Sitting of 9 August 1855

MINUTES.
NEW WRITS.—For Kidderminster, v. Robert Lowe, esq., Vice President of the Board of Trade; for Kilmarnock, v. Right Hon. Edward Pleydell Bouverie, President of the Poor Law Board; for Hertford, v. Hon. William Francis Cowper, President of the General Board of Health.
PUBLIC BILLS.—3° Charitable Trusts; Union of Contiguous Benefices; Crime and Outrage (Ireland) Act Continuance; School Grants, Security for Application.

LEASES AND SALES OF SETTLED ESTATES BILL.
[Progress, 8th August.] Order for Committee read.
House in Committee.
Clause 20.
MR. WHITESIDEsaid, he objected to the clause. He was satisfied that no judicial member of the other House had seen and scrutinised the clause in question, which, it could not be disguised, referred specially to the case of Sir Thomas Wilson, who was the proprietor of Hampstead Heath, and who, it was stated, intended to enclose that heath. Now he (Mr. Whiteside) had a map of Sir Thomas Wilson's estate at Hampstead, and the farm, marked A and B on the map, was the site on which he proposed to build, but which farm was one mile and a-half from Hampstead Heath. Sir Thomas Wilson had previously granted to the parish of Hampstead a right to make a public road through his farm on one side, and a railway passed through it on the other side. All, therefore, that Sir Thomas wished to do was to build on the remaining portion of the farm. The opposition

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offered to Sir Thomas Wilson entirely rested on private grounds. The fact was, that a portion of the land on which he proposed to build adjoined the property and demesne of Lord Mansfield. Now, it appeared on the statement of Sir Thomas Wilson that in 1830 he received a letter from the late Lord Mansfield, saying that he should oppose Sir Thomas Wilson's building on that piece of ground; the fact being that Lord Mansfield wished to become the purchaser of it. The site in question consisted of about fifty acres. The present Lord Mansfield was equally anxious to be the owner of the ground. Both those noble Lords had been unceasing in their application to Sir Thomas Wilson to induce him to sell the property to them. It was quite clear, therefore, that the opposition to Sir Thomas Wilson entirely rested on private grounds. The solicitor of Sir Thomas Wilson had only that morning told him that Sir Thomas Wilson had no more intention of encroaching upon Hampstead Heath than he had of committing suicide. The introduction of such a clause as the one before the Committee into an act of legislation would be most unwise, impolitic, and mischievous, especially when the measure in other respects was a good one; he therefore begged to move that Clause 20 be struck out.
MR. J. FORSTERsaid, he had lived at Hampstead for several years, and he believed the hon. and learned Gentleman knew pretty well that Hampstead was chiefly inhabited by merchants connected with the City of London, and who were persons not to be influenced by any grand clique. That, however, was the first time he had heard that Lord Mansfield had any other objection to Sir Thomas Wilson's building on the property than that which any other persons entertained. It was well known that Sir Thomas Wilson several years ago commenced building operations, although in a small way, and that in the course of those operations he made some encroachments on the Heath itself, his chief building, however, being in a field adjoining the Heath. He had built a large bridge over a ravine, and had made a large brickfield for no other object, as it would appear, than to annoy the inhabitants; and there could be no doubt that his intention was to build on the Heath as soon as he should get the power to do so. Parliament was perfectly entitled to say that it would not delegate to the Court of Chancery, or any other Court, power to
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grant what it had itself on more than one occasion refused.
THE SOLICITOR GENERALsaid, he objected that at that late period of the Session the subject of Sir Thomas Wilson's claims should be revived and discussed. The Bill in question was a general Bill and a general object, and it ought to be so regarded. The ground on which a leasing power to Sir Thomas Wilson was refused was the construction which the Judges of the land had put upon the will of the father of Sir Thomas Wilson.
MR. WHITESIDEsaid, if that had been the ground of the refusal it would have been quite right; but that was not the ground. The real ground was the preservation of Hampstead Heath for the benefit of the public.
THE SOLICITOR GENERALsaid, that that would be on public grounds a very good reason for refusing the powers sought by Sir Thomas Wilson, but, then, if the public wished to have his property they ought to pay for it. That was the view of the case he should always entertain whenever Sir Thomas Wilson should think proper to apply to Parliament. The 20th clause was introduced into the Bill in consequence of its being stated to him that, unless the Bill contained some clause more explicity defining the jurisdiction of the Court of Chancery, it would be impossible to carry the second reading of the Bill. His reply was, that he would not consent to any clause being introduced to give the Bill the character of a private law passed against any individual. He thought the clause contained a correct and sound principle. Whoever was of that opinion let him vote for it even though the case of Sir Thomas Wilson should be included in it; but whoever was against it, let him vote against it upon general grounds, and not in reference to the case of that gentleman. Let Sir Thomas Wilson come again to Parliament, and if the Committee should be of opinion that a tenant for life ought not to be bound by the prohibition of the will under which he claimed, and that there was ground for relieving him from that prohibition, let the House of Commons grant that specific relief. It was to Parliament, whose judgment had already been raised upon the subject, and not to a Court of Justice, that that application ought to be made.
MR. BARROWsaid, he felt bound to vote for the continuance of the clause, because he disapproved of the Bill altogether.

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As regarded Hampstead Heath, if the public wanted it they should buy it; and he objected to the assumption by any court of law of powers to alter the provisions of any man's will, as the Bill proposed to do. He was sorry to hear an imputation thrown out upon a nobleman who was not present, and who had therefore no opportunity of answering it. He (Mr. Barrow) would vote against the general principle of interfering with the wills of testators.
SIR JOHN SHELLEYsaid, his objection to the clause being expunged was, that if it were it would enable a gentleman to do, by a side wind, what Parliament had prevented his doing on preceding occasions. If Sir Thomas Wilson chose to come before the House of Commons, no doubt the House would do him justice. He (Sir J. Shelley) did not consider that the refusal to Sir Thomas Wilson inflicted any hardship on him; and he was satisfied the testator knew what he was about in limiting the leasing powers under his will. The House of Commons had refused, on more than one occasion, to reverse the will; and he (Sir J. Shelley), therefore, objected to the powers being obtained through the Court of Chancery.
SIR JAMES GRAHAMsaid, the principle of the Bill was the enlargement of the powers of tenants for life with regard to leasing and selling their property. That principle had been sanctioned by the House of Lords and affirmed by the House of Commons. Sir Thomas Wilson, being a tenant for life, would necessarily be entitled to the advantage of that principle; and the question before the Committee was narrowed to that point, whether there were any peculiar grounds why his case should be an exceptional case, and one which should be taken out of the purview of the Bill. He was a great admirer of Hampstead Heath, and should be exceedingly sorry to see it enclosed. It would, he believed, be greatly injurious to the public health. He entirely subscribed to the doctrine of the hon. and learned Gentleman the Solicitor General, that instead of Hampstead Heath being enclosed, the full value of Sir Thomas Wilson's rights ought to be paid for, and the whole of the land purchased by the public in order to prevent its enclosure. But then the question arose, if it was thought fit to empower a Court of Equity to decide whether a tenant for life should have the benefit of the provisions of the Bill, whether the case of Sir Thomas Wilson in respect to Hampstead
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Heath formed a special case to be excluded from the benefit of those provisions? It appeared that the testator did give Sir Thomas Wilson power of leasing with respect to other property, but not with respect to Hampstead Heath. He thought there was not a better tribunal than that of a Court of Equity to decide whether that gentleman should have the same power with regard to his property at Hampstead which he enjoyed over his property at Woolwich and elsewhere. The only difficulty, in ordinary cases, was the absence of parties to oppose any application to the Court by tenants at will; but in the case under consideration the hon. Member for Berwick (Mr. J. Forster) had shown that parties would not be wanting. He, however, wished to decide the question upon general principles, and he could not help thinking, upon the whole, that if the principle of the measure was right the exception which had been suggested was not to be maintained. On those grounds he objected to the clause as it now stood, and would wish to see it modified.
MR. I. BUTTsaid, there was a general power in the Bill to tenants for lives to lease for twenty-one years, and Sir Thomas Wilson was not exempted from it. He (Mr. I. Butt) would never have consented to a personal exception, as in the case of Sir Thomas Wilson, only that a public principle was involved in it. The Bill was the last of a series of Estates Bills, and the question was, whether the case should be decided by Parliament. If he could have seen any grounds for resisting the strong public principle in question, he would not support the exclusion of Sir Thomas Wilson from the operation of the Bill. The principle of the Bill had been misrepresented. Unless the clause was allowed to stand it would lay the House open to the imputation that legislation for a particular case was intended under cover of a general law. The Bill, as it stood, left Sir Thomas Wilson exactly where he was before.
SIR DENHAM NORREYSsaid, the decision of Parliament had been given less against Sir Thomas Wilson in the former Bill than in favour of the public. He (Sir D. Norreys) could not conceive how a greater injustice could be done than had been done to Sir Thomas Wilson; and he believed that if the testator could have foreseen the extension of the metropolis in that direction he would not have omitted leasing powers from his will in respect to his Hampstead property. Sir Thomas

