Lords Sitting of 20 March 1868

MINUTES.
PUBLIC BILLS—First Reading—Sea Fisheries* (46); Fairs (Ireland)* (47).
Second Reading—Regulation of Railways (34).

PROXIES.—QUESTION.
EARL STANHOPEsaid, it would be in the recollection of their Lordships that a Committee sat last Session on Public Business, and that one of its recommendations was that the use of Proxies in Divisions should be discontinued, and that a Standing Order should be made against their use. He wished to be informed by the Lord Privy Seal, What course the Government intended to take for the purpose of giving effect to that recommendation?
THE EARL OF MALMESBURYsaid, he intended to call the attention of their Lordships on an early day to the recommendations contained in the Report of that Committee, and to bring forward certain proposals founded thereon, embodying those recommendations. He should, perhaps, be able to fulfil that intention in the course of next week.

REGULATION OF RAILWAYS BILL.— [H.L.]
(The Duke of Richmond.)

(NO.34.) SECOND READING.
Order of the Day for the Second Reading read.
THE DUKE OF RICHMOND, in moving the second reading of this Bill, said, that our railway system had attained such vast proportions that all legislation connected with it must be cautious, practical, and well-considered. But, in dealing with the subject, it was as necessary to look at the interests of the public, on whose behalf the railways have been constructed, as it was necessary not to neglect the interests of the shareholders who had expended their money in those great undertakings. It was advisable, he thought, at the same time, not to enter too much, in the shape of legislation, into the details of the management of the different lines; but to leave those details, in a great measure, to the discretion of the managers and boards of the respective companies. He believed that, as a general rule, the railway managers of this country were a body of men of the highest intelligence, of great energy, and thoroughly acquainted with the business which they directed. As a proof of the great magnitude of the subject, he would mention that, in the year 1866, the authorized capital of railway companies in the United Kingdom was £620,564,406; but of that sum there had been paid up £481,872,184, leaving a balance of authorized capital not paid up to the amount of £138,692,222. The length of the railways constructed was 13,854 miles, and the gross revenue derived from them during that year was £38,164,354. In fact, the sum invested in railway enter-prize throughout the country amounted to rather more than half the National Debt. The Board of Trade Returns from which he had taken those figures were not brought down to as late a date as he could wish; but he trusted that, by the arrangements he then proposed to make, that inconvenience would soon be remedied. It was scarcely necessary for him to remind their Lordships that during the past year all railway property had become greatly depreciated, and that a feeling had, at the same time, sprung up throughout the country that some reform was necessary in the management of the different lines. It was true that, in many instances, the unwise policy which had been adopted by the Directors had been sanctioned by the
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shareholders, who were satisfied with obtaining their dividend, while they did not take upon themselves the trouble of inquiring how that dividend had been obtained, or how the accounts had been kept, or new schemes proposed had been devised. The fact was that, in many instances, the accounts were so badly kept that what ought to have been charged to capital was charged to revenue, and what ought to have been charged to revenue was charged to capital; and, under these circumstances, it was no wonder that railway property had been placed in the very unsatisfactory position in which they found it last year. He was by no means in favour of a policy by which Parliament would lay down stringent rules with respect to all the details of accounts and the management of the various companies; but he believed it was absolutely necessary, for the good working of the system and the well-being of the companies, that the fullest and most accurate information should be supplied to all persons interested in each line, that they should be made acquainted with the various schemes proposed by the managers, and that they should know precisely how their money was expended. He thought the fact that not less than £138,000,000 of the authorized railway capital of the country was not yet paid up afforded a sufficient justification for the interference of the Legislature, with a view to enable shareholders and Directors to see the position in which they were placed. He believed that sufficient time had elapsed since the panic of last year to afford Parliament the means of legislating upon the subject without acting in the hasty and ill-considered manner which might have been inevitable if they had dealt with it during the last Session. They had also the advantage of having been able thoroughly to consider the Report of the Commission which had inquired into the railway system, over which the Duke of Devonshire had presided, and some of whose recommendations he had embodied in the present Bill. He would proceed to state what were the principal objects for which the measure had been framed. It might be divided into six parts. The first of these parts related to accounts and audit; the second to the liabilities of railway companies in certain cases as general carriers; the third provided for the safety of passengers by giving them means of communicating with guards and engine-drivers; the fourth dealt with

