JOINT STOCK COMPANIES' BILL. (Hansard, 26 May 1856)

§ MR. SPOONER
said, before Mr. Speaker left the chair, he wished to ask the right hon. Gentleman the Vice-President of the Board of Trade (Mr. Lowe) what was the nature of the alterations he had made in the Bill now before the House since its being first introduced? If he recollected aright, the right hon. Gentleman on a former occasion said that it was his intention to introduce certain alterations in his Bill, but that he did not explain either the nature of those alterations or the reasons for them. With regard to the principle of the Bill, it was so completely contrary to the policy under which the commerce of this country had hitherto been carried on, and which had led it to that height of prosperity at which it had arrived, that without hearing something from the right hon. Gentleman in its support, he should certainly object to Mr. Speaker leaving the chair. He understood that the principle upon which British commerce had hitherto been conducted was to leave every individual to employ his capital and carry out his own commercial views according to his own will and judgment, and that it was carefully provided against that any combination of individuals should press upon any single person, by their combined act and combined interest, so as to work injury against that individual. The only exceptions were those of objects too large for individuals to undertake on their own responsibility or their private means, but which it was important for the country should be undertaken. In these cases, combination had been legalised by special Act of Parliament or by Charter. This Bill, on the contrary, held out all sorts of temptations to persons to combine their capital and entirely crush small traders. He was sure it was a dangerous principle to establish, and one that would produce most injurious effects upon the commercial commmunity. Let them conceive a company of grocers. 634 Could any individual grocer compete with a body of men who combined their capital in carrying on that trade against him? It must ruin the individual grocer; it was utterly impossible his capital could compete against such a combination. It was said that the public would be benefited by this measure. He denied it altogether; on the contrary, his belief was that the public would be injured, and that it would have the effect of destroying every individual enterprise. He was so dissatisfied with the Bill that he should move, as an Amendment, that the House do resolve into Committee that day six months.

§ MR. LOWE
said, the hon. Gentleman had asked whether he had made any change in the principle of the Bill. [Mr. SPOONER: Or alterations in the details.] The alterations which had been made were purely in detail, and did not affect the principle of the Bill. The hon. Gentleman appeared to imply that the Winding-up Act was abolished by the Bill; but the Winding-up Act was only repealed as far as concerned companies formed under this Bill. The principle of the Bill having been well considered upon the second reading, and agreed to without a division, he did not feel it necessary to re-open the question now by entering upon a discussion of the whole Bill.

§ MR. SPOONER
said, that his question as to the reason why an important clause of the present Act was omitted from the Bill had not been answered.

§ MR. DUNLOP
said, he apprehended that abuses would arise if companies could register in England and carry on business in Scotland, or vice versâ. He would therefore propose an Amendment to compel companies in England, Ireland, and Scotland to be registered in the country in which their registrar's office was situated.

§ MR. HENLEY
said, he would suggest 635 that the memorandum of association should state whether the persons signing held any or what number of shares.

§ MR. LOWE
said, the 17th clause would meet the right hon. Gentleman's views.

§ MR. HENLEY
said, he would then propose that words should be added to require that some statement should be made in the memorandum of association to show the amount proposed to be paid up.

§ MR. GREGSON
said, he wished to move, as an Amendment, to add after the word "company," in line 21 of clause 5, "the amount paid up to be stated, and the number of calls, the amount of calls, and the times of payment."

§ MR. LOWE
said, he objected to the principle of the Amendment. The memorandum of association was a preliminary form. All matters of management were to be left to the articles of association, or to the regulations where there were no articles of association, under schedule D, and he thought very little would be gained by requiring these statements in the memorandum of association, because the statement of a single shilling being paid up would be sufficient. As to fixing the amount of calls and the times of payment, it would be anticipating the emergencies of business, and contrary to the principle of the Bill, which was to leave people to settle these matters for themselves.

§ MR. MALINS
said, the right hon. Gentleman (Mr. Henley) and the hon. Member for North Warwickshire (Mr. Spooner) were opposed to the principle of the Bill; but as the House had affirmed that principle it would be far better if, instead of moving Amendments, they would endeavour to make it a workable measure. They desired to protect the creditor, but how could the alteration propose give any additional protection to the creditor, when upon a company failing to meet its engagements, it would be wound up, and all the shareholders be made liable to the full amount of their calls?

