RAILWAY BILLS—STANDING ORDER CLXXXV. (Hansard, 12 July 1861)

§ LORD REDESDALE
proposed an alteration in the Standing Orders in regard to Private Bills, and said, that many of the railway schemes that were brought before their Lordships were often got up by a solicitor, and engineer, and a contractor, who were sure to make a profit out of it, whether it was sanctioned by Parliament or not. They were often very imperfectly prepared, did not accommodate the district which they traversed to the full extent, and were defective in the junctions which they made with main lines. The funds, also, were frequently proposed to be derived only in a small degree from the promoters, and chiefly from some large Company with whose line they formed a junction. It was of great importance that the persons who appeared as the promoters of branch lines should be obliged in the first instance to communicate with the Companies whose main lines they joined; and he believed that that could be done in no other way than that which he suggested. A noble Lord opposite (Lord Portman) had given notice of an Amendment, in which he sought to secure the same object in a different manner; but he (Lord Redesdale) maintained that it would be accomplished more effectually and more legitimately by the means he proposed. The noble Lord's scheme was, in fact, the present system with several additions, which rendered it more objectionable. The noble Lord then moved— That the Standing Order No. clxxxv. (formerly 223) be considered, in order to its being Amended in the following Manner: after paragraph 2, to insert— 3. That no Provision authorizing any Company to raise money, or to subscribe towards, or to guarantee any Money in the Undertaking of another Company, shall be introduced into any Bill which is not brought in by the Company thereby authorized to raise Money, or to subscribe, or to guarantee, or of which such Company is not a Joint Promoter with the other Company, and shall have been named as such in all the 775 Notices required by the Standing Orders of the House prior to the Introduction of the Bill to Parliament.

§ LORD PORTMAN
had given notice to move as an Amendment, That when in any Bill a Provision is inserted authorizing any Company to subscribe towards, or to guarantee, or to raise any Money in aid of the Undertaking of another Company which Bill is not brought in by the Company so authorized, Proof shall be required before the Examiner whether the Company so authorized has any Bill before Parliament in which such a Provision could be inserted; in the event of there being such a Bill before Parliament the Examiner shall report the Name or short Title of such Bill to the House; in the event of there being no such Bill before Parliament the Examiner shall report whether Proof has been given that the Company so authorized has consented to such Subscription Guarantee, or raising of Money at a Meeting of the proprietors of such Company, held specially for that Purpose, and that such Provision was approved by the Proprietors of the ordinary Shares of the Company, present in Person or by Proxy, holding at least Three-Fourths of the paid-up Capital of the Company represented at such meeting, such Proprietors being qualified to vote at the Meeting in right of such Capital only; in case no such Proof had been given no such Bill shall proceed without the special Order of the House. The noble Lord said, that he had the same object in view as the noble Lord the Chairman of Committees, but he thought his proposal would avoid the very large expense which would be entailed in the case of small lines, if the great Companies who were to assist were made joint promoters of the Bill, in the manner suggested by the original motion. He intended by the words in the last paragraph to provide that the Bill should not proceed in the absence of proof of the Order being complied with, precisely in the same way as when the Examiner reported that the Standing Orders of the House had not been complied with; and if those words did not give effect to that intention he had no objection to alter them. Any suggestion from the noble Lord the Chairman of Committees came with great weight, and any counter-proposal from another Peer came with greatly diminished weight; but he thought the safest course would be to be well-advised before either Resolution was adopted, and in a matter of such difficulty as this he hoped his noble Friend would consent to the appointment of a Select Committee, who, in a few hours, might consider the point and advise the House upon it.

§ LORD EBURY
said, he regarded the ordinary shareholders in a railway com- 776 pany as the mortgagors and the debenture holders as mortgagees; and he, therefore, thought the former should have a voice in any increase of debt which would diminish the value of their reversion. All lines of railway conferred great benefits, especially on the working classes, who were enabled to travel over them, and many lines could not be undertaken without the assistance of larger companies. He trusted, therefore, that their Lordships would pause before they threw difficulties in the way of the construction of these small lines, which were often of the greatest value to agricultural districts.

§ EARL GREY
said, that no one could dispute that railways were the source of immense advantage to the country, but it was greatly to be lamented that so many millions of capital had been uselessly wasted on those undertakings. It was quite clear that if there had been a proper system of railway legislation a greater amount of accommodation would have been afforded to the public at the same time that a higher amount of interest would have been secured to the shareholders. Both the noble Peers who had spoken concurred in stating that under the existing system there was great abuse, and it was the duty of Parliament to guard against that abuse as much as possible. Parliament ought not to be asked to pass Bills for branch railways on the faith that great companies would subscribe unless the question was fairly brought before the shareholders of those companies whether they would subscribe or not. The directors should not be permitted to engage in undertakings which could not pay, and which could only result in loss to their shareholders, without first having their sanction. It was not very material in what manner the difficulty was met, but on the whole he preferred the Amendment, with the omission of a few words towards the conclusion of it.

THE MARQUESS OF CLANRICARDE
said, he was not surprised that their Lordships should have digressed into a discussion of much more importance than the consideration of a Standing Order. There had been a great waste of money upon railways as compared with the accommodation which they afforded, and this was partly owing to the vicious tribunal which dealt with them, and partly to the assistance given by the great companies to new lines, not in consideration of the wants of the districts, but of the extent of territory which 777 they could thereby secure against their rivals. He agreed that the shareholders in large companies should give their assent to any scheme on which it was proposed that their money should be lent, and he thought the Amendment of the noble Lord (Lord Portman) would give effect to that object in a more temperate manner than the original proposition of the Chairman of Committees. It was mostly on compulsion that the great companies had given their assistance to the small lines. Their Lordships ought to be very cautious how they imposed further checks on the construction of small lines, which were essential to the improvement of the country.

THE EARL OF LUCAN
hoped their Lordships would pause before they adopted either noble Lord's Resolution. He had had considerable experience of railways in Ireland, and if this Resolution had been in force for the last eight or ten years the progress of the railway system in that country would have been very much impeded.

§ EARL GRANVILLE
said, there could be no doubt that the tendency of this Standing Order would be to check the promotion of branch lines, which, in many cases, were very advantageous to the country. The two noble Lords who had spoken first on this subject agreed as to the existence of the evil, but differed as to the remedy to be applied, and of the two he thought it would be much safer to appoint a Select Committee, composed chiefly of noble Lords who were in the habit of taking part in the private business of the House, than to rush into the adoption of the Resolution which the noble Lord opposite had moved.

§ LORD REDESDALE
said, he was perfectly prepared to acquiesce in any proposition which would tend to remove the evil of which he complained, and if noble Lords would give their time and attention to a Select Committee he should be very glad to have the matter referred to it. He must protest, however, against the doctrine that great Companies should be compelled to subscribe their money to make lines which were in no way profitable to them. It was not fair that because many of their directors happened to be mixed up a great deal with persons who were concerned in getting up these schemes that, therefore, the shareholders should be injured by having their money subscribed to lines which could be no benefit to them.
778 The small remuneration which railway property now earned was owing chiefly, he believed, to competition to get hold of districts which did not enter into their original schemes. Railway companies had shown too great eagerness to become great concerns, and with that view had undertaken matters which did not repay them the price they had to pay. What he desired was that railway companies should carefully consider all these points before they came forward to undertake new schemes. He would consult with the noble Lord opposite as to the appointment of a Select Committee.

E. Lucan.	L. Colchester.
E. Lonsdale.	L. Portman.
L. Wycombe.	L. Overstone.
L. Redesdale.	L. Churston.