§ Order of the Day for the Third Reading read.
§ LORD STANLEY OF ALDERLEY moved, That the Bill be now read 3a.
§ LORD LYTTELTON
said, he would take that opportunity of making his final protest against the hurried manner in which this Bill had been passed through its preceding stages. It was impossible there ever could be a case to which the Standing Order, fixing a day beyond which no Bills would be read a second time, applied, if this were not that case. The question was a new one; it had never been before their Lordships, and it was one of great importance, involved in much complication. There were differences of opinion upon it, and it peculiarly required the most unmeasured consideration. Having been a Member of that House for seventeen years, he could only say he never knew an instance in which their Lordships had been treated with so much indignity—first, in the Government forcing on the Bill at all; and next, in refusing to refer it to the consideration of a Committee upstairs.
§ THE MARQUESS OF LANSDOWNE
said, he was anxious to take that opportunity of stating that, although he had been distinctly and uniformly, from its first conception, in favour of the principle of the Bill, and although he was in favour of the Bill as it then stood, amended and improved by many of the alterations that had been made in its progress through that House, he did not share in the very sanguine expectations that were entertained, with regard at least to its immediate operation; but he had not the least doubt that the ultimate effects of it would be beneficial. Looking at the measure, and considering the proneness there was in this country, beyond any other in the world, to seek wealth and to expect to obtain it by following untrodden paths, merely because they were untrodden, he believed that great expectations of deriving profit by the operations of the Bill were entertained by many ill-informed parties. But experience would be acquired on the subject, and after it was acquired there was no doubt the operation of the Bill would be beneficial. The Bill was one that rested, and legitimately rested, upon the principle of free trade. By that principle there was established, and would, he hoped, be maintained, in this country the doctrine that any two parties had a right to make a contract in the way most beneficial to themselves; and if one 2124 person chose to enter into that contract exposing the whole of his fortune, and if another person chose to enter into the contract exposing only a limited part of his fortune, the one had as good a right to do so as the other, provided care was taken hat the parties with whom they contracted were aware of the conditions on which he contract was made. It was necessary that the other parties with whom they contracted, whether it was an individual or a public Company, should be made duly sensible of the nature of the risk they ran; and it was the peculiar duty of Parliament in passing an enactment of this nature to provide that such should be the case:—he trusted, therefore, that the securities introduced into the Bill would be sufficient to enable every person to know precisely the nature of the contract he entered into when le undertook to supply this new Company with anything it wanted, and that they would likewise be sufficient to provide the means by which every person taking part in the Company would know exactly the amount he risked. There would probably be failures at the commencement from the too sanguine expectations which were raised. In one respect, he thought there would be a great social improvement effected by this Bill; one of the evils of the commercial and social intercourse in this country being that the credit which was so useful in large transactions, and without which men could not carry out those transactions, was carried down to minor transactions, thereby producing a number of disappointments and losses. He should be extremely glad, if the persons who became connected with the Companies established under the Bill did so with their eyes open, and that they would receive that immediate payment which he sincerely wished was more generally required in this country in all transactions, and which he hoped the Bill would serve to introduce. Upon these considerations, he was of opinion the Bill was one in which the Government had a right to introduce a Motion for suspending the Order, For introducing which he always thought their Lordships were much indebted to his noble Friend (Lord Redesdale). He was glad of the opportunity of saying, nothing would have induced him to Vote for the suspension of the Order in this case had he not thought, perhaps erroneously and differing from others, that it was a case of urgency. It was within his own knowledge that many of the most useful and legitimate undertakings, to 2125 some of which he would subscribe himself if it were not for the law of unlimited liability, were kept in a state of suspended animation for want of a measure of this sort, at a time, too, when there was the greater necessity of calling into action all possible resources and encouraging every possible extension of employment. It was upon that ground he had voted for the suspension of the Order, and he should deeply regret if the consequence should be to affect that Order in general, or to induce his noble Friend to withhold his constant watchfulness upon its due observance.
