Lords Sitting of 8 March 1870

OWENS COLLEGE EXTENSION BILL.

  SECOND READING.
  Order of the Day for the Second Reading, read.
  THE EARL OF HARROWBYsaid, he felt some reluctance in moving the second reading of this Bill, not because he doubted the excellence of its object, but because he was obliged to differ from his noble Friend (Lord Redesdale), who presided so usefully over private legislation in this House, and but for whose very proper jealousy general rules would, no doubt, in some cases, be unduly over-ridden by private Acts. He doubted, however, whether the objections raised by his noble Friend were of sufficient weight to induce their Lordships to refuse to read the Bill a second time. Their Lordships might be aware that about twenty-five years ago an eminent citizen of Manchester, Mr. Owens, bequeathed a considerable sum— nearby, indeed, £100,000— for the establishment of a College in that city, to bear his name, his intent being that it should have a broad and liberal basis, and should embrace everything taught at our Universities, so as to offer the advantages of a first-class education combined with the special knowledge suited to the particular industry of the district. About 1852 the executors or trustees were enabled to carry this purpose into effect. £90,000 being invested in founding a College. The object commended itself to the feelings of the inhabitants of the great northern metropolis, and the endowment was augmented by various persons and societies until it amounted to about £128,000. A demand having arisen for an extension of the usefulness of the institution, a number of persons subscribed considerable sums—many £1,000 each —and £30,000 had been already raised, while there were promises of about £60,000 more. But it was felt that in the case of so large an endowment, there was a difficulty in entrusting so large a sum to mere private trustees, and that there ought to be some better security for its due administration. Then, as part of the money had been invested in land, and a number of transactions had oc-

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  curred in connection with the intended extension of the College, some organization in the nature of an Act of Incorporation was wanted to give legality and stability to any future proceedings. The Bill proposed, therefore, to incorporate the new contributors, and to authorize them to come to an agreement with the College trustees, so as to combine in carrying out the scheme of extension. The objection to this course, as expressed in the report of the Attorney General, was that the Bill was of an unusual character, and sought to create a new incorporated body, which might confer with the College trustees, and with the consent of the Charity Commissioners have the trust transferred to them; whereas the usual method of dealing with and enlarging an existing trust was for the proposal to proceed from within, and for the Court of Chancery or Charity Commissioners to consider whether the extension was a legitimate one. The noble Lord (the Chairman of Committees), moreover, had suggested that a charter might be got in another way, and as the Crown now refused to grant charters to educational endowments, the only alternative was to proceed under the Joint Stock Companies Act. But there would be considerable difficulty in this mode of proceeding. The Joint Stock Companies' Act was not intended for cases of this kind. That Act was intended only for commercial and mercantile undertakings, all its provisions being designed for the protection of the shareholders, and all associations incorporated under it having to apply to the Board of Trade if they wished for any change in their constitutions. The inconvenience of a great educational undertaking being placed under the Board of Trade was obvious, especially as it would not be entirely withdrawn from the control of the Charity Commissioners. The provisions of the Act enabling one-fifth of the shareholders to wind up the concern was also strikingly inapplicable to this case. He was told, indeed, that some twenty schools and smaller educational institutions had adopted this course; but it was evidently a diversion of the Act from its real purpose, and it must be difficult to make its machinery work in such cases. This scheme was, in fact, one for a great northern University; and surely they would not put an University under the Joint Stock Companies Act.
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  He thought, then, there was good reason for asking Parliament to consider this case by itself. He thought there could be no fear of the powers now asked for being abused; it was not an instance of a great company or a great association swallowing up a smaller one nolens volens; they were merely seeking to enable one considerable body of men to agree with another considerable body of men, with the view of enabling them, by their joint efforts, to form one great powerful and united body, for the purpose of enabling them to carry out the objects in a broad and efficient manner. The promoters had shown their good faith by their readiness to make large personal sacrifices, but until they were incorporated, they had no power of dealing with the trustees. Were the object a trifling one he should not have put himself in opposition to the opinion of the noble Lord; but the object was a great one, and it admitted of no delay, for there would be danger of the subscriptions which had been promised not being received. £20,000 had been invested in land, £10,000 more was in hand, and £60,000 more was promised, but without further authority the promoters could not proceed. In view, then, of the importance of the matter to a district with which he had always been connected, he hoped their Lordships would read the Bill a second time.
