SECOND READING. (Hansard, 25 June 1867)

§ THE DUKE OF RICHMOND

, in moving that the Bill be now read a second time, said, that the affairs of some of the railway companies in this country were in so notorious a condition, and had been so long before the public, that he would not detain their Lordships by any explanation on that subject. The Government, however, having deemed it necessary to take 490 some steps in consequence, his right hon. Friend (Sir Stafford Northcote) who at that time presided over the Board of Trade, prepared and brought in a Bill in the other House, for the purpose of dealing with the present condition of the railway interests of the country. It was entitled the Companies Arrangements Bill. At the same time, another measure called the Debenture Holders Bill was introduced in the other House by Mr. Watkin, the Member for Stockport. The result was that, after considerable investigation and discussion before a Select Committee, the two Bills were fused, as it were, into one, and the result was the measure to the second reading of which he now had the honour to ask their Lordships to assent. But although there had been considerable discussion on the Bill, there were certain points in it involving such great principles that it was his intention to propose some Amendments, and as they could not be properly dealt with in Committee of the whole House, he should, after the second reading had been passed, move that the Bill be referred to a Select Committee, where the subject might be more fully discussed That a Bill of this kind was required was, he believed, agreed by all parties. It was necessary that opportunities should be given to the companies to extricate themselves from their difficulties, and it was also necessary that the public should not be injured or improperly deprived of the facilities of locomotion. The object of this Bill was to give greater security to railway property and to all classes of shareholders. He could not, however, altogether approve that portion of the Bill which related to the creation of pre-preference stock. Such a proceeding was altogether a new thing in railway legislation, and it required very grave consideration. A general measure like this would, of course, be applicable to all railway companies; but if it contained a proviso for creating pre-preference shares, it would, instead of settling railway property, have a very pernicious effect. If circumstances rendered it desirable for a particular railway company to create pre-preference stock the power to do so ought, in his opinion, to be conferred by a special Act of Parliament, and should not arise out of the powers of a general Act.

§ LORD REDESDALE

said, that the Bill was one of great importance, and if it had been introduced twenty years ago it might have prevented many of the difficulties into which the railway companies had since been involved. It was very necessary, he thought, that when a railway company got into a state of insolvency, or even into less serious pecuniary difficulties, it should be able to seek the assistance of a Court of Law without being compelled to have recourse to Parliament in each particular instance. There was, however, one portion of the Bill which required careful consideration. The amount of property invested in railway debentures was not less than £100,000,000. Now, he objected to the Bill that it conferred the power of creating pre-preference stock in order that a company might get out of its difficulties. Now, persons who advanced money on debentures did so in the belief that they had a first claim upon the receipts of the company; but if Parliament now stepped in and conferred the power of creating pre-preference stock, he believed that the public would be very unwilling to advance any money upon debentures. It might be very proper that when a company got into pecuniary difficulties the shareholders themselves should have the power of creating preference stock; but it was a very different thing to confer on the company the statutory power of going to a Court and creating pre-preference stock over the debenture holders. The Bill was one that would require the greatest possible attention and considerable alteration by the Select Committee, It was a Measure brought in during a time of difficulty, and he complained that its provisions were of a nature calculated to meet the passing difficulties of the moment rather than to lay the foundation of permanent legislation.

D. Richmond	L. Stanley of Alderley.
D. Devonshire	L. Overstone
E. Lucan	L. Westbury
E. Romney	L. Colonsay
L. Redesdale	L. Cairns.