RAILWAY BILLS—PREFERENCE SHARES. (Hansard, 25 March 1850)

§ MR. LABOUCHERE
said, that the House the other evening unanimously expressed a strong opinion that railway companies ought not to be allowed to alter the terms on which preference shares were granted under the guarantee of an Act of Parliament, and that to come back to Parliament and ask leave to depart from those terms was in point of fact a breach of 1362 faith. Several Bills having that object in view had excited a strong feeling in the country, and it was considered desirable that the House itself should reject provisions which so manifestly violated all the principles of justice. He proposed, therefore, that the House should direct its Committees as a general rule not to interfere with those preference shares. At the same time, there might be cases where the interests of the owners of preference shares themselves might warrant the Committee in departing from the general rule. He should require in those cases that it should be incumbent on the Committee to state to the House the special reasons for so departing from the general rule. The right hon. Gentleman then moved the following Resolutions:— That in every Railway Bill by which it is proposed to authorise a Company to grant any preference or priority in the payment of interest or dividends on any shares or stock, there be inserted a Clause providing that the granting of such preference or priority shall not prejudice or affect any preference or priority of interest or dividend which shall have been granted by the Company by or in pursuance of any previous Act: unless the Committee on the Bill shall report that such provision ought not to be required, with the reasons on which their opinion is founded. That no Railway Company shall be authorised to alter the terms of any preference or priority of interest or dividend which shall have been granted by such Company under any previous Act, unless the Committee on the Bill report that such alteration ought to be allowed, with the reasons on which their opinion is founded.

§ MR. COWAN
seconded the Motion, and stated that the only object which the directors of the Caledonian and Edinburgh and Glasgow Amalgamation Railway had in view in introducing the Bill, to which he presumed the right hon. Gentleman had referred, was that of consolidating the interests of the shareholders.

§ COLONEL SIBTHORP
approved the resolutions, and expressed a wish that the right hon. Gentleman would introduce a clause into all Railway Bills prohibiting the companies from increasing their fares.

§ MR. LABOUCHERE
said, the question as to the increasing of fares had already been referred to the Railway Commissioners.

§ MR. E. B. DENISON
hoped that great watchfulness would be exercised over any special reports of Committees on the subject of departing from the general rule to be established as to preference shares, otherwise it was possible great disadvantages might result to certain companies, and proportionate benefit accrue to others.

§ MR. GLADSTONE
had no objection to the specific clauses proposed by the right hon. Gentleman the President of the Board of Trade, but there was a point connected with this subject which appeared to him to be a matter of considerable difficulty, and at the same time of such great importance as hardly to be fit to be referred to the consideration of a private Committee, unless assisted by some general rule of the House in regard to it. He would suppose a case, that where a company like that of the York, Newcastle, and Berwick Railway had contracted—as was the case—with a company like that of the Great North of England to purchase its line, and that under altered circumstances the York, Newcastle, and Berwick Company came to the Great North of England to ask for a modification of the terms, and that the latter company held a meeting and agreed to such a modification; and that the York, Newcastle, and Berwick Company then brought in a Bill—as they had done—to give effect to such altered terms—now, in this case, he wished to know how the rights of the dissenting minority of the Great North of England Company ought to be dealt with? It was difficult to say whether Parliament, in passing such an Act, ratified the contract on behalf of only one part of the selling body, namely, those who consented to the contract, or on behalf of the whole. This was a point, nevertheless, of great public importance, and one upon which he did not think a Committee of the House would be justified in forming a decision without some previous general declaration on the part of the House.

§ MR. LABOUCHERE
said, that without expressing any decisive opinion at this moment on the point, his first impression was that the cases referred to by the right hon. Gentleman involved so many various interests, that it would be difficult for the House to lay down any general rule upon the subject.