§ MR. HENLEY
said, he was not aware upon what grounds the hon. and learned Member for Wallingford (Mr. Malins) assumed that he was opposed to the principle of the Bill or anxious to protect creditors. The Bill dealt not only with limited liability companies, but with joint-stock companies generally, and his object was to meet the case of companies being used merely for gambling purposes.

§ MR. SPOONER
said, he must also re- 636 pudiate the accusation of the hon. and learned Gentleman, that the House having decided in favour of the principle of the Bill his endeavours were not directed to making it as workable as possible.

§ VISCOUNT PALMERSTON
said, he concurred with the right hon. Gentleman (Mr. Henley) in thinking that it was desirable to give every guard against fraud, but it must be recollected that sometimes by their endeavours to guard against fraud they might in truth give facilities for fraud. By enacting provisions which might be evaded, they would be giving to a fraudulent company a greater appearance of bonâ fides than they would otherwise have, and assisting them in doing the very thing which they wanted to prevent. What could be easier than to state in the memorandum of association what proportion of the shares was to be paid up? It would be easy to borrow money for the moment, and if fraud were the purpose, the effect of what was proposed would be to give additional plausibility, without affording any additional security. He thought it would be much better to leave the matter as it stood. It was the business of all persons to protect themselves. People ought not to embark in joint-stock undertakings without taking the ordinary precautions with the view of ascertaining whether or not those who launched them were men of respectability and substance; and he thought that if men would rush blindfold into matters of that kind, it would be impossible to protect such fools from the consequences of their folly.

§ MR. T. BARING
said, there would always be people tempted by the promise of a high rate of interest, and by one or two good names, to embark in doubtful schemes. If no precautions were necessary against fraud they might strike out the clause altogether; but if some precautions were necessary, let the clause be made more stringent and effectual.

§ VISCOUNT PALMERSTON
I did not say that no precautions were necessary; but that, under the appearance of precautions, there would be none, and that the Amendments proposed would give additional colour to the fraudulent transactions.

§ MR. LOWE
said, that the clause was intended to lay a foundation for incorporation.

§ MR. CARDWELL
said, he regarded any alteration of the kind proposed as not 637 only futile but mischievous. There would be no certainty that a bonâ fide payment would be made, and it would be better to leave it to the discretion of the directors to say when the calls should be paid up.

§ MR. ARCHIBALD HASTIE
said, he would suggest that there should be a provision that 5 per cent of the nominal capital should be paid to the registrar.

§ MR. M'CANN
said, he was of opinion that the formation of mushroom companies would be prevented if companies were obliged to state what amount of capital was paid up.

§ MR. T. BARING
said, he thought it would be desirable that a company should state what amount was paid up on its formation; and, with that view, he would propose to insert the words, "And the amount paid up on each share, if any."

§ MR. HENLEY
said, he thought the proposed Amendment a valuable addition to the Bill; for it was desirable that parties starting a company should give a proof of their own sincerity by stating to the public what they had paid up.

§ MR. LOWE
said, that the effect of these provisions of the Bill appeared to be misunderstood. There would be nothing paid up under them except a few pounds for preliminary expenses and registration for the purpose of the formation of the company. After the company was formed they would proceed to call for what money they deemed necessary, but it would not be necessary to pay up any money before that period.

§ MR. HENLEY
said he wished to ask whether there was any provision to prevent the fraudulent use of the name of a registered company.

§ MR. MALINS
said, that the object of the clause was, that a company should not assume a name by which any existing company was known. If any fraudulent use of the name of a company were made, the Court of Chancery would interfere, as it did now in case of violation of trade marks.

§ MR. HENLEY
said, he certainly did not wish to oust the jurisdiction of the Court of Chancery, in which his hon. and learned Friend practised.

§ MR. LOWE
said, that he would consider the point.

§ SIR FITZROY KELLY
said, that he hoped that the parties in these cases 638 would not be driven into the Court of Chancery.

§ MR. HENLEY
said, he wished to know whether it was proposed that these companies should have an unlimited power of holding lands?

