§ Sir A. HAWORTHI beg to ask leave to introduce a Bill to better regulate the formation of companies for cotton spinning.
In asking leave to introduce this Bill, I may explain a custom which has prevailed in Lancashire in connection with the erection of cotton mills, which does not prevail anywhere else, and by which great facilities are given for acquiring capital by means of loans rather than by the issue of shares. After times of abnormal prosperity, such as sometimes occur in Lancashire, there is a great development of mill building. Nobody wants for a moment to restrain mill building. But we find that these mills are erected by the money of people who have no intention of taking any interest, or any but the very smallest interest in their future working. The share capital is subscribed by architects, engineers, and others, who want contracts for the equipping of the mill, and have no further interest in the working of the mill after it has been built, and they proceed to unload their shares at the first available opportunity. There is in Lancashire in addition a custom of having loans on mortgage, which is a perfectly fair and proper thing to do on business lines. But when a mill goes up people use that mill largely as depositors. Working people in those mills or in neighbouring mills use them practically as savings banks for their money at a good rate of interest, and practically at call. Then when difficulties come, as they have come in the case of several recently built mills, there is very little if any security for those loan holders, and it means disaster. That is the evil one wants to remedy. The proposal is that there shall be a certificate from the directors of the companies giving their estimate of the cost of the building and equipping of the mill, not taking any account of working capital, and then there shall be 10 per cent. paid on application, 15 per cent, on allotment, and another 25 per cent. within a period of two years. During that period of two years there shall be no sale of those shares other than in such cases as those of bankruptcy or death. That would mean that the shares would be held by people who were legitimately interested 1760 in and intended to carry on the work. The Bill would apply only to future mills, and I believe that it would put the business of mill extension on a sounder basis than it is at present. I need only add that this is an absolutely non-party Bill, backed by all parties in the House. The Bill has been promoted by the Master Cotton Spinners, and has received the unanimous consent of various associations of operatives.
Bill ordered to be brought in by Sir Arthur Haworth, Mr. Barton, Major Stanley, Mr. Gill, Mr. John Rutherford, and Mr. Albert Smith. Presented accordingly, and read the first time; to be read a second time upon Wednesday, 8th November, and to be printed.