Lords Sitting of 14 May 1866

MINUTES.
Took the Oath—The Marquess of Westminster.
PUBLIC BILLS—First Reading—Burials in Burghs (Scotland) * (112); Drainage Maintenance (Ireland) * (113).
Second Reading—Inclosure * (107); Harbour Loans * (104); Superannuation (Officers Metropolitan Vestries and District Boards) * (91).
Committee—Attorneys and Solicitors (Ireland) 1866 (60): Contagious Diseases * (95).
Third Reading— Labouring Classes Dwellings * (69), and passed.

MINUTE OF COUNCIL ON EDUCATION—THE CONSCIENCE CLAUSE.

  QUESTION.
  THE ARCHBISHOP OF CANTERBURYsaid, he would now put to his noble Friend the President of the Council, the Question of which he had privately given him notice respecting "the Conscience Clause" of the Education Code. He brought this question forward in no spirit of hostility, but with the sincere desire that this long-vexed question might be peaceably settled, and he hoped that the answer the noble Earl might give would tend to that effect. The questions he was about to put arose out of a correspondence which had lately taken place between two clergymen of the Church of England and the Secretary of the Committee of Council on Education. The Rev. Mr. Caparn put two questions—first,
  "Whether the Apostles' Creed was one of the formularies of the Church which a parent might require his child not to be taught; and secondly, whether the managers of a school might make the daily reading of the Bible absolutely necessary for all children."
  The reply of Mr. Lingen, the Secretary of the Committee of Council, was in these words—
  "In answer to your first question I am directed to state that the Apostles' Creed being a formulary of the Church of England, might be required not to be taught to a child by its parent who belonged to a communion wherein that Creed was not used. In answer to your second question, whether the clause aforesaid allows the promoters of the school to make the daily reading of the Bible by every child an absolute rule of the school, I am directed to state that the clause allows the managers to do so, so long as the text of the Bible is not employed to enforce doctrine which (ex hypothesi) is that of the Church of England, but is not also that of the parents."
  That answer was interpreted to signify that no clergyman was to be allowed in the ordinary teaching of a school to lay down
  848
  any doctrine of the Church of England to which the parents of any child might object. Of course, if that was the case, not only might any doctrine of the Church of England be excluded from the teaching of the school, but the very first article of belief in the existence of God might be excluded. The second correspondence took place between the Rev. Mr. Scott and Mr. Lingen. Mr. Scott was very anxious to ascertain what obligations would be imposed on him if he accepted the conscience clause. He stated that in the case of the schools he had presided over
  "The practice was to allow the children to attend at whatever Sunday school and at whatever place of worship their parents preferred; also, if desired by the parents, the teacher allowed the child of a Dissenter to omit the Church Catechism, or at all events, that part of it to which Dissenters chiefly object; but he had a strong objection to bind himself not to teach the doctrine as well as the formularies of the Church."
  Mr. Lingen's answer was that the managers were bound to make such orders as would extend the benefits of the schools to such children as, not being connected with the Church of England, were not desirous of being instructed in its formularies, and that otherwise the managers were not to interfere with the teaching of the formularies of the Church as by law directed. Mr. Scott expressed his wish that their Lordships would allow the omission of the words "doctrine or" in Clause 2. He said—
  "My objection to the insertion of the word 'doctrine' is its latitude. In the doctrine of the Church of England is included the whole range of Christian truth; so that by engaging that children may be exempted from being taught the doctrine of the Church of England we should, in fact, be engaging that in a Christian school superintended and in a great measure supported by a Christian minister, children should, on the demand of an infidel, be brought up without any Christian instruction at all."
  Mr. Lingen answered—
  "The principle of that clause is that no child ought to be compelled to receive religious instruction contrary to the profession and declared wish of its parent."
  Mr. Scott declined altogether to accept the conscience clause on that interpretation. It was with the hope of arriving at a more definite explanation of what the clause really meant, and the obligations imposed by accepting it, that he wished to ask the noble Earl the Question of which he had given him notice—namely, Whether a clergyman of the Church of England would meet the requirements of the conscience

