§ The Adjourned Debate on the Resolutions relative to Railway Bills was resumed, and the Question again put as recorded in the report of yesterday's debate.
§ MR. R. HODGSON moved the insertion, after the word "Bill," of the following words—"or where the Bill shall have been referred to a Committee, but the case of the promoters shall not have been opened"—with the view of bringing such Bills within the operation of the resolution.
§ Resolution and Amendment agreed to, with the conditions annexed to it.
§ Second resolution read.
§ MR. GISBORNEwas not disposed to oppose the resolutions; but his opinion was, that they would not relieve the House from the mire of railway legislation in which it had been floundering all the Session. Nothing would do that but instituting proper forms of proceeding suitable to the mixed nature of railway business, which was partly judicial and partly legislative, and appointing a proper tribunal to judge on the subject. He had given notice of his intention to bring this matter under the notice of the House when the Railways Bill should be brought forward; and, though he took the proposition of the present resolutions as an intimation that the Railways Bill was abandoned, he did not think the present, considering the state of the House, a con- 296 venient opportunity for discussing the subject to which he had just adverted. He would just observe, that the other day the First Commissioner of Railways was left in a minority in the House on a division upon a Railway Bill, where the question involved the extension of the broad gauge; the reason being, that hon. Members felt they knew nothing of the merits of the case, and therefore followed the decision of the Committee on the Bill.
§ MR. R. HODGSONthought it would have much relieved the pressure upon the money market, if it had been resolved that there be inserted in every Railway Bill passed in this Session a clause prohibiting compulsory calls being made move frequently than once in six months; and if an Act were passed extending by two years the period for the construction of works already authorized.
§ Resolution agreed to.
§ On the Fourth Resolution, for inserting a clause "in every Railway Bill in the present and every future Session," prohibiting the payment of interest or dividends in respect of calls, out of the capital authorized to be raised,
MR. B. DENISONfelt that the manner in which railroad legislation had been conducted in the House was a discredit to it; and he believed the House would continue to be in a scrape with the public until an efficient tribunal should be formed. This resolution was a most unfair one. A number of deeds had been signed by parties a year or two years ago, in which it was stipulated that interest should be paid from time to time upon calls, as they were paid up; it was now proposed to compel directors to break faith with such subscribers, and thus enable these latter to refuse to proceed. The practice complained of had been allowed and encouraged by Parliament in Bills it had heretofore passed. He would move, as an Amendment, to strike out the words "in the present and every," and insert "introduced for the first time in any."
§ MR. RICARDOconsidered the insertion of a clause allowing interest to be paid upon calls out of capital to be "a delusion and a snare." It only led people to believe that they were investing their money instead of speculating. He had always in Committee on any Bill struck out that clause. If it was left in a Bill, the effect only was, that when directors wanted to call for 2l. 10s. they called for 2l. 15s., and the shareholder paid so much more in order to receive part of it back again. He 297 was, unfortunately, chairman of 150 miles of railway—the North Staffordshire line—and finding that some proprietors were in favour of having interest paid upon calls, he sent a circular to every shareholder, asking his opinion, and the majority were against such a course. He was glad to find that companies based on a fair and sound principle would not now he exposed to a disadvantage as compared with others.
MR. C. RUSSELLmaintained that this practice as to payment of interest to shareholders was consistent with the course adopted in various commercial enterprises. The insertion of the clause which it was sought to omit in future, had proved most beneficial; those who were seeking permanent investments were just those who attached most importance to the clause. It was this that, early in the history of railway enterprise, procured the most healthy class of subscribers, and caused many undertakings to be carried out which must otherwise have been dropped. But if the House was resolved to impose this resolution upon the parties connected with railways, it would, at all events, be unjust to give it a retrospective character.
§ MR. HUMEthought the principle of paying interest on the capital of railways before profits could accrue, was a fraud on the Legislature, and a bait held out to ignorant persons for the purpose of inducing them to engage in speculations which they would otherwise avoid.
