§ Notwithstanding any Statute, Regulation, or restriction as to borrowing or otherwise, any company, society, or association shall have power to borrow at interest in respect of the amount of any advance by the corporation under this Act in addition to the amount which any such company, society, or association can borrow at the time of such advance, and for this purpose and to the amount of any such advance with interest shall have power to create a charge or other security in favour of the corporation on its undertaking and all or any part of its property, including its uncalled capital, ranking in priority to any mortgage charge, debenture, debenture stock, pledge, or other security in existence at the date of any such advance.—[Mr. P. White.]
§ Clause brought up, and read the first time.
Mr. WHITEI beg to move. "That the Clause be read a second time," and I ask the right hon. Gentleman to consider it favourably.
§ Mr. DUKEI am advised that the Bill as it stands carries out the object aimed at by this proposal. The case we have to consider is that of a company which has fully exercised its borrowing powers or its powers of the use of debentures. I know of such a case. The scheme of the Bill is for the purpose of the borrowings here sanctioned to make a prior charge. As that would be a Parliamentary prior charge I am advised that those who wish to take the advantages of the Bill will secure them without the provision which the hon. Member makes in his proposal.
Mr. HEALYI sincerely hope not. I could not agree to an Amendment of this kind, and I am surprised that the property owners have put it forward. I think any proposal to put money or charges in front of an existing debenture is fatal to all credit, and I trust the Government will not agree to do anything of the kind. We have already had a most unfortunate example in the case of the Passage Railway, in which those who lent honest money have been landed. I think the right lion. Gentleman has taken up a reasonable line. For my part, if such a thing arises as that which has been stated, I consider that the persons who have lent money and have money out at interest and have any other moneys put in front of them are entitled to compensation from the Government.
§ Mr. DUKEI think I have unduly alarmed my hon. and learned Friend with the expression I used. I am advised that the provisions of the Bill for the creation of the charge exclude the necessity of an increase of borrowing power. I think my hon. and learned Friend will find that there is no cause for apprehension.
§ Question put, and negatived.