§ Order for Committee read.
§ Motion made, and Question proposed,—"That Mr. Speaker do now leave the chair."
§ MR. MUNTZsaid, he rose to move, as an Amendment, that the House should, on that day three months, resolve itself into Committee on the Bill. It was one of the most objectionable Bills he had 1379 ever seen, and he had only been prevented by absence from offering it all possible opposition at an earlier period. The more he spoke to commercial men on the subject of the Bill, the greater did he find to be the objections entertained against it. Who were the parties that called for the measure? There were very few petitions in favour of it. And from whom did the Bill emanate? From the members of the Board of Trade, who were not at all conversant with trade. There was not a man who was practically concerned in any large commercial undertaking, who was not convinced that the measure, if passed, would not only be most useless, but most mischievous. Besides, the very object of the Bill—that of affording additional facilities for obtaining capital to be employed in trade—was a necessity that did not exist; for there was an ample supply of capital for all legitimate purposes of trade. The repeal of the usury laws removed every obstacle in the way of obtaining money to be embarked in any business that deserved to be encouraged. The only effect of the Bill would be to induce ignorant persons to enter into the most delusive and disastrous undertakings. Twenty years ago, when the Political Unions took upon themselves the command of almost everything, Trades' Unions were originated, having for their object to fix the rate of wages. He told the people at that time that such a scheme could not work favourably for them, because the rate of wages regulated prices, and if the prices of British manufacture were higher than those of foreign manufacture, the British manufacturer would not be able to compete with the foreigner, his profits would be destroyed, and his factory closed. The working classes soon found out their mistake, and confessed that what he had told them was true. But how would the measure now before the House work? Men having small capital would invest it in undertakings of the nuture of which they would be totally ignorant, and would have to intrust the sole management of their property to a body of directors, who, instead of being the servants, would be the masters of the Company. Could any man state an instance where a Company had ever succeeded against an individual in his own trade, unless it required an amount of capital which it was impossible for any individual to command? He knew of no such instance. No Company could command that decision of purpose, 1380 that untiring exertion, and that concentrated power which an individual, whose sole interest was at stake, could always display. In fact, no Company could exist in competition against an energetic tradesman who understood his business, and who was industrious, honest, and persevering. If the principle of the Bill was a sound one, it should be carried out and applied to Joint-stock Banks and Assurance Companies. The limit proposed by the Government showed that they had no confidence in their own measure. Why should not the shares be 1l. instead of 25l? He had been charged with being an interested capitalist, and therefore prejudiced on this subject. He could assure the House he had not one atom of interest adverse to the measure. No Company in the world could work against him in his business. He objected to the Bill, because it was not founded on a sound principle, and because he believed that, instead of serving the working man and persons of small capital, it would mislead them, and would deceive society itself. The speech of the right hon. Gentleman, the Vice-President of the Board of Trade, on introducing the Bill to the House, had been published in the shape of a pamphlet, and a more theoretical speech he had never read. It was first stated that one leading objection entertained against the present law was, that it was practically opposed to the interests of a large class of small capitalists, who, if allowed to combine to the extent of their limited capital, might be capable of prosecuting many branches of trade, not only with advantage to themselves, but also to the public. Now that was all assumption. Upon what ground did the right hon. Gentleman affirm that those undertakings might be prosecuted with advantage? If there were parties ready to embark in any fair and honest undertaking, there was always plenty of capital to be borrowed at a reasonable rate. The right hon. Gentleman then referred to the case of inventors, with regard to whom he (Mr. Muntz) could not avoid remarking, that all the great inventors of that country—such as Ark-wright and Watt—had thriven under the present law. There was only one exception, that of Harvey, who was a poor man, and who made an improvement in the manufacture of sugar. But what had been the change of the patent laws within the last few years? Formerly no man could obtain a patent under 500l. or 600l; but now he could get one for 25l or 30l. 1381 But inventors were not the most