§ MR. COLLIER
said, he would now beg to move for leave to bring in a Bill to extend 306 the jurisdiction of the Stannaries Court, to define and regulate the cost-book system of mining, and to limit, in some degree, the liability of partners in cost-book mines. The subject, he need scarcely inform the House, was one of great and growing importance. The discoveries in California and Australia had imparted a great impetus to mining transactions in this country, especially in the production of tin and copper. The prices of these minerals were still, however, higher than they had been for a considerable time. Moreover, gold had been discovered in the mines of this country in large quantities, and there was no reason to suppose that England, as well as Australia, might not become a gold-producing country. Under these circumstances the subject seemed to call for attention, and he was now going to ask leave to extend the jurisdiction of the Stannaries Court, which now had jurisdiction over the Cornish miners only, to the miners of Devonshire. The Stannaries jurisdiction had prevailed time out of mind in Cornwall, by which all disputes relative to tin mining had been determined. In 1836 its jurisdiction was extended to all other minerals, and considerable powers were given to it, together with an appeal to the Lord Warden of the Stannaries, which office was now executed by His Royal Highness Prince Albert. The Court had exercised a most salutary legal and equitable jurisdiction, which had given great satisfaction. The tin miners of Devonshire were supposed to be able to resort to their old Stannaries Court; but that had, in fact, now become obsolete, and he proposed to extend the jurisdiction of the Cornwall Court to Devonshire. He believed this measure would be generally approved of by all connected with mining operations in Devonshire. He was happy to say that the proposed extension would be attended with no increase in the burdens of the country. He had communicated to His Royal Highness Prince Albert, the Lord Warden of the Stannaries, his intention of bringing in this Bill, and he had been informed that, when the present vice-warden was appointed, His Royal Highness had stipulated that he should, if necessary, extend his jurisdiction to Devonshire without any increase of salary. Another part of the measure related to the regulation of mines conducted on the cost-book principle. In 1845 an Act had been passed for the regulation of joint-stock companies, requiring that they should 307 register certain particulars, and placing various restrictions on those companies; but joint-stock mining companies were exempted from the operation of the Act. But though the mines had been exempted from this Act, the Legislature did not define what constituted them. The cost-book system was a simple mode of conducting an adventure by means of a cost book, in which all the proceedings of the company were entered, and all shares were transferred by the simple process of striking out one name and adding another. By this system the whole body of the shareholders held frequent meetings, and exercised a complete control over their own affairs in a primitive and republican manner, and without the intervention of an aristocracy of directors. The Stannaries Act did not apply to cost-book mines, and the consequence was, that many companies were now endeavouring to evade the Joint-Stock Companies Act by a colourable compliance with the cost-book system, so that it was sometimes a matter of great difficulty to determine whether a company was liable to penalties for non-registration under the Joint-Stock Companies Act. He proposed to remedy this by compelling all cost-book mines to register with the vice-warden of the Stannaries of Devonshire and Cornwall, their rules and regulations, and to make it compulsory for them to have some regulations which would ensure a compliance with the cost-book system. The third portion of the measure touched on a subject of great importance—that of the limitation of the liability of partners. He proposed that mines which had conformed to the provisions of this Act should be entitled to borrow money on the common terms of the lender's participating in the profits, without being liable beyond the amount of his shares; and that a list should be published so as to furnish information of the names of the limited and unlimited shareholders. This led him to the subject of limiting the liability of partners generally in trading concerns. The House was well aware that by the law of this country a man who had but one share in a company was liable to his last acre or shilling. The law even went further, and said if any man lends a farthing of a trading concern on the terms of participating in the profits, although he took no part in the management, he should still be liable to his last acre or shilling. This was contrary to the law of nature, and to that of every civilised country. In 308 other nations the law of partnership en commandite had been introduced. It was by reason of that law that Florence, Genoa, and Venice, attained such unprecedented prosperity in the middle ages. It had been introduced in France, and received the approbation of the most eminent jurists of that country. By its means the people of Holland had been enabled to rescue large tracts of territory from the sea. It had also been adopted in the United States. It might be said that, under the present law, this country had attained its present degree of prosperity; but he said that the greatest works of the age, our railways, our canals, our steamers, had been produced by a breach of that law. But for the special intervention of Parliament for the purpose of breaking through that law, we should to this day never have had a railway or a steamer in this country, but should still be travelling by coaches and sailing vessels. The Birkenhead Docks would never have been constructed, the Menai Straits would never have been bridged over. Our law of partnership was inapplicable to large classes of trading concerns, which required the concentration of a great number of persons, and of great quantities of capital. The Board of Trade had a very invidious task to perform in selecting companies for special privileges, and, in doing so, they must cause great jealousy in other companies. It would therefore be extremely desirable that a large number of companies should be allowed, as a matter of right, to adopt the system of partnership en commandite, and that persons should be allowed to lend money to partnerships on the terms of participation in the profits, without being exposed to ruin. This system of limited liability of partnerships—the principle acted upon on the Continent—would tend, he thought, if adopted, to promote enterprises of public utility, such as gas and water works, and the