The EARL of DALHOUSIEsaid, in rising to move for leave to introduce the Bill of which he had given notice on the last evening of their Lordships' sitting, and also the Sessional Order which he had announced it to be his intention of submitting to their Lordships' consideration on the same occasion, he would endeavour to detain their Lordships for as short a time as possible. He would merely open briefly the provisions of the Bill, and the grounds on which he thought such an enactment necessary. Before the House adjourned for the recess, he had taken the liberty of stating to their Lordships what were the circumstances which had induced Her Majesty's Government to produce the Bill for the consideration of the House. He had directed their Lordships' attention to the complaints that had been made, and had endeavoured to set forth the evils that were complained of, and the mode in which it was proposed to remedy them. It was not necessary that he should now travel again over the same ground that he had traversed on that occasion; and their Lordships would, therefore, he trusted, permit him to advert very lightly to the late progress of railway speculation, up to the point at which it now stood. Without taking their Lordships farther back than the close of last year, he might remind them that he had then stated there were provisionally registered at the office for the Registration of Joint Stock Companies, somewhere between 1,200 and 1,400 railway schemes. Of these there were lodged at the office of the Board of Trade 800 plans, and on the last stage in these proceedings, on the last day when the plans could be received—namely, the 31st of December, that number had been reduced to somewhere about 700 projects. At the commencement of the Session in the month of January, it became his duty to direct their Lordships' attention to this subject. At that time the prosecution of 868 these Bills was proceeding with as much earnestness and with as little appearance of flagging as at any time in the preceding season of speculation; but since then the aspect of affairs with regard to railways had entirely changed, and the views of those who were themselves interested in Railway Bills had also in like manner been entirely altered. At the time to which he before alluded, it was expected that, in the first place, the test of making the deposits required to be lodged under the Standing Orders would very greatly reduce the number of Bills which stood for the consideration of Parliament—that the deposits to be made would, as a test of the sufficiency of the companies coming before Parliament, be found very efficient in limiting the extraordinary number of Bills pending; but it had done no such thing; within a fraction of 15,000,000l. of deposits were lodged, and yet no check was found. It was further supposed that in consequence of the extraordinary haste in which all these schemes had been got up, the apparent impossibility of complying with the exact correctness required by the Standing Orders of both Houses of Parliament would have the effect of reducing the number of Bills to come before Parliament considerably; but so far from the Standing Orders' Committees having greatly reduced the number of Bills, they had breathed upon them as gently as a zephyr, and only reduced the entire number of schemes by about twenty-eight. But, in the mean time, the effect of the simultaneous application of this enormous amount of capital to one branch of commercial enterprize began to be felt, and was found of itself to be sufficient to render it impossible that all these schemes could be at once carried into effect. From every side the loudest and the most universal complaints were addressed equally to Parliament and to Her Majesty's Government, to the effect that the application of so much capital to that description of enterprise would have the effect of cramping, confining, and hampering every other branch of industry. The complaints were at length no longer confined to those engaged in other branches of commercial enterprise, but extended to those who had themselves engaged in railway speculation, and who were immediately interested in the success of the Railway Bills before Parliament. It was not necessary for him to enter into any details on this part of the subject. It must be sufficiently known to their Lordships 869 already, and in fact a mere glance at the fallen state of the stock of the various companies, was in itself conclusive proof of the truth of what he said. Indeed, as he had taken the liberty to state the other evening, so sensibly did this feeling operate, that the usual order of things had been entirely reversed in respect to these companies; so that whereas, on ordinary occasions, every appearance of success in the progress of Bills in Parliament had the effect out of doors of creating a desire to become possessed of stock in the successful project, the reverse was the case in regard to the Bills now in progress; and just in proportion as a Bill advanced through Parliament, the value of the shares sunk, until a certainty of its passing into a law sent the stock down to zero. These effects were felt in every part of the kingdom alike. On a former evening he had stated that the manifest duty of those who made these complaints was, that they should, under these circumstances, refrain from prosecuting the undertaking farther, and wind up their affairs. It had been found, however, that it was not in their power to do so. Although the law provides means for winding up the affairs of joint-stock companies that have received the sanction of an Act of Parliament, there was no existing provision to enable inchoate joint-stock companies to wind up their affairs and dissolve themselves. They were in the position of persons engaged in a private partnership, and could not dissolve their connexions without the unanimous consent of all parties engaged in the undertaking. There could therefore, practically, be no final settlement made in the affairs of these companies, because, as their Lordships were aware, the number of persons concerned was very great; too great to admit of obtaining an unanimous consent. There were instances of the attempt having been made and having failed. The parties, therefore, now came before Parliament, praying that a remedy might be provided for their relief. The Bill which he held in his hand, and which he would have the honour to submit to their Lordships' consideration, had for its object the application of this principle, by enabling companies that had not as yet obtained the sanction of Parliament to wind up their affairs. He would, with their Lordships' permission, state shortly the main provisions of this Bill. It was intended to enact that power should be given to the provisional directors, or governing body of any of these com- 870 panies, which should enable them, if they thought proper, to convene a meeting of the scripholders for the purpose of considering whether they ought to dissolve the company or not. It was also intended to provide that in case the provisional directors did not think proper to convene such meeting, that then, on the requisition of a small number of shareholders, say five, the governing body should be required to call such meeting of the company, for the purpose of taking into consideration the question of winding up their affairs; and that such meeting should have power of deciding on the matter, provided due notice should be given in the Gazette and in the newspapers, and that a sufficient time should elapse before the meeting was held, so that, as far as possible, all parties interested in the matter should be aware of the object of the meeting, and should have an opportunity of being present at the meeting. It was intended that at that meeting no other question save that of the dissolution of the company should be taken into consideration. There were provisions in the Bill as to the election of chairman, and other matters of detail, with which it was not necessary he should trouble their Lordships. It might, however, be right that he should state that provision was made for the selection of scrutineers to examine the votes given at the meeting. The power of voting was intended to be given to all who were actual holders of the stock of the company, whether they were original allottees who had not parted with their first allotments, or whether they were persons who had purchased the scrip of others. He might state also, that the votes could be given by the holders in person, or, following the analogy of existing companies, they could be given by proxy; that the production of scrip should entitle the holder to vote in person or by proxy. It was also intended that there should be a further provision to enable parties holding scrip, and residing at a distance, to