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Wilson had been unjustly treated, because that House had not moral courage enough to oppose the desires of the public to possess Hampstead Heath. He thought, therefore, the clause ought to be omitted.
MR. HENLEYsaid, the clause placed the Committee in great difficulty. He was not enamoured of the Bill, still leas of the clause. The former Bill had been rejected on the ground that it was opposed to the will of the testator; but the statement which had been made by the hon. Member for Berwick (Mr. J. Forster) had put that matter in a new point of view, and showed what injustice the House had been led to commit, with regard to Sir Thomas Wilson. It also appeared that the land in question was situate one mile and a quarter from Hampstead, and it was said that there would be no objection to allow that being built upon, provided that Sir Thomas Wilson would come to some stipulation with regard to his land which abutted on the Heath. If the Committee was to come to a decision in the present case and prevent Sir Thomas Wilson from building on his land situate one mile and a quarter from the Heath, there would be nothing to prevent him going to the Court of Chancery with reference to his land abutting upon the Heath, so that the present clause, if agreed to, would not effect the object which hon. Members had in view. If the Court of Chancery was the best tribunal to decide those cases, then no exception ought to be made of a matter because Parliament had before dealt with it. They would, by the present clause, under the pretence of its involving a general principle, inflict an injury on a particular individual, and, under those circumstances, he felt bound to vote against it.
SIR BENJAMIN HALLsaid, that it would be very convenient if they could disconnect the name of Sir Thomas Wilson from the Bill, but that, apparently, was impossible, as it had been sent down from the Lords—he would not say with the intention of its meeting that gentleman's case, yet such would be its effect. He had been informed that it was Sir Thomas Wilson's intention to have introduced, during the Session, another Bill for the purpose of directly attaining his object, but as the Judges to whom that Bill was referred were hostile to it, it was not proceeded with, and now the present Bill, which met his case, had been brought in. That was hardly a fair proceeding, and
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fully justified the insertion of the clause. There were also public rights over that property which it was considered that Sir Thomas Wilson ought not to interfere with, as he had attempted to do by previous Bills. The Bill had been allowed to pass its second reading, on the distinct understanding that the present clause should be inserted, otherwise the Bill would not have been allowed to pass, as it did, in its early stages.
MR. MALINSsaid, the object of the Bill was to rectify the powers in wills which were effected by an unskilful construction of those instruments. He was no party to any understanding that the case of Sir Thomas Wilson should be excepted on the second reading of the Bill. Sir Thomas Wilson had no intention to enclose Hampstead Heath, nor could he do so without the consent of every commoner having rights of commonage on that Heath. Sir Thomas Wilson wanted to build only on the fields beyond the turnpike in the Finchley road, which could not in the slightest degree interfere with Hampstead Heath. To refuse him the power of building on that property was to do Sir Thomas Wilson the greatest injustice. The Court of Chancery, and not the House of Commons, was the proper tribunal for judicial decisions on the rights of property. There was no more reason why Sir Thomas Wilson should not build upon his land beyond the "Spaniards" on Hampstead Heath, as far as a view of that Heath was concerned, than on his land at Woolwich. There were plenty of houses already overlooking Hampstead Heath; why should Sir Thomas Wilson alone be prevented from building houses overlooking the Heath, when he did not interfere with the rights of commonage? Why should Sir Thomas Wilson alone be selected to encounter all the expense of coming over and over again to Parliament for powers to lease when it was proposed by the Bill to give jurisdiction to the Court of Chancery to confer those powers upon any other tenant for life in the same predicament? The Bill purporting to be a general Bill, he would rather stop it altogether than be a party to such erroneous legislation as went to exclude one individual from its operation. He therefore gave his most strenuous opposition to the clause.
LORD ROBERT GROSVENORsaid, he must deny being under the influence of popular clamour on the present occasion, as no tumultuous meetings had taken place

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on Hampstead Heath—at least since it had ceased to be the scene of the Middlesex election. As a Member of the Committee he had objected to the Bill on account of its importance, and of the lateness of the Session; but he had withdrawn his objection on the suggestion of the hon. and learned Solicitor General that the clause in question should be introduced for the purpose of preventing cases which had been adjudicated upon by Parliament from coming before the Court of Chancery for decision. He must deny also that the Metropolitan Members had been actuated by a prejudice to do Sir Thomas Wilson injustice. The House of Lords had rejected Sir Thomas Wilson's application five times; the Judges had been uniformly against it; and only on one single occasion had it been entertained by the House of Commons. He (Lord R. Grosvenor) had opposed the application on the same grounds as the Judges—namely, that it was for powers contrary to the intention of the testator. It was upon the same grounds he supported the clause in the Bill then in question. As regarded the imputation against Lord Mansfield, he (Lord R. Grosvenor) had had a great deal of communication with that nobleman on the subject of Sir Thomas Wilson's estate, and he declared upon his honour that he had never heard anything fall from him which could justify the slightest imputation.
MR. J. G. PHILLIMOREsaid, he objected to the Bill, as giving too extensive powers to alter wills to the Court of Chancery. He was of opinion that the Houses of Parliament were safer in regard of wills than any Judges. To pass the Bill with the clause in question would be a violation of the general principle which was laid down as the basis of the measure. He thought the Bill ought not to pass at all; but if it did pass, the 20th clause ought to be expunged from it, as preposterous and unjustifiable.
MR. WIGRAMsaid, if the case of Sir Thomas Wilson had not been suggested, the clause would not have been objected to. He would suggest, however, whether it would not be as well to let the House take a ride to Hampstead Heath and enjoy themselves as to compel it to discuss a Bill which no one could hope would pass in the present Session. He thought the Bill a useful piece of legislation; but he did no think it of that urgency to require passing until next Session.
THE SOLICITOR GENERALsaid, if
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the clause were rejected he was so bound by his engagements with hon. Members who had agreed to the second reading, lat he could not proceed with the Bill. He considered the Bill one of the most valuable measures of the Session in respect to the amendment of the law, and he should, therefore, abandon it with regret.
MR. HENLEYsaid, he thought the importance of the Bill required more time than was before the Committee; and he considered, therefore, that it would be a very great advantage if it stood over until the following Session.
SIR GEORGE GREYsaid, as the general opinion was that the Bill should be withdrawn, he would move that the Chairman report progress, and sit again that lay three months.
SIR HENRY WILLOUGHBYsaid, he wished to know what would be the position of the public in case Sir Thomas Wilson died in the interval? His successor would lave the power which he did not possess. The present, therefore, was the time for a compromise. He deprecated the imputations cast upon two noble Friends, the late and present Lord Mansfield, for it was his confident belief that neither was capable of the conduct imputed to them.
MR. WHITESIDEsaid, the agent of Sir Thomas Wilson had distinctly alleged that Sir Thomas Wilson was bound by the statements in the letter, and the accident of its concerning those noble Lords he (Mr. Whiteside) could not avoid.
House resumed; Committee report progress; to sit again this day three months.

DESPATCH OF BUSINESS, COURT OF CHANCERY BILL.
[Progress, 8th August.] Order for Committee read.
House in Committee.
SIR JAMES GRAHAM: Sir, I am almost afraid the Committee will consider any interference in this matter, on my part, to be, if not impertinent, at all events intrusive, as this Bill deals with professional matters, of which I may be supposed not to be cognizant. My excuse for troubling the Committee must be that I, together with my right hon. friend the Member for Oxfordshire (Mr. Henley), have taken a deep interest in law reform as connected with the Court of Chancery, and I am bound to say I regard the present measure with considerable anxiety. I have some offences, as a member of the Commission, to answer for with respect to the Court of

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Chancery. I allude to the abolition of the offices of the Six Clerks, and the compensation given them, which I now consider was to an injudicious and exorbitant amount. As a member of the Chancery Commission, I also recommended the abolition of the office of Master in Chancery, and Parliament concurred in that recommendation, and granted to the Masters a liberal allowance—no less than their salaries for life on their retirement. It was believed by the Commission and by Parliament that a great benefit would be effected if the judicial powers exercised by the Masters were transferred to the Judges of the Courts of Equity, and if in Chambers the duties of the chief clerks of the Masters were performed by the clerks of the Judges. The danger of the change was this, that, under another designation the chief clerks of the Judges would perform the duties of the Masters. I have with great anxiety watched the working of this change, and I can safely say that, on the whole, it has been efficacious and salutary. Both in Chambers and on the Bench proceedings have been conducted in a most satisfactory manner, with greater promptitude and at less cost than heretofore, and in these Courts, combined with the Courts of Appeal, business has proceeded with great rapidity, without any sacrifice of efficiency. I must, however, say that I think such a change as the proposed measure contemplates is to be regarded with great jealousy. At the same time I should not be doing justice to the eminent persons who are connected with the administration of justice in these Courts if I did not state that I have been in communication with them, and that I have reason to know that this measure meets with the unanimous approbation of the Judges of the Court of Appeal, the Master of the Rolls, and the Vice Chancellors. The Lord Justice Turner is of opinion that the 1st and 2nd clauses of this Bill are judicious, and is desirous that they should become law. The first clause empowers the Judges of the respective Courts to appoint an additional number of junior clerks. I am informed that, although in the Courts themselves there is no growing arrears of business, yet that in Chambers there is a considerable arrear. I am also informed, on the best authority—that of the Law Society—that at the present time in Chambers an appointment or adjournment before the chief clerks cannot be fixed in less than from two to
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five weeks, and that these arrears arise, not from any want of junior clerks, but from the senior clerks being overwhelmed by work. It is quite clear, however earnest the Judges may be to prevent the accumulation of arrears in Chambers, that it is but natural they should devote the largest portion of their time and attention to the business in their respective Courts which must be regarded as being of primary importance. These learned, assiduous, and able men, throughout Terms protracted beyond those of the Common Law Courts, devote day after day, from ten in the morning until four in the afternoon, to proceedings in open Court, and night after night they have to prepare themselves at home for coming judgments in the causes which they have heard. This is their primary business, in addition to which they undertook to transact in Chambers the duties of the Masters on the abolition of the Masters' offices. The great object of the change of 1852 was that the Judges should, from the commencement of a cause to its final adjudication, have it under their notice and control in all its stages. To effect this it was absolutely necessary, however irksome it might be, that, in addition to the leading features, the minor details of the cause should be attended to by the Judges. The arrears of business in the Courts have been kept down by the exertions I have mentioned, but I am bound to say that the most assiduous of the Judges have given less time to the business in Chambers than I think is desirable. Their practice has been to go to Chambers after four o'clock, and to devote occasionally an hour, or an hour and a half, to business there. [Mr. MALINS: They generally go to Chambers after three o'clock.] Still that is at the fag end of the day, when the mind is exhausted and oppressed with a sense of duties awaiting them at home, hardly less important than those of the Bench; and this practice of devoting occasionally not the whole but a portion of a day to the business in Chambers is, I think, to be regarded with jealousy and apprehension. In order to give the Committee some idea of the business which is got through, I may state that during the last year 12,000 ordinary summonses have been heard, which were before heard by the Masters' head clerks; that 5,000 orders have been made, which were before these alterations made by the Masters; that 3,500 orders have been issued, which

