LIMITED LIABILITY BILL.

HL Deb 07 August 1855 vol 139 cc1895-918

LORD STANLEY OF ALDERLEY moved to resolve— That the Limited Liability Bill having been introduced and passed by the House of Commons in conformity with an unanimous Resolution of that House declaring "that the Law of Partnership which renders every Person who, though not an ostensible Partner, shares the Profits of a Trading Concern liable to the whole of the Debts, is unsatisfactory, and should be so far modified as to permit Persons to contribute to the Capital of such Concerns on Terms of sharing their Profits, without incurring Liability beyond a limited Amount;" and the Progress of the Bill having been delayed by the lengthened Discussions on the Conduct of the War, which prevented it being sent up to this House at an earlier Period, and great Inconvenience being experienced from the Suspension of many Undertakings of great Importance, consequent on the Stoppage of all Charters and Acts of Parliament for giving limited Liability, in the Anticipation of Parliament legislating on the Subject, the Circumstances which render Legislation on the Subject Matter of the said Bill expedient are of such Urgency as to render the immediate Consideration of the same necessary. The noble Lord said he thought he could show sufficient reasons why their Lordships should assent to the measure. The question had been before the country for more than twenty years; had been the subject of inquiry of several Committees of both Houses, and of a Royal Commission. In 1852 a Commission was issued, whose Report was considered last year, and the House of Commons came to the unanimous Resolution that the present state of the law was unsatisfactory and required immediate alteration. In pursuance of that Resolution this Bill was introduced in the present Session of Parliament, and passed the other House after very trifling and insignificant opposition; or rather there was no opposition to the Bill on its principles, but only some objection to some of its details, and on account of the late period of the Session when it was introduced. To show that the general feeling of the public was in favour of the Bill, he might mention that when a deputation of Gentlemen did him the honour a short time since to wait upon him and express a wish to have the measure postponed, he asked them how, if the Bill were so mischievous, the almost universal opinion of the country, as indicated by the public Press, was in its favour; and they candidly admitted that, with the exception of the Leeds Mercury, there was no journal in the kingdom which would admit an article against the principle of limited liability. To show the peculiar urgency of this measure, he need only to state the principle of the existing law:—the principle was, that whoever shared in the profits should bear also the risk of all the losses. The law of unlimited liability was found to be impracticable, if attempted to be enforced in its utmost vigour. If it had been carried out in its full integrity, this country could not have boasted of some of the greatest works ever constructed in any part of the world. The whole of our railways, canals, docks, harbours, piers, and works of that kind, involving an expenditure of 320,000,000l., had been constructed in violation of the principle of unlimited liability, and in accordance with the principle affirmed by this Bill. It had, in fact, been found absolutely indispensable to make exceptions to the law in certain cases; and there were two modes of doing this—either by private Acts or by charters from the Board of Trade. Both these modes were objectionable. With regard to the charters, they were granted by a department presided over by a political Member of the Government, who was changed with every change of the Administration. It might thus happen that one President, who was in favour of the principle of limited liability, would grant these charters with the greatest facility, but his successor, holding opposite views, might throw every difficulty in the way. With regard to private Acts of Parliament, there was a Standing Order of the House which operated as a complete exclusion, except in the case of certain undertakings exempted from its operation. The Board of Trade had lately thought it better not to grant any more of these charters until Parliament had decided the question in one way or the other; it was, therefore, on that account, still more important and more urgent, that this Act should be passed without delay. There was plenty of time to discuss it. There was no other Motion of greater importance pressing upon their attention so as to prevent their Lordships from giving full consideration to the subject, and he knew no period of the Session when more than a day was considered necessary in that House of Parliament for each stage of a Bill. If this Bill had been brought before their Lordships on the 6th of May, instead of the 7th of August, they would not have given it more attention, and there was no reason why any noble Lord should not now attend in his place and express his views upon it. For these reasons he hoped their Lordships would agree to suspend their Resolution, and allow the Bill to proceed.