  Moved, "That the Bill be now read 2a."—(The Earl of Harrowby.)
  LORD REDESDALEsaid, it was extremely painful to him to raise an objection to a measure which many persons of great eminence were anxious to see carried. At the same time, he thought it his duty to bring this matter before the House in the strongest possible manner, because he believed the concession of this Bill would be absolutely fatal to the proper conduct of the Private legislation of Parliament. The noble Earl (the Earl of Harrowby) said he would not have brought forward the measure if it had been of a trifling character. The question, however, was one of principle, and that being so the importance of the scheme was immaterial. In fact, one of the great dangers of the Bill was to be found in the fact that it was backed by Members from Manchester and other parts of Lancashire, and that an amount of influence had been exerted in favour

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  of the Bill which, if allowed to prevail, would prove most injurious to the course of private legislation. The noble Earl had not fully stated the objections to the Bill. The principal objection to it was that the body asking to be incorporated was not yet constituted—in short, was a non-existent charity. If people who merely subscribed to promote objects in which they took a personal interest were to be allowed to be incorporated in this way, it was difficult to see how the Private Business of Parliament was to be secured from gross abuses. Long before the meeting of Parliament, he had stated his objections thus —"This is a Bill for incorporating a non-existing charity, to enable it to annex the property of another charity, setting aside, to a great extent, the express intentions of the founder. I do not think anything of the kind has ever been done, and it would be a bad precedent." When Parliament met, and the Bill was lodged, it was referred to the Attorney General in the ordinary course. The Attorney General in his report pointed out that it was of an unusual character, requiring the serious consideration of the House, inasmuch as its object was to create a new incorporated body, without the consent of the Charity Commissioners, and to authorize the transference to itself of the trust property connected with Owens College. The Attorney General added —"Looking at the usual mode of dealing with such foundations, any enlargement of existing foundations should proceed from within, and be directed under the previous sanction of the Court of Chancery or the Charity Commissioners." Therefore, having that opinion in confirmation of his own, he was justified in saying that the Bill ought not to be proceeded with. His objection was, first, that the Bill would incorporate a non-existing charity; secondly, that it would fuse Owens College with the body so incorporated. It was true that the consent of the Charity Commissioners would be required; but if the Bill passed, the Commissioners would be able to do what they pleased; whereas the course had always been for the Commissioners, after due inquiry, to sanction a scheme which was afterwards submitted to Parliament for consideration or alteration if necessary. Thus Parliament would abandon its power of revising the decisions of the Charity Commissioners, and a precedent
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  would be established for dealing with a charitable fund in a manner totally opposed to the intentions of the founder without subjecting the new scheme to the approval of Parliament. If the door was once opened to such a danger it was impossible to say how far it might extend. The noble Earl (the Earl of Harrowby) said it would be awkward for the promoters to incorporate themselves under the Joint Stock Companies Act. He believed that in some cases charters had been refused on the ground that the parties applying formed an educational body, and they were recommended to incorporate themselves under the Joint Stock Companies Act. That was the case with Cheltenham College. [The Earl of HARROWBY: In that case they were shareholders.] The persons applying in that instance might have been shareholders, but not for any profit. They were merely subscribers, like the promoters of this Bill, and their object was to erect a large educational institution. Why should not the same course be resorted to in this instance? But if they did not like to put themselves under the Joint Stock Companies Act, there was the alternative of placing themselves under a deed of settlement which would make their fund perfectly safe, and enable them to treat with Owens College, and then apply jointly to the Charity Commissioners, so as to come before Parliament as a united body in a regular and formal manner. In neither case need there be any serious delay. This was not a party question; but there had doubtless been a considerable canvass, and if their Lordships allowed such agitation to be applied to Private Business the door would be opened to great evils. In answer to his challenge for the production of precedents the promoters had only been able to cite two Scotch cases; but in both of them the trusts were already constituted and estates were held, to deal with which an Act of Parliament was required. They were, in fact, Estate Bills, and had been sanctioned by the Scotch Judges; but this was a body without any constitution, which desired to be incorporated and to deal with another body, in order to act contrary to the intentions of the founder. Unless they wished to act contrary to his intentions there was no occasion for an Act of Parliament, for the original powers which he gave his trustees were very

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  wide, though, not wide enough to authorize a departure from certain things which he deemed fundamental, and therefore the promoters of this Bill now sought, without any recommendation from the Court of Chancery or the Charity Commissioners to alter the powers of the trust. He hoped their Lordships would not open the door to dangerous and fatal consequences.
