§ SIR R. PEEL
then rose and spoke as follows: I gave notice two days since that I should feel it to be my duty to call the attention of the House to the state of railway business which is now pending and waiting for the decision of Parliament. No one can be more impressed, Sir, than I am, under all ordinary circumstances, with the importance of adhering to the great principle of permitting in this commercial country the free application of individual enterprise and capital; and although I certainly must contend that there is a distinction between the ordinary application of capital to commercial enterprise, under existing law, and the demands made upon Parliament to give to inchoate companies large powers of taking possession of the property of others, and establishing, as I fear is the case in many instances, a qualified monopoly, yet that general principle is so valuable, that even with respect to that species of commercial enterprise which seeks to be invested with the authority of Parliament, I should be unwilling, under all ordinary circumstances, to interfere. I should think it the better rule to assume that individuals are the best judges of the mode in which their capital can be profitably employed; and as the usage has been for Parliament to grant certain persons certain powers, where there 893 is no strong opposition on the part of the andowners whose property is to be applied to the use of the railway company, or where no competing lines urge strong reasons why the line seeking for the sanction of Parliament should not pass—I say, even with respect to that kind of commercial speculation and enterprise, I should have been desirous, under ordinary circumstances, of adhering to the rule on which Parliament has usually acted. But, at the same time, where there is a risk of great public inconvenience, I do think that Parliament is perfectly entitled to depart from those principles which, under ordinary circumstances, would guide it; and the question now is, whether there be not, at the present moment, a case which justifies Parliament in adopting some new precautions, in order that the capital of the country may not be needlessly applied to railway speculations, from which no great public benefit is to be derived, thus fettering and embarrassing all other commercial engagements and commercial enterprise, and possibly sacrificing the interests of those persons who may, under a different state of things, have unadvisedly lent themselves to those speculations; and I conceive it will be necessary, in order to justify any interference—even interference to that qualified and limited extent which I propose—and in order that that interference may not be lightly drawn into a precedent, for me fully to state the circumstances which impose upon me, as the organ of the Government, the duty of calling the attention of the House to this matter. In the first place, I wish to put the House in possession of the amount of capital which is already pledged by Act of Parliament to railway speculations, and also the amount of capital which, by the very Bills now pending—I speak of the Bills of the present year—will be required, in order to carry out the projects contemplated in those Bills. I find that in 1844 the number of railway projects which received the sanction of the Legislature was 37; that the capital authorized to be raised by those Acts amounted to 13,981,000l.; that the amount of loan capital, as distinguished from share capital, authorized to be raised, amounts to 4,006,000l., being a total amount of share and loan capital authorized to be raised by the Bills passed in 1844 of 17,987,000l. Then I find in 1845 the number of Railway Bills passed was 118; and the share capital authorized to be raised by those Acts amounts to not less 894 than 45,849,000l., whilst the amount authorized to be raised by loan, in addition to the share capital, is 14,635,000l., making the total amount of capital authorized to be raised by the Acts of 1845, and applicable to railway enterprise, of 60,484,000l. I have called for a Return of the number of Railway Bills which, on the 11th of April last, were under the consideration of this and the other House of Parliament, and I find that the number of English Bills amounts to 369; of Scotch Bills, 107; and of Irish, 43—making a total of 519 Bills, which, so far as the public records can be relied on, are Bills in respect to which the decision of Parliament must be given. I find by the English Bills that capital to the amount of 184,700,000l. would be raised, supposing all those Bills received the sanction of Parliament, and that in addition, under the same Bills, loans to the amount of 58,000,000l. might be raised. By the Scotch Bills, capital stock to the amount of 28,500,000l. might be raised, and loans to the amount of 9,500,000l.; whilst by the Irish Bills, 18,104,000l. capital stock could be constituted, and loans to the amount of upwards of 5,000,000l. would be sanctioned, making a total of capital stock authorized to be raised by the Bills for England, Scotland, and Ireland, respectively, of 231,302,000l., and of capital to be raised by loans of 72,781,000l., being a total of capital authorized to be raised by Bills pending in this Session, independently of the unpaid capital of the Acts sanctioned by Parliament in 1844 and 1845, of 304,000,000l. I know it would be quite illusory to rely upon that as the amount of capital which would be actually required. Many of these Bills are for competing railways, and many are Bills the passing of which would be quite unnecessary for the public interests; and therefore, although I state 304,000,000l. to be the total amount of capital which, if all these Bills were sanctioned, would be authorized to be raised, yet a very great deduction must be made for many of them which Parliament would reject, and many of them would not be carried on; but still, make what deduction you will, the total amount of capital, were there no interference at all on the part of Parliament—if we were entirely passive—that will be sanctioned in the present Session, will be much greater than that which I think it would be for the public interests ought to be raised for railway speculations. Now, I am afraid the same rigid inquiries cannot be made by 895 the Committees now as when there is a full opportunity for such inquiries. There is a kind of despair prevailing among them; and I fear that towards the latter end of the Session Bills might pass, which under ordinary circumstances might not receive the assent of Parliament. I am sure that might be the case. Now, I must first state what is the amount of capital not paid up, which has been authorized to be raised under the Bills that have already received the sanction of Parliament. In respect to Acts that passed before the year 1844, there is a sum of 20,867,000l. not yet called for. Again, that must not be taken as the amount of capital authorized to be raised, likely to be called for, because in many of those cases money has been raised by loans on the security of outstanding shares, instead of calling for payment upon shares. What is the amount raised by loans, instead of calls upon shares, I cannot say. I can only state the fact; and the unpaid capital connected with railways that received the sanction of Parliament before 1844, amounts to 20,000,000l., supposing that no loans were raised on the security of the outstanding shares for the purpose of completing the lines. With respect to the Acts passed in 1844, the amount of capital stock still unpaid is 5,219,000l. In respect to Acts that passed in 1845, being 118 in number, there remains of capital stock, shares authorized to be issued, stock still to be paid, amounting very nearly to 28,000,000l.; it is 27,950,009l. And, therefore, putting aside all the Bills passed before 1844, there remains of capital stock to be paid up under the Acts sanctioned in 1844 and 1845 an amount of 33,242,000l.; and, of course, there is to be added to that capital, the amount of capital stock, whatever that amount may be, to be raised under the Bills that may be sanctioned this Session. Now, with regard to this application of capital—greater, I cannot but think, for one particular species of enterprise, than is for the public interests—though I do not propose to throw any obstacle, any arbitrary selection by the Government, in the way of that application; I wish to call the attention of the House to this—may we not safely take the opinions of the parties who have entered into these speculations as a guide by which we shall determine whether or not these speculations shall continue, or whether we shall give our sanction, by Act of Parliament, to these schemes? As a reason for doing 896 this—for calling for the intervention of Parliament after mature consideration, I will first state that there has been a great change of circumstances since many of those parties committed themselves to their engagements. In the first place, I take an authority on which, I believe, this House, or a Committee of this House, is acting, in coming to a decision upon a Bill brought before them. I understand that when Mr. Brunel, a gentleman whose name must be familiar to the House from his great ability and experience, and from the great acuteness he has always exhibited whenever I have heard him give his opinion upon railway matters, upon being examined by the London and Oxford Railway Committee, gave this evidence:—The prices have so increased since Acts were obtained, that the lines mentioned above the Oxford and Worcester, and the Oxford and Rugby, cannot be constructed at the estimated price.And he considered that the construction of the railway would be 50 per cent more than at that time last year. Then it is stated, that—At that point of the proceedings the chairman said the Committee thought it unnecessary to hear any more evidence respecting the Oxford and Worcester Railway; and, after the room had been cleared a few minutes, the chairman stated that the Committee considered that the preamble of the Bill (the London and Oxford) was not proved.Now, if there be so material an increase in the cost of all articles necessary in the construction of railways—such as iron, labour, &c., of course the estimates for making these railways must be increased, and the actual cost must be greatly increased; whilst the prospect of profits must be in a proportionate degree diminished; and that circumstance alone—I do not say precisely—might justify the House in giving to those parties the opportunity of saying whether or no, upon a fresh consideration of their estimates and prospect of eventual gain, they still wish to call on Parliament to pass the Bill for any particular railway. I find it also stated in the same paper to which I referred for Mr. Brunel's evidence, in a copy of an advertisement of the London and York Railway, that this increase in the cost of many articles necessary in the construction of railways has produced such an effect in respect to many railway schemes that they have been abandoned. I have here a list of several railways, with the amounts paid for premiums per share in 1845, before the Bill was obtained; and the discount per share in 1846, when the calls were 897 being made; and I think from the mature consideration of some of these cases, where Acts have been actually obtained, and where, in consequence of this increased cost or increased competition, there has been a very material difference between the sum paid as a premium when everything appeared prosperous before the Bill was obtained, and that which can now be realized by the unfortunate persons who purchased those shares—they might draw some most useful conclusions. It is stated that in the case of the Caledonian Railway, 10l. per share was paid up; that the premium in 1845, before the Bill was obtained, was 12l. per share; and that the discount now per share is 3l. 6s. There are several other railways mentioned in this paper, but I will not trouble the House by reading them. They are published, and the names are given; but in every case it appears that there were considerable premiums paid on the shares before the Bills were obtained, but that those shares are now at a great discount. These are the cases of Bills that have already obtained the sanction of Parliament. With respect to the Bills now in progress through the Legislature, I apprehend the same observations will strictly apply; that there are many railways projected in October, 1845, in respect to which the sum now to be realized by the sale of shares differs most materially from that which was paid in October, 1845. And again, as I apprehend our object is not to encourage enterprises which are unprofitable to the parties who engage in them—that very fact is another reason why we should give the parties, under certain restrictions, and with due precautions, the opportunity of reconsidering their position, and apprising us of their present views with regard to the Bills in which they are interested. I have mentioned, therefore, three considerations which ought to have great weight with the House. First, the enormous amount of capital which, whatever deduction you may make from the number of Bills, must still be pledged by Parliament to railway enterprise in the course of the present Session, is one consideration why we should entertain some such plan as that which I am about to bring under the notice of the House; another reason is the increased cost of the articles used in the construction of railways; and a third is the difference between the present value of the shares in railways from that which they realized when they were first projected. I 898 think I may mention as a fourth reason, that which I understand to be the case—namely, the willingness and even the anxious desire of many parties to relieve themselves from those engagements, and to put an end to the projects in which they have embarked. I understand that, in respect of many undertakings, there is, on the part of those who are committed to the payment of the deposits and the expenses that must necessarily be incurred, a sincere desire to have the opportunity of releasing themselves from those engagements; and I must say that, in the present state of the law with respect to inchoate railway companies, I am not surprised at this. I think that the present state of the law with respect to inchoate companies ought not long to be continued. The liabilities of the parties are anything but well defined. The powers of the directors or provisional committees are very great; and, so far as I can judge, there is no very effectual control over the acts of those provisional committees. I have received a letter which I shall have no objection to show to any hon. Member. I should be sorry to quote any information of the kind which it communicates without giving up my authority; and therefore I shall, of course, be ready to show the original letter which I have received in respect to the proceedings of several of these committees. And if the statements contained in this letter are correct, there are proceedings on the part of those who are intrusted with the management of their affairs by innocent and helpless subscribers, which I think do require some permanent Parliamentary regulations. I shall not give the names of the companies, though the names of the companies are given in the letter addressed to me. The party who addresses it states that he is in a position to enable me to vouch for its truth. I cannot undertake to answer for the accuracy of the statements. All I can do is that which I think every body quoting information of this kind is bound to do—namely, give up the name of the party by whom the information has been communicated, and that I am prepared to do. This gentleman states in his letter, which I received yesterday—One of the greatest deceptions of the new companies has been the holding back of large portions of the shares"—(that is, the shares formed by the provisional committee, that committee inviting persons in all districts of the country to commit themselves as parties to companies hereafter to be established)—"One of the greatest deceptions of 899 the new companies has been the holding back of large portions of the shares, for the purpose of rigging the market, and pocketing premiums at the expense of the public. I will instance a few out of the countless number of the railway rigs that have been played. In the—only 42,000 out of 50,000 shares, I understand, were issued, the other 8000 being kept back though the shares were at a high premium, and applications out of number for them. In—10,000 out of the 100,000 were reserved by the directors above the number paid on.