improvement in the dwellings of the poor; for it was well known that a number of persons who had capital to lend were restrained from lending it by the fear of ruin. The present law of this country had the effect of deterring capitalists from advancing money for such schemes, and turned it into what he (Mr. Collier) considered an unnatural channel of limited liability, and had been in some measure the means of fostering schemes of a speculative nature and the railway mania. This principle of unlimited liability bore with peculiar hard- 309 ship on our mining companies. He had been told of an instance in which a farmer in the north of Devonshire had a mine discovered on his estate, who was presented by the company that worked it with five shares in compliment to his liberality and courtesy to the company. In consequence of this he became liable for the debts of the company, and was reduced to utter ruin. The effect of such a law tended to deter persons of respectability from embarking in mines, and gave them up to adventurers, who made mere speculations of them. He ventured to think that what he proposed would tend to place mining schemes on a more solid foundation, increase the capital embarked in them, and tend to develop the mining interests of the country to an extent that they could at present hardly calculate. He was aware that to carry out the principle that he advocated to the utmost, would be to extend the principle of limited liability of partnership to the whole Kingdom, and he would not shrink from the consequences of that. The present Bill would extend this principle only to mines in Devonshire and Cornwall, and he did not think they could try the experiment under more advantageous circumstances. It would be on a limited area, and under the control of a Court combining law and equity, and administering justice speedily and cheaply. If the experiment failed, it would not then be too late to retrace their steps; if it succeeded, he considered it would be a most important event. It would have the effect of giving additional opportunities for the investment of capital, especially to the middle and labouring classes. It would have the effect of interesting the labourer in the commercial transactions of the country, not merely as a labourer, but as a capitalist; it would also have the important social effect of tending to bring together labour and capital, the interests of which, though they might sometimes appear antagonistic, were not so in reality. These were the grounds on which he proposed to introduce the present Bill.
THE ATTORNEY GENERAL
said, this was unquestionably a matter of great importance, and he begged to assure his hon. and learned Friend who asked leave to introduce the Bill, that it was one to which he was willing to pay every possible attention. He was far from saying that he was prepared to go all the length of his hon. and learned Friend in the matter on which he proposed to legislate. It was a 310 subject which involved questions of the greatest importance. That of limited liability, for example, was one on which there existed great diversity of opinion—some thinking that it would add greatly to the trade and enterprise of the country, while others looked upon it as too vast a change to introduce into the law of partnership. So far as he was concerned, his hon. and learned Friend should have leave to bring in the Bill, and he could promise him that it should receive the utmost consideration at his hands. There was no doubt that he had devoted much attention to the subject, and the measure was one well worthy the attention of the House. Without at all pledging himself or the Government, therefore, to any opinion with reference to the matter, he would give his assent to the introduction of the Bill.
said, the subject was one of such vast importance, and the opinions which prevailed in the country were so decidedly in favour of limited liability, that he thought the House ought to have from the Government as early a decision as possible. A Commission had been appointed to inquire into the law of partnership, which Commission might have, he thought, obtained all the necessary evidence in a few days, and he rose to express a hope that the Government would not allow any time to be lost, for there was throughout the country a disposition that the law of partnership should be reconsidered, He frankly owned that up to a recent period he had been opposed to the principle of limited liability; but at length he had become so satisfied from many facts which had reached him of its advantages, that he confessed he was a convert to the doctrine, and, like all those who embraced a new faith, felt very anxious for its promulgation. The middle and lower classes took a deep interest in the question, and he must again express a hope that the Government would lose no time in bringing the matter fully and fairly before the House.
said, that as one who had a large interest in mining operations, he wished to offer to the House a few observations upon the question then under its notice. It seemed to him not a little strange, when he reflected upon the great extent and importance of those operations, that no measure for their better regulation had up to the present day been submitted to Parliament. He believed that the measure which his hon. and learned Friend (Mr. Collier) asked for leave to introduce 311 was a step in the right direction, and he (Mr. Moffatt) felt assured that one provision of that measure—the extension of the jurisdiction of the Stannaries Court to Devonshire, would be regarded as a great boon by the inhabitants of that part of the country. With respect to the cost-book system he must observe, that it was one fraught with inconvenience as it now stood, and he should like to see the principles of that system well and clearly defined. Now, with reference to the importance of the interests which were involved in mining operations in this country, it would merely be necessary to state to the House a few facts in order to convince hon. Members of their magnitude. He found upon inquiry that the quantity of copper which had been produced from the mines of Cornwall and Devonshire in the year 1729 had been valued at 30,000l. In the first year of the present century it appeared that the quantity produced had been estimated at the value of 500,000l., while last year its value had been 1,211,000l. With respect to the law of limited liabilities, he had merely to observe that, so far as he could ascertain the feelings of the people in the south-western counties of England, they were entirely favourable to its extension to mining operations. There were also other portions of the Kingdom—Wales, Westmoreland, and Cumberland, for instance—in which mines existed, and into which it was desirable that the law should be introduced.