  THE EARL OF HARROWBYwished to explain that he was ready to modify the Bill, so as to make the scheme settled by the Charity Commissioners dependent on the approval of Parliament.
  LORD REDESDALEreplied that this concession took away the entire reason for the Bill, except as to the incorporation of a non-existing charity, which could be effected in a more regular way. If the matter was to come before Parliament in the last resort, there was no occasion for applying to Parliament now.
  EARL DE GREY AND RIPONstated that while admitting the weight due to the opinion of the noble Lord (Lord Redesdale) on a matter of this kind, Her Majesty's Government, having given very careful consideration to this question, had come to the conclusion that the objections raised by the noble Lord were not of such a nature as ought to induce their Lordships to reject the Bill. The noble Lord divided his objections into two parts—the first being that this was a proposal to incorporate what he called a non-existent charity; and the second that it was intended to unite that body with an existing trust. Now, the opinion of the Attorney General had reference to the latter point only. As to the first objection, he thought the noble Lord's distinction between an existing and a non-existing body rather a shadowy one. There were many examples of charitable institutions supported by subscriptions, after a certain period of existence in that stage, coming to Parliament to ask for incorporation. Therefore the objection, so far as it rested on precedent, was that the subscribers in this case had not done a sufficient number of acts to constitute them an existing body. [Lord REDESDALE: Hear, hear!] But they had, at any rate, done acts which showed a considerable amount of vitality. They had subscribed £90,000, and bought the land on which they proposed to erect their new College. Having
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  done that, and being desirous of carrying out their most important scheme, they found that unless they could obtain a legal position all these proceedings would be undertaken at their own personal risk. The noble Lord recommended them to incorporate themselves under the Joint Stock Companies Act, and referred to the refusal of charters in some instances as a precedent for rejecting this Bill. But the circumstances of Cheltenham College were not analogous to those of this case; it was already a highly flourishing institution, and had no need of a charter for educational purposes; besides it was a proprietary College, whereas in this case there was no question of proprietary interests. Further, he thought it important that very great care should be exercised in the granting of Royal Charters, because they tended to give an unfair advantage to institutions which received them, where such institutions were in competition with other similar establishments; and, further, it would be unfair at the pleasure of Government to grant them in some cases and refuse them in other similar ones. The noble Lord's suggestion, that a body of gentlemen who had subscribed a large sum of money for a public object should form themselves into a joint-stock company simply in order that having united themselves with other trustees and obtained the approval of the Charity Commissioners to a new scheme they should then wind themselves up, seemed rather unreasonable. Except that a shorter time had elapsed since the formation of this body of subscribers, he did not see the great distinction drawn by the noble Lord between this and other cases in which incorporation had been sought. The noble Lord said the trustees of Owens College were the persons who ought to be asked for a new scheme; but it was only natural that this large body of subscribers, comprising persons of eminence in Lancashire, should prefer to reserve to themselves the initiative and the power of dealing with the trustees, instead of taking the course advocated by the noble Lord, which would place them entirely in the hands of the trustees and of the Commissioners. This Bill, however, distinctly provided that the scheme should be submitted to the Charity Commissioners for approval; and he did not know that it would be impossi-

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  ble to insert a clause to secure to Parliament an opportunity of pronouncing a final opinion. The noble Lord spoke more than once of this Bill as altering the fundamental trusts of the will of the late Mr. Owens. The first of those was that there should be an entire freedom from religious restrictions in regard to instruction; and the second, that a certain degree of preference should be given to Manchester, and then to Lancashire. To the first of these the testator attached the greatest importance, and the Bill provided for the observance of the directions of the founder of the College in that respect. No doubt the Bill would interfere with the second provision; but during late years those who had paid attention to the question of education had formed the opinion that a preference of that description did not operate advantageously. Indeed, in the case