JOINT-STOCK COMPANIES BILL. (Hansard, 2 June 1856)

§ MR. SPOONER
said, he should move that the debate be adjourned. The right hon. Gentleman (Mr. Lowe) had given notice of a long list of Amendments; and it was too late (five minutes before One o'clock) to proceed with a Bill of such importance.

§ MR. LOWE
said, that it was of great importance that the Bill should go up to another place as soon as possible, and he, therefore, urged the House to allow him to proceed with it. The Amendments of which he had given notice were intended to meet objections which had been taken in Committee, and he, therefore, apprehended that they would not be opposed. He himself should not oppose the addition of the clause of which the hon. Gentleman (Mr. Spooner) had given notice.

§ MR. HENLEY
said, he wished to move the omission of Clauses 46, 47, and 48, which authorised the Board of Trade to appoint an inspector to examine into the solvency of a company. The provision he considered mischievous and fallacious, the only trust-worthy investigation into the accounts of an undertaking being one instituted by the shareholders themselves.

§ MR. LOWE
said, he could not accede to the proposition of the right hon. Gentleman, Those clauses were originally proposed last year by a noble Lord in another place, who took for his guide the New York Act, which empowered a small number of shareholders, if dissatisfied with the state of a company's affairs to apply to a Court of equity for an inquiry. That was a very objectionable provision, as it would arm a small section of the shareholders with the power of endangering the stability and shaking the credit, of the undertaking by giving undue publicity to their internal quarrels; but it was thought that all the benefits of such a clause, without its disadvantages, would be secured by allowing one-tenth of the proprietary, under the guarantee of payment of the costs of the proceeding, to apply to the Board of Trade to appoint an inspector to examine into the accounts. That Board would not, however, be responsible for the 898 report of this officer; and yet it was desirable that it should be enabled to nominate a respectable and impartial person to conduct such an investigation. The Board of Trade possessed an analogous function in its power to select an arbitrator to settle disputes between railway companies. It was true the majority of the shareholders in a joint-stock company could examine into the accounts, if so disposed; but this provision was intended for the protection of a minority suspecting that the affairs of the concern were not going on satisfactorily, and who would thereby have an impartial tribunal to which they could appeal, whose inquiries could be conducted with the least possible detriment to the interests of the undertaking. If some such power as this had existed in the case of the Tipperary Bank, the proceedings which had proved so ruinous to that unfortunate concern might have been arrested.

§ MR. NEWDEGATE
said, he strongly objected to the appointment of a secret tribunal at the discretion of the Government, and he thought the right hon. Gentleman (Mr. Lowe) could not have referred to a case more fatal to his own proposition than that of the Tipperary Bank. In his opinion, shareholders might safely be left to decide upon matters affecting their own interests, and he felt called upon to protest against the substitution of the secret action of the Board of Trade for the open action of shareholders themselves.

§ MR. WHITESIDE
said, he could fully comprehend the illustration of the Tipperary Bank, and when the proper opportunity arrived he might be able to afford some information with reference to the gang of persons concerned in that establishment. The Bill under consideration provided that if any officer or agent of a company refused to produce books or documents, or to answer any questions which might be put to him by the inspectors, he should incur a penalty of £5. Now, what was to be done with that sum did not appear. Perhaps it was to be handed to the shareholders. The Bill provided, also, that the Report of the inspectors was to be forwarded to the Board of Trade, and he supposed it would be preserved among the archives of the country.

MR. WALPOLE
said, he likewise objected to this measure, because it would enable a public board to deal with private transactions. One ground on which the Bill was supported was, that the interests of a company might be prejudiced if in- 899 spectors were appointed at a public meeting to investigate the affairs of the company; but he thought the same danger would arise if it transpired that an application had been made to the Board of Trade to institute such an inquiry. The Bill was also advocated on the ground that, if a majority of the shareholders were unwilling that an inquiry should take place, the minority might apply to the Board of Trade to direct an investigation; but he would prefer that such an inquiry should be proposed and discussed at a meeting of shareholders, rather than that it should be undertaken in consequence of a secret application to a public Board.

§ MR. LOWE
said, in explanation, that the Bill did not contemplate any interference on the part of a public department beyond the appointment of persons, for whose impartiality there was some guarantee, to investigate the affairs of companies. The Bill did not merely provide for the infliction of penalties in case of the non-production of books, but it gave power to examine persons upon oath, and if that power had existed previously he did not believe that one person connected with the Tipperary Bank would have obtained possession of £200,000. The Bill was designed to prevent a minority of shareholders from being trampled upon by the majority.