AUDIT OF RAILWAY ACCOUNTS BILL.

HC Deb 17 May 1848 vol 98 cc1143-9

SIR F. T. BARING moved the Second Reading of the Audit of Railway Accounts Bill, of which he would briefly state the objects. It originated with the House of Lords, in consequence of the evils which appeared to the Members of that House to exist in the present system, and not from any desire on their parts to interfere unduly with the course of railway legislation. In many instances there had appeared to them, as no doubt there had appeared to many Members of that House in the progress of business before Railway Committees, many circumstances which required alteration and revision. In particular it seemed objectionable, that in cases where a large minority of shareholders were dissatisfied with the management of any particular railway, they should have no power to procure a satisfactory explanation of the accounts. The Bill of which he moved the second reading was a measure to enable the minority of the shareholders, when it reached a certain extent so as to constitute a considerable number of the persons interested, to have the accounts of any company fairly audited by an impartial person who should be appointed by the Government. It was not proposed, however, that Government should interfere to make such appointment, unless a requisition was addressed to them by a certain number of shareholders; and once the audit was made and the result exhibited, the Government possessed no further powers of interference. The Bill contained many details; but he would not enter upon their discussion, as what he had stated sufficiently embodied the principle of the Bill. That principle appeared to him to be just, and he, therefore, was at a loss to imagine why there should exist, as he had reason to believe there did exist in some quarters, a serious opposition to the Bill. There were many hon. Members who might think the measure exhibited an unnecessary stringency, and if they objected to it on principle, they would no doubt oppose the second reading; but at the same time any objections which related to details merely would best be urged in Committee. He did not see why any distinction should be drawn between the principles which applied to the auditing of railway accounts and to the accounts of other corporate bodies. Of one thing he felt certain, that if the opposition to this Bill succeeded, the House would, at no distant period, be obliged to pass a measure still more stringent, for it was impos sible to allow the present system to continue.

MR. BANKES could not be suspected of being actuated by any railway interest in giving his opposition to the measure, inasmuch as he had never connected himself by any tie with any railway in the country. At the same time he was bound to state that this measure could not receive his approbation; and unless his present opinion should be changed by the statements of the right hon. Gentleman at the head of the Board of Trade (Mr. Labouchere), or by the representations of Gentlemen connected with railways and railway management, he should feel it his duty to persist in the Amendment he had to make on the Motion of the hon. Baronet, that the Bill be read a second time that day six months. He objected to the Bill, more especially because he conceived it to be only another piece of that piecemeal legislation with respect to railways, of which he had so often complained. The Bill was introduced merely for the purpose of giving the Railway Commissioners something to do. The existing regulations were quite sufficient for the objects this Bill had in view; and, if passed, it would introduce nothing but discord and confusion into railway companies. The principle of giving to the minority power over the majority, was new in legislation; and why the railway interest should be selected for the application of that principle, he was at a loss to understand. He trusted that the Railway Board would soon be placed on a different footing to that upon which it was placed at present, as he was of opinion that from that tribunal ought to emanate all measures relating to railway matters. He was of opinion also, that such a Bill as this ought not to originate in the other House of Parliament, as it was a measure which the House of Commons was better able to judge of than the House of Lords. Such a Bill as this ought to have been founded upon petitions praying for its enactment; but as far as he could learn, not a single petition had been presented to either House of Parliament in favour of such a measure. Under these circumstances he should persist in the Motion of which he had given notice, that the Bill be read a second time that day six months, unless he heard stronger arguments in favour of the Bill than had been urged.