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a subject of great importance—one in which great interest was taken by the public and by the companies,—namely, compensation for railway accidents; the fifth laid down rules with respect to the appointment of arbitrators by the Board of Trade; and the sixth referred to various miscellaneous matters, to which he need not then more particularly allude. In the first part of the measure he had endeavoured to provide for the establishment of a uniform mode of keeping accounts by all railway companies, and for that purpose he proposed to insert, in a Schedule at the end of the Bill, a form of accounts which it would be compulsory upon all companies to adopt. He had not, however, as yet, decided what the precise form should be, and he was in communication upon the subject with some most eminent accountants, who were specially connected with railway matters, in order that he might obtain, if possible, a system which would be approved by railway auditors, and which would at the same time secure the object which he had in view. He wished to establish such a form of accounts that any person looking at them could see at a glance what was the exact financial position of each company. At present one company had one form of account; a second another, and a third a form different from them both, so that it was impossible to compare the accounts of the various companies, as it was desirable to do, and as he hoped they would be enabled to do. There was another point to which he attached great importance. In the 3rd clause of the Bill it was provided that there should be printed and issued every six months a statement of the estimated capital expenditure of each company during the following half-year. That system had been adopted for some time, and with great success, by the London and North Western Railway Company, and he perceived that at the half-yearly meeting of the London and South Western Railway, held last February, a resolution was moved to the effect that the Directors should submit to each half-yearly meeting an estimate of the sums to be expended out of capital during the ensuing six months, and the proposal, having been seconded by Lord Bury, was carried by a large majority. He (the Duke of Richmond) believed that such a measure was perfectly practicable, and that it would afford very useful information to the shareholders. Then the 4th clause required that the accounts should
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be printed and distributed, not only to the shareholders, but to the debenture-holders, who had no voice in the management of the property; but who ought, he thought, to be furnished with correct information with respect to the position in which the company was placed. The next portion of the Bill commenced with the 6th clause, which would enable the Board of Trade, on the application of a certain proportion of the holders of shares of various kinds, to order an inspection of the affairs of the company. That application would be granted, if the discontented shareholders should satisfy the Board of Trade that it was not one of a frivolous character, but that they were unable to obtain information which they had a right to demand. The Board of Trade would then appoint an Inspector who would report, not to the Board of Trade itself, but to the shareholders, the state of the company. In all these proceedings there was one point that should be guarded against—namely, the Government taking upon themselves the responsibility of the management of the different companies. He believed that the report should be made by the Inspector to the shareholders and not to the Government; because it was clear to his mind that no Department of Government could be held responsible for the vast extent of the railway affairs of the United Kingdom. Those clauses of the Bill which related to inspection established no new principle, because the system was introduced into the Companies Act of 1862, where it was limited to joint-stock companies; and he proposed by this Bill to extend it to railway companies. With regard to the appointment of the auditors of a company, he had provided that in the event of a requisition to the Board of Trade, under certain circumstances, that Department should have power to appoint one auditor, not necessarily a shareholder of the company, because it was desirable in some cases that the auditors should be independent, and entirely unconnected in any way with the company. The next point referred to the liability of railway companies as carriers. When a person shipped goods at Holyhead and sent them to Dublin, the shipowner was merely liable for a limited amount of risk described in the hill of lading, which was made out at the time the goods were received on board the ship; but from the increased facilities of railway communication, and the great increase in the production of manufactured goods, the

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North Western Railway, among others, were carriers by sea as well as by rail, and it was found impracticable to have anything in the shape of a bill of lading for those transactions. It might so happen, therefore, that when a person sent goods from London, viâ Holyhead, to Dublin, the railway company would not only be liable for damage sustained during the transit by rail, but also for the full amount of damage which might take place through any accident upon the high seas. This state of things required alteration, and he had therefore inserted a clause in the Bill which he believed would meet the difficulty. He had received several deputations from Chambers of Commerce in different parts of the country, who urged that silk ought to be exempted from the operation of the Carriers' Act, and treated in the same way as cotton and lace, the company being rendered liable for any damage done in the transit of such goods. The subject was a very difficult one, and he had heard strong cases made out on both sides: the people dealing in silks having some grounds for their views, while the railway companies