—had only 55,000 out of 100,000 shares issued, though the shares were also at 1½ to 2 premium. There are some facts connected with this line which I could not trust on paper. The — reserved an enormous number of shares, notwithstanding hundreds of thousands more than the whole number of shares in the company were applied for. In the — about one half of the shares were kept back, the market rigged to 6l. or 7l. premium, and then certain of the directors sold to their friends, as favours, shares at, I believe, 3l. or 4l. premium; a part of which premium they were compelled to give back on the breaking up of the company. But the last is the most extra ordinary of all. In the — several thousand pounds of the deposits were taken out of the bankers' hands to rig the market.That is to say, the shareholders and scripholders in these schemes having paid 10l. per cent, there was a sum of 20,000l. paid into the bankers, and I am told that that money was taken out and invested in the purchase of shares wherever shares could be got; that, in consequence, the shares rose to very high prices, and then the reserved shares were sold in the market at higher prices—that higher price having been obtained in consequence of the application of the deposits, and the directors having pocketed the premium. I was told this day that a gentleman, and, to my surprise, a lawyer, applied to a certain committee for some shares; that he was told by the company all the shares were gone—there was not a share left; but upon further inquiry he ascertained that not a single share had been issued, and yet the answer universally returned was, that all the shares were bought up, and that was for the purpose of taking advantage of the impression on the part of the public that the shares were in such requisition, and then the shares were issued. I believe these proceedings have not been practised by any respectable companies; but that they have been very general I have no reason to doubt. I may be told that scripholders will not come forward to avail themselves of the provisions of the Bill; that a feeling of shame will deter many; and that these persons, having entered into certain speculations, will be afraid that their credit will be injured by coming forward in the manner I am about 900 to describe. I hope that will not be the case. I hope that persons will not be influenced by such motives. But if persons will not avail themselves of the opportunity now given them by the Legislature, it cannot save them, for their names are pretty well known, I imagine, in their own neighbourhood, and they will not gain much. And if, when Parliament gives them the opportunity, they refuse from any such motive as I have described to accept it, they ought to be the objects of no sympathy from us. All we can do is to give them an opportunity of stating,—"In a moment of excitement I speculated to a greater extent than was prudent, and I shall be glad if Parliament will give me the opportunity of releasing myself from my engagements." And I think no false sense of shame should deter any persons from taking advantage of our present proposal, But if it should appear that provisional committees and directors traffic in shares in order to overpower the sense of shareholders, at the meetings proposed to be held, and if undue means be resorted to for the purpose of counteracting the intention of the House with respect to these Railway Bills, I don't believe that such parties will be exempt from Parliamentary inquiry. If these measures, as the foundation of our legislation upon inchoate companies, are by any such methods made unavailing, it will be the duty of Parliament to expose these transactions and lay them bare before the world as an example to parties inclined to speculate, and as a guide and a warning to them. Then, again, Sir, the law is in an unsatisfactory state in respect of such railway companies. Now, I believe, in respect of companies that have not got their Bill, that in nine out of ten of them the directors have not the power to dissolve the company. I believe the general principle of law to be this, not perhaps resting upon statute, but on common law—that if every party without exception does not agree thereto—that if all the scripholders are not unanimous—the company cannot be dissolved. But if the law requires unanimity, it is clear that unanimity in these cases is unattainable. In the first place, the original shareholders are not the present ones. There has been a transfer of scrip, and in any one case, if there is an interruption of the unanimity, it is impossible to dissolve the company. It may be that by some companies, in their original deeds, a power has been providently taken to dissolve; but I believe 901 that the power exists upon the original contract deed in the case of very few companies indeed. In the case of most the directors have undertaken to use their best efforts to procure the assent of Parliament to their Bill, and in many cases no limitation to the time for procuring that assent has been fixed. So that it does not at all follow that the rejection of a Bill in the present Session would enable the directors to dissolve the company, nor even would the continuous rejection of it for four or five years enable them to dissolve. If that be so—if there be no inherent power to dissolve, except in certain special cases, where the original deed provides for it—and if the power of the scripholders over those directors and provisional committees is so imperfect, is it not another strong reason for Parliament giving to those parties power to release themselves from those engagements? What we shall do hereafter is a question which is well deserving mature consideration. I only attempt to deal with the present and pressing emergency; and the measure which I shall have to propose on the part of the Government will be in reference only to present circumstances. But I do think the consideration of the law as applicable to railway companies is a subject well deserving the attention of the Legislature. There have been recent discussions in the courts of law on the matter; and the House will recollect what are the provisions which have received the sanction of Parliament with respect to the regulation of joint-stock companies, an Act having passed on the subject very recently—the 7th and 8th of the present Queen—with several useful provisions. That Act provides with respect to all joint-stock companies, railway companies included, that there shall be a provisional registration previous to any application being made by the company to Parliament. With respect to joint-stock companies which do not require the sanction of Parliament, that Act provides that there should be also a second and, as it is called, a complete registration; and after the complete registration and the requisite signatures being formally given, the companies may be constituted, and the directors have the power to act; but until this second act of complete registration is performed, the power of the directors is circumscribed within narrow limits. The regulation of the provisional registration applies to all companies; but it has been decided that the complete registration is not necessary 902 in the case of railways, and of all those enterprises which require the sanction of Parliament, which latter stands in the place of complete registration, though that was, I believe, contemplated by the Act. This question has recently arisen, and has been decided by the Court of Exchequer. The question, which is a most important one, was whether or no a transfer of the shares of an inchoate railway company, in other words, the sale of scrip, was a valid transaction, to which legal effect could be given. The plaintiff brought an action for the recovery of a certain sum for the sale of the scrip of railway companies which had been provisionally registered. The allegation of the defendant was, that the 7th and 8th of Victoria included railway companies as well as other joint-stock companies, and in consequence that the sale of scrip was an illegal transaction; the railway company not having been completely registered. But it was decided by the Court of Exchequer—Sir Frederick Pollock giving the judgment—that the Act exempted railway companies from the necessity of completing the registration, and the plea was accordingly overruled. The legal effect of that judgment was to establish the principle that the sale of the scrip of railway companies which had not been completely registered was a legal transaction; and that parties suing on such a claim could recover. There have been some doubts raised in a court of equity about the strict state of the contract, which are adverse to that decision; but still we must at present assume that the sale of scrip is a perfectly valid transaction. Under these circumstances—in this state of the law with respect to railway matters—Her Majesty's Government feel it their duty, well knowing that it is a case of great difficulty, and believing it to be possible that the particular measure they propose may be open in some places to exception, and in others possibly to amendment; still they have felt it their duty, seeing the evil effects which such improvident speculation is producing upon the general state of mercantile affairs, and foreseeing the evil effects which may arise from an improvident sanction of those Bills brought into Parliament, to originate the proposition for interference which I submit to the House. I believe the present is the period when that proposition for interference is likely to be most favourably received. I doubt much whether it would have been so at an earlier period. I think the presumption in favour 903 generally of non-interference on the part of the Legislature with enterprises of private speculation would have prevailed against any proposition on the part of the Government at a period when the sense of present evil, and the prospect of greater, was less strong than at present. As I said before, we do not propose to throw any arbitrary obstacle in the way of the progress of measures; but we propose to consult the interests and wishes of the parties interested; and to ascertain whether the expression of those wishes may not in itself interpose a useful check against superfluous railway legislation. We propose to remedy the defect in the law with respect to the dissolution of companies; and we will immediately bring in a Bill to provide in the case of all inchoate railway companies provisionally registered, namely, of all companies whether they have presented a petition to Parliament, or made any progress with a Bill, or are suspending their proceedings—to provide, with respect to all such railway companies, without exception, that a power be given to the scripholders to dissolve the company under certain circumstances. We propose to proceed, first by a Bill, and next by the Sessional Order which I laid upon the Table on Tuesday night. The Bill will give the power of dissolution. We propose to enable a small number, say five scripholders, to address a requisition to the directors—I mean the managing committee of the company—a requisition to them to call a meeting of the scripholders. The committee are to announce their intention of holding a meeting in such a manner as to give all parties the opportunity of attending. I propose to make it obligatory upon the managing committee to call such meeting, and to give previously due notice thereof. If the managing committee refuse to call the meeting, there will be provisions to insure the holding of the meeting. Then, in case there shall attend that meeting a certain number of scripholders—either the original scripholders or the present scripholders—if the persons attending that meeting, or voting by proxy, represent more than half the shares originally issued, that majority may at once determine not to go on. But as there may be a difficulty in having a meeting representing more than half of the capital stock of the company, we propose that a meeting of the shareholders representing one-third of the capital stock of the company, may resolve upon a dissolution, provided three-fifths of the persons present, or voting by proxy, 904 signify their desire to dissolve the company. We take security for the meeting not being packed, by requiring that the capital represented should not be less than two-thirds of the entire stock of the company. At the meeting, if the capital represented shall not amount to one-third, nothing can be resolved upon. But we propose that there should then be an adjournment to another day after due notice; and that if at such second meeting the amount of additional capital represented shall, when added to that at the first meeting, make together three-fifths of the one-third prescribed, then we recognise that as the amount required by the Act. In order to prevent the application of reserved shares from being used unduly to influence the decisions of these meetings, we propose that the scrip represented at the meeting shall have been issued before the 31st of March in the present year. With respect to the scrip which may have been purchased since, as there is no record of the period when it was made, there is no power of dealing with that: the only security we can take is that the scrip in respect to which the right of voting accrues, shall be scrip which has been issued before the attention of Parliament was called to the subject. Ancillary to that Bill will be the Sessional Order; and, I believe, some resolution of the sort by the House of Commons to be absolutely necessary; because it is impossible not to be aware that some time must elapse before the passing of the Bill. Unless, therefore, the House adopts some resolutions on the subject of its assent to Bills, some companies, which I am sure are not specimens of the general mass of companies, may, by their directors, press their Bills unduly on the consideration of Parliament. It is the manifest interest of some parties to carry on their schemes; for, by the passing of the Bill, they are relieved from a responsibility which rests upon them while it is inchoate. I believe there are many instances in which, if a Bill were passed into law, one of the first results would be to dissolve the company; but it appears to me to be unwise, if that is to be the result, to subject parties to the expense of all those preliminary proceedings; and it would be much better to give facilities at first to effect that dissolution which would be the consequence of the passing of the Bill. I propose, therefore, that the House of Commons should resolve that it will not give a third reading to any Bill, unless a certifi- 905 cate be sent in that there has been a meeting of the company, and that, at that meeting, a certain number of shareholders, possessing a certain amount of the capital stock of the company, declared their continued assent to the Bill, and their desire that it should pass. Instead of detailing more at large this Resolution in a speech, I have laid it upon the Table; and I trust the House is sufficiently acquainted with the general tenor of it to render further explanation unnecessary. I believe that many Bills, especially such as are most liable to objection, and by which, if passed, the least of public benefit would be attained, are entirely unopposed, and they might be incautiously passed from that very circumstance. Our legislation would therefore be incomplete, unless we were to lay down some rule upon the subject. But, independently of that consideration, looking at the amount of capital, at the understood willingness of many to release themselves from their obligations, and at the public benefit likely to result from the course I recommend, I think ample ground exists for the Resolution. One single proof, perhaps the most striking that could be adduced, I may be allowed to offer. There is, within twenty-five miles of this place, a valley through which it is proposed that eleven different railways shall pass; there are eleven different registered provisional companies for the purpose of executing those lines; it is almost impossible that Parliament could assent to more than one line passing through the valley; and in consequence of the present state of the law, there will be remaining ten railway companies, constituted for an impracticable purpose, with respect to which there exists no power of dissolution. That fact alone calls for some immediate remedy in favour of giving a power to parties to dissolve their companies. That legislative power would necessarily be incomplete, unless we resolve to have that additional evidence of the desire of the parties to proceed with their Bill which would be afforded by a meeting of the shareholders. I again say, that I am most deeply sensible of the great importance and difficulty of the subject; but I thought it infinitely better, instead of again proposing a Committee, to make on the part of Government a distinct and definite proposition. I have done so with a full knowledge of the inconvenience that might result from non-intervention, and with a strong conviction that the intervention I propose is perfectly legitimate. 906 It establishes no dangerous principle of interference with the application of private capital, and, on the whole, if assented to by the House, it is likely to release for other enterprises a vast amount of money now locked up, and the want of which is paralysing all commercial transactions. To persevere in many of these schemes would only lead to unprofitable expenditure—to the payment of engineers, of solicitors, and of witnesses, in cases which would not finally receive the sanction of Parliament; the Bills must be submitted to the consideration of the House, whatever might be its decision. I am satisfied, and I trust the House will be satisfied also, that Her Majesty's Government have done their duty in thinking that no further time ought to be lost in bringing this important matter before the House. I, therefore, beg leave to move the first Resolution.
The following is the whole series of Resolutions as they were moved by the right hon. Baronet, and assented to by the House:—
Resolved—"That this House will not read a third time any Bill to empower any Company (whether intended to be incorporated by such Bill, or already incorporated by Act of Parliament), to construct a Railway, unless, three clear days before the third reading, there shall have been deposited at the Private Bill Office, there to be open to the inspection of all parties, a certificate signed and authenticated in manner hereinafter mentioned, and comprising the particulars hereinafter expressed, and stating the following facts, viz.:
Resolved—"That for the purposes of this Resolution it shall be competent for the Chairman of any meeting called in pursuance thereof, in the event of the above prescribed quorum of scrip, shares, or stock (as the case may be), not being represented at such meeting, to cause the votes of the persons constituting the said meeting, approving or not approving of the Bill, to be taken and recorded, and then to adjourn the same to some day, hour, and place to be declared by the Chairman, such day not being less than three days, and not more than one week, from the original day of meeting; and such day, hour, and place being, in the meantime, advertised twice in each of three London daily newspapers, or in the Edinburgh or Dublin newspapers, as above directed in the case of Scotch or Irish Railways; and at such adjourned meeting it shall also be competent to the Chairman thereof to cause to be taken and recorded the votes of such of the persons constituting the same as have not voted at the original meeting; and the total amount of votes given at the original and adjourned meeting shall be received as if given at one and the same meeting.
Resolved—"That such certificate shall also comprise, in a tabular form, the following particulars:
1. The day, time, and place of the meeting, and of the adjourned meeting (if any).
2. The dates of insertion of the advertisements for the meeting, and the names of the newspapers in which they were inserted.
3. The names and addresses of the persons producing scrip, or Bankers' receipts for scrip, at the meeting, according to the statements of such persons:
Or, in the case of a Company, already incorporated,
The names and addresses of the Shareholders, or Stockholders, present at the meeting, according to the register book of names and addresses.
4. The denoting numbers, if any, of the scrip, and in the case of Bankers' receipts, the names of the persons from whom the deposit is therein
stated to be received, and the amount of the scrip and receipts respectively produced by the persons so producing the same at the meeting:
Or, in the case of a Company already incorporated,
The respective amounts of shares or stock held or represented by the Shareholders or Stockholders attending the meeting.
5. The fact of the approval or non-approval of the Bill (as the case may be) by the several persons producing scrip or Bankers' receips at the meeting, or by the several Shareholders or Stockholders attending the meeting.
6. The total amount of scrip and Bankers' receipts produced at such meeting, and the amount thereof produced by the persons approving of the Bill:
Or, in the case of a Company already incorporated,
The total amount of shares or stock represented, either in person or by proxy, at the meeting, and the amount thereof so represented by persons approving of the Bill.
7. The total amount of the capital proposed to be raised by the Company under the Bill.
Or, in the case of a Company already incorporated,
The total amount of the capital or stock of such Company.
Resolved—"That such certificate shall be signed by the Chairman of the meeting and by one of the solicitors of the Company; and the authenticity of such certificate shall be verified by the signature of the Parliamentary Agent depositing the same.
Resolved—"That these Resolutions shall not apply to any Bill, the Third Reading of which is fixed for Monday next.
