LORD BROUGHAMI rise, my Lords, to bring under your consideration a subject second to none which ever yet engaged the attention of Parliament, in its magnitude and its great national importance—I mean the Railway concerns of this country, producing a vast mass of commerce, involving a prodigious investment of capital, causing a great entanglement of credit, and, though leading in their remote consequences to immense national advantages, and though connected ultimately with mighty improvements in our social condition, yet in their present position and in the stage at which they have now arrived, deserving the most cautious and mature deliberation both of Government and Parliament, because in their present aspect, whatever may be the value of their ulterior results, whether they may end in benefiting or in ruining the country, they fill every reflecting man with no slight, nay, with most serious apprehensions. If there be any persons, my Lords, who take blame to themselves and look back with self-reproach to their indifference in former years on this subject—if there be any persons who were then blind to the dangers which beset the path of Parliament—who were insensible to the possible evils of the course of legislation which we then pursued—who were callous to the appeals made to their feelings, moral as well as political, on the subject of the gambling mania which then infected all classes of the country from the highest to the lowest—who shut their eyes to the risk that the nation incurred from panics in the money-market and from disasters in the commercial community—and who, because they did not perform their duty by giving warning of such results, 1032 rendered Parliament as it were an accomplice in their offences—I have the satisfaction of reflecting that I am not in the number of those persons. For I, backed by a noble and illustrious Duke, who is now absent, early in the day, indeed so long ago as the years 1838 and 1839, denounced this state of things, and with another dear and lamented friend of mine, whom I can no longer hope to see in his place, the late Lord Ashburton, we two warned Parliament not to encourage this madness of gambling, and warned the country to stay in its progress to destruction by not making itself a party to that disease. But those warnings, my Lords, were given in vain. We have now these Railway Bills presented to us daily, and are expected to pass them as matters of course. We have suffered those Bills to pass into law almost without examination, and we have established in all directions these public nuisances, these gambling companies, which, by a euphuism, we mildly call Railway Companies. We have suffered them to arrogate powers to themselves, without which they never could have absorbed the capital of the country. We have given them the most extraordinary rights and privileges, and immunities, and, above all, the most extraordinary powers to deal with private property. I am not now speaking of the power of requiring returns of the profits of their lands from private individuals, which is a great nuisance, and a great oppression upon them; but I am speaking of public bodies enjoying transcendental powers far beyond that—a power, too, given by Acts of the Legislature. Not only have those bodies power to interfere with lands strictly settled—not only have they power to obtain lands fettered by the wills of the dead, and by the settlements of the living—not only have we allowed lands, which the ordinary courts of law could not by any stretch of jurisdiction convey from the rightful occupiers, to he transferred to those bodies in fee-simple, but we have even allowed them to establish their works, and to make their roads, and to drive their engines, through the private grounds of individuals, not one acre of which they could touch by law; and we have set all private rights at defiance that railways may go through our noblest properties, usurping the place of the harrow and the plough, and rendering the surrounding country hideous and uninhabitable. Why have we done all this? Because we have adopted the principle that all private interests must 1033 give way to the public advantage; and hence the monopoly of transcendental power which Parliament deemed itself justified in granting to these companies. But Parliament has done worse and has gone further than this. We have given them powers which enable these joint-stock companies to obtain subscriptions to an enormous amount for their own purposes—subscriptions which not one of them would ever have obtained but for the sanction of Parliament. All the writers on that branch of political philosophy, which is sometimes decried and sometimes extolled under the name of political economy, have contended, and justly, that there are some advantages in the joint-stock companies, when they are not established for the purpose of monopoly, but only are enabled to borrow capital for the erection of their works which they could not otherwise obtain for that purpose. But all authorities join in saying this, that great care should be taken that you do not seduce into those establishments more of the small capitalists of the country than its general interests, agricultural, trading, manufacturing, and commercial, require, and can afford. But as everything was to be sacrificed to the one thing needful, namely, rapid locomotion—as the old established mode of travelling at the rate of ten miles an hour, with comfort and convenience to Christian men, and at their own time of commencing and closing their journeys, reposing when they pleased, at comfortable inns, which are all now either destroyed or ruined—as that old established mode of travelling was to be exchanged for a system by which you are cooped up in a box and shoot along the road with a velocity so tremendous that you have to thank God if you arrive at your place of destination with unbroken bones—as all this was to be done for what was called the public advantage, we established these companies and enabled them to collect an amount of capital far larger than any required for mere purposes of locomotion. My Lords, you did more than this—you enabled persons whose object was not locomotion, and who cared not one straw whether one inch of the railways which they projected was ever laid down or not—you enabled, I say, persons who were not makers of railways but makers of railway plans, and railway surveys, and railway attorneys' bills, and who wanted to charge, without stint of measure, for the plans, and surveys, and bills which they drew up, to go 1034 on without the least check on their proceedings. There is also another class of persons to whom your Lordships made yourselves accessories before the fact—persons who cared as little for the formation of railways as the surveyor, the engineer, and the attorney, but who cared exceedingly for the shares which were thrown into the market. You enabled these persons, the traffickers and gamblers, to dispose of those shares, and to take advantage of the dupes