also had grounds for their objections. That, however was a point which could not be argued now, and he would be prepared to deal with it when the Bill got into Committee. The next point was one of great importance, relating to small parcels. At present all parcels of less than 500 lbs. weight were called small parcels, and some years ago the manufacturer dealing in small parcels was charged a very high rate for them, all parcels weighing upwards of 500 lb. being charged by weight. An alteration was, however, made, and the manufacturer was permitted to take his goods out of the category of small parcels, provided he sent them to one other person, and the goods he sent were of the sort in which he dealt. But that privilege had been abused, and it had been found that persons collected small parcels at one terminus and sent them directed to some person at the other end, claiming to have them carried at the lower rate, and not as small parcels. They were, in fact, goods of all descriptions, collected by a carrier, who got all the money he could for delivering them at the other end to the persons to whom they were addressed. The mode in which he proposed to meet this grievance on the part of the companies was, that when goods of the same description were sent to one person, a bonâ fide consignee, they should not be
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charged as small parcels. The companies were great losers by the present system, and this provision would enable them in the future to deal more liberally with the public, and the public would gain in the end by the present system being put a stop to. He now came to an important point to which their Lordships' attention had been called last year, when a noble Lord opposite had charge of a Bill, the object of which was to regulate the communication between guards and drivers. At that time he (the Duke of Richmond) did not think they had had sufficient trial of the system to warrant them in passing such a measure; but he undertook on the part of the Government to look into the matter during the Recess, and, if possible, to frame some measure which would meet the views which were then entertained. In fulfilment of that promise, he had requested one of the Inspectors of the Board of Trade to carry out, with the consent of the railway companies, certain experiments upon their trains. During the close of last year, and the commencement of the present, experiments were made on the London and North Western, the London and South Western, the Midland, and the South Eastern Railways; and he would call their Lordships' attention to the last part of Colonel Yolland's Report upon them, in which, after giving the details of the various experiments which had been made, he said—
"The prominent question for decision appears to me to be, 'Shall railway companies be compelled by legislative enactment to provide means of communication between passengers and the servants of companies in charge of the train?' This decision must properly depend on the answers to the two following questions:—First, is such communication necessary in order to provide for the public safety? and secondly, is it practicable? With regard to the necessity for such means of communication, I believe there are few who would contend that it is not necessary in the very long journeys taken by express trains without stopping, and I have already expressed my opinion, founded on actual experience of what has been accomplished, that it is quite practicable."
Colonel Yolland also pointed out that it was necessary that the electric or any other system of communication that might be adopted, must be very carefully looked after, and used at all times for starting the trains from the stations, as it would not do to use it only when an emergency arose. He (the Duke of Richmond) thought that some such means of communication ought to be adopted in trains; but it was a very remarkable fact that, notwithstanding the enormous number of persons who traveled

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by rail, few fatal accidents occurred through railway travelling in the course of one year. In 1866 there were 274,293,668 passengers by rail in this country, and of that number only fifteen were killed, averaging one in about 18,000,000; so that, in fact, it was far more dangerous, as a reference to the Registrar General's Report would show, to walk about the streets of London, than to travel by railway. Another point in the Bill was one which would be a great advantage to shareholders in the saving of expense in their proceedings before Parliament. The Bill provided that railway companies should have what was commonly called a "Wharncliffe" meeting before the second reading of a Bill in the first House of Parliament to which it should be introduced, and the shareholders would thus have an opportunity of expressing their opinions on the advisability of proceeding further with the measure. In the event of the decision of the majority of the shareholders being against the Directors, a vast amount of money, which was now spent in Parliamentary contests, would be saved to the company. He was aware that the Bill which he now asked their Lordships to read a second time was not so comprehensive a measure as might have been desired by many people; but he could assure the House that it was by no means an easy task to bring in a comprehensive measure on the subject of railway regulations. As the Bill first stood in the draft, it was a much larger measure than it was now; but upon going into the details of the various clauses, with the object of seeing how they would work, he found that a great many matters, though admirable in theory, were thoroughly impracticable, and he therefore thought it better to bring in a small and practical measure, rather than to introduce a much larger Bill, which would not work properly when it was passed.