  849
  clause by exempting the children of Dissenters from, attendance in school during the reading of the formularies of the Church, or whether he would be bound to abstain from teaching in the schools any doctrine of the Church of England which the parents of a child might desire should not be taught to his child?
  EARL GRANVILLEsaid, that it was hardly necessary for him to state that he never apprehended that this question was likely to be put in a hostile spirit; and he was induced to hope that a settlement of the question, which could not long be delayed without injury to all concerned, would soon be arrived at. There was some hope that the matter might be dealt with in a manner to give satisfaction to the clergymen of the Established Church. Some inconvenience had arisen in connection with this question from the fact of individual promoters of schools putting abstract questions to the Council Office on matters with which they were not called upon to deal practically, but which were of a speculative character; and the consequence was, that the Council Office were sometimes compelled to give answers which, when applied to facts, might seem ambiguous. At the same time, there was the greatest desire on the part of the Council to give the most perfect information. With respect to the first question, put by the most rev. Prelate in two parts, he could not answer either part in absolute terms. With respect to the first part of the question—whether a clergyman of the Church of England would satisfy the requirements of the conscience clause by exempting the children of Dissenters who objected from attendance in school during the reading of the formularies of the Church?—it was clear that that description did not meet the requirements of the conscience clause; for it would not be acting justly to the Dissenters if the managers of Church of England schools were to allow the children of Dissenters to withdraw while the formularies of the Church were being read, and to be brought in again to hear the doctrines of the Church taught. He would read the following extract from The Church and, State Review of November 1, 1865—
  "We cannot help thinking that, if Dissenters were aware how little effect the mere Catechism has in the creation of Church people, they would not make such a fuss about a conscience clause; and we are quite certain that, unless our dogmatic teaching is to be of a very different kind in future from what it has been heretofore, we may just as
  850
  well save ourselves the trouble and the odium of struggling against its imposition. If, instead of puzzling their brains with lists of Old Testament kings, our children were impressed with the lesson to be learnt from the fate of Korah, with the application of it to our own times as enforced by St. Paul and St. Jude; if they were carefully instructed in the perpetuity of the ministry founded by the Apostles; in the necessity of that ministry in order to the validity of sacraments, and to the existence of a true Church; in the unchangeable-ness of the one faith, and the character assigned by St. Paul to all' new gospels,' and deviations from it; in the guilt of schism, as part of that one faith; in the primitive and apostolical mode of maintaining that one faith, by means of synods and councils; in the distinction between the Church and the world, and the independence of the former society from the rules of the latter; in the mutual equality and yet inter-dependence of bishops; in the Scripture way of salvation, and the necessity of a heavenly life if we are to attain to Heaven;—if such were considered as necessary a part of the instruction of the children of the Church as the three R's, which she has nowhere been commissioned to teach, we venture to think that the rising generation would be very different from the present."
  He did not say that the opinions put forth in this article represented the real opinions of any considerable portion of the Church of England; but it was quite clear that a small number of Churchmen might be able, in schools unprotected by the conscience clause, to outrage the feelings of a great number of Dissenters in this country. He, therefore, thought it was evident that doctrines as well as formularies should be included within the scope of the conscience clause. It must be obvious to their Lordships that not only did the conscience clause not interfere with the religious instruction in the schools, but it absolutely required that no interference should take place by forcing that instruction on the unwilling. This was clearly shown in every letter which emanated from the Council Office, and the conscience clause did not in the slightest degree touch the religious teaching of the Church of England in schools promoted by the Church of England. The only thing it enforced was, that a child should not attend that portion of the religious instruction to which his parents objected.
  THE ARCHBISHOP OF CANTERBURYsaid, he thought that on the whole the noble Earl's answer was satisfactory. It appeared to throw a considerable light on the question and it would relieve many clergymen from great anxiety. He understood that if a clergyman accepted the conscience clause he would not have the general instruction of his school in any way interfered with; but that if a parent

  851
  chose to withdraw his child from any part of the instruction he was at perfect liberty to do so.
  THE BISHOP OF ST. DAVID'Ssaid, that there never was a time when he did not consider the principle of the conscience clause was not only consistent with, but was absolutely required by common justice and charity; but there was also a time when, while he assented to the general principle, he did not see the necessity of its compulsory imposition. The object of the clause, as he always understood it, was not in the slightest degree to restrict the liberty of religious instruction in any Church of England school, but simply to secure liberty to parents who objected, to withdraw their children from a certain portion of the instruction given in the school. He believed that the object of the Question which had been put by the most rev. Primate was to ascertain from the highest authority whether there was or had been anything to prevent clergymen of the Church of England from accepting the conscience clause, and making it the rule of their conduct in the religious instruction they gave in their schools. There was a time when he was not convinced of the necessity of the compulsory imposition of this clause, because his own experience in his own sphere had led him to believe that the principle was so uniformly adopted in practice that it was not necessary to resort to other measures. But recent proceedings had convinced him that he was wrong in that respect. He deeply deplored that those proceedings had issued in the present most unhappy breach between the Committee of Council and the National Society, but he hoped that it was not too late for that breach to be healed. The answer given by the noble Earl would contribute in a considerable measure to that most desirable object. He must say that it was the absolute duty of the Committee of Council to insist on the conscience clause.
  THE EARL OF CARNARVONexpressed his regret that a discussion should have arisen on so grave and important a subject, under circumstances which precluded the possibility of its being satisfactorily-dealt with. His sole object in rising to say a few words upon it was to guard against the supposition that he, at all events, accepted the views with respect to it which had been laid down by his noble Friend the President of the Council, or the right rev. Prelate who had just spoken.
  852
  He denied that the questions arising under the conscience clause were so easily disposed of as the noble Earl seemed to imagine. If time had allowed, he should have been prepared to enter into the whole question, and he trusted an opportunity for doing so would before long be afforded. Meantime he would content himself with observing that the clause referred to was one which had never been formulated in a Minute of Council, which had never been laid before Parliament in any shape, and which rested on no other authority than that of the President of the Council himself.
  LORD LYTTELTONalso expressed a hope that their Lordships would have an opportunity of discussing the question on a future occasion.

  ATTORNEYS AND SOLICITORS (IRELAND), 1866, BILL—(No. 60).
  (The Lord Chelmsford.)