go before a Master Extraordinary in Chancery, or before a justice of the peace, and on production of the scrip, and on the numbers being verified by the Master or by the justice, a certificate to that effect could be transmitted to the meeting, and allowed in the votes by proxy. If it appeared at the meeting that on the votes being taken there was a clear majority of the shares of the company, either present in person or by their proxies, in favour of a 871 dissolution of the company, then such dissolution should take place. As the Bill stood, the votes would be regulated on the scale provided in the case of joint-stock companies; that is, a vote for every share up to ten, and then an additional vote for every five shares up to fifty, and one vote for every ten shares up to one hundred. They had taken this scale in preparing the Bill. But then, as it was evident that if a clear majority of the whole number of stockholders in the company were required, in order to empower the meeting to dissolve the company, a dissolution would be a very difficult thing to effect; it was further provided, that if three-fifths of the whole stock represented at the meeting, either in person or by proxy, were in favour of a dissolution, power should be, in such case, given to dissolve the company, provided that the stock represented at the meeting shall not be less than one-third of the entire stock of the company. This, it was thought, would present a fair indication of the general sense of the company. This condition was necessary on this account. Of course, if a majority of the whole company should be in favour of a dissolution, there would be no difficulty; but inasmuch as it was possible that small meetings might be packed to attain their own purposes, it was required that at least one-third of the whole stock of the company should be represented at the meeting. If at such meeting it were decided that a dissolution should take place, it was then proposed that the meeting should next determine the mode in which the affairs of the company were to be wound up. It was the object of the Government in preparing this Bill to avoid as much as possible any alteration of the existing liabilities, or of the remedies of creditors against the persons interested in these companies under the law as it stood. It was proposed, therefore, that it should be left to the meeting themselves to decide whether they would leave the affairs of their partnership to be wound up according to the law which regulated ordinary partnerships; but if that course were objected to, then the company were to have power to elect for themselves an official trustee, who should be empowered to act with an official trustee appointed as under the Court of Bankruptcy. These two trustees were to take upon themselves the satisfying of all claims against the company, and of then dividing the remainder of the funds, if any, amongst 872 the shareholders. It was not intended that the liabilities of those who were now liable by law should be in any degree affected by this Bill. It was provided that those who should be claimants upon the company should be first satisfied out of the funds, and that, if there were a residue after all claims were paid, it should be divided among the shareholders; but if the amount were not sufficient to meet these claims, then that the defficiency should be made good by those who were now by law liable. These, he thought, were the main provisions of the Bill, which it would be obvious to their Lordships would meet the circumstances of those inchoate companies that were either unanimous or very generally desirous of winding up their affairs. But, if Parliament went no further, it was clear they would leave a great portion of the evil still untouched. He, therefore, proposed that a Sessional Order should be agreed to for meeting this difficulty. Their Lordships would perceive that, even supposing this Bill should be found acceptable to their Lordships and to the other House of Parliament, still that a considerable time must elapse before it became law; and, in the mean time, the Bills now before Parliament would be making their way onwards, and the probability was, that many of them would thus escape the test to which it was proposed to subject them by this Bill. It was pefectly well known that many of these Railway Bills were at this moment forced onwards, contrary to the sense and to the wishes of the great majority of the scripholders interested in them. It might appear, at first sight, that there was hardly any inducement to parties to adopt this course; that if the schemes were bad, the sooner they were brought to a conclusion the better. Such, however, was not the case. There were always numerous parties interested in the Bills, who were anxious to get them through Parliament. He did not mean that the respectable Gentlemen who were intrusted with the conduct of these Bills in chief would force them forward; but there were besides them numerous local parties who were interested in getting them through Parliament, or who would be benefited by them after they had passed; there were also a thousand other motives by which the provisional directors and governing bodies were influenced in forcing on their Bills. In the first place, the promoters thought it was a point of honour with them to go on: they would not give way to their rivals, but pre- 873 ferred to get their Bills and to take their chance of what might follow; they saw all the difficulty, but determined to face it. They had also a sensible benefit in obtaining the sanction of Parliament, for they would thereby be enabled to obtain the deposits, which until the Bill obtained the sanction of Parliament they could not touch, and to relieve themselves in a conderable degree from the personal responsibility which they otherwise sustained. There was, therefore, a direct interest on the part of those entrusted with the direction of these Bills in forcing them forward; and the consequence was that there were instances, day by day, of Bills advanced in their progress contrary to the feelings of the great mass of the scripholders interested in them. He had on a former occasion suggested that, on the presentation of a petition signed by a large proportion of those interested in the company, the progress of a Railway Bill should be stayed; but in consequence of numerous representations which had been since made to Government from various quarters, it became obvious that such a resolution would be totally inoperative. The holders of the scrip of these companies were, in the first place, scattered all over the country. It was not like the case of shareholders, who were known and could be found out; but with regard to the scripholders of these companies, nobody knew where they resided, or who they were. There was no organization among them; it was impossible they could hold any communication with each other. Many of them had so small an interest in the undertaking that it was not worth their while to take any step; many others did not wish to come forward; and, let him add, there was a vast number of the most substantial stockholders who would be the very last to come forward, to take any step in winding up the affairs of the company, inasmuch as the revelation, on their part, of their being engaged in worthless schemes, and to a large extent, would injure their credit in other undertakings. There would, therefore, not only be no hold upon the small scripholders who were scattered over the country, but there would be a strong inducement to the substantial holders to abstain from taking any step even for the purpose of winding up the affairs of the company, and relieving themselves of liability; they would much rather throw their scrip certificates in the fire, and thus abandon all their interest. The Government proposed, therefore, not 874 to adopt the recommendation made to them by persons of the highest authority in the mercantile and commercial world—namely, to put a stop to all Railway Bills, and to allow none to be read a third time, unless there were a petition from a majority of those interested, praying that it should pass: they felt that that would be little better than a circuitous way of saying that no Bills should pass at all. But if anything to that effect were to take place, it was thought that it ought to be done manfully and openly by a resolution, not laying down a particular course contingent upon a condition which was impossible to be fulfilled. They proposed that no Railway Bill should be read a third time unless evidence was furnished to the House that a meeting of the stockholders had been held consisting of the representatives of one-third of the stock of the company, and that three-fifths of that meeting signified a desire that the Bill should proceed.