§ MR. WILKINSON
said, he was strongly in favour of the principle of limited liability. One great advantage he anticipated from it would be that of putting an end in a great measure to the strikes which so often distracted and disturbed the manufacturing interests of the country. It would enable a large class to take a share in commercial enterprises who were now excluded from them—fearing the responsibility which attaches to them—and would greatly extend the demand for labour.
§ MR. W. BROWN
said, he was no convert to the principle of limited liabilities generally. He was quite convinced that this country owed much of its prosperity to the credit and honour of the British merchant, which he believed would be greatly impaired if we were placed in the same condition as France at this moment, through the adoption of the principle of limited liability. As matters now stood, a merchant who wished to have transactions with for Feigners was often deterred from engaging in them because he was not able to ascer- 312 tain the position in which the parties stood, in consequence of this very law of limited liability. It was dishonourable for any commercial man who profited largely in years of prosperity to evade his share of the burdens and losses which fell upon traders in years of adversity; yet in 1847, and similar years, he did not doubt there were many who would have availed themselves of the shelter afforded by the law of limited liability, had it existed in this country, and the character of our traders would consequently have suffered. In mining concerns and railroads, in large and speculative undertakings, or in new pursuits, it might be expedient for the Government to grant the protection of limited liability; but he would prefer that in each individual case of parties coming before the House, it should be decided whether it was expedient to have limited liability or not. If we had prospered on the system of unlimited liability, he hoped that our prosperity would not be endangered by the adoption of the opposite system.
§ MR. H. H. VIVIAN
said, he thought that if the jurisdiction of the Stannaries Courts was extended to the neighbouring county of Devon, the House would confer a great boon on the mining interests of that county. On the question of limited liability, he begged to say that he thought it would be highly undesirable to introduce it generally into our commercial system, but it appeared to him that there were certain undertakings with regard to which it would operate beneficially, such as required an amount of capital quite beyond the control of individuals—railway and steamboat undertakings, for example, and also insurances and others attended with great risk. He conceived that mining especially came within the class of undertakings to which this principle was applicable, and the practice of the country showed that it was so, for he could not recollect the case of a single mine in Devonshire or Cornwall that was carried on by an individual.
§ VISCOUNT GODERICH
said, the law of partnership was in a position in which it could not be allowed long to remain. The power now vested in the Board of Trade of granting at its pleasure charters by which special privileges were conferred on some bodies, while they were denied to others whose object was similar, was virtually a power of granting monopolies. This objection would be removed if limited liability were granted to all who were prepared to submit to the stringent regula- 313 tions which would in that case be necessary. If it were right to suspend the law in favour of large undertakings, how could it be just to enforce it against those who were engaged in undertakings which required a small amount of capital? The present law often operated with very great injustice. Let the House take the case of a man who had made a valuable discovery. This man wanted capital to carry out his discovery. He went into the market to raise it, but here he was met by the law of partnership, and he could not obtain the money which he wanted, because the capitalist would not be satisfied with a fixed rate of interest, and the law forbade him to share at all in the profits of the undertaking, unless he was willing to become liable in the event of its failure, with his last shilling. It was, however, chiefly on account of the interests of the working classes that he advocated the principle of limited liability. He agreed with the hon. and learned Member for Plymouth, that by the alteration of the law which he sought to effect, they would do something towards putting an end to the disputes between capital and labour, which must have of late engaged the attention of every Member of that House. A law which would enable the master, if he chose, to share a portion of his profits with those whom he employed, would tend more to bind together the interests of the two classes than any other measure that could be passed. And if workmen themselves wished to combine together to carry on manufacturing operations, whatever might be the opinion of the House as to the result, they ought not to be denied the opportunity of making the experiment. He trusted, therefore, that the whole subject would shortly come under the consideration of the House.
§ MR. CARDWELL
said, before the question was disposed of, he wished to remind the House in what position the principle of limited liability now stood. His hon. and learned Friend the Attorney General had stated that he had no objection to the first reading of this Bill, which, as he understood it, was for the purpose of extending the jurisdiction of the Stannaries Court to Devonshire; but in the course of the discussion that other question was introduced. He wished to remind the House, that in 1850 a Committee of that House had sat upon one branch of the subject. In 1851, another Committee sat for the purpose of more particularly considering the law of partnership, and upon 314 that Committee were men of great commercial and legal ability, who had investigated the subject. Immediately upon the accession of tie present Government to office, a Commission was appointed, in accordance with a recommendation of a Committee, consisting of eminent legal and commercial men. That Commission had been most attentively engaged in investigating the subject. That very day he had been informed the Chamber of Commerce of Liverpool had been consulted by the Commission, and he thought, therefore, it was obvious that in sanctioning the first reading of this local Bill for Cornwall and Devonshire, the House was not passing an opinion aye or no on the greater question which was now under the consideration of a Commission. He would offer no opposition to the introduction of the Bill, but would defer any opinion upon the question of limited liability until the Commission had concluded its labours.
§ Leave given.
§ Bill ordered to be brought in by Mr. Collier and Mr. Moffatt.