who were disposed to pour into their coffers the money, of which they had not too much; and, by doing this, you enabled them, upon the ruin of private persons, to raise princely fortunes for themselves. Against those persons you took no precautions, and it is now difficult to see how you could have taken them when you once allowed Bills of this kind to pass. In one Session—that of 1846—no fewer than 519 Railway Bills were passed, some extending, some amending, and others altering existing laws. I have already stated to your Lordships the transcendental powers which you conferred by these Bills on the railway companies to obtain property, and the extraordinary means with which you invested them for the collection of capital. Your Lordships can have no idea of the extent of carelessness of which you were guilty in passing the various clauses of those Bills. I recollect well that my noble and learned Friend when on the woolsack (Lord Lyndhurst) was perfectly incredulous when I first informed him that your Lordships had passed a Bill by which the Great Western Railway Company was entitled to make evidence, not of its books by producing them, but of extracts from those books, which any copying clerk might produce without even proving that they were correct copies. But, furthermore, that Bill made such extracts conclusive evidence for the company of payment of money by the company—evidence, too, which could not be refuted, except by the very difficult, and in some cases impossible, process of proving a negative. I mention this as a proof of the zeal displayed by Parliament to forward the object of those dealers in locomotion, and of these jobbers in shares and scrip, and as a proof also of the unreflecting carelessness with which you granted immunities to the railway companies for the execution of schemes for which you had previously granted them largo privileges. I have now stated to your Lordships the 1035 causes of the recent mania, and I now proceed to explain its effects. They are not trifling—they are not disproportionate to the magnitude of the causes. How much capital do your Lordships imagine was vested in four or five years in railroads in England and Scotland alone, without including Ireland, India, Guiana, Demerara, Jamaica, and other parts beyond the seas? If I were to say that in England, 50,000,000l. were so invested, your Lordships would say it was a large sum—it is; the amount of one year's public income of the whole country. But what would your Lordships say if I were to mention 100,000,000l, nay, if I were to go further, and say 150,000,000l.? What if I were to tell you of 180,000,000l.—ay, and those millions actually paid up? For such is the fact, under the various railway calls. No great wonder, then, if the money market and the commercial world felt this. No great wonder if the Chancellor of the Exchequer of the day, for whom I have a great respect, and other most able financiers whom I see before me, and who are no longer Chancellors of the Exchequer, happily for themselves, should all be in great trepidation and alarm, when so large a sum as 180,000,000l. was withdrawn in so short a period from the capital of the country, and vested in one particular and novel line of employment. No great wonder if there has been a commercial and a money crisis, and that we are scarcely out of it now, when I am addressing your Lordships. I recollect well that when I told my dear friend. Lord Ashburton, that things were as bad then as they were in 1824 and 1825, he replied to me that they were much worse, and he took out of his pocket a paper on which he had noted down the various sums which had been paid up for railways at that time. They amounted then to 83,000,000l.; now, they are more than doubled; for, as I stated before, 180,000,000l. have been paid up. During all this time, the money-making Englishman was rivalled in all his proceedings by the long-headed Scot. The spirit of gambling, which had never crossed the Tweed since the time of the Darien and Mississippi schemes, again attacked the cautious and wary natives of the north, and they rivalled their English neighbours in their devotion to these hazardous speculations. Ireland, with its light-heartedness and lightheadedness, had 5,000,000l. embarked in them, which for a not very rich country is no inconsiderable 1036 amount, although I believe a large portion of it, as usual, came from England. Beside this, another million and a half was, I believe, contributed to the support of similar schemes in Demerara and Jamaica. But this is not all. There are calls still to be met. No wonder, I say, that we still have fears of a crisis in the money market, and disasters in the commercial community; for how much do your Lordships think still remains unpaid to these companies, and how much are their dupes liable to be called on to pay? I have not had time since I first gave notice of my present Motion to go through the lists of all the companies; but I have gone through one-fifth of the list by the alphabet, and I find that in that list the calls which remain to be paid amount to 30,000,000l., and for those calls, in whole or in part, the shareholders are liable at any amount. Multiplying this by five you will have 150,000,000l. Thus 150,000,000l. to be paid, is to be added to 180,000,000l. which has been paid; and that amount of good money is to be sent after the bad money already expended. Now the liability to which parties are subject for these unpaid calls, is far worse, and entails more anxiety, than the liability of a merchant who puts his name to a bill of exchange, and knows that he must pay it on a certain day, or go into the Gazette. These unhappy individuals do not know when they will have to pay their liabilities—they may be called upon to pay them at once, or they may be deferred by instalments for years. They are therefore obliged to keep their capital locked up to meet the calls, or else they are tormented with ceaseless anxiety lest they should not have it at command when it is wanted. This liability is a cloud always impending over their heads, which may burst in storms to their destruction, but which certainly hides from them the cheering and refreshing light of day. I am not therefore surprised, my Lords, looking as I do to the 180,000,000l. vested in one line of business, that we have already had one great panic. I think that we may be justly apprehensive of another, when we find that 180,000,000l. is not sufficient to satisfy the maw of this ravening pest, but that 150,000,000l. more must be extracted from the already exhausted resources of the country. Therefore, it is, my Lords, that I look upon this spirit of gambling, this overturning of all the prudent maxims and habits of our ancestors, as the gigantic, the monster evil of the 1037 present day. By small degrees it first made progress amongst us; but each day it is making further advances, and gaining fresh strength, and before long I am afraid that it will be found overwhelming the soil.
