§ Order for Third Reading read.
§ MR. ARCHIBALD HASTIE
said, he rose to oppose the measure, which he looked upon as one of the worst that had been brought under the notice of the House of Commons for many years. He denied that the measure was based upon the principle of free trade. It was as its title declared, a Bill for limited liability, and anything that was limited could not be 1710 free. Under the Bill every tradesman in a country town might be ruined by capitalists, who would oppose them on the faith of limited liability. The effect would be to establish a monopoly of capital by which the small tradesmen would be driven out of the market. In London too there would be Italians, Jews, and Greeks who were all looking for such a measure, speculating against the ordinary traders.
§ MR. THOMSON HANKEY
said, that he must congratulate his right hon. Friend (Mr. Bouverie) upon the success of his measure. He hoped that it would pass during the present Session, because he was persuaded that the mercantile community would derive great benefit from it. It was most creditable to the Government that they had relieved the Board of Trade from all discretion as to the grant of charters of limited liability.
§ MR. MICHELL
said, he should oppose the Bill, and, as an instance of the inconvenience which occasionally arose from the application of limited liability, he would adduce the case of what are known as "scrip" mines in Cornwall.
MR. CARD WELL
said, he did not believe that the hon. Member for Paisley (Mr. Hastie) intended to divide the House; and, after the determination to pass the Bill which had been expressed, he thought the hon. Member exercised a wise discretion. He only wished that he could concur with the hon. Member for Peterborough (Mr. T. Hankey) in thinking that the Bill would be a valuable contribution to our system of commercial law. But, on the contrary, he believed it would tend to multiply a class of Companies in which the shareholders were always to be found when there were dividends to receive, but who, when things went wrong, would disappear, and nothing be heard of them. Under the Bill as it now stood there was no safeguard against that state of things, which might, ad libitum, be carried into effect—namely, that Companies might be established to any amount, who would call up all their capital, and, having thus fulfilled the requirements of the Act, then redistribute the capital among the shareholders in the shape of dividends or otherwise; and then you would have a body endowed with corporate powers with no assets and no legal liabilities, which could enter the market and get any credit it could by any means obtain. He considered that it was eminently dangerous to create bodies without assets or legal liabilities to entrap 1711 persons into granting them any amount of credit. Again, the measure having been brought in, it was essential that it should have been accompanied by a general reform and consolidation of the law relating to Joint-stock Companies, which was in a very unsatisfactory state, and which reform and consolidation he had intended to introduce when he proposed a measure of the nature now before the House. He also regretted that a subject so important as the present Bill should have been discussed at a period of the Session, when, although the preponderance of opinion had been expressed in its favour, yet when the whole number of Members assembled was inadequate to a fair and full representation of the commercial interests, and did not afford sufficient opportunity for such suggestions and amendments of the measure as would have made a good and useful law, for that there should be a change in the present law he always admitted, especially as regarded the present powers of the Board of Trade; but it was an operation which required the most serious care and deliberation on the part of the House, and he regretted that the Bill should have progressed thus far, believing as he did that it would be an instrument for the promotion of fraud, and believing also that it would not be long before other measures would have to be introduced to redress the evils which it would cause.
§ MR. GLYN
said, when the Bill was first committed, there were some restrictions which mitigated the evils incidental to such a Bill, but those restrictions had since been removed. A Company could now start without capital. The amount of the shares was reduced, and the clause was rejected by which additional liability was to attach to contributors and shareholders. The machinery for winding up was also removed from the Bill. The subject, he considered, was of such importance to the commercial body—affecting as it did such important changes, and being likely to produce such pernicious effects—that he trusted the question would have full attention when it reached the other House.
§ MR. MASTERMAN
said, if three or four people put a few pounds together they became a Company under the proposed Bill, and were in a situation to do incalculable mischief to the fair trader. He sincerely regretted the threats held out by the noble Lord at the head of the Government. He hoped the subject would 1712 receive proper attention when it reached the other House of Parliament.
§ MR. BOUVERIE
said, he was surprised at the language of the right hon. Gentleman the Member for Oxford (Mr. Card-well), because he thought the right hon. Gentleman was favourable to the principle of the Bill. The right hon. Gentleman said there was no safeguard provided against a fraud such as he had indicated. But, in reply, he would say such a Company as that described was not likely to get a great deal of credit in the country. He denied the assertion that there were no safeguards in the Bill. If the Act was properly complied with, and Joint-stock Companies compelled to make proper returns, that class of frauds referred to would be done away with. Other hon. Members had expressed a hope that the Bill would receive another kind of attention from the other House; but he would express his thanks for the general support on both sides that bad been given to the Bill, and he had no doubt with that support the Bill would go through the House and meet with a favourable reception in another place.
§ MR. MALINS
said, that he was very much surprised at the remarks of the right hon. Gentleman (Mr. Cardwell). The right hon. Gentleman would have the British public to believe that the people were such idiots that they would not know what the credit of these Companies was, when every name, every note, and every letter would have marked on it limited liability. He was surprised to hear the hon. Member for the City of London (Mr. Masterman) opposed to the Bill, on the ground that the whole system of business in the City would be changed by the measure. If the hon. Gentleman would look at the matter with an unprejudiced eye, he could not suppose that commercial affairs could be carried on, on a general system of fraud. He (Mr. Malins) was persuaded that the members of the legal profession supported the Bill because they believed its operation would tend to the protection of individuals, and not to the increase of litigation.
§ Bill read 3°, and passed.