§ Order for Second Reading read.
§ MR. MILKER GIBSON,
in moving the second reading of this Bill, said, it would be in the recollection of the House that, in the course of the proceedings of the present Parliament, his hon. Friend the Member for Birmingham (Mr. Scholefield) had introduced a measure for the purpose of amending the law of partnership. The object of that measure was to enable a person or persons carrying on business with unlimited liability to enter into partnership with others who should be liable only for a specific amount, those others being designated "limited partners." The measure contained various rules and restrictions which rendered it necessary that the Bill should have a great number of clauses, and it proposed to effect a very considerable change in the law of partnership. It was referred to a Select Committee, of which he himself was a Member; 1274 but, upon its being afterwards proceeded with in Committee of the Whole House, his hon. Friend found the difficulties in his way so hard to be surmounted—difficulties which usually beset the path of private Members in dealing with such subjects—that he abandoned the measure, an understanding having been come to between himself and the Chancellor of the Exchequer that the question should receive the serious consideration of the Government. Under those circumstances the Government had deemed it to be their duty to take the matter in hand, and it had occurred to them that the benefits to be derived from such a measure as that of his hon. Friend might be secured by another mode of proceeding of a simpler character, and one which would be attended by less alteration in the rules and principles of the law of partnership. The Bill which he was about to submit to the House had for its object so to relax the rule of law which laid down that a participation in profits constituted a partnership, as to enable a person to lend a firm carrying on trade a sum of money, on the condition that the remuneration for the use of that money should be in the form of a portion of the profits, instead of a fixed rate of interest. Under its provisions a person lending money on such a contract would stand in the relation of a creditor to the trader, and would not be constituted a partner simply because he received for his loan a share of the profits by way of remuneration for the use of his money. That was the proposal embodied in the first and principal clause. The second clause would enable persons to pay their servants as a reward for their labour, instead of a fixed salary, a portion of the profits of the business in which they happened to be engaged; while the third clause would entitle the widow or child of a deceased partner in any commercial house to receive a portion of the profits by way of annuity without thereby being constituted a partner. These were the three proposals which he had to make, but it was provided that the different parties whom he had mentioned—the lender of the money, the person who received a share of the profits as a reward for his labour, and the annuitant, although they should stand in the relation of creditors to the trader with whom they had had transactions, yet they should be "postponed creditors," and should not be entitled, in case of bankruptcy, to recover what 1275 was due to them until all the other creditors of the firm had been paid. He had adopted in this Bill pretty nearly the words which were suggested some years ago by the hon. and learned Gentleman the Member for Belfast (Sir Hugh Cairns). A Bill was at that time before the House to accomplish the object which he now had in view. It was a very cumbrous Bill, containing a great many regulations and restrictions, and the hon. and learned Gentleman the Member for Belfast gave notice of his intention to move the omission of all the clauses and the substitution of those which were, with the exception of a few words, the same as those of this Bill. Two of those clauses were to this effect—
The clause which was contained in the Bill now before the House with reference to the widows and children of deceased partners was an addition. He mentioned these facts to show the origin of the simple form of enactment which he had adopted, and to obtain from it the benefit of the authority of the hon. and learned Member for Belfast. "When the right hon. Gentleman the Member for Calne (Mr. Lowe) introduced his comprehensive measure for authorizing limited liability to joint-stock companies, he at the same time brought in a Bill similar to that now before the House, and also adopted the form of words which had been suggested by the hon. and learned Gentleman. There were some words in the first clause which he should be prepared to omit from this Bill—namely, "or bear a share of the loss." He was informed by his hon. and learned Friend the Attorney General that those words were not necessary to the attainment of the object which he [had in view, and therefore he should be willing to leave them out. It must be remembered that at the time that limited liability was given to joint-stock companies it was admitted that private traders carrying on business with unlimited 1276 liability could not be left under any restrictions which could properly be removed. It was recognized that these great mercantile associations, which were to have the benefit of limited liability, would come into competition with private firms and individual traders carrying on business with unlimited liability, and it therefore seemed reasonable that all the restrictions which could safely be removed from the operations of this latter class of traders should be got rid of. It was at the time contended that they ought to be allowed to raise capital in the best way that they could, and upon such terms on which lenders were willing to advance it. The argument that the repeal of the usury laws had enabled lenders to advance money to traders at any rate of interest they could obtain was not a sufficient answer to that appeal, because it was clear that a trader would rarely engage to pay a high fixed rate of interest, whether he made any profit or not, if he did he would not be acting as a prudent tradesman or taking a course which was likely to conduce to his commercial welfare. Now that great joint-stock associations had obtained, not as a matter of privilege, but as a matter of right, power to carry on business with limited liability, private partnerships had a right to claim some greater facility for raising money than a mere repeal of the usury laws, which, though right in principle, and productive of much benefit, was not of itself sufficient. What he proposed was simply this—that a lender should be allowed, without becoming liable as a partner, to advance money to a partnership carrying on business with unlimited liability, at a fluctuating rate of interest; in fact, receiving a portion of the profits in lieu of interest; and he could not see any difference in point of principle between an agreement of that sort and an agreement to receive a high rate of interest. It would be better for the creditors and it seemed in itself more reasonable that if a lender wished to assist a trading firm he should stipulate to be paid a portion of the profits, so that he should receive no interest when no profits were made, and a high rate of interest when large profits were earned. That seemed to him to be a fair and reasonable bargain, and he did not see why the law should deter persons from entering into such arrangements by making them liable to the debts of the firm to their last shilling; while if they advanced 1277 money at usurious rates—20 or 25 per cent—it allowed them, in case of bankruptcy, to rank with the rest of the creditors, and perhaps sweep away a large portion of the assets. That did not seem to him to be a reasonable state of things, and therefore he proposed that a mere lender upon the terms which he had described should not by that act alone be constituted a partner. Let the House observe that he was not in any way interfering with the general laws of partnership. If a man lending money to a firm was with his own knowledge put forward to the world as a partner; if he allowed his name to be used as a means of obtaining credit; if he was, in fact, the person who was trusted, then, although he was only a lender, he must be responsible for the debts that were contracted. But if he was a mere lender, if he was not known to the creditor when credit was given to the firm, he did not see upon what principle of justice he could be called upon, should the firm to which he had advanced money fail, to pay all the debts even to his last shilling. He believed that it was doubted by competent authorities whether the law laid down in the case of "Waugh v. Carver," which established that participation in profits constituted a man a partner, was not erroneous. He had a high authority to cite in support of his assertion. When Mr. Baron Bramwell, then Mr. Bramwell, was examined before the Mercantile Laws Commission he said that he should have thought that nothing could have been conceived more contrary to law than the rule which was laid down in that case, but that it had been so long received as law that it could not be changed without legislation. What he was now proposing was, therefore, according to this high authority, not to change the principle of our law, but rather to restore the law to what in his opinion it ought to have been held to be. It appeared to him that permitting persons to advance money upon condition of receiving a share of the profits, without thereby becoming liable to all the debts of the concern, might be of great utility in enabling assistance to be given to clever, prudent, and industrious men who had all the qualities necessary for the advantageous and safe administration of capital, but had not the capital itself. Now, he thought that it was good policy—it certainly was the policy which lay at the root of recent legislation with reference to limited liability—as