal of the right hon. Baronet a very proper one. If he understood the Bill, it was intended that the House should wait for the third reading of any Railway Bill, before it gave its decision; but there was no reason why parties should be dragged through all the previous expenses of the Committees, and some means of stopping the proceedings at an earlier stage than the third reading would be, he hoped, devised.
MR. BECKETT DENISON
agreed that it would be proper to give the shareholders in new lines a locus pœnitentiœ, so that they might withdraw their Bills if they liked. But he was surprised to find an hon. Member opposite recommending that the shareholders should be brought together for the express purpose of saying whether they should proceed with their object or not. He would take the case of such a railway as the London and York. The shareholders in that line were scattered all over the kingdom, and, if Parliament compelled them to meet, it would impose a great hardship upon them. So many of them would not or could not attend, that the meeting might be an unfair one, and might resolve that the undertaking should go on when the majority were of a different opinion. He called the attention of the Government to this point, that the majority 604 for abandoning the Bill should represent not only the numbers of the shareholders, but also the money subscribed; otherwise it would be the interest of existing railways to set to work immediately and persuade a numerical majority of parties interested in new lines to give up their present projects. He agreed in general with the views expressed by the right hon. Baronet; but he thought parties ought not to be compelled to begin de novo to express an opinion they had always entertained.
said, there could be but one opinion of the value of the measure proposed by the right hon. Baronet, and he only regretted it came so late. At the close of last Session he endeavoured to awaken the attention and enlist the energies of the right hon. Baronet on this point. He endeavoured to point out to the House the gambling, the misery, and the ruin, that would ensue from the prevalent spirit of railway speculation; but his warnings fell upon dead ears. He wished now to see some limit put to the spirit of speculation. The House did not know what cruel proceedings were going on to extort money out of the pockets of those who had put their names, not as shareholders only, or as provisional directors, but as inhabitants of the district favourable to the proposed scheme. The consequence was the ruin of many, and the stagnation of business in every part of the country. Almost every discussion in this House upon railway matters influenced the share market; and the House should, therefore, be cautious, as it might sometimes be doing great injury without intending it. The hon. Member who last addressed the House had expressed himself opposed to a compulsory meeting of the shareholders. It was possible to provide, whether the registered shareholders were to be taken or not, that shareholders at distant points, as, for example, at Edinburgh, Dublin, or Drogheda, should make affidavits and be empowered to vote by proxy. [An hon. MEMBER: It is not possible.] Why was it not possible? Unless this were done, they could arrive at no useful result. He saw an advertisement in the papers of that day of a contest between the shareholders on the one hand, and the directors on the other, in which the directors refused to comply with the request of the shareholders, and said they considered themselves bound in honour, and with reference to the interests of the projected company, to proceed with their application to Parliament. If the 605 shareholders were not to express their opinion before the third reading, enormous and unnecessary expenses might be incurred. He hoped to see the Government measure come into operation and take effect at the earliest possible stage of Railway Bills.
inquired whether the right hon. Baronet intended his measure to apply to the original shareholders, or to parties in possession of the scrip? The shareholders might have sold their scrip, and the right hon. Baronet could not mean to obtain their assent or dissent. He knew that it was now becoming a common practice for shares to be depreciated on the Stock Exchange for a purpose which was called "speculating for a wind-up." For instance, if a shareholder had paid 3l. deposit, and the shares fell to 1l., they were bought by parties in the hope of getting 2l. or 2l. 5s. at the wind-up. Hon. Members might laugh, but he knew that this was done every day at Edinburgh.
§ SIR R. PEEL
"I do profess to be wholly unacquainted with the mysteries of this business. [A laugh.] It's true!" Cases might arise which Ministers could not foresee, and he did not wish to preclude such alterations as might be considered advisable in Committee. Indeed, he might defy any man to speak very confidently with respect to the operation of a measure of this kind. He thought the Government ought not to be blamed for not interfering before with the spirit of railway speculation. The right time for interfering was the great point. The House should be sure that they had public feeling with them; if they had not, all he could say was, they would be sure to fail. In reply to the question put by the hon. Member who had just resumed his seat, he would state that it was not the original shareholders, but the present holders, who were interested in the success of the undertakings, and they were, therefore, the parties who were entitled to express an opinion whether they should proceed or not. Certainly, the original shareholders who had sold out had no right to express an opinion. He proposed, therefore, that if a certain number of the present holders, holding a certain amount of the shares, perhaps more than half, should present a petition to Parliament stating their belief that the undertaking would not answer, or simply expressing their wish that the Bill should not pass, then it would be wise in the Legislature, on receiving that petition, to decline 606 to legislate upon that Bill. He did not propose to postpone this proceeding until the third reading of the Bill. There were some Bills which stood for a third reading to-morrow; and he thought it would be a proper thing to postpone the consideration of them, not to a distant day, but to the close of the present month. No Committee would make great progress during that interval, and the Easter recess would give the shareholders an opportunity of reconsidering the question. This particular time was therefore a favourable one for giving notice of what the Government intended to propose. If the petition from the shareholders were presented before the second reading, or at any other stage after the first reading, or if a certificate from the directors, being the holders of a given amount of stock in the company, were published in the Gazette, expressing their wish that the measure should not pass, then the Bill would not be proceeded with. Whether it would be proper to require that the shareholders should meet and give their express assent to the third reading, or whether it should be at their option to meet and express their dissent, might be considered hereafter, but at present he inclined to his original views. They had a right to assume the assent of the parties, from what had already taken place, and to assume that the shareholders would be sufficiently provident of their own interest to dissent from the speculation if they now saw reason to alter their opinion concerning it. He was not prepared to agree to the suggestion of an hon. Gentleman, that it should be requisite for more than one-half of the shareholders to express their assent to further proceedings. No Bill in that case could obtain the sanction of the House, unless half the shareholders again represented it to be their wish to go on. The directors did not certainly know who the shareholders were, since the Government did not propose to take the original registered shareholders; and it would be an onerous thing to say, that unless they procured the formal assurance of their consent, the undertaking was to be at an end. He thought it advisable to give the companies a locus pœnitentiœ; and if a certain number, holding a certain amount of shares, had the power of withdrawing the Bill, that, he thought, would be better than insisting on meetings of the shareholders. In the case of a company with a capital of 1,000,000l., if shareholders representing shares to the amount of 500,000l. expressed 607 their wish, either by petition or by the certificate of their directors in the Gazette, to abandon their Bill, that would be sufficient to induce Parliament to withhold its assent thereto.