§ MR. LOWE
said, that under the existing law, when a company wished to hold land for a specific purpose, it was the custom for the Board of Trade to grant the necessary licence. They had been asked to grant licences to companies for the express object of dealing in land. He confessed, his own impression was that it would be better to give an unlimited power. There was no mortmain, in the ordinary sense, in the matter, for these companies would not abstract land from the purposes of trade and commerce.

§ MR. HENLEY
said, that it would be quite new to lay down the principle that companies might hold lands not connected with the trade which they carried on.

§ MR. LOWE
said, that he would consider the subject before the next stage of the Bill.

§ SIR FITZROY KELLY
said, that all the great railway companies were restricted as to the amount of land which they held.

§ MR. MALINS
said, he should support the clause. Mortmain, which meant land devoted to charitable uses, had nothing whatever to do with the matter. With regard to railways the case was different, for they were instituted for a limited object, and they had compulsory power of taking land.

§ MR. CARDWELL
said, he thought that it would be introducing a great novelty into the law of the land if they were to give them unlimited power of taking land.

§ MR. SPOONER
said, he would suggest that some provision should be made to prevent shares being transferred until all the calls due thereon had been paid up.

§ MR. LOWE
said, the object of the Bill was to enable persons to know who were the shareholders upon looking at the registry. To prohibit the transfer of shares until the whole amount was paid up would be to introduce an element of uncertainty, as the register would not show whether any calls were due at the period of trans- 639 fer. It was very important that the register should be conclusive evidence of who were the shareholders.

§ MR. HENLEY
said, he could not see what difficulty there would he in empowering companies to refuse registry of transfers in cases where the calls had not been paid up.

§ MR. LOWE
said, there was nothing in the Bill to prevent companies from refusing to register transfers if they pleased.

§ MR. MICHELL
said, he wished to move, as an Amendment, the following proviso— Provided always, that any shareholder may transfer his share or shares to the company, as in the form marked F, and the chairman of directors shall accept the said transfer on behalf of the company; the value of the property of the company shall be paid to the transferrer in proportion to the number of shares, as per balance 72 a, Table B, such payment to be made within fourteen days after the next annual account has been passed by the auditor, deducting therefrom all debts due to the company by the transferrer, the transferrer to remain liable in the same manner as if he had sold his share or shares, according to the provisions of this Act. Without some such provision the Bill would never work well; but he would not press his Amendment if the right hon. Gentleman would undertake to introduce a provision to enable the shareholders to withdraw from a company by resigning their shares.

§ MR. LOWE
said, the hon. Gentleman's desire was already met. It was competent for any shareholder to transfer his shares to the company, if the company thought fit to receive them. There certainly was no provision to compel the chairman to accept such transfer for the company, whether the company wished it or not.

§ MR. HENLEY
said, he was of opinion that parties should he allowed to take copies of the list of shareholders.

§ MR. LOWE
said, that provision was omitted, because it might be made the means of annoyance to the companies.

§ MR. MALINS
said, he thought it of importance that the greatest facilities should be given to creditors to ascertain who were shareholders. Creditors ought to have the power of making extracts from the register, or obtaining a copy on payment of a small sum.

§ MR. LOWE
said, he would consider the suggestion of allowing copies to be taken upon a small payment.

§ MR. W. BROWN
said, he would now beg to move an Amendment, to make the directors amenable to penalties for injury to the register, instead of the company.

§ MR. LOWE
said, the point had been considered, and it was thought better to make the company responsible, and leave the company, by by-laws, to recover the penalty from the person in fault.

§ MR. WARNER
said, he wished to move that the latter part of the clause, enacting that the limited nature of the company's liability should be expressed in all bills of exchange, promissory notes, &c., be omitted.

§ MR. GLYN
said, he hoped that the hon. Gentleman would not press his Amendment. He had intended to ask the right hon. Gentleman the Vice President of the Board of Trade to do a little more, and to insert the word "letter," so that all orders abroad should express the limited liability of the company.

§ MR. LOWE
said, that the principle upon which the Bill was argued was, that the public were entitled to the fullest publicity that could be given to the fact of the limited nature of the liability. As a temporary provision adapted to a period of transition, be thought it would be desirable to retain the latter part of the clause referring to bills of exchange and promissory notes.

§ MR. MALINS
said, he thought that the greatest publicity ought to be given to the limited liability of companies.