far as you could with safety to 1278 the public to facilitate the bringing of capital into conjunction with talent, prudence, and industry, thus enabling men who possessed those qualities legitimately and properly to acquire wealth and raise themselves in the social scale. He therefore thought that on moral grounds, and as a matter of public policy, the proposed change should be made. With regard to the second clause, he thought it a very reasonable thing that an employer should as a reward for labour pay a portion of profits either in addition to or in lieu of wages. He was told by those learned in the law that an employer might pay a servant a sum calculated in proportion to profits as a reward for his labour; but for his part he could not see the distinction between a percentage on profits and a portion of profits. What public policy could there be in preserving such a distinction? It appeared to be a sort of trap. Men really acting from the best motives in giving their servants an interest in their business, and paying them in the most legitimate manner, felt uneasy under the present state of the law, and therefore he was of opinion it would be good policy to get rid of this distinction. Mr. Anderson had stated before the Mercantile Law Commission that a mercantile house sending out a traveller might agree to give him a certain salary and £10 for every £100 of profits made by the firm; that was no partnership; but to agree to give him one-tenth of the profits, which would be the same amount, would constitute the traveller a partner. That state of the law should not continue. On grounds of general policy it was very desirable to remove all doubts in this matter, and enable employers and employed, if they thought proper, to make such contracts without any fear under the law of partnership. Too sharp a line was drawn between employers and employed. Strikes and turnouts frequently arose from an exaggerated view of the profits of capital; and the more the system proposed was acted upon, giving the labourer in reward for his labour a portion of the profits, the more likely would correct views on this subject prevail, and the less likely would strikes and turnouts become. He therefore thought the measure now proposed was politic, and might be productive of in this way some advantage to the country. So, again, with regard to paying a portion of profits by way of annuity to the widow or child of a deceased 1279 partner. The Attorney General would tell him that even a fluctuating annuity would not necessarily entail liability. But if it were dependent on profits, probably the widow or child would thereby be constituted a partner; but, whether that was established law or not, this Bill would put an end to all doubt, and enable this most reasonable thing to be done, that the widow or child of a deceased partner in a mercantile house might receive a portion of the profits by way of annuity without any question arising as to whether the widow or child were constituted a partner. In the case of "Waugh v. Carver" Chief Justice Eyre said—
- "1. The advance of capital or money to be used in any trade or undertaking upon a contract with the person carrying on such a trade or undertaking that the person making such advance shall be remunerated solely by a share of the profits of the undertaking shall not of itself constitute the person making such advance a partner in the trade or undertaking, or render him responsible as such.
- "2. A contract for the remuneration of the servant or agent of any person engaged in any trade or undertaking by a share of the profits of such trade or undertaking shall not of itself render such servant or agent responsible as a partner thereof."This case has been extremely well argued, and the discussion of it has enabled me to make up my mind, and removed the only difficulty I felt, which was whether, by construing this to be a partnership, we should not determine that if there was an annuity granted out of a banking-house to the widow, for instance, of a deceased partner, it would make her liable to the debts of the house, and involve her in a bankruptcy; but I think this case will not lead to that consequence."—[2 H. Bl. 235.]To this, however, a note was appended to this effect—Provided the annuity be not dependent on the profits of the business.This Bill would put an end to all that doubt. It had been stated that there was a great difference between a fluctuating and a fixed rate of interest, and it might be very well to deter men from contracting for the one and allow them freely to adopt the other. It could be shown, however, that the necessity of traders in trouble having recourse to the advance of money upon high fixed interest had more than anything else been disadvantageous to regular creditors, and generally, as he was informed, these advances, which might be made under the usury laws, were, in fact, too often the precursors of bankruptcy. He had a letter from a solicitor in extensive practice in connection with bankruptcy, who said—I know many cases in which persons have lent traders large sums of money at exorbitant rates of interest, and when bankruptcy or insolvency has followed, as usually happens in these cases, the lender has proved the whole amount of the debt and interest against the debtor's estate in competition with bonâ fide trade creditors; but I know of no case in which money has been lent so colourably, so as to insure the lender a share of the profits, without incurring the consequences of partnership. In fact, where money is lent at high rates the lender takes good care to steer clear of any suggestion or suspicion of participation of profits, lest the debtor should turn round 1280 in any subsequent stage, disclose the secret arrangement, deprive the lender of his claim to rateable payment with the other creditors, and render him liable to pay the debts of the secret partnership.That was from Mr. Lawrence, of Old Jewry Chambers. How much better it would be if the loan in these cases had been made under the provisions of this Bill—namely, upon profits with postponement until all the bonâ fide creditors were paid? He had another letter from an eminent Liverpool house. The writer said—I cannot remember how many cases I have met with in which the parties have wished that a capitalist should advance capital into a business, and receive a share of profits, without incurring the liability of a partner; but men in business are now so familiar with the actual state of the law on the subject that the number of times which an attorney has been consulted upon such a subject will form no sure criterion of the number of times that the difficulty has been felt, as in most cases the parties themselves would know that what they sought to do was impracticable. The course which in my experience has been taken to get rid of the legal difficulty in those cases in which the transaction has not been abandoned altogether has varied according to the circumstances. I have known the difficulty disposed of in the following different ways:—By an ordinary partnership, with stringent restrictions on the working partner for the protection of the moneyed partner; by the formation of a small joint-stock company, with limited liability; and by a loan, at a high fixed rate of interest, secured according to the circumstances of the case. I have also met with cases in which the agreement has been entered into, and the secret partner has sought to protect himself by a refined distinction, recognized by some of the cases, between taking a share in the profits, which would make him liable as a partner, and taking a sum of money in proportion to the profits (whatever that may mean), which has been held not to constitute a partner.He thought it was much better to provide a straight and proper mode of entering into these contracts rather than drive people to this indirect and circuitous mode of proceeding. This measure had been frequently approved in one form or another by Parliament. The right hon. Member for Calne (Mr. Lowe) succeeded in getting the House to read his Bill two or three times, and it failed only because there was some amendment introduced in Committee which he thought would be so injurious to the measure that it was not worth while to proceed with it. Though he was sorry to find the Bill now before the House was threatened with opposition at the second reading, he hoped the House would now do what had been so frequently done before—namely, to affirm the principle that a 1281 man may lend money and receive remuneration by a fluctuating instead of a fixed rate of interest without incurring unlimited liabilities. If the House was not satisfied with the other provisions of the Bill, it would be quite competent for the Committee to make Amendments. He did not profess to have that knowledge of the law which would entitle him to say that the Bill drawn at the Board of Trade was perfect in all its parts, and he should be most happy to take the advice of those who by their experience were competent to judge of the practical working of the measure. What he asked the House to do was to agree to a sound and salutary principle. He knew that hon. Gentlemen might raise objections to the Bill and say that a person might lend his money to a trading firm, that he might receive profits when profits were made, but when days of adversity came he would take good care to get out of the concern and defeat the object the Bill had in view. It was easy, however, to meet this objection, and it only referred to matter of detail. It was easy to provide for such dangers by merely putting in words to the effect that money so advanced, if withdrawn within a certain period before the bankruptcy, should be paid back; or that the money advanced should be for a fixed period. He believed, however, the present law of Bankruptcy provided a remedy for that case. He confidently placed the Bill in the hands of the House, and begged leave to move that it be now read a second time.