§ LORD DALHOUSIEHis noble and learned Friend would see that proxies clearly must be admitted, as the Resolution would otherwise be nugatory; the provisional directors would have a large number of the shares in their own hands, and would have the power of commanding the meeting, unless the votes of others than those present should be received; and therefore a quorum was proposed, amounting to one-third of the stock of the company. Without that precaution, the provisional committee might be sure of passing whatever resolutions they pleased, as the meeting would be determined by them. He admitted, without waiting for the objection, that the course which he proposed was a somewhat unusual one. It was not, however, altogether without precedent. He admitted the principle that where parties had complied with all the conditions prescribed—had completed their subscription contracts, and paid their deposits—double what they had been in former years, in compliance with an Order of their Lordships—the presumption was, that having complied with all these requisitions, and desiring to go on, they ought not to be prohibited. But their Lordships had already required further securities, in particular cases, by the Order called Lord Wharncliffe's Order, which required in the case of established companies, if they sought to construct branch lines, or demanded powers beyond their original powers—that in 875 addition to the test of the subscription contract and the deposit, a meeting consisting of three-fifths of the company should have sanctioned the proposed alterations. He stated this merely as a precedent in some degree applying to the question now before the House. But he contended that the cirumstances of the present time were altogether peculiar. He would remind the House of the obligations under which the country now was with respect to railways. In 1844, Railway Bills were sanctioned by Parliament to the amount of 14,000,000l. In 1845, Railway Bills were sanctioned by Parliament involving an expenditure of capital of upwards of 60,000,000l. Thus, in these two years there were imposed on the community liabilities to between 70,000,000l. and 80,000,000l. for railways alone. He would state to their Lordships the amount of capital proposed to be involved in the 519 railway projects before Parliament. He would not trouble the House with going into details on the subject, but he would state that in round numbers the amount involved would appear to be 300,000,000l. It was obvious that nothing near this amount of capital would be actually required; but if they were under liabilities to the amount of upwards of 70,000,000 now, and if even one-fifth only of the Bills now before the House passed, it could not be done without incurring the greatest risk. He would not ask the House to go into any speculative conjectures as to the amount of the available capital of the country which could be taken from other branches of industry; but he hoped that they would look at the circumstances as they stood at present. He had said that between 70,000,000l. and 80,000,000l. was required for the completion of the railways to be made by the Bills of the last two years; and it was notorious that there had been experienced the greatest difficulty in raising the funds for carrying them on. The price, also, of all materials used in the construction of railways had risen in an exorbitant degree, and the price of labour employed in railways had also risen greatly. It had been stated a few days ago, by one of the most eminent practical men engaged in the construction of railways, before a Committee of the other House, that the charges on all articles necessary for the formation of railways were now fifty per cent more than they were last year. It might be said, if the companies chose to force their Bills, why not let them suffer the conse- 876 quences? He was endeavouring to show that these consequences would not fall on them alone, but on every other class of the community. The best railway companies now felt the greatest difficulties in raising the instalments of money to construct some of the lines of last year. It was found, also, that the effect of this pressure on the money market had been such that accommodation for the customary commerce of the country could hardly be obtained, and over the whole country traces of the effects of raising such large sums, not in the ordinary employment of capital, might be seen. In the language of a respectable gentleman, writing to him on this subject, "it had taken the very heart out of the business of the country." They, therefore, should look to the interests of the other classes of the community, and they should also call upon those companies to look to the probable effects of the measures which they called for when they asked the House for its final sanction. All that he required was, that before they arrived at the last stage of the Bill there should be a meeting of the proprietors of shares in the company representing not less than one-third part of the capital or stock of the company, and that the passing of the Bill should be stayed until it should have received the sanction of the holders of at least three-fifths of the total amount of scrip produced at the meeting. He put it to the House whether such such a test was too strong, or such conditions too hard, when they looked to the consequences which would be produced to the country if they allowed the present state of things to continue. He should now read the Resolutions which he intended to propose, and he should to-morrow, or some other early evening, move that they be taken into consideration:—
I. That this House will not read a Third Time any Bill to empower any Company (whether intended to be incorporated by such Bill, or already incorporated by Act of Parliament) to construct a Railway, unless, Three clear Days before the Third Reading, there shall have been deposited at the Office of the Clerk of the Parliaments, there to be open to the Inspection of all Parties, a Certificate signed and authenticated in manner hereinafter mentioned and comprising the Particulars hereinafter expressed, and stating the following facts, viz.:—He knew that advantage might perhaps be taken of the winding up of the affairs of a company by parties going into the market and purchasing shares at the depreciated value, and thus acquire a power over the existence of a company. This was also the case where large numbers of shares had been held back; but he proposed to make provision as to the period when shares came into the market, and that no scrip which had not been issued, or the deposit paid on, before the 31st of March last, should be regarded as giving a power to vote. He should be willing to go the full length of a suggestion of a noble Lord opposite, that no vote should be given on a share which was acquired subsequently to the day on which the former Resolution was proposed; but such difficulties were found to exist, from the want of all means of tracing the transfer of scrip, that this was found to be impossible. He doubted whether, practically, it would be acted upon largely; but he had no doubt on the winding up, some companies' shares would be purchased for that purpose From all the inquiries that he had been able to make, he did not believe that such a proceeding would be carried to any very serious extent. The Resolutions provided—
- "1. That a Copy of the Bill was submitted to the Consideration of a Meeting of the Scripholders of the Company, or (in case of a Company already incorporated) of the Shareholders or Stockholders of the Company, specially called for that Purpose.
