THE EARL OF WEMYSS moved:—
That the Bill be read a Third Time this day six months.
He said that this Railway Bill had excited a great deal of attention and much interest among persons conversant with Parliamentary procedure; and the circumstances in which the Bill passed through Committee ought to be noticed. He had no interest at all in this or any other Devonshire railway. The last time he was in Devonshire was 20 years ago, and previous to that, his only visit was 50 years ago. Further, he did not in the least impugn the bonâ-fides of this railway, or question that it would be advantageous to the country. Apparently the railway, in the opinion of the Committee, would be extremely advantageous, because the Committee had ignored an important Standing Order in order to pass the Bill. There was a grave question at issue here. He was old enough to remember the railway mania of the early forties, when the speculative element of society was at the feet of the then railway king, Mr. Hudson. Those were the halcyon days for Parliamentary counsel, and Mr. Austin, Mr. Talbot, and Mr. Hope respectively made £50,000, £20,000 and £10,000 a year for several years. He doubted whether even his noble Friend Lord Grimthorpe could show such a record as that. But the rush led to many bubble Bills and bogus speculations, and the security against such bubble schemes being insufficient, Parliament passed a Standing Order in 1846 requiring that any railway or public undertaking should deposit 5 per cent. of the estimated cost of construction—
not, be it remarked, of the capital—before the 15th January. That Order had remained ever since; and he did not believe that the Chairman of the Committee would be able to cite any instance of departure from that wise and salutary Regulation. The money deposited was, as it was culled, "impounded," and was only returned when the works were completed. The object of holding the deposit was to provide some security for the compensation of landowners and others injured by the non-performance of the undertaking. Until the present Bill, not a single case had occurred where this Standing Order had been "ridden round." In this Lynton Railway, the estimated cost of construction was £50,000, and the share capital was £60,000; while the borrowing powers were up to £20,000. Therefore there was a margin of about £30,000 between the total capital and the estimated cost. The Committee decided that the share capital and the borrowing powers were not sufficient for the work to be done; but said that they would be inclined to pass the Preamble subject to alteration giving an increased capital. Asked by Counsel as to what the increase should be, Lord Hampden, the Chairman of the Committee, said that an increase of £10,000 in the share capital, and of £5,000 in the borrowing powers would about meet the case; adding:—
It will be understood that you (the promoters) would have to pay a proper deposit, and take the risk of what may happen in another place.
The Standing Order required a deposit in regard to the estimated cost, and not in regard to the capital; and, virtually, the Committee authorised an increase on the estimate, which had never before been done. Hitherto, Bills had stood or had fallen on their estimated cost. A supposed precedent existed in the case of the Neath Water Bill. The Neath Water Bill was largely for the construction of waterworks. Four per cent, had to be deposited. The Committee, during the progress of the Bill, insisted upon the deposit being increased from 4 per cent. to 10 per cent., and this deposit was not impounded as the other was. It had nothing to do with the estimate. The Corporation had opposed the Bill, and one of their points of opposition was, that a certain
reservoir would not probably be constructed. They insisted that that reservoir should be constructed, and the Committee, with the view of enforcing the construction of the reservoir, changed the amount of deposit to 10 per cent. It therefore had nothing to do with the question of estimate, or capital, or general construction of works. That was no precedent whatever. He hoped that his noble Friend did not act upon that; but, if he did it, appeared to him that his noble Friend had acted absolutely on a new precedent, and was absolutely ruled out of court by the nature of the transaction. There was a Bill, however, which appeared to him to come nearer to a precedent than the Neath Water Bill, and this was the Dublin Tramways (Central) Bill of 1877. That Bill passed through the House of Lords and went to the House of Commons. The Committee of the House of Commons found that the estimate was insufficient, and they inserted a clause to that effect. The promoters then lodged an amended estimate, and made a further deposit. The House of Commons made an order specially referring the Bill to the Examiner, who held that the Standing Order had not been complied with as regarded the estimate and the deposit; and on the Examiner's report the Standing Orders Committee of the House of Lords rejected the Bill. It was on those grounds that he had ventured, in the public interest, to bring the matter forward. He had no hostility to the Bill, which was, no doubt, promoted by honourable and solid men, and it might of be great benefit to the district. But if it passed as it stood at present it would take away the security which proprietors and others interested in the district had against bogus schemes being promoted. It was suprising that the Committee did not take a course of action which did not run counter to precedent, and override this most important Standing Order. In 1877 the Select Committee on Standing Orders issued a special report. They were of opinion that in any case where in future the estimate of any undertaking was increased, during the passage of the Bill through Parliament, such increase should be made on petition for additional provisions. That would be a legitimate and natural course for the Committee to
have adopted. In the meantime he raised the issue in the broadest way by moving the rejection of the Bill.
