NORTH WALES RAILWAY. (Hansard, 4 July 1848)

§ LORD MONTEAGLE
, pursuant to notice, presented a petition from Henry Archer, complaining of the conduct of the directors of the North Wales Railway. The petitioner was one of the original shareholders in this line of railway, which was intended to run between Carnarvon and Bangor. The Act authorising the construction of the railway passed in 1845, and two instalments of 10 per cent were paid up by the shareholders. Soon after, a change in the direction of the company took place; and one of the first proceedings of the new direction was to lend the money of the North Wales Railway Company for the purpose of completing another railway with which the North Wales Railway had nothing to do. Many of the members of the new direction were also directors of the London and Richmond Railway Company, and to this latter company the money of the North Wales Company was lent. But, as the North Wales Railway Company were not empowered by law to lend, nor the London and Richmond Company to borrow, the course taken was not to lend the money to the London and Richmond Company in its corporate capacity, but to private individuals connected with the company on their notes of hand. After a time the Richmond Railway was made, and sold to another company. The directors of the North Wales Company, having lent the money of the company on insufficient security, and contrary to law, nevertheless thought proper, when this took place, to repeat the experiment, and they lent the money of the company to two other individuals. A shareholder applied to inspect the accounts, and after some resistance he was allowed to have access to them. Their Lordships would hardly believe in what manner those accounts were kept. He hold in his hand a copy of the very account in question, and he found these entries:—"Loan to 'A' for investment, 1,500l." "Loan to 'B' for ditto, 1,200l." "Loan to 'C' for ditto, 4,000l." "Loan to 'D' for ditto, 8,000l." "Loan to 'E' for ditto, 3,000l." "Loan to 'F' for ditto, 1,000l." "Loan to 'G' for ditto, 1,000l." In fact, the account was a cypher which explained nothing. The parties asked for an explanation as to who were represented by the letters "A," "B," "C," "D," "E," "F," and "G," but that was refused. These were the two main allegations contained in this petition, namely, 86 first, a misapplication of the funds from the purposes for which they were intended by Parliament, from the North Wales Railway Company to the London and Richmond Railway Company; and secondly, the mode in which the accounts were kept. The answer of the directors to the latter charge related a most curious fact. They stated that this mode of keeping accounts, namely, that of putting forward an unintelligible account to be inspected by the shareholders, and keeping a private ledger for their own use, was the common course taken by other railway companies; and they justified themselves by this most extraordinary plea. He thought it behoved their Lordships and the Parliament to take notice of this matter. He should content himself at present with presenting the petition; but if the subject should be allowed altogether to drop, he conceived their Lordships would he partly making themselves accessory to a system of fraud. Of the parties he knew nothing. He had no connexion with either of the companies. The facts were admitted by both sides; and they clearly showed a departure from the law of the land, and a violation of a public trust. The prayer of the petition was that a Bill might be passed to exclude these parties from the direction, and to appoint others to carry out the railway. So important did he consider the question that he should be inclined at a future day to move for the appointment of a Select Committee to inquire into these facts, and to report upon them to the House.

§ EARL GRANVILLE
suggested, that whether the noble Lord brought forward a Bill, or moved for a Select Committee, it would be better that he gave a formal notice of the course he intended to pursue.

§ LORD WHARNCLIFFE
considered this to he one of the most scandalous cases that had occurred in the mismanagement of railways. He considered it to he highly incumbent on their Lordships to apply a corrective and check upon these proceedings.

§ LORD REDESDALE
said, that unless some noble Lord should hereafter make a statement on the other side that should satisfy their Lordships, he considered this was a case in which the Legislature ought to interfere. These great bodies ought to be compelled to render accounts of their proceedings. If they concealed them from the shareholders, they could never hope to possess the confidence of the public.

§ The MARQUESS of LANSDOWNE
said, it appeared to him to be a subject of very considerable importance. It had been said that there was a Bill pending in the other House of Parliament to facilitate the dissolution of one of these companies. He had not seen that Bill, but he thought that no such steps should be taken without first ascertaining the state of the accounts of the company, because Parliament might otherwise he sanctioning a great injustice. Their Lordships ought not to allow any facilities whatever to the parties until after a full investigation into these facts, especially after a Bill had been rejected which would have enforced a distinct and bonâ fide audit of all these vast budgets that were going on in the country under the direction of these companies.

§ LORD MONTEAGLE
said, that before the Bill empowering the company to effect a dissolution reached their Lordships' House, he should move for a Select Committee to consider and report on the facts stated in the petition.