§ MR. HUDSONhad heard with great surprise the objection which had been taken to this resolution. It was said by his hon. Friend the Member for Reading (Mr. C. Russell), that the payment of interest on calls had been the means of bringing capital into several largo undertakings. In the north of England, the principle was a very novel one; but there were cases in which it had been followed. Yet, to take money out of the one pocket to pay it into the other, was surely an absurdity. All he wished was, that the House would come back to the sound principles on which all commercial transactions ought to be conducted. He could not approve of holding out any unfair inducements to parties with the view of leading them to embark their capital in undertakings, to the real soundness of which they ought rather to look. This was one object of the resolutions; he approved of that which was now under the consideration of the House; and he trusted the Amendment of the hon. Mem- 298 ber for Yorkshire (Mr. B. Denison) would not be adopted.
§ SIR G. STRICKLANDdisapproved of the payment of interest out of capital before any profit could be received. But could the House properly exclude the clause authorizing such payment from Bills which had already gone through Committee, and in cases where parties had signed the contract on the clear understanding that a clause giving them immediate interest on their capital would be embodied in the Bill for which the directors applied? He felt compelled to come to the conclusion, that, under such circumstances, they could not fairly substitute another clause withholding interest on calls.
§ The CHANCELLOR OF THE EXCHEQUERobserved, that the question was whether, when all concurred in thinking the existing practice should not be continued, and the House had it in its power to act upon a different principle in regard to Bills introduced this Session, they would persevere in sanctioning that of which they disapproved. It was imagined that they were doing something unfair towards parties who had signed contracts on condition of receiving the benefits of such a clause as that which it was now proposed to exclude from Railway Bills. His answer was, that supposing the Committee on any Bill had thought proper to refuse the power of paying interest out of capital, no charge of unfairness could have been made. It was evident that many Committees would have refused such powers without any regulation on the subject; and the hon. Member for Stoke-upon-Trent had stated, that in Committees of which he had been a Member the clause allowing interest out of capital had been struck out when he objected. It was only within the last two or three years, since the construction of rail-ways had become of a much more gambling or speculative character than before, that it had been found necessary for railway directors to obtain the power given by such a clause. In all other undertakings, whether in mining, agriculture, manufactures, shipping, or whatever their nature, parties received no interest on their investments till profits were realized, and there appear- ed to be no reason why an exception should be made in favour of railways.
§ MR. GROGANregretted that this question had not been raised at an earlier period of the Session. The illusory practice of paying interest out of capital, every one seemed anxious to prevent; but it must be 299 borne in mind that Bills had proceeded a certain length with the provision which the resolution struck against. In attempting to introduce a sound principle, they might commit gross injustice. He thought all Railway Bills should in future he framed without a clause allowing interest out of capital. But he would vote for the Amendment.
MR. CHAPLINgenerally approved of the resolutions. He considered that they were necessary, and that they would be found a mild corrective for such evils as existed. He hoped the House would support the resolutions; but in regard to the particular question under consideration, he agreed in the remarks of the lion. Member for Dublin (Mr. Grogan).
VISCOUNT CLIVEobserved, that after the House and the Government had given their sanction to the principle of paying interest on calls, it was now proposed to turn round and tell the shareholders in railways that in the present Session they were not to receive interest on the calls which they had paid on the understanding that they were to receive interest. As regarded the present Session, the operation of the resolution would be as partial as the principle it introduced was novel.
§ MR. R. HODGSONobserved, that the resolution would affect very few Bills of the present Session. The practice having been sanctioned by Parliament during several years, it was not expected that a new principle would be introduced. It was a matter for consideration whether it would not be wise to extend the provisions of the Companies Dissolution Act of last Session to undertakings of the present. That Act applied only to cases where the contract was signed after a certain period.
MR. H. J. BAILLIEdid not approve of introducing such provision in the middle of the Session. It ought to have been introduced at the beginning of the Session, if at all, or made to apply only prospectively.
§ MR. STRUTT, with reference to the remark that this clause imposed a hardship on those who had subscribed their contracts on the understanding that their directors were to apply to Parliament for powers to enable them to pay interest out of the capital, said, that these parties ought to have borne in mind that their directors had no right to take it for granted that they would get such a power. The hon. Member for Stoke-upon-Trent (Mr. Ricardo) had told the House that he had 300 struck the clause containing that power out of every Bill that came before him without any complaint whatever; and it was obvious that it depended on the discretion of the Committee whether such a clause would he allowed to remain in the Bill or not. He could not see, therefore, that there was any implied understanding that Parliament was to allow such a clause to remain in all Bills during the present Session.