Moved, "That the Bill be now read 2a."—(The Duke of Richmond.)
LORD REDESDALEsaid, he thought the Bill contained a great many excellent provisions, and would be generally useful. At the same time, without the Schedule to which the noble Duke (the Duke of Richmond) referred, it would be very difficult to form any opinion as to the accounts which might be produced. It was exceedingly desirable to have one form of accounts; for all accounts were very difficult to be understood by persons not well ac-
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quainted with such matters. How could the position of railway companies be estimated, when one company produced their accounts in one form and another in another? It was extremely necessary to have some provision in the Bill that no securities of any sort given by the Directors for a company should be legal unless registered, and the accounts should show clearly every security that was issued. There were a great number of railways which had nominal power to borrow to a certain amount; but which had borrowed five, six, or seven times that amount upon what were called Lloyd's bonds, and neither the shareholders nor the public were at all aware of the liabilities to which the companies were subject. Registration would give greater security, and all the liabilities to which a company was subject should be noted in the accounts. It was necessary also that the floating debt of the company—that is, any debt upon which interest was paid—should appear in the accounts. It was found from the reports of the Great Western Railway Company that they had, a short time ago, a floating debt of £1,000,000 upon which, in times of financial pressure, they had to pay a large amount of interest, in order to secure the necessary accommodation. The audit proposed would be most beneficial; but one provision in the Bill was rather contrary to the principles generally applicable in such cases. It was, that if any statement of account, balance-sheet, or report turned out to be false, the auditor, or other officer of the company who signed the same, should be liable to a penalty, unless he satisfied the Court who tried the same that he was ignorant of the false statement. Now, this provision was at variance with the general principle of law, that the onus of proof did not lie with a prisoner or defendant, and the clause ought not to be adopted without some consideration. Another provision was, that when an auditor was appointed to investigate the matter and to make a report, the shareholders might appoint another auditor; and if there were any difference of opinion between the two, either auditor might issue to the shareholders, at the cost of the company, the grounds on which he differed from his colleagues, and such a statement respecting the financial condition and prospects of the company as he thought material for the information of the shareholders. It was desirable that this clause, instead of being permissive, should be im-

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perative, so that the matter might be brought fairly before the shareholders. With regard to provisions for the safety of passengers, he thought that, after the Report to the Board of Trade upon the subject of communication between railway passengers and guards, such a communication ought to be insisted on. But there was some reason in what had been urged to him—namely, that the Board of Trade should specify the manner in which the communication should be made; that it should not be left to each railway company to adopt a system of its own; otherwise, a change of carriages would be necessary in all cases where two railway systems were connected. Besides the questions treated in the Bill, some other matters required legislation. For instance, great complaint was now made, especially on the Metropolitan Railway, of the extraordinary way in which the passengers were crowded in the carriages. At times the carriages were more like pens for cattle than for passengers. When the doors were opened people crowded in in any number; the officers of the company did nothing to prevent them; and inconvenience and sometimes injury arose in consequence. He did not see why railway carriages, like other public conveyances, should not be licensed to carry a certain number of passengers. At all events, some arrangements should be made to avoid undue crowding, and also to provide a better description of carriage than was now often furnished in all three classes. With regard to the management of railway companies, the provision that the Bill should be submitted to a Wharncliffe meeting, before the application to the Board of Trade or the second reading, might in some cases be a very useful one; but there were other matters connected with those meetings which required consideration, and which possessed an importance that had not as yet been commonly attached to them. There were no provisions whatever for regulating the voting at such meetings, and the consequence was that the way in which the votes were taken gave rise sometimes to great discontent and to the impression that fair decisions were not come to. It was desirable that some formal rule should be laid down on the subject. He had come to the conclusion that it would be extremely desirable to get rid altogether of proxies in railway companies. He believed that the proprietors would be far more truly represented by the small number of those really
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interested in the affairs of the company, who would attend the meetings than by the proxy system, which put everything into the hands of the Directors, unless their management had become so gross that public opinion had been excited against them in a very unusual manner. At the same time this was a matter which required great consideration, and he merely stated his opinion, leaving the point to be duly weighed and canvassed by the public. Nothing was more unsatisfactory than the powers of railway proprietors at this moment. They really had no power whatever over the management of the line, and he was sorry to say that, judging from the Bills which came before him, there was a great desire on the part of some Boards to make them still more close, and prevent the interference of the proprietors still more completely than they were before. He admitted that on all these points it was not desirable to legislate unless Parliament felt that it was on certain ground; but he hoped that next year, if the noble Duke (the Duke of Richmond) held the same office, he would be able to propose some further regulations for the security of railway shareholders and of the public.