§ Motion made, and Question proposed, "That the Bill be now read a second time."—(Mr. Milner Gibson.)
§ MR. JOHN PEEL
said, before moving the Amendment of which he had given notice, he wished to explain his objections to the Bill. In the first place, he could not assent to the declaration in the preamble, "that it was expedient to alter the law relating to partnership." He believed there was no part of the world in which such great facilities existed for the transaction of commercial affairs as in England, where capital found its way so readily into channels of enterprize, and where credit was 60 extended, and at the same time founded upon such great security. The present law of partnership was one of the main props upon which our present healthy credit system had been erected, and he could not find out that there was any important portion of the commercial 1282 community who desired an alteration in that law at present. He had taken great pains to ascertain the opinions of men engaged in commerce—bankers, merchants, and manufacturers, and he found among all those whose judgment was entitled to respect the greatest apprehension of the consequences that would ensue from the adoption of the principle of limited liability in private partnerships without most ample publicity. He also believed that the present moment was particularly inopportune for any speculative alterations in our Commercial Code. It would be better to leave well alone at present. He wished to make a few observations with regard to the first clause of the Bill, which, in fact, embodied its principle. If the House were to adopt that clause, the remainder of the Bill must pass as a matter of course. There was a good deal of ambiguity as to the wording of the clause, and "lender" was made use of instead of the old word "partner." So far as he could understand the clause its object was to enable two persons to associate themselves for the purpose of carrying on a trade or calling under a contract by which one should provide the capital and the other contribute his skill and knowledge with his personal attendance to the furtherance of the common object. That each should participate in the profits or losses, and while the working partner should be subject to all the responsibilities of a partner, as under the present law, the person who furnished the capital should have no further risk than the loss of the capital which he originally put into the concern. There was no provision for any publication or registration of the partnership, so that as far as the public were concerned the contract might be a perfect secret. This would be productive of very evil consequences, and a probable result would be that cases of this kind would occur:—A scientific person, or a man of mechanical skill, would invent some improvement in the manufacture of a commodity, but not having sufficient capital to carry out his plans he would invite the co-operation of a man of capital, and make a contract with him that money should be provided sufficient to carry on the business for a term of years. During that period supposing the business to be eminently successful, the capitalist would be never named, but the business carried on in the name of the inventor, the ostensible sole proprietor. Being so successful, 1283 every one would be anxious to give him credit and supply him with the articles which he required. His credit increased, at the end of the term of the contract the monied partner would withdraw his capital and retire. The working partner, very naturally seeing that he could get any amount of credit, would think he could get on without capital, and continue the business as before. The credit would have been given in the belief that the working partner was in the possession of all the accumulated profits obtained during his successful operations. A slackness might occur in the demand for the article which he manufactured, and he would go on for a while with the hope that trade would revive, and avail himself to the utmost extent of the credit which people were willing to give him. Trade not mending work would be stopped, he would be obliged to call creditors together, tell them he was unable to meet his engagements, and the creditors would then find for the first time that, instead of gaining largely from year to year, he had had all this time a vampire on his back in the shape of a monied partner who, after sucking his life blood, left him a mere skeleton. This was one of the results which was likely not unfrequently to happen under the operation of such a Bill as that before the House. It was most probable that the Bill would also have the effect of leading to ruinous speculation and over-trading. It was obviously the interest of the monied partner in any concern at present to exercise continual supervision over those who had not the same capital as himself, and to exercise a salutary control over those who might be more energetic and speculative than prudent, and the result was that in very few instances firms of that kind came into difficulty. If this Bill passed the interest of the capitalist would be exactly the reverse—namely, trading to the utmost extent, and encouraging the working partner not only to avail himself of the capital he had advanced, but to stretch his credit to the utmost, and that for the sake of making the annual profits as large as possible. It was quite probable that during a few years of prosperity the capitalist might take out five or six times as much as he had advanced, and if bankruptcy came his loss would be small, while many of the creditors would be involved in a common ruin. This, he believed would be a certain result of the 1284 Bill. It would, in addition, open the door widely to deliberate fraud. He would be sorry to give instances which he might readily adduce, lest if the Bill passed they might be adopted as suggestions. In times of panic, which we must expect occasionally, he was afraid that the distrust which prevailed on those occasions would be greatly increased by the suspicion that every man would entertain of his neighbour, that he might have some unseen partner taking the profits unknown to the public out of the concern. He thought he had said enough to show that this Bill was pregnant with mischief and danger, and he should not be doing his duty if he did not do all in his power to oppose it. He therefore begged leave to move that it be read that day six months.
