§ Order for Consideration read.
§ * THE CHAIRMAN OF WAYS AND MEANS (Mr. Courtney, Cornwall, Bodmin)This is a Bill upon which it is necessary that I should make some remarks. The House is aware that many Railway Companies who have built up their enterprise by Acts of Parliament containing varying powers have, of late, simplified their capital account by concerting their Preference and Debenture stock into a unified stock. That has been done by several of the great Railway Companies to the simplification of 878 their accounts and the advantage of the stock holders, nor is there any question of public interest involved in such conversion of their Preference and Debenture stock. They are irredeemable, and when we speak of £100,000 Preference stock at 5 per cent, and of £100,000 Preference stock at 4 per cent we ought more strictly to speak of the sums of £5,000 and £4,000 which are annually payable upon them. This Bill deals with the Debenture and Preference stock of the Taff Vale Railway Company, who propose to follow the precedent of other Companies, and if it had been confined to this object I should not have felt it necessary to trouble the House. But the Bill does more. The House is probably aware that many things have been attempted, and that some things have been done, with respect to the ordinary stock of Railway Companies—such, for instance, as dividing the ordinary stock into Deferred and Preferred stock, and increasing the nominal amount of stock. Many schemes have been proposed for producing the same simplicity in regard to ordinary stock as that which has been secured in regard to Preference and Deferred stock. The Bill now before the House, as it originally appeared in another place, proposed to enable this company, with the approval of the shareholders, to prepare and carry out a scheme of unification and simplification of its ordinary stock. The provisions of this Bill, and of other Bills with similar objects, have occupied the attention of my noble Friend the Chairman of Committees in another place and myself; but most of the measures which have been introduced have proved abortive and have been abandoned. But I think that on the present occasion a solution has been arrived at which may recommend itself to the House not only as good in itself, but as one which establishes a precedent, although it need not be followed unless it is approved by the general sense and wisdom of Parliament. This Taff Vale Railway is not a passenger railway under Lord Dalhousie's Act, which prescribes the terms under which passenger railways may be purchased. It is a mineral railway, and the average dividend which it has been paying for some years is 15 percent. The company seek to convert their ordinary stock into 879 one uniform stock of £250, that being about the market value of the stock with the high dividend now enjoyed by the Company. It is desired by the shareholders to increase the amount of the stock and thereby to make the price of it more nearly approximate its nominal value. Although, apparently, a merely domestic matter, my noble Friend and myself, together with other authorities who have had the subject under consideration, are of opinion that such a conversion could not be recommended to the approval of Parliament, but it has been suggested that it might be convenient to convert the old stock into a new stock of larger amount, provided a limit of dividend might be fixed. This railway company have complied with that suggestion, and have embodied in this Bill provisions by which every £100 of ordinary stock is converted into £250 ordinary Stock carrying in future a maximum dividend of 6 per cent. It is further provided that if the profits of the company should hereafter enable it to pay more than 6 per cent, any surplus in excess of 6 per cent shall be applied to the reduction of the tolls, rates, and charges leviable by the company, or in such other manner, in the interests of the public, as Parliament may from time to time suggest. It is further provided that the accounts shall be rendered under the ordinary Companies' Act, but so rendered that if, hereafter, any action could be taken under Lord Dalhousies' Act for the purchase of the railway the conditions and information necessary to enable that Act to be carried out shall always be in the hands of the Board of Trade. The Bill is of a simple character. It consolidates the Preference Stock according to the principles followed by all the Railway Companies of the country, and it also increases the amount of the ordinary Stock, accompanying that increase with the limitation that the dividend is not to exceed 6 per cent, and that if there is any increase of profit it shall go to the benefit of the public in the reduction of charges, tolls, and rates. I think that, under these circumstances, the Bill may safely receive the assent of Parliament. I may, however, remind the House that there is another stage, the Third Reading, yet to follow, so that the House does not lose command of the Bill by assenting to the present stage.
§ * THE PRESIDENT OF THE BOARD OF TRADE (Sir M. HICKS BEACH, Bristol, W.)My attention has been called to this matter during the progress of the Bill through both Houses. I wish to say, in addition to what has fallen from the right hon. Gentleman, that I think the House is very much indebted to him and to the Chairman of Committees in the other House for the care with which they have watched the interests of the public in this matter. The question of the increase of the Stock of Railway Companies by the process known as "watering" is, of course, one of great importance. For reasons which seemed to them sufficient, and in regard to which they appear to be quite unanimous, the shareholders of the Taff Vale Company desire to effect this change in their ordinary Stock. The right hon. Gentleman and his noble Colleague in the other House, as a condition of assenting to the proposal of the company, have insisted on the insertion of clauses in the Bill which, I think, are largely in the public interests, and which, if adopted as a precedent, will certainly secure the public advantage. All I would suggest is, that if this Bill should be followed next Session by other applications to Parliament for the same powers, that Parliament might usefully consider whether a strong Committee ought not to be appointed—probably a Joint Committee of both Houses—to look into the whole question, and report to Parliament as to the way in which the matter can best be dealt with.
§ Bill, as amended, considered, and. ordered to be read a third time.