SECOND READING. (Hansard, 11 July 1878)

§ MR. RAIKES
I feel bound to call the attention of the House to this Bill, which is, perhaps, not so important in itself, as the departure which it embodies from the usual practice of this House. Before stating the nature of the points which I wish to bring before the House, I must say that I regard with extreme surprise the absence from the House on this occasion of both of the hon. Members who have made themselves responsible for this Bill. I certainly expected that the House would have been put in complete possession of the facts in regard to the Bill, either by the hon. Member for Hythe (Sir Edward Watkin) or the right Member for Sandwich (Mr. Knatchbull-Hugessen), both of whom are connected with the Company who are interested in promoting the Bill. I feel that the House will, to a certain extent, be placed at a disadvantage in dealing with the Bill in their absence. It was with great scruple and reluctance that I gave my consent to the introduction of this Bill as Chairman of Ways and Means. That consent became necessary because, owing to the lateness of the period of the Session at which the Bill came forward for second reading, the ordinary Notices had to be dispensed with. The measure is of some importance, and it affects, to a very considerable extent, the interests of an important Railway in this Metropolis. It has been brought before the House, as I have said, at a late period of the Session, when it can only be by the indulgence of this and the other House of Parliament that such a measure could become law. With regard to the measure itself, I have no wish to go into the past history of this Railway. It does not appear, up to the present time, to have been a fortunate line, and I believe that very large liabilities have been incurred by the Company. In order to 1228 meet these liabilities, considerable obligations have, from time to time, been incurred by the late Board of Directors. At the present moment we are, it is to be hoped, at a new point of departure in the fortunes of the Company, inasmuch as a new Board of Directors has come into existence, which is presided over by the hon. Member for Hythe (Sir Edward Watkin), whose singular dexterity in matters relating to the management of railways is acknowledged by everyone. The present Bill proposes to take power for raising a loan by the Company, in order to enable it to clear off its existing liabilities; and I wish to point out that a very unusual course has been taken in regard to the money which it is proposed to raise. £120,000 is the sum which it is proposed by this Bill to raise. That sum of £120,000 is to be repaid by the 31st of December, 1880, or within a year and a-half of the present time; and the persons from whom it is to be borrowed are to receive a premium of 20 per cent upon every £100 subscribed, in addition to a dividend at the rate of 5 per cent upon every £100 share. Consequently, the House will see that the payments in regard to this borrowed money will amount to something like 27½ per cent altogether for the loan of this money for the short period of a year and a-half. That, I believe, is a very unusual thing in regard to railway finance, and requires, I think, the careful consideration of this House. There is another point in the Bill which is also, I think, deserving of consideration, and that is the fact that it is proposed that the repayment of the money which it is intended to borrow shall constitute a first charge—not merely upon the undertaking and upon the revenue of the Company, but also upon all the property of the Company. That is an arrangement which, if not absolutely unprecedented, is almost unprecedented, in the history of railway legislation. This being so, we are asked to do an act of exceptional favour towards the promoters of the Bill by admitting the Bill to the consideration of the House at this late period of the Session. If there had been absolutely no precedent for such a step, I should not have felt it compatible with my duty to advise the House to take that course; but I find that some years ago the Great Eastern Railway Bill was allowed, 1229 under somewhat similar circumstances, having reference to a financial arrangement, to dispense with the Standing Orders, and to introduce a Bill at a very late period of the Session; and the same course was subsequently taken with regard to a Bill promoted by the London, Chatham, and Dover Railway Company. That being the case, I considered that it would not be wrong to allow the Standing Orders to be dispensed with in this instance, so that the Bill might have an opportunity of being considered by the House. I was further induced to take that course by the fact that I understand the money has already been subscribed, and that at the meeting which has been held of the shareholders, there was an unanimous approbation of the Bill. I understand that the debenture holders, who are most seriously compromised by the proposal, assented to it almost unanimously. I believe, in the proportion of 11 out of 12, an express assent was given to the Bill. Under these circumstances, I felt that the House