COMMITTEE. (Hansard, 3 April 1867)

§ MR. SERJEANT GASELEE
said, he wished to know whether the Government were prepared to allow the passing of that 1065 measure. It appeared to him to be one of a very absurd character.

§ MR. WALPOLE
said, he entertained no objection to their proceeding with the consideration of the Bill in Committee.

§ MR. SERJEANT GASELEE
said, that and the Companies' Act provided that proxies should be sent in in proper time before a meeting, whereby an opportunity was given to ascertain the genuineness of the proxies. But as he understood the Bill, it would enable shareholders to use those voting papers without affording the directors an opportunity of knowing that they were to meet with any opposition; and that would, in his opinion, be an unreasonable arrangement.

§ SIR FRANCIS GOLDSMID
said, he and he wished to know whether the clause would not authorize the use of voting papers without a stamp, as it enabled persons to give voting papers in person, or by proxy. Did not that imply that a voting paper was not a proxy—and would not a voting paper, in consequence, be exempted from the stamp? It was his intention to move insertion of a clause exempting public companies and associations, in whose Acts or Articles it as provided that there should be no voting by proxy, from the operation of the Bill.

§ MR. DARBY GRIFFITH
said, that the objection of the hon. Member for Reading did not apply, inasmuch as the case of those voting papers to which he referred was provided for in the last Act at that had been passed with regard to stamps. A Bill with similar provisions to the present already passed through Committee in the Sessions of 1864 and of 1866, and he enable was now re-introducing that measure without any alteration. As he had already fully explained on former occasions, the measure was framed for the purpose of obviating the imperfections and inconvenience of the existing law, by which shareholders anxious to record their votes should either appear in person, which would in many eases be wholly impossible, or else should commit their proxies to the hands either of the directors or of their opponents, without having had any opportunity of ascertaining the value of the explanations which might be offered at any particular meeting. Many companies were so large that it was impossible to accommodate the number of shareholders within 1066 any reasonable space, while ladies, who sometimes formed fully one-fourth of the shareholders, were practically precluded from personal attendance at their meetings. He did not in the slightest degree seek to prejudice the position of the directors; but his sole object was to give shareholders facilities for voting with greater freedom and security. By the adoption of voting papers, as he proposed the evils of the existing system would, he hoped, to great extent be obviated; for while personal attendance at a meeting would be dispensed with, there would be no necessity for handing in those papers, as in the case of proxies, forty-eight hours before the meeting was held. It was the habit of directors of railways to send out with any report without disclosing the real position of the company, applications for proxies, and he might explain his object by referring to a case that occurred the other day. The directors of the Great Western Railway called a meeting for the 8th of March, and issued a report giving generally a favourable view of the company's affairs. Before that meeting took place, however, it transpired that the railway was in difficulties, and a private meeting was called, at which it was intimated that there was no resource for the payment of dividend except a loan. After some negotiations the directors at last came to the conclusion of laying the whole case frankly before their shareholders. This policy was adopted, and it was proposed that the shareholders should receive certain securities in lieu of their dividend. The directors should have trusted to the good sense and confidence of their shareholders; and this was what he wished to enable them more effectually to do by means of voting papers. The only objection urged against the proposal was that it would cause delay; but this might in many cases be favourable rather than otherwise. The present mode of voting was too exclusive, and placed temptations in the way of directors to adopt an extravagant policy; and he hoped the house would therefore agree to his proposition, which was designed to remedy the evils now existing.

§ MR. LAWSON
said, he did not think the clause would carry out the object which the hon. Member had in view; and it would, moreover, be calculated to introduce confusion into the management of affairs. At present there were two modes of voting, one in person, and another by 1067 proxy. The hon. Member objected to the system of voting by proxy; but the Bill did not at all interfere with that system. It merely gave shareholders permission to vote in a third manner by means of voting papers under a machinery of an extraordinary character. A shareholder might execute a voting paper, and give it to another shareholder to be used at an adjourned meeting, or at a poll, and if a proxy had been previously executed for use at the first meeting, it would be impossible to say which of the two documents ought to prevail. The voting paper, besides, might be produced without sufficient time being allowed for its proper examination. He submitted that the clause ought not to be passed.

§ MR. VANCE
said, the clause was intended to remedy a great inconvenience at present existing. As matters at present stood, directors were almost invariably successful in carrying out their views, owing to their superior organization, resulting from the facilities which the law gave them, and all that was sought by the Bill of his hon. Friend was to enable shareholders to act independently of the directors, or of one or two proprietors who might have organized an opposition to their policy. It was objected that there would be some difficulty in identifying the voting papers; but this difficulty, in his opinion, would not be greater than in the case of University voting papers. He saw no difficulty in using the voting papers at an adjourned meeting, and he was persuaded that if such a system were adopted the extravagant schemes of directors would be checked and many misfortunes obviated.

§ SIR FRANCIS GOLDSMID
said, that however good the objects of the Bill might be, they were not carried out by its provisions. The only effect of the clause would be to throw the present state of the law as to proxies, which was now clear, into hopeless confusion; for it would enable any factious shareholder in a company to subject the whole body of his fellow shareholders to a great expense, and to postpone for a week a dividend about which there was no substantial difference of opinion.

§ MR. DARBY GRIFFITH
said, it was rather late in the day to object to the principle of voting papers, since it had last year received the approval of the President of the Board of Trade, and as they all knew the last Oxford University Election had been decided by the use of voting papers.

§ MR. WALPOLE
said, he did not think that the clause would be of any great practical good or of any great practical harm; but, if the house should think fit to pass it, he would suggest that the words "or at the poll," should be omitted, or otherwise great inconvenience would be occasioned by the poll being necessarily delayed for the purpose of examining and testing the validity of the voting papers. Those words were struck out upon the Report last year, and it was as so amended that the Bill received the sanction of the President of the Board of Trade.

§ MR. SERJEANT GASELEE
said, he thought the Bill was a very clumsy one, and that the hon. Member for Devizes must be connected with a very small company or he would not have drawn up such a measure. He would recommend the hon. Gentleman boldly to raise the question of the abolition of the forty-eight hours notice, which was required with regard to proxies. He could not see why a period of forty-eight hours should not be allowed for the examination of the voting papers before they were used. He thought that the wisest course for the hon. Member for Devizes to pursue was to withdraw his Bill.

§ MR. LEEMAN
said, he hoped the hon. Gentleman would not accept the suggestion of the hon. and learned Serjeant, as the abolition of the forty-eight hours notice would occasion the greatest possible inconvenience. He was vice-chairman of a company (the North Eastern Railway Company) connected with which there were 17,000 shareholders, and if this clause respecting voting papers were passed, and those papers could be sent in up to the very time of the holding of the meeting, it would be perfectly impossible to get through their business for several days.

§ MR. LAWSON
said, that it was most objectionable that the House should be called upon to give its sanction to legislation on the ground that it could do no harm if it effected no good.

§ MR. DARBY GRIFFITH
declined to make the suggested alteration in the clause.

§ SIR FRANCIS GOLDSMID
said, this clause would, after the decision of the Committee on the first, be nugatory, and moved that the Chairman leave the Chair.