Parva metu primò; mox sese attollit in auras Ingrediturque solo.Upon that soil it will pour all its desolating and pestilential influence as sure as ever effect followed cause. I have now spoken of the evils which this unhappy system has imposed on the commerce of the country. I have spoken of the gambling mania which it has excited among all classes; but I have as yet scarcely alluded to the moral pestilence which it introduced among us—first ten, and latterly three, years ago. I much fear that these gambling propensities, these desperate speculations, cannot he indulged in with safety to any who intermeddle with them. They cannot be without damage to the regular habits of trade, or to the honest pursuits of industrial labour. I think that it cannot be safe that men should desert the ordinary occupations in which they obtain regular profit from their exertions and the judicious employment of their capital, and should betake themselves to dealing in all the chances and risks of a lottery, acting the parts of reckless gamblers rather than of prudent tradesmen. So far the character of our people has suffered, not only among the middle classes, who generally gamble not, but also among our inferior classes, who are always clear from the contagion of that vice. I much fear, my Lords, that I cannot stop here. Schemes much worse than any which I have yet mentioned are to be considered—schemes which, unfortunately, are but too notorious to us all. It is not merely of common gambling in shares that I have to complain, but of contrivances of a worser kind. At the time when this spirit of gambling was authorised, encouraged, and stimulated by the formation of highly privileged companies, unfortunately left without that superintending control over them by Parliament which I now seek and wish to obtain, there arose a practice of carrying on these speculations in one regular way, though it varied somewhat in its phases. The object of the speculator was not to make railways, but to make profit in shares. His first endeavour was to get hold of a number of shares, but not for the purpose of qualifying himself to be a director, unless thereby he could obtain 1038 a control over the company, and so render his shares more valuable by the patronage they commanded. In that case he might go on as a shareholder for some time, but, unquestionably, not for long. No, he did not long hold fast by his shares. Some people may think that Brag is a good dog, but Holdfast is better. Not so the shareholder; he is of opinion that Holdfast is a good dog for the present, but that Brag is a better for the future. His object is to dispose of his shares at a profit; and he, therefore, goes about among his friends and neighbours, and says, "You get but 3½ per cent now for your money; I have a scheme by which I will guarantee to you 7 per cent or 10 per cent for your money for a series of years." "Oh!" then says a poor widow woman, "if that be the case, as I can't got more than 3½ per cent for my money in the funds, I'll even try to get 7 per cent in the railroad; and "Oh!" says a poor man—and I now speak of a surgeon in Yorkshire, a very able man, who after labouring for twenty years in his profession saved a few thousands, which he had invested in the 3 per cents as a provision for his old age—"if I can convert my 150l. a year into 500l. a year, I am a happy man; and why should not I have a share in the railroad?" Whilst this manœuvring is going on, a good dividend is declared out of capital, the shares rise to a high premium, and then the demand for shares comes pouring in. What does Holdfast with his shares then? Holdfast he is no longer: he is now Brag; he takes his shares into the market, and he sells them at a premium to his friend the widow, or to his friend the surgeon, who no longer thinks of riding about the country to his patients in all weathers, and of charging half-a-crown for his visits, but says to himself, "I'll sleep in bed at nights, and enjoy myself with my 500l. a year like a gentleman;" and then he proffers his thanks to his good friend Holdfast. What follows next? One year the surgeon's dividend is paid, the next it is not. What is still worse, the year afterwards this unhappy gentleman receives a call to pay up large amounts on which he had never calculated. Having paid down all his savings for his shares, and having neglected his business on the strength of his anticipated income, and having, perhaps, let a rival step in to take it from him, he is called on to pay 25—or, it may be, 40—per cent on his shares. He is a ruined man for the rest of 1039 his life; all his savings are gone: he had paid down his all for his shares at a premium of, perhaps, 20l. per share; they tumble down to par, and then to 20l. discount. Holdfast has by this time got rid of all that he once held. He makes his fortune, but the poor surgeon is ruined. In every railway company, I am sorry to say, you have an Holdfast; and in every railway company, by his artifices, shares are first run up to 20 per cent premium, and afterwards dropped to 20 per cent discount. I know, my Lords, of another individual who was ruined in this way. He belonged to one railway company which purchased the property of another. An interest of 10 per cent was guaranteed to all who joined in the purchase. What cares Holdfast how that guarantee is to he made good? It is paid one year. How? Out of capital. That is now the patented mode of dealing in such cases, and will continue to be so as long as the community is placed at the mercy of the dealers in shares. You have knocked up, my Lords, the travelling by post; you have destroyed the postmasters and their inns; and you have thus left yourselves entirely at the mercy of the railway companies. What care the dealers in their shares for the comfort or convenience of the public? All they want is to raise the price of shares, and to sell them at a profit. There is, however, my Lords, another class of men who have an interest in bringing shares down from a premium to a discount. I know a relation of my own, who purchased shares at 187, which subsequently dropped as low as 108, and, I believe, even to 104. He purchased them, not to sell, but to hold, in the North Western. [A VOICE: The Midland.] No, I say nothing of the Midland, for I am not alluding to any individual. A great capitalist from London came into the field. He took every means—he used every artifice, to pull those shares down. He succeeded. Then he bought them up largely; then, again, he did all he could to raise them; and, finally, he raised them to 134, when he was no longer Holdfast, but Brag, and he sold every one of them. In another railway 10 per cent interest was guaranteed to the subscribers, as usual, for a certain number of years. Capitalists were attracted to this line, and the shares rose to a premium of 20 per cent. Here, again. Holdfast was awake to his own interest. He had raked together 2,000 of