LORD REDESDALE

said, he was sorry that he should again feel it to be his duty to oppose the Resolution moved by the noble Lord; but in doing so he desired particularly to confine his observations upon the subject to the purport of that Resolution, and inquire whether the present was such a case of urgency as to justify their Lordships in reading the Bill a second time. Now, he meant to say that there had been no case of urgency made out which should induce them to suspend the Standing Order. The best method of testing the question of urgency was by referring to the conduct of those who had had charge of the measure. If they had treated it as a case of urgency, by postponing other less important measures, then he granted that they might, with some face, have come before their Lordships and represented that it was a measure which required to be dealt with in the manner now proposed. But, as he could show, the Bill had been so considered by its authors until within a very recent period, and the attempt to force it through Parliament now was, in fact, but a convenient method either of getting rid of the measure with the least possible difficulty, or of obtaining the eclat of having done something in a Parliament which otherwise had not been very fruitful in useful legislative measures. Than that he believed there was no other reason for urging forward the measure at the present time. The first argument of the noble Lord was that the Bill had been introduced in conformity with the unanimous Resolution of the House of Commons; but when was that Resolution arrived at by that House? In the last Session of Parliament, not the present; and if the Bill were urgent in consequence of a Resolution come to in the preceding Session of Parliament, why was it not introduced at the commencement of this Session? One would have thought that that was a necessary consequence. Besides, it appeared that a Bill had been prepared by the Government, and was ready so long ago as February last. And what were the subjects for which it had been postponed? First, there were the English Education Bills, which had not been persevered in. Four times it had been postponed on account of those Bills, and once on the Scotch Education Bill, which, on meeting with opposition in this House, was abandoned by its own promoters. It was not until the 29th of June that the Bill was read a second time in the House of Commons, and it was then read without any opposition. So that if the second reading might have been taken pro formâ, he saw no reason whatever for the numerous postponements in that House. It would be remembered that two Bills had been brought in by the Government—the Partnership Bill and the Limited Liability Bill, both of which it was announced were to proceed pari passu. Their Lordships had the Limited Liability Bill now before them; but what had been the proceedings of the Government on the subject? The Bill having been read a second time on the 29th of June, the Committee was fixed for the 2nd of July; but on that day the Scotch Education Bill took precedence, and the Bill was postponed till the 9th of July, when the House went into Committee, not on this, but on the Partnership Bill. The fact was that the Bill had been postponed over and over again, but only on one occasion to make way for a subject that might be regarded as more important—the conduct of the war. It was not until the 24th of July—the day before that on which their Lordships, by their Standing Order, had declared they would not give a second reading to a Bill—that the House went into Committee again, and on that day they went into Committee on the Partnership Bill; and the House did not go into Committee on this Bill until the 26th of July. Now, he held that conduct such as this was proof positive that the measure had not been pressed forward as if it were considered by its promoters to be a measure of urgency. Well, it then proceeded, sometimes at the morning sittings, sometimes at the evening sittings, until it reached their Lordships' House on the 3rd of August, and now, on the 7th of August, they were asked to read it a second time, though an entire fortnight had elapsed since the day after which their Lordships' Resolution declared that they would not read a Bill a second time. He might be told that he had taken a very narrow view of the subject; but he believed that the only good to be derived from that Resolution was by strictly adhering to it. The effect of the Resolution was to get forward the public business at an earlier period of the Session; and if they adhered with strictness to their rule he was convinced they would find that their business was expedited in a manner that had never previously been the case. He could only say that the effect it had produced upon the private business of the House was something most remarkable. So long as any relaxation was allowed there had always been a delay in bringing up Bills in time; but the moment the power had been taken out of the hands of the Chairman of Committees the promoters of private Bills were ready to the day. But the object of the Resolution was also that their Lordships might have an oppor- tunity of fairly discussing the measures which were brought before them with such attendance as ought to be present on the consideration of important Bills, and that could not be secured if such measures were permitted to be brought up and read a second time a fortnight after the day on which their Lordships had determined not to give a second reading to Bills. For his (Lord Redesdale's) part, he could not see why this Bill might not be postponed until next Session. He could imagine no injury or loss that would accrue to the mercantile community from the delay. There was surely no difficulty in granting charters to Companies whose cases were urgent, subject to any provisions that might be introduced in any Bill to be hereafter passed for regulating the affairs of such Companies. A provision such as that would render the granting a charter perfectly unobjectionable. The noble Lord (Lord Stanley) said that the Bill could be discussed as well now as if it had come up in May; but the measure was one which required more consideration than almost any other that had come before their Lordships this Session, and it was a perfect mockery to say that on the 7th of August it could receive due consideration from their Lordships. He owned he felt strongly in reference to this matter, and that he regarded it with something akin to personal feeling; for it was he who had induced their Lordships to adopt the Standing Order which the noble Lord now proposed to suspend. When he proposed that Order it was cordially accepted by Her Majesty's Government; and, he believed, and other noble Lords believed, that, so accepted, it would be candidly and honestly adhered to. He knew that it had had a very good effect, and to set it aside on the present occasion would be really degrading to their Lordships' House. So far as his experience went, he had never known a Bill of anything like the importance of this proceeded with at so late a period of the Session, when, on the part of the leading Members of the House, there was such a difference, or rather diffidence, of opinion as to induce them to ask for the postponement of the measure; and that this measure should now be pressed forward in the teeth of their Lordships' Resolution, and he believed great unwillingness and dissent, would, he thought, produce a very unfavourable impression with regard to the proceedings of their Lordships' House. He trusted, then, that they would adhere to the Order which they had deliberately adopted, and which, if carefully maintained, would, he was satisfied, be productive of vast improvement in the manner in which the business of the House was transacted.