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before required a motion or petition to be made in open Court; and that there have been 500 summonses in the nature of decrees for execution, which formerly required a bill and the attendant expenses. Anticipating this increased business, and anxious to avert the accumulation of arrears, the Chancery Commissioners, in their Report, used these words—
"The judicial business which has hitherto occupied the attention of the Masters would thus, in effect, be transferred to the Court, and the duties not discharged by the Judges themselves would be transferred to officers immediately attached to the several branches of the Court, which officers should possess similar qualifications and perform similar duties to those of the present Masters in Chancery."
And then came the anticipation to which he wished to call attention—
"If experience should prove that the business of the Court cannot be sufficiently transacted without an addition to the number of Judges, we trust this necessity will be promptly met by the Legislature."
Now, how can you meet the present accumulation of business in Chambers? If you seek to give effect to the principle—which I am satisfied is a good one—that the Judges only should themselves exercise their judicial functions with respect to a case from its beginning to its close, then it is absolutely necessary that the Judges should not give a small portion of a day, but that they should at least devote a day in each week to Chamber business. I will not now go into the question of additional Judges, nor into the question of the Testamentary Courts, nor matrimonial jurisdiction, which I trust will early next Session meet with the attention of Parliament, and which will give rise to the question of the appointment of one or more additional Judges, who, if not in immediate attendance on the Court of Chancery, will be in connection with it. I am afraid in the appointment you propose of junior clerks you are, in this change, beginning at the wrong end, and my fear is, that these junior clerks will do the work of the Masters' clerks, and that you will erect into a new power the clerks of the Judges, who will do the work of the Masters, and the Judges will no longer be responsible for the business in Chambers. I am apprehensive that, under these proposed appointments, the abuses which have heretofore been rife will arise under a new term, but in an old shape, and that the measure of 1852, which has been so advantageous, will be sapped to its foundations. I need
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not say that I have the utmost confidence in the Master of the Rolls and the present Vice-Chancellors, but there is in the clauses of this Bill an evil which the Committee ought to regard with jealousy. It is the infirmity of human nature that when a man is overburdened with work his natural desire is to transfer a large portion of it to his assistants, and there is inherent in the Judges, although they may not know it, a desire to increase their share of patronage. The clauses we are discussing are vicious in both these respects; they will tempt the Judges to transfer duties to their subordinates, and then hold out the inducements of a considerable increase of patronage. The necessity for the first two clauses of this Bill is very doubtful—they are objectionable in principle and likely to be vicious in effect. I should prefer the direct proposition of the appointment of additional Judges in order to prevent an accumulation of Chamber business, and I am sure that if such a course were adopted there would be a saving rather than an increase of expense, and that the public would benefit much more by the application of the remedy which I have suggested than by that which is proposed under the present measure. I am not, perhaps, competent from my experience to deal with this question, but I am certain that, both with regard to the friendly feelings which I entertain for some of the Judges, and also the part I have taken in this question, I am justified in stating my views frankly to the Committee. If the Committee should not agree with me, and should think I am not justified in the apprehensions I entertain, still what I have said may have the effect of causing the House of Commons and the Government to bear in mind that which I think will be found to be the most efficacious remedy of the evil now complained of. I could also have wished, had time admitted of my so doing, to have commented on the other clauses of the Bill. I doubt whether it is wise to increase the salaries of the clerks of the records, as the Judges already have power, should they think fit so to do, to transfer to those clerks any additional duties without any increase of salary. The 10th clause, which provides that public practitioners may take affidavits, I consider is most objectionable and indefensible. Then, again, the clause empowering the sale of Southampton-buildings directly and essentially affects the question of the site of the

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Law Courts. All these are questions of importance which I know cannot receive at this late period of the Session the attention which they deserve, but I have felt it my duty thus to state my views, and although we cannot hope to proceed far with the Bill to-day, still to pass it over without a discussion would be, I think, treating it in a manner wholly unworthy of its importance.
MR. HADFIELDsaid, he apprehended that after the remarks of the right hon. Baronet it was very doubtful whether any progress could sbe made with the Bill that Session.
MR. MALINSsaid, the country should feel indebted to the right hon. Gentleman (Sir J. Graham) for the attention he had given to that most important subject. He (Mr. Malins) could corroborate the right hon. Gentleman's view that it would be difficult to imagine greater improvements in the practice of the Court of Chancery than had been effected by the alterations of 1852. The former practice of the Court was to defer decision; the practice since 1852 was to accelerate decision. Formerly cases were referred to the Master for decision; now they were decided on affidavit, under the immediate supervision of the Judge in Chambers. With regard to the statement of the right hon. Baronet as to the mode of transacting business in Chambers, there was a great deal in his suggestion. Every Judge was occupied on an average six hours each day in open Court, during which some sixty to eighty matters were often disposed of. That a Judge should have, after that, to go to Chambers was undoubtedly an evil, which, however, the appointment of an additional Judge, to enable the Judges to sit a day each week in Chambers, would not remedy. One of the advantages of the alteration of 1852 was that of getting rid of the arrears in the Court of Chancery. Vice Chancellor Stuart had risen on the 27th of July, having disposed of every cause and every petition in his Court, except one, which stood over on agreement. The other Chancery Judges had also disposed of every cause set down for hearing, so that there were only six weeks' arrears at the utmost. As regarded the delay in appointments at Chambers, he was very much surprised to hear the statement of the right hon. Baronet. He was assured, on the contrary, that the present staff, of two chief clerks for each Judge, was amply sufficient if the Bill passed giving additional junior clerks.
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He could not think that the appointment of another Vice Chancellor would be of any good; but rather the contrary. While, if an additional Judge was to be appointed to each Court, besides the unnecessary expense which it would cause, it would not effect the purpose. The present chief cherks were perfectly competent persons, and they had stated to him that the presence of a Judge more than a couple of hours twice a week was unnecessary.
House resumed; Committee report progress.

CONVOCATION—QUESTION.
MR. KINNAIRDsaid, he wished to ask the Secretary of State for the Home Department whether any Address had been presented to Her Majesty praying for the revival of Convocation, and whether any answer had been given to such Address: and if he had any objection to lay copies of the same on the table of the House?
SIR GEORGE GREY: Sir, an Address was transmitted to me not long ago from the Upper House of Convocation, praying that Her Majesty would be pleased to grant Her licence to Convocation to consider and agree on a canon or constitution to be submitted for Her approval for the purpose of modifying the representation of the clergy in the Lower House of Convocation. That Address had been laid before Her Majesty, and an answer had been returned to the Archbishop of Canterbury. There would be no objection to produce the Address of the Upper House of Convocation and the reply thereto. But he might state that Her Majesty had not been advised to comply with the prayer of the Address.

METROPOLIS LOCAL MANAGEMENT BILL.
Lords Amendments considered; several agreed to.
On Amendment, Clause 49 (that the elected members of the Metropolitan Board of Works shall submit the names of three of their number to the Secretary of State for the Home Department, who shall select one of them for Chairman of the said Board.)
LORD ROBERT GROSVENORobjected to the alteration, and thought it far better that the Board should elect their own Chairman as originally proposed.
SIR GEORGE GREYalso disapproved of the Amendment, which he thought would tend to diminish the responsibility of the

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Board without giving any real power or responsibility to the Home Office.
Amendment disagreed to.
VISCOUNT EBRINGTONsaid, he approved highly of the Lords' Amendments, almost all the material ones among which were in accordance with views he had himself pressed upon the House. As some of these Amendments, however, related to pipe drainage, he would take the opportunity of calling the attention of the House to the remarkable report of the surveyors of the Metropolitan Commission of Sewers with regard to the working of the pipe drainage in the metropolis, which had just been distributed to Members. And he did so, on account of its being not only upon the much-controverted question of pipe drainage, but also upon the personal conduct and character of the chief engineer of the Commission. The term, "pipe drainage," had been identified with the principle of using for the conveyance of sewage drains of dimensions calculated with reference to the quantity they had to convey, instead of with reference to the stature of man; because, for the drainage of all houses, without exception, of ordinary streets, and in some cases, of the whole of a small town, this principle had led to the laying down of pipes of from four inches to rather more than a foot in diameter, instead of constructing, as formerly, all house-drains and sewers of a minimum size of something like a yard in diameter, to allow of the passage of a man for the purpose of cleansing or repairs when required. He used the word therefore in this sense, though the strongest advocates of pipe drainage quite recognised the necessity of having recourse to brick sewers, whenever the quantity of sewage to be conveyed was too large for pipes to carry it off. Pipe drainage, taken in this sense, had been pronounced by the noble Lord at the head of the Government to combine the greatest degree of efficiency with the greatest degree of economy, as indeed it had been proved to do by the experience of many places for several years. Unhappily, however, several engineers, most eminent in other branches of the profession, had pronounced against it; and following in their wake, Mr. Bazalgette, the engineer to the Commission of Sewers, had latterly made himself conspicuous by his hostility to it. It appeared from the Return on the table of the House, that some time last year a number of pipe drains were opened and examined secretly
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in the dead of night by Mr. Bazalgette, and were then found, or rather were stated by him to have been found, either wholly or partially choked up in the manner graphically represented in the plates at the end of that Return. It would be for the House, after hearing the sequel, to attach to Mr. Bazalgette's unsupported assertions such weight as they might seem to deserve; but it should be remembered that Mr. Bazalgette had taken care that no producible witnesses—and least of all, any of the engineers of the Commission—should be present at these extraordinary nocturnal examinations. Still this Report of Mr. Bazalgette's for a time had produced a considerable impression on the public. A few months since, however, a second examination into the condition of the same drains was ordered by the Commissioners, and, unlike the other, was carried on publicly by the district engineers of the Commission, Mr. Bazalgette being specially invited by them to attend. This time, by a strange and most suspicious coincidence, the drains represented as choked or choking up more than a year before, had—not in one, but in dozens of cases—somehow run themselves so clear in the interval as to be working most satisfactorily, instead of choking up entirely, as might have been expected; in short, their condition, as seen by various competent witnesses, was what is represented in the other sections of the same Return. Mr. Bazalgette had previously made some most unfavourable Reports, since laid before the House, about the working of the new system of drainage in several provincial towns. The engineers of these works had, however, answered Mr. Bazalgette's Reports, and had most conclusively demonstrated their gross unfairness—to use no harsher term. In one particular case, that of St. Thomas's at Exeter, he (Lord Ebrington) himself had had an opportunity of ascertaining, by personal inspection, the utter disingenuousness and untrustworthiness of Mr. Bazalgette's Report. As to the system itself, its proved advantages were too great to be resisted, notwithstanding the weight and influence of some of its opponents. Town after town was adopting it; and even in the metropolis, the Commissioners of Sewers, though by no means originally predisposed in its favour, had adopted it extensively, and were adopting it more and more in spite of the strenuous opposition of their own chief engineer. He (Viscount Ebrington)

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had therefore no fears for the system. But it was a serious thing to have an officer in so responsible a position, conducting himself as those official documents showed Mr. Bazalgette to have done. He however rejoiced to feel that one of the operations of the present Bill, when it became law, would be to cut short this officer's tenure of office.
Other Amendments agreed to. Some disagreed to.
Committee appointed to draw up Reasons to be assigned to the Lords for disagreeing to those Amendments to which this House hath disagreed.