adventurous of men. Take the instance of Watt. No doubt he was a very able and clever man, but if it had not been for the strength of mind, the boldness, and the energy of Bolton, Watt would never have been anything. Seven years after he had joined Bolton so nervous was he, and so fearful as to the result of his inventions, that he proposed that Bolton should pay him an annuity and take the risk upon himself; but Bolton, like an honest man, said he would not do anything of the kind, and the consequence was, that by his energy, boldness, and vigour, Bolton was the making of Mr. Watt. Now, if a law of limited liability had existed, Watt would have come under the control of a few ignorant donkeys, who knew nothing about his works, and the end of it would have been, that all the inventions of that great man would have come to nothing. He believed that the foundation of the Bill was to induce hon. Gentlemen, who were possessed of large capital, instead of being content to receive 3 per cent. from the funds, or 4 per cent. from land, to embark that capital in speculations promising 5, 10, and 15 per cent. But let not hon. Gentlemen be deceived. Those rates were far beyond the average profits in trades which required great skill, industry, knowledge, and care. With regard to railways and canals, in which so many millions were embarked, he was of opinion that the Legislature ought to have a voice as to whether such concerns should be entered into or not. How many millions had been lost in such undertakings for the want of knowledge and proper management? But what would have been the result if all the railway Companies had been formed on the principle of limited liability? They could not have maintained themselves, and all the subscribers would have been ruined; and such he believed would be the case of all the Companies which would be formed under the provisions of the Bill now under consideration. The directors would manage the Company, and not the Company the directors. There would be a source of ruinous litigation. All the mischief, loss, and vexation that had attended the railway Companies had emanated from the fact of the directors being the masters of the Companies, instead of the Companies being the masters of the directors. But, after all, it had not been shown that the interests of the country required such a change in the law. There had been no complaint of a want of capital. It was said, to be sure, 1382 that the lawyers were in favour of the measure. No doubt they were, for it would open a wide field for litigation. It was one of the provisions of the Bill, that no man should be liable beyond the amount for which he was registered, unless it was shown that he had taken a part in the management of the concern. The first thing, then, to be done, would be to ascertain whether any man had interfered in any way which would make him liable beyond his subscription, and that was a point which would lead to litigation without end. After due consideration, therefore, and without having the slightest interest in the matter, except a wish to promote the general good, he felt it his duty to move that the Bill be committed that day three months.
§ MR. GLYNsaid, he would second the Amendment, although he did not participate in the general views which the hon. Gentleman (Mr. Muntz) had expressed. He, however, was of opinion that the present law regulating the granting of charters was one which could not be maintained, and that it was necessary some measure should be passed on that subject. The Bill ought to be referred to a Select Committee, with a view to ascertain how it bore on the law of bankruptcy here. Those who advocated limited liability were in the habit of appealing to the state of the law in France. But the law of limited liability in that country was introduced under very peculiar circumstances. The prejudices against trade in France on the part of the upper classes were such that they would not embark their capital in trade, which it was desirable they should do, if they were made ostensible partners in any commercial concerns. But there was no such necessity existing in England. It was the opinion of eminent men in France that, although the law of limited liability had to a certain degree succeeded there, it would be inapplicable to England until the law of bankruptcy was made much more stringent, and was assimilated to the law of bankruptcy in France. To that point he had more than once called the attention of the House, but no one had attempted to meet that part of the case. The question with commercial men was, how they were to deal with the question of limited liability in the present state of the law relating to bankruptcy. There was not a single clause in the Bill which met that difficulty. He did not so much object to the principle of the Bill, as to its machinery, and on the whole he thought it would be much better 1383 to postpone its further consideration till next Session.
§ Amendment proposed, to leave out from the word "That" to the end of the Question, in order to add the words "this House will, upon this day three months, resolve itself into the said Committee," instead thereof.