§ MR. GURNEY
said, he was inclined to think that every signature given on behalf of the company should state the limited nature of its liability.

§ MR. W. BROWN
then moved, that the word "letter" be added after the word "invoices." The matter was one he considered as involving the credit of the country, and all letters abroad ought to show that the liability was limited.

§ MR. HENLEY
said, that if these companies were allowed to act by signature, the signature should be in the same form as upon the engraving of the seal.

§ SIR FITZROY KELLY
said, he thought the word wholly unnecessary. Where the company were partners to any of those documents their corporate 641 seal would be sufficient to mark their liability.

§ MR. LOWE
said, that these clauses were taken out of the Bill of last year, and as he considered they were liable to some objection, he would, if the Committee agreed upon the principle, recast them before the Report. A subsequent clause showed how the company was to be bound. With regard to the question of letters, he thought it hard to make the company liable to a penalty of £50 for an accidental omission in a letter written in a hurry. If the suggestion about letters were adopted, a malicious servant might intentionally make the company liable to penalties. At the same time, he thought it right that the full title should be placed on bills of exchange, or any instruments to which the least ceremony was attached.

§ MR. HENLEY
said, he would suggest that merchants at a distance—say at Glasgow—might be induced to sell goods to a London company in consequence of letters transmitted to them, and afterwards find, when it was too late, that the company was limited. The insertion of the word "limited" on all letters of the company would prevent such an occurrence.

MR. MOFFATT
said, the Committee had already decided that all contracts for goods should contain the title of the company.

§ MR. HENLEY
said, he was aware that, in technical orders for goods, frauds was provided against; but there were ways of obtaining goods by means of correspondence, without making a formal contract.

MR. LINDSAY
said, he thought it would be the duty of merchants to make inquiry whether a company was limited or not. He could not understand why people should not be taught to depend on themselves instead of depending on an Act of Parliament?

§ MR. SPOONER
said, that the objection could be easily met by requiring the usual head of the company to all their letters. He believed the indorsement would not be required under this Bill. He thought the proposition of the hon. Member for Kendal (Mr. Glyn) should be attended to.

MR. MOFFATT
said, he must oppose the Amendment. If it were adopted every scrap of paper might be tortured into a "letter," and thus great inconvenience would result to joint-stock companies without any benefit to the public.

§ MR. MALINS
said, he quite concurred 642 with the hon. Gentleman who had last addressed the Committee. The word "letters" would impose a difficulty without giving an advantage. No official of the company could write a letter, if the Amendment were adopted, without exposing the company to inconvenience.

MR. WALPOLE
said, he thought that persons, abroad or at home, should know when they were dealing with a company, and when with an individual, otherwise a man might think he was dealing with a company when he was dealing with an unauthorised person. On the other hand, he thought it would be wrong to have a company exposed to the inconvenience which might accrue to it from any unauthorised person writing a letter for a vexatious purpose—merely to involve a concern in difficulty.

§ MR. ATHERTON
said, he thought it was a protection to a company that no binding form could be attributed to a letter forming the basis of a contract unless such letter have the full signature of the company.

§ MR. HENLEY
said, he should support the introduction of the word "letters,'' being of opinion that there would be no sufficient protection to foreign correspondents if some such word was not introduced.

§ MR. HENLEY
said, he could not understand why the advantage of limited liability should stop at the mystical number of seven, or why it should not be extended to six, or even down to one.

§ MR. LOWE
said, that the object of the Bill was not to give limited liability, but to incorporate companies. When the partnership was very small the Acts of Parliament were apt to become ambiguous, and it was of importance to distinguish between what a man was doing in his corporate and in his individual capacity. It was considered necessary, therefore, to stop somewhere to avoid that difficulty.

§ MR. HENLEY
said, it appeared to him that the clause did not apply to incorporations so much as to limited liability. It, 643 in fact, only dealt with the mystical number of seven, who were to have the privilege of limited liability, and touched no one else.

§ MR. MALINS
said, he was decidedly of opinion that the clause was open to considerable objection. Supposing, for instance, the number of parties was reduced by death or any other cause below seven, what would be the result? Why, that the limited liability at once ceased, and the remaining members of the partnership were subjected to all the consequences of unlimited liability. He thought there ought to be a reasonable latitude allowed for diminution in the number of shareholders. He would suggest, therefore, that the word "seven" should be omitted, and the word "five" inserted in its stead.