asked whether the same powers should not be given to the directors, if they thought it not desirable to proceed with their Bill?
§ SIR R. PEEL
said, the directors might part with their interest in the undertaking, and might have agreed to lease or sell the concern to some other line. It would therefore be undesirable to give them alone the power without consulting with the shareholders.
§ MR. W. COLLETT
was glad the right hon. Baronet had drawn the line between the original shareholders and the holders of scrip, and had proposed to take the opinion of the latter. He considered that some clause ought to be introduced to indemnify persons who had signed the deeds, after the just claims of the creditors were paid, against any further responsibility, so that the original subscribers might be secured from the annoyance to which in many cases they had been subjected.
§ VISCOUNT MORPETH
considered that the measure suggested by the right hon. Baronet was a most proper and prudent one; for there was a strong desire on the part of many scripholders to get rid of their present liabilities.
§ MR. RUTHERFURD
suggested that, pending the adopting of the measure to which the right hon. Baronet had referred, it was desirable for the House to obviate the evils to which allusion had been made, by passing a Resolution not to proceed further with any Railway Bills now before them, if petitions were presented to the House, signed by a majority of scripholders in number and value, praying them not to sanction such Bills. What difficulty would there be in Parliament saying, if petitions of that kind were presented, "We will not proceed further with these Bills at present." By such a course they would not interfere at all with the liability of the parties. The House would, of course, take means to ascertain the authenticity of the signatures to such petitions, and would be satisfied before acceding to them, that they truly expressed the wishes of a majority of the scripholders in numbers and value. It must be remembered, however, that many of the persons who were now scripholders were not the original subscribers to railway projects; and 608 he wished to remind the right hon. Baronet of the fact, that the addresses of these scripholders were frequently not very well known, and that certain strong reasons might render some of those gentlemen not over-anxious to declare themselves. He (Mr. Rutherfurd) thought it important that, if a petition from a majority of the scripholders was required to induce Parliament to abstain from proceeding with a Bill, means should be taken to render a meeting of the company compulsory, in order to elicit the opinion of the scripholders; and that, if such meeting were held upon sufficient notice, it might be well for Parliament to consider whether they would not act upon the opinion expressed by a majority of scripholders in numbers and value attending the meeting. This was, undoubtedly, a question of great difficulty: but he thought the suggestion he had just made was not undeserving the attention of the House.
§ MR. RICARDO
said, there was one practical difficulty against which he had no doubt the right hon. Baronet would take means to guard. As the shares were not registered, there might be great difficulty in ascertaining whether the persons who signed petitions were real bonâ fide scripholders, and some precautions should be taken to avoid fraud.
§ Mr. C. BULLER
would like to know by what arrangement the right hon. Baronet proposed to ascertain the validity of the signatures to such petitions. He considered it most desirable that something should be done in this matter before the recess; some decided intimation on the part of the House, so that parties might employ the recess in taking measures accordingly. It would be well if the House adopted the views of the right hon. Baronet, to appoint, after the recess, a Committee, to which all petitions against proceeding with particular schemes should be referred, which should thereupon determine whether the respective schemes should proceed to Select Committees. Suppose, by way of beginning at once, the hon. Gentleman who had moved the second reading of the Bill before the House (The Buxton Leet Potteries and Crewe Railway Bill) were to consent to the second reading being postponed, until it were ascertained whether the majority of the shareholders were favourable to its going on.
§ VISCOUNT SANDON
thought the best course for the House would be to adopt without delay the suggestion of the hon. 609 and learned Member for Liskeard, and to pass a Resolution on the subject, which he had no doubt would induce many of the companies to wind up their affairs.
§ MR. J. O'CONNELL
wished to offer a suggestion—which certainly had no immeate connexion with the question now before them—with reference to Irish railways. That House had shown a strong desire to facilitate the progress of Irish Railway Bills, with a view to afford relief to the destitute poor of that country. He must say, however, that although Bills for several railways in Ireland, which had promised extensive employment to the poor, had been sanctioned by Parliament, not a single stroke of work had yet been done towards their commencement. He wished, therefore, to suggest for the consideration of hon. Members during the recess, whether it might not be advisable, when Irish Railway Bills were brought forward, to introduce some clause rendering the completion of the works within a given and limited time compulsory, on pain of the dissolution of the companies.
§ Bill read a second time.