LORD LYTTELTON

said, he was not opposed to the principle of the Bill, but he was bound to say that, in the opinion of men who were much better able to judge than he was, the details of the Bill were wanting in those safeguards which were deemed to be necessary and essential. If this were so, it was certainly matter worthy of consideration; and to call upon the House now, when there were not more than two days remaining of the Session, to consider these details, did appear to him a most reprehensible proceeding, and one which he was astonished the Government should press upon the House. So far as he was aware this question had never been properly before this House—he had not certainly been afforded an opportunity of expressing any opinion upon the question. But it was said that this was one of the most important measures of the Session. What right had any one to expect any important legislation at all this Session? Was it not a matter of doubt whether any legislation would take place this Session on account of the war? He earnestly hoped that their Lordships would not agree to this Resolution.

EARL GRANVILLE

I do not think, my Lords, notwithstanding what has fallen from my noble Friend the Chairman of Committees, that any case has been made out against the Government, or that any valid objection can be raised to the course they propose to take. My noble Friend said that the Sessional Order would be of no effect if it were set aside on this occasion after having been unanimously adopted by the House and sanctioned by the Government. Now, I beg to remind my noble Friend that when he proposed the Order last Session, the then Prime Minister pointed out some inconveniencies that would arise from adopting arbitrarily a rule of this kind, and observed that it would sometimes have to be relaxed, as it would be impossible for the House to adopt a rule which would altogether prevent them from reading any Bill a second time after a certain day. I think that my noble Friend in the observations he made this evening, departed in some degree from the judicial character which he usually maintains in speaking upon points connected with the business of this House, and that the whole tone of his speech was that of accusation against the Government for not having brought in this Bill at an earlier period, and not having pressed it through Parliament with vigour after it had been brought in. It would be easy for me to answer my noble Friend by a statement of the line which has been taken by the Opposition in the other House with regard to public business; but I will not do so, for this simple reason—supposing, on the one hand, that my noble Friend could make out a case against the Government, and, on the other hand, that I could make out a case against the Opposition, the commission of some fault in the management of business by one of these parties is no reason why your Lordships should reject a Bill which it may be desirable should be passed for effecting a great public good. The only reason for urging your Lordships to adopt this Resolution is the importance—of which there can be no doubt—of the measure to which it relates. My noble Friend asked why we gave precedence to other Bills which we were not able to carry through Parliament? In my opinion, those Bills were of great importance; but we were beaten upon the Scotch Education Bill in this House, and it was impossible for us to carry the other Bill to which he referred. I believe that the decided opinion of a majority of this and of the other House is in favour of this Bill. When my noble Friend talks about debating it in a thin House, I must remind him that there are now about sixty members present, or they have been present in the course of the evening, and that there has not been so large an attendance more than three or four times in the course of the Session. If so strong an objection to the Bill is felt upon the other side, I should like to know how it is that none of the principal leaders of the Opposition are present, with the exception of two noble Lords who were members of the late Cabinet. Their absence does not arise from want of notice, because, although the noble Earl the leader of the Conservative party passed through town the day after the notice was placed on the paper, he did not think it worth while to stay to state his opinion on the subject. Any noble Lords who take an interest in the discussion might have followed the example of a distinguished Member of your Lordships' House (Earl Grey), who has come a distance of between 200 and 300 miles in order to be present at it. After the Resolution of the House of Commons, after the general feeling which has been expressed by the public with regard to this question, and after the impediments which parties have necessarily met with in obtaining charters granting limited liability from the Board of Trade, I say it is very urgent that the trading community should no longer be kept in a state of suspense, which must check a number of useful enterprises. With regard to the observations which were being made yesterday by my noble Friend opposite (the Earl of Hardwicke) when I interrupted him, it appears to me that a time of war is the very time at which you ought to free commerce from restrictions, and, therefore, that the reason he mentioned is an especial reason for pressing on the Bill instead of retarding it. When my noble Friend the President of the Board of Trade said there would be plenty of opportunity for the discussion of the Bill, and that your Lordships hardly ever took more than one day for a single stage, I heard a derisive cheer from a noble Lord near me. I hardly remember a case in which a stage of a Bill has taken more than one day; but, if your Lordships like to discuss this measure at greater length, and to have an adjourned debate on the second reading, or to take two or three days in going through the clauses, I can only say that no opposition to that course will be offered by the Government. I hope, with a view to the public good and to the interests of the trading community, that your Lordships will pass this measure.