§ MR. FRENCH
wished to call the attention of the right hon. Baronet and Her Majesty's Government to the injustice, in relation to the railways proposed to be constructed in Ireland, of passing the Resolution as at present worded. At the commencement of the Session, such had been the anxiety professed by the House to extend the advantages of railway communication to Ireland, that the privileges of the House were placed in abeyance; and to ensure their speedily passing into law the Irish Railway Bills were sent, in the first instance, into the other House of Parliament. There were forty-three Irish Railway Bills now before the House of Lords, five of which were waiting for a third reading. He trusted the promoters of these Bills might not be placed in a situation of peculiar hardship. If this Resolution were adopted, the Irish Bills now waiting for a third reading in the House of Lords would be subjected to much unnecessary delay. He would suggest to the right hon. Baronet that the promoters of English Railway Bills originated in that House should not be required to comply with these Resolutions before the Bills passed that House, 909 but that it should be sufficient for them to fulfil the conditions now proposed to be imposed upon them before their Bills arrived at a third reading in the House of Lords; and on the other hand he would suggest that the Irish Bills which had been originated in the other House, and which were now waiting for a third reading there, should be brought down to this House after their adoption by the House of Lords, under the obligation of fulfilling to the letter the Resolutions now under discussion, before they were read a third time in this House. The Resolutions required that notices should be given in the London Gazette and the daily newspapers for two consecutive weeks; and if this requisition was to be complied with by the promoters of Irish Bills now ready for a third reading in the House of Lords, those Bills must be delayed for at least three weeks. If, however, those Bills were allowed to pass the other House, they might be brought down to this House, and there would be no inconvenience in complying with the preliminary conditions required by the right hon. Baronet's Resolutions while the Bills were proceeding through Committee. This subject was undoubtedly one of very great difficulty, and any plan that might be proposed by the Government would probably be open to objection. The right hon. Baronet proposed that the meetings required to be held under these Resolutions should be attended by scripholders, and not by the persons who had originally signed the deeds, and to whom the shares had, in the first instance, been allotted. The House must bear in mind that railway directors were not bound either by their regulations or their deeds to recognise a scripholder, unless he were a subscriber, as having an interest in the undertaking, and that it was quite competent for them on obtaining their Act to refuse to register such a person as a shareholder. This was most reasonable. The directors, in the first instance, had the power of selecting the shareholders, by refusing allotments to those of whose solvency they might reasonably entertain a doubt. If the responsible party so selected was to have the power of disposing of his scrip to a pauper, and that the company was compelled to register that pauper, the pains taken to select a solvent constituency, and taken at a very considerable expense, would be defeated. It was clear that the mere scripholder had no interest in the undertaking under the company's deed, because 910 the directors might refuse to register him, or give him a share, and in many cases it might be their bounden so to do. Now, the right hon. Baronet was probably aware that at this moment a number of persons were purchasing shares in the market for the purpose of dissolving companies, with a view to their own profit; and he (Mr. French) considered that such a class of jobbers was not entitled to much consideration. A Dublin stockbroker, of the name of Pim, who was interested in the atmospheric patent of the Messrs. Samuda, was endeavouring to get up a petition, through the instrumentality of Mr. Croucher, for the dissolution of the Irish Great Western Railway. This Mr. Pim endeavoured to persuade the Cashel Company to construct a portion of their line on the banks of the Grand Canal; a proposition scouted by their able and intelligent engineer, Sir J. MacNeill. He had for the last two or three years published prospectuses for the construction of an atmospheric railway to the west of Ireland, and he (Mr. French) believed once got so far as to advertise in the papers something like a promise of a company for this purpose; last year he expended a couple of thousand pounds in opposing the Galway line, which sum he applied to the directors of the Grand Canal to be reimbursed. This, however, they refused to do. He persuaded them this year to vote a thousand pounds for the survey of a line on their banks, to be an atmospheric one, but had failed to get up a company to provide the necessary funds for its construction; and judging from the experience of the Croydon line, there was little chance of money being so unprofitably invested. He (Mr. French) took for granted that the canal directors would call for the repayment of this money, as their shareholders had not now a chance of deriving any benefit from Mr. Pim's projects. Mr. Croucher had called on several of the shareholders with a petition, which he requested them to sign, and represented himself as coming from the body of the shareholders, although neither he nor Mr. Pim held a share in the undertaking. One gentleman, who looked over the petition, wrote to him that he saw the name of a person attached to it, who had told him he had long since disposed of his shares, and that he had no interest in the railway. Was it fair that proceedings such as these should be considered as the acts of the bonâ fide shareholders? There was another class of persons interested in the 911 winding up of these railway projects, to whom the right hon. Baronet did not propose to afford any relief. He alluded to those persons to whom shares were originally allotted, but who had since disposed of them; they had relinquished all prospect of gain, but they were still subject to liabilities which they were naturally anxious to escape. Those were the persons who, in his opinion, had the most legitimate right to a voice in deciding whether the companies should or should not be dissolved. As the chairman of a railway company, he (Mr. F. French) was aware that there was at this moment an active agency at work, unconnected with the opinions of the shareholders, to force the dissolution of companies. The right hon. Baronet proposed, as he understood, that the meetings to be held in conformity with these Resolutions should be attended by persons representing at least one-third of the capital or stock of the companies. Now, suppose a meeting of one-third of the scrip or stockholders was held, and decided upon the dissolution of a company, and that subsequently another meeting representing more than one-third of the capital came to a contrary decision, he would ask the right hon. Baronet which of these decisions was to be regarded as the determination of the company?
§ SIR R. PEEL
said, he did not intend to impose upon the scripholders the necessity of holding two meetings to petition the two Houses of Parliament; it would be clearly sufficient to hold but one meeting to obtain the certificate each House would require as the result of such meetings. With respect to the hon. Gentleman's observations respecting Bills in the other House, he could not of course speak for the House of Lords; but in respect of the House of Commons he should propose in the case of all Bills which had gone through their preliminary stages, that the third reading should be postponed until these Resolutions, if agreed to, should be complied with. With regard to the last point mentioned by the hon. Gentleman, and the difficulty that would arise if two meetings should come to an opposite determination, he did not see why those who attended the first meeting should not attend at the second, in which case it was quite clear there would be no difficulty.
supposed it was intended to read the Resolutions seriatim, and to remark upon them as they proceeded: he would, therefore, offer a few observations 912 upon the first. He gave the right hon. Baronet credit for having paid great attention to the subject, but he regretted that he had come forward with his proposition at so late a period. Ministers ought to have seen the danger earlier, and provided against the evils of speculation. The recommendation was, that no Bill should be read a third time without a certificate, lodged in the Private Bill Office three days before; but he wished to know why any Bill should be read a second time, and referred to a Committee upstairs, without the same certificate? The parties would thus be saved an enormous expense of maintaining a phalanx of witnesses from all parts of the kingdom, from Scotland, and perhaps even from the Orkneys, to say nothing of the engineers, pseudo-engineers, and a host of other persons filling all the hotels and lodging-houses from Hyde-park-corner to Whitechapel, and living at a rate of the utmost extravagance. He saw no reason for not stopping before the Bill came to the third reading, if only for the sake of saving the money of the parties. He contended also that too small an amount of representative capital was required at a meeting, for if the whole amount subscribed for an undertaking were 900,000l., it was only necessary that persons representing 180,000l. should attend. The present state of the law was most unsatisfactory and indefinite; parties had most incautiously made themselves liable—writs were issued, and most iniquitous demands made; and he knew of one gentleman who was unjustly threatened with actions to the amount of 60,000l. He called upon the Solicitor General to state what was the law, for nobody knew the extent of liability of provisional committee-men or of scripholders. It had been stated in a leading journal this day, in reference to the cases recently before the courts, that eighteen months or two years might elapse before any certainty was arrived at as to the responsibility of such parties. In the meantime all the harpies of the law, not the regular practitioners, would be at work, endeavouring to extract from pockets that contained nothing whatever they could get. He was aware that this sounded like a bull; but the truth was, that many of the persons sued had nothing wherewith to pay any damages that might be recovered. It might be a sort of monomania on his part, but he still contended that all questions like the present ought to be agitated before a distinct 913 tribunal; at all events, no good reason could be urged why these Railway Bills were to be carried on to the last stage. As to the Irish Bills, he had objected to give them priority in the House of Lords, because the present state of Ireland would prevent their being of any use; and what was the fact? That not a spade had yet been struck into the soil. There was no money in the country, and it would be just as easy—perhaps easier—to obtain diamonds as money in Ireland. What he wished mainly to impress upon the right hon. Baronet was, that an earlier point for determining whether a Bill should proceed might be found than the third reading, with quite as much advantage to the country, and vastly to the relief of the parties.
The SOLICITOR GENERAL
said, that the first question for the House to consider was the evils sought to be remedied. The first great evil was that alluded to by the hon. Member who spoke last, viz., that owing to the multiplicity of railway companies, and owing to their being entirely new institutions, the law upon nearly all questions that could arise was full of complication and uncertainty. No lawyer could, therefore, on the sudden be expected to answer a question. What was the state of things at the present moment? That railways authorized by Bills passed last year and the year before required a capital of not less than one hundred millions; and that for new schemes of this year's growth between two and three hundred millions more would be necessary. Even at the present moment, before any of the Bills were passed, the commercial interests were exposed to great injury and difficulty; in consequence of the withdrawal from circulation of the sums which were now locked up in the shape of deposits. The commercial operations of the great commercial and manufacturing towns of the country were seriously impeded. The House had it from the petition of the noble Lord the Member for Liverpool that such was the case in that great port; and Manchester, Leeds, in short, every great place in England and Scotland, was in the same condition. Not only were the operations of the merchants, bankers, and large capitalists, embarrassed and impeded by the existing state of things; but the small traders even were suffering under the same depressive influences to an extraordinary and most alarming degree, in consequence of all or the greater portion of their available capital having been paid up as deposits upon scrip 914 in the several railway schemes, or by reason of the calls that were every day in the course of being made in the case of projects which had obtained Acts of Parliament, and with which, unhappily for them, they were connected as shareholders. Now, what was the remedy in this case? It had been suggested, that as this state of things was partially felt before the meeting of Parliament, it behoved the Government to adopt some scheme which, by selecting a certain number of projects to receive the sanction of the Legislature, would relieve the pressure upon the country; but those who had given the subject any consideration could not attach any blame to Her Majesty's Government for not selecting out of the 400 or 500 schemes ready to proceed through Parliament, those which they thought should receive its sanction. For when it was borne in mind how numerous were the grounds upon which such a preference should be accorded to one scheme over another—some of these being the more direct character of the line proposed to be made; others the populous nature of the country through which the line was proposed to pass; some for one reason, some for another—was it not obvious that it would be absolutely impossible to proceed in the matter of selection, even a single step, without exercising in the first instance all the functions which the law had committed solely to the Legislature? How could any one say with justice to the promoters of a Bill, for instance, or the other parties concerned in it, that such a project should be accepted and such a one rejected, without, in point of fact, entering upon precisely the same course of inquiry in respect to those schemes, as was now conducted by Committees of the House of Commons? And, therefore, he felt bound to say that though the subject had been discussed by Members of that House, and considered for some time with all the attention it deserved, no one had, up to the present time, with the exception of his right hon. Friend, offered anything in the shape of a practical suggestion in relation to it for the decision of the House. Thus the evil went on increasing, necessarily increasing, from day to day, and from hour to hour, until Parliament had now arrived at that period of the Session when some mode was absolutely requisite to be devised to purge the House of the number of projects that were presented to it for consideration, as well as to free the country from the embarrassment and difficulty in which it was placed under 915 the present circumstances. He would now come to the situation of those unfortunate persons who had speculated in railway shares, as well as to that of others who had speculated, but who perhaps could not be called unfortunate. They were divisible into four distinct and separate classes. The first class consisted of the committee men, managing and provisional directors; in a word, of the governing bodies of these schemes. The second class was composed of those who were original subscribers to the deeds of those companies with which they were connected as shareholders, and who in that capacity were liable to all the covenants of those deeds which they had so signed; but who had ceased to have any beneficial interest in the several schemes with which they were so connected, by reason of having sold or otherwise parted with their shares. The third class consisted of holders of scrip purchased either from original subscribers, or holders in the capacity of original subscribers themselves; and the fourth, of creditors who were not speculators in shares, but who had given credit to committee men for the purposes of promoting such schemes, and to whom in that capacity large debts were due and owing. Now, it became a question in what way these several classes should be approached by any act of the Legislature, and what steps should be taken—doing as little injury as possible to the country—to allow a fair opportunity to both Houses of Parliament to select such of them as should pass into law, and such of them as should be rejected, upon the present occasion? And here the first legal difficulty presented itself. It was this, whether the companies consisted of original shareholders, or of scripholders and shareholders, or both; there were no means existing at present, in law, of dissolving them without the direct consent of every individual connected with them in these capacities. That was the first great difficulty; and why was it so? Because it was an actual impossibility to know, at any one moment of time, who these persons were, or where they were, such was the nature of the property; and, therefore, it became a matter clearly impossible to unite them for the purpose of performing any one common act. If, then, there were no means at law of dissolving these companies, what was the inevitable consequence of their continued existence, covered, as they would be, with hourly accruing liabilities? If there was a company, for instance, in which the directors were 916 all honest men, anxious to avoid expense, and desirous to waste no more of the money of the shareholders, seeing that there was no probability of success; and if a majority of the shareholders were of the same mind, in what position were they placed by the law, as it stood at present? They could not alone dissolve the company, unless they had the consent of all the parties as he had stated; but they could not even hold their hands in regard to expenditure—on they were obliged to go, whether they liked it or not, out of regard for their own personal safety. They would, in a word, have to proceed with the Bill, and, of course, proceed with the expenditure, under penalty of action at law or suits in Chancery, on the part of those parties who might choose to dissent from them in the matter. Therefore, even where it was the interest of the promoters and shareholders of a company to dissolve it, they had no power, practically speaking, so to do; and he would ask any one, whether, under these circumstances, some remedy was not requisite in the present emergency of the country? There were several companies circumstanced in the manner he had described, of which the promoters and governing bodies were desirous to do what was right, and dissolve, and return the deposits as far as possible; but they were, through this state of law, compelled to proceed, wasting that money daily and hourly upon solicitors, engineers, witnesses, surveyors, and the whole host of persons needful to pass a Railway Bill through Parliament; because, if they stopped short, they would be liable to actions and Chancery suits, at the instance of any individual or individuals, members of the company, who saw fit to dissent from them in respect of such proceedings. Bringing their Bill before Parliament, and passing it if possible, was, therefore, a means by which every member of the managing body of a company consulted his own interest and his own safety; because, even if they chose, they could not stop its progress or dissolve. But if this view of the case applied with such force to companies which were in a position to go before Parliament, how much more forcibly did it apply to companies which were not in that position! During the wild fever of speculation in railways which raged last year, hundreds of companies had been formed, in which the speculators risked all they had in the world for the purpose of paying the deposits on their shares, and had rendered themselves also liable to the 917 whole amount of the capital for which they had so subscribed, in case the several projects to which they were subscribers should become law, by the respective Bills passing through Parliament. They found themselves in this position, perhaps. There would be a sum of money subscribed sufficient, it might be, to pass the Standing Orders—one-fifth of the capital, say 150,000l. or 200,000l. That sum would, in the first instance, be paid into the hands of the Accountant General, and, therefore, locked up altogether from the general circulation of the country, and taken wholly out of the power of the subscribers. But, as the law now practically stood, these companies could not dissolve; and the fact of a rejection of their Bill did not necessitate a dissolution. Thus the subscribers would be kept for ever, in point of fact, out of their money; and the country would also lose the benefit of the sum so kept from the general circulation. With respect to three out of four of the railway projects before Parliament, there was no reasonable ground to hope that they would pass through Parliament; and, therefore, the capital of three or four hundred companies would be kept locked up, while the circulation of the country would suffer to the amount of the enormous sum involved in their aggregate. In most of those projects the promoters were unwilling to go forward; while, for the reasons alleged, they were incapable of holding back or stopping in their disastrous progress. In the meanwhile, the provisional directors, the governing bodies, were obliged, for their own security, to waste the funds of the company, it may be against their own will, but certainly without a single reasonable chance of success for their proceedings. As the law stood, not even the rejection of a Bill would have the effect of dissolving a company, and there would be still an obligation on the part of the directors, contracted by their covenants with the shareholders, to go on in their efforts to pass through Parliament, so long as they had any of the funds remaining in existence. So it followed that, even though a Bill should be rejected in the present Session, the capital subscribed to go before Parliament, in the first instance, would still continue locked up in the hands of the Accountant General; and the directors feeling it imperative upon them to proceed in the next Session in the same manner as before, there would be no end to liability, and no limits to the expenditure but the amount of money subscribed. 