would probably agree to allow the Bill, at all events, to come to the light, and to undergo that investigation which the forms of this House prescribe in the case of Private Bills. I see that the right hon. Member for Sandwich (Mr. Knatchbull-Hugessen) is now in his place. It is unnecessary to repeat what I have already stated; but I may be allowed to add that I am not disposed to object to the second reading of the Bill. At the same time, I should be glad to hear any opinions which may be expressed by hon. Members on the subject. But if the House is prepared to read the Bill a second time, I should feel it my duty, as soon as the time for petitioning has expired, to propose to refer the measure to a Select Committee, a certain number of which should be nominated by the House and the remainder by the Committee of Selection. A similar course has been taken in reference to the Tasmanian Railway Bill and the European Assurance Bill. Those Bills were carefully considered by Select Committees so constituted, and they were very largely amended, to the advantage, I think, not only of the shareholders, but of the general public. I mention that matter because, having regard to the fact that the debenture holders are in 1230 favour of the Bill, they are not likely to present a Petition against it, and in that case the measure might come, as a matter of course, before the Chairman of Ways and Means as the Committee on Unopposed Bills; and I should certainly not be willing to accept the sole responsibility of dealing with the measure without having previously brought the circumstances of the case under the notice of the House. I am desirous, therefore, that a strong Committee should be appointed which should examine the measure; and I think that the House will, under the circumstances, having regard to the interests involved and the unanimity of the persons who are most largely concerned in the matter, allow the Bill to proceed, so as to insure that it shall go before a Committee. Of course, it is not for me to say what further objections may be raised against the measure eventually; but I must repeat what I said at the beginning of my remarks, that I think when a course so exceptional is proposed to be taken in regard to a Private Bill, it is necessary that the House should not be left in ignorance of the whole circumstances of the case, and of the objects which the promoters of the Bill have in view.

§ MR. KNATCHBULL-HUGESSEN
wished to apologize to his hon. Friend the Chairman of the Committee of Ways and Means, and also to the House, for the accident which had caused him to be a few minutes late and had prevented him from being in his place when the Bill was called on. The House would naturally arrive at the conclusion that if this were not a very exceptional case, they would not be now, on the 11th of July, debating the second reading of such a Bill as the present. The circumstances, however, were so exceptional, that the House might well be induced to suspend its Standing Orders and to read the Bill a second time. He ventured to submit that the Standing Orders of the House, wise and proper as they were for regulating the Business of the House and protecting the public against legislative surprises, would become simply acts of tyranny if, in cases of emergency, when important interests were deeply affected, there were not provisions for suspending them. By too much stringency in the observance of the Standing Orders they would cease to be instruments for the protection of 1231 the public, and would become instruments of oppression. What was the case in regard to the present Bill? The affairs of this unfortunate Company had got into a very bad state, although it was not through any fault on the part of the Company themselves. They saw before them, nothing but financial disaster, unless there was a total change of management, and some new course were opened which gave a promise of improvement. They had now formed a new Board of Directors. He might say that he himself had been requested to go upon that Board of Directors, and he had consented, because he believed that properly developed, and by acting in a friendly manner in regard to other Railway Companies, this line of railway might succeed in retrieving its position, and would become an important link in the metropolitan railway system. But in order to give the Directors any hope of being able to improve the affairs of the Company, it was necessary, in the first instance, that they should pay off all their debts. As had been mentioned by his hon. Friend the Chairman of Ways and Means, the object of the present Bill was to raise a sum of money that would enable the Company to pay off their debts, so that they might start clear in regard to their future operations. He entertained no objection to the Bill being referred to a Special Committee, as proposed by his hon. Friend, and he was ready to concur with any reasonable proposition that might be submitted to the House. But with regard to the second reading of the Bill, he felt that the House could not do wrong by allowing the Bill to proceed. The only parties concerned were the shareholders