these shares—sold every 1040 one of them—and netted, by the sale, 40,000l. The parties who bought, what has become of them? Do they get the 10 per cent interest guaranteed to them? Nothing of the kind; they cannot even sell their shares now; and that shows how much they have lost and Holdfast has gained by the transaction. My Lords, there is another shift to which these stockjobbers have recourse, and to which I must briefly call your attention. A friend of mine, Mr. Hutton, the official assignee at Bristol, by accident, but fortunately for the public, happened to succeed either as legatee or executor—I forget exactly which, nor is it material—to the property of a person who had fifty shares in a certain railway. In either case—either as proprietor or trustee—he was bound to look after the accounts of that company; and he, therefore, required to see their books. That company had stated in its published accounts, that it had at the bank a balance in its favour of 32,100l., meaning, as was naturally to be supposed, money actually there, to be operated on according to the will or exigencies of the company. Now, this company was the South Devon, one of the branches of the Great Western Railway Company. At first the company objected to Mr. Hutton seeing their books: but, on his threatening to enforce their production by legal proceedings, he was allowed to inspect them, but was told that he could not be allowed to take any extracts from them. Mr. Hutton, however, having a good memory, I and being from his official engagements I well versed in figures, he retained in his; memory the figures which he found in the I books, and thereby discovered that the alleged balance of 32,100l. was, in point of fact, only a balance of 2,500l., and that the remainder was made up of a quantity of overdue bills—absolute trash, not worth the stamps or even the paper upon which they were written. Your Lordships may, perhaps, be disposed to ask how these overdue bills had come to he placed to the I credit of the railway company. I will inform you, my Lords—for it lets a very I strong light in upon the transactions of these railway gamblers to keep up the price of their shares for their own private purposes and for those of their company, by a series of tricks injurious to, and therefore concealed from, the public at: large. Of that deficit of 20,000l., 11,000l. was owing to the company by their solicitor, a gentleman belonging, or lately 1041 belonging, to a respectable firm in the metropolis; and he had paid in these overdue bills when a demand was made upon him by the company for the calls due. This discovery led to further inquiry. Mr. Hutton asked how certain other calls were met; and then, upon inquiry, discovered that Mr. Sandars, the secretary of the Great Western Company, who was in receipt of a liberal salary of 2,000l. a year, had been allowed to run into an arrear of 16,000l for his calls, of which only 2,000l. odd was paid, so that there was a balance against him of more than 13,000l. My Lords, I ask whether anything can be more dishonest than this, that the directors of a company should be guilty of such a delusion and fraud on their shareholders and the public as to allow their secretary, so well and so liberally paid, to run in arrears for such a sum upon his calls, when they pounce on a poor widow for her calls the very moment they are due? The secretary, I am told, is still in his office; and there is a solicitor, who now owes to that company 190,000l.: having received that amount of money to pay for land which he had purchased on its account at different times, the directors had allowed him to draw first 20,000l. and then 40,000l., and then 90,000l. for the land which they had purchased, and that, too, without the production of a single title-deed or voucher. Your Lordships may ask why the directors do not sue this man? Why, he has not a halfpenny wherewith to bless himself; but if that fact were made known, down would come the shares of the company, and therefore this transaction has been carefully concealed by the directors. The Motion, my Lords, with which I intend to conclude my observations this evening, will put an end, now and for ever, to the concealment of transactions like these. It will be remembered beyond this evening, and will make the affairs of these railway companies more accessible than they hitherto have been to the shareholders and to the people of England. I have one more statement to make to you, my Lords, which I think is not immaterial. A mode has for some time past existed of adding to one concern another, when the capital of the first is found insufficient to carry on the original project. A railway company starts, I will suppose, with a capital of 1,000,000l. The bills for the surveys, for the expenses of agents, for those of engineers, for attending to the progress of the measure 1042 through the two Houses of Parliament, amount to a largo sum; and another large sum is duo for the engines, the trains, and the rest of the plant. Here I may be permitted to state, what I forgot to mention to your Lordships, that in the accounts of the South Devon Railway Company, the balance of 31,000l. in its favour was drawn up on the hypothesis that all the plant was then as valuable as on the first day on which it was purchased—an hypothesis which was destitute of the slightest foundation. But to return from this digression. The sinews of war are found to be insufficient—more money is wanted. Application is made to Parliament for the increase of their capital by the creation of an increased number of shares. To induce new shareholders to come in—for in such an emergency the old shareholders cannot easily get out—they guarantee to the new shares a larger amount of interest, and call them "preference shares," a name indicating something good for the new interest, but nothing save loss to the old shareholders. Suppose a person to purchase original shares, he would expect to get a rateable portion of the increase of traffic. Not so, however—he would be tied down to the 5 or 3½ per cent, and nothing more—or at least he would never be guaranteed more—he might get it, or he might not. The "preference shares" have, however, a guaranteed sum entirely independent of profit, and the holders of the original shares are exposed to all the jeopardy and risk as to the amount of dividends which they may receive. The secretary of the Great Western Railway, and the solicitor to whom I have before alluded, held preference shares. So long as they thought those shares good, and as they were not called on to pay any calls upon them, those gentlemen answered to the name of Holdfast, and never dreamt, or at least never breathed, a suggestion, that there was anything illegal or fraudulent in the transaction. For my own part, I do not give an opinion whether it was illegal or fraudulent; I only say that originally these gentlemen never dreamed or said that it was so. But