§ MR. E. BALLsaid, the course taken by the hon. Gentleman the Member for Birmingham (Mr. Muntz) and the observations made by him very much resembled the conduct of certain saints!—["What?"] saints!—who, when they had given a glowing description of the joys of heaven to which they had obtained access, unkindly refused to bridge over the way by which their fellow-creatures might obtain access to the same blissful abode. That hon. Gentleman, having by industry and talent amassed great wealth in the field of individual competition, refused to others the advantages of a measure, the provisions of which he himself could do so well without. The hon. Gentleman had said, that out of the House he had met with none who were in its favour. That must have arisen from the fact, that so well known was the pertinacity of the hon. Gentleman to his own preconceived opinions, that to argue the matter with him would have been perfectly useless. But how were they to ascertain what was the opinion on the subject out of doors, but by the opinion expressed by their representatives within that House; and was it not a fact that on every division on the question there had been a majority of almost two to one in favour of the Bill? All great works had been accomplished by the combination of mind, ability, and property, which no individual energy could have achieved. The supply of water for the metropolis by the New River Company originated from the energetic mind of an individual, but Sir Hugh Myddelton was not able to sustain his project unaided; no sooner, however, was the scheme taken up by a Company than it became a source of wealth to those who embarked in it, and resulted in being one of the greatest blessings that a commercial speculation had ever conferred upon the country. He might also refer to the great mercantile establishments of the metropolis in further illustration of the truth of his proposition—such as the breweries, the joint-stock banks, the mutual assurance societies, and especially the railways. Would the hon. Gentleman say that the railway had accomplished no national good? It really seemed to him that 1384 the hon. Gentleman's prejudices were so strong that all the experience of our social system had been lost upon him. Individuals having small capital could effect nothing of themselves, but by a combination of those small sums a large capital might be created, and great public service be rendered. If there ever was a time when such combinations ought to be encouraged, it was now. There was a great drain upon the national resources, and the hon. Gentleman, who was conversant with politics, must know that the only immediate benefit which resulted to any country from the state of war was, that while war itself was a source of immeasurable suffering, and of enormous expense, yet the impulse which it gave to the energy of the people, and the power which it infused into the mind of the nation were so great, that the money expended and the losses sustained were more than compensated for by the increased energy and greater diligence displayed by the people in drawing forth the resources of the nation.
§ MR. W. BROWNsaid, he was of opinion that his hon. Friend who had just sat down had been reasoning on the subject upon false premises. He seemed to think that those who were opposed to the Bill were unfavourable to all combinations for the purposes of trade. That was a complete fallacy. He might say, from his own experience in transactions which he had had with France and the United States that, whenever he had come in contact with parties who were established under the principle of limited liability, it had always injured the credit of those parties in his estimation. He was reluctant to part with the advantage the country now possessed, unless he could be assured of some countervailing advantages to be obtained from a new law.
§ MR. STRUTTsaid, the subject now under consideration was one on which his own opinion was opposed to that of a majority of the House; at the same time, as he entertained a strong apprehension as to the results that might arise from passing the measure, he hoped the House would bear with him while he stated the grounds for that apprehension. He did not deny the necessity of some legislation on the subject. If a Bill were in-introduced for the purpose of defining those schemes which should be considered as involving the necessity of raising a large amount of capital which it was not within the means of an individual to raise, or if it had been proposed to adopt the 1385 principle in the case of certain benevolent schemes in which an individual might not wish to embark, or for establishing some tribunal for granting a charter for such measures, he would not have opposed it. But the question they had to consider was, whether or not they should introduce this system of limited liability into the ordinary trades and ordinary transactions of the country. The hon. Member for Cambridgeshire (Mr. E. Ball) had asked whether it was intended to put an end to the system by which breweries, banks, and other establishments of that kind had been carried on; but did not the hon. Gentleman perceive that every one of those establishments had hitherto been carried on upon the principle of unlimited liability? And the question now was, whether those establishments shall be continued as at present, or whether they would sanction such establishments and ordinary trades to be conducted on the principle of limited liability. In the first place, he would ask—the question had, however, been asked before—was there any great want of capital in the country which made a change of the law necessary? He could understand the case of a poor country where an exception might be made and sanction given to a departure from a sound principle for the purpose of raising capital. But he was not aware of there being any complaint of a want of capital here; on the contrary, the complaint was the other way. There was an immense amount of capital; trade was overflowed with it. One great evil of which the commercial world had to complain was, that at certain periodical intervals traders, by imprudent speculations, brought on a crisis; and his great fear was whether, if the House passed such a measure as the one now before them, on the recurrence of such a crisis evils of a much greater magnitude than had hitherto taken place might not result. What, in fact, was the measure they were then considering? It was a Bill to enable persons to embark in trade with a limited