§ VISCOUNT HAMPDEN
, as Chairman of the Committee to which this Bill had been referred, asked the House to consider the method of attack on this Bill and the change in that method. In the first instance, there was a Notice of Motion standing in the name of Earl Fortescue, who was a principal promoter of a rival Bill before the Committee. Now, it seemed from prudential reasons that the noble Earl had withdrawn, and the Notice of Motion for the rejection of the Bill was moved by his noble Friend, behind whom he saw the hand of the promoters of the rival railway. He did not think the precedents in this case were vital to the issue. The decision of the Committee might, of course, be a good one, even though there might be no precedent for it; but in this case, at any rate, there were numerous precedents for an increase of capital. It was not, however, on that point that the issue was taken. There were plenty of precedents for an increase of capital in a Bill going through Committee; but what happened in this case? Having increased the capital, the Committee was over-conscientious, and they inserted a clause imposing a further deposit of money with the view of protecting the landowners' interest. The promoters were warned by the Committee that they must take the risk which had to be run in the other House. The question, therefore, was not one so much of precedents as whether, looking at the circumstances of the case, the decision of the Committee was legitimate, sound, and sensible. The circumstances were, to a certain extent, novel. There were two schemes before the Committee. Both schemes provided railway communication from Lynton to Barnstaple. The one was for a railway on the ordinary gauge of light construction from Lynton, and then passing on the Great Western Rail way to Barnstaple. The other was a toy railway of two feet gauge from Lynton to Barnstaple. It was proved before the Committee that for many years the town of Lynton had been waiting for railway communication, of which it stood in great need. There had been many abortive attempts at legislation, and they had always failed for want of 389 money. The two great railway systems—the South Western and the Great Western—had no intention of constructing a railway to Lynton, presumably because they thought that it would not in all probability pay. That was the state of things proved before the Committee. The Committee considered the question, and after hearing the promoters of the Lynton Bill, which was mainly promoted by Earl Fortescue and other landowers, they came to the conclusion that they could not in the circumstances pass the Preamble of the Bill. The question, therefore, came to be one between a light railway of a two-feet gauge from Lynton to Barnstaple or no railway at all. The Committee took a very serious view of the question, and, having regard to the history of the Lynton railway, they came to the conclusion that it would be a very great misfortune if this scheme were to fall through simply because the Estimates on certain points were not sufficient for the work that had to be done. They were much impressed with the severe austerity of the estimates made by the engineer. The stations that were provided for the railway were probably adopted by the engineer because of his experience in the making of light railways or agricultural railways in Wales. Stations that were adapted for light mineral railways in Wales would not have been, in the opinion of the Committee, adapted for ordinary passenger traffic. Therefore, they came to the conclusion that there ought to be further provision of money for the stations. Having come to that decision, the Committee sought the opinions of the authorities of the House, and they asked whether in the circumstances it would be possible for them to save the Bill by intimating to the counsel of the promoters that if they would increase the capital to an amount named by the Committee, the Committee would be inclined to pass the Preamble. The Committee were informed that though it was an unusual course, there were precedents for it, and that it was within the power of the Committee to take that course. The Committee took that responsibility, and subsequently added the provisions with regard to deposit money in order to protect the landowners.
differed from the noble Lord, and thought that the precedent which had been created was a bad one, and if allowed to pass without protest would lead to pernicious consequences. He would not, however, go as far as to suggest the rejection of the Bill. He assumed that the Bill which the Committee passed was the better Bill of the two. It was no doubt true that there were many precedents for increasing the capital of a Bill; but it was not easy to discover a precedent for allowing a Bill to proceed when the Committee found it necessary to make so large an increase of capital owing to the extreme the deficiency of the estimate made of the cost of constructing the line. The estimate was put at £50,000 and the capital at £80,000, yet a sum of £13,000 had to be added. It had always been one of the canons of private Bill legislation that if the estimate of cost was grossly deficient the Committee were bound to reject the Bill; that, in other words, it was a case of the Preamble not being proved. The reason why he thought the precedent a bad one was this: the object of having estimates carefully put forward, and of seeing that they were carefully framed, was because a deposit of 5 per cent, had to be made. That deposit was, so to speak, impounded, and was a security to those whose lands it was proposed to take that the scheme was bonâ fide and would go on. This was some protection against fictitious schemes, of which there were far too many as it was, and anything which tended to weaken that protection was a false step in public policy, because promoters, without any real intention to go on with a scheme, would propose a Bill to Parliament, get possession of a district, and act the part of a dog in the manger by preventing any other people from going on with the scheme, even if they could raise the capital to do so. This was his first objection. He thought it would be more easy in the future to take that course of action, because the money which would have to be sunk in enterprises of this kind would not be so formidable in amount. Another reason was exemplified by what took place in regard to this very proposal. In some of the evidence given before the Committee, he found that one 391 of the arguments used was that the work could be done for so much less, and, other things being equal, one would naturally like the cheapest scheme. But he submitted that it was unfair that one scheme should first get all the advantages of being cheapest, and then, when some other scheme had been knocked out on that or similar ground, that the Committee should turn round and say that they would add a large sum on to the capital, because the Estimate was deficient. He had no wish to carry the matter further at the present time, but he hoped that the Chairman of Committees would give the House his opinion on the subject. If the Chairman of Committees thought that this Bill should go on upon the conditions imposed by the Committee, he hoped that he would make it clear that the precedent set upon this occasion was not a safe or a sound one to be followed.