§ MR. J. A. TURNER,
in seconding the Amendment, said, he wished to explain that he had. no objection whatever to the principle of limited liability. He believed that under that system many extensive businesses, both in banking and mercantile operations, had been carried on, which would never have been contemplated under another system. He thought that great advantages had been derived from the establishment of limited liability in joint-stock companies, but the confidence of the public had been given to those companies mainly by reason of the system of registration and publicity of accounts which were required of them. But under this Bill nothing of the kind was provided for, and the public would be perfectly ignorant as to the position of any concern which might have a sleeping partner, or rather a sleeping lender of money. He would have at all times—without the creditors being at all aware of the fact—the opportunity of taking from the profits of the concern with which he was connected a large proportion of the profits for which no doubt he would bargain when he was lending his money—a proportion which would not only represent the capital he had advanced, but ultimately the whole of the capital itself. In the course of a few years, if the concern should fail, the creditors would find that they had been left in the lurch, and that the capital had to a very great extent been withdrawn by the lender who had, in reality, been an exhausting creditor. He, therefore, disapproved of the Bill. The Manchester Chamber of Commerce had intrusted him with a petition against the Bill unless the principles of 1285 registration and publicity were provided for in the clauses.
§ Amendment proposed, to leave out the word "now," and at the end of the Question to add the words "upon this day six months."—(Mr. John Peel.)
§ Question proposed, "That the word 'now' stand part of the Question."
§ MR. SCHOLEFIELD
said, it had been his duty to introduce in two Sessions of Parliament a Bill founded on the same principle, and he thanked the right hon. Gentleman for having introduced a Bill which he (Mr. Scholefield) thought would be so efficient and simple as the one now before the House, and which he believed was a better Bill than his own. The present Parliament had on several occasions affirmed the principle of this Bill, and therefore he had been in hopes that the hon. Member for Tamworth (Mr. J. Peel) would not have felt it his duty to have moved the Amendment which he had done. All the objections which had been offered to the Bill were objections not so much to the principle of the Bill as to its details, and he thought, therefore, that the hon. Gentleman would have done well to have allowed the Bill to go to a Committee. The hon. Member for Manchester was anxious that there should be publicity in regard to the names of those who lent their money on the ground that they shared in the profits, but he (Mr. Scholefield) wanted to know why a man who lent his money on the ground that he should share in the profits of a concern should have his name registered any more than a man who lent his money out at 5, 6, or 7 per cent. If a man lent money on condition of his receiving a return from the profits, he would not be paid in case of the insolvency of the man to whom he had lent that money until the demands of the other creditors had been satisfied; whereas, if the money were lent at a fixed rate of interest, the world knew nothing of the transaction, and the man who lent the money would share with the other creditors in the estate, and would in many cases receive the largest amount. The law as it stood at present did not depend upon the deliberate decision of the Legislature at all. It was not governed by statutes, but by the decision of one particular Judge, and the correctness of that decision had been questioned by many of the first lawyers in the kingdom. He believed that this measure would effect a great improvement in the 1286 law, and he therefore hoped that the House would proceed with the second reading.
§ MR. MOOR
said, it was clear that the second clause of the Bill did not govern the case of the servants or the widows and the children. As it was at present drawn he believed it would be a dead letter. He did not think it likely that any person who risked money to a trader in difficulties, with a right of receiving a rate of interest for the profits, would do so if he were bound by the penalty contained in the second clause, and in the present state of the law a man advancing money under these circumstances would exact 20, 30, and even 50 or 60 per cent, while cases constantly arising in our Law Courts proved that this was actually the case. Such a person would be entitled to receive, to the detriment of the trade creditors, 50 or 60 per cent. In such a case was it likely that a man would lend his money upon the fair chance of receiving a rate of interest out of the profits of the trade when he knew that if the trader failed he would have no chance of receiving a sixpence? He did not object to the principle of the Bill, and in much that had fallen from the right hon. Gentleman as to the benefits that had flowed from limited liability he quite concurred; but he would suggest that a proviso should be attached to the first clause to the effect that every contract for a loan of money to a trader, upon a certain rate of interest out of the profits of trade, should be registered. In the absence of such a proviso they would be opening the door to a large amount of fraud. It had been stated that registration would be useless, because the person who lent the money would not be known, but he only desired that the fact should be registered.
§ MR. CAVE
said, it appeared to him that the opponents of the Bill based their objections to it on the ground of the uncertainty of the commercial transactions that would be effected under it. But if that uncertainty were great under the principle of limited liability, what, he asked, was it now under that of unlimited liability? He reminded the House of the vast number of failures they had had recently, and of the unlimited confidence reposed in many of those firms up to the very moment of their failure. When they remembered the failures of banks such as Hammersley's, Paul, Strahan, and Co.'s, and a still more recent instance, there could be no doubt that under no system 1287 that could be adopted could the public be more misled. With such facts before them, surely this proposed addition to the law of limited liability need not frighten them much. He was a Member of the Select Committee on the Bill of the hon. Member for Birmingham. After considerable labour that Committee left the Bill more complicated than they found it. He thought the present a more simple Bill, and, as confessed by the hon. Member for Birmingham himself, a better Bill than his own—and for this reason, that it did not deal with the law of partnership, but simply allowed a man to lend his money at a fluctuating rate of interest according to profit. What charm was there in a fixed rate of interest? During the existence of the Usury Laws there might be some reason for such a thing, but it had now disappeared. Surely an exorbitant fixed rate was far more oppressive than a varying rate. It would be small consolation to the creditors of a bankrupt's estate to find that the bankruptcy was owing to a fixed rate of 80 per cent for a portion of borrowed capital, as in a case before the court the other day, it was proved that a bankrupt had paid £130 upon a loan of £22 10s., the whole of which was nevertheless still due. The public would not be deceived by this change in the law, they gave no credit to the lender, they trusted A and B, partners, on account of their reputed means, and they derived additional security from the borrowed capital of C, which was under this Bill postponed, to all other claims. Those who insisted upon publicity and registration would defeat the object of the Bill, and would expose the public to a danger of thinking they had a better security. If there were publication of lenders the public would associate the credit of the lender with that of the trader, and thus would be liable to be deceived. He agreed with the hon. Member for Brighton in thinking that the Bill would not be acted upon in a great many instances, but at the same time it would not be altogether a dead letter, as many respectable persons would be very glad to assist a rising trader or clever inventor with a certain amount of money when they ran no risk of losing their whole capital. The only objection, perhaps, that could be raised to the second clause was that what it proposed was already the law; but, as some doubt existed as to this, it was only fair to make the Act declaratory in that respect. Payment of work- 1288 men by a share in profits, was becoming more and more the practice, and among other recommendations was this, that it was a remedy for the unfortunate strikes of which they had lately heard so much. He had some doubts as to the third clause, whether it would be for the advantage of widows and orphans to be paid according to profits, and thought that it would be better to leave out that clause in Committee, On the whole, he heartily supported the principle of the Bill.