  COMMITTEE.
  Order of the Day for the House to be put into a Committee read.
  Moved, That the House do now resolve itself into a Committee.—(Lord Chelmsford.)
  THE LORD CHANCELLORsaid, that when the Bill was before the House on a previous occasion he said-that he regarded the principle of the Bill as a sound one, inasmuch as it proposed to assimilate the law in Ireland on the subject with which it dealt with that of England; but he had subsequently received communications from Ireland which led him to entertain serious doubts as to the expediency of passing the measure. In that country the Society of the King's Inns was presided over, and had been for more than two centuries, by the Lord Chancellor, all the Judges, a certain number of Queen's Counsel, and other distinguished legal functionaries, who exercised authority not only over the Bar, but also over the attorneys and solicitors. Unlike the case of England, solicitors might be members of the Society of the King's Inns just in the same way as barristers; proper lecture-rooms were provided for them, and lectures given, and they paid a certain sum to the Society in return for the accommodation thus afforded. The present Bill, however, proposed to do away with that system, and to take away from the Society, as now constituted, the funds out of which the lecturers were re-

  853
  munerated. The proposal was one, he could assure his noble and learned Friend (Lord Chelmsford), which was regarded with considerable dissatisfaction by the Judges and high legal functionaries in Ireland, and it was, under the circumstances, one which he did not feel himself justified in supporting.
  LORD CHELMSFORDsaid, that when he undertook the charge of the Bill he was under the impression that there would be no opposition to it, and he was surprised to learn that it was looked upon with disfavour by the Benchers of the King's Inns and other distinguished legal functionaries in Ireland. When his noble and learned Friend on the Woolsack informed him that such was the case and furnished him with the Report of the Committee of Education of the King's Inns, which put forward the objections of that Society, he felt disposed to withdraw from the Bill altogether, But on reflection he deemed it to be his duty not to do so unless he found that the opposition to it was well founded; and he was bound to state that although the Report of the Committee of Education of the King's Inns had attached to it the signatures of the Lord Chancellor and Lord Justice Blackburne, he did not think it furnished any conclusive argument against the proposal which he asked their Lordships to sanction. The Society of the King's Inns was not, he might add, established by charter or by Act of Parliament, but constituted a purely voluntary association, of which the Benchers were the governing body. There was also an Incorporated Law Society, composed of solicitors and attorneys, in Ireland, as in England, but all the solicitors were obliged to become members of the King's Inns; but had never for more than a century been permitted to form part of the governing body (which was self-elective), although they paid fees amounting to more than double the sum paid by the same class of persons in this country. They had, in fact, no share whatever in the management of the affairs of the Society, and no control over the administration of its funds. The original constitution of the King's Inns, it was also necessary to state, gave the Society no authority over the solicitors, and it was not until 1710 that it began to exercise that authority. In the year 1792 the Society obtained a charter giving them certain powers over Attorneys, which they had long exercised in fact, and that charter was confirmed by
  854
  Act of Parliament; but so strong an opposition to that charter was raised both by the Bar and the solicitors that the Act was in the following year repealed, and the Society reverted to its original condition—that of a voluntary association. The Benchers, notwithstanding that, however, made in 1794 rules and regulations for attorneys, founded, not upon any legal right, but upon long usage, and among the other regulations laid down was one to the effect that every person who was admitted as a solicitor should become a member of the Society, and should pay certain fees. Those fees were exacted from them from 1794 to 1838, when a question was raised as to the legality of the exaction, and it was pronounced by Mr. Serjeant Warren (himself a Bencher,) to whom the case was submitted, to be his opinion that the Society of the King's Inns was a mere voluntary society, and that the Benchers were not entitled to exercise control over attorneys or their apprentices, except in so far as they, by becoming members of the Society, had subjected themselves to its rules and ordinances. The Benchers, however, still continued to require that all attorneys should be members of their Society; they took fees as before on the admission of apprentices; and from a Return which had been made to the House of Commons in 1856, it appeared that the total amount of the fees received by the Society from attorneys between 1794 and that year was no less than £87,000. What did the Benchers of the King's Inns do for that large sum which they had received from the Attorneys? They certainly gave them a building called the Solicitors' Buildings in the Four Courts; and probably they had laid out in its erection about half the money they had obtained from the Solicitors. But they had another most important duty to perform—namely, to make regulations for the training and education of apprentices, and to institute an examination for the purpose of seeing that they were duly qualified before they were admitted as attorneys. In their Report the Benchers said they had done that duty—that, in addition to the making of general regulations for the binding of apprentices, they now maintained and had maintained for years a Professor for the purpose of delivering lectures, and an Examiner for conducting the legal examination of apprentices before they were admitted to the profession. The words "for years" almost necessarily implied that for a very