EARL GREY

I was greatly astonished when the Government gave notice of their intention to propose the second reading of this Bill this evening, as I was entirely at a loss to conceive upon what possible ground they could ask the House to depart from the Resolution to which we agreed in May last; and my astonishment, far from being diminished, has been much increased by the present discussion. I could not, unless I had actually heard it, have believed that the Government, having been parties to that Resolution, could have asked the House now to depart from it on grounds so palpably inadequate, I can hardly forbear saying, so insulting to the House as those which have been brought forward. For many years it was the constant subject of complaint by your Lordships that Bills were brought up from the other House at a late period of the Session, and then passed hurriedly and without due consideration. My noble Friend the Chairman of Committees, therefore, proposed a Resolution with regard to private legislation, which is now strictly adhered to, and which has been productive of great improvement in the mode of transacting private business. My noble Friend then proposed a Resolution by which the same principle was applied to public business, and the House was unfortunately induced to waive that Resolution last Session in order to pass a measure which, although its operation was limited, is, I think, as heedless a piece of legislation as ever passed through Parliament. The Government have borne testimony to the advantage which has attended the adoption of the Resolution; it was unanimonsly agreed to by your Lordships, and although it has been waived to allow of the passing of several Bills, some strong and apparent reason has in each case been given for not enforcing it. My Lords, this Bill is one of such a character that, even if there had been no Standing Order like this on your Journals, no noble Lord would, in former times, have ventured to press forward at this period of the Session. What is the object of the measure? It is to introduce an entirely new principle into our commercial legislation, and one which the highest authorities, both in law and in commerce, view with distrust and apprehension. It proposes to depart from the old-established maxim that all the partners are individually liable for the whole of the debts of the concern. My own opinion was formerly decidedly in favour of the change suggested by this measure; but I confess that my views have since been somewhat shaken on the point by the eminent authorities who oppose this Bill, but, more than all, by the line of argument taken and the conduct adopted by its advocates. An attempt has been made, by means of a popular cry, to force rapidly through Parliament, without due deliberation, a measure that demands, the most careful consideration. I will, however, assume that the principle of the Bill is as sound as the Government allege, and that its adoption would effect a valuable improvement in our commercial legislation. Even then there would not be the slightest justification for setting aside the Standing Order of this House in this case. Everybody must admit that in legalizing the principle of limited liability the greatest caution is requisite in framing the details of the measure, in order to prevent the door from being opened to practices detrimental to the high mercantile honour and credit of this country. My noble Friend (Earl Granville) says it is unusual to give more than one day for considering a single stage of the measure; but it should be recollected that when an important change, affecting a large portion of the community, is proposed, the general rule of this House is to refer the question to a Select Committee; and, if this Bill should now be read a second time, I shall certainly move that it be sent before such a tribunal. Nothing requires more circumspection and care than a measure introducing such an innovation; and it is absurd to suppose that on the 7th of August, with the announcement that the Session will probably be brought to a close on the 14th inst. at the latest, and in the absence from town of noble and learned Lords whose presence is of great importance, this measure can be duly considered by your Lordships. Of all questions of legislation that require deliberation, a question like this that introduces a new principle into our law, is one that requires most; and if the Bill passes precipitately and in an imperfect shape, you may find, when too late, that great mischief has been done which it will be most difficult hereafter to repair, and that vested interests may have been created which will be found very inconvenient in regard to future legislation. This, therefore, is a measure to which, above all others, the Standing Order most strictly applies. Really the reasons adduced by the noble Lord (Lord Stanley of Alderley) in asking us to assent to this Resolution, can scarcely have been seriously urged by him—they are such a perfect mockery. He says the House of Commons came to a unanimous decision in favour of limited liability; but does that warrant your Lordships in sanctioning this principle without considering the manner in which it should be adopted? Then we are told the Bill was delayed by the discussions elsewhere on the conduct of the war; but that surely is no reason why we should abandon our own Resolution. It would not be decorous for us to assume that blame attaches to the other House in this matter; and, therefore, I will take it for granted that the delay in sending up this measure to us has been unavoidable. Yet, if the Bill comes before us too late to be effectively dealt with, and can only be hurriedly passed at the risk of our making serious mistakes, its discussion may and ought to be deferred till another Session, without offering any just ground of offence to the other branch of the Legislature. It is said, however, that great inconvenience will arise if this Bill is postponed to another year, and that undertakings of great importance and public utility must be suspended, from the stoppage of all charters and Acts of Parliament for giving limited liability. Why, then, are not some of those undertakings mentioned to us? I believe that really useful undertakings have no difficulty under the existing law in finding the needful capital. In fact, the difficulty experienced arises not so much from a want of capital as from the want of good investments for capital. There are, however, bubble Companies and bubble schemes, which no capitalists will take up, and the projectors of which wish to trade, under cover of limited liability, upon the small sums advanced by other people, and thereby to escape from personal risk. The question is, whether we shall delay this Bill for another Session, or break through our recorded Resolution and pass it with the certainty of not being able to give it that attention and consideration which its importance demands? The only consequence of adhering to our Resolution will be to delay the Bill for a few months; but if we consent to pass the Bill we must accept its provisions as we find them, and we must be content to have confidence in the care and deliberation which the other House has bestowed upon them. Have we, then, any evidence that the Bill has received an amount of care and circumspection elsewhere, that may make it safe for your Lordships to trust to them? On the contrary, my noble Friend the Chairman of Committees, in tracing the progress of this Bill through the other House, has shown very clearly that it can only have been very hastily and inadequately considered there. If we pass this Bill in an ill-considered form the evil we may do will be irreparable, but the worst we can do by rejecting it will be to delay it for a few months. I need scarcely point out to your Lordships how cautious we ought to be in meddling with a system under which the commercial character of this country has risen to so high a pitch; and surely recent events in the commercial world should teach us that this of all others is a subject which ought not to be dealt with in a hasty and off-hand manner. My Lords, I feel convinced that, considering all the circumstances of the case, if you consent to suspend this Standing Order and proceed with the Bill you will strike a great blow at the character and position of this House in the country, and at its future usefulness as an independent member of the Legislature. My noble Friend the President of the Council tells us that there is a larger number of your Lordships present than is usual at almost any period of the Session; but, if that be so, it is because Her Majesty's Government have determined to use all their power to force us against our will to pass this measure. Let me warn Her Majesty's Government that though they may thus gain a temporary triumph they will ultimately lose far more than they gain; they will forfeit the confidence of your Lordships, by placing you in so unworthy a position in the face of the country, which justly looks up to this House as a great check on hasty and ill-considered legislation. That your Lordships should continue to exercise that important function is the more necessary because, so far as I am able to judge, there never was a time when business was conducted in the other House in a manner so little calculated to command public respect and confidence. I feel so strongly on this subject, my Lords, that when I saw that Her Majesty's Government had put this Resolution on the paper, I returned to town for the purpose of opposing it, and I sincerely trust that your Lordships will not be prevailed on by Her Majesty's Government to give your consent to so dangerous and uncalled-for a Motion.