as soon as a call was made upon these preference shares, these gentlemen said that the whole transaction was illegal, and that they would have nothing to do with it. The secretary, I believe, used such language; and the solicitor, I know, did so. I should like to know one thing, from sheer curiosity. If another House of Parliament—I won't say in this country, but in another 1043 country, which has great dealings in railways—would take a hint from me, and institute a searching inquiry into the expenses of pushing Railway Bills through the Legislature—say in Canada, for I don't say here—I would wish that Canadian House of Commons, for which I have a very profound respect, to inquire also how those expenses are to he diminished. For, when in the year 1837, I gained the concurrence of the House of Lords to my standing orders, which placed private Bills on an entirely different footing, and sent them to the consideration of a Committee consisting of only five individuals, I recollect well that people said, that if such a plan were good for the Peers of England, why was it not equally good for the Commons of Canada? They said—" Is England, where the climate of December is now connected with the calendar of May, so cold a climate, that what does well for the Peers there, cannot do well for the Commons of Canada? "And I may, then, well inquire why the representatives of the people in the Canadian Legislature cannot do that which we have done in this country? Some time ago I wished some of the Members of the Canadian Parliament to communicate their resolutions to their colleagues; they had done so, but their colleagues said that such resolutions would not do at all, for, said they, the very reason that would make them do well in England, was precisely the reason why they would not do at all at Montreal, or Quebec, or Toronto. It was found in this Canadian Parliament, that the Members of whom it was composed, had usually been put to great expense in the conduct of elections; that their constituents pressed sore upon them for the purpose of exerting their influence to procure situations through the Colonial Office, commissions from the Commander-in-Chief, patronage from the Treasury, and every species of employment which the service of the State could in any manner supply. Now, the Members of the Canadian Legislature found these demands upon their favour and assistance so onerous, that they were glad to get rid of them upon almost any terms; and they found it much easier to do jobs for their friends in passing Railway Bills than in procuring Government employments; and thus the hon. Members of the Canadian Parliament contrived to pay their constituents either in meal or malt. I tried, year after year, for seven or eight years, to induce those Members of Parliament to adopt the orders which 1044 your Lordships had, at my instance, sanctioned by your approval; but, as you well know, I tried in vain. The House of Commons, after seven or eight years, that is to say, in the year 1845, had been induced to make a change; but what I wish to get at is the state of things antecedent to the time at which the Canadian Parliament had taken any step towards reforming the abuses of which I complain;—I wish for returns showing the practice which prevailed at the time when any Member who thought proper could get a Bill committed. I have seen some of the bills of costs to which the carrying of those railway measures gave rise—I saw that the money had been spent, but I never for a moment supposed that a single shilling of that money went improperly into the pockets of the agents; they were men of honour, and incapable of appropriating a penny of that money to their own use; but they were perfectly capable of applying shares for the benefit of the company. They were prompt to send shares in the right direction—nothing so good as right shares in right places; applied to Members at critical moments—nothing could be more effectual than the application of shares; they often brought down half a dozen Members, or more, to vote upon a question which they had never hoard debated. It was under a knowledge of such facts as those that your Lordships passed your recent Standing Orders; and, if similar orders had been adopted elsewhere, there was not one of those Railway Bills which would not have been thoroughly sifted, and such orders would have thrown great light on the mode of conducting Bills through the Canadian Parliament. There had been instances of as much as 5,000l. having been offered to one, two, three persons to lend their names to certain railway concerns; and when they asked how they were to have it, the answer was, "In any manner you please—in shares, in hard cash." Of course, they disdained to do anything of the kind, or to accept any consideration upon those terms. But such was the acuteness, the astuteness, the sagacity of the agents in those cases, that they were eventually enabled to bring about and produce the desirable end at which they aimed. The 658 Members of the Canadian Parliament—I beg pardon, I was thinking of another place—what I meant to say was, that of the 150 Members of the Canadian Parliament, many were glad to obtain a certain number of 1045 shares, and pass the necessary Bills with the least possible delay. But are we, after all, quite sure that even the House of Commons in this country will adopt all the measures that your Lordships may think necessary upon this subject? Not long since a very stringent measure against bribery at elections was submitted to the House of Commons, which they did not like, and which they seemed resolved not to have. Still I shall do everything in my power to obtain the information which my Motion is calculated to bring forth. I feel an insatiable curiosity to get at that information. I can scarcely sleep comfortably in my bed until a Committee is appointed to examine into these Railway Bills. Companies that acted honestly could incur no disgrace by such a proceeding, because everything disgraceful must be the fault of individuals. I want above all things to know what was paid to Members of Parliament in passing Bills. And now I will ask, is there any person in this House, or out of this House, prepared to deny that the case which I have brought under the notice of your Lordships is one that calls for the interposition of Parliament—an interposition which I conceive has become indispensable, although so many schemes have been devised and propounded for arresting and staying the progress of the evil—an evil that is twofold—being one that gives power to men to cheat unwary members of society by false, fraudulent, and manufactured returns; and, secondly, by producing a species of mischief more difficult to deal with, but still not impossible to be suppressed—I mean the spirit of gambling, which unhappily pervades so large a portion of the community, that it becomes no easy matter to define its limits. It is a mania which, I