918 Then, again, the state of the law to which his hon. Friend (Mr. Bernal) had referred was deplorable. Many persons might have subscribed to an undertaking, in the hope it would succeed, but it failed. Debts were incurred, the deposits were locked up; no funds were coming in, yet the provisional directors were obliged to go on. To what position, then, were they reduced? To that of bringing actions against the subscribers and allottees. It was impossible, in the present state of the law, to say whether such an action was maintainable or not; and if any particular case was stated, a lawyer might say an action was maintainable; but in another case, with a very slight difference in the circumstances, it might be doubtful. Here, then, was pressure on the other hand by the directors against the shareholders and allottees, to make them contribute to the expenses which they (the directors) were obliged to incur; and they were going on bringing actions upon a supposed decision in a court of law. He alluded to the case of "Woolmer v. Toby." But there had been no decision in that case. The learned Judge who presided at the trial pronounced no opinion; he reserved all the points: but upon the bare report of a verdict being pronounced, encouraged by, and in consequence of, erroneous reports in the newspapers, he had reason to believe no less than 200 actions had been brought by the directors of three companies, the names of which he would not mention. Again, actions had been brought by subscribers against directors, upon the ground of the undertaking having failed. He referred to the case of "Walstab v. Spottiswoode." Here, again, no decision had been pronounced upon this point. No lawyer would be rash enough to say what the decision would be; for the law was unsettled upon all these questions; and the very circumstance of the law being unsettled, as if there was not mischief enough already, would introduce a new species of speculation, because the people who had now done with speculating in shares would begin to speculate in actions. There was really no end to the mischief and injustice which belonged to the present state of things. That all these evils could be remedied by any legislative measure it would be futile to hope; but he ventured to entertain a sanguine expectation that if the House and Parliament should hereafter adopt the Bill which would be submitted by Her Majesty's Government, and if in the mean time 919 the Resolutions proposed to be laid upon the Table should be adopted, the evil might not indeed be altogether remedied, but would receive a most salutary check and a most important mitigation. What was the nature of the Bill to be submitted? He would not detain the House by going through all its provisions, but he would state a few of its principal points. First, power was given to the holders of a small number of shares in any railway undertaking at any time between the signing of the deed, or the issue of the scrip, and the obtaining of the Bill, to require the managing committee to convene a meeting, in order that the sense of the proprietors might be taken upon the question of dissolution. It was proposed by the Bill that when the meeting should be convened, the parties might vote by their scrip or by proxy, it being provided that the scrip should be produced and shown by the party holding the proxy. A majority of the shareholders, not in number, but in value, might then, if they thought proper, by resolution, at once dissolve the company; and a proportion less than a majority, three-fifths, or some other amount to be hereafter determined, of the number of shares represented at the meeting, should have power to dissolve. The directors being, then, required to hold their hands, in what position would the parties be? There would be certain liabilities and certain funds; and trustees would be appointed under the Bill with power to wind up the undertaking, in the way that partnership affairs were wound up upon a dissolution of the firm. The trustees would have power at once to possess themselves of the whole of the funds of the company; first, in order to discharge the liabilities, and next, to apply the surplus, if there should be any, proportionably among the bonâ fide shareholders. The effect of this would be to create two classes of cases. One—it was to be hoped the most numerous—where, from the large deposits, the funds in hand would exceed the liabilities; and the other, where the funds would be insufficient to liquidate the demands upon the company. In the first case, the trustees would have nothing more to do than possess themselves of the funds, discharge the liabilities, apply the surplus to the shareholders, and thus put an end to all further waste and expenditure; in the other they would, after having ascertained the liabilities, have to apply the funds in reduction of them. With regard to the unliquidated balance, whatever it might be, it must be left to those who 920 had thought proper to trust, what proved to be an insolvent company, to recover their claims in course of law, against those with whom they had entered into contract, and who were by law already liable. This was the effect of the measure; but, in the mean time, it must be obvious that some time must elapse before the Bill could pass. What, then, was to be done with the 300 Bills now before Parliament, during the few weeks which must elapse before the Bill could pass into a law? To permit all those Bills to go on without any check, would be to leave the evil, at this period of time, when it was most pressing, urgent, and grievous, without any remedy or attempt at remedy; but, on the other hand, was the House to take the stringent course suggested by his hon. Friend opposite (Mr. Bernal)? His hon. Friend suggested that the House should do more than classify and check—that it should at once put a stop to all legislation upon Railway Bills. He (the Solicitor General) must be allowed to explain why he thought this course would be too stringent. In the very first place, a fortnight or three weeks must elapse before the certificates could be prepared under the resolution; and was the House, then, to stop all legislation? If legislation upon all Bills were stopped, even for a period of three weeks from the present time, it was worth consideration whether it might not endanger the passing in this Session of those Bills which were wholly unexceptionable. But independently of that consideration, he must say that, considering the great amount of money, and the varied, complicated, and extensive interests involved in the railway undertakings now before Parliament, it would be too strong a measure to stop them at once, without giving the parties a proper opportunity of expressing their assent or dissent; or to postpone the further consideration of the Bills to a time so remote as to endanger their passing in the present Session. It was therefore proposed by the Resolutions, that any number of shareholders, however small, might forthwith proceed to convene a meeting, which should be held within a fortnight, or a little more, to decide whether the scheme should be proceeded with or postponed. But then, said his hon. Friend (Mr. Bernal), why give so small a number as one-fifth the option of proceeding with the Bill, when the other four-fifths might come forward and oppose it? His hon. Friend and the House must remember that by the Resolutions an oppor- 921 tunity was given to the whole body of scrip-holders, by public advertisement, to express their sentiments; and if four-fifths of the whole body thought fit to hold back, and one fifth to proceed, he must say that was sufficient evidence to the Legislature that the Bill was a fit Bill to be considered by the Committee, and, if approved, to receive the sanction of Parliament. It was to be observed that it was utterly impossible to frame Resolutions calculated to meet every particular case; and no doubt his hon. Friend (Mr. Bernal) might readily put instances in which it might be said that four-fifths of the shareholders were against going on. Such cases, however, would not often occur; at all events, what was there to prevent the remaining four-fifths from holding a meeting of their own, and proceeding against the Bill? Nothing at all. And he apprehended that it would be competent for any Committee of Parliament, although the assent of one-fifth had been given, if they had reason to believe that a more considerable body of the shareholders were against the Bill, to reject it on that ground. Her Majesty's Government did not say that all Bills supported by one-fifth of the subscribers should necessarily pass, but that they should be considered; and it would therefore be competent for the remaining shareholders to allege their grounds of opposition. He thought when it was considered that these Resolutions were to operate upon every Bill which should come before either House of Parliament, and that they placed this great and important check that no Bill should pass that House unless, in the present state of feeling in the public and among the shareholders, they received the express assent of one-fifth of the whole scripholders, they did all which could reasonably and safely be attempted, without an undue, and, he might almost add, an unconstitutional interference with the rights of property, and the rights of free dealing between man and man. Some other objections had been stated to the Resolutions, and since he entered the House it had been suggested that where the power of stopping a Bill, or, rather, of requiring the assent to it by the holders of scrip, there was one class of cases in which persons who had a fair and just right to interfere, would not, under the terms of the Resolutions, be represented. In other words, there was a class of persons who, having originally subscribed and paid bonâ fide the deposits, had not received their scrip, but only the banker's receipt. He 922 apprehended this case was already met in the Resolutions; but if not, the introduction of the words "banker's receipt" in the Resolution, to which there was no objection, would put an end to the difficulty. It had also been said, more out of doors, he believed, than in that House, "You are not to take away from the original subscribers the right of voting at these meetings, and give it to the scripholders;" and the reason suggested was, that the original proprietors remained liable. He could not acceed to the validity of that reasoning. What was the situation of the original proprietors? They had paid their deposits, and if they had intended, bonâ fide, to become real proprietors in the undertaking, to maintain their interest in it "for better or worse," they would have retained their shares, and have been prepared to stand or fall by the concern. There was, however, a class of persons, and he was afraid a very numerous class, who had subscribed to a multiplicity only with the view, whenever they could, of selling their shares at a premium, and so making a profit. Many of these parties had paid only 2l. 10s. per share, and afterwards sold them in the market at a premium of 3l., 4l., and 5l. What right had they to claim a voice in the meeting? None. They had no interest in the undertaking, inasmuch as they had parted with it by sale, and put the money into their pockets. If the undertaking should succeed and become profitable, they would not be entitled to participate in the profits. It was the persons to whom they had sold their shares who had an interest in the undertaking, and they only ought to have a voice upon the question of its continuance or its dissolution. With regard to the continuance of liability upon the original subscriber, the original subscriber at the time he sold his shares knew he could not be exonerated from his responsibility under the deed. He was in the same situation as any retiring partner from a mercantile house. If a member of the firm of Messrs. Coutts or Messrs. Drummond were to retire from those great banks, though he sold his share for 100,000l., he would remain liable for every shilling of debt upon every contract entered into during the time he remained a partner. What right then had men who had originally subscribed to a railway undertaking to ask to be put in a different situation to other persons, because they had sold out their interest? Clearly none. It had been also complained, that 923 in the winding up of a concern the provisional directors were left in a condition of liability, whilst the funds were taken from them. The answer to this complaint was, that the funds were not taken away from the concern, but the right was taken of applying those funds, in satisfaction of the liabilities of the concern, not by the hands of those who might be too apt to favour themselves by paying only those claims which pressed upon themselves, and setting other creditors upon other persons, who had not the same access to the means. The hon. and learned Gentleman concluded by pressing upon the House the consideration, the importance of which he had already dwelt upon, that it would not be safe for Parliament to go further at this moment than the Resolutions proposed. Under them the shareholders in every undertaking would have an opportunity of expressing their sentiments; and the House, he thought, might safely come to the conclusion that where three-fifths of the body intimated their approbation of a Bill, that at least was a sufficient reason for the Committee neither at once to reject the Bill nor at once to postpone it.
§ MR. LABOUCHERE
said, the hon. and learned Gentleman (the Solicitor General) had adverted to two questions of great importance, which, though not unconnected, yet had no necessary connexion with each other, so far as the present debate was concerned. One was the Bill to regulate and amend the law by which joint-stock companies were constituted, which the Government had announced their intention of bringing in; and the other, the Resolutions which were now the subject of discussion. He should, in the few observations he was about to offer, confine his attention to the Resolutions. All he should say with regard to the Bill which the Government had announced their intention to introduce, was, that he heartily rejoiced that they had turned their attention to the subject, which was one of equal difficulty, urgency, and importance. He was perfectly unqualified to express an opinion upon the provisions of the Bill which the hon. and learned Gentleman (the Solicitor General) had detailed; and he would only say, that anybody who had paid attention to what was going on in the country, must have seen that it was absolutely necessary the vigilance of the Government should be directed, and the intervention of the Legislature asked, for a state of things which was producing scenes of confusion extremely prejudicial to indi- 924 viduals, and not creditable to the commercial character of the nation. There was only one point to which he would venture to advert, namely, to what the right hon. Gentleman the First Lord of the Treasury had said about the mode of reserving shares by the directors of railway companies. He confessed he was rather surprised at the innocence which the right hon. Gentleman exhibited, and at the tone of surprise in which he detailed the transactions which he had stated to the House as having taken place on the part of the directors of companies. He thought it had been matter of notoriety, and, he would add, matter of scandalous notoriety, during the last four or five months, that the system of reserving shares upon the part of persons who, from their situation and influence, ought to have known better, had been carried on to a very great degree, completely hoodwinking and deceiving the great body of the public, and inveigling persons of small property to embark in these undertakings to their loss and detriment. By this system of reserving shares, he said, provisional directors had been enabled to make great profits for themselves and their friends, not only to get scot free, but to come out with great personal gain, and had led the unfortunate persons who by their credit and the influence of their names had been induced to join them, to be the sufferers, and bear the brunt of the calamity. He did not know whether it were possible to check this system by legislation; but if the Government could propose an efficient remedy for this abuse, they would confer a very great obligation and advantage upon the country. But these were points for discussion when the Bill itself was before the House, and he would confine his observations entirely to the Resolutions. He had observed with satisfaction a wish on the part of the House to give a generous support to the course taken by the right hon. Baronet. That course, he thought, was on the whole the best which the House could adopt; and in the main he agreed with the arguments and reasons for it which had been adduced. He did not mean to deny that very valid objections and inconveniences might be pointed out in it. We were so situated in this matter that it was quite impossible to avoid very serious inconveniences, and some degree of hardship and injustice in any course that might be taken; but he had heard of no course which could be adopted that did not present difficulties as great, if not greater, than that now proposed. He 925 must also say—though he did not wish to dwell upon it—that he could not agree with the notion which the right hon. Gentleman had, of this being just the most felicitous moment for Government to step in and interfere. The right hon. Baronet said if they had interfered before, the public mind would not have been ripe for it, and if they interfered later, much mischief would have been done; that they had been particularly fortunate in choosing the moment when they should step in to save the public from the evils which were manifestly coming. He could not help thinking this was rather a late opinion of the right hon. Baronet; for he had a clear recollection of a speech made by the right hon. Gentleman at the beginning of the Session, and still more distinctly of the speech which the right hon. Baronet's noble Colleague the Earl of Lincoln made on the same occasion; and the speech of the right hon. Baronet left upon his mind the impression that the Government had considered this subject before Parliament met, and that, as a Government, they were of opinion at that time that interference was necessary. The public had the same impression; and he thought the Government were then disposed to deal in a more wholesale manner with railways than, without great cause and good reasons, it would be expedient for the House to support them in. But what he objected to was, that when they appointed the Committee at the beginning of the Session, instead of coming to the House with the scheme which they then had upon the subject, they employed a month in feeling the pulse of the House—in ascertaining what the House thought, when they ought themselves to have taken the initiative, and given their advice to the Committee. That, in his opinion, was a most unfortunate course. If a plan had then been proposed by the Government, and adopted by the House, it would have been of infinite advantage. In a question of this kind it was the duty of Government to look ahead, as it were, and undertake the responsibility at once, without waiting till the public out of doors had become convinced of the necessity for something being done. He, therefore, could not agree with the right hon. Gentleman that he had been felicitous in the particular time he had chosen for proposing the present measure. At the same time it was likely to be a very useful measure, and he should give it his cordial assent. He had already stated that this, as well as any 926 other course, would be accompanied with inconveniences. There was one likely to result, to which the attention of the Government and the House should be directed, namely, that all competing schemes would be swept away; that the great companies would extend their monopoly, and keep the field, where, under other circumstances, they would have had to contend with new rivals. The effect, therefore, might be, that at the end of the Session, the already formidable influence which the great companies had would be increased. He did not say whether this was an evil or a good; but it was a state of things that rendered it important for the House, and the Government specially, to consider whether some means might not be found of effectually protecting the public against an influence already so great, and which might become greater. Whether some parts of the machinery of the scheme might not be improved, was another question. He should be extremely sorry if the plan introduced by the Government, which no doubt had been well considered, should be interfered with, because it was more likely to be better matured by them than by suggestions across the Table; but at the same time he might, perhaps, be permitted to offer one or two suggestions. One was, whether it would not be possible to give, as an alternative to the scripholders, the power of communicating in writing their wishes to the chairman of the company, instead of having the meeting. The Resolutions did not state where the meetings of the scripholders were to be held; and, for all that he saw to the contrary, an Irish railway company might be called on to meet in London, or an English company in Dublin. That should be defined. On the whole, he much preferred the proposal of Her Majesty's Government to the suggestion of his hon. Friend the Member for Weymouth. He heartily rejoiced that the Government had directed their attention to this important subject. He believed that the course which they had recommended was a judicious one, and one which would give great satisfaction to the public at large.