THE MARQUESS OF CLANRICARDE

said, he should vote for the Resolution of his noble Friend on the very ground on which the noble Earl opposed it—namely, the character of the House of Lords. He thought the greatest blow which the influence and position of the House could sustain would be inflicted upon it if they refused to consider this measure for the reasons alleged by the noble Earl. The noble Earl said that he did not care under what circumstances the Bill had come before them. Was it to be said that because their Lordships had passed a Resolution declaring that no Bill sent from the other House should be read a second time by their Lordships after the 25th July—that on that account a measure of this importance must be rejected with- out consideration? The attempt on the part of their Lordships to stop legislation and to deal with the business of the country in that arbitrary manner would be totally unjustifiable and intolerable. Nor was that the spirit in which their Lordships had passed the Resolution. What they had, in fact, said by the Resolution was, that they would have primâ facie a strong objection to receive Bills after the day named; but they reserved to themselves, both in precept and in practice, the right to consider the circumstances under which each Bill was presented to them, and whether the urgency and importance of each measure were such as to bring it within the terms of the Resolution. What was urgency in a Bill, if it was not its great importance to the interests of the public? When he proposed that a Bill (the Beer Bill) should be introduced last night, it was said that the matter was not of sufficient importance to warrant the suspension of the Standing Order; but now they were told that because the particular Bill before the House was of great importance they must stop it by means of the Resolution. He knew that his noble Friend opposite wanted to pass no Bill at all; but what reason would he give to the public to show them that the 7th of August was a particular day in this year on which the Bill ought not to pass a second reading? The only reason for delay was the personal convenience of noble Lords. If this had been said a month ago it might have been because noble Lords wanted to be in their counties during the assizes, and a month later, the harvest might have been made an excuse; but at the present time the only reason was personal convenience. It had been also said that they were taken unawares; but had they not all read a fortnight ago that the First Lord of the Treasury was prepared to agree that Parliament should sit until September to pass this Bill, which he thought it would not be right for Parliament to rise without adopting? His noble Friend had talked of the influence of Government having been used on the present occasion; but he denied that anything like party or improper influence had been used; and the division would no doubt show noble Lords of different politics voting on the same side. And for what were power and influence placed in the hands of Government, if it were not to protect the interests of the people, where those interests were deeply involved? His noble Friend had rather unfortunately referred to the great honour and high character of the merchants of this country throughout the world; were they to be told that these depended upon a statute which gave to great capitalists a tyrannous monopoly of the most valuable part of trade? He denied that it could be traced to that. His noble Friend had also said that there would be bubble Companies under this law; but even if that were so, what could any man suffer? Perhaps he might lose his hard-earned savings through imprudence in investing them; but was that to be compared to the breach of trust and misappropriation of funds, such as they have recently seen under the present law? At present people looked to a name or to the style of living of a man, without any knowledge of his real means, and fancied that because he spent a great deal, therefore that he had a great deal left behind. There always would be a great number of bubble Companies; but the objection to the present law was that it prevented people who had acquired money by industry, though not sufficient to enable them to set up on their own account, but who had practical knowledge and skill enough to see where capital might be properly laid out, from expending that small capital in a manner which would be of the utmost service to themselves and to their fellow-workmen. Was there any noble Lord who had not known of his own knowledge several useful undertakings which had for a long time failed to be carried out because great capitalists would not undertake them? A comparatively wealthy man could not give his money to forward a scheme, he might not well understand, for he would by doing so be liable to any sort of expenditure that might be incurred, while under the present Bill capital for undertakings calculated to be of benefit to the country would be readily obtained from men of practical science but of small capital. The present law was monstrous, and they themselves had found it to be so, for they repeatedly passed special Acts of Parliament containing exemptions from it, and many Companies had been referred, most unconstitutionally, to the Board of Trade to get charters. That was the step which ought to have been really avoided, and it was indeed wonderful how little mischief had arisen from it. The value in the market of a speculation frequently depended upon whether a charter could be got; and might not people in office give a hint upon that subject? He thought it wonderful that such a facility had not been abused. They might refer to the large railway works formed under the present law; but these had been carried out on plans the most extravagant and wasteful. He quite agreed that their Lordships' Resolution should be brought to bear upon any novel subject suddenly introduced into the House; but was this a thing of that kind? Had not public opinion been gradually led to see that an alteration of the law was absolutely necessary; and why should they say that they ought not at this particular season of the year to pass this short and simple Bill? [A Laugh.] Was not this a short Bill? To adopt the suggestion which had been made to refer this Bill to a Select Committee would be a most unwise step, and could lead to no advantage. The question had been discussed for years; there had been Reports of Committees and Commission upon it. [Lord MONTEAGLE: Reports against it.] No doubt there had been adverse reports, but those reports were not final, and high authorities who gave evidence were favourable, and public opinion had been ascertained upon this subject, which so much concerned the development of the capital and resources of the country. Was there not an immense amount of capital in the country ready to be at once employed, but which could not be employed because of the want of a law like that now proposed?—and on that ground he thought that they should pass the Bill. His noble Friend said that there would be an immense amount of speculation if the Bill passed; but that showed that there was an immense amount of capital which it was urgent should be let loose. The Earl of Derby was known to have expressed an opinion the effect of which was that the law should be altered, and that was perhaps the reason of his absence from the House on that occasion. The great mass of the middle classes were in favour of this measure, for they were prevented from using their capital as they would use it, if the law were different. They had seen what had been done in France when a loan was asked for, and the capital which was held in hand in this country was as great, or perhaps greater than it was in France. There was an immense amount of capital in this country which could not be employed, because under our existing laws it could not be accumulated and put together. He thought that if ever there was any Bill which called for earnest and immediate legislation, it was such a Bill as that before them, and he trusted that their Lordships would proceed to its immediate consideration. Let them sit if they liked until September, but let them not throw over the question through any pedantic formality of consistency, or from adhering arbitrarily to a Resolution intended only for the general guidance of Parliament.