chance of loss, but with an unlimited chance of gain. That was a direct encouragement to a system of vicious and improvident speculation. Suppose a person with a capital embarked in two different speculations, in both of which he formed a partnership on the principle of limited liability, he being the principal manager, and the person finding the greater part of the capital in those undertakings; suppose he should enter upon a system of rash and improvident 1386 speculation, and that in one case he succeeded and realised a large fortune, while in the other case he failed and paid his creditors 2s. 6d. in the pound. Was that a state of things desirable to be established, or one on which the mercantile credit of the country should be based? Was it desirable that a person should be able by one operation to amass a considerable fortune, and, at the same time, by another operation to pay his creditors a small dividend in the pound? He was aware it might be said that it would be imprudent to trust such a person. No doubt, if all the world were prudent, wise, and sagacious, no such things would happen. But legislation was not to control the conduct of the most wise and of the most virtuous; it was intended to check the erring, and to deal with human nature as they knew it to exist. And when they also knew that a system of wild speculation had at times arisen, it afforded a strong reason why they should not give further encouragement to such a system. Supposing a number of instances of such things as he had described to happen, would it be any satisfaction to those who had been thrown into a state of distress by such conduct for them to be told that, although you had passed the law, the fault was their own, and upon them must fall the risk? He believed that, under such circumstances, a universal feeling of indignation would be excited throughout the country, and that if Parliament passed such a Bill they would be compelled to repeal it by a much more powerful clamour than any that had been raised in its favour. Another argument urged in favour of the measure was, that the present system was an interference with free trade. He disputed that proposition, because the first and most natural principle of commercial legislation was, that every man was bound to pay the debts he had contracted, so long as he was able to do so; therefore, the onus of showing that men might be exempt from paying their debts rested upon those who argued in opposition to the principle he had laid down. Besides, it had been considered a violation of the principle of free trade to impose such restrictions in the terms of contracts, as experience had proved to be necessary. A banker was allowed by the issue of his notes to contract a liability for 5l., but he was not allowed to contract a liability for a sum so small as 5s. And why? For the following reason:—That it would introduce a system of speculation 1387 most injurious to the community. Upon exactly the same principle, then, as the Legislature acted in regard to the one case ought they to act in regard to the other. It might be said that no one would be able to introduce a system of limited liability in ordinary traders, because such parties would not obtain credit in the commercial world. He was afraid that in coming to that conclusion they would be over-estimating the prudence of the country. He remembered, twenty-five years ago, Companies starting up of the most extraordinary and extravagant character—Companies for the sale of fish, for the washing of clothes, and for almost every conceivable purpose. What was the result? They all failed, and brought ruin upon themselves and every person connected with them. He trusted that that had worked a wholesome lesson on the minds of the people; but if a Bill of the nature of the one before them was to pass, encouraging such speculations—if such a system which had been carried on under unlimited liability was allowed to be carried on under a law of limited liability—they would have the same evils, in an aggravated form, renewed, and the same painful experience to be encountered, until the Legislature would find it absolutely necessary to impose a legitimate check upon them. It had been said that the measure was desirable in order to give the working classes an opportunity of profitably investing their savings; but there were only two practicable modes in which the working man could invest his savings—either in some secure investment from which he would receive the ordinary rate of interest, or in some trade which he would be able to carry on under his own immediate superintendence. All experience showed that if they encouraged the working man to invest his money under a system of limited liability in the hands of a Company for carrying on any ordinary trade, it would only bring ruin upon him, and cause to him the very mischief from which they would wish to protect him. He entirely agreed with the hon. Member for Birmingham (Mr. Muntz) that it was perfectly absurd to suppose that ordinary trades could be carried on by Companies as well and as prosperously as by individuals. It had been assumed that all those who were opposed to the Bill were influenced by some motives of jealousy and that, having become rich themselves they wished to prevent others from becoming rich also, and an attack had been made 1388 upon Lord Overstone as having been influenced by these sordid motives in expressing an opinion opposed to this measure. Everybody knew that there was no person n the United Kingdom whose opinion was more deserving of weight than that of Lord Overstone. There was no man whose personal opinion had had greater weight in commercial matters than that noble Lord's; and yet, according to the argument of the hon. Gentleman opposite, because Lord Overstone was a rich man his opinion upon the subject was of no value whatever. The logic of the hon. Gentleman was that, Lord Overstone was rich, the working men were poor, therefore the noble Lord was prejudiced and influenced by feelings of jealousy. He (Mr. Strutt) really did not think that an argument such as that was worthy of an answer. There was only one other point to which he wished to allude. If the Bill was intended to be passed, it ought not to go forth to the poorer classes that they were passing a Bill which was to open to them in unlimited field for speculation, by which they were to reap vast gains. It was in reference to that point that he wished to enter his protest against the language which had been used in that House.