fear, still affects society to a very alarming extent, manifesting itself by such symptoms as sending coals to Calcutta, and crockery to Brazil—a delusion not surpassed by the Mississippi scheme, or the South Sea Bubble, the license trade of 1812, or even the joint-stock companies of 1824 and 1825. The continuation of the same passion during the last two years is almost sufficient to make one despair of applying any remedy to an evil of such enormous magnitude. When capital becomes abundant, and the means of its employment circumscribed, I cannot but look with fear and trembling upon the itch for speculation which seems to afflict every class in this country; and especially when I see that irresistible tendency influencing 1046 the mercantile classes of England—men who of all others should be the most cautious. I believe that the Legislature can do much to prevent the excessive operation of that tendency, but not so much as they can do to prevent fraud and Imposture, for they can do much to give absolute, unqualified, unsparing publicity to all railway transactions. I see no remedy so effectual as that. The Parliament of England have a right to enforce that publicity, and it is their bounden duty to exercise that right. It will be in the recollection of your Lordships, that my noble Friend opposite (Lord Monteagle), who by the course which he took in this House regarding railways has done much service to Ireland, as well as to this part of the united kingdom—your Lordships, I say, cannot have forgotten that my noble Friend brought forward a Bill, which, if it had been carried into a law, would have produced an honest and stringent audit of all railway accounts; and I hope in the present instance for the support of my noble Friend in pressing upon the adoption of the House a decision which cannot for one moment longer be delayed. The Motion to which I have to request your concurrence is one of considerable length, entering into many details, with the reading of which I shall not now occupy your time; but this I will say, that if the returns take many months in preparation, I would rather not wait for them, but prefer to content myself with a portion of that which I now require. Whatever can be obtained in the course of a month or six weeks, will be much better than to wait perhaps till the end of the Session for returns which, however full, would at that time be uselsss, because if not obtained within the shorter period that I have mentioned, they cannot be rendered available till the next Session of Parliament, and every one knows that calls upon railway shares will come in immediately. It is, therefore, of the utmost importance that information should be obtained, and measures passed by Parliament in order to prevent the continuance of unjust or unreasonable calls, and to endeavour, if possible, to stay the progress of the gigantic gamblings in which vast numbers of the community are now engaged. In the course of the observations which I have addressed to your Lordships, I have spoken and stated facts without reference to papers or documents; but if any of your Lordships should think proper to refer to official sources, then you will find that every 1047 one of my statements is in exact accordance with all the records relating to this subject that can he considered authentic. Let me remind your Lordships that there are calls now in progress for capitals which in the whole are not less than from 140,000,000l. to 150,000,000l., and that these calls are in many instances made by persons who are desirous of paying interest by obtaining more capital for the purpose of carrying on a culpable traffic in share gambling. I trust that the course I have taken may be productive of good effects, and that as many as possible of these returns may be speedily produced. The Noble Lord then handed his Motion to the Lord Chancellor, as follows:—Return of the Share Capital of every Railway in the United Kingdom: Also, the Capital authorised to be raised by their Acts of Parliament: Also, the Number of Shares issued and Number allotted to each Director: Also, Amount of each Share: Also, when the Calls on such Shares became due: Also, when received: Also, the Capital raised by each Railway in the United Kingdom on the Security of their Debentures: Also, when such Debentures were issued: Also, Date of Act of Parliament sanctioning such Issue of Debentures: Also, Amount of each Debenture: Also, Rate of Interest paid to the Lender: Also, Term for which such Loan was made: Also, Commission paid by the Railway Companies to the Broker or Agent for obtaining Loans on the Security of Debentures: Also, Cost of Construction of each Railway, exclusive of Land Purchases, Parliamentary Expenses, and Law Charges: Also, Law Charges, and stating whether Taxed or not: Also. Money expended in Purchases of Land and Property: Also, Parliamentary Expenses: Also, Engineers' Charges: Also, Cost of Railway Plant: Also, Amount entered in each Year's printed Account for Depreciation of Plant: Also, Total Annual Receipts from Passengers or Goods from the first Opening of any Portion of the Railway; Also, Total Annual Expenditure contingent on the working of the Railway, exclusive of the Interest paid to the Debenture Holders: And also, Mode by which the fixed Dividends which have been paid to the various Shareholders was ascertained
The MARQEUSS of LANSDOWNEI am assured that the House must feel deeply interested in the statement which has been just made to them by the noble and learned Lord opposite, and will be most anxious to join with the noble and learned Lord in every effort that can reasonably be made for the purpose of repressing the spirit of gambling to which he has this evening so forcibly called your Lordships' attention. It has been very fairly, and I may add very truly, stated to your Lordships, that there will be considerable difficulty in producing all the papers included in the Motion 1048 now before the House; but I trust that as much as may serve the immediate objects in view, will be prepared within the period which we may presume to be sufficiently early. I am bound also to say that in the opinion of Her Majesty's Government the time has arrived when this and the other House of Parliament are bound to provide by law for the future protection and security of that class of persons who have from various circumstances invested considerable parts of their fortunes in these undertakings. We all understand very well, and it is therefore perfectly unnecessary that I should waste your Lordships' time with any explanation or description of the powers which the Legislature has delegated to the directors of railway companies; but those who have thus been invested with great powers, must be instructed and made to feel that such powers have been delegated to them as important trusts, not for their own individual advantage, or even for the profit of the company whose affairs they conduct, but