§ MR. ALEXANDER HASTIE
said, he would point out a case to the attention of the Committee. Suppose the case of a person forming a company of seven, consisting of himself and six others—it might be his servants—to whom he gave a single share. He could not think it right to give limited liability to a company when the right was liable to such abuse.

§ MR. LOWE
said, that the same objection applied to the existing law. He could not agree to the substitution of five for seven.

§ MR. J. G. PHILLIMORE
said, he would recommend the omission of the clause altogether.

§ MR. MONTAGU CHAMBERS
said, he thought a difficulty would arise as the clause now stood. Suppose there was a trading corporation of seven members and one died, then the six remaining members would cease to have the privilege of incorporation and limited liability. It struck him that that was exceedingly unjust. He would recommend, therefore, that a certain time should be allowed during which the remaining six might have the opportunity of filling up the number, so that the corporate body should not expire at once, but have facilities given it for continuing the limited liability.

§ MR. G. M. BUTT
said, he understood the right hon. Gentleman the Vice President of the Board of Trade to say that the effect of this clause was not that the company should cease to be a limited liability company, but that when the numbers of the company were reduced to less than seven, and that that reduced number should carry on business, they should be liable, so long as they did so, under the 644 unliability law, with respect to all contracts made by them during the time they so carried on business; but that they might afterwards increase their numbers to seven, and then the doctrine of limited liability would attach itself to the company again.

THE SOLICITOR GENERAL
said, his hon. and learned Friend had rightly apprehended the meaning of the clause. In the case of a death or cessation of one or more of the members of the company it would have the power to fill up its members to the prescribed number. The Committee, however, must remember that the provisions of the Act would not apply to a company consisting of less than seven members; but it might happen that that number might be reduced to less than seven, without the knowledge of the other members, and who might be incurring responsibilities. At the same time it was necessary that a certain number should be fixed. It, however, might be right to fix a certain period before the liability should be incurred, in order that in the meantime the company might have an opportunity to fill up the required number. He would suggest the period of two months.

§ MR. J. G. PHILLIMORE
said, he would propose three months after the knowledge of the reduced number.

§ MR. HENLEY
said, he thought that if at the end of three months the company did not fill up their number to seven they should be deprived of the privileges of the Bill.

§ MR. ATHERTON
said, he was of opinion that the period should be six months.
It was then agreed that the number of shareholders to be registered under the Bill should not be less than seven.

THE SOLICITOR GENERAL
said, he would now move that, after the word "seven," the words "for the period of three months after that number should have been so reduced," be inserted.

MR. LINDSAY
said, he wished the period to be extended to six months.

§ MR. LOWE
I agree to its being six months.

§ MR. MALINS
said, he objected to the clause as inconsistent with the object of the Bill. The Bill was intended to give increased facilities for the formation of joint-stock companies; but, supposing a company originally consisting of more than seven partners was reduced below that 645 number, the remaining partners would inherit an unlimited liability. That circumstance was calculated to deter prudent men from joining companies formed under the Bill. He (Mr. Malins) could imagine why one person could not form a company, as at present a single trader's liability was limited by the contracts he made. The principle of the Bill was applicable to associations of two or more persons. And what advantages would be derived from the clause under consideration by any one? The shareholders could derive none, and, as to the public, other clauses made it imperative that the list of shareholders should be open to the inspection of any one. Believing, therefore, that the clause would impede the operation of the measure, he felt bound to oppose its adoption.

§ MR. COLLIER
said, he thought that, without the clause, the operation of the Bill would be null and void. The Bill was not intended to apply to all ordinary partnership. If it were not for this clause, a company consisting of seven shareholders might be formed one day, and one of such shareholders buy up the shares of the other six the next day. The intentions of the Bill would thus be frustrated.

§ MR. MONTAGU CHAMBERS
said, the winding-up clause provided that when the shareholders were reduced in number to six, the Court of Chancery might wind up the company.

§ MR. MALINS
said, he could not understand why the Vice President of the Board of Trade had not adopted the machinery of the existing Winding-up Acts instead of introducing new provisions.

