§ The Order of the Day for Standing Order, No. 176, to be considered, in order to its being dispensed with, read.
§ THE EARL OF HARDWICKE
, in moving the suspension of the Standing Order for the purpose of allowing this Bill to be introduced, observed that he was in no way connected with the Fibre Company, being neither a shareholder nor knowing anything of the parties concerned; he appeared before their Lordships more in the character of a counsel than as a person about to discuss a topic of his own. It would be well known to their Lordships that the article which constituted the basis of the manufacture of paper was becoming extremely scarce; and that at the same time the consumption of paper was rapidly increasing, having increased, between the years 1842 and 1854, from 96,000,000 lbs. to 177,000,000 lbs., and it was impossible to procure a sufficient quantity of rags to supply the demand for paper. A short time ago The Times newspaper offered a reward of 1,000l. to any person who might succeed in inventing or discovering any new material for the manufacture of paper produced in sufficient quantity to supply the demand that had grown up. This offer led people to look about them and consider what could be done, and it was found, after various experiments, that excellent pulp and excellent paper could be produced from the refuse fibre of flax after the oil had been extracted. He held in his hand the copy of a newspaper printed upon paper manufactured of this material, from which the great value of flax as an article for the manufacture of paper would be perceived at once. In consequence of the satisfactory nature of the experiments which had been made, a company had been formed for the purpose of making paper from this article, and he now appeared before their Lordships for the purpose of asking them to permit the introduction of a Bill for their incorporation, which had already unanimously passed the House of Commons. At its entrance into their Lordships' House, it was, however, encountered by one of their Standing Orders, which rendered it necessary that three-fourths of the capital of an intended company should be subscribed before the Bill 868 was read a first time in that House. That Standing Order had, however, been dispensed with in various cases of railways, and also in the case of an electric telegraph company. The object of the Standing Order was to afford a certain amount of protection to the public; but he thought that sufficient securities on behalf of the public were given by certain Acts of Parliament now in existence, and by other Orders of their Lordships' House, and he now asked their Lordships to suspend this Order, and permit the introduction of a Bill relating to a subject of so much public importance.
§ Moved, That the said Standing Order be dispensed with on the said Bill.
§ LORD REDESDALE
opposed the Motion. This Bill was one seeking to establish a company with the privilege of limited liability. Now, he did not see how they could consistently relax the Standing Order in this case, unless they were prepared to relax it with regard to all fibre companies; and, if so, he did not see how they could refuse to abrogate it with respect to all companies for carrying on manufacturing processes.
§ LORD STANLEY OF ALDERLEY
said, he would not say that the Standing Order in question was the best that could be framed, but while it existed h should be enforced, unless a special cause was shown to the contrary. No special cause had been shown in this instance; and, therefore, he trusted the Motion would not be agreed to.
§ THE EARL or DERBY
said, he did not know much of the merits of the case before the House; but it appeared to him that upon one ground, at least, it was entitled to favourable consideration. The Standing Order required that three fourths of the capital of the company to be created should be subscribed before the Bill entered the House; but this Bill wag for the expenditure of capital spread over a long series of years. With regard to the question of limited liability, he must be permitted to complain of the course which had been taken by the Government upon that subject. A Bill on the law of partnership and limited liability was announced to be in preparation as far back as November last. At the commencement of this Session, he (the Earl of Derby) asked the noble Lord opposite what was the intention of the Government respecting it, and he was then told that it was considered important that it should be settled without 869 delay, and was assured that shortly after Easter a Bill should be introduced for the settlement of the whole question. But we were now approaching Whitsuntide; at all events, we were nearly six weeks past Easter, and yet no measure had been introduced upon the subject. He must say, that he could not understand why, during the whole of that time, the President of the Board of Trade had not taken up the question, and introduced a measure in this House, which, thus far, had certainly not been overburdened with business. Notice had been given to bring in the Bill in the House of Commons on Thursday next; but he very much doubted if the opportunity would be found of doing so on that day, or, indeed, until after Whitsuntide; in which case he saw very little prospect of the Bill passing into a law during the present Session.