of the East London Railway Company, and they had already given a direct approval of the provisions of the Bill. They simply desired to pay off their debts in full—in fact, to pay 20s. in the pound—and they asked for the sanction of Parliament to enable them to perform an act of honesty. If that Parliamentary sanction were refused, and they were not allowed to raise this money in the manner in which they proposed, and which they believed would be of benefit to the public, the future prospects of the Company and of their creditors would be very small indeed. At the same time, he fully admitted, with his hon. 1232 Friend the Chairman of Ways and Means, that these were matters which might very rightly and very properly be referred to a Select Committee of the House. His hon. Friend, who was the rigid guardian of the Orders of the House, and who scrutinized carefully any proposal made to it in a Private Bill, would have stopped the progress of the Bill at once, if he had not felt that there were substantial grounds for allowing it to be read a second time. His hon. Friend did not object to the second reading of the Bill; and, under the circumstances, he (Mr. Knatchbull-Hugessen) thought that the wisest and most respectful course he could take was to ask the House to follow the advice of his hon. Friend, and to read the Bill a second time. Contenting himself with these few observations, he would simply express a hope that no obstacle would be placed in the way of the progress of the Bill; but that the Company, by means of this measure, would be enabled to pursue the effort they were making to clear themselves of debt. As it was a case of great emergency, he thought it only right that the Standing Orders of the House, which applied to ordinary cases, should have been suspended.

§ SIR JOSEPH M'KENNA
expressed his approval of the observations which had been made by the hon. Gentleman the Chairman of Committees. The hon. Gentleman had placed before what happened to be a very thin House at the time what appeared to him (Sir Joseph M'Kenna) to be the salient objections to the further progress of the Bill being silently assented to, and to the necessity of some strong expression of opinion upon the Motion for the second reading of the measure. The Bill itself was a Bill to enable the directors of a Joint Stock Company to raise money at something like the rate of 15 or 16 per cent per annum, and to close it at that rate by giving under this Bill a first charge upon the property of the Company to those who were about to advance the money. He ventured to say that that was a provision in a Private Bill which was altogether without a precedent. The hon. Gentleman the Chairman of the Committee of Ways and Means said he was informed—for the hon. Gentleman could only have made such a statement on infor- 1233 mation—that the money was already subscribed for; and he (Sir Joseph M'Kenna) had no doubt that it had already been subscribed for. He believed that a capital of £1,500,000 had been laid out upon the East London Railway, and the House was asked to sanction the creation of a rent-charge to enable persons who advanced a sum of £120,000 as a first charge upon this £1,500,000 worth of property, to receive something like 16 per cent per annum. It was further to be borne in mind that the money was only to be advanced until the end of the year after next. He ventured to say that such a proposition as that had never yet received the sanction of the House. He did not mean to say that the hon. Gentleman the Chairman of Committees, having, as he had all along, the power of bringing, as he had now done, in a fair and temperate manner the merits of the Bill before the House—he did not mean to say that the hon. Gentleman was not justified in giving a sanction that enabled the promoters of the Bill to appear before the House that day in furtherance of the measure. He did not call in question the course taken by the hon. Gentleman in any shape; but he really thought that if the House had heard the statement made by the hon. Gentleman, they would hesitate before they gave their sanction to the second reading of the Bill. He (Sir Joseph M'Kenna) had no interest, either directly or indirectly, in throwing out the Bill. He conceived it possible that sacrifices ought to be made on special occasions for the purpose of raising money in a particular exigency for the use of a railway company or any other company; but such extravagant and exorbitant terms as were offered in this instance he ventured to think nobody ever heard of being embodied in an Act of Parliament before. He had only to express a hope that if the House passed the second reading of the Bill, they would clearly understand what the measure was to which they were giving their sanction. He would content himself with making these observations, and would not propose the rejection of the Bill; because he apprehended that that was a course which had better be taken, if taken at all, by some person who was more interested in the matter than he was. He had only spoken in the interests of the public, and in 1234 the discharge of his duties as a Member of the House.