§ MR. JOHN MACGREGORsaid, that all experience showed the contrary of the assertions of the right hon. Gentleman who had just sat down. In the Hanse Towns the principle of limited liability had worked with great success. It was the principle of limited liability which had rendered the United States of America one of the most powerful States in the world. What man with a fortune of 140,000l. for instance, would risk the whole of it in one ship? Would he not rather divide his fortune into portions, and invest it in different ships, 10,000l. in one, 12,000l, in another, and so on? The principle had not only produced the best effects in America, and especially upon her naval power, but it had also most materially contributed to the commercial and material prosperity of France. So also in Belgium and Holland. The Low Countries would never have reached their present position without the advantage of limited liability in their commercial transactions. He could prove by the history of every country in the world that the right hon. Gentleman was wholly wrong in his views, and if the country had acquired prosperity under different circum. stances it was owing to her geographical position. But it did not appear that she 1389 would not have been more prosperous under a system of limited liability. He had no hesitation in saying, though Lord Overstone might be a very honest man, that he was the most prejudiced man in the country on the subject now under consideration. It did happen very curiously that the owners of large concerns and large capitalists were the principal opponents of the Bill in that House. He believed they acted quite honestly, but they were accustomed to look at their own particular cases, and hence their minds ran in a certain groove, out of which it was very difficult to get. If they rejected the Bill it assuredly would create an impression abroad that the rich were not willing to let others become rich also.
§ MR. VINCENT SCULLYsaid that he thought many advantages might be obtained by the Bill before them, as also by the Partnership Bill, but they should be carried out in a right form. He did not think it would be possible to give them full consideration between this and the end of the present Session. It would be better therefore to postpone the Bills, and allow opinions to be matured on them before the next Session. He therefore thought it a waste of time to discuss a question which every one knew could not become law in the present Session. These Bills had twenty-six clauses, and he found that there were twenty-eight new clauses besides seventy Amendments to be proposed. He put it to the House whether it was possible, at the present period of the Session, to consider all the matter contained in those clauses and Amendments as they ought to be considered?
§ VISCOUNT PALMERSTONSir, I really do entreat the House not to waste time in discussing whether we should or should not discuss these Bills, but to go at once into Committee and discuss them there, where those who entertain objections to the Bills may state the grounds of their objection, and those who are in favour of them may state the grounds on which they support them. My own opinion is—and no one denies—that these Bills are of the utmost interest and importance. I confess I am quite surprised that Gentlemen who have been the strenuous and successful advocates of the principles of free trade should now turn round and try to defeat these Bills, which are based upon those very principles. I will say in a few words that I consider that this contest lies between the few and the many. It is just one of those instances in which, I won't 1390 say the prejudices, but in which the opinions of the few are to be set against the interests of the great bulk of the community. There is nothing, I am persuaded, that would tend more to the general advantage of the public than the setting free, as these Bills propose to do, small capitals, that they may be turned to profitable employment. The present law prevents that being done. There is, consequently, a great quantity of small capital locked up, which, if these Bills were passed, might be employed for the benefit of those who possess them, and also for the advantage of the community at large. It is a question of free trade against monopoly. [Cries of "No, no!"] I don't say it offensively, but that is the real fact. You may disguise it as you will, but it is a principle well understood by every man in the country, I can assure you; and I tell the House that I feel so strongly on this question that I will urge the House to go on day by day, and morning after morning, with these Bills, and if it is attempted to talk the Bills out, and to consume time by long speeches, the country shall at least see with whom the fault rests, and who it is that would deprive the nation of that advantage which I contend these Bills would afford, if passed. Of course, at this time of the Session, if Gentlemen are determined to waste time by long speeches, and prevent business from being done, the consequence may be that we shall have to sit, perhaps, into the month of September. I can assure the House that no exertion and no determination shall be wanting on the part of the Government to give the public the benefit of this change in the law during the present Session.