EARL GREYsaid, he was far from regarding this Bill as accomplishing all that could be desired in this direction. But he did not dispute the discretion of the noble Duke (the Duke of Richmond) in bringing forward, in the first instance, a moderate measure, and he thought that their Lordships were deeply indebted to him for the pains he had taken in framing a Bill which, as far as it went, would, no doubt, be very useful. The railway system of this country was now a subject of the highest national importance; not only because the facilities for communication afforded by railways were necessary for the public welfare, but also because so many persons were interested in railway property that the general prosperity of railway companies was a matter of national concern. The depreciation of railway property that had taken place in the last two or three years had involved such an amount of private suffering and general injury that it was inevitable the question should attract attention. The Bill did not go so far as it might ultimately be necessary to go; but it was based upon the sound principle of at once protecting railway property, and enforcing upon railway companies the discharge of the duties imposed upon them by law, and of which the

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proper performance was necessary for the safety and advantage of the public. Some of the matters provided for by the Bill certainly required immediate attention, especially the more efficient audit of railway accounts. Some of their Lordships might remember that many years ago the Government of the day endeavoured to pass a Bill to provide for a better system of audit; but at that time the railway interest in the other House of Parliament was too powerful to allow this measure to pass. Now, however, shareholders had reason to regret that some measure of the kind was not adopted, so as to have saved innocent persons from the ruin in which, in too many instances, they had been involved by the reckless conduct of those entrusted with the management of railways. This Bill would do much towards securing an honest system of railway management in future. He hoped Her Majesty's Government would consider whether those who had been guilty of great abuses that had been brought to light ought not to be held responsible. It appeared to him that the transactions that were exposed day by day in the papers—whether in the technical language of the law they were frauds or not—were in their character fraudulent in the highest degree, and the persons who had suffered by them had been cheated of sums of money, sometimes of great magnitude. Before these windings-up and arrangements were completed he hoped Her Majesty's Government would cause their Law Officers seriously to consider, whether persons who had been guilty of offences of which the law could take cognizance should be allowed to escape punishment, because it was not the interest of individual shareholders and sufferers to prosecute in cases of this character. In such cases it was the special duty of Government, for the protection of the public interest and in the cause of morality, not to allow offenders to escape; but, if there were grounds for prosecutions, to cause them to be instituted by the Law Officers of the Crown. Without further discussing the principle and details of the Bill, he would say that it might have gone further in the way of providing means to enforce obedience to the law. It was notorious that many railway regulations were habitually ignored, and the authorities set at defiance. One matter seriously affecting the comfort of travellers, and the health and safety of those living by the side of railways, was that locomotives did not
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consume their own smoke, and that coal was burned upon them in such a manner that property by the side of railways was exposed to the danger of ignition by flying sparks. Fires were, therefore, continually taking place by the side of railways, and it was only a few days ago that cases of this kind were brought under his notice. It was certain that great risk of destructive fires was incurred in this way. Another source of risk and danger was that level crossings were insufficiently protected. He knew an instance of a level crossing which, for many years, had been left without anyone in charge of it after a certain hour of the night, and the gate was often left open, and extreme hazard thereby incurred. He could not but believe that some simple provision, requiring the police to take legal proceedings where infractions of the law were brought under their notice, would do a great deal to prevent their recurrence. The intervention of the police in the matter of the smoke nuisance in this town had tended greatly to abate it, and why should not police intervention be applied to railways? Parliament was greatly to blame for the state of things which had now arisen in the railway world. The conduct of Parliament during the last thirty years had been greatly wanting in foresight and judgment, and had led in great measure to the results deplored. Many existing evils were due to the fact that railways were very often distressed for want of money. Shareholders were not receiving the dividends