877 - "2. That such Meeting was called by Advertisements, inserted once in each of Two consecutive Weeks in the London Gazette (if the Railway be an English or Scotch Railway), or in the London and the Dublin Gazettes (if the Railway be an Irish Railway), and in each Case in at least Three London daily Newspapers, and not less than Three Times in each such Paper, in each of such two consecutive Weeks."
3. In the Case of the Company being intended to be incorporated by the Bill—That such Meeting was constituted of Persons producing thereat Scrip of the Company representing not less than One-Third Part of the whole Capital proposed to be raised by the Company under the Bill, such Scrip having been actually issued, or the Deposits in respect thereof having been paid before the 31st of March in the present Year.4. In the Case of the Company being already incorporated—That such Meeting was held, except so far as is herein otherwise provided, according to the Constitution of the Company, and was constituted of Shareholders or Stockholders thereof competent to vote at the Ordinary Meetings of the Company, and representing either personally or as Proxies not less than One-Third Part of the whole Capital or Stock of the Company.5. That at such Meeting the Bill was approved of by Persons producing thereat Scrip equal to at least Three-Fifths of the Total Amount of Scrip produced at the Meeting; or, in the case of a Company already incorporated, by Three-Fifths at least of the Meeting, the Votes being given and computed according to the Constitution of the Company.878 It might be suggested that it might be difficult to get, at one meeting, one-third of the shareholders of a company together; it therefore appeared only reasonable to give the meeting the power of adjourning for a short period; and if the number of votes taken on the first day and on the day of adjournment was equal to the required number, it should be held to give effect to the Resolution.II. That for the Purposes of this Order it shall be competent for the Chairman of any Meeting called in pursuance thereof, in the Event of the above prescribed Quorum of Scrip Shares, or Stock (as the Case may be), not being represented at such Meeting, to cause the Votes of the Persons constituting the said Meeting, approving or not approving of the Bill, to be taken and recorded, and then to adjourn the same to some Day, Hour, and Place to be declared by the Chairman, such Day not being less than Three Days, and not more than One Week, from the original Day of Meeting, and such Day, Hour, and Place being, in the meantime, advertised Twice in each of Three London daily Newspapers; and at such Adjourned Meeting it shall also be competent to the Chairman thereof to cause to be taken and recorded the Votes of such of the Persons constituting the same as have not voted at the original Meeting; and the Total Amount of Votes given at the original and Adjourned Meeting shall be received as if given at one and the same Meeting.III. That such Certificate shall also comprise, in a Tabular Form, the following Particulars:—
- "1. The Day, Time, and Place of the Meeting, and of the Adjourned Meeting (if any).
- "2. The Dates of the Insertion of the Advertisements for the Meeting, and the Names of the Newspapers in which they were inserted.
- "3. The Names and Addresses of the Persons producing Scrip at the Meeting; or, in the Case of a Company already incorporated, the Names and Addresses of the Shareholders, or Stockholders, present at the Meeting.
- "4. The denoting Numbers, and the Amount of the Scrip respectively produced by the Persons so producing the same at the Meeting; or, in the Case of a Company already incorporated, the respective Amounts of Shares or Stock held or represented by the Shareholders or Stockholders attending the Meeting.
- "5. The Fact of the Approval or Non-approval of the Bill (as the Case may be) by the several Persons producing Scrip at the Meeting, or by the several Shareholders or Stockholders attending the Meeting.
- "6. The Total Amount of Scrip produced at such Meeting, and the Amount Thereof produced by the Persons approving of the Bill; or, in the Case of a Company already Incorporated, the Total Amount of Shares or Stock represented, either in Person or by Proxy at the Meeting, and the Amount thereof so represented by persons approving of the Bill.