LORD ST. LEONARDS

said, the noble Marquess talked of sitting until September, and probably was not aware that the Government intended that their Lordships should not sit beyond Saturday next. If they were not to sit beyond Saturday, what time was there properly to consider the Bill?

EARL GRANVILLE

observed, that he had already stated that he should interpose no obstacle to their Lordships sitting to consider the Bill.

LORD ST. LEONARDS

said, it was generally understood that they were not to sit after Saturday, and until that was expressly denied he should believe it.

EARL GRANVILLE

expressly repeated that the conclusion of their sittings depended entirely upon the state of public business.

LORD ST. LEONARDS

said, then if the Resolution now moved was carried and the Bill was to be read a second time, he should propose that a period of a week or ten days should be allowed to elapse, in order that their Lordships might be enabled to make themselves acquainted with the Bill. Any one regarding the House and noticing the thin attendance of Peers on that (the Opposition) side of the House, would imagine that the subject under discussion was of very inferior importance, and one in which that side of the House took no interest. But this was a question of the greatest social importance, and one which the House should have a full opportunity of considering; and it ought not to come to a hasty and premature conclusion, simply because the friends of the Government had mustered in force to pass the Bill without discussion. When they were told that the subject had been for twenty years under discussion, it should be remembered that there had never been any discussion upon it in that House; and he contended that it was unfair to take advantage of the absence of noble Lords on that side of the House, who had been led to believe that the Bill could not be passed in the present Session. Should the Resolution of the House be suspended on the present occasion, he should consider it a mere trap for future occasions when it was intended to pass measures without due notice. No one could doubt that the noble Earl the leader on that side of the House (Earl of Derby) would have been present if he had imagined that such a great question would be really dealt with at this period of the Session. Then, with regard to the Bill itself, what was it? It was originally proposed that Companies to be established under the Bill should have a capital of not less than 20,000l., which should be composed of shares of not less nominal amount than 25l. each, upon which at least 20 per cent should be paid up. That restriction proved that sensible men who approved the principle, still thought it necessary to interpose some checks. The Government then proposed to reduce the nominal capital to 10,000l., but ultimately the restriction as to the amount of capital was wholly omitted. The shares were cut down to 10l., of which 20 per cent was to be paid up, so that under this Bill, which was said to be perfect, 10,000 Companies could be started with no more capital than 250l. or 300l. each. The noble Marquess seemed to think every one ought to understand this subject; but he himself had not shown that he really comprehended it, for he talked of the railway mania exhibiting the want of a measure of this sort, when in truth the measure had not the slightest operation upon railways.

THE MARQUESS OF CLANRICARDE

explained that, he said the railway mania showed there was no security from the present law against the dangers apprehended from passing this Bill.