§ MR. LOWE
said, that Clause 57, and the following clauses relating to the same subject, had been introduced into the Bill with a view of amending the present Winding-up Acts in those respects in which they had been found deficient. Those Acts had not worked altogether satisfactorily, and the clauses in the present Bill had been framed with the assistance of the Gentlemen who had been charged with the administration of the existing law—the Lord Chancellor, the Vice Chancellor, and the Master of the Rolls—upon which he thought they would be found to be a great improvement.

§ MR. J. EWART
said, he would move the omission of the words "whose nominal capital does not exceed £5,000," the effect of which would be that the affairs of all companies might be wound up by the district Courts of Bankruptcy, instead of by the Court of Chancery. The Chancery Courts, it was well known, were overwhelmed with business, whereas the Court of Bankruptcy had very little to do.

§ SIR F. KELLY
said, that the Motion of the hon. Gentleman had anticipated him, and had raised a question of the greatest possible importance—whether the winding up of companies should be carried on henceforth in the Court of Chancery, with all the expense and delay still incident to proceedings in that Court, or whether it should be effected in the Courts of Bankruptcy of London and throughout the kingdom? In order to determine that question the Committee should consider the whole course of the proceeding, from beginning to end, of winding up the affairs of the companies to be created under the Bill. Without entering into any inconvenient details, he would undertake to say, without fear of contradiction, that let the circumstances of a company be what they might—let its capital be £10,000, £50,000, or even £100,000—let its dealings be extensive or limited—its affairs would be wound up in any Court of Bankruptcy in one-fifth of the time, and with less than one-fifth of the expense at which it would be possible to wind them up in the Court of Chancery. He was willing to admit that of late years the procedure in the Court of Chancery had undergone considerable improvement; but so much still remained to be done that to bring the winding up of the affairs of the companies to be created under the Bill within the jurisdiction of the Court of Chancery would, he apprehended, be productive of many and serious evils. For instance, there were long and frequent periods of the year during which the Court of Chancery did not sit at all; the chances were that in the long vacation, two, three, or even four months, might elapse, however urgent the circumstances, before the petition could even be heard, consequently causing great expense and injury to the interests involved; whereas the Courts of Bankruptcy were nowhere fully employed, and their machinery was the most perfect existing in any department of our law for winding up the affairs of a mercantile company. There was also the prominent defect of the Court of Chancery; no vivâ voce ex- 647 amination, but a mass of written evidence, swelling the briefs, increasing the expense, and leading to great delay and litigation. Supposing counsel on both sides to have been heard, and an order for winding up made, the matter would then be referred to officers created by this Bill, called "official liquidators." He would, therefore, submit that it would be much better to trust to the official and trade assignees, of whom they had had long and well-founded experience, than to refer to "official liquidators," of whom they had had no experience, and in whom the public would not, therefore, have the same confidence. In the actual winding up the accounts would have to be taken, and the books would have to be examined by the chief clerks and other officers of the Court of Chancery. Those officers were already overburdened with business, and great delay would necessarily result. If the winding up were deputed, as the hon. Member for Liverpool (Mr. J. Ewart) proposed, to the Courts of Bankruptcy, the Bill would be made almost as efficient as possible, and he should, therefore, support the Motion of the hon. Member.