  855
  long time that course had been adopted; but the fact was that from the year 1794 down to 1860 there was no provision whatever made for the examination or the instruction of those apprentices. In 1846 a Committee of the House of Commons inquired into the state of legal education in Ireland, and in their Report they said that for the solicitor's apprentice there was not any opportunity afforded for obtaining a legal education; that he was treated chiefly as a mechanical agent for carrying out the practical processes of the profession; and that consequently whatever higher or more comprehensive education he might acquire, he owed almost exclusively to himself. Master Lyle, in his evidence before this Committee, said—
  "No attendance at a University, a college, or any other institution was required; no course of legal lectures was insisted upon; and his attendance at the Courts of Law need only be of a purely formal nature."
  The present Judge Longfield being asked whether he would exempt the solicitors from the payment of fees to King's Inns, answered—
  "Yes; that he thought there was no fair object in requiring them to pay them; and that he could not see on what principles of justice solicitors should be obliged to pay fees to an institution from which they derived no benefit."
  In 1855 the Solicitors presented a memorial to the Benchers of the King's Inns praying them to make some arrangement for the examination of apprentices applying for admission to practice, and calling their attention to the fact that no course of studies was prescribed. In their reply the Benchers admitted that they had failed to devise a plan of that kind; and they added that the only course by which that could be done was by establishing law lectures—a proceeding which the state of the Society's funds rendered impossible. At last the Solicitors got a Motion made in the House of Commons for a Committee of Inquiry into the subject. That Motion was vehemently opposed by the Benchers, and it was only after the Committee of Inquiry was granted, that in 1860 that Institution appointed for the first time a Professor with a salary of £100, and an Examiner with a salary of £30. So that the whole sum voted by the Benchers of the King's Inns for the purpose of legal instruction, which was so essential, was only £130 per annum; whereas from the year 1794 down to 1856, the Solicitors had contributed to their funds no less a sum
  856
  than £87,000; and this was the way in which the Benchers had discharged their duties to the Solicitors. Scanty as the provision was it was only extracted from them after long years of patient endurance. Yet, in their Report, the Benchers claim credit for having discharged their duties properly, and maintained that it would be quite wrong to take away from them powers which had been so well exercised. But their authority having commenced in usurpation, the duties which it involved had been entirely neglected. But the Solicitors of Ireland were not desirous of withdrawing themselves altogether from control; all they sought was to place themselves in precisely the same position as their brethren in England occupied. In England the solicitors were under the control, first of all, of rules and regulations made by the three Chief Justices and the Master of the Bolls. Examiners were appointed by the Incorporated Law Society, who examined candidates for admission to the profession. What the attorneys of Ireland proposed was that they should be placed under rules and regulations framed by the Lord Chancellor, the three Chief Justices, and the Master of the Bolls before indenture and before admission, and that they should be examined by the Examiners of the Incorporated Law Society. He did not know why the Benchers of the King's Inns should be so extremely desirous of retaining their powers over the Solicitors, unless it was on account of the large fees which they had so long obtained from them. The Solicitors had little imagined that there would be any objection to that measure. In answer to a letter addressed to him on the subject, Mr. Serjeant Armstrong, one of the Benchers, promised that the Bill should have every aid in his power. With such strong evidence before him, therefore, he (Lord Chelmsford) did not feel warranted in abandoning the measure, and he trusted their Lordships would now pass it through Committee.
  THE EARL OF ELLENBOROUGHsaid, he knew nothing of the Bill except what he had just heard from the two noble and learned Lords; but if, as had been stated, the Benchers of the King's Inns had no legal right to collect these fees, and yet the Bill transferred them from one body to another, that would be giving to them a Parliamentary recognition, and would have the effect of creating a new text.
  THE LORD CHANCELLORsaid, that

  857
  after the speech of his noble and learned Friend (Lord Chelmsford) he would no further say anything against the Bill; as it seemed to him that his noble and learned Friend had made out a case fully justifying its introduction.
  On Question, agreed to: House in Committee accordingly; an Amendment made: The Report thereof to be received To-morrow.

  FINANCE OF RAILWAYS—RAILWAY LEGISLATION.—OBSERVATIONS.
  LORD REDESDALE, in calling Attention to Matters in connection with the Finance of Railways, and particularly in reference to Legislation on the Subject, said, that just before Parliament adjourned for the Easter holidays he called their Lordships' attention to the subject he now begged to resume—namely, the state of the railway system of this country as regards the manner in which its financial operations were carried on. He then stated that when he again brought the subject under their notice he should direct their Lordships' attention to the state of legislation in respect to it, and would propose for their consideration the advantage of amending certain of their Standing Orders, with a view to create a new and improved system on which the finance of these companies should be conducted. Since that time he had received various communications from different parts of the country, highly complimenting him on the course he had taken, and pointing out the advantage of bringing the matter before the public. He believed that at that period the extent to which the evil had spread was not generally known, and if he had delayed for a time to take the matter in hand again, it was because he was satisfied that his case must be strengthened during the interval, and that expectation had been completely realized; but he had hardly expected that his anticipations would have been borne out to the extent they had been by what had since occurred. When he last addressed their Lordships a railway contractor of great eminence and respectability had just failed. They had now learnt the failure of perhaps the very largest of all these contractors; and he was convinced that the system on which the construction of our railways had been carried on for a very long period had completely broken down, and they could not hope that it
  858
  would be possible to re-construct it on the same principles. It was in 1864 that the difficulties began to arise, the railway contractors then experiencing pressing difficulty in obtaining money for their undertakings; and certain "finance companies" were formed for the avowed purpose of providing the capital which would enable contractors to carry out their schemes. Last year all the schemes which were brought before Parliament by Bills more or less looked to these finance companies for assistance. But what had occurred must have satisfied their Lordships that not only had the finance companies failed to support the railway system, but that the railway system had in a great degree contributed to destroy the finance companies. He was convinced that when the history of the great firm of Overend & Co., which had recently failed, came to be known, it would be found that their difficulties had been in a large measure occasioned by advances made by them to railway companies or to contractors on railway securities. When they considered the nature of those advances, and how these affairs were carried on, their Lordships would see that there was no foundation for expecting any soundness in those transactions. What was the system? It was a paper creation of credit, founded on works that were not completed, and which of themselves offered no security at all. The system not only led to great difficulty in completing the works—it also led to great delay. Even short lines of only twelve or fourteen miles in length were sometimes five or six years in the course of construction. During that time the interest of money had to be found, and that interest accumulated upon the cost of construction. It was only necessary to show that the system allowed of such latitude on the part of contractors and those interested in raising the money, and the only wonder was that the system had not broken down before. There was a case brought under his notice which he would state to their Lordships as it appeared from the statements made at a meeting of the shareholders—he alluded to the Carmarthen and Cardigan Railway Company. The original capital of the company was £300,000 in shares. There was a further sum of £93,400 in borrowed money. At that meeting it was stated that of the original capital only £29,000 was ever subscribed. That