§ MR. BAXTER
said, that the arguments of the hon. Member for Tamworth were the same which had been urged against extending the principle of limited liability to joint-stock companies. The questions of registration and publicity were questions for consideration in Committee, and did not affect the principle of the Bill. He could not agree with the hon. Member (Mr. Moor) who had said that the Bill would be a dead letter. On the contrary, he thought it would be extensively acted upon, and would be productive of the greatest advantages to the commercial community. A great change had taken place in public opinion as to the principle of limited liability, and now in the north, the whole mercantile community were in favour of it. He was prepared to give the Bill his cordial support.
§ MR. HUBBARD
said, he ventured to surmise, notwithstanding the opinions which had been expressed by the right hon. Gentleman and others to the contrary, that the object of the Bill was to alter the law of partnership in a most material point, in a point which had been hitherto accepted as constituting the true test of partnership. The whole of the law, on that point would be impaired by the Bill as it now stood. The right hon. Gentleman said that the measure was intended to bring together capital and skill, to raise a competition against large corporations and trading companies, and to avert strikes. How it was to avert strikes he could not see, and he could neither admit that a stimulus to competition was required, nor that any fresh means for bringing capital and skill together were necessary, as there never was a time when capital and skill were on such cordial terms. The terms in the Bill were very vague. A lender might be a mere lender of capital to another, or a capitalist employing his servant, or a principal employing his agent. In either of those cases he might take a lion's share of nine-tenths of the profits, and 1289 leave only one-tenth to his agent or servant. If the business went on well the arrangement proposed in the Bill would be perfectly satisfactory, because there would be profits to share; but suppose there were no profits at all? He wished to know how the lender would be satisfied in that case. As to inspection of accounts, the very essence of the proposal was that the lender was to be a sleeping partner, and no sensible man would allow himself to be put in a position in which he was asked to rest satisfied with statements as to the accuracy of which he had a right to obtain information. He looked on the Bill as mischievous, not merely as touching the law of partnership, but as affecting the law of principal and agent. That was a most important commercial law, and if they impaired that which was the test of a man being a principal they would destroy that law altogether. He was, therefore, at a loss to know how the right hon. Gentleman reconciled this Bill with the law of principal and agent. This Bill destroyed that law and substituted one which had no countervailing advantages. Under it the capitalist or principal might, the moment an undertaking was going wrong, take all his capital away; and the expectation that the creditors would reap the benefit of his contributions would prove quite illusory. He must deprecate a change which he thought would operate most detrimentally on the character of our commerce. It was argued that if a failure took place the creditors would be better off, because they would have the money of the lender. But how were they to get at it? There was no provision to compel the lender to leave his money in the concern a single day. It was said that the Bill was opposed by great capitalists; but if there was one point on which he felt more confident than on another, it was that those who opposed that measure did so in the interest of the community at large, and not of our great capitalists. If the Bill passed it would he easy for men of large capital to set up servants and agents and themselves direct their operations from behind a screen, reaping the profit as long as things went on smoothly, but withdrawing their money from the concern when they saw insolvency appproaching, but before bankruptcy was declared. It was asked why, if one man had skill and another capital, they should not be allowed to come together upon any terms they chose? There could be no objection to any arrangement which 1290 concerned themselves alone, but if a third party is brought into their transactions, if they incur liabilities, if they obtain credit, ought not the creditors to be considered? If losses were made, who ought to bear them? Ought it not to be the man who had conducted the business, or the man who had received the profits, rather than the creditor, who had given a perfect consideration for his claim? For these reasons he should cordially support the Amendment.
THE ATTORNEY GENERAL
said, he was always glad to receive instruction from Gentlemen conversant with the practical operation of the law of partnership; but perhaps those hon. Members did not speak with equal authority when they referred to the principles of the law. The effect of the Bill as regarded the law of principal and agent was quite the reverse of that described by the hon. Gentleman who had just sat down. It would repeal an arbitrary law, established by judicial authority alone, which did interfere with the law of principal and agent. The law of principal and agent was that a man should be held responsible for contracts which he authorized another to make on his behalf, but not otherwise. Then, putting aside the arbitrary decision in the case of "Waugh v. Carver," he asked—did the man who lent money to be repaid with interest according to a fluctuating rate out of profits really authorize the borrower to bind his whole fortune by any contract which he might make? Clearly, nothing could be more foreign from his intention than to give any such authority; and the court of law which said that he should not lend money without being taken to give that authority interfered with the natural course of mercantile transactions, and virtually prohibited them by imputing to them a false character and intention. The principle on which the Legislature had hitherto proceeded in altering the law of partnership and introducing limited liability had been that of leaving the parties free in mercantile matters to make such contracts as they pleased, and not by arbitrary legal rules to circumscribe the range of contracts which had nothing evil in themselves. As long as a man knew what he was about let him do it. If A knew that B did not undertake to be responsible to him beyond a certain limit, that was his affair; he knew whether or not it was worth his while to deal on that footing. Many un- 1291 successful undertakings might be started on the principle of limited liability, and he confessed that when the principle was first introduced he looked upon it with jealousy, but experience had shown that the principle of limited liability had extended itself, and was practically successful in the mercantile world, as applied to companies, and why should it not be extended to other contracts? The simple question was, would they allow a man to lend money to a borrower on the terms which they might arrange between themselves? If the law did not interfere the transaction would not make the lender a partner. Then, why should they interfere to make him so? It was said they might mislead those who became creditors of the concern. But this was a transaction the creditors knew nothing about. To whom did they give credit? They gave credit to the man carrying on the business, and to the business he was carrying on; and the Bill did not take away or limit the liability of the person to whom they gave credit. His property was made liable to the trade debts before any part of it could be applied in repayment of those who lent him money on the terms described in this Bill. The object of the Bill was to prevent the arbitrary interference of law with the actual meaning of contracts made by parties. It was said there might be evasion, and that if a lender saw danger he might require repayment of his advances, and so withdraw the means which the trader had of carrying on business. But the law of bankruptcy, to a certain extent, provided against that. If, however, the House thought any further safeguards should be introduced they might be introduced in Committee. Nothing could be more irrational than the present state of the law. No practical man could understand the distinction between a loan for remuneration in the shape of interest in proportion to the profits, and a loan of which the interest was to be paid out of the profits. Could anybody but a lawyer follow that distinction? Every writer who had referred to this part of the law had condemned it, and its maintenance surely could not be essential to our commercial prosperity.