they expected to get when they invested their money, and pecuniary embarrassment no doubt often tempted railway managers to neglect provisions that were required for the public safety. The low average dividends of railways, notwithstanding the high fares, were mainly due to Parliament, and the want of a proper tribunal for considering applications for railway Bills. He had held this opinion many years, and had more than once urged it upon the House; and, until railway schemes were subjected to a more searching, impartial, and judicious investigation, we should never have a thorough reform in railway schemes. We knew by experience that a railway was necessarily a monopoly, and that competition was practically impossible. The natural consequence was that, when a given district of country was provided with more railways than it required, the different undertakings combined, and their extra expenses restricted the amount of accom-

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modation which at a given cost they could afford to the public. It was quite clear that under the system of a Parliamentary tribunal for considering Railway Bills, a system had grown up which pressed most severely upon the public. Engineers and speculators had promoted companies for no other object than that of getting themselves bought out. Schemes had been brought forward merely for the purpose of annoying railway companies, and hence their legal expenses were frightful in amount. Of course, in some way, this useless expenditure fell upon the public. The system by which railway schemes were now considered looked as if it had been carefully contrived in order to stimulate the gambling propensities of mankind, and to bring railways before Parliament in as expensive and as imperfect a manner as possible. A railway scheme was submitted to a Committee, first of one House and then of the other, and after a decision had been obtained at great expense, if the scheme were rejected it might be brought forward in the following year, and laid before new Committees, who, entertaining different views and adopting different principles, might reverse the decision previously come to. There was no consistency in the decisions pronounced by Committees, and there was no uniform principles or rules for their guidance. In order that the public interests might be duly served, it was necessary that the policy pursued in reference to this matter should be steady and consistent. It would, in his opinion, be impossible to perform in a proper manner the duty of granting powers for constructing railways until a strongly-constituted tribunal was established, the sittings of which should not be confined to a few weeks, but should extend over the period during which the Courts of Law usually sat. The members of such a tribunal ought, of course, to be well paid, and in every respect equal to their duties; and Parliament could then look to them for advice as to some consistent principle in regard to the schemes submitted for consideration. He did not, however, for a moment propose that the ultimate decision should be withdrawn from Parliament; but that the first consideration of the various schemes should be submitted to a Court such as he had suggested. It had been asserted that a scheme of this kind had been already tried and had failed. He was aware that in the year 1845 the Board of Trade was called upon
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to report to Parliament on the Bills which ought to be passed, and that those Reports turned out to be of no practical use or advantage whatever. Indeed, he had himself taken a somewhat active part in the other House of Parliament in breaking down the authority of those Reports, and under such circumstances he should certainly do the same thing again, for the Reports in question were made in a manner which deprived them of all proper authority. The real nature of the business to be transacted was not at that time perfectly understood by anybody, and the Board of Trade was called upon, without making a public examination, but merely acting on the faith of ex parte statements delived in private, to draw up Reports for the guidance of Parliament. Now, it was obviously impossible that Reports so drawn up should give general satisfaction, but he could not admit that if a similar plan were adopted and carried out in a fitting manner before a better constituted tribunal it would also prove a failure. If means were taken to establish a proper tribunal, which should openly and publicly hear all applications for the construction of railways, and prepare Reports for the consideration of Parliament as to whether particular schemes deserved to be adopted or not, and on what conditions the powers asked for should be granted, he was persuaded that great advantages would be gained, and that Parliament would be enabled to discharge its duties in reference to this subject in a much more effectual and satisfactory manner than it had done hitherto. In conclusion, the noble Earl said that though this question did not immediately arise out of the Bill under discussion, it was nevertheless so closely connected with it, that he had deemed it right to take this opportunity of addressing these remarks to their Lordships.