MR. LABOUCHERE attached no great importance to the objection that this measure was not introduced by the Govern ment: independent Members of Parliament had an undoubted right to originate any measures which they might conceive the public interest called for. It was remarkable that this Bill, which it was understood was to be strongly opposed in that House, passed through the House of Lords without opposition. He had been informed by some Gentlemen connected with the railway interest that they were not aware of the nature of the measure whilst it was in the other House; but it was difficult to believe that the railway interest, generally so watchful as to anything likely to affect them, should on this occasion have been caught napping. The hon. Member thought that the Railway Board had little business to transact; but in that he was mistaken. The business performed by the Railway Commissioners was considerable in quantity, and great as regarded the gravity of its character. It was business which could not be performed in a satisfactory manner by men who were not of high and recognised station in the country. The hon. Member for Dorsetshire had spoken disparagingly of the Railway Commissioners; but so long as it was the will of the Legislature to maintain a board of that description, so long was it the interest of the country that the character of that board should be upheld. If those who composed it were deficient in knowledge and capacity, at least the public had an interest in their integrity; of that nothing could deprive them. The real question for the consideration of the House was, whether there should or not be a more efficient audit than at present existed for railway accounts. He differed upon this question with most of the Gentlemen connected with railway companies. They considered railway companies to be strictly private companies, and partaking in no degree of a public character, any more than any other commercial undertaking. Now, he never could persuade himself that that was a correct view of the question. Railway companies were very anomalous bodies. It had always appeared to him, considering the enormous amount of capital they possessed, and the extensive powers that were given to them by the Legislature, which practically conferred upon them a monopoly over the means of communication throughout the country, that railway companies stood in a middle position between public and private establishments. He had always understood that it was this consideration which justified that interference of the Legisla ture with those companies which they were not prepared to apply to private companies. Upon general principles, no doubt, all commercial transactions were better managed by private enterprise than by the interference of the Government, which, for the most part, was not only useless but mischievous. But, although he agreed that private undertakings should not be interfered with, still, viewing railway companies as a species of public institution, he could not join with those who resisted the present measure on the ground that such companies were merely private concerns. Upon these grounds he thought there was nothing contrary to sound principle that Parliament should provide speedily for railway companies a means of audit which did not exist in the case of other companies. He wished to speak with all respect of the general management of the great railway companies of this country. He knew that some of the most eminent mercantile men had, to the great advantage of the country, taken part in the direction of those great undertakings. At the same time, if he were asked whether there had not been considerable abuses in the mode of conducting many of those companies; whether they had not considered shemselves as being almost chartered libertines; whether they had not often set at nought the provisions of the Acts of Parliament under which they derived all their authority, he should feel bound to say that he believed that that had been very much the case. He did not think any Gentleman would deny that the railway companies had in a great many instances disregarded altogether the provisions to which the Legislature had subjected their management. The present system of auditing railway accounts was most unsatisfactory. The auditor was appointed by a majority of the shareholders. What did that practically amount to? Why, that in point of fact the directors appointed the auditor, for the directors naturally and necessarily possessed the confidence of a great majority of the shareholders. Under such circumstances the idea that the auditor had any real check upon the management of the company was visionary and unfounded. He believed that there existed the greatest practical difficulty in any minority of shareholders of a large company inducing any great portion of their body to take part against a majority of the shareholders. Great abuses might go on for a long time without there being any practical means for a minority of shareholders obtaining any efficient redress. He therefore did not attach much importance to the system of audit which now existed. The principle of the present Bill was this—not that Government should be empowered at its own will and fancy to appoint an examiner and auditor, but that it should be competent for a proportion of the shareholders to express a desire that such an audit should be instituted; and, as a check against any abuse of this power on the part of the shareholders, it was required that they should deposit 200l. to meet the expenses of the inquiry. But even upon a minority representing a desire that an auditor should be appointed, it would not be compulsory on the Commissioners of Railways to appoint an auditor, should they have reason to believe that the application was not bonâ fide. This was not a Government measure; but, connected as he was with the Railway Board, and approving as he did of the principle of the Bill, he should vote for its second reading, without, however, considering himself at all pledged to its details.

MR. HENLEY had in vain listened to the right hon. Gentleman's speech, to get at what really were the reasons in favour of this Bill. The right hon. Gentleman had conceded the general principle, that public commercial companies ought to be left untouched and uninterfered with by the Government; but, said the right hon. Gentleman, railway companies were an exception; he had not, however, proved that assertion. There were other public companies with which the right hon. Gentleman might have compared the railway companies—the Bank of England, for instance. But would the right hon. Gentleman propose to deal with that establishment by legislation in the same way as it was now proposed to deal with railway companies? The principle of the Bill, if there were any principle in it, was to produce a species of appeal. It did not impose an audit upon the company in the first instance. The Bill would not be put in motion at all unless it should be set going by the act of a certain portion of the shareholders. Upon what pretence could that be called an audit on public grounds? The principle of the Bill, if it had any principle at all, was not that the public should interfere, but that private shareholders should interfere. As to saying that there was not an efficient audit so far as the shareholders were concerned, he wanted to know where were the shareholders who complained? The right hon. Gentleman argued that railway companies were "chartered libertines;" but he did not find that the shareholders were dissatisfied parties. Some years ago a general Railway Bill was passed, after great discussion and consideration in Parliament. Almost every one of the railway companies had now come under the provisions of that Act, which provided, he believed, a most efficient audit for the private concerns of those companies. Unless a very strong and overwhelming case could be made out, to show that the public good would be promoted by the measure, he thought it a very questionable matter whether Parliament had a right to interfere with private Acts, upon the faith of which parties had advanced their money. Upon these grounds he should give his vote against the second reading of the Bill.