§ MR. HUDSON
fully concurred in the course which had been pursued by Her Majesty's Government, believing that if they had brought forward the proposed measure at an earlier period of the Session it would not have received that general support which it was now likely to obtain. It would have the effect of placing the parties interested in railways on a solid basis. 927 They would be induced seriously to consider their present position; and after the meetings which would take place, he believed, in many cases, Parliament would have little trouble in coming to a decision. He admitted that considerable excitement had existed in the railway world. That had arisen in a great measure from the successful progress of existing companies. Many parties had come forward to join those individuals who had been toiling in the field, in order to reap some share in their harvest after they had borne the heat and burden of the day. He had cautioned the public at various meetings against the wild speculations which had been entered into, foretelling the result; but he was told that he was speaking as an interested individual; and if the Government had interfered sooner it would have been said they were stopping the progress of public works which would confer a great benefit on the country if carried into execution. An earlier interference would have been ineffectual; but now public opinion was in favour of the Resolutions of the Government, which would have a most salutary effect; and he had no doubt that those measures which were really good would be proceeded with in the House, and pass into law. Railway communication was of essential importance to the country, and ought to be encouraged to a proper extent; and he regretted the statement which had been made by a man of great eminence as to the increased cost of construction. He (Mr. Hudson) did not at all agree in the opinion that the expense of construction had been increased 50 per cent. Nothing could be more injurious than the propagation of such an opinion, inasmuch as it might cause the abandonment of many important and beneficial schemes. This statement might, perhaps, militate against the interests of certain companies respecting which some jealousy was entertained by the hon. Member for Taunton; but he considered himself bound in duty to Parliament and to the country to state his real opinion on the subject. He had been connected with railways for a series of years, beneficially to himself, and, he hoped, advantageously to the public. Probably the largest amount of private capital ever entrusted to one man had been placed in his hands, and he had enjoyed the confidence of the proprietors with whom he had been connected; but he should feel ashamed if he allowed his duty to the proprietors to prevent him from giving to the House such 928 information as might be beneficial to the country. When the Midland Railway was made, the price given for iron was 11l. 10s. per ton, and the sleepers cost 7s. each, and the charge for other articles was in a similar proportion. The House was aware that land, also, was an important item. The other day he bought a large quantity of iron at 9l., and could purchase sleepers at from 4s. to 5s. Land also was much cheaper than at that time. Although a considerable rise had taken place since the year 1841, when he bought rails at 5l. per ton, yet the prices were not so excessive as to deter parties from embarking in those undertakings, which would confer such benefit on the country. The hon. and learned Gentleman (the Solicitor General) had stated that the scripholders might attend these meetings and vote for the continuance of their undertakings, meaning at the same time to take the chances of the market, and not register their shares; and the original proprietors might be called on for the execution of the works. This was the position in which the original shareholder had placed himself, and he had now no right to complain. He trusted the proposed measure would be fairly treated by all railway directors. From his knowledge of the directors of different companies, he believed they would give the proprietors a fair opportunity of reconsidering their position, and determining whether it was advisable to proceed with their undertakings or not; but he hoped, at the same time, that no grievous panic would take place. He could mention one company which would have been abandoned but for the exertions of two or three individuals. The shares at one time were unsaleable, and some parties would not register their scrip; but the company waited patiently, and every 50l. share now produced the proprietors almost 300l. The railway world were under great obligations to the Government for the judicious Resolutions which they had proposed, and he felt quite confident that the public generally would meet them in the same spirit.
§ MR. M. PHILIPS
said, that notwithstanding what had fallen from the hon. Member who had just sat down, he must say that he should have been glad had the Government interfered at an earlier period. He had himself thought of proposing a measure some time ago, but upon canvassing his Friends he found that he should have had no support in that House. At any rate he had no hesitation in asserting 929 that they were not now interfering one moment too soon, for such had been the abstraction of capital from its legitimate sources for the purpose of fostering these railway speculations, that the greatest possible embarrassment in the manufacturing districts had been the consequence; an unless some such wholesome measure as that now proposed were introduced, he feared that the employment of labour would be greatly impeded. Under these circumstances he should give his cordial support to the measure, at the same time that he hoped no legitimate measure might be checked by it. He agreed with the hon. Member for Sunderland that the development of the railway principle was one of the greatest boons to the country, and he should regret, therefore, to see it checked. Many people thought that it would have been better if Government had taken railways under their care. He differed from them in that opinion, for he believed that the railway principle would not have developed itself so completely under their care in twice the time which had been required to bring it out, leaving it to private enterprise. He certainly could not but regret that there had been a great spirit of gambling mixed up with a subject so valuable in itself as railway communication: and he did hope that what they were about to do would put a stop to all unsound and speculative schemes; but that it would not delay the fair and full development of a principle which he believed was calculated to confer the greatest blessings upon the country, and one, not the least of whose advantages was, that it kept our capital at home, and enabled us to employ beneficially large masses of the working population of this country.
§ MR. NEWDEGATE
thought the Resolutions before the House much needed, but he could not concur in an expression of an hon. Member, that the country was recovering from the vortex of speculation. It could not be denied that much gambling, loss, and ruin had already accrued from railway schemes. He thought the right hon. Baronet trusted far too much to the restrictive influences of the year 1844. That it had laid a heavy hand upon speculation was perfectly true. It appeared to him that the fact of requiring deposits had given the railway scrip and railway shares a character for which other things had neither the claim nor the credit. He rose merely to suggest to the consideration of the Government the registration of all 930 shares. It was quite clear they could not prevent railway shares from participating in the functions of money, and they would have an undue issue of scrip, owing to the subsequent deposit under the sanction of Parliament; and there were no fair means of limiting this, unless the Government provided for the registration of that scrip and all shares, and gave the public the same means of access to that registry as was allowed in the case of bankers' issues.
§ MR. WARD
observed, that in so far as the railway schemes were concerned, the Parliament had prescribed certain conditions which were complied with. The mania that had prevailed had been compared to the Mississippi and South Sea schemes. He agreed in the propriety of the comparison, and thought that a vast amount of money had been diverted from its legitimate channel; tradesmen had been induced to enter into these speculations, and to invest in them those moneys which ought to have been reserved for their own business, and the consequence was great embarrassment. But what was Parliament to do, under the circumstances? Such a state of things had never before presented itself. With these Resolutions he had no fault to find, because he said that unless a board of directors could get a third of their shareholders to consent to the carrying on of an undertaking, there could be very little satisfaction in their proceedings. He also thought the proposed machinery sufficiently simple. He should have been better pleased had the Resolutions been made applicable to stages of a Bill previous to the third reading, because at present the provisional directors of an inchoate scheme had no discretion: they must go on incurring expense until relieved by a Bill now before the other House of Parliament. He should therefore have been glad to see these Resolutions apply to the early stages; but he had been told that considering the advanced period of the Session, and the position of the Railway Bills, this would be impossible. He regretted the circumstance, but he felt assured that all directors who took a proper view of their own interests, and those of their constituents, would, before their Bills had gone through the Standing Orders, avail themselves of the powers given by the Resolutions, and ascertain the sense of their shareholders before incurring any further expense. In the third Resolution he did not clearly understand the right hon. Ba- 931 ronet's meaning. He thought that words should be introduced to the effect that persons producing sufficient scrip of the company, whether their own or the property of others, should be entitled to take part in meetings convened in pursuance of the Resolutions. [Sir R. PEEL: It was so provided.] That was satisfactory. Of course the House was fully aware that the right hon. Baronet had to deal with difficulties of the most conflicting character. Those difficulties did not arise from the bonâ fide proprietary. Nothing of the kind. It was well known that half the shares were bought up by persons who had neither interest in, nor knowledge of the lines, but were merely speculating in the share market. These parties had brought the evil on themselves. The Resolutions before the House would provide a practical remedy for a practical grievance. Those who held four-fifths of the shares never intended to complete the lines; never dreaming of a panic, they bought the shares for the purpose of selling them again, and now being utterly unable to meet the expenses, it was necessary that Parliament should interfere on their behalf. The remedy proposed was one of which they would so eagerly avail themselves, that he believed the number of Bills would be reduced to one in ten. Speculators now saw the extent of the liabilities in which they involved themselves; and depend upon it the lessons taught them this year would not be forgotten for ten years to come. One word in reference to some rather harsh observations made that night respecting the conduct of provisional directors. It was admitted on all hands that railway enterprise was useful; that much of the prosperity of the country depended on it; and that it was a legitimate pursuit. Now, as every railway project must begin with a provisional directory, if they endeavoured to the utmost of their power to ascertain that the enterprise was likely to prove useful, he did not think they were now to be cried down, because in the mania of last year very exceptionable transactions took place in the railway world. The right hon. Baronet had referred to the practice of reserved shares, but there must be companies in which shares would be reserved. If the right hon. Gentleman had to wade through a mass of applications for shares—to sift the sound from the unsound, and to reject those having forged references, which gave a character of respectability to the applicants, he would find that out of 100,000 932 shares, not more than 40,000 of them could be allotted with safety. The very desire to discharge those functions properly, in bonâ fide schemes, had led parties to reproach provisional directors for reserving shares. [Sir R. PEEL: These are not fair specimens.] Why, the rage for obtaining shares was quite beyond anything that had ever come within the range of his experience. He had not the least doubt but a great many errors took place in the company in the management of which he was concerned; but any error in the allotment of shares, was chiefly owing to the cause he had mentioned. It was within his own experience that applications had been made to companies for a large number of shares by Members of that House, and those shares were never taken up, because they did not come out at a premium. Talk of innocent shareholders! Why, almost every man was concerned in taking shares on which they did not pay the deposit. Allottees were fully as guilty in that respect as provisional directors were, in reserving shares. If allottees did not see that they could realize a premium, they threw up their letters at once. The most respectable parties were engaged on provisional committees. Many of them, having the best intentions, unfortunately found themselves involved in the whirlpool of last year, and they were glad to come out of it with anything like an admission, on the part of the proprietary, that they had dealt fairly. He was sure that the railway transactions of last year would be a lesson to him. He was extremely anxious to wind up the concern with which he was connected; and he believed one-third of the shareholders would gladly avail themselves of the opportunity afforded for doing so by the right hon. Baronet's Resolutions. He had derived no advantage from being in the direction of the company with which he was connected, nor did he think that for his six months' labour he should get one shilling from either party.
§ MR. F. T. BARING
said that in Committee he had objected to any legislative interference with the employment of capital, and since then he had seen no reason to alter his opinion. He regretted that the less, because the right hon. Baronet had so framed his Resolutions as to effect beneficial results without at all touching on the principle. To the Resolutions he had not the slightest objection. They afforded a remedy in accordance with the wishes of the proprietors, and made no attempt to 933 control them. It gave them an opportunity of considering their position, and discussing the point of whether it would be expedient to proceed according to their original intention. It was, in fact, only an appeal from Philip drunk to Philip sober; an inquiry whether a voyage projected with fair breezes and smooth water, was to be persevered in when clouds were gathering, and the waves were so rough as at present. For these reasons he gave his cordial concurrence to the proposal of the right hon. Baronet. The only objection he had was as to the time at which they came into operation. If possible, he should wish to have avoided the expenses of the early stages; but there was no proposal to which some objection could not be made. With this reservation he gave his cordial consent to the Resolutions.