GOVERNMENT OF THE NAVY.
CAPTAIN SCOBELL,said he would now move according to notice for a Select Committee to inquire into the Government of the Navy. Though the Motion was for a Committee he did not move for one in expectation that it would be operative during the present Session, but in the hope that one would be appointed next Session. His object was not to detail individual cases, but to attack the system. There were present three right hon. Gentlemen, who had held the office of First Lord of the Admiralty, and all of them must be convinced that the system of promotion at the Admiralty was not satisfactory, and that the pressure of political influence clogged the dispensation of patronage in a way which he hoped they could not approve. For his part, he had long condemned it, and he defied the Government to show that during the time he had occupied a seat in that House he had ever asked for the smallest favour. He might observe that there were in that House only ten or eleven sailors, while there were upwards of a hundred military and militia officers, and about as many lawyers, and he thought naval officers ought to be allowed to call attention to any defects which, in their opinion, existed in that branch of the public service with which they were connected. He was afraid that many hon. Gentlemen advocated Administrative Reform only with respect to the civil service; but such reform was at least as much required in the military and naval services. Within the last four or five years there had been four First Lords of the Admiralty, so that it was impossible the gentlemen who occupied so important a position could have acquainted themselves fully with the duties of the department, or have carried out on an extensive scale any of those reforms which were so much needed. There were at present
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ten or twelve gentlemen living who had been political Secretaries of the Admiralty, from the time of Mr. Croker to the present Secretary, but they knew scarcely anything of naval affairs; while, during a period of thirty years, there had been only three second Secretaries—that office not being a political one—including the present Secretary, who had held his appointment for a very short time. He must say that merit was not fostered in the navy, although during a war some gallant officers might force themselves forward, and obtain that promotion they so well deserved. Every naval officer, however, was perfectly aware that, under ordinary circumstances, no man in that service could expect advancement unless he possessed family or political influence. Not long ago a noble Lord, who had held high office, expressed his opinion, in another place, that if the military service was conducted in the same manner as the naval service it would be nothing but a system of jobbery and trickery. If naval officers would speak for themselves—which they dared not do—the House would hear enough of malediction of the system. He did not wish to attack the aristocracy, and was quite willing that if an officer had merit the fact of his belonging to the aristocracy should not in the least degree tell against him. If he had not merit, then birth or connection should give him no advantage. With respect to the constitution of the Admiralty, he would refer to some authorities, which he conceived would have more weight with the House than anything he could say. After Sir George Cockburn's decease a paper was found with his will, containing opinions which he never uttered while alive with respect to the system. That gallant officer was a Lord of the Admiralty for seventeen years, and had found himself so shackled that he allowed things to go on as they did without attempting to put them right, but he left his opinions on record, and since his death they had been printed in a pamphlet. Sir George Cockburn therein stated, that he had no hesitation in saying, that he considered the present system of the Board to be most unsatisfactory, and the least efficient for the purposes of the service that could be devised, and he added, that the annoyances he was subjected to while at the Admiralty—from First Lords not understanding naval affairs—kept him in a continual state of anxiety and difficulty, and that it required him to exercise the greatest forbearance in order to remain in the situation. The remedy

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he (Captain Scobell) would suggest was, the abolition of the Board of Admiralty, the transference of the management of the navy to a naval Commander in Chief, assisted by two naval officers who might or might not be in Parliament. His own opinion was, that they ought not to be in Parliament, but that there should be a Member of Parliament for the controlling of the financial expenditure of the navy. When the present Commander in Chief of the army was appointed, he was informed by, he believed, the noble Lord the Member for London (Lord J. Russell) that his duties were exclusively professional, and as no one would interfere with his patronage of the army he would alone be responsible. The first Lord of the Admiralty ought to be able to feel himself in the like position. Dispensing as he did the patronage of a service numbering 4000 officers, he ought to be able to say—what he was afraid he could not—that no political influence was mixed up with his patronage. The noble Lord the First Minister of the Crown was also an authority on the question, because he was sure the noble Lord would not deny that what he had said with respect to the army was equally applicable to the navy. The noble Lord said, and the statement applied in all its force to the navy, that "it would be fatal to the character and spirit of the army that its discipline should be committed to the charge of mere citizens, and that to allow the patronage of the army to be dispensed by the Government was open to grave and serious objections." Now if the noble Lord was prepared to carry those sentiments into full effect, he would as soon as possible divest the Admiralty of its political character, and would not sanction the dispensation of patronage upon the part of the Treasury bench in the case of the naval profession. The right hon. Gentleman the Member for Buckinghamshire (Mr. Disraeli) had also stated in that House that—
"He saw no reason whatever why we should apply to the navy rules different from those which were acted upon with reference to the sister service; so far from it, he was of opinion that everything should be done to make the navy as efficient as possible."
The right hon. Gentleman had gone on to assure the House that the attention of the Derby Government had been directed to the subject, and that they were only waiting for the Report of the Committee to take more active steps with respect to it. The question was one, therefore, the importance of which had been admitted by very high
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authorities in that House; and having said thus much upon that point, he should now proceed to state to the House what the result of the present system of naval administration was, so far as the officers were concerned. He should commence with the admirals, of whom, in the year 1800, there were ninety-nine, when we had 167 sail of the line. There now being only forty sail of the line, we had 272 admirals and 40,000 seamen and marines, instead of 120,000, which was the number in the year 1800. Now, of these 272 admirals, almost all were from sixty to eighty years of age. Since the 1st of January, 1850, there had been thirty-seven captains made active admirals, and many of them were old men when they had got their appointments. Since the same date 113 captains had been made retired admirals because they had not gone through those six years' service as post captains which was required, it being impossible from want of interest they could have complied with the regulation. Such was the result of the present system so far as the admirals were concerned; and he could assure the House that it had been felt to act in many instances with considerable severity. To take individual cases of promotion in the navy, he might mention that the late Captain Christie had been thirty-one years in the service before he had attained the same rank as that at which Admiral Dundas, now in the Baltic, had arrived in nine years. Now, to refer to the captains' list, he should inform the House that during the years 1847, 1848, and 1849, there had been fifty captains promoted, and of that number thirteen had served a period of from two to five years only as commanders. During those very three years, however, he found that there were others who had served as commanders from ten to twenty-six years. Now, was not that, he would ask, an instance of the hardships to which officers in the navy were subjected, and which ought to induce the House to institute an inquiry into the facts upon which the inequality of promotion, which he had just pointed out, was based? There was no corresponding inequality in the system of promotion in the army. In that service, at all events, men advanced, though slowly, by seniority in the regiments. There was at the bottom of the captain's list another list, which was that of the retired captains. They consisted of 100 officers, whose half-pay in the first instance amounted to 10 s. a day; and would the House believe that when

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they retired they received only 6d. a day in addition to that sum, although they ranked with colonels in the army? He should next take the commanders, of whom there were, in the year 1800, 386. Now, there were 549 active commanders, and of that number 220 had been from forty to fifty years in the service; while we had 570 retired commanders of about fifty years' service, and many with medals, making a total of 1119. Of the active commanders there were 196 employed, while 353 were upon half-pay. Hon. Members could not fail to see how the present system worked when we had such a large number of half-pay officers upon the list. The fact was that there was no encouragement held out in the navy; and his belief was that there was more of pining and of heart-burning among the officers in that service than among any equal number of men in the Queen's dominions. He should next advert to the lieutenants, whom he should contend were the most ill-used body in the navy. He had known men who through political or family influences had obtained high rank in the service before they could possibly be fitted to discharge the duties of that rank; while, upon the contrary, he was aware that there were crowds of lieutenants who had been in the service for thirty or forty, and even fifty years, who perfectly understood their business, and yet who never had been enabled to obtain the promotion which upon every ground they deserved. Of those who were lieutenants in the year 1840, there were thirty-two who still retained the same rank, while others, of the same year, who had not entered the navy until long after, were now post captains. At present there were 1713 lieutenants upon the retired list, notwithstanding that they were the class of officers whose services were now most required. Three lieutenants had lately been promoted for gallant conduct in the Sea of Azoff; but when men were promoted for gallant conduct, they were usually placed upon the half-pay list, and their services, from not having family interest, became lost to the country. Of these three officers to whom he referred, one had been twenty years in the navy, and the others had each served twenty-five years. There were now about twelve first lieutenants of line of battle-ships who have been longer in the navy, and seen far more service, than some political favourites who are post captains. He thought he had made pretty sure that the House would take some interest in that body of men. He had no wish to
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fix the form of inquiry; if a Commission was preferred to a Committee of the House, he should have no objection to it, as all he wanted was to see the facts inquired into. There was another point he must draw attention to before he sat down, and that was that too many cadets were allowed to enter into the navy, because, under the existing system, out of the large number that entered every year, those only with interest could get on. His objection, on that head, applied as much to what was the practice before the war began as to the present time. The entries were vastly disproportioned to the promotions, and that was one of the great causes of the evil. He had troubled the House with figures, but he believed they were the best arguments for his case; and he hoped, as they were so irresistible, the Government would say that a Committee shall be appointed next year. At all events, he had no alternative but to leave the matter in the hands of the House in the full hope that ultimately some remedy would be applied to those evils, either in the way of limiting the mode of promotion to merit and service, and by extending the system of retirement with a step of rank, as in the army, with the half pay of that rank, and there should be an age fixed, varying in the different classes of officers, at which they should necessarily pass to the retired list. The safety of England depended upon the command of the sea, and, therefore, it was of vital importance that her navy should have fair play, which it could not be said to have had for a long series of years. He was an advocate for an efficient but a small army, and with such assistance the navy would always be able to defend the country against her enemies.
MR. TITEsaid, he should second the Motion. He hoped that the House would assent to the proposition of his hon. and gallant colleague, for it was of the greatest importance to the country that the navy should be upon a satisfactory footing. Upon a subject of such a technical nature it was hardly possible that he should go into any detail; that, however, was not a matter of importance after the statement which his hon. and gallant Colleague had made. An opinion was growing up in the country that the Minister in whom the superintendence of the navy was vested ought to be chosen independently of political exigencies; to discuss that, however, would raise a great constitutional question into which that was not the time to enter. He trusted that the Government