to be exercised for the public good; and they should further be required to remember that such powers were not given to them by any means unconditionally, but that, on the contrary, those persons are liable to a very heavy amount of public responsibility. At the same time your Lordships, I am sure, will not disregard this circumstance, that much excitement was to be expected from a change so great as that which has taken place in the commercial enterprise of this country. The discoveries in science—discoveries remarkable and brilliant—have been in a manner most extraordinary applied to practical purposes and objects. Such results have excited the attention and the admiration of the world. Can your Lordships then wonder that events of so startling a character should be followed by dazzling effects upon the minds of those who regarded those changes not as means where by science was to be advanced, but by which great gains and emoluments were to be realised? It had its effect not only on persons engaged in legitimate traffic and enterprise, but it also produced its effect upon every adventurer—upon every person disposed to speculate in that lottery which was opened on a larger scale than ever it had been opened before to the gambling spirit of the world—that lottery in which large prizes were to he gained, but in which, unfortunately, there were so many blanks. In the midst of this earnest pursuit of advantages, many 1049 of which were found to have been imaginary, there cannot be a doubt that still many respectable companies were formed, enterprises founded on the most legitimate principles, and carried on in the most honourable manner, and for the most lawful objects; and those who have conducted their affairs honourably and fairly will have nothing to apprehend from the proposition brought under the notice of your Lordships this evening. I think we may feel a perfect reliance that the companies who have managed their affairs with prudence and good faith will he amongst the first to hail with satisfaction this proposition, the effect of which will be to place upon a footing different from companies worthy of confidence those who have mismanaged their affairs, and who have made it manifest to the world that they are unwilling or unable to carry on business upon sound principles. It is the interest of the public that a means for auditing the accounts should be provided, and that it should be seen that the conditions on which the Act of Parliament had been passed, to enable the various companies to carry out the system, were lawfully and completely fulfilled. I therefore join in expressing, on behalf of the Government, my earnest hope that my noble Friend near me (Lord Monteagle) will be prepared again to undertake the task which he engaged in last year, and which he may now hope to commence under more favourable auspices, and with a more complete knowledge of the subject. To such a Bill as I hope my noble Friend will bring in, the Government will give its support; and if my noble Friend should, from any cause of which I have now no knowledge, and which I am very far from anticipating, be unable to bring in a measure of the kind to which I refer, then the Government will themselves feel it their duty to propose a Bill of that nature, though I beg most distinctly to declare my full conviction that it would be much better—much more advantageously introduced—if laid before your Lordships by my noble Friend—because from the very great attention which my noble Friend is known to have paid to the subject, I hope and trust that his measure would enjoy the support not only of this hut of the other House of Parliament.
§ LORD MONTEAGLEcould not allow the opportunity to pass without expressing, in the first instance, the great satisfaction he felt on the subject being at last brought under the consideration of their Lordships; 1050 because, impressive as had been the statement made by his noble and learned Friend—important as the facts were on which he had dwelt—ho took upon himself to say, that if the whole of the information, for which it was the object of his noble and learned Friend to call, were laid before them, the result would be infinitely more astounding and alarming than even the eloquence of his noble and learned Friend. When they considered this question in its bearings on the whole commercial interests of the country, it was impossible to overrate its importance. If ever there was a case in which it was the duty, nay the obligation, of Parliament to give an effective and instant remedy, it was one in which, if they looked back to past years, they could not fail to consider themselves to a great extent responsible. It was quite true that there were cases in which, from the natural expansion of enterprise and speculation, let them do what they would, they could not restrain the imprudence of mankind; but this was a case in which, unfortunately. Parliament had aggravated and stimulated, in spite of all warning, the mischief that had occurred. It was impossible to approach this subject without taking an opportunity of doing justice to a noble Member of their Lordships' House, to whom one might refer the more freely because he was absent. But though he was absent, it ought to he remembered, both there and elsewhere, how Lord Dalhousie had warned them, and that if his warnings and recommendations had been attended to in both Houses of Parliament (he need not on this subject, as had been done by his noble Friend, adopt, in speaking of the other House, any geographical disguise), much difficulty would have been averted. Their Lordships gave their sanction to his proposition, which however, was fruitlessly adopted by them, for it was not adopted in the other House of Parliament. The noble Lord, who during two years had applied himself to this subject, had induced their Lordships to pass a Bill, which, if it had been accepted by the other House of Parliament, would make that important separation in which the public was so much interested, namely, a separation of that class of railways to which the noble Lord the President of the Council had alluded, and which he (Lord Monteagle) believed to be a most important and numerous class—the class that was well managed, from the class which he would designate as being a disgrace to 1051 those individuals who supported them, as well as a means of the moat serious loss to the subject. He (Lord Monteagle) could give additional information as to the mode in which evils were produced under this system, and could afford proofs of how deeply Parliament were responsible for those abuses. His noble and learned Friend had alluded to the fact of capital being applied, not to the purposes for which capital was properly applicable, but to enable parties to declare fictitious dividends. As long as there was capital to be so applied, there existed the means of effecting this fraud—for fraud it was; the man who declared out