THE MARQUESS OF CLANRICARDEsaid, he thought the Bill would effect some good, but not all the good that was expected by the noble Duke. In his opinion, the question of railways ought never to have been intrusted to the Board of Trade at all; for it was one of such magnitude and importance to the country that it ought to have been dealt with by a special tribunal, as was done in every country on the Continent. The noble Duke surely could not believe that the present measure would really prevent such financial calamities as had lately occurred, or that it would effectually diminish the number of lives lost

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by railway accidents. This Bill was not a Bill for the regulation of railways, except in a very slight degree, and ought rather to have been called a Railway Companies' Bill, for the consideration of their affairs and accounts. One of its clauses contained a provision for laying before the shareholders an estimate of the expenditure out of capital. That might, perhaps, have produced a beneficial effect if it had been enacted ten or twelve years ago; but, in reality, the reckless expenditure on capital which had taken place in various companies had never been condemned by the shareholders at subsequent meetings, and, so far as he was aware, there was not a single instance of shareholders having withdrawn their confidence from the Directors, in consequence of the reckless expenditure which had been incurred. Then there was a provision for a public audit, but it should be remembered that the duties of an auditor is confined to ascertaining that the various sums of money had been paid out faithfully and honestly by the treasurer in the manner stated in the accounts. An auditor could not inquire whether the expenditure had been extravagant or not, and though it might be right to congratulate ourselves on the comparatively small number of lives lost on railways, it was certainly a matter of astonishment to all railway travellers that more fatal accidents did not occur. In his opinion there was no reason why the Board of Trade should not be invested with those powers which the Duke of Wellington proposed to confer upon it twenty-eight years ago. He was borne out in his statements by the officers of the noble Duke's own Department. In a Report made on the 4th of January, 1866, by Colonel Yolland, in reference to two successive collisions which had occurred on the 4th of December, 1865, a short distance south of Sudbury station on the London and North Western Railway, there was this statement—
"It is true that the practice of the Department is to send one of the inspecting officers to inquire into and report upon the circumstances attending accidents, as in this and the former collision at Walton Junction, and such inquiries are submitted to by the railway companies; but their Lordships are not empowered to make an order for anything to be done. No responsibility appears to attach to any person for the complete neglect exhibited towards Captain Tyler's recommendations; and the unfortunate signalman of thirty years' service, who was, I have no doubt, as he thought, doing his duty properly, is the only person to whom any liability attaches; whereas the
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expenditure of a small sum would have prevented him from inadvertently committing the act for which he will shortly be tried for manslaughter, and have saved the railway company a very large sum of money that must now be paid as compensation for those who suffered. The utility of their Lordships continuing to maintain the present system of making these unauthorized inquiries into the circumstances connected with the accidents which occur on railways may therefore be fairly questioned."
He concurred with Colonel Yolland in what he said as to the utility or inutility of the present system of inquiry; and he thought that great responsibility attached to the Department for not coming forward to demand such additional powers as would enable it to compel any railway company to make such improvements in their line as in the opinion of the officers of the Board were necessary for the prevention of accidents in future. He admitted that in other days there might have been an indisposition on the part of Parliament to grant such powers, but he thought that they would be granted now. When the Duke of Wellington twenty-eight years ago made the suggestion to which he had referred, the reply of the Government was that the railway companies and their interest were so strong that the Government could not obtain power to control them. The noble Duke (the Duke of Richmond) had not mentioned the number of passengers injured in the year 1866. It was 534. Besides to the enumeration of the passengers killed or injured was to be added that of the servants of the companies. Now, he found that the number of servants of companies killed in 1866 from causes not within their own control was seventeen, and that the same class injured from similar causes was seventy, so that the total number of the killed was twenty-eight, and that of the injured 604. Once a railway was opened under certificate from the Board of Trade, the Department had no further power over it in the way of compelling the company to make additional provision for the safety of the public, though the company might add sidings and even small branch railways. These were free from inspection if they were not intended for passenger traffic. As showing how necessary it was that the Board of Trade should have the power of enforcing conditions after a line was opened, he might mention that in a difference about terms of an arrangement between the Great Western and the South Wales Companies the former threatened to put in

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force certain provisions of their Act to compel the South Wales Company to substitute stone bridges for certain wooden ones. The smaller and weaker company were obliged to yield, and the Great Western Company got possession of the line. From that day to this they had worked it with the old bridges. Then, as to the Carriers' Act, to which a clause in this Bill related, it had been ruled that, in an action brought against a railway company, a question to be decided was, what conditions were reasonable. On this point there had been such a difference among the Judges that a case had been brought to the House of Lords. This was not a satisfactory state of things; why should not the Inspectors of the Board of Trade have similar powers in respect of railway companies to those possessed by the Inspectors of Factories, Mines, and Emigration Ships, in respect of the proprietors with whom they had to deal?