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would make no objection to the Motion, for much benefit would, doubtless, accrue to the country from it. The House would recollect that, in 1848, a Committee, known as Lord Seymour's Committee, inquired into the matter, and the result of that Committee's Report was admitted on all hands to be highly satisfactory.
Motion made, and Question proposed—
"That a Select Committee be appointed, to inquire into the Government of the Navy, relating to the lists of officers, patronage, promotion, and the efficiency of the Service in all the grades belonging to it."
SIR CHARLES WOODsaid, he was prepared to do full justice to the motives of the hon. and gallant Gentleman in bringing such a subject under the consideration of the House. But, while he honoured the motives which had actuated the hon. Gentleman, he was not prepared to consent to the Motion which he had brought forward. The subject into which the hon. and gallant Gentleman proposed to inquire had already been most fully considered by as able a Committee—a Committee presided over by the noble Lord the Member for Totness (Lord Seymour) as had ever been appointed. That Committee had offered certain suggestions, all of which had been carried out with the exception of one, which was that power should be given to the Government to appoint Admirals by selection instead of by seniority. If old officers were appointed to posts of authority, then the complaint was made that the talents and energy of younger men were overlooked, but if younger men were appointed, then the outcry was that the old and meritorious officers were slighted. The problem to be solved was how they could best promote the efficiency of the service, coupling that with the regard which was due to the claims of old and deserving officers. Now, no persons could form a sound opinion upon the question unless they looked at the state of the Navy Lists from the time of the last war. His hon. and gallant Friend (Captain Scobell) said there was a great number of old and meritorious officers who had been passed over. That was perfectly true, but it was quite inevitable. The House of Commons was very apt to take at one time a view totally different from that which it took at another. At one moment it could not do enough for the members of the naval profession; great promotions were asked for; and, consequently, great charges entailed, while some time afterwards the House of Commons would, perhaps, complain
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of those charges, would call, perhaps not unnaturally, for their reduction, and would require the Executive to check the number of promotions. At the end of the war there were 855 captains, 816 commanders, and 3,982 lieutenants. That was an immense number of officers—more, of course, than could possibly be employed, but fifteen years afterwards, there were 851 captains, 905 commanders, and 3,580 lieutenants. The House of Commons naturally took exception to so large a number, and complained that after fifteen years of peace the list of officers should be as large as it was at the end of the war. The promotions during that time had of course gone on just as if the war had continued, and the House complained very justly of the heavy charges entailed upon the country. Yet, notwithstanding the promotions had been kept up in that way, there were still during that time complaints of the destitute state of old and meritorious officers, and of the number whom it was impossible to employ. At the beginning of 1814 there were 3,285 lieutenants, of whom 1,600 were employed; in 1817 there were 3,982 lieutenants, of whom 405 were employed; so that in the first of these years one half, and in the second only one-tenth, of the whole number on the list were on service. What on earth could any Government do under such circumstances? Would his hon. and gallant Friend have them commission ships for the sake of employing officers? What would have been the case if employment had been given to those officers in rotation? At the end of 1817 there were in round numbers 4,000 lieutenants, of whom 400 were on service. The ordinary term of a ship's commission was three years, and at that rate it would have taken about thirty years before all those lieutenants could have filled their term of service, and the last 400 employed would have been twenty-seven years on shore. His hon. and gallant Friend could not be of opinion that those would have been men whom it would be for the interests of the public service to employ, and that, therefore, would explain why it was inevitable that a large number of lieutenants should be left unemployed for a great part of their lives. It might, therefore, very well happen, in the way he had explained, that there might be at this moment lieutenants who were at Trafalgar, and who possessed a medal, but whom it was perfectly impossible ever to employ again. At the end of the year 1817 there were 791 commanders

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on the list, of whom forty-two only were employed; and thus, if the Government had promoted lieutenants, they would only hare been encumbering the ranks of unemployed commanders. How, then, could any Government avoid the complaint that a great number of officers were left on half-pay? Since the time he had mentioned the number of officers had been much larger than could be employed. The Committee presided over by the noble Lord the Member for Totness (Lord Seymour) recommended that the list of lieutenants, commanders, and captains, should be reduced to a certain number, and that until that number was reached the promotions should be limited to one in three. That rule had been adhered to up to the present moment, but neither the list of commanders nor of captains had as yet reached the number recommended by that Committee. He considered, therefore, that it was unnecessary to pursue the subject further. He had already shown the circumstances under which a greater number of officers remained upon the lists than could be employed, and the inevitable consequence was that a large number of officers of the lower rank must necessarily remain in that lower rank. The recommendation of the Committee had been closely adhered to, and it was impossible to prevent a large number of men from remaining unemployed. It was proposed to limit the number of lieutenants to 1,200, and the number of commanders to 450; and it followed naturally that the whole of the lieutenants could never be promoted to the rank of commander. The hon. and gallant Gentleman acknowledged that at the present moment only one-third of the active list of commanders was afloat. There must, therefore, be a certain number of commanders who would never become captains, and also many captains who would never become admirals. In all the higher ranks there must necessarily be a certain number of persons who would never be employed or promoted. If any man could devise a better system of promotion than that which now existed he would be a great public benefactor, for at all times the selection of men for appointments was a most disagreeable and painful duty. Ten or a dozen able men could always be found well qualified to supply any vacancy that might occur, and it was a most painful and responsible task to select from that number one particular individual. In many cases great complaints were made of partiality. No military man thought himself too old for service, and no
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admiral thought himself too old to go to sea. Entertaining such an opinion, it was natural, when one officer was promoted over another, that the officer passed over should imagine that some other motive than a proper appreciation of the talent of the officer appointed had decided the appointment, and at all times it was very difficult to assign reasons why commander A had been selected and commander B passed over. He had not been very long at the Board of Admiralty, and consequently he had not had many appointments to make, but nevertheless several accusations had already been made against him in regard to the appointments which had been made. The very first appointment that he had made, was the appointment of an officer to command a sloop of war. The officer selected was recommended to him by his hon. and gallant Friend (Admiral Berkeley) and other gentlemen as an old officer of the highest character, and well fitted to command a ship of war. As far as he (Sir C. Wood) was concerned, he had never heard of the officer in question before, but soon after the appointment was made he received a letter, charging him with having appointed his own relation. He was certainly astonished at such a charge, knowing at the time that the only relative he had in the navy was a youth of some thirteen years of age, and on inquiring into the matter, he found that the name of the officer appointed was Francis Wood, which fact alone had been considered sufficient to justify the imputation which had been made against him. A week afterwards he made a second appointment, and a day or two afterwards a letter appeared in The Times, headed, "Another Malappointment," stating that Mr. Haslam, a mate in the Black Sea Fleet, who had greatly distinguished himself, had been rewarded with a lieutenancy, and soon after appointed to the command of a ship on the coast of Africa. The letter concluded by saying, "How long will the people of England suffer such atrocious mismanagement to degrade them before all the world?" That officer had distinguished himself in the Arctic expedition, and the inquiries he had instituted satisfied him that he was a gentleman of the highest character. The appointment was made simply on the ground of merit, yet he (Sir C. Wood) had been accused by the public Press, of having been guilty of the most atrocious abuse of his patronage. It was very easy to make charges of that kind, but he was anxious to show how

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utterly unjust they were in many cases. He had been told the other day by an intimate friend that a noble Lord had complained that he (Sir C. Wood) had refused him a naval cadetship, and that the appointments to those cadetships were made upon political grounds. He did not remember having received any application from that noble Lord, and on referring to his letters he could not find such an application. He then looked at the list of naval cadets who had recently been appointed, and he found that of eight, six had been appointed in consequence of their connection with distinguished naval and military officers, and only two upon the recommendation of Members of that House. One of those Members sat on the opposite side, and he believed had never given a vote in favour of the present Government. A complaint was made by his hon. gallant Friend (Captain Scobell) that young men sometimes obtained promotion very rapidly. Undoubtedly that was the case, but the consideration which weighed with the Admiralty in making those promotions were how the country could best be served, and if it was desirable that officers should attain the rant of admiral at a comparatively early period of life, it was indispensable that young officers should be promoted for distinguished services. The Committee, which was known as Lord Seymour's Committee, had stated that the efficiency of the naval service must depend, in a great measure, upon the mental and bodily vigour of the officers who were intrusted with commands, but as a general rule that union of mental and bodily vigour was only to be found in men who were comparatively young; and unless, therefore, young officers were promoted it was impossible that they could have admirals who, according to the opinion of the Committee, would be fit for active service and for important commands. In 1851 the right hon. Member for Portsmouth (Sir F. Baring) established what was called the reserved list, upon which officers were placed after a certain period of service. No doubt, as his hon. and gallant Friend had stated, that regulation operated with some inequality, for there were admirals on the reserve list who Were perfectly capable of rendering service to their country, and there were others on the active list who were utterly unfit for active duty. He did not think it would be advisable to adopt the plan suggested by his hon, and gallant Friend—that all admirals should be
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removed from the active list at a certain age, for no two men were equally strong, and some were more vigorous at the age of sixty than others were at fifty-five. It appeared from the Report of 1848 that there were at that time only six admirals under the age of sixty upon the active list, but there were now seventeen under that age upon the list, and of these nine were below the age of fifty-five. In reply to the statement of his hon. and gallant Friend that all naval officers who were promoted early in life owed that promotion to family, or political, or Parliamentary influence, he might observe that, although three of the nine admirals under fifty-five might possess some aristocratical or political influence, he must deny that such was the case with regard to the other six. If they took the aristocratic names in the navy it would be found that, with the exception of Lord Dundonald, they were almost exclusively on the retired list, while the great majority of persons actively employed possessed neither family nor political influence. The rule laid down some years ago by his right hon. Friend the Member for Portsmouth had worked admirably with regard to admirals, and had been the means of enabling them to get younger men for that part of the service, and he must say that in the case of the lower ranks something might be done, though the subject was attended with very great difficulties. Twenty years ago, when he was Secretary to the Admiralty, a suggestion was made whether, in order to obviate the evils which existed, it would not be wise to introduce a system of sate and purchase in the navy. It was obvious that the system of purchase, such as existed in the army, offered facilities for young men entering the service, but it was doubtful how far such a system was practicable in the navy, and, if it were so, whether it would receive the sanction of that House, in which complaints were not unfrequently heard of the existence of the practice in the army. He must again deny that family or political influence had that weight in regulating promotion as had been alleged by his hon. and gallant Friend, and the fact that every service had been performed in a manner which conferred credit upon those employed and glory upon the country was the beat answer to any assertion which might be made that merit was not sufficiently acknowledged. Not a Russian vessel dared to show itself in the presence of our navy, the recent services it had rendered in the