MR. R. YORKE, while concurring in the soundness of the principle laid down by the Lord Mayor of York (Mr. Hudson) as to the inexpediency of the practice of paying, as it were, for our own existence out of our own vitals, was nevertheless of opinion that, as Parliament had given its sanction to various Bills containing such a clause, it was utterly impossible to make the resolution now proposed act retrospectively with respect to those Bills which had been introduced in the strongest reliance that such a power would be granted, and but for which reliance the Bills would probably never have been heard of.
§ On the question that the words "originally proposed" stand part of the Question, the House divided:—Ayes 70; Noes 27: Majority 43.
| List of the AYES. | |
| Aglionby, H. A. | Hodgson, R. |
| Austen, Col. | Howard, P. H. |
| Baine, W. | Hudson, G. |
| Bannerman, A. | Hume, J. |
| Baring, rt. hon. F. T. | Hurst, R. H. |
| Bellew, R. M. | James, W. |
| Bennet, P. | Jolliffe, Sir W. G. H. |
| Bentinck, Lord H. | Lascelles, hon. W. S. |
| Bodkin, W. H. | Lemon, Sir C. |
| Burke, T. J. | M'Taggart, Sir J. |
| Busfeild, W. | Mitcalfe, H. |
| Carew, W. H. P. | Mitchell, T. A. |
| Cavendish, hon. G. H. | Monahan, J. H. |
| Clerk, rt. hon. Sir G. | Mostyn, hon. E. M. L. |
| Denison, J. E. | Mundy, E. M. |
| Douglas, Sir C. E. | O'Brien, A. S. |
| Duckworth, Sir J. T. B. | O'Brien, J. |
| Duncan, G. | Ogle, S. C. H. |
| Dundas, Adm. | Ord, W. |
| East, Sir J. B. | Owen, Sir J. |
| Ellice, rt. hon. E. | Parker, J. |
| Entwisle, W. | Peel, rt. hon. Sir R. |
| Ewart, W. | Prime, R. |
| Feilden, Sir W. | Repton, G. W. J. |
| French, F. | Ricardo, J. L. |
| Graham, rt. hon. Sir J. | Seymour, Lord |
| Granby, Marq. of | Shelburne, Earl of |
| Grimsditch, T. | Stanton, W. H. |
| Guest, Sir J. | Strutt, rt. hon. E. |
| Hamilton, W. J. | Thornely, T. |
| Hastie, A. | Troubridge, Sir E. T. |
| Hatton, Capt. V. | Waddington, H. S. |
| Hildyard, T. B. T. | Warburton, H. |
| Hindley, C. | Williams, W. |
| Somerville, Sir W. | Tufnell, H. |
| TELLERS. | |
| Winning-ton, Sir T. E. | Wood, rt. hon. Sir C. |
| List of the NOES. | |
| Aldam, W. | Grogan, E. |
| Bailey, J. | Hamilton, G. A. |
| Bailey, J. jun. | Harris, hon. Capt. |
| Baskerville, T. B. M. | Hornby, J. |
| Beckett, W. | Masterman, J. |
| Berkeley, hon. C. | Pakington, Sir J. |
| Blackburne, J. I. | Powlett, Lord W. |
| Buck, L. W. | Russell, Lord C. J. F. |
| Buckley, E. | Stansfield, W. R. C. |
| Chaplin, W. J. | Strickland, Sir G. |
| Clive, hon. R. H. | Turner, E. |
| Davies, D. A. S. | Yorke, H. R. |
| Fitzmaurice, hon. W. | TELLERS. |
| Gill, T. | Denison, B. |
| Gore, W. O. | Russell, C. |
§ Resolution agreed to.
§ On the 6th Clause being proposed,
§ MR. R. HODGSONwished to know whether the Chancellor of the Exchequer meant that it was the aggregate capital, one half of which was required to he paid up and expended before exercising the powers of sale, lease, or amalgamation; or one half of the capital authorized by each particular Act?
§ The CHANCELLOR OF THE EXCHEQUERreplied, that it was the aggregate capital that was meant.
§ Remaining resolutions agreed to.
§ The whole were as follows:—
§ Resolved—"That the Promoters of all Railway Bills in the present Session of Parliament, shall be empowered, on the Second Reading, or on the completion of any subsequent stage of any such Bill, to suspend any further proceeding in the present Session, with the option, under the following conditions, of proceeding with the same Bill in the next Session of Parliament, at the stage where the Bill shall be now suspended."