  859
  £158,780 was raised by preference shares and £60,355 by debentures. In addition to this there was raised £733,833 in Lloyd's bonds: making the total capital £983,968 for the construction of a line for which a capital of only £393,400 had been allowed by Parliament. So that nearly three times as much had been spent upon the construction of the line as the authorized capital. There was another remarkable instance of the operation of the system, in the case of a very large concern. It had been working for a considerable period, and was a very energetic line, which stopped at no expenditure in carrying out its objects. He mentioned it because it was connected partly with the contractors who had recently failed, and when their Lordships heard the proceedings that had occurred in regard to the raising of the capital of the line, they would not be surprised at the failure of the contractors or the financial embarrassment of the company. Last year there was a new scheme for the extension of that line into the City, for which a separate capital was raised for a large amount. In the course of the year those contractors went to the Credit Mobilier Company for £1,100,000. [A noble LORD: What was the name of the Company?] The London, Chatham, and Dover Railway. They raised that sum on the following terms:—For £21 cash there was given £40 of fully paid-up stock—thus sacrificing £19 to obtain £21. It was, in effect, getting £577,500 by a sacrifice of £522,500. And this was noted at the time as a most successful operation on the part of Messrs. Peto and Company, who were quite satisfied at getting the money on such terms. During the present year the value of money had increased, as had also increased, most probably, the embarrassment of contractors. It was therefore announced that £100 stock could be had for £27 10s.—and by this means, on a capital of £2,270,000, a sum of £624,250 was raised at a sacrifice of £1,645,750. When they heard such facts as these, was it possible to suppose that a system so reckless could ever stand, and was it either reasonable or proper to allow it to go on? They were all feeling at this moment the state of the money-market, which he believed had been largely occasioned by such operations. Speculation had been carried on for some years to an enormous extent, and even three or four months ago, before the alarm was given,
  860
  it was notorious that the rate of interest in this country, notwithstanding its vast capital, was much higher than it was in France. This was a system which interfered with all legitimate undertakings, because it made it so much the more difficult for persons who were carrying on a sound business to obtain the money they required on reasonable terms. Formerly, before any new work was undertaken, the persons who were to form the new company were expected to enter into a subscription contract for a considerable portion of the capital required for the works. The old Standing Order required that three-fourths of the capital should be subscribed beforehand. In the early history of railway enterprize those contracts really represented a large amount, if not the whole, of the capital required. But the mania of 1845–6 led to the starting such an enormous number of schemes with large capitals that fictitious subscription contracts were made, and Parliament became dissatisfied with a system that seemed to offer a very imperfect security for finding the capital put down, and not very wisely abrogated the system of subscription contracts, substituting for it what they thought a reality—a system of deposits. But the deposits not being connected with the subscription contract, and not necessarily forming part of the capital required, the result was that while the subscription contract was really founded on a sum of money which was provided by those who had got up the scheme, the deposits were advanced by those who got out their money on bond after the Bill had passed. Thus the latter system, instead of being an additional security for the construction of the line, was mischievous rather than otherwise, because the money was borrowed at great cost, and was of no good to the promoters of the line. For a time he had thought that to make the deposits a reality would be sufficient in order to secure a sound system for those undertakings; but what had occurred lately, and further consideration of the subject, had satisfied him that Parliament must revert to the old system of subscription contracts, and make them a reality by attaching to them a real deposit. He knew he should be met by the assertion that if that were done new railways would not be constructed, and an end would be put to that branch of national enterprize. He thought it very possible that under the change he proposed a temporary check would be in-