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Sea of Azoff had been properly acknowledged, and he must again repeat that there was no rank in the service, from that of admiral down to that of cabin boy, but was equal to the execution of every service which it was called upon to perform.
SIR GEORGE PECHELLsaid, he was glad that his hon. and gallant Friend (Captain Scobell) had brought forward the subject now under discussion, inasmuch as it had afforded the First Lord of the Admiralty an opportunity of defending his conduct in connection with the department over which he presided. Sir George Cockburn had complained that he was overruled during his services at the Board, and that his recommendations had not been attended to; but the fact was that that gallant officer had never submitted any project to the House, and had opposed the Motions of Sir Charles Napier and other gallant officers when they were submitted to the House. He could not imagine who had overruled Sir George Cockburn at the Board, and the only hon. Member now present who could enlighten the House on that subject, was the hon. Member for Lewes (Mr. FitzRoy). The present Board of Admiralty was a vast improvement over former Boards, when the majority were of the lay and civil class, and when naval officers were almost excluded. There was nothing to complain of now with respect to the Board, except the system. With respect to patronage he believed that political influence was too powerful, and that some change ought to take place. He could recommend that the sum paid for the conveyance of treasure should be brought to the public account, and applied under the direction of the Admiralty. In regard to the employment of Admirals on the retired list, when he applied for a ship he was informed that the timber was not cut to build the ship, nor was the sheep killed whose skin was to supply the parchment on which to write his commission. Many officers were unable to obtain ships, and thus to comply with the regulations required to be fulfilled before they became admirals, because they had no influence to enforce attention to their wishes. With regard to the coast-guard service, he must complain that, while the officers employed on that service were certain of promotion if they were so fortunate as to come in contact with smugglers and kill half a dozen of them, they received no promotion at all if they had saved lives and property from
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wrecks. As to the Motion of his hon. and gallant Friend, the First Lord of the Admiralty had certainly made a great many explanations which it was well should be known, but it would be very satisfactory to the service if the right hon. Gentleman would concede the inquiry asked for.
ADMIRAL WALCOTT: Sir, I will not detain the House at any length, because it occurs to me that the arguments which have been adduced for and against the Motion before it, have been fully sufficient to enable the House to arrive at a right decision; and, moreover, were I to enter into detail of my own views and opinions they would approach in many particulars to a recapitulation of those already spoken. If the hon. and gallant Member for Bath determine to press his Motion to a division, I shall be found in the same lobby with him, satisfied, as I am, that if a Committee were appointed the decision would be beneficial to the service, and most certainly could not be injurious. The First Lord of the Admiralty had said that any man would be a public benefactor who would devise a means by which the present system of patronage could be got rid of, and it occurred to him (Admiral Walcott) that he could point out a means by which a more beneficial system could be introduced—namely, by constituting the Naval Lords of the Admiralty, in fact, and reality the responsible Counsellors of their Political Chief with regard to the employment, promotion, and decorations of honour given to naval officers, as those best fitted to sympathise and to encourage, to deal gently with the disappointed, and to award justly the successful; in a word, to propose to themselves but one motive of thought and action to secure the welfare of the whole profession, and to consult without partiality for every individual member in it. If such a system were adopted great satisfaction would be given, and the service would feel full confidence that merit would be its own patron, and good, gallant, and meritorious service the only effectual recommendation to employment, promotion, and recommendation to the Sovereign for decorations of honour. The hon. and gallant Admiral, the Member for Brighton, had animadverted in terms of disparagement in the selection of a naval officer to preside at the Admiralty in the Derby Government; I cannot but regret his having done so, nor will I forbear to offer my tribute to that naval officer (the Duke of Northumberland) for the able and

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energetic manner in which he endeavoured—and with success—to provide for the efficiency of the service; in so doing I but speak the testimony, in that particular, offered to the House by his successor, the right hon. Baronet the Member for Carlisle, and the feelings of many gallant officers.
Notice taken, that Forty Members were not present; House counted; and Forty Members not being present,
The House was adjourned at a quarter before Eleven o'clock.

MINITES.
PUBLIC BILLS.—2a Public Houses (Ireland); Public Health Act 1854 Continuance and Amendment; Diseases, Prevention; Consolidated Fund (Appropriation); Exchequer Bills (£7,000,000); Militia Pay.
3a Nuisances Removal and Diseases Prevention Acts Consolidation and Amendment; Sale of Beer, &c.; Militia Ballots Suspension; Metropolitan Buildings; Customs Laws Consolidation; Passengers Act Amendment; Island of Tobago Loan; Ordnance Board.

PUBLIC HOUSES (IRELAND) BILL.
EARL GRANVILLE EARL GRANVILLE moved to resolve—
"That inasmuch as the Bill for the Transfer of Licences of Public Houses in Ireland is intended to remedy a Construction of the Law in relation to the Transfer of Licences which has been but recently arrived at, the Introduction of the Bill necessarily took place at a late Period; and as the Decisions on the existing Law have been such as to be productive of much public Inconvenience, consequently the Circumstances which render Legislation on the Subject Matter of the said Bill expedient are of such Urgency as to render the immediate Consideration of the same necessary."
LORD MONTEAGLEwas understood to express his disapproval of the repeated propositions to suspend the Standing Orders.
EARL GRANVILLEsaid, that he thought this was a case in which it was desirable to suspend the Standing Order. He would therefore move the Resolution, but he would not divide the House if any one objected.
LORD REDESDALEsaid, that if anything had occurred recently to make this Bill necessary, he would not raise any objection.
EARL GREYsaid, that rather than go on in this manner, suspending the Resolution, sometimes for one class of reasons and sometimes for another, it would be better to take the bolder step of rescinding the Resolution at once. If Government intended to persist in this plan of compelling the House to proceed with important measures of legislation at a period of the Session when it was utterly impossible for their Lordships properly to consider it—then, if, that Was the policy which they had deliberately, resolved upon all he could say was, that he wished they had never consented to the Resolution being placed on the Journals of the House.
EARL GRANVILLEprotested against the almost un parliamentary language of his noble Friend. His noble Friend had accused the Government of intentionally forcing through the House measures to which their Lordships were not disposed to give their consent. His (Earl Graville) appealed to those of their Lordships who had been present at the discussion some little time before and subsequently to the 24th of July, to say whether his noble Friend was borne out in the statement he believed there was no man in his senses who would have agreed to the Resolution upon the Journals unless it had contained qualifying words. Upon almost every Bill in reference
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to which that Resolution had been suspended, communication had been had with his noble Friend the Chairman of Committees. It was only in the case of the Limited Liability Bill that there had been the slightest different of opinion as to the degree of urgency which required their Lordships to read a Bill a second time, and the reason the Government had so large a majority on that occasion was, not that noble Lords opposite were in the country and could not be in their places, but, because a large number of Peers who were usually opposed to the Government were more favourable than opposed to the Bill: when, therefore, his noble. Friend stated that the Government were forcing Bills against the will of the House, he must say that it was a gross exaggeration. If a measure for the removal of the Jewish Disabilities had been to come on that night, he felt persuaded there would be a very good attendance on the opposite side.
THE MARQUESS OF BATHsaid, that at this period of the Session Government had complete control over the House, and a great number of Peers had gone down into the country, because they trusted in the Resolution of the House, and thought, as he himself had thought, that there would be no matter of sufficient importance to make it necessary for them to attend; and the time that had elapsed since the Bill had been before the House did not admit of their being present to consider the subject.
EARL GREYsaid, that the Government, by these frequent relaxations of the Resolution, were converting it into a dead letter. Could the noble Earl give him any one Instance in which the Resolution, of their Lordships had stopped the progress of a Bill? It was too true that a party question would be much more potent in bringing a large assemblage of their Lordships; but he thought it was very important that they should act upon some steady principle in dealing with questions in which the interests of the nation and the honour and dignity of the House were involved. He did not believe that the Resolution suspending the Standing order in the case of the Limited Liability Bill would have been carried in a full House.
EARL GRANVILLEsaid, that the noble Earl was much mistaken when he spoke of the Order in question as a dead letter. Such was not the case, for the Government had abandoned several measures

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in the House of Commons which they would have wished to press, in consequence of an unwillingness to risk a collision in reference to this Standing Order; and other measures were pressed forward by the Government in order to send them up to their Lordships before the Resolution of that House came into operation.
Motion agreed to; Bill read 2a (according to Order) and committed to a Committee of the whole House To-morrow.

PUBLIC HEALTH ACT (1854) CONTINU- ANCE AND AMENDMENT BILL.
Moved, to resolve—
"That the Public Health Act, 1854, Continuance and Amendment Bill was unavoidably delayed in the House of Commons pending the Progress of other Measures which would have superseded the Necessity of the Continuance of the existing Board of Health by a separate Act; but inasmuch as the Bills now before this House do not contain any such Provisions, the Circumstances which render Legislation on the Subject Matter of the said Bill expedient are of such Urgency as to render the immediate Consideration of the same necessary."
Agreed to; Bill read 2a (according to Order), and committed to a Committee of the Whole House To-morrow.

DISEASES PREVENTION BILL.
Moved to resolve—
"That the Diseases Prevention Bill was unavoidably delayed in its Passage through the House of Commons until the Provisions of the Nuisance Removal Bill now before this House were fully determined on, with which Measure the aforesaid Bill stands in necessary Connection; and inasmuch as the Provisions thereof are formed to protect the Country against the Spread of any formidable Epidemic, Endemic, or contagious Disease similar to that with which it was afflicted last Year, the Circumstances which render Legislation on the Subject Matter of the said Bill expedient are of such Urgency as to render the immediate Consideration of the same necessary."
Agreed to; Bill read 2a (according to Order); and committed to a Committee of the whole House To-morrow.