§ CONDITIONS.
§ First Paragraph:—
§ The Promoters of such Bills are to give notice in the Private Bill Office, on or before the 18th day of June; or if the Bill shall be in Committee, "and the Case of the Promoters shall not have been opened, then before the opening of their Case, or if their Case shall have opened," then within six days of the Report of the Committee, of their intention to suspend any further proceedings thereon, on the completion of some subsequent stage of the Bill.
§ Second Paragraph:—
§ The Promoters of such Bills are to give notice by advertisement for three successive weeks, in October or November, or either of them, in the London, Edinburgh, or Dublin Gazette, as the case may be, and in the local paper or papers usually in circulation in the part of the country through which the Line of Railway is proposed to pass, of their intention to present a Petition for the re-introduction of any such Bill.
§ Third Paragraph:—
§ Upon a Petition for leave to bring in a Railway 302 Bill in the Session of 1848, and being referred to the Examiner of Petitions, he is to examine whether the Petition be the same in substance as any Petition for the same purpose, and from the same parties, which was presented in the Session of 1847; and, in that case, whether any Bill brought into the House in pursuance of such Petition in the Session of 1847, was pending in either House of Parliament on the termination of such Session; and if so, whether a Subscription Contract, as required by the Standing Orders, binding in the usual way the Subscribers to the Undertaking, has been entered into, and is valid at the time of such inquiry, and whether the deposit of 10l. per cent upon such Subscriptions is lodged in the manner required by the Standing Orders.
§ Fourth Paragraph:—
§ In such case, and on proof of such Notice having been given as aforesaid, and if it appears that such Bill had, in the Session of 1847, been suspended in the House of Lords, or in the House of Commons, or on or after the Second Reading, the Standing Orders, with respect to any such Bill, are to be held to have been complied with.
§ Fifth Paragraph:—
§ The time between the Second Reading of any such Bill and the meeting of the Committee thereon, is shortened to three clear days, the parties to give the regular notices in the Private Bill Office.
§ Sixth Paragraph:—
§ In case the Report of such Bill shall have been agreed to in the Session of 1847, the Committee on the Bill are to examine whether the Bill be in every respect the same as such former Bill at the last stage of its proceeding in the House in the Session of 1847, and in such case no evidence is to be received by such Committee; and on the reception and adoption by the House of a Report from such Committee, that the Bill referred to them is in every respect the same as such former Bill at the last stage of its proceeding in the House in the Session of 1847, such Bill may be ordered to be engrossed without any further proceeding in respect thereof.
§ Resolved—That the Promoters of all Railway Bills in the present Session of Parliament shall be empowered, on the Second Reading, or on the completion of any subsequent stage of any such Bill, or where the Bill shall have been referred to a Committee, hut the case of the Promoters shall not have been opened, to suspend any further proceeding in the present Session, with the option, under the following Conditions, of proceeding with the same Bill in the next Session of Parliament, at the stage where the Bill shall be now suspended.
§ CONDITIONS.
§ The Promoters of such Bills are to give notice in the Private Bill Office, on or before the 18th day of June; or if the Bill shall be in Committee, and the case of the Promoters shall not have been opened, then before the opening of their case, or if their case shall have opened, then within six days of the Report of the Committee, of their intention to suspend any further proceedings thereon, on the completion of some subsequent stage of the Bill.
§ The Promoters of such Bills are to give notice by advertisement for three successive weeks, in October and November, or either of them, in the London, Edinburgh, or Dublin Gazette, as the 303 case may be, and in the local paper or papers usually in circulation in the part of the country through which the Line of Railway is proposed to pass, of their intention to present a Petition for the re-introduction of any such Bill.
§ Upon a Petition for leave to bring in a Railway Bill in the Session of 1848 being referred to the Examiner of Petitions, he is to examine whether the Petition be the same in substance as any Petition for the same purpose, and from the same parties, which was presented in the Session of 1847; and in that case, whether any Bill brought into the House in pursuance of such Petition in the Session of 1847, was pending in either House of Parliament on the termination of such Session; and if so, whether a Subscription Contract, as required by the Standing Orders, binding in the usual way the Subscribers to the Undertaking, has been entered into, and is valid at the time of such inquiry, and whether the deposit of 10l. per cent upon such Subscriptions is lodged in the manner required by the Standing Orders.