- "7. The Total Amount of the Capital proposed to be raised by the Company under the Bill; or, in the Case of a Company already Incorporated, the Total
879 Amount of the Capital or Stock of such Company. IV. That such Certificate shall be signed by the Chairman of the Meeting, and by one of the Solicitors of the Company; and the Authenticity of such Certificate shall be verified by the Signature of the Parliamentary Agent depositing the same.Perhaps the House would permit him to correct a mistake into which he had fallen with respect to the winding up the affairs of a company. The subject was very complicated, and involved so many considerations, that it was difficult to give at once a clear and satisfactory explanation of all the details. At a meeting for such a purpose, the determination was to be taken in the way in which he had stated. If it was determined to dissolve the company, the course taken should be this:—The sense of the meeting might be taken as to whether, instead of the affairs of the company being wound up as in a case of ordinary partnership, it should be done under the provisions of the law for winding up joint-stock companies, which passed last year, and that the provisions of this law should be made applicable in this case. It had been suggested whether it would not be better that a trustee should be appointed by the meeting, and that he should act with an official assignee. A determination had not been come to on this point, and he thought that it was better not to delay the introduction of this Bill until that point of detail had been finally determined. He had thus laid before the House the provisions of the Bill he intended to present, and also the Sessional Orders which he proposed to submit to the House in aid of the Bill. The subject was of an extremely dry and complicated nature, and he had endeavoured as closely as possible to confine himself, in the observations which he had made, to the provisions of the Bill, and not to introduce extraneous matter, which certainly would not tend to render the subject clearer. The noble Earl concluded with moving the first reading of the Bill.
§ LORD PORTMANasked why the decision of the company was to be required on the third instead, of the second reading, or other stage of a Railway Bill?
The EARL of DALHOUSIEreplied, that if they required it at an earlier period, and said that no Bill should go on its stages until the consent of scripholders had been obtained, it would create such a delay that it would appear to be an underhand way of 880 saying that there should be no legislation on railways this year.
LORD BROUGHAMsaid, that the part which he had always taken in the consideration of this very important subject—the manner of transacting the private business, so greatly increased as it had been in both Houses of Parliament by the railroads which had been promoted in this Session and the last—would naturally suggest to their Lordships that he had attended, with the greatest possible interest, to the very candid, full, and luminous statement of his noble Friend at the head of the Board of Trade. That he should be able at once to state whether he approved of the whole of the principles and the details of this extensive and comprehensive measure, was certainly out of question. He must have more time to deliberate upon it, to examine and compare its different details, before he should make up his mind distinctly to say that he would give his assent to it. He should be most ready and anxious to give it the best consideration in his power; and, as he was at present advised, he could see no objection whatever to the general fairness of either of the means, the legislative plan, or the Order, the Parliamentary plan, suggested by his noble Friend. He felt the greatest possible satisfaction in considering that we had at length reached the point when we might hope to see an end of the railway mania, of the gambling disease and fever of speculation which had, for the last two years done so little credit to the character of the country, and been productive of so great mischief to its best interests, and among those best and highest interests; he feared he must enumerate the morals of the people. In this point of view, he had always regarded with the greatest alarm, and to a certain degree with disgust, the scenes which, day after day, had been exhibised to his view, not only among the upper classes of society, though they had been largely tainted with the mischief, but extending to the middle classes, and, he feared he must add, to the humbler classes of the people of this country. In quarters where gambling had been heretofore unknown, in quarters where that vice of their betters had never appeared to taint their character, he was sorry to say that, for the last two years, that most pernicious and detestable practice—the enemy of all prudence and economy, the foe of all foresight and discretion in the management of private affairs, and the great corrupter of the human heart—the practice of trusting 881 to chance, instead of exertion, and labour, and honest industry—had been at work even among the humbler classes of life. He had stated on various occasions lamentable instances of the havoc which it had made in the circumstances, as well as, he feared, in the morals, of persons very much raised above the humbler classes. He had stated instances of poor clergymen, of maiden ladies of small means, of widows of small jointures, who, in the hope of obtaining suddenly a great accession of fortune, had given themselves up to, and become attacked by the venom of railway gambling. It was lamentable to think that the mischief which had arisen from hence could not terminate with the disease itself; and these parties were now suffering, smarting most severely in their fortunes, in their comforts, many of them exiled from their native country, through their inability to pay the calls, and to answer the liabilities they had so heedlessly contracted. To a great degree this measure would prevent the mischief from proceeding further. Great relief would be administered by the Bill, and by the Order of his noble Friend, to that class of the sufferers; and he would fain hope that the mere promulgation of its provisions, the mere statement now made, and the general acceptation which that statement had received in that House, and which he hoped it would receive elsewhere, would have the desired effect, even before the proposed draft should be reduced to the form of a Bill (and in this he feared he must agree with his noble Friend again), long, long before it should pass into a law. He heartily agreed in one observation of his noble Friend, that, though this House might pass over all else, a great delay would inevitably take place before it passed, if it ever passed. Their Lordships' House was admirably adapted, not only for legislative discussion, but for action—for doing business; but he feared that adaptation was not paralleled in other places. He feared there were some railroad bodies, which were excellent for debate, full of discussion — which could debate for twelve days, one after another, without