LORD ST. LEONARDS

said, the railway mania had no more to do with limited liability than with the moon. The railway mania arose from an immense amount of capital being entrusted to people who wasted the greater portion of it in opposing each other, and in litigation. To return to the real question, the law of this country was not opposed to the principle of limited liability, for any person or Company in their dealings might limit the amount of their liabilities, provided only that it was held out to the public that they were only liable to that limited amount. All our charters were charters of limited liability. But at the same time the per- sons seeking this privilege of limited liability were compelled, and wisely so, to submit to numerous regulations and restrictions, and in the charters granted by the Board of Trade it was the special duty of the Lord Chancellor, a duty which he, when in office, faithfully discharged, to examine them carefully for the purpose of seeing that their provisions did not go beyond the proper limit. Every care was taken in such cases to provide proper fences and safeguards, but no fence whatever was provided by this Bill, nor was the slightest security afforded by it against the formation and establishment of bubble Companies of the worst possible description. It was fashionable to say they ought to let people make their own bargains, but if they removed the guards against abuse, they would be applying a law between party and party, which did not and ought not to exist without serious restrictions. He was not opposed to limited liability, though he was wholly opposed to limited liability without proper securities and safe-guards. The question they were called upon to decide was simply whether, if there were no Standing Order of this sort before their Lordships, they would at this period of the Session enter upon a discussion of a measure of so much importance, or whether, this Standing Order being in existence, their Lordships would feel disposed to rescind it in order to afford opportunity for an incomplete discussion of the Bill. In his opinion the Resolution of their Lordships not to receive any Bill after a certain date ought not to stand in the way of any measure which was of an urgent character, but he denied that the present Bill was one of urgency. He had shown every disposition to assist Her Majesty's Government, and he would not for a moment obstruct any measure which he believed to be really urgent and necessary, and to which the attention of the noble Lords on his side of the House had been called. But he could not believe that it was a matter of indifference whether that side of the House was or was not represented on such an important occasion as the present, and he asserted that his noble Friends were fully justified in withdrawing their attendance when they knew exactly the state of the business in the House, that there was nothing calling for their attention, and that the minority were secured against a tyrant majority by the Resolution that the House would not read any Bill a second time after a particular day, which day had expired before they left town. If Her Majesty's Government persisted in forcing this measure through the House without giving any opportunity of duly considering it, they would lose that consideration and respect which he had hitherto entertained for them. It appeared numbers and not opinions would carry this important question. He did not mean to say that noble Lords opposite were incapable of forming opinions, but he said they had no right to form any opinion on this measure without its being discussed. Lord Overstone, who had declared a strong opinion against the principle of the Bill, was inaccessible. Other noble Lords, whose opinions on the question would be respected, were also absent. He should vote against rescinding the Resolution; he should vote against the second reading; he should support the noble Earl in his proposal to refer the Bill to a Select Committee; and he should give the Bill every possible opposition, not because he disapproved the principle, but because he disapproved the conduct of Her Majesty's Government on this occasion. As the Bill stood, a more mischievous measure was never framed. If it passed a vast number of small Companies would start up, which by their failure would spread constant alarm and mischief among the mercantile community. A flaming prospectus would be issued, promising a large amount of interest, and domestic servants, artisans, and small tradesmen, hoping to gain large profits, would, instead of taking their money to the savings banks, invest their savings in 10l. shares in these undertakings, with 2l. paid up and the promise of limited liability. When the money had once got into the hands of the Company it would be difficult to get it back again. This country had long flourished under the very laws which their Lordships were now asked to alter. There was no reason why they should not improve those laws, but there was every reason why they should not alter them hastily. Noble Lords opposite might obtain their own sanction to this Bill, but they would not obtain the sanction of that House. They might even carry the Bill, but it would not be with the sanction of their Lordships' House. If the Government wished to retain the respect of the public for that House, they would not attempt to pass a Bill requiring so much deliberation at a period when it was impossible to give it. Look at the manner in which the other House treated their Lordships' Bills. They were refusing, day after day, to consider measures that had been most fully considered by their Lordships, because they arrived too late to be properly considered. But the other House sent their Lordships up a Bill of a thousand times greater importance at the last hour, and he, for one, refused to agree to such a measure when it arrived at too late a period for deliberation.