MR. B. DENISON
regretted that in the course of last summer Parliament had not attempted some preliminary interference with railway schemes. There were then outward signs which would fully have justified legislative interference. The spread of unsound speculation had injured wholesome trade in all its branches, by tying up capital which would have been otherwise employed. However, it was better to interfere late than not at all. He was sorry that his hon. Friend the Member for Sunderland was not present, because at the commencement of the Session he had deprecated interference with railway projects, and said that the country could bear an outlay for such purposes of fifty millions a year. He approved of the Resolutions, because they would enable parties to wind up; and the sooner the better. With reference to the question of time, it should be remembered that the Resolutions offered no hindrance to immediate meetings, and therefore, if directors did their duty, they would at once take advantage of the Resolutions, call their shareholders together, and thus save their deposits from solicitors and agents. There was another point to which he wished to call the attention of his right hon. Friend the First Lord of the Treasury. His right hon. Friend had, in his speech, alluded to Mr. Brunel's statement as to the increased cost of constructing railways. That statement had already been answered by the hon. Member for Sunderland; but he would add, that he had been in communication with persons in the habit of contracting for railway work, and they had informed him that the increase would be 934 10 or 15 per cent; not 50, as stated by Mr. Brunel. In another part of his right hon. Friend's speech he had alluded to a newspaper paragraph, referring to the London and York Railway. His right hon. Friend had seemed to infer from that paragraph that the directors of the London and York were themselves anxious to wind up. [Sir R. PEEL: By no means. Was the paper signed by a person named Phillips? [Sir R. PEEL: Yes.] Then the paper from which his right hon. Friend had quoted was a circular which had been sent round to the shareholders of the London and York Company, exhorting them to wind up. It was signed by a person named Phillips, who dated it from the office of the London and York Company. He was a director of that company, holding only fifty shares; he had never bought or sold, and had joined the railway solely on public grounds. Would the House believe, that this Mr. Phillips who had taken so much trouble, was not secretary to the company, but merely a self-elected functionary? He was not known to the directors, but had merely been appointed by persons who were anxious to damage the company. He (Mr. Denison) was in a condition to prove that, since the announcement of the right hon. Baronet's intentions, persons connected with Mr. Phillips had been buying up shares in the London and York line, for the purpose of bringing them to bear on meetings to be convened under the Resolutions. The House would agree with him that this was a most dishonourable proceeding. He was glad that his hon. Friend the Member for Sheffield had not left the House. Would it be believed that the directors of the Eastern Counties Railway, of whom the hon. Member for Sheffield was one, had by letter put themselves in communication with Mr. Phillips and his friends, and there was no doubt but that their united object was to prevent the London and York Bill from passing through Parliament. He would go so far as to say, that the London and York directors had been persecuted by their opponents in a way which was not at all creditable to the directors of other companies. He thought he could refer to his hon. and learned Friend the Solicitor General, and ask him whether statements had not been, laid before him which were unheard of before, and which the directors were forced to lay before him? His object in mentioning these facts was to show the right hon. Baronet that by his Resolution existing companies 935 would have decided advantages and facilities in buying up the shares of infant companies for the purpose of burking them. He did not say this from the slightest fear that the London and York would be affected by such practices. He believed that it might set all such attempts at defiance; but he wished to point out the advantages that were given to existing lines. There was no doubt but that directors of existing lines would have great facilities in buying up scrip for these meetings; and therefore he would have it provided, if possible, that no person should have a vote who had not been in possession of his scrip on the 4th of April, or the time at which the announcement was made. He had no objection to the general scope of the Resolutions. One word more. He thought that the Resolutions might be condensed without injuring their effect. One said that the meeting must be convened by scripholders representing one-third of the capital, and, of them, three-fifths when present would be at liberty to affirm the proposition to go on or off with the Bill. Now, what would happen? Until three-fifths of the scrip was in the room, the parties to whom he had alluded would stay out, and delay a meeting being formed. As an illustration of this, he would allude to what often occurred in that House. When a discussion was about to come on which some hon. Gentlemen were desirous of avoiding, it was not unusual for them to remain in the lobby, knowing that unless forty Members could be got together, the question could not come on; but should the House be made without them, then, as they had no further interest in remaining outside, they also came in. So it would be with these railway meetings. The parties objecting would not go into the room until they found there was sufficient scrip represented already to constitute a meeting; but when that was the case, they would of course go in and take their chance with the others. He thought, therefore, if the right hon. Baronet would allow the meeting to consist of one-fifth of the whole instead of one-third, it would in practice be much better. The Resolution provided that three-fifths of the one-third required to be present, should divide whether the undertaking should proceed or not—that was one-fifth of the whole; then why not let the meeting consist of one-fifth of the whole in the first instance, and leave it to them to confirm, if they thought proper, the resolution for going on? Generally he was in favour of 936 the Government Resolutions, because he thought the sooner those schemes which were not to be carried out were wound up the better. He wished to say one word in regard to the last observation of the hon. Member for Sheffield. He was quite aware of the great difficulty which had occurred to directors of late in allotting the shares; but, twelve or eighteen months ago, when many good and profitable schemes were being brought forward, he knew that in many cases the directors did retain for themselves, and keep in their own pockets, very large numbers of shares—not hundreds merely, but thousands—refusing to allot them to applicants who were equally wealthy and respectable with themselves. He said this advisedly; and he must add that it was a most unfair way of dealing with the public. He would not mention any names; but, if called upon to do so, he could refer to one, two, three instances in which respectable parties, living in the immediate district through which the railway was intended to pass, were refused shares, while they were retained in the pockets of the directors. In one case, a gentleman who had applied for twenty-five got only ten; another, who applied for fifty, got twenty-five; and when the allotment was concluded, and it was found that a large number of shares still remained, the directors appropriated them to themselves, and sold them to the public at a large premium. This was a practice which Parliament should prevent if possible. It was in consequence of the large sums of money that had been made by a few individuals in this way, that this mad application for shares had taken place.
The CHANCELLOR OF THE EXCHEQUER
observed, that there was so general a concurrence in the main objects of these Resolutions, that it would be unnecessary for him to intrude any lengthened remarks. Some one or two objections had, however, been advanced to some portions of the proposal, and to the general course of the Government, upon which he would offer one or two observations. In the first place, it was urged that the Government might have interfered more directly, and at an early period. Every one who had paid attention to what had taken place upon the subject of railways during the close of the last year, must be aware that the extent to which undue speculation was then carried was such as to threaten great danger to the commercial and monetary affairs of this country. Placed in the situation he 937 had the honour to fill, he had felt it his duty to use all the means in his power to discourage such speculation, and to induce all those over whom he thought he had any influence, not to embark in or give countenance to them. But, to prevent their being carried to a still more ruinous extent, he apprehended two courses only were open as far as the interference of Parliament was concerned. They might at the commencement have resolved to permit only such a number of railway schemes to be brought forward in the present Session as they thought the resources of the country could reasonably and without inconvenience carry out. But how would they, had they adopted that course, have met the difficulty of selecting those schemes to which the indulgence of being permitted to proceed with their case should be extended, and those which should at once be refused? They would have been involved in the difficulty from which the hon. Member for Manchester could find no better way of extricating them than the giving a monopoly to the existing lines, and excluding all new lines from competing with them. But when Parliament first met, there was not that general sense of impending difficulty which would have justified Parliament in embarking in the task of making any such regulation. That fact was, indeed, sufficiently proved by the speech made about that period by the hon. Member for Sunderland (Mr. Hudson). The only course, then, as it appeared to him, for Parliament to take was, to refrain from immediate interference, and to allow the public mind to cool down until it became itself convinced of the danger which these over-speculations must occasion. That period had now arrived, and the public being now sobered down—or, as the right hon. Gentleman had expressed it, there being now an appeal from Philip drunk to Philip sober—had the opportunity of effecting that, through their own medium, which it was most desirable should be effected, but which could not be so well accomplished through any other. One consequence of the delay was, that they had now the concurrence of the hon. Member for Sunderland in the Resolutions which his right hon. Friend (Sir R. Peel) had brought forward, which it was quite clear he would have opposed at an earlier period of the Session. This was the ground upon which he justified the delay which had taken place, on the part of the Government, in dealing with this sub- 938 ject. Another objection which had been taken was, that the Resolution ought to come into operation previous to the measures which might be affected by it going into Committee instead of before the third reading, inasmuch as by delaying it till the third reading, the parties were subjected to great expenses—expenses which in some cases the directors, engineers, attorneys, and others, had a direct and positive interest in forcing the company to incur—in carrying the Bill through Committee. The reason for not applying the Resolution before the committal of the Bill was this: that as the Resolution was necessary in consequence of the Bill brought into the House of Lords, which would afford to those companies the means of dissolving themselves, and as some time might elapse before that Bill received the Royal Assent, if all the railway schemes now before Parliament were in the meanwhile delayed until the required assent was obtained, it might, and he thought would have happened, that none of those genuine railway measures which were now before Parliament, would have had time to go through their several stages, however good they might be, and however much to the public advantage would be their passing. Then, was not every possible advantage which could be required secured by imposing this check previous to the third reading? These Resolutions permitted the companies immediately to hold the necessary meeting; and if at such meeting a resolution in favour of carrying out the project was not come to, what would be said of that body of directors who would, nevertheless, entail upon their constituents the expense of attempting to force their Bill through Committee; and what chance would such Bill have with the Committee upstairs? Or, having the opportunity to obtain it, what would be said of the directors who, not having the authority of such a resolution, determined without consulting their consulting their constituents to put them to the expense of a contest in Committee? Therefore, although the check was not imposed until previous to the third reading, it would, he thought, be effectual for its object. His hon. Friend behind him (Mr. B. Denison) had suggested, that instead of making the meeting to consist of the representatives of one third of the whole number of shares, and allowing three-fifths of that one-third to decide, they should provide at once that one-fifth of the whole should be sufficient to sanction the pro- 939 gress of the Bill. The hon. Member urged truly, that three-fifths of one-third was equal to one-fifth of the whole of the proprietors. But, though this was mathematically correct, the practical working of the matter was a different thing. He did not think that the mere assembling of one-fifth of the holders of the scrip would sufficiently show the feeling of the whole body of proprietors. If the meeting were convened as proposed by the Resolutions, the whole circumstances and position of the scheme would be canvassed—the conduct of the directors, whether they deserved the confidence of the shareholders, would be considered — and it would be seen whether any unjust representations had been made as to the desirableness or the prospects of the measure, and whether it would be desirable to pursue or abandon it. A discussion as to these matters would take place, and after that discussion they would have the decision of two-thirds of those who had engaged in it. This would prevent every thing like evasion, and every thing like trick—at all events, there would be much less chance of trickery than if it were entrusted to one-fifth of the whole in the first instance to decide whether the Bill should go forward or not. He did not, therefore, think that it would be desirable to make any change in this respect. His hon. Friend had, however, urged another objection to the measure. He said, that the great companies, who have considerable capital and influence at their command, would immediately buy up the scrip of the opposing schemes, in order to be able to attend the meeting and vote against their further progress, and thus all competition would be put an end to. To obviate which evil his hon. Friend proposed that no shareholder should be permitted to vote who had purchased scrip subsequent to the 4th of April, or the day when these Resolutions were first promulgated. If it could be ascertained correctly when the parties purchased their scrip, such an arrangement might be useful; but scrip passed from one hand to the other so rapidly that that was impossible. They might ascertain when the scrip was issued, but not generally when it came into the hands of its present possessors. But if such an arrangement could be made, he doubted whether it would answer the end his hon. Friend wished to effect. Suppose the case his hon. Friend had put of one of the large railway companies going into the market and buying up the scrip of a competing line for the purpose 940 of putting a stop to the undertaking. The very fact of such purchase, if made to any extent, would defeat the object for which it was made, inasmuch as it would increase the demand, and so raise the value of the shares in the market. Thus while the established company were accomplishing their object on the one hand, they would be arming the proprietors of their opponents against them. He had now, he believed, adverted to the principal objections which had been raised against the proposition. He did not mean to say that the question was not beset with difficulties on every side; no persons could be so well aware of that as those who had been now for some time engaged in devising a remedy by which those difficulties should be met. He was glad to find that the House was disposed to agree that in their attempt to do so, the Government had been tolerably successful. He believed if these Resolutions were confirmed, and the Bill which had that night been introduced by his noble Friend in the other House should pass at a comparatively early period, the danger which now threatened would be averted, and a great benefit conferred on the commercial community.
§ MR. GISBORNE
said, whether the Government had interfered or not at the right time, there could be no doubt they had interfered in the right direction. The measure to which the right hon. Gentleman had just alluded was in all respects an enabling and not a restraining Bill. The Resolution placed, as he understood, the scripholder in the same position as the original allottee—that was right, as the scripholder was the party directly interested. But he was anxious to be set right upon one point. Many parties had purchased scrip at a large premium from the original allottees. If the Bill which had been alluded to, should not pass in the present Session, it was doubtful whether the holder could not recover from the allottee the money so paid for the scrip—how would that affect his interest in voting?
The SOLICITOR GENERAL
said, that upon that point there was no doubt as to the law. The party could not recover.
The SOLICITOR GENERAL
It is perfectly clear that as the law stands, a person who has purchased scrip cannot recover back from the original allottee the price he may have paid for it. If he has 941 given his money for scrip, he must abide by the bargain.
§ VISCOUNT SANDON
saw with hearty satisfaction the course the Government had adopted on this question, the more so that it accorded with the suggestion he had himself made, for giving the parties themselves the power to proceed with or abandon the undertaking. At any rate it would have the effect of clearing the Table of a deal of rubbish. But he must say that with regard to branches emanating from established companies, he should take particular care not to confine himself specifically to the branches brought before Parliament by those companies, but should consider it his duty to see the plans of other schemes that had been before Parliament to accommodate that locality. He would examine their plans, and if he found they were likely to be of more service to the public, and there was a probability of their being ultimately carried into effect, although dropped for a time, he should feel himself quite justified in rejecting the Bill of the established company, not because it would not be advantageous, but because he thought there were other lines more advantageous. The adoption of such a principle as that was the only way in his opinion of escaping from the difficulty of adopting those inferior projects, whilst others more advantageous were driven out of the market. He trusted the effect would be to give an additional impetus to the industrial energies of the country, by employing the large amount of capital which must otherwise have lain in a comparatively dormant state.
understood the number of Bills which had been rejected for non-compliance with the Standing Orders, was between thirty and forty; for some of them, the longest lines, he understood, nearly half a million of money had been subscribed. He understood the hon. and learned Gentleman (the Solicitor General) to refer only to those Bills at present before the House.
The SOLICITOR GENERAL
said, that the Resolutions applied to Bills at present under the consideration of Parliament.