intermission—which could make speeches by the score, and obtain attention by the hour, but where, nevertheless, there seemed an utter and absolute incapacity to get through business, to do anything, or to bring anything to a close, owing entirely, he supposed, to the bad constitution of those railway communities—or, he might call them, House of Railways. [The Duke of RICH- 882 MOND: It is the fault of the directors.] He denied this; it was the fault of the body at large. That House of Railways, owing, no doubt, to some faulty construction, could debate for ever, and discuss without end, and argue without intermission; but, as for ever coming to any conclusion, that seemed to be out of the question. He therefore quite agreed with his noble Friend that it would be a long while before the Bill would become an Act; but he hoped most devoutly that the bare promulgation of the plan would have the effect sought to be produced—that their Lordships would all be disposed to give it their ready acceptance—and that they would strongly feel the propriety of putting a stop to this, so much so that they would even strain a point, and go beyond former precedent, to obtain so great a good; and the proposal of the measure would not then be without its effect. With respect to the Order, he was of opinion that it was going beyond precedent; for undoubtedly it would have the effect of tying up the hands of the House for the future. They pledged themselves by this Order not to read a Bill a third time—though all the Standing Orders were framed upon the assumption that it was not very usual for a mere Standing Order to affect a measure which had come to be ripened, and was ready for a third reading—yet, by this Order, the House would, in effect, say that no consideration whatever should induce them to give the measure its final step, by reading it a third time, unless something should be done out of the House, and by parties over whom they had no control, and with whom they had, in fact, no communion. He should be sorry were this Standing Order to be adopted without much consideration; it required great deliberation; but he, for one, was very much disposed to strain a point, in order to gain so very great a good; for he was perfectly persuaded that the Bill itself, though passed into a law, would not be effectual without some such order as that which his noble Friend had sketched out. And if he were called on to state which of the two measures he should view with the most hope of effect, he rather inclined to prefer the Order—though he did not see why he should be put to his election, for he saw no reason why they should not have both. But, in his opinion, the Order would certainly be the most efficacious; and, at all events, it had this very great convenience about it—the House was pretty sure of getting through the one, but they 883 were not sure that the other would be obtained in any reasonable time. Looking back on what had been done in the last year or two, he could certainly have wished that these things had taken another course. It was very much to be desired, that with reference to all these matters of private legislation, including railways, canals, and all private Bills—he did not say they should be referred to another tribunal; nothing of that sort had entered his imagination; but, that Parliament should make such arrangements as would secure the private business being efficiently, properly, and cheaply done, and in a reasonable time; so as to avoid the enormous, the endless delay, and the great anxiety attending the present system, and to avoid that inefficient and unsatisfactory manner in which, of necessity, and without imputing blame to any one whatever, but of necessity, as the Committees of both Houses of Parliament were at present constituted, but much more the Committees of the other House—they had been obliged to carry on that important branch of their inquiries. Looking at the enormous amount of private business—considering that, in the present Session, in one department alone, railways, there were 519 Bills before Parliament, and reflecting that those Bills were of the most transcendental nature, that they gave power to interfere with every man's private property, to tear down woods, to grub up plantations, to overthrow houses, to drive roads through a man's pleasure grounds, to make a person's estate utterly worthless, or utterly incapable of being inhabited by himself and his family, where they might have lived for ages; considering that the very principle of these Bills was to compel people to part with their property whether they would or not, and not at a price fixed by themselves, though that would be bad enough; considering that this was the nature of their private legislation, of all the objects for which their legislative functions could be used, it was the one that most required to be dealt with by a tribunal of a totally different kind from the Committees of both Houses. This difficulty was one which he had long felt, and he regretted that previous steps had not been taken for ensuring a better mode of managing the private business. The manner in which his noble Friend (the Earl of Dalhousie) had laid this proposition before the House, was deserving of the utmost possible commendation; all their Lordships must have gone along with him in the very clear and 884 candid, the perfectly unadorned and yet fitting statement which he had made. He (Lord Brougham) felt thankful to the Government for having now brought forward so important, useful, and necessary a measure.
The EARL of WICKLOWagreed with the noble Lord that the Bill could not be expected to pass for some time; therefore it was most desirable to adopt the Resolution. He rose, however, to call the attention of the noble Lord who had introduced the Bill and the Sessional Order, upon the very different effect they would have upon Bills coming up from the other House of Parliament, and Bills which originated in their Lordships' House. The one would have already incurred all the expense of passing the Bill, while the other would have to guess at that expense. It therefore became desirable that some consideration should be given to that practice.
§ The EARL of EGLINTONhad as great a horror of the railway mania as his noble and learned Friend; but he thought they should have reason to hope that the energies of the country would not be affected to such an extent as to prevent railways being made for the future. There was one point in the Bill which he thought should be rejected as unjust. The noble Lord who introduced the Bill stated, that it was intended that three-fifths of those attending the meeting should sanction the proposition for going on with the company; but then, they must observe, that the meeting was to be composed of the holders of one-third of the shares. They empowered little more than one-fifth of the meeting to prevent their going on with the Bill: they, therefore, gave to a small minority a power of counteracting the wishes of a large majority. He wished also to know how the determination as to the termination of the company by the shareholders present should be taken.