*THE EARL OF MORLEY
said, that he fully recognised that the noble Lord on the cross-benches (the Earl of Wemyss) had introduced this Motion only on grounds of public interest. He agreed with him that the House should in all cases require that the estimates of works sanctioned by Private Bills should be prepared with the greatest possible accuracy. But, having said this, he hoped that the House would not agree to the Motion, and would allow the Bill to be read a third time and passed. Before giving his reasons, he would like to explain that Earl Fortescue would have proposed his Motion before the Easter Recess had he (the speaker) not thought it desirable to postpone it till the House should be fuller; and it was entirely owing to this that Lord Fortescue was not present that afternoon. With regard to the increase of capital, he agreed that it was difficult to find a precedent on all-fours with the one now before the House; but it was by no means an uncommon thing where extra works were required by Parliament, for the capital of a company—even a new company—to be increased. The noble Lord was very solicitous—and in this he entirely sympathised with him—that the securities provided should be maintained against bogus or fictitious schemes, but he did not think the noble Lord need be anxious lest this precedent should diminish the securities which already 392 existed in the 5 per cent, deposit. In the first place, with regard to the comparison of estimates with capital, he thought that both the noble Lords had somewhat exaggerated the disparity between the capital, as it first appeared in the Bill, and the estimate of £50,000. The loan capital usually represented what was required for the equipment of the line, and the share capital, originally £60,000, only gave a margin of £10,000 over the estimates. The Committee had added £10,000 to the share capital. This was a question entirely for the Committee to decide, and, under the circumstances, he was of opinion that the Committee came to a right decision; and he was perfectly ready to take the responsibility for any advice which he had given to his noble Friend. If there had been any shadow of a doubt in the minds of the Committee as to the bonâ fides of the estimate—if it had been thought that the estimate had been kept low in order to diminish the amount of deposit, or if it had been found that this was done in order to give the line an undue advantage with regard to the competing scheme—then he thought that the noble Lord ought not to have passed the Bill. There was, however, no such suggestion. The capital of the competing scheme was, in fact, more than double that of the Bill which was adopted, and therefore the increase which had been referred to in the capital of the latter could not in any way have affected the relative merits of the two schemes. Neither was there any question as to the bonâ fides of the engineer or those responsible for the Bill. Moreover, the character of the line was somewhat novel, being one of the two-feet small railways, and the noble Lord considered that the equipment of the line, as proposed, was not up to what Parliament should sanction. The Committee determined not to pass the first line, which was to cost £120,000. Then what were they to do? They might have rejected both lines, and left the district without a railway for an uncertain time; or, in the alternative, it was open to them to allow an addition to the capital—not to the estimates—of £10,000. With these, two alternatives before them it seemed to him that the Committee were right in giving this addition of £10,000 to the capital of the line. Then came the difficulty as to deposit. 393 If they gave that addition, it was not obligatory on them to require any further deposit; but, with a view of giving the public a still further and absolute security, they required that the additional deposit should be made; and the promoters at once acceded to this. He thought that the noble Lord and his Committee were perfectly right in regard to that deposit and the increase of capital. With these explanations he trusted that the House would not take the unusual course of differing from the Committee, but would allow the Bill to be read a third time and passed. At the same time he was glad of having had the opportunity of speaking on the subject, and he quite concurred in the views as to the importance of not allowing this to be made a precedent for relaxing the vigilance and safeguards of the House in these matters.
§ THE EARL OF WEMYSS
said, that his object had now been attained, and he had no wish that this railway scheme should be cast out. He had, however, considered it right that the question should be brought before the House, and he thought that the Debate had fully justified that course. His hon. Friend gave up all idea of precedent, and said that he was proud of the precedent which he was establishing. On the other hand, Lord Balfour objected to its being made a precedent at all. And the Chairman of Committees had stated that there need be no alarm that the case would be drawn into a precedent. By assenting to the Third Reading, they would be voting for a Bill for which there was no precedent as regarded this question, and he hoped their Lordships, with the help of the Chairman of Committees, would take care that what was now done without precedent did not become itself a precedent in the future. After the views expressed by the Chairman of Committees and other noble Lords, he certainly should not press the matter to a division, and he bogged therefore to withdraw the Amendment.
§ Amendment, by leave, withdrawn.
§ Bill read 3a.