§ LORD REDESDALE
said, he must thank the noble Marquess for the speech he had made, for he had most distinctly laid down that it was the urgency, and not the importance, of a measure which should exempt it from the operation of the Order. His (Lord Redesdale's) objection still remained to the Bill, and he was convinced that it was an extremely imperfect measure. His opposition throughout was not directed to the principle of the Bill, but he desired to improve it and render it a working measure. He had done all he could to improve the Bill, and many things their Lordships had done tended to improve it. He thought it materially improved, so far as it applied limited liability to existing Companies upon their giving proof of solvency. There could be no objection to give to such Companies the limited liability provided by this Bill; but that was not the case with regard to many Companies that would be formed by this Bill. Many Companies would be got up by persons who would derive profit by starting Companies, and getting a certain amount of deposits, out of which they would obtain payment for their own labour. Such Companies would not arrive at maturity—there would be a good deal of plunder of the smallest capitalists—and the question was, how far it would be expedient to require that a Company should be fully registered for a couple of years, and then subject to audit, before they could take advantage of the limited liability. By doing that the public would have some assurance as to the mode in which they would conduct themselves in future.
had no difficulty in voting that the Bill be read a third time, and that it do pass. He regretted that their Lordships had not had more time for the consideration of the Bill, but he had been, and was still, of opinion that a case 2126 of urgency had been made out for the suspension of the Standing Order. He was afraid that great disappointment would arise from the operation of the Bill as it stood. There were very few trades to which the principle of Joint-stock Companies could be successfully applied; but, on the other hand, he thought there was no great danger of indiscreet credit being given to Companies of limited liability.
§ LORD MONTEAGLE
trusted that the gentry, clergy, and friends of the working classes would advise them against inconsiderately entering into speculations arising under this Bill.
§ EARL GRANVILLE
expressed his regret that a charge of showing disrespect to the House should have been made against him by his noble Friend (Lord Lyttelton). The urgency of the case had been acknowledged by the noble and learned Lord behind him (Lord Campbell), and by his noble Friend the Marquess of Lansdowne, whose authority on a question affecting the dignity of the House could not be diminished by the fact of his being connected with the Government. He (Earl Granville) was glad that this had been acknowledged, because he would be most unwilling to be deemed wanting in respect to their Lordships' House. He very much doubted if the Bill would be improved had they a longer time to consider it, for all the Amendments proposed were restrictions on the principle of the Bill, and he thought that the Bill would go forth with a greater chance of success if these Amendments had not been introduced. Observations were made with regard to the speculative feeling it would create, and people might be foolish enough to be deceived by groundless expectations; but the principle of the Bill was, on the one hand, to limit the expenditure, while in the nature of things it was likely to limit the profits. They had no right to consider that in passing this Bill they had discovered anything new. Under the common law any; two persons under a special contract could limit their liability, and all they proposed was, that a general measure should supersede the necessity for special contracts.
hoped that this Bill would be the forerunner of a more general system of free trade in the application of capital to mercantile engagements, and that it would lead to the adoption of the American system of commandite and commanditaire. In the meantime the present 2127 Bill would, he had no doubt, confer a benefit upon the community.
§ After a few words from Viscount St. VINCENT,
§ Motion agreed to.
§ Bill read 3a accordingly, with the Amendments.
§ LORD STANLEY OF ALDERLEY
, although he still entertained an opinion that it would be a matter of extreme difficulty to interfere in the auditing of Companies' accounts, yet, in deference to what appeared to be the general feeling of their Lordships, proposed to add a clause to the effect that, in the event of any Company, formed under this Bill, obtaining limited liability, and being subject to the Joint-stock Companies' Act, if one auditor only be employed to audit the accounts, that he should be nominated subject to the approval of the Board of Trade. If two or more auditors were appointed, one of them must be appointed by the Board of Trade, and in the event of no auditor being appointed by the Company, then the Board of Trade to have the power to appoint one, as it now had under the Joint-stock Companies' Act.
§ Clause agreed to, and added to the Bill.
§ LORD MONTEAGLE
proposed a clause, to the effect that nothing in this Bill should exempt Companies formed under it from being subject to the provisions of any future Act for the better regulation of Joint-stock Companies.
§ Clause (by leave of the House) withdrawn.
THE LORD CHANCELLOR
proposed, after Clause 15, to add a clause expressly rendering Companies formed under this Bill subject to the provisions of the Joint-stock Companies Winding-up Act.
§ Clause agreed to, and added to the Bill.
§ Bill passed, and sent to the Commons.
§ House adjourned to Monday next.