  861
  terposed. The very formation of a subscription contract required time, and some little time would elapse before people could accommodate themselves to the new system. But their Lordships would agree that a little repose in the railway world at the present moment would be attended with considerable advantage. He would say to noble Lords who might have to attend on Committees on opposed Railway Bills that it would be their duty under present circumstances to be very careful how they gave their sanction to very speculative lines that required large sums of money. They were passing through a very trying time—although, perhaps, not so bad as had been apprehended—and unless something was done to prevent the country from being flooded with this system of false credit, the greatest injury would be likely to arise; and he did not know but what a moderate check to such schemes would be extremely desirable. He was aware that some of those who were interested in railway undertakings, and who had good opportunities of forming an opinion on the subject, but who at the same time were apt to look upon it under the influence of prejudices—he meant gentlemen of the Bar and Parliamentary agents—he was aware that these parties would object to the alteration he proposed, and thought that it would injuriously affect railway enterprize altogether. But he asked their Lordships to consider whether what had been done once could not be done again. It would also be well that their Lordships should bear in mind that even now the line was the foundation on which credit was obtained by the contractor; but if they asked for an advance of money on Lloyd's bonds, the security given was shares issued at 40 or 50 per cent discount. He believed- that if his proposal were adopted, the schemes would be more cautiously got up, with the view of inducing' people to advance their money upon them; more careful surveys and calculations of traffic would be made, and there would be no difficulty in raising the money from those who were always looking out for investments. Capitalists were ready to subscribe very large sums for all sorts of schemes all over the world, and when a new and sound system of railway construction was established money would be found as in former times for these projects. The old subscription contract was for three-fourths of the capital. What he should propose was, that it should be for two-
  862
  thirds of the capital; and he took that amount because borrowed money was now allowed by Parliament to the extent of one-third; and if two-thirds were first subscribed, and the one-third required under the estimate for the completion of the line was authorized to be borrowed, the remainder of the share capital would soon be forthcoming. One objection to the present system was, that practically there was now no company at all. A very small capital was subscribed, and subsequently, perhaps, one or two country gentlemen were put nominally upon the list of directors, but in many instances the contractor was practically the sole director. He gave a certain number of shares to his nominees, in order to enable a meeting of the company to be held for the purpose of making calls—and of doing nothing else whatever. How could things go on under such a system? One of the advantages of the change he proposed would be, that persons would be put into the management of the line in whom the public would have confidence. The next point to which he would refer was the amount he thought desirable to have for the deposit. He proposed that one-eighth of each share subscribed should be subscribed as a deposit. He selected that amount upon the subscription contract because it was as nearly as possible the same proportion as was as present required—namely, 8 per cent upon the whole capital. For example, on £.'300,000 capital a deposit on the plan proposed would be £25,000, while on the present plan it was £24,000. In addition, he proposed that the shares subscribed for should not be transferable until three-fifths of the amount were paid up. As it might be thought that the first deposit and the restriction on the disposal of shares might operate against persons entering into subscriptions, he should propose a clause authorizing the payment of interest out of capital on calls at the rate of 4 per cent; the payment on the deposit to commence from the 15th of January, and on calls, of course, from the day on which payment was made. That was an alteration of the principle hitherto adopted by Parliament in not allowing interest on calls; but if they adopted the system of subscription contracts, it would be desirable to depart from the present practice, and to offer inducements to parties to subscribe—by that means they would probably get more sound subscription contracts. He knew it would be said that landlords and others who were

  863
  interested in a district would not care to subscribe more than they do at present, although they benefited their estates by the construction of the line. The present system had a tendency to discourage such subscriptions, as in almost every instance an issue of preference capital became necessary, whereby those who came forward to construct a line, and who subscribed 20s. in the pound, were the parties to suffer most—if they did not, as in too many in stances they did, really lose all the money they had advanced. A system of preferred and deferred shares had been introduced, which enabled persons desirous to promote the interests of a company at some personal sacrifice on account of the advantage to be secured to their properties, to subscribe to the same amount, or to a larger amount than they might be disposed to do at present without incurring greater liabilities. Under this system a share was divided into two parts, and when a portion was paid on one-half the other half was thrown upon the market with a secured preference. The effect was, that a person was enabled to increase his subscription without increasing his risk, that the necessity for raising preference capital was probably avoided, and the money required being found, the line would be constructed without delay, the shareholders knowing what they are about. Another matter, in respect of which he desired an alter action of the Standing Orders, was one of very great importance: he referred to the amalgamation and the sale of lines. He proposed to require that the terms upon which these amalgamations and sales were to be made should be stated beforehand. The rule at present was for general powers to be taken to enable line A to absorb line B by lease or purchase; but the proprietors of the railways really knew nothing about these transactions, and had not the means of inquiring into them before their companies were bound to the terms, whatever they might be. In each case notice was given of a general special meeting to sanction an agreement which had been entered into between the one company and the other for the transfer of one concern to the other; but the share holders were not told anything about the terms; they had no means of making inquiries; and he had no hesitation in saying that the grossest jobberies had been perpetrated by means of amalgamations, purchases, and arrangements effected in this manner. He proposed that notice of
  864
  every proposition for the amalgamation or sale of a line should appear in the November Gazette notices, and that the terms upon which the arrangement was proposed to be carried out should be set forth in the notice. There would then be time for the shareholders and others interested to make themselves acquainted with the terms, to ascertain what were the receipts of the line it might be proposed to purchase or lease, and to consider how far it might be advantageous that the amalgamation should be carried out. It was also desirable in these matters to increase the control of Parliament, which was allowing such control to pass too much out of its hands. Arrangements ought to be entered into in a more formal way than they were at present. These were the alterations in the Standing Orders he wished to submit to their Lordships, affecting the points to which he had called attention. He would lay on the table the formal alterations he proposed, but he would not ask their Lordships to agree to them without full consideration; and therefore, without positively pledging himself to the day, he would name that day three weeks as the day on which he would move the new Standing Orders.
  LORD STANLEY OF ALDERLEYsaid, that their Lordships were much indebted to the noble Lord the Chairman of Committees for having brought the subject under their notice. It was one of very great importance. At the same time, the proposals which the noble Lord had signified his intention to submit involved changes of the greatest magnitude, and he was inclined to think it would not be desirable that their Lordships should come to a decision upon them without entering into some communication with the other House of Parliament. No doubt there were abuses in the existing railway system, but in remedying them care must be taken not to throw unnecessary impediments in the way of the construction of railways which might materially benefit the country. He would appeal to their Lordships in their capacity of landowners to consider the bearing the matter might have upon the construction of lines in which they were peculiarly interested. The lines contractors now made were chiefly such as opened up country districts in connection with great trunk lines, which were often opposed by them; and if great difficulties and impediments were thrown in the way of their construction they