§ MR. BOVILL
said, that the law was not quite so unreasonable as had been stated by the Attorney General. The principle of the law was perfectly intelligible—namely, that a man who took the benefit should also sustain the loss. Every 1292 merchant and every lawyer would concur in that principle. It had been said over and over again that this was a Bill to establish limited liability. He was not opposed to the principle of limited liability, but the object of this Bill seemed to be to absolve persons from all liability; in fact, it might be designated as a Bill to enable capitalists to commit frauds on the public. By its provisions a capitalist might place £10,000 in the hands of a person of skill, agreeing to remunerate him with £500. Large and gradually increasing commercial transactions might be carried out, and so long as they were prosperous the capitalist might draw out all the profit beyond the £500; but let the reverse be supposed, let there be a loss, the capitalist would withdraw his contribution, would be absolved from all liability, and leave nothing for the creditors. It was a mere farce to say that the capital could not be withdrawn. The Bill provided for no such thing. If an example were required he would refer to the large cotton speculations lately carried on in India. It had been said, that the House had in two previous Sessions approved the principle of the Bill. In the Bills of 1862 and 1863 safeguards were provided, but the House was asked to read this Bill, and then send it to a Committee, and leave them to make such insertions as they chose; but against that course he protested. According to the Bill, a man who subscribed £10 or£l0,000 might sweep away the whole of the profits and leave the ordinary creditors without any remedy. In the Bills both of 1862 and 1863 provisoes had been introduced for the protection of the public, which were omitted from the present measure. There were in those Bills clauses which provided that all partnerships should be registered, and that no partner should withdraw his capital unless the debts were paid; but the present measure contained no such clauses. It would simply enable capitalists to lend money and reap the advantage without incurring any portion of the loss in the event of failure. His hon. and learned Friend the Attorney General said that credit was given not so much upon the security of a name as upon the security of a business; but that security was utterly fallacious if the capital could be withdrawn and nothing left for the creditors. He repeated that all the securities contained in the former Bills were removed from the mea- 1293 sure then under the consideration of the House.
§ MR. MILNER GIBSON
said, that the House had twice assented to the second reading of Bills precisely the same as that they were then discussing.
§ MR. BOVILL
The Bill, when it had first been introduced, had been read a second time and had then been abandoned; and it had, upon a subsequent occasion, been referred to a Select Committee, who had introduced into it a number of Amendments which had been struck out of the present measure. It was said that this was a very slight alteration of the law, but he could not regard it in that light. He contended that the Board of Trade were bound, before introducing the Bill, to see that it contained those guarantees for the safety of the public which were recommended by a Select Committee of the House, and which it contained when introduced by private Members. In the interest of the public he should feel it his duty to give to such a proposal the most decided opposition; and he should cordially support the Amendment of the hon. Member for Tamworth.
THE SOLICITOR GENERAL
said, that the object of the Bill might be very briefly stated. It was to distinguish between lenders to a firm and members of a firm. To a certain extent the law distinguished between them now. If a man lent money and received for it a fixed rate of interest, he was not liable for the debts of the borrowers; but if, instead of a fixed interest, he received a share of profits, then he was liable, although he never was, and never intended to be, a partner in the concern. As the law at present stood, it made some lenders partners in spite of themselves, and in spite of the truth of the transaction. That was a defect which the present Bill was intended to remedy. It separated the lender and his liabilities from the partner and his liabilities. If, as his hon. and learned Friend (Mr. Bovill) had urged, in illustration of his objections to the operation of the Bill, a man should advance a sum of £10,000 for the purposes of trade, and should pay a man £500 a year to carry on that trade, he was in reality the trader, and would therefore be responsible as such. The case adduced by his hon. and learned Friend had, therefore, nothing to do with the present question. Assuming that a man who advanced £10,000 was a real lender, where was the distinction between 1294 a man lending that sum at a fixed interest, and his doing so for a portion of the profits? The same argument was applicable in either case. The present Bill would define who was really a lender and who was really a partner, and would make clear that which at present was in a great degree confused. Every single inconvenience which his learned Friend had supposed was as applicable to, and was as likely to arise under the present state of the law as under this Bill. The whole subject really lay in a nutshell. The Bill would make a great improvement in the present state of the law, and he hoped the House would pass it.
MR. THOMAS BARING
said, he agreed with the Solicitor General that the question lay in a nutshell, and the nutshell was this—should a system of trade be established in this country, under which a man should be enabled to get any amount of credit he chose, to trade to any extent, and when a time of misfortune came, should be able to withdraw his capital and leave the public to bear the loss, by turning round and saying "I am not a partner but a lender." The system of trade hitherto had been to inculcate on our traders that everything depended on their integrity and prudence. A man in trade hesitated now before he rushed into speculation, because he knew that he would risk the whole of his capital and his future prospects, and it was this knowledge that had made the British merchant prudent and calculating. It was true that you could not even under a system of unlimited liability get rid of all frauds, but this was no argument against the adoption of every necessary precaution. Two-thirds of the trade of the country were carried on upon credit, and this rendered necessary all the safeguards which could be provided against plans to deceive the creditor. The commercial system of this country drew a distinction between limited liability in individual private partnerships, and from the same principle in great concerns which could not be carried on by individuals. The latter had always been sanctioned in one shape or other by Act of Parliament, Royal Charter, or, lately, by the system of limited liability; but hitherto this House had always rejected proposals for applying the same system to individual partnerships. This measure was without any of the safeguards contained in former measures which had been proposed. It was, therefore, necessarily 1295 crude and imperfect and ought to be rejected. The Bill, in whatever shape it passed, was sure to give abundant employment to gentlemen of the long robe. If safeguards were not to be maintained because their existence did not insure against fraud, then on the same principle policemen ought to be dispensed with in the City as they were unable to put down burglaries. This measure did not give the protection which was afforded to creditors in other countries; it would not clear up the law, but would rather introduce further confusion; it would lead to great difficulties in carrying on the commerce of the country, and he hoped it would not be sanctioned by the House.