MR. AGLIONBY would cordially support the Bill, considering it most wholesome, as regarded the public, and beneficial as regarded the shareholders themselves. No set of men who dealt honestly could be injured by the measure. There was no attempt at unjustifiable interference on the part of the Legislature, for railway companies were not altogether of a private character. On account of their public character, they were permitted to take land on compulsion, and the State had therefore a right to interfere with them. It was said, that the shareholders had sufficient power already; but if that were so, the public had not, and their interest should not be lost sight of. He could not agree with the hon. Member for Oxford, that the minority of the shareholders, who would have the power of putting the machinery of the Bill in motion if they thought their affairs ill conducted, would be so foolish as to destroy their own property. The companies, if they meant to act honestly, could therefore have nothing to fear. There was nothing inquisitorial in the Bill, nor anything likely to lead to a bad result, and therefore it should have his support.

MR. MUNTZ said, the supporters of the Bill had completely failed in making out a case in its favour. They were going upon the old plan of dabbling in everything, and mending nothing. They were interfering in other people's business, and not minding their own. He, thanked God, had no interest in railways; but he did not understand the principle on which the minority was to coerce the majority. This was no public question—it was a private one, and legislative interference with private concerns must prove injurious to the State. The House might as well interfere with gas companies and canal companies, and appoint auditors for all private establishments.

The House divided on the question that the word "now" stand part of the question:—Ayes 38; Noes 100: Majority 62.

List of the AYES.
Armstrong, Sir A.	M'Taggart, Sir J.
Blackall, S. W.	Marshall, W.
Brotherton, J.	Melgund, Visct.
Carew, W. H. P.	Power, Dr.
Clements, hon. C. S.	Power, N.
Clifford, H. M.	Rawdon, Col.
Craig, W. G.	Rice, E. R.
Dawson, hon. T. V.	Sidney, Ald.
Dundas, Sir D.	Simeon, J.
Dunne, F. P.	Stansfield, W. R. C.
Elliot, hon. J. E.	Sullivan, M.
Estcourt, J. B. B.	Sutton, J. H. M.
Fergus, J.	Tennent, R. J.
Foley, J. H. H.	Thicknesse, R. A.
Forster, M.	Thornely, T.
Fox, R. M.	Wawn, J.T.
Granger, T. C.	Williamson, Sir H.
Hardcastle, J. A.
Heywood, J.	TELLERS.
Labouchere, rt hon. H.	Aglionby, H. A.
M'Cullagh, W. T.	Baring, rt. hn. Sir F. T.

List of the NOES.
Anderson, A.	Ellice
Arkwright, G.	Evans, W.
Bagshaw, J.	Ewart, W.
Bailey, J.	Forbes, W.
Baldock, E. H.	Fuller, A. E.
Barrington, Visct.	Gardner, R.
Bennet, P.	Glyn, G. C.
Bentinck, Lord G.	Greene, T.
Beresford, W.	Grenfell, C. W.
Berkeley, hon. H. F.	Grogan. E.
Boldero, H. G.	Hallyburton, Lord J. F.
Bouverie, hon. E. P.	Hastie, A.
Bright, J.	Hawes, B.
Brown, W.	Hayter, W. G.
Buck, L. W.	Heald, J.
Buller, Sir J. Y.	Heneage, E.
Bunbury, W. M.	Herries, rt. Hon. J. C.
Busfeild, W.	Hildyard, R. C.
Cavendish, hon. G. H.	Hodgson, W. N.
Chaplin, W. J.	Hope, Sir J.
Christy, S.	Hornby, J.
Clive, H. B.	Houldsworth, T.
Cobden, R.	Howard, hon. C. W. G.
Collins, W.	Hudson, G.
Cowan, C.	Humphery, Ald.
Dick, Q.	Jolliffe, Sir W. G. H.
Divett, E.	King, hon. P. J. L.
Douglas, Sir C. E.	Lacy, H. C.
Duncan, G.	Lincoln, Earl of
Duncombe, hon. A.	Loch, J.
Duncuft, J.	Lowther, H.
Du Pre, C. G.	Lushington, C.
East, Sir J. B.	Lushington, C.
Edwards, H.	Maule, rt. hon. F.

Muntz, G. F.	Smollett, A.
Mure, Col.	Spooner, R.
Newry & Morne, Visct.	Stafford, A.
Ord, W.	Tancred, H. W.
Ossulston, Lord	Thesiger, Sir F.
Oswald, A.	Thompson, Col.
Palmer, R.	Trelawny, J. S.
Patten, J. W.	Trollope, Sir J.
Pilkington, J.	Tynte, Col.
Plowden, W. H. C.	Tyrell, Sir J. T.
Powell, Col.	Villiers, Visct.
Reid, Col.	Waddington, D.
Renton, J. C.	Walmsley, Sir J.
Ricardo, O.	Wortley, rt. hon. J. S.
Scott, hon. F.
Seymer, H. K.	TELLERS.
Shirley, E. J.	Bankes, G.
Smith, J. B.	Henley, J. W.

Bill put off for six months.