§ In such case, and on proof of such Notice having been given as aforesaid, and if it appears that such Bill had, in the Session of 1847, been suspended in the House of Lords, or in the House of Commons, on or after the Second Reading, the Standing Orders, with respect to any such Bill, are to be held to have been complied with.
§ The time between the Second Reading of any such Bill and the meeting of the Committee thereon, is shortened to three clear days, the parties to give the regular notices in the Private Bill Office.
§ In case the Report of such Bill shall have been agreed to in the Session of 1847, the Committee on the Bill are to examine whether the Bill be in every respect the same as such former Bill at the last stage of its proceeding in the House in the Session of 1847, and in such case no evidence is to be received by such Committee; and on the reception and adoption by the House of a Report from such Committee, that the Bill referred to them is in every respect the same as such former Bill at the last stage of its proceeding in the House in the Session of 1847, such Bill may be ordered to be engrossed without any further proceeding in respect thereof.
§ Resolved—That the Deposits made in respect of all Railway Bills, the proceedings on which shall have been suspended, shall be returned to the Depositors; but that, before proceeding in a future Session, Deposits to the same amount shall be again duly paid in, according to the Standing Orders of the House of Commons.
§ Resolved—That a Clause shall be inserted in every Railway Bill, in the present and every future Session of Parliament, prohibiting the payment of any Interest or Dividend in respect of Calls under such Bill (except the Interest by way of Discount on Subscriptions prepaid, agreeably to 8 Vic. c. 16, s. 24), out of any Capital which they have been authorized to raise, either by means of Calls, or of any power of borrowing.
§ Resolved—That in all cases of application to Parliament by existing Railway Companies, either for powers to construct Branches or Extensions, or to contribute towards the expense of constructing other Lines of Railways, a Subscription Contract for three-fourths of such additional capital as may he required for these purposes, shall be given in, beyond the Capital authorized for the 304 existing Lines, and Deposits shall be duly paid thereon.
§ Resolved—That a Clause shall be inserted in every Railway Bill in the present and in every future Session of Parliament prohibiting any Railway Company from paying, out of the Capital which they have been authorized to raise for the purposes of any existing Act, the Deposits required by the Standing Orders to be made for the purposes of any application to Parliament for a Bill for the construction of another Railway.
§ Resolved—That in every Bill of the present Session containing powers of Purchase, Sale, Lease, or Amalgamation, a Clause shall be inserted prohibiting any Company from exercising such powers until they shall have proved, to the satisfaction of the Railway Commissioners that they have respectively paid up one-half of the Capital authorized to be raised thereby, by means of Shares, and expended for the purposes of their Acts, a sum equal thereto.
§ Resolved—That in future Sessions of Parliament no powers of Purchase, Sale, Lease, or Amalgamation, shall be contained in any Act for the construction of a Railway.
§ Resolved—That in future Sessions of Parliament no powers of Purchase, Sale, Lease, or Amalgamation, shall be given to any Railway Company or Companies, unless previous to their application to Parliament for such purpose they shall have proved to the satisfaction of the Railway Commissioners, that they have respectively paid up One-half of the Capital authorized to be raised thereby, by means of Shares, and expended for the purposes of their Acts, a sum equal thereto.
§ Resolved—That no Railway Company shall in the present, or any future Session of Parliament, be authorized, except for the execution of its original line or lines sanctioned by Act of Parliament, to guarantee interest on any shares which it may issue for creating additional Capital, or to guarantee any rent or dividend to any other Railway Company, until such first-mentioned Company shall have completed and opened for traffic such original lines.
§ Resolved—That in Bills in the present, or any future Session of Parliament, for the amalgamation of Railway Companies, the amount of Capital created by such amalgamation shall in no case exceed the sum of the Capitals of the Companies so amalgamated.
§ Resolved—That in Bills in the present, or any future Session of Parliament, empowering any Railway Company to purchase any other Railway, no addition shall be authorized to be made to the Capital of the purchasing Company, beyond the amount of the Capital of the Railway purchased; and in case such Railway shall be purchased at a premium, no addition on account of such premium shall be made to the Capital of the purchasing Company.
§ Resolutions referred to the Select Committee on Standing Orders Revision, to make provision accordingly.