§ MR. GOSCHEN
said, the latter argument of the hon. Gentleman rather showed that jewellers' shops should not be permitted in the City because they were incentives to crime, and the opponents of the Bill seemed to argue on this principle when they said that there was so much fraud that business of this kind could not be carried on at all. The opponents of the Bill wished to prevent the English trading public from doing what they liked with their own. It was poor testimony to the honesty of British capitalists to sup pose that there would be a rush of capital in the direction described by the opponents of the Bill, and that it would be advanced with a fraudulent tendency. This argument presumed, besides, a considerable amount of folly as well as dishonesty on the part of the capitalist, because if you were to trust £10,000 or £100,000 to a man who was to deceive the public you must assume, for the success of such a collusion, that he would assist you in defrauding others, but would not assist others in defrauding you. He doubted whether a man of this kind would be able to impose upon the sharp money-lenders of London. If capitalists and men of straw desired to collude and deceive they had ample means of doing so at present. Did they not hear of many men with £5,000 or £7,000, getting credit to the amount of £200,000 or £300,000? It was the public and not capitalists who were really anxious to have the Bill passed. The question really amounted to this—whether a contract should be allowed to be made freely between two men or not. He believed that the proposed system would not lead to fraud in the way suggested, and that the managing partners would not allow those who advanced their money to share in the profits without sharing in the 1296 losses. Fraud there always was and would be; but a varying rate of interest was not more likely to encourage a disposition to fraud than a fixed rate of interest.
§ MR. MALINS
said, he must protest against the doctrines laid down by his hon. and learned Friend (Mr. Bovill) that the Bill was one under which the lender would incur no risk whatever, while he would share in the profits. This was certainly not the principle of the present Bill, because it jeopardized his capital the moment it was advanced. All the evils contemplated by the opponents of the Bill could be brought about by a loan of money at a fixed rate of interest. He had heard of a case in which the lender and borrower met every three months to fix the rate of interest to be paid, and it was increased or diminished in proportion to the amount of profits. That was doing indirectly what this Bill proposed to do directly. The arguments he had heard against the Bill were the old arguments which were used against limited liability, and it was one of the satisfactions he had that he did his best to establish that important principle for which he had contended. Capital and skill ought to participate alike, but there was great difficulty in bringing them together. The Bill of the hon. Member for Birmingham (Mr. Scholefield) was one to establish limited liability between ostensible partners; but the case now contemplated was one in which a man was not, in point of fact, a partner, but a lender of money. The evils which his hon. Friend the Member for Huntingdon (Mr. Thomas Baring) said would arise under this Bill existed at present to an extent which was discreditable. They all deplored the case of a bank which affected a Member of that House (Mr. Spooner), for whom they had great respect and affection. He alluded to a bank in the Midland Counties, which everybody for twenty years believed to be as good as the Bank of England. It came suddenly to a stop, creating great ruin in the district, and then it was discovered that it became insolvent twenty years ago, when the money partner drew out all his capital. The fact was, that under the present law there was greater facility for taking out capital in a firm than there would be under this Bill. Take a case, which had actually occurred, of an advertisement inserted in a newspaper, in which a person required capital to work a patent. A gentleman came forward, and the borrower said that it was a most admirable 1297 patent, and the gentleman agreed to lend the requisite amount on participating in the profits. Could any one say that such an arrangement was unreasonable; but could anything be more unreasonable than that if a man lent £500 for working a patent the man who was working the patent should be entitled to spend the last farthing of him who lent the £500? Was it not apparent that the lender intended to do no more than to authorize the spending of the sum advanced? He considered the Bill to be founded on the soundest principle, and that it was one of national importance. He was rather impressed with what fell from the hon. Member for Brighton (Mr. Moor). He was by no means certain that the Bill would be extensively adopted, but that was no reason why they should not adopt a sound principle. He gave its opponents credit for entertaining an honest and conscientious objection to it, but having as a lawyer and a man of the world considered the subject many years, he must give his opinion distinctly in favour of it, and should, therefore, vote for the Government.
§ MR. ALDERMAN ROSE
said, he believed that the measure would aggravate the evils already felt by too great an extension of the principle of limited liability. The case referred to of the Bank at Birmingham would become the rule instead of being, as at present, the exception. At present, if a man had dealings with a limited liability company, he knew that each shareholder was liable only to the extent of his subscription, and the House might perhaps be surprised to know that, taking the whole list of limited liability companies, there were scarcely more than 10 per cent of them paying. It was now proposed that a man might withdraw money without liability, after receiving a large proportion of the profits of such company. In his opinion the present Bill was a monstrous misapplication of the principle of limited liability.
§ MR. NEWDEGATE
said, that allusion had been made to the failure of an eminent banking firm in the midland counties. Nobody regretted that failure and its consequences more than he did, but by what was it occasioned?—the withdrawal of capital unknown to the great body of creditors. This Bill would enable a sleeping partner to share the profits of a limited liability company without appearing before the public in the sense of liability for the engagements of the firm. It appeared to be totally over- 1298 looked in the debate that this sleeping partner, whose name might be used to enlarge the credit of the company, might withdraw every shilling of his capital—after participating in the profits—at a period which would enable him to walk off with most of the profits, while the unhappy creditors would have to divide the losses amongst themselves. Thus the effect would be that all the evils which resulted from the management of private firms would be extended to companies founded on limited liability. There had been great confusion in the debate. No one justified the law as it at present stood, the question really at issue was solely what remedy should be applied. The advocates of the Bill could not escape from the fact that they did not propose to register the lenders as well as the partners, those lenders being participants in the profits. They could not justify refusing to register the lenders who might contribute two-thirds of the capital, and he begged to ask the President of the Board of Trade why he had omitted any provision for registering these lenders, when he himself admitted that there ought to be a provision introduced to prevent the withdrawal of the loan of capital within a certain period of bankruptcy. The loans might be two-thirds of the capital. That point pinched the right hon. Gentleman very closely, and he could not escape from the argument, which compelled him to register the share capital of the company, and, if so, how could he justify the omission to register that portion of the capital, which would be contributed by lenders, who were to participate in the profits? There was, in fact, no justification for omitting to register the lenders, and therefore his advice to the hon. Member (Mr. Peel) would be to withdraw his Amendment, and in Committee to propose to register the loans; then he admitted they would approach something like an amendment of the law. Unless they introduced such a provision they would be practising a fraud upon the public, because companies might borrow to any extent, the lenders participating in the profits, and yet the creditors would not be able to touch one shilling of their property, not even to the extent of those profits. This Bill as it stood would only aggravate all the evils attending limited liability and introduce a general insecurity. The true remedy would be found in the registration of these loans, an issue which would not arise if a division were taken on the present Amendment.