§ MR. W. COLLETT (Stamford)
had no hesitation in saying that bonâ fide directors would do all in their power to give effect to the Resolutions of the Government. Of course he could not answer for mere provisional committee-men. But he must say he considered the former a very 942 ill-used body. He rejoiced to hear it stated by an hon. Member of the Government, that stamped proxies were not now necessary. He, however, denied that the increase in contracts for works was an argument against the prosecution of railway enterprise; and, although in consequence of the demand, the wages of labour had risen, there had been a diminution in the price of land, and various articles necessary for the construction of the works: in fact, the contracts this year were less, upon the whole, than during the last. He hoped that, in cases where bonâ fide directors had called a meeting of the shareholders, and an opinion was expressed favourable to a winding-up, that that winding-up would not be taken out of the hands of the directors, who had had all the trouble, and confided to a trustee or any other party, and thereby cast a sort of slur upon the management; but that those companies who wished to wind up would be allowed to keep the arrangement of their affairs in their own hands.
suggested that a clause should be introduced into the Bill, compelling every party who attended a meeting of shareholders to bring with him a document, showing that he had brought his scrip or interest in the company prior to the 4th April. In all other respects he thought the Resolutions objectionable.
thought the evils of the railway speculation had not been exaggerated by the right hon. Baronet opposite; and although he should not offer any opposition to the Resolutions which had been proposed, he could not help remarking how many different opinions might be formed of the proper mode of dealing with the subject. In his opinion they must establish something like a railway code, and they ought to have, too, a railway judge, and legislation might be so shaped that this judge should have jurisdiction to decide upon the several Bills which came before him. He would have the House recollect that there was nothing extravagant in this notion of having a particular judge to preside over a particular court. They had Ecclesiastical judges—Judicial judges — Admiralty judges — separate judges for the different courts of law—Criminal judges, and Registration judges, and why not have a railway judge? The hon. the Solicitor General told them that power would be taken in the Bill to compel companies to wind up upon certain conditions; but if they were to be compelled 943 there must be some tribunal to enforce it. The Act of Parliament itself would not compel them. True, they might inflict penalties for non-compliance, and then litigation would arise; and who so proper to settle the difference as an officer appointed for the purpose? and although the cost might be an additional one, he was persuaded that no real good would ever be effected until they had an established railway code and a railway judge. He would have them take from the bar some one of those intelligent gentlemen in the vigour of youth and of good practice, and make him a railway judge. It might, however, be said that the necessity for such an official would not exist beyond two or three years. His answer to that was, if there was no necessity for such a judge, let him succeed to the first vacant judgeship; and whilst he should give his support to the Resolutions, nevertheless he had deemed it right to throw out this suggestion as one which might not be unworthy of consideration.
§ MR. PACKE
agreed in the Resolutions before the House. He believed there had been railway lines put forward merely for the purpose of preventing competing lines which would afford a useful railway communication; he thought it unfair, by such a proceeding, by such a cajolery, to deprive persons of the advantage of railway communication.
§ MR. M. GIBSON
asked the Solicitor General—Suppose a person bought scrip in the market, who had no liability whatever, not being bound in any way, having signed no Parliamentary contract; if that person attended a railway meeting, where he acknowledged himself as a shareholder in the concern, by his so attending, was not his position altered, and consequently, was he not liable?
THE SOLICITOR GENERAL
said, that he had no hesitation in assuring the hon. Gentleman that there would not be the slightest additional responsibility incurred by scripholders by the adoption of the Resolutions before the House.
§ LORD G. BENTINCK
Sir, I have no desire to discourage railways when they are established upon a sound and wholesome basis, but am rejoiced to see measures passed which are calculated to encourage safe and legitimate enterprise. As regards observations that have been made by hon. Members, I cannot altogether concur in their unqualified approval of the conduct of Her Majesty's Government 944 in reference to these matters. When the right hon. Gentleman the Chancellor of the Exchequer draws a distinction between "the people drunk" and "the people sober" as regards railway speculation, I would ask, have not Her Majesty's Ministers had a great share in making them drunk on railway shares? Up till 1844 a restriction existed of making people pay a deposit of 10l. per cent, before introducing their measure to this House; but in that year Her Majesty's Ministers relaxed that restriction, by reducing the deposit required from 10l. to 5l. per cent; and that, Sir, encouraged these wild speculations in railways. But in 1845 those speculations increased to a still greater height—and then was established a Railway Board, and at the head of that Board sat a nobleman of great talent, experience, and ability, the Earl of Dalhousie, the President of the Board of Trade—who did every thing in his power to discourage the wild speculation that was then going on. Her Majesty's Ministers, however, did so much to encourage the extension of railways at that time, that it could not be endured if the large and small towns did not adopt a shorter line for communication with each other, which was the cause of setting up a number of competing lines. Therefore, when the Queen's Government encouraged it, it is not to be wondered that the people should have become so excited. Why, Sir, it was not to be endured at that time that in the communication between Manchester and Liverpool there should be a round of ten or twelve miles in the line; and therefore, when the people were thus encouraged, it is not to be wondered that they should have entered into all kinds of speculation. Not satisfied with making speeches In approval of those matters, the right hon. Baronet at the head of Her Majesty's Government, became the hero of the silver trowel and mahogany wheelbarrow. Sir, I consider that in a great measure we are indebted to Her Majesty's Ministers for the wild speculations that have taken place, and in proof of that I may here remark that at Burton-on-Trent, near Tamworth, there were at one time no less than ten competing lines.
§ MR. CARDWELL
, without taking any notice of the concluding observations of the noble Lord, begged to state that if Her Majesty's Government could be said to have caused speculations in railways, they did so under these circumstances only—that previous to 1844 trade was not in a 945 very easy condition, and the money market was not in a particularly good state; but in that year matters began to mend, and railway speculation very naturally began to increase; so that if the Government had caused that speculation, it was by improving the state of trade, and rendering more easy the state of the money market. The noble Lord would not deny that the railway mania or intoxication was at its height in September and October last; and at that time it was required by the Standing Order of the House that one-tenth of the proposed capital of a railway company should be deposited.
observed, that the Government had turned a deaf ear to all remonstrances on the subject up to 1844. But in that year, when trade revived, and any relaxation of the rule was unnecessary, they reduced the amount of deposits from 10 to 5 per cent. As to the existing regulations fixing the amount at 10 per cent, that was introduced at a late period of the Session, and speculation had previously been carried to a great extent.
§ MR. T. S. DUNCOMBE
believed he should be able to prove that the speculation in railways had been encouraged by people totally unconnected with the Ministry—he wished he could say equally unconnected with the two Houses of Parliament. The only blame he could attach to Her Majesty's Government was that they had not come sooner forward to say what ought to be done. In November last, the amount of railway business likely to come before Parliament was known; yet here the House had been sitting for three months, they were at the present moment floundering in the midst of an accumulation of Railway Bills, and at last the Government produced for their consideration a proposition to wait for the opinion of the present scripholders before proceeding to the third reading of such Bills. The right hon. Baronet stated that circumstances had greatly changed since these parties embarked in the undertakings with which they were severally connected; but did the right hon. Baronet suppose that they were the parties who embarked in these undertakings in September and November last? It did look very suspicious when such approbation and unanimity appeared among parties connected with the Stock Exchange in support of the Government measure. They might depend upon it that they were not going far enough. The right hon. Ba- 946 ronet read a letter which he said shocked him most dreadfully. The right hon. Member for Taunton (Mr. Labouchere) observed that the remark only showed the innocence of the right hon. Baronet as to what his correspondent called "rigging the market," a phrase known to every man, woman, and child at Christmas last. Did Ministers ask them now what to do? To send to a Committee upstairs the great majority of the Bills got up in that manner, fictitious values having been given to the shares. They were wading through all this mass of filth, and this "rigging of the market," so well described by the correspondent of the right hon. Baronet. When the Resolutions of the right hon. Baronet were disposed of, he (Mr. Duncombe) should propose a Resolution which would probe this matter to the bottom, and show whether railway projects were of a bonâ fide character or not, whether they were undertaken with a view to the public welfare, or for stock-jobbing purposes. He should propose to institute a preliminary inquiry on the part of the Committees to whom the Railway Bills must be sent for the purpose of ascertaining how and by whom those enterprises had been got up. No company that had been honestly got up could object to such a preliminary inquiry; but all the bubble schemes would dissolve into thin air, and never venture before a Committee. He was told that the parties concerned in these affairs did not care one straw about the Resolution for stopping short at the third reading, and that the only resolutions they were afraid of were the resolutions he was about to propose. It was felt that his resolutions would probe the matter to the bottom. What he proposed was—That it be an instruction to the Committee on every Private Bill originated in this House relating to any Railway, before proceeding with the merits of such Bill, to require to be produced before them, and verified by the Promoters—1. A copy of the original Return made for the purposes of Provisional Registration, with the names of the Promoters as then registered.In explanation, he had to state, that any man might go and get any scheme, how absurd soever, provisionally registered on paying 5l. In November and September last, every man who dreamed almost of a railway got it registered. It would generally be found that most of the parties who registered were only solicitors or surveyors.2. The names, residences, and descriptions of the present and past Provisional Directors, Trea- 947 surers, Solicitors, Secretary, and other Officer, if any.No provisional directors could object to having their names placed before the Committee appointed to consider their own Bill.3. The present and proposed amount of the Capital of the Company. 4. The number of Shares and the amount of each Share. 5. The number of Shares actually allotted, with the names, residences, and descriptions of the original Allottees, and the number of Shares allotted to each.At present the House compelled the production of such information in the case of certain Bills.6. The amount of Subscriptions paid up by such original Allottees. 7. The amount of Shares retained by or for the Provisional Committee. 8. The amount of Subscriptions actually paid up by such Provisional Committee, upon the Shares originally allotted to them.That, he thought, would rather show up some of these gentlemen. Surely no honest provisional committee-men would object to have such a statement produced. Every sort of animal that could be thought of had been huddled together on provisional committees. There, for example, was "the Direct Manchester, Leeds, and York Railway." It had no less than 172 of these provisional committee-men. He wished to see how many shares they had received, how many of them had paid upon those shares, how many shares had been paid upon by the whole lot. These 172 men—there were aldermen among them, Peers, Members of Parliament, deputy lieutenants, doctors of every sort, and even clergymen were implicated—but these 172 men were presented as decoys for the public. There were 172 decoys in all. The list was curious; but it would be still more curious if all those gentlemen had received letters stating that if they would only allow their names to be used on this provisional committeee, they would be guaranteed against any liability. He had received several letters of that description; but he should have nothing to do with the projects. One of these letters addressed to him was couched in the following terms:—Sir—I beg to forward to you a prospectus of the projected Portsmouth and Langston Railway and Dock Company, of which I respectfully solicit your perusal. The fact of the Lords of the Treasury having made a grant of the site for the proposed docks, coupled with the cminency of the engineers, Messrs. Rennie, and the high character and respectability of the solicitors, Messrs. Coverdale and Lee, will, I trust, in your opinion, fully warrant my application to you to become one of the provisional committee for carrying out this great national undertaking; and in that case to 948 sign and return the enclosed consent. Annexed is the Company's guarantee.—I have the honour to be, Sir, your most obedient, humble servant,J. POLE, Assistant Secretary.The Lords of the Treasury were actually drawn into it: then the eminence of the engineers, and the high character and respectability of the solicitors, were pressed into the service; and all these considerations were stated as fully warranting the application that he should become one of the provisional committee for carrying out "this great national undertaking." They enclose the form of the consent:—Sir—I request you to insert my name as one of the provisional committee of the Portsmouth and Langston Railway and Dock Company.Then the guarantee is expressed as follows:—Sir—On behalf of myself and the other projectors of the Portsmouth and Langston Railway and Dock Company, I hereby guarantee you, as a member of the provisional committee, against all costs, charges, and liabilities whatsoever in any wise relating to this undertaking.GEORGE N. WHITE, Secretary.Was not that most tempting? He had got several of these applications, and so had other Gentlemen. The Solicitor General would tell him whether that was a good guarantee or not; whether he would have incurred any responsibility had he become one of the provisional committee of "the Portsmouth and Langston Railway and Lock Company;" whether Mr. George White's guarantee was good for his protection in the eye of the law. Supposing these 172 gentlemen who were provisional committee-men on "the Direct Manchester, Leeds, and York Railway" had received the same guarantee, did the House believe that this was not a gross fraud on the public?—that the public, the applicants for shares, when they saw the names of the provisional committee published to the world, were not led to the conclusion that each of them participated in the liabilities? It did behove the Committee to examine into the responsibility of the provisional committees, because they were the decoy ducks, and had misled the public at large. It had not been Her Majesty's Government, but these provisional committee-men, who had induced, the public to believe that they incurred responsibilities adequate to the importance of the objects. There was a list collated from different companies, and taken from a railway newspaper, showing 102 of the clergy on these provisional committees. He had said that the clergy were equally implicated. What 949 would be the consequences in their respective parishes? Here were deacons and archdeacons, and rev. and right rev. Gentlemen, vicars and rectors, and others, to the number of 102, giving their spiritual sanction to these undertakings. How, then, were they to blame the farmers and the shopkeepers in their neighbourhoods? When they saw these rev. personages taking this active share—when they knew that their pastors were so occupied—knowing also that the Church always looked to its own interest, and took care of itself, it was natural for the flock to write for a number of shares. He would require also—9. The original Subscribers' Agreement, signed by the Allottees;" and "10. A Statement of the amount of money in hand, and of the liabilities of the proposed Company: together with an Abstract of all receipts and expenditure, up to the presentation of the Petition for the Bill.This would show the state of the company, and it was what they owed to the holders of scrip in the present position of affairs. The shareholders might now meet and might call upon the provisional committee for the statement of the accounts; but the committee always refused the statement, and would not let them look at the books; but the Committee of that House, before it went into the merits of any Bill, ought to have this information; and the information so obtained before the Committee of the House of Commons would be a guide for the shareholders when they should hereafter come to the decision which the right hon. Gentleman asked: the House owed it to them to give this information, and it would have a most beneficial effect. Then he would further require—11. A statement of the source whence the (Parliamentary) deposit was paid to the Accountant General, whether out of the deposits or by loan, or whether a declaration was made of a surplus revenue or deposit.The noble Lord the Member for Lynn attached great importance to the deposits, and to the difference between 5 and 10 per cent. He believed, when Parliament came to the determination with respect to the deposits, or whether a declaration was made of a surplus revenue instead of a deposit, it was with the view of ascertaining whether the enterprise was or was not bonâ fide, and the Resolution appeared on the face of it to secure this; but in all his experience of delusion and humbug in practice he had never known a greater than this deposit with the Accountant General; and 950 not only was it a humbug, but great inconvenience had been experienced in the commercial world, by locking up 15,000,000l., whilst at the same time they had no security that the Bill on which the deposit was paid was not a bubble scheme. What was the practice? One or two of the leading directors, or indeed any banker, would lend the money on the security of the company, if it were shown that the present liabilities did not exceed the amount of the existing deposits. A note of hand was given, and the amount of deposit placed in the Accountant General's hands. If the Bill passed, the deposit was returned to the lender, and if it were rejected it was equally returned. So that the shareholders, who fancied that at all events they had the 10 per cent to clear them, had fresh calls made, because there was no money to go on with. The money paid to the Accountant General might be only borrowed, and might be paid by the merest bubble; if there were one solid man in the company he could get the money, though they might never afterwards proceed with the Bill. The last requirement he would make was—12. A statement of the source whence the additional 5 per cent required to be paid by the other House of Parliament will be paid or raised.If he were correctly informed, there were Bills pending before that House, and which would come before the Committee, where the company had just mustered sufficient to meet the Standing Orders of that House and to go before the Committee, yet trusted to the chapter of accidents to meet the additional 5 per cent required by the Standing Orders of the House of Lords. The chance of a profit on the shares might induce the directors to make the additional advance; but, at least; before they went before a Committee on the merits, they should show they had a reasonable probability of providing the 5 per cent to meet the extra payments. He believed that, in mony instances, this could not be done, owing to the bad odour of these schemes in the market. If these requirements were agreed to, he would move in addition—And that, in case the said Committee shall find that these particulars, or any of them, are not furnished, or shall be of opinion that the said intended railway was not originally proposed, or has not been carried on bonâ fide or from any other cause is not likely to be executed if the Bill be passed, the said Committee shall desist from proceeding with the said Bill, and shall report the facts to the House. And that the Committee reporting on the Railway 951 Bill report specially on each of the foregoing particulars.He hoped Her Majesty's Government would agree to these resolutions, in addition to those which the House had virtually sanctioned. If they should adopt them they would save an infinity of trouble, for the bubble schemes would not come to pass such an ordeal. The provisional committeemen of such schemes would take care to keep out of sight; to whatever class of society they belonged, they would not expose themselves to this searching inquiry; and they would thus give the shareholder not only a remedy for the past, but a security for the future. If any verbal amendments could be made in his resolutions to render them more stringent he would be happy to adopt them; but the House would not do its duty if they allowed Committees to sit on these rotten Bills—for he could call them nothing else—unless they probed the schemes to the bottom, and, in fact, turned them inside out; a plan to which no honest scheme could possibly object.
