§ LORD MONTEAGLEsaid, he had a petition to present from certain proprietors of stock in the Caledonian Railway Company, stating some facts which, from their gravity, were entitled to their Lordships' most serious attention. He believed there was no principle which their Lordships were more disposed to maintain, in the ease of railway companies, than that the money subscribed on the faith of the Act of Parliament for the construction of railways, should be employed strictly in the way that the Legislature authorised: but in the case of the Caledonian Railway Company, this principle, according to the petitioners, had been entirely departed from. He was not going to impute any personal corruption or dishonesty to the directors in the misapplication of the funds. The directors were, he believed, personally above suspicion in the matter, and nothing could be further from his intention than to make any allegation reflecting in the slightest degree on their personal characters; but at the same time their Lordships were not, on that account, 1085 to overlook the mischief that had been done. This railway was one of the two great lines intended to form a communication between England and Scotland; after proceeding as far as Carlisle, it branched off in two directions, by lines leading off to Glasgow on the one side, and to Edinburgh on the other. The Committee had reported favourably of the line, and had recommended the Bill specially to the consideration of Parliament. The Bill was afterwards amended, and between 3,000,000l. and 4,000,000l. were authorised to be raised and appropriated for the great national purpose of forming a direct communication by railway between the capitals of the two countries. Out of these 3,000,000l. or 4,000,000l. the directors had, however, employed, in the purchase of shares in other railway companies, no less a sum than 381,000l., every sixpence of which had been withdrawn from the purpose for which Parliament had authorised it to be raised. He held in his hand a list of the several railways, eleven in number, to the purchase of shares in which this fund had been applied. Now, how had the shareholders been dealt with? They knew nothing of these transactions—they were ignorant of the mode in which their money had been expended—and they now found themselves in possession of nearly 400,000l. of shares of other lines that were not marketable, and on which they might be liable at any time to further calls. If such practices were permitted, their Lordships had better at once give up all control over the conditions they imposed in those Acts of Parliament, and in future there would be no need to apply a single sixpence to the purposes for which the funds were authorised to be raised, but the directors might be at liberty to devote the money of the shareholders, as they had done in this instance, to speculative projects of another kind. The shareholders stated in their petition that they had been excluded from a knowledge of the accounts until the month of February in the present year, when this misapplication of their money was first discovered, and no blame was, therefore, to be attached to them. It was for their Lordships to say whether these directors, or any others so misconducting themselves, were entitled to any favours from Parliament, and whether the prayer of this petition, which was against the second reading of a Bill now on their Lordships' table (Bill for the Lease of the Glasgow, Barhead, and Neilston Direct Railway), should not be acceded to. 1086 He was therefore resolved to take the sense of the House, on the second reading of the Bill to which he alluded, on the inexpediency of entrusting new powers to directors who had already so misconducted themselves.
LORD BROUGHAMsaid, that the noble Lord had rendered a great service to the country by the zeal and perseverance which he had shown on this subject. Since he had himself brought the subject of railway management before their Lordships, he had been in communication by correspondence with a great number of shareholders, directors, and other persons interested in various ways in railway undertakings, and he could assure their Lordships that that correspondence was of the most extraordinary character. He had received many hundreds of letters, and had read a large percentage of them; and he would have road the whole of them but that he found all those which he did read of precisely the same character. They all presented the same melancholy picture of distress inflicted by these companies on persons who could not afford to speculate—persons living on small incomes, widow ladies, maiden ladies, and trustees of orphans who had exceeded their powers from the charitable motive of obtaining the means of better providing for those committed to their care, all of whom were persons least adapted for speculating or for gambling—for why should it not be called by its proper name? He could not describe to their Lordships the pain with which he read these afflicting details. The uniformity of their complaint was, that they had been taken in by speculators—now an attorney, now an engineer, now a surveyor, but, above all, by speculators who belonged to neither of those classes, but who were gamblers in the share-market, but who were not holders of shares except for the moment, and till they got to a premium, when they transferred them to some unfortunate person, who was ruined in the course of a year or two afterwards. He had been blamed by persons who were ignorant of what was passing on the subject, for having contented himself with making a statement only, and he had received letters asking him why he did not take the most obvious course, and bring in some measure on the subject. Why? For this simple reason, that a notice of a measure had already been given by his noble Friend opposite (Lord Monteagle), and he felt that it could not be in better hands. Why, it was asked. 1087 did he not lay the axe at the root of the evil by promoting a system of audit of railway accounts? That was the very thing he did; the whole of his argument throughout his statement was to promote a system of auditing railway accounts. He supported his noble Friend both last year and this in his effort to establish that system. He agreed with his noble Friend that those parties who violated the provisions of an Act of Parliament which conferred on them extraordinary powers, were not exactly the persons who were entitled again to come to Parliament for an extension of those powers. All such Acts of Parliament were in themselves a violation of the common law of the land; a violation of marriage settlements, of rights of inheritance, and of the enjoyment of property; and no extension, therefore, of their Lordships' high legislative authority to any parties ought ever to be granted unless they stood recti in curià. If what was alleged in these petitions as having been done by those parties did not actually amount to fraud, yet they were most unwarrantable and most unjustifiable acts, and he therefore hoped his noble Friend would persist in his intention of opposing the Bill that was now pending before their Lordships at as early a stage as it was practicable. He wished, however, to ask his noble Friend whether the parties had had an opportunity of being heard in answer to these allegations?
§ LORD MONTEAGLEsaid, the moment he received the petitions he put the parties in possession of the fact, and informed them that the Railway Committee would have the whole matter placed before them. The Committee was still sitting, and was open to the parties; and, if they felt desirous of being heard, the Committee could be called together and they might be heard to-morrow.
LORD BROUGHAMwas completely answered; and he heartily rejoiced that their Lordships would be able to oppose the second reading without the tedious and expensive formality of going into Committee upon the Bill.
§ LORD WHARNCLIFFEagreed with his noble Friend (Lord Monteagle) that these transactions were of a most pernicious and ruinous description. They were not only illegal in themselves, but contrary to the covenants upon which the company obtained their powers from Parliament, and must be detrimental in the highest degree to the interests of the parties 1088 themselves. Their Lordships and the public owed a considerable debt of gratitude to his noble Friend for the labour he had bestowed, and the efficiency with which he had applied himself to such cases as the present. His noble Friend had said that he had no intention to impute anything dishonourable on the part of the persons implicated in this transaction; he (Lord Wharncliffe) thought it but justice to those parties to say, that whatever might have been the error committed by them in the management of the Caledonian Railway, there was this distinction between their cases and several others which had been brought before the House—that all those errors and acts of illegality had been committed by the parties with the sole view of promoting the interest of the proprietors, and not for their own personal advantage.
The DUKE of BUCCLEUCHhoped, as the noble Lord opposite had declared it to be his intention to oppose the Bill now pending, he would look carefully into its provisions before doing so, as its rejection might inflict very serious injury on the shareholders and the public. He concurred with what had fallen from the noble Lord who had just spoken, and was convinced that neither the chairman nor the directors had acted with any view to promote their own interests, and that, though they might have been in error, yet what they had done was intended to advance the interest of the company at large.
§ LORD MONTEAGLEdisclaimed having cast the least imputation on any of the parties concerned in this transaction, many of whom were friends of his own.
Petition read, and referred to the Select Committee on the Audit of Railway Accounts.
Certain accounts of the Caledonian Railway Company were ordered to be laid before the House forthwith.