§ MR. MALINS
said, the description which his hon. and learned Friend had just given of the Court of Chancery was as inapplicable as it could be to any institution existing in this country. Any one would believe from that description that the Court of Chancery was one system of delay, expense, and over-burdening of business. To take the last charge of his hon. and learned Friend that the Court of Chancery was over-loaded with great arrears of business, what would the House think when he told them that the Court of Chancery had its business so closely done that, to use a common expression, it lived almost from hand to mouth? [Laughter.] He could well suppose that hon. Gentlemen were surprised at the statement. He could, however, assure them that it was possitively true. He was not representing that the business of the Court of Chancery had diminished, but he said that such was the effect of the altered system that the Judges of the Court of Chancery were able to keep down all arrears, and he stated, upon his credit as a Member of that House, and of the profession to which he had the honour to belong, that it was his opinion the business could not be brought up closer without disadvantage to the public. [Derisive cheers.] If it were doubted, he would give a statement of the 648 facts. He would not be deterred by the vulgar prejudices which came into operation directly any one mentioned the Court of Chancery. He would not detain the House by describing a Chancery suit, although it was short enough now, but the hon. and learned Member for East Suffolk having said that all the Courts of Equity were overloaded, his (Mr. Malins) assertion was that no one of those Courts was overloaded. The Master of the Rolls had the largest number of causes, and only a fortnight ago he had to apply to the Lord Chancellor to transfer to him other causes to feed his Court with. Vice-Chancellor Kindersley had no arrears. Vice-Chancellor Stuart was out of business when he rose last term. Except in Vice-Chancellor Wood's Court there were no causes waiting any time for hearing, and in his Court there was not a cause which had been set down for so long a period as two months. In the Appeal Court there was not an appeal which was ready to be heard one month ago. He emphatically said there were no arrears, nor were there likely to be any, and the expense was as moderate as was consistent with the due administration of justice. His hon. and learned Friend had stated that the winding up could be done in the Bankruptcy Courts at one-fifth of the expense. The object of that House, he apprehended, was to have the matter well done by Judges who, from their position and learning, administered justice in a satisfactory manner. Now, he ventured to say that no tribunal gave so little satisfaction—indeed, he might say, so much dissatisfaction—as the Court of Bankruptcy. He was certain of the fact that the Court of Bankruptcy was most unsatisfactory, and so unsatisfactory that he believed it could not be tolerated much longer. There were five Commissioners sitting in Basinghall Street, each with a salary of £2,000 a year, who were not called upon to give to the public more than eight or nine hours' service a week. He would venture to say that any one of the Vice-Chancellors would, with the greatest facility, dispose of the whole business by sitting from ten to four o'clock daily on the average of the whole judicial year. If they wanted Judges to give the country satisfaction they must keep them fully occupied; for, of all things calculated to lower the character of the Judges in Bankruptcy, the most likely to do so was the system by which they were enabled to make arrangements for one sitting one or 649 two days in the week, while the rest were idling about the country, becoming men of pleasure instead of men of business. If they transferred, as proposed, the business to the Court of Bankruptcy it would scarcely add more than an hour a month to the sittings of each Commissioner. The winding-up business could not be of great extent. There had been a good deal of litigation in the Court of Chancery upon the Winding-up Bill of 1845, because there had been hundreds of abortive railway companies. But these had been nearly all settled, and, while for two or three years the business of the Court was incumbered by applications under the Winding-up Act, it was now the fact that sometimes for two months together there was not a single application to the Court under the Act, Since Parliament by this Bill would settle the question "Who are contributories?" Companies might be wound up in three months at the most in the Court of Chancery, and by a simple and economical machinery. Although himself a practitioner in the Court of Chancery, it was a matter of perfect indifference to him whether the business were transacted in the Court of Chancery or the Court of Bankruptcy, because the nature of the winding-up business was so simple and unimportant. But it was of great importance to the public that the business should be transacted in a Court of easy access, where the expense would be small, and where it would be transacted to the entire satisfaction of the public without delay or the prospect of delay. The Court of Chancery was never closed for a single day, for one of the Judges was always accessible. But it was a consequence of the Judges of the Court of Bankruptcy having so little to do that in no Court of the kingdom was so much done by deputy. In the absence of the Commissioner orders were continually made by the registrar. The defects and vices of the Court of Bankruptcy were indeed so great that, instead of adding to its business, it would be absolutely necessary for the House, in his opinion, at no distant period, to remodel that Court. If no other hon. Member did it, he would himself bring the vices of the Court of Bankruptcy before the House. He therefore objected to the transfer of the business from a Court which was familiar with it to a Court which worked unsatisfactorily, and was about the worst in the kingdom.

THE SOLICITOR GENERAL
said, that the effect of the omission would be to 650 give an unlimited jurisdiction to the Court of Bankruptcy. He thought the Court of Bankruptcy exceedingly competent to exercise that jurisdiction. It was true that the Court was open to some of the animadversions of his hon. and learned Friend (Mr. Malins), but it was no doubt perfectly competent to the discharge of this duty. He was not going to enter into the rival merits of the Courts of Chancery and Bankruptcy. One of his hon. and learned Friends had spoken of the Court of Chancery as a sort of Pandemonium, and another as a sort of Paradise. If Parliament gave an exclusive jurisdiction to the Court of Bankruptcy, a great deal more must be done than one of his hon. and learned Friends seemed to imagine necessary; for if they gave complete jurisdiction to the Court of Bankruptcy they would end by making the Court of Bankruptcy a Court of Chancery. If a company went to the Court of Bankruptcy to be wound up, and if in the interim before the winding up one of the members of the company died, that Court would have no power to follow the property of that member. He saw no objection to the omission, and he believed that his right hon. Friend (Mr. Lowe) would also agree to the omission.