said, that he differed from the Gentlemen who sat near him, because he did not believe that this Bill would either make dormant partners or sleeping partners. On the contrary, it expressly declared that lending money in a particular manner should not in itself create a partnership. Had the Bill proposed to create a new form of partnership, he would not vote in support of it as he intended doing. Whether the Attorney General was right in saying that the present state of the law was unreasonable to everybody but lawyers, he did not know, and time only could show whether the new state of things proposed would make it better or worse for them. The hon. and learned Member had stated truly that a great portion of the trade of this country was carried on upon credit, and year after year they passed laws to facilitate its operation. The best maxim for the present day was caveat emptor—they must give perfect freedom and let every one look out for himself. He thought it useless to mince matters, and he believed that to be the plain state of things to which they had come. He had heard a great many ugly words made use of during the course of this discussion, but having a very bad memory for such things he would not repeat them. He supposed pretty large profits had been made lately, and, although people objected strongly for it to be known that they were getting 60 per cent for their money, they had no objection to receive 100 per cent if they could get it. He did not believe that under the proposed system there would be a great deal of business done, because he did not believe that persons in ordinary circumstances, even for the sake of getting 30 or 40 per cent, would be induced to lend when there was a risk of not getting their principal back again. He did not think people would be over ready to lend their money to firms just on the verge of bankruptcy for the purpose of cheating the creditors by withdrawing their loans at the last moment. Whether the safeguards provided by the Bill were good or bad might be considered in Committee. The principle of the Bill he understood to be that a man should not be a partner because he lent money and took instead of interest a share in the profits, and he should vote for the second reading.
§ Question put, "That the word 'now' stand part of the Question." The House Ayes 126; Noes 39: Majority 87.1300
§ Main Question put, and agreed to.
§ Bill read 2°, and committed, for Monday next.1301
|Acland, T. D.||Jervoise, Sir J. C.|
|Adam, W. P.||Johnstone, Sir J.|
|Anstruther, Sir R.||Kingscote, Colonel|
|Antrobus, E.||Kinnaird, hon. A. F.|
|Ayrton, A. S.||Knatchbull-Hugessen, E.|
|Aytoun, R. S.|
|Bagwell, J.||Layard, A. H.|
|Baring, T. G.||Lefevre, G. J. S.|
|Barnes, T.||Lewis, H.|
|Bass, M. T.||Lopes, Sir M.|
|Bentinck, G. C.||Lowe, rt. hon. R.|
|Blake, J. A.||Malins, R.|
|Bouveie, rt.hon. E. P.||Martin, P. W.|
|Bromley, W. D.||Moffatt, G.|
|Bruce, rt. hon. H. A,||Moncrieff, rt. hon. J.|
|Burrell, Sir P.||Montagu, Lord R.|
|Bury, Viscount||Moor, H.|
|Buxton, C.||Morris, W.|
|Cardwell, rt. hon. E.||Morrison, W.|
|Carnegie, hon. C.||Naas, Lord|
|Cave, S.||Neate, C.|
|Cheetham, J.||North, F.|
|Childers, H. C. E.||O'Loghlen, Sir C. M.|
|Collier, Sir R. P.||Padmore, R.|
|Cowper, rt. hon. W. F.||Paget, Lord A.|
|Cox, W.||Paget, C.|
|Craufurd, E. H. J.||Paget, Lord C.|
|Davey, R.||Palmer, Sir R.|
|Denrnan, hon. G.||Pease, H.|
|Dillwyn, L. L.||Peel, rt. hon. Sir R.|
|Dodson, J. G.||Peel, rt. hon. F.|
|Douglas, Sir C.||Powell, J. J.|
|Duff, M. E. G.||Powell, F. S.|
|Enfield, Viscount||Pritchard, J.|
|Evans, T. W.||Proby, Lord|
|Ewart, W.||Robertson, D.|
|Ewart, J. C.||Roebuck, J. A,|
|Fellowes, E.||Russell, A.|
|Fenwick, E. M.||Schneider, H. W.|
|Fenwick, H.||Scholefield, W.|
|Ferrand, W.||Scott, Sir W.|
|Forster, W. E.||Seymour, A.|
|Fortescue, hon. F. D.||Shelley, Sir J. V.|
|Fortescue, rt. hon. C.||Stacpoole, W.|
|Gibson, rt. hon. T. M.||Stanhope, J. B.|
|Gladstone, rt. hon. W.||Staniland, M.|
|Goldsmid, Sir F. H.||Stanley, Lord|
|Goschen, G. J.||Stansfeld, J.|
|Gower, hon. F. L.||Tracy, hon. C. R. D.H.|
|Greenall, G.||Trefusis, hon. C. H. R.|
|Greene, J.||Vernon, H. F.|
|Grenfell, H. R.||Villiers, rt. hon. C. P.|
|Grey, rt. hon. Sir G.||Vyner, R. A.|
|Handley, J.||Waterhouse, S.|
|Hankey, T.||Watkin, E. W.|
|Hartington,Marquess of||Weguelin, T. M.|
|Headlam, rt. hon. T. E.||Whalley, G. H.|
|Henley, rt. hon. J. W.||Williamson, Sir H.|
|Henley, Lord||Wood, rt. hon. Sir|
|Hibbert, J. T.||Wyndham, hon. P C|
|Hodgkinson, G.||Young, G.|
|Horsfall, T. B.||TELLERS.|
|Ingham, R.||Brand hon. H. B. W.|
|Jackson, W.||White, hon. L.|
|Adderley, rt. hon. C. B.||Jolliffe, rt. hn. Sir W. G. H.|
|Baring, T.||Langton, W. G.|
|Beecroft, G. S.||Legh, W. J.|
|Black, A.||Liddell, hon. H. G.|
|Bovill, W.||Martin, J.|
|Bramley-Moore, J.||Murray, W.|
|Bridges, Sir B. W.||Parker, Major W.|
|Bruce, Sir H. H.||Pender, J.|
|Dalglish, R.||Potter, E.|
|Dickson, Colonel||Rose, W. A.|
|Edwards, Colonel||Sclater-Booth, G.|
|Egerton, hon. A. F.||Selwyn, O. J.|
|Ewing, H. E. Crum-||Smollett, P. B.|
|Gray, Lt.-Colonel||Taylor, Colonel|
|Hamilton, Major||Turner, C.|
|Hervey, Lord A. H. C.||Watlington, J. W. P.|
|Hennessy, J. P.||Woods, H.|
|Hesketh, Sir T. G.|
|Heygate, Sir F. W.||TELLERS.|
|Heygate, W. U.||Peel, J.|
|Hornby, W. H.||Turner, J. A,|