  865
  might not be made at all. He was not sure that if measures were adopted to make a deposit a more effective reality, the desired object would not be to a large extent attained; and if it were required that the money deposited with the Treasury should not be taken away until the line, or a considerable part of it, was constructed, the public would obtain the security that could be required for the construction of a line. One of the suggestions which had been made by the noble Lord was founded upon reason and propriety—he referred to the suggestion that the terms of an amalgamation should be set forth, so that the subscribers or shareholders interested in the matter might learn what they were.
  THE MARQUESS OF CLANRICARDEsaid, he thought that the alterations proposed in the Standing Orders did not go to the root of the matter. The noble Lord the Chairman of Committees had referred to the failures that had taken place recently; but how had such disasters in relation to railways originated? They were due to the fact that we had from the first gone upon an entirely wrong system; that very system which his noble Friend the Chairman of Committees proposed to bolster up and to restore in certain details which had been unwisely abandoned. To say that a Committee of that House could enter into the full consideration of everything appertaining to a railway speculation for the accommodation of the country was, from beginning to end, an absurdity. In matters of this kind there ought to have been some supervision on the part of the State; the Government ought to have had a control which might have been exercised for the benefit alike of the country and of speculators, and which might have been a source of great public economy and convenience. The money estimated to have been laid out in the construction of railways in this country he believed amounted to about £450,000,000; but the accommodation which the public had received might have been given for £250,000,000. What had made that great difference? It had occurred because our railways had been made higgledy-piggledy, one at a time, without any comprehensive plan, and under no supervision, which, if it had been properly applied from the first, might have given us gradually a system of railway accommodation, without the close competition, the battles of the gauges, the struggles of town with town, and the
  866
  jealous rivalries which had done so much injury. Had there been any supervision by the Board of Trade, or by a Department of the State, lines would also have been laid out with more regard to the public convenience, and the evils of unregulated competition might have been avoided. One result of our want of system and of supervision was that we were paying high fares, although, with the exception of Belgium and some parts of France, fares ought to be cheaper here than in any other part of the world. We were paying extravagant fares, and monstrous sums had been expended on our railways. Yet it was now proposed that speculation should be checked and the construction of railways stopped. Why should that be done? Nobody could deny that railways had led to very beneficial results, nor could any one doubt that the great increase in the wealth of the country of late years had been greatly owing to railways. See, too, how they had brought out the wealth of France. Indeed, they formed one of the requirements of the civilization of the present age, and the country ought, therefore, to be properly, gradually, steadily, and wisely supplied with them everywhere. He agreed, however, that that could not be done under the present system, and thought, therefore, that far greater alterations should be made than those proposed by the noble Lord the Chairman of Committees. The Select Committees now appointed to consider Railway Bills knew nothing whatever of the country through which the railways were to pass. For instance, the last Committee of which he was a member was appointed to inquire into a scheme for constructing a railway in the east of Yorkshire. He had no interest in the country, and knew nothing about the matter; the noble Lord who presided came from Cornwall, and two other noble Lords who sat on the Committee were, like himself, from Ireland—in fact, all the members were selected because they were supposed to have no interest in the line, and to be perfectly ignorant of everything connected with it. In the case to which he had just referred it was only proposed to make a line from Goole to Doncaster, but it turned out that all the northern and western counties and their railways were interested in the subject. Now, he maintained that such a scheme ought to have been submitted to some person who was thoroughly conversant with all those systems of railways. The Committee on that occasion came to a con-