§ MR. SPOONERsaid, if he thought that the measure would set free small capital safely he would give it his cordial support, but believing the contrary to be the fact he should oppose it. He was convinced that the Bill would act as a snare and delusion to entrap persons into improvident and dishonest speculations, and that the most disastrous results would be the consequence. He deprecated the practice of those in support of the Bill imputing improper motives to their opponents. He denied that those with whom he was associated in opposition to those Bills were influenced by any but the most honourable and disinterested intentions. He was not opposed to the principle of limited liability, but he was opposed to the mode in which it was to be carried out by those Bills.
§ MR. BASSsaid, he did not agree that 1391 the Bill was intended merely for the benefit of the very poor, but considered it to be designed to give employment to portions of large amounts of capital which might be advantageously invested if allowed to be advanced on the principle of limited liability.
§ MR. MITCHELLsaid, the speech of the noble Lord at the head of the Government would not prevent him from stating his objections to the Bill. He was not opposed to the principle of limited liability properly understood and carried out. But it was a waste of time to entertain the consideration of a measure which he felt persuaded could not pass during the present Session. No one supposed that the Bill would pass through the House of Lords, sent down to them, as it would be, so late in the Session. The observations of the noble Lord were the most improper and uncalled for that he had ever known to fall from a Minister of the Crown. The noble Lord could not say of the commercial class in that House that they ever threw any impediments in the way of legislation. It was the Government of the noble Lord himself that threw the real impediments in the way of the measure now before the House; for, instead of bringing it under discussion at an early period of the Session, as the noble Lord might have done, he wasted the time of the House upon the Scotch Education Bill, which he did not make an attempt to defend in the other House of Parliament, and upon the Tenants' Improvements Compensation Bill, which the noble Lord knew very well could never pass that House. It was not till the 26th of July that he called upon them to enter upon the consideration of the details of the measure, about which there existed the greatest difference of opinion; and then the noble Lord lectured them, and said that unless they allowed their opinions to be "burked" he would sit till September, and he tried to intimidate them by a threat of sitting from day to day, and morning to morning. Let there be a Committee to inquire into the present bankruptcy law, and let a proper measure of limited liability be then brought in, and he would not oppose it. He denied that the present was a free trade measure, because it was a piece of exceptional legislation, and the working man, for whose benefit it was professed to be brought forward, would find it a delusion and a [...]nare.
MR. LLOYD DAVIESsaid, he should 1392 support the Bill, which he considered the House would be justified in passing from the results which had already flowed from combination in trade. Not only would the poor man be benefited, but the rich also would be enabled to turn to use many small amounts of capital which, under the present system, stood idle.
MR. JOHN FOSTERsaid, he was entirely in favour of the principle of the Bill, which he would support.
§ MR. MALINSsaid, he would certainly record his vote in favour of the Bill, which he considered of the utmost importance to the country. The only argument which he had heard against the Bill was that it would be useless. If that were so, let it be passed, and then no harm could result from it, as it would remain a dead letter. He could only say that the whole country was watching with the greatest anxiety for the measure to become law.
§ MR. HENLEYsaid, that the noble Lord at the head of the Government had denounced the opponents of the Bill as being opponents of free trade. Had the noble Lord read the Bill? Did he know that there was a clause in the Bill limiting its effect to Companies whose capital was 20,000l., and knowing that, did the noble Lord limit free trade to 20,000l.? Really, the argument could hardly have been expected from any one in the noble Lord's place except the noble Lord himself. It was a matter of complaint that the position of the Limited Liability Bill and the Partnership Amendment Bill had been shifted in order to give to the former of those measures the first place. He could not but think, not with standing the explosion of the noble Lord, that the shifting was made in order to get rid of the Bills. He might be wrong, but such was his impression; and, believing that the Bill could not be properly considered in the present Session, he should vote with the hon. Member for Birmingham (Mr. Muntz).