§ LORD OVERSTONE
said, he saw in Bills of this kind the first premonitory symptoms of a great disease, which he thought was likely to settle upon this country—he meant the indiscriminate desire for limited liability without fully considering or understanding the principles upon which that question rested, or what was really conducive to the public interest of the country. The Standing Order which it now sought to override was passed by their Lordships in 1824—a period well known to have been characterised by an extraordinary mania for joint stock speculations—dishonest in their purpose and dangerous to the community; and the object of this Standing Order was to protect creditors from speculators who were trading with the capital of other people. He confessed that he heard with satisfaction the assurance of the noble Lord who presided over the forms of this House (Lord Redesdale) that he should oppose the suspension of this order, because he believed that, if maintained, it would now present to the people of this country a protection against the recurrence of such embarrassments as those which led to its establishment in 1824. That danger now assumed the form of asking the Legislature to assent to Bills enabling an undertaking to be carried on, not with the capital of those who conducted it, but with the capital of others, and at the same time protecting these speculators from the repayment of that which they borrowed to the utmost extent of their property. This Bill was promoted under the pretence that there was a great demand for an article of essen- 870 tial importance, and that it would be impossible to attempt to supply that demand unless the Legislature enabled capitalists to combine for the purpose of carrying out a certain invention. Now, this was a just ground for legislative interference, provided the persons calling for it came forward in good faith. The question involved two great objects—the maintenance of the high commercial character and the protection of honest creditors; and there were two principles on which commercial undertakings might be carried on—one was by the subscribed capital of the parties interested, and the other by confidence in the integrity, assuidity, and zeal of the undertakers. Great complaints were made that such was the present vicious state of the law of partnership that capitalists, anxious to enter upon a legitimate speculation, were prevented from doing so. What, however, did they find when they looked at this Bill? Why, that the very moment the persons with whom these complaints originated came into contact with the wise and just Standing Orders of their Lorships' House, which required that speculators asking to be protected beyond the full extent of the obligations they might contract should at all events be called upon to subscribe three-fourths of the capital required for their undertaking—the moment they were required to do this they asked for the suspension of that Standing Order. It was impossible sufficiently to condemn the audacity of parties who asked for limited liability on such loose and insufficient grounds. Deeply interested as he was in the maintenance of the commercial character of this country, and in the protection of honest creditors against fraudulent debtors, he trusted that a Standing Order, which he looked upon as involving this high commercial principle, would not be dispensed with by their Lordships.
§ EARL FITZWILLIAM
agreed with his noble Friend who had just sat down that it was of the utmost importance that, in any commercial speculation which Parliament might encourage, there should be the greatest attention paid to the security of those who became the creditors of the concern. He concurred, also, with his noble Friend opposite (the Earl of Derby) in the regret which he had expressed that the Government had been prevented from giving that consideration to the general subject of the law of limited liability which he had been led to believe that they would have given to it in the present Session 871 of Parliament. His noble Friend who had just sat down had taken a somewhat exaggerated view of the question, and had entirely left out of view the numerous important public interests which were thwarted and impeded by the present state of the law. What he (Earl Fitzwilliam) would suggest was, that the Government should appoint a Committee to inquire into the best mode of carrying into effect the principle of limited liability. Undoubtedly it was a question which deserved to be most seriously considered, and he believed that means might be devised for establishing the principle of limited liability, and, at the same time, for securing creditors, who certainly ought to be protected, against the frauds of speculators who were trading upon the capital of others.
§ EARL GRANVILLE
thought that it was better not to enter at that time into a discussion of the general question of limited liability; but he must say that the noble Earl opposite had pressed a little unfairly upon his noble Friend the President of the Board of Trade, who, to his (Earl Granville's) personal knowledge, had from the very day of his appointment devoted his attention to the details of the Bill which the Government proposed to introduce, which had at that time already been prepared. It was the wish of his noble Friend that that measure should be introduced at as early a period as possible, and he had wisely determined to introduce it into the other House, where alone could be found the representatives of the great commercial interests of this country. Notice had been given three weeks ago of its introduction into the other House, but it had been compelled to give way to other business, over the management of which his noble Friend had had no control. As that Bill, however, was now fixed for Thursday next, it would be better to postpone any discussion upon the general subject until it should come up from the other House. With regard to the particular question before them, it appeared to him that the arguments of the noble Earl who had introduced the subject had been directed solely against the Standing Order as it existed, and that he had not shown any special reasons in regard to this Fibre Company which should exempt it from the operation of the general Standing Order. Under these circumstances, if the noble Earl divided, he should vote against him.
§ LORD BERNERS
did not agree with 872 the noble Earl when he stated that no special case had been made out for the suspension of the Standing Order. On the contrary, he thought that a very good case had been made out, for his noble Friend had shown the extent of the demand for paper annually, and that the supply of rags in this country for its manufacture was only equal to one-fourth of that demand, thus leaving the remaining three-fourths to be obtained from other parts of the world. The fact was, that the case was one of great emergency. The Government had promised that the blockade of the Baltic and the Black Sea should be an efficient one; and, in that event, there would be a considerable deficiency in the supply of Russian produce. It became the bounden duty of this House, therefore, by every means in its power, to encourage our own country and the colonies in the endeavour to supply the demand for that description of produce.
§ THE EARL OF HARDWICKE
briefly replied, and observed, that considering the view which seemed to be generally entertained in the House, and that the Government had promised that a Bill for limiting liability should be introduced into the other House on Thursday next, his better course would be to wait until that Bill had received the consideration which the question deserved, and not press their Lordships to a division on the present occasion.
§ Motion (by leave of the House) withdrawn.