  867
  clusion totally different from that which had been arrived at by the Committee appointed by the House of Commons, and the parties were in consequence sent back for a whole year—in the course of which, however, the matter in dispute was satisfactorily settled; but the Committee might have settled it in a very unsatisfactory manner indeed. No one appeared on the part of the public, though some resistance was offered by a few landed proprietors. Noble Lords and hon. Gentlemen were chosen to sit on the respective Committees simply because they had no interest in the matter and knew nothing about it. He was afraid that the Government of the late Sir Robert Peel did wrong when they refused to place the railways under State control, for at that time a general supervision of the railways might have been provided by the State. He thought their Lordships ought to proceed very carefully in the consideration of a proposal to place fresh obstacles in the way of making railways. If railways ought to be made, he did not see why the construction of them was to be stopped. He did not believe that the noble Lord the Chairman of Committees could, by the proposed system of deposits and paid-up calls, put a stop in toto to such proceedings as he had described. You might impose a fine, and thereby put an obstacle in the way of persons who wanted to make a railway; but what was called "financing" would still go on, for means would be found of driving holes through any Standing Orders which might be made. He hoped their Lordships would consider whether a system could not be devised much better than, and totally different from, that which had prevailed up to the present time. He was aware that all statesmen, whether in or out of office, would be averse from undertaking such a task, but still it was their duty to do so.' The penalty paid by men in high office, or who had attained political distinction and renown, was the dealing with difficult questions like this one—which, he might remark, was not in any way a party question. In conclusion, he urged upon their Lordships the necessity of considering the whole matter with great care and circumspection.
  LORD OVERSTONEwas understood to express his thanks to the noble Lord the Chairman of Committees for having brought this subject before the House, and for the valuable and prudent observations with which he had accompanied his
  868
  proposal. He would not at present give any opinion as to the proposed alterations—he would only say that he quite approved their general object and purpose. It was painful to contemplate the commercial immorality which had prevailed in this country of late years, and which he feared could end only in disgrace to our national character. He attributed the position in which we were now placed in regard to our railway system to the imperfection of previous legislation, the con-sequences of which he had foretold long ago; and he welcomed the suggestions of the noble Lord, not only because he thought they would improve legislation on the subject of railways, but because he looked upon them as a first step towards a return to more sound, more healthy, and more just views than those which had prevailed for a very long time past.
  EARL FORTESCUEsaid, he joined in acknowledging that the House owed a debt of gratitude to the noble Chairman of Committees for the luminous and valuable statement which he had made, and he quite concurred with the noble Marquess (the Marquess of Clanricarde) as to the unsatisfactory legislative proceedings of both Houses of Parliament with regard to railways. He could not help feeling that successive Governments and successive Parliaments had been drifting too much and steering too little with respect to railway legislation. There had been too much fear, or too much neglect, in laying down general principles for the guidance of the Committees on Railway Bills. It seemed to him extraordinary that after so many Railway Bills had received the sanction of Parliament no general principle should have been laid down by either House for the guidance of its Committees, and that at this very moment no one could tell, except from his knowledge of the individual opinions of the members of a Committee, whether the fact of a line being competitive was to be held as a recommendation or an objection to the Bill authorizing its construction. Years ago he did hope, when he was a Member of the other House, that the Government of Sir Robert Peel, under the guidance of a much lamented and most able Member of their Lordships' House (the Earl of Dalhousie), would have laid down some general principle for the guidance of Parliament in legislation on this subject. Millions and millions had been wasted since that time; scheme after scheme had been passed, and

  869
  scheme after scheme had been rejected by different Committees on the same ground—that the line was a competitive one. He ventured to hope, before it was too late—before the remaining links in the railway communication of the United Kingdom were connected—some general principles would be laid down for the guidance of projectors and Committees, and, above all, that Parliament would authoritatively decide whether competition should be considered an objection or a recommendation to a line.
  THE EARL OF BELMOREwished to direct attention to the manner in which the borrowing powers of companies were exercised. The public were told that Parliament had put a limit upon these borrowing powers; but they all knew that under the semblance of this limit, money was every day borrowed beyond the authority which Parliament had given. The question was, what remedy they could apply to this state of things. He did not want to try to make it safe for people to jump in the dark—you cannot do that, but he thought that every company ought to be compelled to make periodical Returns, coupled with some system of registration, which should be open to public inspection; this would enable the public to judge for themselves. Last Session he introduced a Bill on this subject, which passed their Lordships' House, but, owing to the lateness of the Session, did not go further. This Session a Bill, which was substantially the same as his, had been introduced into the other House, and had gone as far as the second reading; but its further progress was postponed for the present, until a Bill brought forward by the Government on the same subject would reach the same stage. He trusted the Government would have no objection to refer both Bills to the same Committee, in order that a principle of registering the securities of railway companies might be considered.
  LORD REDESDALE, in reply, said, that his object in proposing these alterations was the same as that of the noble Lord on the cross-bench (Lord Overstone)—his desire to see a sounder system of finance in respect of railways. The noble Marquess (the Marquess of Clanricarde) seemed to be of opinion that no legislation could put a stop to "financing," and that whenever a speculator desired to borrow money for his schemes some means would be found for driving a hole through any Standing Orders that might be made. But the effect of having the required capital
  870
  to begin with would prevent the necessity for having resort to these measures for raising money, which became more objectionable at every step, and which raised money by offering more and more ruinous terms. With regard to what fell from the noble Lord opposite (Lord Stanley of Alderley), he did not desire to make the subscription contract more stringent—what he wished was to add the deposit to the subscription contract in order to test its soundness. The money would, of course, be applied to the completion of the scheme, and was not to be returned to the person who had subscribed it. He should deprecate any direct communication with the other House on this subject. The other House had constantly altered their Standing Orders without any communication with that House, and he did not see why their Lordships should not do the same. But he should be sorry to do anything without giving the whole House and the public the means of knowing precisely what alterations he proposed. If they were likely to be beneficial there was every reason to anticipate that they would be adopted by the other House. Yet there were interests that did operate to prevent measures which were thought desirable from being carried into effect. More than two years ago measures were proposed in the shape of Standing Orders, with a view of carrying out a system of efficient deposit available for the construction of lines; but they were defeated. He should therefore recommend their Lordships to wait and see how the proposals he made were received by the other House and the public; and if they saw that the alterations proposed would be advantageous, he hoped they would have prudence and courage to adopt them, in order to insure that some change should take place in a system which, if suffered to go on, would lead to the greatest and most serious inconvenience.
  House adjourned at half past Seven o'clock, till To-morrow, half past Ten o'clock.