§ MR. LAINGsaid, that his intercourse with practical men out of doors convinced him that there was a very strong feeling among such persons that there was a necessity for an amendment in the principle of the English law, which so positively excluded the principle of limited liability in the case of Joint-stock Companies. He thought the Bill proposed would meet all the difficulties which had hitherto been experienced, and would prove of the greatest benefit to the country. What railway had ever been constructed by any private parties? 1393 It was, therefore, to the principle of limited liability that they were indebted for their means of conveyance. But when the capital of a Company was not large, the enormous amount of Parliamentary expenses was often enough to prevent its commencing operations, and the delay involved in getting a charter was even a greater obstacle than its cost. In France, where the principle of limited liability was recognised in all cases, the Railway Companies' capital had more than doubled, and the dividend paid by such Companies was, on an average, more than 10 per cent. The same was the case in Belgium, and he felt sure that if there was not soon made a most material change in our law, Paris, and not London, would soon become the great centre of European industrial enterprise.
§ MR. ARCHIBALD HASTIEsaid, he was one of those who were opposed to the Bill, although not at all opposed to the principle of limited liability, as applied to railways, docks, canals, and other undertakings which required a large amount of capital. Such works were of great national importance, but he could see no reason for applying the same principle to Companies who possessed but 20,000l. It was stated that America had prospered under the law, but there capital was extremely scarce, and barely sufficed to carry on their great schemes; but in England, where there was no want of capital, they could not anticipate the same results from the application of the principle of limited liability as had been the case in America. The principle of limited liability had produced injurious effects to commercial credit both in America and in France by inducing reckless speculation and systematic frauds upon creditors. Being perfectly convinced that the measure before the House would produce unmitigated evil, he must beg the noble Lord at the head of the Government to withdraw them for the present Session, and introduce them after the recess. He would also recommend the noble Lord, then, to adopt the plan of sending them up stairs to a Committee.
MR. F. W. RUSSELLsaid, he would also urge the postponement of the measure. No Member of that House was opposed to the principle of limited liability for railways and other great Companies; but only to that principle, as applied to small private undertakings. Railway Companies did not come to Parliament merely 1394 to get limited liability, but to get power over land, &c., and they would have to come to Parliament even although that principle were universally recognised.
§ MR. BOUVERIEsaid, he only wished to give a reason why they ought to go on with the Bill, even at that period of the Session. He believed it was most desirable that the Board of Trade should no longer be entrusted with the duty of granting charters of limited liability. It therefore was a matter of great urgency that Parliament should deal with the question during the present Session. In consequence of the Resolution to which the House came last Session, the Board of Trade had very properly determined not to grant any charter of limited liability until the decision of Parliament on the general subject was known. In fact, the safety-valve of our present Joint-stock system had been screwed down, and was the Board of Trade to act on the Resolution of the House and the general sense of the country, or was it to open the floodgates of private speculation, and grant charters to everybody who came without restriction, or was it to act in every case according to the mere dictates of its absolute unfettered discretion? On the part of the Board of Trade, he protested against having such an odious power entrusted to, or imposed upon any Government Department. No person at the Board of Trade, however experienced or able, should be called upon to decide whether a particular Company should be allowed to carry on business with limited or with unlimited liability. In all such cases the decision ought to depend upon some fixed and intelligible rule laid down by Parliament, by which charters should be granted to ex debito justitiœ, and not at the discretion of a Government Board. He considered the question of charters was one of great urgency, with which Parliament ought to deal during the present Session, he therefore trusted hon. Members would support him in going into Committee.