§ MR. STEEL
said, he conceived that, except in the neighbourhood of large towns, the business would be better done by some tribunal in the metropolis than by the district Commissioners of the Court of Bankruptcy.

§ MR. HENLEY
said, he was rejoiced to hear that the jurisdiction under the clause was to be transferred to the Court of Bankruptcy. It was true, that the Court of Chancery was always open; but the Court of Bankruptcy got hold of the assets rather quicker. In cases of limited liability that was a most important consideration, for otherwise the capital of the company would be gone before they came to the state which brought them under the scope of this clause.

§ MR. GLYN
said, he also agreed to the Amendment, for he thought that the machinery of the Court of Bankruptcy was most effective for the purpose of obtaining assets. As to the new system in Chancery, he was willing to admit that it worked very effectually, and he preferred it in London cases to the Courts of Bankruptcy. But in country cases he preferred the Courts of Bankruptcy.

§ MR. MALINS
said, he thought that it should be left to the parties themselves in 651 country cases to select the tribunal. He believed, however, that they would prefer the Court of Chancery.

§ MR. LOWE
said, he gathered that it was the opinion of the Committee that the Amendment proposed by the hon. Member for Liverpool (Mr. J. Ewart) should be agreed to; and, as it was his wish only to select the tribunal which should be deemed the best, he was willing to acquiesce in the change. The Bill was drawn with a view both to the Court of Chancery and to the Court of Bankruptcy, and though the enormous powers of the former might enable it to work the most complete justice, still he hoped that the latter would on the whole be found a satisfactory and cheaper tribunal.

§ SIR FITZROY KELLY
said, he would suggest that the clauses affected by the Amendment should be read as they stood, pro formâ, and carefully considered by the right hon. Gentleman opposite (Mr. Lowe) before the measure reached its next stage.

§ MR. HENLEY
said, he thought that there was some looseness in the expression, whereby companies who could not pay their debts did not commit an act of bankruptcy like ordinary tradesmen.

§ MR. LOWE
said, he did not think the clause would have any such effect.

§ MR. HENLEY
said, he thought that if the company shut up their premises, it was like a tradesman absenting himself, and should be treated in the same manner.

§ SIR FITZROY KELLY
said, that he had himself proposed clauses to remedy that as well as other defects. There was much in the observation of his right hon. Friend (Mr. Henley), that what were acts of bankruptcy in individuals should be acts of bankruptcy in companies. He trusted that the right hon. Gentleman the Vice President of the Board of Trade would take the matter into consideration before the Bill passed another stage.

§ MR. HORSFALL
said, that he had a clause on the paper to the effect that the creditors should have the power of appointing one official manager, while the Court appointed the other. Would the right hon. Gentleman consent to it?

§ MR. LOWE
said, he was in favour of 652 the original clause, which gave the sole appointment of the manager to the Court. The proposal of the hon. Gentleman would be certain to produce anarchy and confusion, and he therefore could not agree to it.

§ MR. HORSFALL
said, that there was a strong feeling in the community on the subject, and he should press his clause to be inserted instead of the original clause. It was to the following effect:—For the purpose of conducting the proceedings in winding up an insolvent company, and assisting therein, two persons should be appointed to the office of official liquidators, one of such persons being appointed by the Court, and the other by the creditors at a meeting held by them for that purpose; and the Court shall require due security from every person so appointed; and the Court and the creditors, as to the person appointed by them respectively, shall fill up any vacancy occasioned by the death, resignation, or removal of any other person; and the Court may remove any other person so appointed, either by the Court or by the creditors, and such removal shall occasion a vacancy, to be supplied as before mentioned.

§ MR. HENLEY
said, he did not see any force in the objection to the clause—that it would produce anarchy. It was in accordance with the usual practice in the present system of winding up concerns.