of capital a dividend that should only be declared out of profits, was, so far as that transaction was concerned, guilty of a fraud on the public, because parties purchased on the faith of the dividend, and if the dividend were fraudulent, the purchaser gave a consideration which the real value of the property would not warrant. But their Lordships could hardly believe the length to which Parliament had gone in some cases to allow the indefinite perpetuation of this system. A power of borrowing proportionately to the capital was allowed, as well as a further power to allow the parties who borrowed to capitalise the debt. There was also a further power given to borrow more money in proportion to the extended capital, and money was So borrowed a second, third, and fourth time; and he asked was not Parliament responsible for that? He did not complain of the people out of doors; but let them look at home, and see whether that and the other House of Parliament had been faithful stewards in discharging the duty entrusted to them. It was to be hoped that the Legislature would at length become sensible to the grave responsibilities of their position, and perceive the necessity of taking, with as little delay as possible, the requisite steps with a view to the correction of an evil which all admitted to be a very serious one. The trickery of the present railway system was managed by a select few. It was all arranged, not after the curtain had been raised, but while the curtain was still dropped, and the public knew nothing about it until they experienced its damaging effects upon their pockets. He would do the Bank of England and the East India Company, but particularly the former, the justice of admitting that they had never desecrated their characters by having to do with such proceedings. Whatever difference of opinion 1052 might exist as to the general policy adopted by the Bank of England, it was at all events certain that the directors of that great commercial company never gambled in its shares, and seldom held a larger quantity of stock than was essentially necessary to give them a qualification. It was capable of demonstration that in the case of that particular railway company whose officers had been committed a few days since for a breach of their Lordships' privileges, the directors had taken steps to run down the value of their own securities, in order that they might afterwards buy them up at a profit of 50, or 150, and sometimes even of 200 per cent. That was, no doubt, an enormous gain for the directors; but the melancholy feature of the case was, that the profit thus netted was taken out of the pockets of another class of people who had no knowledge of what was going on behind the curtain. It was full time that the Legislature should step in, and prevent the indefinite perpetuation of a system which was productive of so much injury to the public. The interests which would be injuriously affected by it were every day becoming more numerous, for it was a well-known fact that the practice was becoming quite common of inserting in marriage settlements a power to the trustees to invest the stock in railway debentures; but what is the value of the debenture of a fradulent company? The measure which he (Lord Monteagle) brought forward last Session, with a view to correct the evils of the present state of things, was such as no honourable railway company could have complained of or objected to. All well-managed companies would have found their financial condition very much improved by the operation of such a measure. They would be in a much better position if their accounts were accompanied and attested by the official signature of an independent officer. The present system of auditing railway accounts was a farce; for everybody knew that the person who audited and attested the accounts was himself more or less connected with the men who had plotted the original fraud on which the company was based, and had, like them, a direct interest in its success. He felt the necessity of a measure to remedy the evils of the present system, and he was happy to find that the Government was prepared to take up the matter in an earnest spirit. He could have no wish to keep this or any other measure in his own hands; but he felt justified, by 1053 the discussion of that night in having introduced it. The measure would be better in the hands of the Government; and if ever any public good should be done, by reason of the enactment, he wished that his noble friends connected with the Government should have the credit of it. He would infinitely prefer that to claiming it for himself, and if he could assist them, he would earnestly afford them his co-operation. If the Government were unwilling to undertake it, then he was willing to proceed with his measure. He had received many well-founded obejections to the Bill he had introduced last year, which would enable him to prepare another Bill less open to objection than that presented by him last Session. While it would not be open to the objection of being less stringent, it would be more operative; but while it was more operative, he would take care it should not be a measure likely to be used for purposes of a vindictive character.
§ EARL GRANVILLEwould like to have said a few words on the subject under discussion; but after the statement of the noble and learned Lord (Lord Brougham), as well as of the noble Lord who had taken so much pains on this subject (Lord Mont-eagle), and still more after the declaration of the noble Lord the President of the Council, he felt it was unnecessary for him to do so. He might state in confirmation of what the noble Lord had said, that their Lordships would, he was sure, he unanimous in saying that a measure for the audit of accounts was required. Some honourable members of the railway world who were opposed last year to the Audit Bill of the noble Lord, and to the clause introduced by the Railway Commissioners the year before last, giving a power to the Railway Commissioners to inspect accounts, now wished for the passing of a law that might be satisfactory to the public. With regard to the noble Lord (Lord Monteagle) taking charge of the Bill, he (Earl Granville) could say, on the part of the Government, that it could not be in better hands. The Government were very anxious that the noble Lord should continue his exertions; but, at the same time, feeling the necessity was great, they would themselves bring forward a Bill if the noble Lord abandoned his measure.
LORD BROUGHAMhad totally forgotten to mention one of the strongest illustrations of the necessity for their Lordships' interference, and which showed the desire that existed on the part of some 1054 railway companies to conceal their affairs. There was a case recently disclosed where there was actually a correspondence in cipher between the chairman and the secretary.
§ Motion agreed to.
§ House adjourned to Thursday next.