THE LORD CHANCELLOR

said, there was one expression in the speech of his noble and learned Friend which he could not accept. His noble and learned Friend said it was incumbent upon him to oppose the second reading of the Bill in every possible way, that he would support a Motion for referring the Bill to a Select Committee, and that he would dispute every clause of the Bill from beginning to end. That was a perfectly legitimate course. But his noble and learned Friend had said that he should resist the attempt to rescind this Resolution. Now, no one asked his noble and learned Friend to rescind the Resolution, or to do anything that it did not warrant. It would indeed be the most unconstitutional Resolution that ever passed, if, when a measure of urgency came up to their Lordships, they were prevented by this Resolution from considering it. But, in truth, nothing was required by the Resolution now before the House more than was provided for in the Standing Order itself, namely, that of allowing Bills of urgency to pass; and the question was—not the propriety of rescinding the Resolution, but whether this Bill was one which came within its meaning as a Bill of urgency. He believed that, unless their Lordships took a most liberal view of the question of urgency, they would strike a very dangerous blow at the constitution, and encourage the opinion which some theorists expressed, that their Lordships were mere obstacles to improvement. There could be no doubt that this was a measure of urgency. It was said that a great deal of speculation was already on foot; but was not it desirable to strike a mortal blow at it, and, instead of postponing the matter to next Session, to settle it at once? He believed there would be no such abuse of the proposed law as his noble and learned Friend anticipated. The question was not so much whether there was to be limited liability or not, as whether we were to have one Government after another, and one President of the Board of Trade after another putting different interpretations upon the circumstances under which it was desirable to grant charters. He hoped their Lordships would not leave the public in a state of uncertainty with regard to this measure, but would decide whether it should or should not be passed. On the grounds he had stated, without going into the merits of the Bill, he thought that a sufficient case of urgency had been made out to justify the suspension of the standing order.

LORD MONTEAGLE

thought it would be in every respect better for the preservation of the regularity of the proceedings of their Lordships for securing the respect and confidence of the public, and perform the duties and obligations which the Government owed to Parliament, if they were invited to repeal the Standing Order altogether than to be called on to suspend it upon an occasion like the present. He was not unprepared to consider the question on a fitting occasion. He was ready to consider the question of limited liability when it came before him at a proper time; but the arguments he had heard in favour of the Motion before the House did not apply so much to the urgency of the measure, as to its importance—two very different points. It was the former and not the latter consideration that could justify them in suspending their Resolution. That urgency had not been shown—what was the House called on to consider? Three separate editions of the Bill had been submitted to the House of Commons, and the Government must be prepared, if they intended to proceed with the present measure, to have their own original propositions moved as Amendments, and they would be compelled to adopt their original recommendations or to justify the change; for the great danger which, in his opinion, might result from the passing of the Bill, should be sufficient to make the House cautious in giving assent to it. He feared that if it was carried in its present shape, without the limitations and restraints originally very wisely introduced, would be the establishment of a number of commercial "little goes" and bubble Companies, which would have the most injurious effect upon the country. It had been the fashion to say that it was only the interested large capitalists who were opposed to the Bill. A more vulgar and unfounded accusation could not have been made, or one which betrayed greater ignorance of economical science, than that the capitalists were opposed to the industry of the coun- try. Those interests could never be antagonistic. They were, on the contrary, identical. Capital could not be profitable but through labour, nor labour productive but by the aid of capital. It was not surprising that this cry had made its way among the most prejudiced of the least improved classes, but he had been shocked and surprised to hear it repeated by any leading Member of the Legislature. What could capital do without industry? It was through industry alone that capital could be made productive, and when left free from interference and from artificial facilities, capital was sure to be employed in the most profitable manner. But the Resolution of his noble Friend (Lord Redesdale) was, it appears, attacked as unconstitutional. It was said that it would not be endured that one branch of the Legislature should resolve that after a given day they would not entertain legislative measures. But their Lordships had not adopted this rule for their own convenience, but because without it their legislative functions could not be performed either creditably to themselves or usefully to the community. The sole object of the Standing Order was to provide due and sufficient time for the discussion and consideration of matters of importance, and the House of Commons had itself acted on the same principle in regard to proceedings for the punishment of those of its own Members who had intruded themselves into Parliament by improper means; yet, surely there was nothing now at stake more sacred than the freedom of election. This Bill had occupied the House of Commons from May to August, and now their Lordships were asked to waive their rule, on the ground of urgency, in favour of a measure that ought to have been introduced in 1854. Moreover, this measure had been three times revised and reprinted, and in its present shape it was not the Bill that the Government introduced on their own responsibility, but differed from it in most essential particulars. Therefore, by adhering to their Standing Order, by asking more time for deliberation, by acting with the same caution evinced by the House of Commons, their Lordships would justify the public confidence reposed in them as a calm deliberative assembly, who would not allow themselves by passion or claptrap to be betrayed into a sanction of precipitate changes in a commercial system, which afforded a glorious example to the world, and a striking contrast to the legislation of other countries where a different code prevailed. On these grounds he must resist the suspension of the Standing Order, although he was ready to consider the question of limited liability whenever there was time afforded for dealing with it in a wise, cautious, and beneficial manner.

On Question, their Lordships divided:—Content 38; Not Content 14: Majority 24.

Resolved in the Affirmative.

List of the NOT CONTENT.
MARQUESS.	St.Vincent
Bath	Hawarden
EARLS.	BARONS.
Fitzwilliam	Lyttelton
Harrington	Calthorp
Grey	Wynford
VISCOUNTS.	St. Leonards
Beauchamp	Monteagle
Middleton	Redesdale