LIMITED LIABILITY BILL.
Moved, That the House do now resolve itself into a Committee.
LORD ST. LEONARDS LORD ST. LEONARDS rose to express a hope that when he showed how the law at present stood, and the nature of the Bill, the Government would see the necessity of making the concession to arguments and facts which they were not disposed to yield to the small number of Peers in attendance to oppose the measure. Amongst other matters, it was desirable to consider what would be the operation of the Bill on bubble Companies.
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The repeal of the enactment preventing shareholders in Joint-stock Companies from transferring their shares without the consent of the other partners enabled bubble Companies, which were not actually fraudulent, to establish themselves without any check but this—that each shareholder was liable for the debts of the concern to the whole extent of his means. They were now about to get rid of that check, and to leave any bubble Company to establish itself without the slightest reason to prevent its members from endeavouring to provide for themselves at the cost of the public. Some philosophical writers thought that Joint-stock Companies were desirable to enable undertakings to be carried out for which a large capital was required, of which the profits were to be postponed, and which would be attended with great risk; but it would be most unwise to allow such Companies to be established without any limit as to capital, or the slightest provision to prevent an abuse of the power which a measure like that on their Lordships' table would confer. The law of France on this subject was said to be desirable, and that it should be adopted; and though he did not recommend the adoption of that law in this country, he begged to remark that it possessed this advantage, and afforded this check, that whoever actually carried on the business was liable to the whole extent of his means. It might be said that a man of straw could stand at the head of a considerable establishment, and that, therefore, there was no safety in the French law which the Bill before the House did not afford; but there was this further security in the French law, that if the partner en commamdite at all interfered in the business he became liable; he therefore must be strictly a sleeping partner, taking no part in the business, but merely advancing capital to carry on the business. There was, therefore, this check—that the man who carried on the business was responsible for the whole obligations of the Company; and a man placed in that situation was more likely to carry on the business with advantage to the public and to the Company when he knew that the sole responsibility rested upon him. The Bill as it stood proposed to enable any number of persons to enter into a partnership on any capital they pleased with 10 l. shares. But what had happened before? In 1824 or 1825 there had been a deluge of Joint-stock Companies, without any of the immunities

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proposed to be conferred by this Bill; and when the bubbles burst the bankruptcies were awful, and only very few of those who intrusted their money to these Companies had succeeded in saving it. Again, at a later period, there was another rush of Joint-stock Companies—some bubbles—and associations devoted to every conceivable description, and they knew the result. That experience should not be thrown away. There was no reason why the small capitalist should not be encouraged; but it was clear that Joint-stock Companies should not be created with special immunities, unless it was for the carrying out of large undertakings; and his own opinion was, that, generally speaking, commercial business of an ordinary character could not be advantageously conducted by such bodies. At the period to which he referred, however, these Companies went on trading recklessly upon the money of other people to the extreme injury of the regular trader who had only his own private means to rely on; but, after a time, they all failed, and the only one which, to his knowledge, had since been revived, was that really useful enterprise, the Parcels Delivery Company. What was the present state of the law on this subject? The Legislature had already put some check upon Joint-stock Companies, and had subjected them to some regulations. An Act, passed in the 7th and 8th of Victoria, enabled every Joint-stock Company, complying with its regulations, without applying to the Board of Trade, to become a corporation. Contemporaneously another Act was passed which allowed these Companies to be dissolved when they had become bankrupt; reserving, however, to every creditor, notwithstanding the bankruptcy, the right of maintaining his claim upon the concern against every individual member of the partnership. Powers were also ultimately given for the winding up of Companies or Associations consisting, of a very small number, of partners. These different Acts contained a most important series of provisions, constituting, in fact, a code of commercial legislation; and this code they were now called upon entirely to abrogate, in order to put in its place the principle of limited liability, unaccompanied by those restrictions which were indispensable to prevent it from operating serious mischief. The practice of our law had heretofore been to limit liability, subject to certain conditions; and there could be no reasonable objection, at a fitting time, to consider
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whether that practice could not be extended in a more effectual manner, provided due precaution were at the same time taken against the evil consequences that night otherwise flow from its adoption. In fact, the opposition offered to the present Bill originated not so much from an objection to the principle of the measure, is to the ill-considered mode in which it was sought to hurry it through Parliament at the end of the Session. They did not accuse the noble Earl (Earl Granville) of a general want of courtesy to the House, but certainly it was very much like an act of tyranny to insist on forcing this crude and ill-digested Bill upon their Lordships under present circumstances. If the measure passed in its present shape its promoters would incur a heavy responsibility; and, no doubt, many eminent Members of the other House who were friendly to its principle now coincided with those of their Lordships who desired to see it postponed until it could be properly considered. In the Bill originally introduce into the House of Commons it was proposed that there should be a limited liability in the case of Companies which had a capital of 20,000 l., with shares of 25 l. each, on which 20 per cent was to be paid up. In the course of discussion this amount was considered to be too large, and the Government acceded to a proposition that the capital should be fixed at 10,000 l., in shares of 10 l. each, on which 20 per cent was to be paid up; but, ultimately, all stipulations as to the amount of capital were struck out. He was not by any means inclined to put restrictions on the small capitalists; on the contrary, he was desirous, as far as possible, to advance their interests, but he certainly was not prepared to give the immunity of limited liability to Companies with no capital, or with what amounted to no capital. If the Bill, therefore, went into Committee, or if it were referred to a Select Committee, he should propose to restore to it that provision which required that all Companies trading under limited liability should have a capital of at least 10,000 l. He was not opposed to limited liability—on the contrary, he was for it with proper checks and restrictions; and he was convinced that, if some restriction, such as that which he had just mentioned, were not introduced all sorts of small Companies would be formed, which every man who could command 2 l. would be running to join, and the result would be that the general trade of the country would be completely deranged. He felt that he was defending

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the interests of the poorer classes in asking their Lordships not to agree to a Bill which, as it at present stood, would throw temptation in the way of the working man to draw his earnings from the savings-banks in order to invest them in unprofitable undertakings. Had their Lordships considered what would be the effect of the Bill on the small traders? What a great injustice it would inflict on the baker or butcher who, trading with a limited capital and unlimited liability, saw established next door to him a butcher's or baker's shop, supported by the subscribed capital of all his neighbours, and underselling him by the sacrifices which a limited liability would enable the association to make. What individual trader could bear up against such a competition? Suppose, for instance, all the domestic servants in some wealthy neighbourhood should combine to set up a baker's shop; of course they would be able to support it by giving their masters' custom to it, and every baker in the neighbourhood would very soon be ruined. In this way an entire set of tradesmen might be driven out of a neighbourhood. A real bonâ fide capital was the best security for the public when limited liability was sought to be established, and that security he desired to see established by this Bill. In the law, as it now stood, great care was taken to wind up Joint-Stock Companies when they had expended a reasonable amount of their capital, and in this Bill, as it was originally introduced in the other House, there was a provision of this sort, though a very imperfect one. In the Bill now before the House there was no provision for winding up any of the Companies formed under it. The first Report of the Mercantile Law Commissioners, who considered this subject, expressed an opinion against the very measure which the Government had brought forward. The Commissioners, after stating that the subject was one of paramount importance, arrived at the conclusion that the proposed alteration would not operate beneficially on the general trading interests of the country, and they added that they had not been able to discover any evidence of the want of a sufficient capital for carrying on legitimate enterprise and for all the requirements of commerce. The Commissioners also stated that they had considered the subject with respect to the benefit which it might be calculated to confer on individuals, by enabling them to obtain capital and establish themselves in business by the
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aid of partners, incurring a limited liability only; and they went on to say that it could not be doubted that instances occurred where men of probity would derive benefit from such a system; but they expressed an opinion that such benefit bad been greatly overstated. The Commissioners ended their observations on this subject in these words—
"With regard to those undertakings the execution of which involves an interference with the rights of property, the sanction of Parliament always has been, and still ought to be, required. With regard to others, the privilege of having a limited liability may be granted by charter, and, for the purpose of regulating the granting of charters, your Majesty's Commissioners recommend that a Board be established to decide upon all applications for them; and this Board should require in all cases compliance with certain fixed regulations."
The introduction of the present Bill by the Government interfered, therefore, with the recommendations of their own Commissioners. When persons spoke about the necessity of the freedom of capital, he would ask, what country was there in the world where capital was more free than in this? It was an abuse of terms to say that there was a want of freedom of capital; but there was a want which he should be willing to supply, to a certain extent, of a limitation of liability, upon the reasonable condition that there should be capital in a concern; yet he was not willing that a measure like the present should pass, establishing limited liability for a concern where there was no capital. Since he had had the honour of sitting in their Lordships' House, he had never shown any disposition to obstruct any really useful measure; but he felt such strong objection to the Bill in its present shape that he should oppose its passing, unless some concession were made by the Government enabling the measure to be put in a more satisfactory state. He had no desire to throw the Bill over for the Session, and he would undertake that if it were referred to a Select Committee the whole subject would be considered in three or four hours. He would for himself undertake to give no factious opposition to the consideration of the measure.
EARL GRANVILLEadmitted that some arguments might be adduced in favour of referring the Bill to a Select Committee, but at the same time he thought that there were very serious objections to that course. If, as the noble and learned Lord said, the Bill could be considered in three or four

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hours in a Select Committee, it might also be considered in an equally short time in a Committee of the Whole House; with this Advantage, that any amendments which it might he thought desirable to propose upon a subject in respect to which, as a noble and learned Lord had said, there was a strong popular feeling, would be discussed in public. He would not pledge himself to adopt all the Amendments which might be proposed, but whatever arguments might be put forth in favour of any changes in the Bill would certainly receive his most anxious consideration, if their Lordships would allow the Bill to be considered in Committee.
LORD ST. LEONARDSconsidered that a Committee of the Whole House was a most incompetent tribunal to consider a question of this kind. It would be a mockery to attempt it. If the Bill was to be calmly and properly discussed it could only be done in a Select Committee.
LORD CAMPBELLsaid, he would most earnestly advise his noble Friend (Earl Granville) to assent to the Select Committee proposed by his noble and learned Friend in the spirit which he had exhibited. In two hours the Bill could be considered, and he had not the smallest doubt but in a very short time it would be rendered innocuous. One of the reasons why he (Lord Campbell) asked their Lordships to proceed with the Bill was that the public might be cured as soon as possible on this subject. He thought there would be great dissatisfaction should their Lordships stop the Bill in its present stage, but he was satisfied that in a Select Committee clauses might be introduced which would prevent the measure from producing mischief. It was calculated, in its present shape, to promote fraud, and he believed that it could be so altered as to make it incapable of producing mischief to the public. As a general principle, all who engaged in trade ought to be liable as contractors for the full amount of the pecuniary demands against them; but there were certain exceptional cases, such as railway and dock Companies and the like, whose undertakings could not be carried out expect with limited liability. But to say that two or three persons might engage keeping a chandler's shop on the principle of limited liability, was absurd. He had only a slight opportunity since his return from circuit to glance over the Bill, but it seemed to him to be one that would enable two or three, or half a dozen,
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to engage in a chandler's shop with 20 l. capital. [Lord GREY: A capital of 10 s.] He had been a long time a Member of their Lordships' House, and he could say that no good was done in general to a Bill in a Committee of the Whole House; but in a Select Committee the service that a Bill received could not be exaggerated. To refer a Bill to a Select Committee of their Lordships' House was the way to pass a measure, whereas to refer a Bill to a Select Committee of the other House was the way to destroy it. His noble and learned Friend recommended that they should consider this Bill in a Select Committee, and if that were acceded to, the Committee could meet to-morrow, and he hoped that in the course of four hours they would be able to come to an understanding, and make it conform to the principles on which they were agreed and which had been recommended by the Commissioners.
EARL GREYsaid, he was extremely glad to hear what had fallen from his noble and learned Friend, because it gave him high authority for moving an Amendment to the Motion that the Bill be committed, that the Bill be referred to a Select Committee. He could assure their Lordships that if they assented to that proposition and should do him the honour to place him on the Committee, he would do everything to promote the Bill's passing in the present Session; but he could not be so sanguine as to think that it could be brought into the shape in which it could pass with safety to the public in the course of a few hours. He had been so taken by surprise by the intention of the Government to proceed with the Bill at so late a period of the Session, that when he addressed their Lordships on Tuesday evening, he had not been able to make himself acquainted with the details of the measure. He had now to some extent supplied the deficiency, and must profess his astonishment that such a Bill should have passed through the other House, and could now be recommended to their Lordships. It was a remarkable circumstance that the House was called upon to adopt a Bill which would establish the principle of limited responsibility, against the opinions of every person, so far as he knew, who had paid attention to the subject. He found from the Report of the Commission that a learned Scotch Judge, Lord Curriehill, had remarked that limited liability appeared to have some peculiar tendency to the encouragement of fraud, because in