§ MR. CARDWELLsaid, he entirely agreed that nothing could be more objectionable than that the Board of Trade should be entrusted with an arbitrary power, which the wisest of men ought not to exercise, and which that Board possessed no machinery for exercising properly and effectively. He, therefore, had regarded it as a matter of extreme urgency and importance that a satisfactory Bill should be introduced and passed during 1395 the present Session of Parliament, and he had, therefore, introduced such a Bill at a very early period of the Session. It was a most essential part of the matter that the whole law of Joint-stock Companies should be consolidated and reformed, but that part of the measure appeared to have fallen through, and there now only remained two measures of a character extremely imperfect and unsatisfactory. With regard to the two measures which had been brought forward, he considered them unsatisfactory and imperfect, but, nevertheless, he had facilitated their passing at every stage of their progress, and should have remained silent on the present occasion; but when his noble Friend (Viscount Palmerston) said that these were important measures, and that the House would incur great responsibility if they did not carry them through that Session, he (Mr. Cardwell) might be permitted to ask if it was a question of such cardinal magnitude and importance, why were the Bills only introduced, without a speech, the night before the Whitsuntide recess? And why, since the Whitsuntide holidays, had not a single evening been afforded to the House for the purpose of investigating the subject? He wanted to know why they had been occupied so long by the Scotch Education Bill, which was thrown aside in the other House? And why had they been occupied so long with the Tenants' Compensation Bill, which was dropped as soon as they had got through the controverted points of that measure? He also wished to know, if it really was a measure of such great importance, why they were not asked to go into Committee upon it until the day after the other House would not read a Bill a second time? He was most sincere in his desire that a satisfactory measure on the subject of limited liability should be passed, and he thought that, if they failed in passing the measure, the responsibility would rest with Her Majesty's Government. Looking at the late period of the Session, and at the composition of the present Bill, he reluctantly felt it his duty to vote for the Amendment of the hon. Member for Birmingham.
§ MR. DILLWYNsaid, he must deny that the Bills had anything to do with the question of free trade. On the contrary, the principle involved in them was entirely antagonistic to free trade. As there was no chance of their passing at that late period of the Session, he trusted they would be postponed for the present.
§ Question put, "That the words proposed to be left out stand part of the question."
§ The House divided:—Ayes 121; Noes 40: Majority 81.
§ Main Question put, and agreed to.
§ House in Committee.
§ Clause 1.
§ MR. CAIRNSsaid, that he had several Amendments to propose, but he thought that he should best suit the convenience of the Committee by moving that the Chairman should report progress. Before doing so he was anxious to make a few observations in consequence of what had been said by the noble Lord (Viscount Palmerston) early in the debate. He (Mr. Cairns) had come down to the House in the expectation that they would have gone into Committee at twelve o'clock; they would then have been enabled to dispose of most of the questions which would have arisen on the present Bill, but the time of the House had been occupied in a most unprofitable discussion; and he appealed to the Committee as to whether a great deal of that discussion had not been raised by the noble Lord himself? He had said that the question was of vital importance; that the country was anxious that the present Bill should pass into law; that delay was greatly to be deprecated, and that those who caused delay would have a great deal to answer for in the eyes of the country. He (Mr. Cairns) agreed with those assertions, but he wanted to know how long such opinions had been embraced by the noble Lord? A discussion took place last year on the subject of limited liability, when a great number of Members expressed their opinions on the subject, but not one Member of the Government then got up and said that it was a question of vital importance and ought to be passed into law. When the noble Lord took his place at the head of the Government, what was the course which was taken with reference to what had been termed by the noble Lord an all-pressing and vital question? The right hon. Gentleman the President of the Board of Trade said that it was his intention to bring forward a Bill on the subject, and gave a notice to that effect; but that notice remained on the paper month after month, without any Motion being made, and it was not until the night before the Whitsuntide recess that the Bills were laid on the table, without a discussion, for the purpose of being printed. It was not until they had reassembled for several weeks 1397 that any discussion took place on the Bills, and, even after the second reading was passed, the noble Lord did not proceed with the question that he had termed vital and important, but occupied the House, night after night, with the Scotch Education and Tenants' Compensation Bills; and, finally, on the 26th of July, a date when the House of Lords would not read a Bill a second time, they got a chance of going into Committee, when a long discussion arose, which the noble Lord's speech was most calculated to prolong. He wished the matter to stand clearly before the country. The Government had not been sincere with regard to the measure. They perceived that the Bill was popular out of doors, and, wishing to take advantage of that feeling, had made concessions to the popular desire, but had not afforded an opportunity for discussion. He believed that, had the present measure been discussed, it would have been carried by an overwhelming majority; but the Government had prevented discussion, and the responsibility would rest only with the Government if the measure did not pass into law during the present Session.
§ VISCOUNT EBRINGTONsaid, that not to the Government, but to the practice of the House itself, and the many useless discussions which had taken place, must be attributed the delay which had taken place, and which had prevented measures from being passed.
§ House resumed.
§ Committee report progress.