The MARQUESS of CLANRICARDEsaid, he had no objection to the Bill, as explained by the noble Earl. He thought it a good measure by itself, and if it extended only to England; he objected to it so far as it extended to Ireland as well as Scotland. Three years ago he had said that the present system of regulating railways was perfectly absurd, and at variance with the great interests of the country. He thought that the Government were right to interfere; but he thought they ought to interfere in a manner entirely different from what they were now doing. 885 Let their Lordships consider what they were doing. They were endeavouring to put a check and stop to the railroad mania, and in such a step they were fully justified. But what was this railway mania? It was a subject connected with the best interests of the country; and when they endeavoured to put a stop to what was called the railway mania—and on this point he thought the observations of his noble and learned Friend and the noble Earl were most just—they should do nothing to deprive the country of the great means of communication. He had been examined before a Railroad Committee, and while waiting there had heard the evidence of a military officer of high rank, pointing out the importance of railroads for the defence of the country, as well against a foreign foe as for putting down domestic disturbances. In such a state of things was it satisfactory that it should be left to the Stock Exchange market or to a company of individuals what lines of railroad should be taken up? He had always entertained a strong feeling on the subject, and he had always thought that the Government should take a much more active part than had hitherto been the case. By the propositions before Parliament large liabilities were proposed to be incurred, which would tend to injure the resources and cramp the trade of the country; but if the superabundant capital of the country were directed into sound and useful channels, it would benefit, instead of impoverish the country. As a check to the railway mania he could not object to the measure, for he conceived it was required by the extent to which it had run. There was still, he thought, time for the Government of the country to acquire some control, by taking them into their own hands, and to point out the channels in which railway concerns were necessary and desirable; and with such encouragement and control, there was no doubt that superabundant capital would be found without affecting unfavourably the resources of the country, and by that means such works would be completed as were desirable—such, for instance, as would ensure the security of the country from foreign enemies, and lead to the improvement of the internal resources of the country. In that way good would be done, to which there would be no reverses, and with reference to which there would be no such subjects of complaint as had been referred to. As regarded Ireland, there certainly ought to be some change 886 in the manner of dealing with the Bills for railroads in that country. The Government should undertake to point out the channels in which railway communication was necessary and desirable, and to which, with such management and under such control, the superabundant capital of the country would be directed, without any injury to other enterprises equally necessary, or to trade and commerce. They would then secure a benefit such as all would appreciate; they would obtain security from foreign invasion; they would open up and improve internal resources; and, in that way, a good would be done to which there could be no reverse, and from which could follow no evil. He desired to know from the noble Earl (Earl of Dalhousie) whether, by this Bill, in the case of Irish railways, a stop would be put to them in the same way as to English Railway Bills.
The EARL of ROSEBERYthought, from the speeches of his noble Friends who had previously addressed the House, that there was some misconception on their part with respect to what the Sessional Order meant. He apprehended that his noble Friend (Lord Dalhousie) did not mean that this Sessional Order should be a Standing Order, on which Parliament would proceed in future years, but merely an Order on which Parliament would proceed with regard to railways during the remainder of the Session. From what fell from his noble Friends, he did not think they understood the meaning of his noble Friend the President of the Board of Trade on that point, and it would be well to know to what extent the Sessional Order would go.
§ LORD ASHBURTONconceived it to be useless now, to be considering what might have been done some time ago. The real question for the House was, what, in the very awkward and peculiar position in which they found themselves, was the wisest course to take at present. He must say, always reserving to himself the privilege of considering the particular details of the Bill, that the proposition which had been made appeared to be the best means of relieving them from the difficulty in which they stood. First of all it would relieve them from an immense mass of business; and in the next place it would relieve them from the immense demand upon the capital of the country, which paralysed and stood in the way of its legitimate commerce. It would also afford those who wished to get out of those undertakings 887 into which they had improvidently entered, the best means of doing so. He had himself, in the Committee called the Railway Committee, appointed early in the Session, pressed upon their attention the necessity of taking some decided, some unusual step suited to unusual circumstances, to obviate the inevitable effects of the railway system as it had recently existed. He had then and always been of opinion that the enormous railway business proposed to be carried on was altogether incompatible with the means of the country—with the means of any eountry—and he might even say that the united resources of all Europe would have failed to ensure success to the mass of adventure which in a few months had originated in Great Britain. They had undertaken what they could not, by any possibility, accomplish, and the result was now before them. Undoubtedly, as the noble Lord (Marquess of Clanricarde) had said, there were many pressing reasons why every facility should be given to the passing of the Railway Bills connected with Ireland; but he (Lord Ashburton) was inclined to think that the projects in that country had very greatly exceeded the available capital, and that the effect was to clog every other species of enterprise from which a benefit to the people of Ireland could be derived. He thought that, generally, it was unwise in these matters to interfere with or to prevent individual speculation; but he certainly agreed in the observation made, that an advantage would be experienced from the classifying of the different Irish projects, with a view of deciding upon which was more or less pressing, which more or less desirable, to meet the exigency in Ireland, and, by giving employment to the population, alleviate the wide-spread distress. They would, thus classifying those Bills, take as the first class the lines which were important as giving facilities to the removal and conveyance of troops, and to such lines they would be called upon to give a preference; the class next in importance would be the lines intended to fill up gaps in already existing railroads, and to complete some certain line of communication; and the third class would be those lines, the consideration of which could, with advantage to the public, be postponed over the present Session.
LORD CAMPBELLexpressed his approval of the measure proposed by Her Majesty's Government; and his principal reason for giving it his support was, that while it instituted a salutary check upon 888 excessive and ill-directed speculation, it still left everything to individual judgment and enterprise. With great deference to his noble Friend who had lately addressed the House, he (Lord Campbell) thought it was much better that the Government and the Legislature had not sooner interposed. The railway system had been carried on, upon the whole, in this country, he believed, very advantageously, and much more advantageously than if the Government, in the first instance, had assumed to itself the power of saying what lines should be preferred, and, as in France and in other countries on the Continent, had taken everything into its own hands. But, now, the natural cure for excessive speculation was taking place; the evil was felt, and now brought this remedy with it, and the Government very properly left it to the individuals themselves to say whether they would go on, or whether they would recede; they had it now in their power to change their minds—a locus pœnitentiæ was given to them—and that he thought was a salutary cure. The noble Lord (Lord Dalhousie) had stated the case with much perspicuity; but there was one point to which he (Lord Campbell) wished to call his attention, and it was this—whether any, and what provision was made by this Bill for the indemnity of those who were liable to creditors of railway companies. He stated that the liabilities of such individuals would not be at all affected, and of course it would be very unjust to deprive them of the means of indemnity. It must be considered that those individuals who were now liable would be deprived of the means of indemnity which they would possess if the company were to proceed and be incorporated, and entitled to require calls to be made, and to have large funds in their hands. Suppose an individual was liable to a solicitor, or to a surveyor, for business done for the company to a very large amount; at present, if an action were brought against him, he would be individually liable for the amount, but he would have an indemnity against the funds of the company; but if they put an end to the company, and the funds were dispersed, then the individual who had so become liable had no indemnity. He hoped, before the close of this conversation, the noble Lord would state in what situation a person would be who had made himself liable to the creditors of a company, and was deprived of the indemnity which he at present enjoyed.
