§ Order of the Day for the House to be put into Committee, read.
§ LORD REDESDALEsaid, that this Bill had come before the House as a Private Bill; but he had thought it his duty to remove this Bill from the usual place occupied by Private Bills on their Lordships' Notice Paper. There were 994 exceptional circumstances in connection with it, as introduced, involving a principle of great importance in railway legislation, which rendered it desirable that it should be considered by a Committee of the Whole House, as if it were a Public Bill. The question involved was, in a word, whether the promoters of a Railway were to be allowed to issue preference stock in their first or original Bill. That was what the promoters of the Bill now before their Lordships asked to be allowed to do, and which had never hitherto been granted. On the one hand he did not like, as Chairman of Committees, to give his sanction to a Bill containing such a provision; but, on the other hand, he did not like to take upon himself to reject a Bill to which there was no opposition, and which was represented to be one of some importance to the North of Ireland. The promoters asked for borrowing powers to the extent of one-half of their subscribed capital, which would be the first charge on the line. The landowners of the districts through whose land the line would pass had guaranteed a sum of £39,300 towards its construction, and £33,500, had been guaranteed by the baronies through which the line was to pass. The spirit and liberality of the landowners and of the baronies was very creditable; but he could not overlook the very serious objection to the proposal of the promoters to raise £50,000 by the issue of "preference stock" to come next after the borrowed capital, and before the two other capitals referred to. This was a complete departure from the rule usually observed of not giving power in an original Bill for the issue of preference stock. He believed that if the provision were sanctioned the result would be that none of the ordinary stock of the Company would be taken up, and that the promoters would have to come to Parliament for pre-preference stock or further borrowing powers, such securities necessarily taking precedence over the stock to be issued as preference under this Bill, and which the holders would consequently have been induced to subscribe under a deceptive title. He thought the principle involved in the provision was a vicious one, and likely to form a dangerous precedent.
THE EARL OF MORLEYbegged their Lordships to remember that the Bill 995 came before them as an unopposed one, and that consequently, instead of having been sent to a Select Committee, it had been only subjected to the ordeal of the Committee of the noble Lord the Chairman of Committees. Their Lordships would see that the only persons who could be injured by the provision to which the noble Lord had drawn attention, were the landowners and baronies who had guaranteed£72,800 of the whole capital. As one of the landowners who had subscribed to the guarantee money spoken of by the noble Lord, and as the representative of those landowners, he thought he might assure their Lordships that the evil anticipated by the noble Lord would not arise; they were, however, quite willing that the provision in question should be introduced into the Bill. They were, therefore, fully aware of their obligations. Without such powers as were given in the Bill it would be impossible to make the railway; for such was the difficulty of raising capital for the construction of railways in Ireland, that without some kind of collateral guarantees, the capital could not be raised at all. There could be no danger of introducing this as a precedent for English railways, for the system of personal guarantees was neither known nor required; whereas, in Ireland, unless it were authorized, railway enterprize would come to a stop.
§ THE EARL OF LEITRIMgave his decided opposition to the Bill. There was no principle in it; it was got up in a most objectionable manner, and was a gross job.
THE LORD CHANCELLORsaid, this was an opportunity for doing an act of national importance in Ireland. The object of the Bill was not to authorize the construction of a speculative railway, but one that was required by the necessities of the district, its purpose being to form a connecting line between two systems of railways; but, from its nature, it was one which could not be done in the ordinary way. To meet the difficulty a course had been taken highly creditable to the neighbourhood through which the line would pass,—but to which we were not used in England—namely, to guarantee a certain amount of the capital required. There would be a preference capital of £50,000 at 5 per cent, and then a £70,000 guaranteed capital by the landowners of the 996 district. If anybody was to be prejudiced by the first preferential charge it would be the landowners of the country: they were satisfied with the arrangement, and they asked Parliament to sanction it. He knew that his noble Friend the Chairman of Committees looked with horror on a proposal to issue preference stock in pursuance of powers given in a first Bill; but what reason or principle was involved in that doctrine, he (the Lord Chancellor) had never been able to see. If persons with their eyes open chose to enter into such arrangements, he saw ground why they should be prevented from doing so.
THE EARL OF ENNISKILLENbelieved this railway would be a benefit to Ireland, and in that belief he had guaranteed a certain sum of money.
§ THE EARL OF BANDONapproved of the principle of guarantees, and mentioned instances of its useful application in the South of Ireland. He should support the Bill.
§ LORD WINMARLEIGHsaid, that he objected to the principle of guaranteed capital; but from the peculiar circumstances of Ireland, he was afraid that English capital would not flow into Ireland for the construction of railways without it. Seeing therefore that the proposals of the Bill were necessary in Ireland, he should not oppose it.
§ LORD REDESDALEreplied that his objection remained still unanswered—namely, how, in the face of such a provision as that to which he called their Lordships' attention, the Company could raise the remaining £72,200 of ordinary capital. He was convinced if this Bill passed, the promoters would have to come to Parliament in a year or two for pre-preference stock or extended borrowing powers, and that the holders of the preference stock and the guaranteeing landowners and baronies would all find themselves deceived as to the position in which they would have been led to consider themselves placed by this Bill.
§ THE DUKE OF MANCHESTERsaid, he thought that it would be unnecessary to do; so he believed the line would be constructed with the preference and guaranteed capital.
§ LORD REDESDALEThen why ask for more?
§ LORD WAVENEYobjected to the Bill as involving exceptional legislation, but intimated that under the circumstances 997 in which it came before Parliament, he should offer no opposition to it.
House in Committee accordingly.
§ Amendment made; the Report thereof to be received on Monday next.