LORD STANLEY OF ALDERLEYthought that the noble Earl who spoke from the cross-Benches (Earl Grey) had raised the whole question of the mode of procedure in that House with respect to private legislation, and the mode of transacting their Private Business. After some remarks on Lord Redesdale's recent letters to The Times on railway management, he said, he thought the Government had exercised a wise discretion in not attempting too much, or making their Bill too comprehensive in the first instance. He approved of its provisions generally, but there were one or two points on which he should in Committee desire further explanations.
LORD WESTBURYsaid, that it was very little use laying down rules with regard to the keeping or presentation of accounts, and permitting that which was to a great degree the source of the uncertainty, confusion, and deception which were practised in the accounts as they now stood. He alluded especially to the practice which prevailed in railway companies of keeping their capital account open. Then they shuffled the charges, sometimes entering them to the capital account and sometimes to the revenue account; so that it was impossible to ascertain what was their actual expenditure, and still more impossible to say whether that expenditure was justified or not. He believed there was much truth in these allegations, because he found that, in the half-yearly accounts of almost every railway, there
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was an item of proposed expenditure for the ensuing half-year, which was charged to capital. The capital account would never be closed in that way. If the capital account was to be kept open at all, it ought to be done by some rule apportioning the expenditure that was to be paid out of capital, and the portion to be paid out of revenue. No doubt there would then be some items of expenditure that would be due partly to capital and partly to revenue. But he would prefer that the capital account should be closed altogether. It was impossible to form a decided opinion of the Bill, favourably as he was disposed to regard it, until they saw the form of accounts which was to fill up the first Schedule. He hoped the noble Duke would provide that the accounts should not be limited to the ordinary payments and receipts; and that, on the other hand, they should not be so extensive that the eye could hardly follow and the mind would be incapable of comprehending them. It was particularly necessary that they should show clearly what was the amount of expenditure incurred in the year or the antecedent year that had not been paid, and should exhibit every description of security, whether debentures or not, that had been issued. He should be glad if those nondescript securities called "Lloyd's bonds" could be struck at in some way. They might or might not be within the strict limit of legality, but they certainly had a tendency to be made a most fruitful means of deception, and of concealment of the real position of the affairs of a company. He should be most happy to render the noble Duke any assistance that he could to perfect this measure and to render it a piece of useful legislation.
LORD REDESDALE, in answer to the observations of the noble Lord (Lord Stanley of Alderley) said, he should rejoice if the private legislation of that House, and the affairs of the railway companies in particular, could be brought before their Lordships in such a manner as would enable the public out of doors to understand from their discussions the true state of affairs. It had been said with regard to his letter to the newspapers on the affairs of the Great Western Railway that he ought not to have prejudged the question. But he was in some measure obliged to do so, because it was his duty to send his observations to the railway companies upon the Bills that came before

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him, and they were, therefore, perfectly aware of his opinion. He had not such perfect confidence in his own opinion as to suppose that he could not learn anything in return, and he had derived great advantage from the representations thus made to him. But he thought it of great importance to the persons who had a pecuniary interest in the matter that they should be informed of the real bearings of the question, and he must say that not the slightest answer had been given to any single word of his letter. He believed that the statements he made were unanswerable, and although the railway company still persisted in pursuing a similar course, he trusted that great good had been done by the publication of his letter. Whatever he sent to the newspapers he put his name to, and, as his object was the public good, he conceived that he was justified in the course he had adopted. Some persons entertained a notion that as Chairman of Committees he could carry out the law in all cases; but there were so many ways in which wrong could be done, that the only way in which he could exercise any check was by appealing to public opinion.
LORD STANLEY OF ALDERLEYbriefly disclaimed any intention of condemning Lord Redesdale's judgment in writing the letters in question.
Motion agreed to; Bill read 2a accordingly, and committed to a Committee of the Whole House on Thursday next.
House adjourned at Seven o'clock, to Monday next, Eleven o'clock.