of an old established charity Parliament would have no hesitation in removing such a restriction; but if, in Committee, it was thought desirable to retain the preference, he should advise the promoters to accede to it. Upon these grounds, it appeared to him that if their Lordships read this Bill a second time they would not set up a precedent so dangerous as his noble Friend seemed to fear. They would not establish any precedent which would allow a mere body of subscribers to ask for incorporation; because one of the features of this Bill was the proposal to unite with an existing trust. He could not doubt that the object of this Bill—the establishment of a great educational institution in the North of England—was one of great public utility, and he rejoiced to see the leading citizens of Lancashire coming forward with large subscriptions for so good an object. He did not deny that if the objections of the noble Lord were as weighty as he supposed they would constitute a reason for stopping the Bill in limine; but he (Earl De Grey and Ripon) believed they were not so important as had been represented, and he therefore hoped their Lordships would read this Bill a second time.
  LORD ROMILLYsaid, he was not opposed to the second reading of this Bill; but he desired to call attention to a highly important question which it raised —namely, the whole private legislation of Parliament and the manner in which it was conducted. It was a subject de-
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  manding the utmost consideration and even investigation. The functions which Parliament discharged in trying the merits of Private Bills were purely judicial functions, and no part of the judicial functions of the country was so ill performed at such enormous expense, or at such a sacrifice of justice. A few years ago nobody could obtain a divorce without an Act of Parliament, and a very few years ago an estate which was closely entailed could not be sold, however desirable it might be, if the person entailing it had forgotten to insert powers of sale, without an Act of Parliament. These things, no doubt, had been altered. Government talked of consolidating and uniting the law courts; but whilst they were engaged upon legal reforms they ought not to forget to reform private legislation, which stood greatly in need of it. Feeling the great importance of charities, he himself had ventured last year to introduce a Bill on the subject, constituting all charities corporations. It was, however, vehemently opposed by noble and learned Lords, with the single exception of his noble and learned Friend on the Woolsack, who was disposed to assist him at first, but afterwards thought the objections so strong that he could not assent to the Bill, and he was obliged to withdraw it. Had it passed, however, the greater part of these Bills would have become unnecessary. A great objection to private legislation was that it only assisted those who could produce a very large sum of money —for he did not believe any Private Bill, if opposed, could pass at a less expense than £1,000. These were judicial functions, and should be treated as such; but no body of persons were so incompetent to perform judicial functions properly as Committees of the House of Commons. He might mention a very serious fact that had come under his consideration. Shortly after he had the honour of a seat on the Bench, an eminent railway company having got into a dispute with one of its directors, he had to take the accounts between them in the Court of Chancery. In going over these accounts he found the item of £10,000 for secret service money paid to Members of Parliament. The director stated in his affidavit that the money had been paid; he disbelieved him, and he disallowed the item, and he only mentioned the circumstance then in order to show the

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  scandal that arose from the present system of private legislation. Now, the scandal occasioned by the discussion of such a question in court was a serious evil, and steps ought to be taken to treat these functions as purely judicial. The noble Lord (Lord Redesdale) had for a great number of years performed the functions of Judge in Committees with great care and skill, and great reliance was placed upon him in uncontested cases. But in all other cases the conduct of Private Business was most unsatisfactory. Either the Bill under discussion must be treated as a Public Bill, or it must be left to the consideration of a Committee like a Private Bill. He did not say whether it might not be desirable to take the former course, in which case it would come before a Committee of the Whole House; whereas, if treated as a Public Bill, any alterations, such as the important and desirable one conceded by the noble Earl (the Earl of Harrowby), might be made in a private room, without the House exercising any judgment in the matter. He trusted the Government would seriously consider this question of private legislation, with a view to making that really judicial and comparatively inexpensive which was now very costly and unsatisfactory.