§ LORD WHARNCLIFFEthought it premature to discuss, at present, the provisions of the Bill brought before their Lordships; but he would make one observation on the subject of the Order. To put an end to any of those railway companies, it was proposed that the parties interested should be empowered to call a meeting, at which there should not be less than one-third of the capital of the company represented; and three-fifths of that one-third part should have the power of signing a certificate that shall decide the fate of the company. The result of that arrangement was this—that in any case in which the parties could obtain the sanction of one-third—that is, 3–15ths of the proposed capital of the whole undertaking—the 3–15ths will have the power of deciding the interests of the remaining 12–15ths. Now, it appeared to him (Lord Wharncliffe), looking at that superficially, and at first sight, that that was too small a proportion. He thought, if it were made something higher, they would be more likely to obtain the real sentiments of the substantial body of the shareholders, than by putting it at so low a point; because, what they had to dread from this proceeding was, that some fictitious, some intriguing attempts would be made to get together the fallacious appearance of a meeting, as if of the entire capitalists, and so dispose of the concern one way or the other.
The EARL of DALHOUSIEreplied to the several questions which had been put to him. He would first address himself to the observation made by the noble Lord (Lord Wharncliffe) sitting near him, that the proportion of shareholders to decide upon the withdrawal or prosecution of any given project was too small, and was likely to open a door to jobbing and to dishonest means of obtaining either of these results. But he begged to remind his noble Friend, that although three-fifteenths—that is, one-fifth—was a very small number, it was the minimum, and it by no means followed, that one-fifth only would in each case be the majority. When the noble Lord, therefore, came to consider the matter in that light—when he remembered that one-third of the entire capital was called upon to be represented at the meeting at which the decisive step was to be adopted, he would see that they were about to enforce a very stringent regulation. In the already existing great lines, in the London and Birmingham, or in the Great Western, with their capitals of 5,000,000l. or 7,000,000l., 890 it would require, even for a number of branch lines, considerable exertion on their part to obtain the necessary assent of their shareholders. Incorporated companies, no doubt, possessed a great advantage over those other companies which were as yet only inchoate. The old companies had all their machinery ready at any moment to be worked; they knew where to put their hands upon their shareholders; and this of course was a facility which would put them in a very superior position, as compared with the companies unincorporated — the scripholders in which were scattered all over the world, and beyond the easy access of the promoters. The test of obtaining the expression of opinion from such a body, so situated, was consequently most severe, and would assuredly answer the end in view—of arriving at the feeling entertained by the majority of those interested in railway projects. It had been said also, that it was too much granted to allow two-fifths to prevent the progress of a Bill; but he thought that, under the existing circumstances, looking to the immense amount of capital for which they were even already liable—looking to the consequences which would result from the addition expected to be made to it—and aware of the notorious fact that many of those Bills were forced on against the sense of the proprietary—if a company could not obtain a meeting of one-third of the shareholders; if they could not produce to Parliament an opinion from three-fifths of those that the concern was a good concern, then Parliament might be assured, in the absence of such a statement, that it was not a good concern, and that, at all events, it might safely be postponed. And if such a postponement did take place, the concern was not extinguished; the worth of the project, at a future period, could again be tested. In the case of a good Bill, such an expression of opinion would be obtained; in the case of a bad Bill it would not be attained; and in the case of a doubtful Bill, if there were a doubt at all, Parliament, under the circumstances, ought to throw that doubt into the negative, and postpone the consideration of such a Bill to an after period. The noble Lord (Earl of Rosebery) was right in supposing that the Sessional Order submitted to their Lordships did not mean a Standing Order; it was merely a Sessional Order—of an extraordinary character, he (the Earl of Dalhousie) would admit, but in- 891 tended solely to apply to the extraordinary circumstances of the present time, and to expire at the end of the Session. Then, as to what had been said relative to Irish Railway Bills, it would be in the recollection of those of their Lordships who sat on the Committee appointed at the commencement of the Session, that an earnest desire had been expressed by the Government that every possible justice and facility should be given to the consideration of those Bills that had for an object the construction of railroads in Ireland. But the noble Marquess could not expect that the Bills proposed for Ireland should be altogether exempted; in fact, it was known that there was more alarm in Ireland, lest too many Bills should pass, than could possibly arise because certain Bills should not receive the sanction of Parliament. It had been agreed that the Irish Bills should be originated in that House; and some of those Bills stood over from before the recess for their reading. Now they intended that they should get their third reading in that House, and would fall under the operation of the Sessional Order in the next House; and on the 27th he should be prepared to move the third reading of those Irish Bills that stood over. With respect to the question of the noble Lord (Lord Campbell), whether the Bill would make any alteration in the liabilities of parties at present liable for debts incurred by the company, he begged to explain that such was not the case. The liabilities would remain exactly as they were: the rights of parties would not be affected by the winding up.
The EARL of DALHOUSIEunderstood that by this Bill the person who was liable would have his remedy. He might make good the demands upon him out of the funds in the first instance; and if the funds were insufficient, he would have his resource against such parties as now were liable.
§ Bill was read 1a. Sessional Order to be taken into consideration on Monday.
§ House adjourned.