§ MR. M. MILNES
said, that it had been before proved that many companies, beneficial to the public, had not originated in a way which would bear the strictest inquiry; and though the hon. Member's inquiries would be extremely amusing, and the "Mysteries of Capel-court" might rival in popularity the Mysteries of Paris, he doubted whether so intricate an inquiry would lead to any practical result. He thought the hon. Gentleman had forgotten a party he did not often overlook—the interests of the public. There were, perhaps, a greater number under consideration at present than there ever would be again; and he would therefore request that they should all have an opportunity of coming fairly before their Committees. Although he admitted that public morality should be considered, yet he was of opinion that even that was of less importance than the interests of the public which were at stake; and it was for their interest that they should have the best possible lines, and he therefore trusted that no resolution of Her Majesty's Government would prevent those schemes from coming before the Committees of the House, in order that they might be able to select from amongst them which were the best.
§ MR. DISRAELI
said: Although the House is not so full as I have seen it upon other occasions, I believe it will not be denied that the question we are discussing is one of great public importance. Sir, I 952 am of opinion that the Resolutions proposed by the hon. Member for Finsbury contain, as far as I could catch their import, a great deal of good sense. I am not disposed to oppose the Resolutions brought forward by the Government to-night: but I cannot see why, if the public welfare had been at all considered, that so much time has been suffered to elapse — how it is that at so late a period Resolutions have been offered for the consideration of the House, and that no Member of the Opposition, nor of the Government, has previously thought fit to take such a step? Now, you are all ready to acknowledge that the mischief has been done, and you are all ready to propose a remedy. One thing, I think, is quite evident, that the Administration has not been found equal to the emergency which has arisen. I cannot understand why the Government of this country—a country so renowned for the amount of its capital, for its skill and industry, and for the facility with which it applies capital and labour to public works—why the Administration of such a country should be less prepared for an exigency such as that which lately arose, than the Government, I will say, of a neighbouring country not so renowned for capital, skill, or labour—France. When the occasion presented itself, the Administration of France was prepared to grapple with it; and, although they may have committed some errors, they must at least get credit for not shrinking from attempting to guide the powers which arose, and for preventing ferment and confusion. I recollect when people complained of the delay and difficulty of prosecuting these enterprises in France; but I don't suppose anybody complains of delay now. The general complaint is, that too much facility was given to speculation in England; and our neighbours must feel that, with respect to the construction of public works, they possess some advantages over us in having an Administration which directs enterprise, and which does not leave all to chance. It strikes me as rather singular, that at the same moment the House of Commons is called upon to limit the application of capital and labour, it is also called upon to pass measures which have a reverse tendency; and the Government which introduces them, protesting against anybody interfering with the administration of capital—anybody coming forward to regulate its exercise. The supporters of those measures exclaim against protection to either capital or labour; but every Gentle- 953 man who speaks upon the present question, as well as those who are silent, particularly those who hold shares, must feel the necessity of protection. Her Majesty's Government have on this subject more than once interfered, but in a very feeble and timid manner. They have in the course of two years twice changed the qualification which permitted a Bill to solicit our attention. This of itself shows, I think, that they could not have had any definite opinion, or any confidence in their own convictions on the subject. The hon. Member for Finsbury expresses an opinion which I believe is very common, namely, that the precaution as regards deposit—whatever be its rate—whether it be five per cent or double that amount, is equally inefficacious. How little the Government of the country thought on this business, how wavering were their opinions, how imperfect their information, may be seen by the fact, that in the course of two years, even upon the subject of qualification, they twice changed its nature, and again referred to a qualification which eighteen months before they had rejected. All this proves to me that the Government of the country was totally inefficient and unequal to the occasion. I think that upon the Government must be visited a great deal of the mischief, loss, and ruin which have occurred. My noble Friend the Member for Lynn has noticed the dramatic performance whtch, no doubt, produced much effect on the public mind—the Prime Minister of England breaking the first sod of the Trent Valley Railway. That was in October last, the very period when the Secretary for the Treasury admits the railway mania was at its height. What! the Prime Minister himself—the Minister of finance, who is most eminent for his knowledge of finance—whose chief pride it is to be considered an able finance Minister—was he to be found, at a period which the Secretary of the Treasury described as the moment when the railway mania was at its height, coming forward with all the paraphernalia and dramatic effect of which the occasion was susceptible, and giving all that impulse to railway speculation which, nobody could deny, did much to stimulate it. To show, Sir, that I am not in any way exaggerating the effect which that performance produced, I could read to the House some documents which are in my possession, and which, I dare say, the hon. Member for Finsbury has seen among the railway archives—I may allude in particular to a railway pro- 954 spectus headed with an extract from the speech of the Prime Minister, delivered on the occasion referred to. I repeat, that it was just at that time when the Secretary to the Treasury says the railway mania was at its height, that the First Minister of the Crown thought fit to come forward, and, in a manner the most striking, give his sanction, and thereby an unnatural impulse to it. I remember that a few months previously the right hon. Baronet made a speech, which is to be found in a work no longer mentionable, and to which I shall not, therefore, more explicitly refer, but of which speech I will read an extract to the House:—The tendency of the improvements which were almost daily introduced, was decidedly in favour of the shortest lines. He had expressed this opinion in the year 1839. They had chosen to establish a railroad between Liverpool, Manchester, and London; and it was thought desirable that it should go round by Birmingham. Include Birmingham, by all means, in your line between Liverpool and London: it is useless to take a shorter line, through a country much less productive. He then ventured to predict that the people of Liverpool and of Manchester would not be sent round ten or twelve miles out of the direct line in their journey to the metropolis.That was the language of the right hon. Baronet only as far back as March, 1845. Notwithstanding the immense works created, the extraordinary amount of capital invested in order to save ten or twelve miles, the people of Liverpool, the right hon. Baronet said, would not go out of their way, and would have a direct line between Liverpool and London. That was, I repeat in March, 1845; it was in October, 1845, that the right hon. Gentleman at tended at the ceremony of the Trent Valley Railway, and yet the right hon. Gentleman, it is said is not to be held responsible for those various results which have arisen from excessive speculation, and which the House and the country have now to deplore. I rose on this occasion to refer to the observations made by the Secretary to the Treasury, in reply to my noble Friend the Member for Lynn. A point was made by my noble Friend—most clearly and intelligibly made—an unanswerable argument; but which the hon. Gentleman (the Secretary for the Treasury) strangely, but perhaps unintentionally misconceived. I have noticed on this, as well as upon many preceding occasions, the sort of anxiety which seems to exist among the Members of the Government, that it should be generally supposed they had a sort of partnership with Providence. The 955 Government always seem to apply this when talking of the country. They seem to entertain a particular desire to show the House and the country that they owe a deep debt of gratitude to them for the good harvest with which we were blessed. They never make any allusion to the prosperity of the country, without at the same time telling us that they were Ministers when this prosperity was experienced. So that if you want to know what the price of wheat was, or what was the state of the weather, or the condition of the labour market at a particular time, you must refer to the Red Book, and you must refer at the same time to the first page of Hansard, to ascertain who was the First Lord of the Treasury. We all know that there was considerable prosperity in this country—we don't deny the fact—and are perfectly ready to give the Government credit for all they have really done — much more indeed than for what they propose doing—but, nevertheless, we are of opinion that the harvest had some influence on that prosperity, and that when money was rife in the market, it was not absolutely necessary that the existence of a particular Government should be brought into consideration, in estimating the public weal. But, Sir, the present state of affairs seems to be the catastrophe of the plot. It is rather unfortunate, considering that we have been governed by institutions older and longer than any country in Europe—although the moral tone of England need not shrink from comparison with that of any other nation in the world—it is most unfortunate, I say, that in such a country so insane a desire for the accumulation of wealth should exist—a desire which has always originated on as flimsy a basis as the present—which leads to mad speculations, and terminates in private ruin and public distress. The Prime Minister has not been found able to cope with the emergency—he has not been found equal to the occasion any more than Aislabie was on a nearly similar one—the one might be pure as the other was corrupt, but both were unequal to the emergency. But let us now at least draw some lesson from the past—let us reflect, and we must now come to the conclusion that it is the duty of a Government, whether that Government be Whig, or whether it be Conservative, to govern the tone of the public mind, and to watch the pulse of the public fortunes. This system of letting everything take its course has been of late the fashionable one among the 956 advocates of political economy; it is the course which we have been all latterly encouraged to pursue, but is one, Sir, which, in my humble opinion, is hurrying on this country to ruin and degradation. We now seize upon this particular question—we take you at this moment when in a thin House, and with as little noise as possible you are endeavouring to assert a principle which you have already disavowed—we now catch you crying peccavi; for though the subject under discussion has not excited so much attention as it deserved, it is pregnant with consequences—we seize upon you at this moment, and we contrast your present opinions with the flourishing speeches you were wont to make upon free trade, the evils of protection, and your vehement protests against the interference with capital and labour. You have allowed things to take their course, and you now come forward and tell us that the public fortunes are endangered. But you did not say they were in danger a few weeks ago when you painted the country as in a state of great prosperity; when you talked of the amount of labour employed, of the extent of capital invested, and of the premiums upon these schemes, what wealth and advantages were likely to flow from them, and how many years the population would be employed on them, and how many years you would have to try your newfangled experiments on the commerce of the country. You talked very large about thirty, forty, and ninety millions a year being employed in railroads—you might do anything—you might throw the Corn Laws to the winds—you might even defy your colonial connection, so long as the railroads went on, and the people would be employed—you flourished your Trent Valley scheme, and you expected a long run—shares were at a high premium, and the public sympathized with a philosophical Government. Such were your past professions—what is your present conduct? The face is things is changed — all are agreed upon that—the senators have become stags—the public, like all people losing money, begin to moralize. They think that if money cannot be made upon premiums on railway shares with that rapid facility with which they have been too long familiar, that it may be necessary to fall back upon the good old system of regulating our industry and our commerce—of maintaining and promoting our colonial connexions; and you, who have so often preached to us for occasioning delay 957 in the discussion of a great measure, have forgotten the wisest saying of one of the wisest men of modern times—Frederick the Great—who said, "He who gains time gains everything." When we opposed the economical measures of the Government, we opposed the Minister who was proud at having cut the first sod of the Trent Valley Railway—we were opposing a Minister who came forward to uphold a system of a dangerous tendency, and to repress those empirical adventurers, because a great part of the population would be employed, and because there would be premiums upon shares for many years. But now we have to discuss this question in sober sadness. Sir, I do not think the discussion of this evening will be soon forgotten; and when the Minister again calculates the resources of the country—when he contemplates the prospects of the population of the country, the means of employment, and the modes by which they are to subsist, he shall at least be forced to look at the essential resources of the State, and not upon the Legislature, for the encouragement of gambling projects, nor upon those visionary adventures which seem to me to have too much influenced the conduct and decision of cabinets and statesmen.
§ MR. BRIGHT
said, the hon. Member for Shrewsbury and the noble Lord the Member for Lynn had taken an unjust and ungenerous course in opposition to the Government. They threw the whole discredit of the railway speculations upon the Government. But time was when they were as loud as any in praising the Government. It was only when Ministers proposed to repeal the Corn Laws that these Gentlemen found out they were undeserving of their confidence. The true secret of the late violent speculation was, that for many years capitalists had made no profits; and that as soon as a period of sunshine occurred, they wished, in the words of the adage, to "make hay" in it. Hence the rash and insane desire to obtain in one year an amount of profit that ought to be spread over two or three, or several years. He believed that when the Corn Law was repealed, speculations would become more steady; and that they would not see trade prostrate one year, and excited to an extraordinary degree in another. These fluctuations had arisen from the interference of that House with the trade of the country, and when that interference was withdrawn those fluctuations would cease. The noble Lord opposite (Lord G. Bentinck) was the 958 last person to taunt the Government on the score of encouraging speculation, because he remembered that when he first entered the House the noble Lord was night after night very constant in his attendance to watch the progress of a certain Bill that was passing through that House, defending certain parties who had made speculations and were in danger from gambling—gambling, too, which was contrary to the spirit and the letter of the law. That noble Lord was not the man who ought to dictate to the House on this subject; not set up his authority in reprobation of all matters connected with speculation and gambling.
§ Resolutions proposed by Sir R. PEEL agreed to.
§ MR. T. DUNCOMBE
moved the Resolutions which he read in his speech.
After a brief coversation these Resolutions were agreed to, except the 12th, which was withdrawn. The words we have printed in italics were omitted, and those we have placed within brackets added.