  On Question? their Lordships divided: —Contents 33; Not-Contents 6: Majority 27.
  Motion agreed to: Bill read 2a accordingly.
  LORD REDESDALEsaid, that if the Bill should come before him as "unopposed" he should certainly, as he had power to do, refer it to a Committee of the Whole House. He was sorry to find that the Government and their supporters had in such numbers voted for the second reading of this Bill, and he regarded the course which had been taken as fatal with regard to the conduct of Private Business. He hoped, with the noble and learned Lord (Lord Romilly), that steps would be taken by public legislation to render private legislation in many matters unnecessary. He hoped power would be given to constitute bodies of this kind in a manner less open to objection than by the machinery of the Joint Stock Companies Act. The noble and learned Lord's remarks applied also to Local Government and Health
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  of Towns Acts, for almost every large community had an Act of its own—a confusion which would be avoided if the general Acts on these subjects were of a satisfactory kind. As regarded the vote now recorded, he could not help feeling that more mischief had been done by it to the private legislation of Parliament than had been done during the whole time he had been Chairman of Committees in that House.
  EARL GRANVILLEagreed in the desirability of rendering Private Acts in many cases unnecessary by some general legislation. He must protest against the noble Lord's statement that this was a Government measure; for his noble Friend (Earl De Grey and Ripon), when asked to move it, distinctly declined to do so. The second reading of the Bill had been moved by his noble Friend opposite (the Earl of Harrowby), who certainly did not belong to Her Majesty's Government, and it was supported by a majority of Peers on the front Opposition bench. Although his noble Friend (the President of the Council) had thought it his duty to support the second reading of the Bill, there was no ground for saying it was a Government measure.
  LORD REDESDALEsaid, there had been a Government "whip" to insure the attendance of noble Lords on that side. ["No, no!"]
  LORD HOUGHTONassured the noble Lord (the Chairman of Committees) that he laboured under a misapprehension as to the feelings of the House on that matter.
  THE LORD CHANCELLORthought the noble Lord (Lord Redesdale) had charged the Government rather hastily with taking up this Bill as a party measure. Looking on such Bills as being, on the whole, matters of a semi-judicial character, as his noble and learned Friend (Lord Romilly) had termed them, he should have been ashamed of himself if he had treated this Bill as a party measure. It certainly seemed to him to fall under the ordinary rules applicable to Private Bills. Having had some experience of Private Bills, as counsel before both Houses of Parliament, it certainly surprised him to hear the noble Lord (Lord Redesdale) urge that the circumstance of a number of persons not being already incorporated was a reason why they ought not to be allowed to come before Parliament as they now

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  did. Why, all persons who wished to make a railway were in precisely the same position. They subscribed their money; and because they could not execute their works without applying to Parliament, they came there to be incorporated. So, in the present case, the parties had got together nearly £90,000; they had purchased land; and they now came there to be incorporated —than which nothing could be more natural or legitimate. As to the suggestion that they should come in under the Acts relating to the carrying on of business by shares, the gentlemen who had subscribed this money had done so for the promotion of a great public object, and not for any purposes of profit—indeed, many gentlemen who would willingly subscribe to an object of that description if the promoters were incorporated, would hare nothing to do with it in the way of shares. No doubt, in the case of a charity, the ordinary course was for the trustees first to apply to the Court of Chancery to know whether the Court thought they ought to make an application to Parliament. But that was because trustees had no funds of their own —they were a charitable body, and could not spend sixpence on an application to Parliament without the sanction of the Court of Chancery. In the present case, however, a number of persons had subscribed their money and asked to be put side by side with another corporate body, saying they would save it the expense of going to the Court of Chancery for leave to promote a Bill in Parliament by themselves bringing in a Bill empowering them to act together for an excellent object. It was a measure of immediate local interest, and it appeared to him to fall fairly within the Standing Orders and the rules and regulations relating to Private Bills.
  House adjourned at half past Six o'clock, to Thursday next, half past Ten o'clock.