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every State in which that principle prevailed it was only permitted, subject to the severest checks that could be imposed. He (Earl Grey) had referred to the evidence taken by the Commission, and he found that every witness, even those most in favour of the principle of limited liability, agreed as to the necessity of introducing the most stringent precautions to guard against fraud. This Bill contained no provisions whatever to guard against fraud, which experience and authority proved partnerships of this kind were calculated to produce. It was absolutely necessary some restrictions should be introduced. As the Bill now stood three persons might form a Company. The number was governed by a clause taken from the Joint-stock Companies Act. That Act required that a Joint-stock Company should have not less than three directors, who must be shareholders, and, therefore, under this Bill a Company could not consist of less than three shareholders; but there was nothing in the Bill that he could discover which required a greater number of partners than three. Thus, three persons, upon going to the registrar and declaring they had subscribed a certain amount of capital, of which a certain portion was paid up, would be at liberty to establish a Company. They might be convicts, only discharged the preceding day, after having undergone punishment. They might be persons who had failed and paid 6d. in the pound upon large liabilities, and who had been refused any certificate by the Court of Bankruptcy. He knew a Joint-stock Company which had been applying to the Board of Trade for a charter, one of the promoters of which was a person in that precise situation. There were no means whatever of ascertaining the accuracy of the statements made by persons going to the registrar and setting up a Joint-stock Company under this Bill. Was it fit or decent that with so little authority any Company should be allowed to be established? A Company might be established by men having a large amount of capital, but who wished to employ their capital for dishonest purposes. In the metropolis a very large amount of capital was invested in the extremely dishonest trade of receiving stolen goods. The possession of wealth so little implied the possession of honesty that very possibly Companies would be formed the object of which would be to defraud and plunder the public. He wished to point out the facilities for their operations
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which this Bill afforded. They might embark in a very large business, either manufacturing or mercantile, carry it on with all the outward appearances of wealth and stability, pay all demands for a considerable time, divide large nominal profits, and yet the whole concern, from first to last, might be a gigantic swindle. They might be carrying on business wholly at a loss, and obtaining, by dividends out of capital, far larger sums than they originally invested.
They might put in their pockets a large amount of money they had received from other parties, and, retiring from the Company when concealment was no longer possible, be perfectly free from any pecuniary responsibility. That was perfectly easy, because the only check whatever provided by this Bill was the necessity of presenting a balance sheet and report from auditors. But the auditors were appointed by the Company themselves, and persons establishing a Company for fraudulent purposes would take care to appoint auditors who were in the plot, and the auditors would take care not to let that appear which was wrong. It was often matter of doubt what charges should be carried to revenue and what to capital account, and many men had been brought to ruin by using that which seemed to be profits, but was really capital. With perfect good faith it might easily happen; but when there was bad faith—when it was the object of those who presented the accounts to conceal the truth—when those accounts were not submitted to independent auditors, but to auditors in collusion with fraudulent directors—what security was there in a balance sheet being required by this Bill? Then, again, let their Lordships look at the injustice in the operation of this act towards the honest trader. A fraudulent Company, meaning to absorb its capital in ten or fifteen years, and carrying on business upon that principle, could afford to undersell the honest trader and drive him out of the field. Any branch of trade taken up by such a Company would be engrossd. The public for the moment would be gainers by having cheap goods provided for them; but in the end they would severely suffer. When the Company was broken up, the honest producers would not be able to take the place of the bankrupt concern, the whole trade would be disturbed and the public would be deprived of the proper supply which it required. It needed very little ingenuity to point

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out many different modes in which fraud might be committed, but if he were to do so he should be trespassing most unwarrantably upon their Lordships' time, and he would therefore content himself with having shown that there was one plain and obvious mode by which fraud could be committed. He, therefore, asked their Lordships to introduce such Amendments as would deprive the Bill of those mischievous tendencies which were inherent in the principle of limited liability unless sufficient checks were provided; and this could only be done by a Select Committee. The Amendments which he was anxious to introduce into the Bill would be included under six different heads. Under the first, he proposed that some provision should be made in the Bill for providing an independent audit in the case of all Joint-stock Companies formed under this Act. There could be no objection to the principle of that provision, for the noble Lord the President of the Council had himself, on more than one occasion, endeavoured unsuccessfully to introduce a like provision in the cese of Railway Companies. Under the second head he proposed to re-introduce into the Bill the provisions which the Bill contained when it was first introduced by Her Majesty's Government, to the effect that when 75 per cent. of the original capital had been lost, the Company should be dissolved, and in the event of the directors continuing to carry on business after that proportion of capital had been so lost that they should be liable to severe penalties. Government could of course offer no objection to that provision, seeing that it was one which they had originally inserted in the Bill, in which he now proposed to re-insert it. The provisions under the third head would be to the effect that directors who declared a dividend in any Company which was insolvent, or should make a Company insolvent, by declaring and paying a dividend, should be liable in their whole property for the debts of the Company. Provisions similar to these existed in the law of Massachusetts with respect to all Companies formed with these privileges, and he did not see how any one could object to such a provision. The fourth head would include provisions to the effect that notes or obligations of shareholders should not be considered part payment of any subscribed capital of a Joint-stock Company. This also, was part of the law which existed in Massachusetts. The clauses under the fifth head would provide that the debts
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of the Company should not at any time exceed the capital stock of the Company Under the sixth head, it was provided that the directors should become personally responsible for the debts of the Company, if they were guilty of making any false statements or false representations of the state of their affairs to the public. He would ask their Lordships if it were possible in a Committee of the Whole House to discuss with advantage or effect provisions for the accomplishment of these important objects? It was the duty of the Government, if they were determined to recommend this great change in the commercial law of the country, to have submitted the proposal in the form of a complete digest of all the laws on the subject of Joint-stock Companies and not to have left the matter in the vague and uncertain state in which it would be if this Bill were allowed to pass in its present state. Looking at the extent of the changes which he considered necessary, and the extreme difficulty in providing for and giving effect to these provisions, he certainly was not so sanguine as the noble and learned Lord behind him (Lord Campbell) had been, that it would be possible in a select Committee, in the course of four or five hours, to deal with the subject, and to make all necessary Amendments; he would, however, if the Committee were appointed, do the best he could to facilitate the carrying out those provisions which he considered absolutely necessary, and to improve the Bill as much as possible—though he confessed he thought it quite unimprovable. One reason which had been given by the noble Earl for pressing the Bill was, that the public were impatient for legislation on this subject, and he supposed it was, therefore, intended that a practical proof should be given them of the delusion under which they were labouring. But he had always supposed one of the main functions of that House was to check hasty legislation, and to take care that inconsiderate clamour for a particular measure was not mistaken for that well considered public opinion to which both Houses of Parliament ought to give way. If Amendments were introduced in the Select Committee, they would have to be reprinted, and two or three days ought then to be given for their consideration by the House and the country. Could that be done when the Appropriation Bill had been read a second time? It was almost impossible; but, if their Lordships were determined to pass the Bill, let them at any rate endeavour to

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render it innocuous by referring it to a Select Committee.
Amendment moved, to leave out from the word "That" to the end of the Motion and insert "be referred to a Select Committee."
LORD STANLEY OF ALDERLEYsaid, that although he had been somewhat influenced by the speeches of the two noble and learned Lords (Lord St. Leonards and Lord Campbell) yet the speech of the noble Earl (Earl Grey) had convinced him that it would be utterly useless to refer the Bill to a Select Committee. His noble Friend had hardly given a fair statement of the opinions of the Commissioners, only five of whom had signed the Report, which was certainly one of the most contradictory and unsatisfactory Reports he had ever read, being a mere balance of opinion throughout. He would however read a few passages from the Report of one of them, Mr. Bramwell, whose opinion on this subject was entitled to great weight. Mr. Bramwell said:—
"If ever there was a rule established by reason, authority, and experience, it is that the interest of a community is best consulted by leaving to its members, as far as possible, the unrestrained and unfettered exercise of their own talents and industry. Our modern legislation has been founded on this principle, with the sanction of the immense majority of those whose opinions are of any value."
EARL GREYsaid, that Mr. Bramwell also stated his entire concurrence with another of the Commissioners, Mr. Kirkman Hodgson, who condemned the principle of a société anonyme without certain restrictions.
LORD STANLEY OF ALDERLEYsaid, he would also read a passage from the opinion given by the gentleman to whom his noble Friend had referred. Mr. Kirkman Hodgson said:—
"This country is now, I believe, almost the only one in which this law of limited liability does not exist. It prevails in all those with which we have the most extended and important intercourse, and this isolation acts very injuriously in many cases to the English merchant. I could mention whole trades which, thirty years ago, were entirely carried on by English houses, in which at the present moment scarcely one is to be found; their places have been entirely supplied by foreigners, who establish branches of their houses here and in the manufacturing districts, while the main establishments (almost all under the commandite principle) are abroad."
He admitted that there were many passages in these Reports which were not favourable to the Bill; but since 1853, when they were drawn up, public opinion
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had much advanced with regard to this question. He had not heard any of their lordships, with the exception of the noble Earl (Earl Grey) adduce any arguments in opposition to the principle of Limited Liability, and many of the objections which the noble Earl had brought forward in opposition to the details of the Bill were perfectly unfounded. Among other things, the noble Earl said that there was no limit to the number of partners in a Joint-stock Company—but it was a mistake to suppose that any two or three people might form a partnership under the Bill, for the minimum number of persons who could do so was twenty-five. The noble Earl seemed to think, because the conditions of the Joint-stock Companies Act were not recited in this Bill, that there would be no conditions imposed by this measure on the establishment of Companies based on limited liability. That was entirely a mistake. The first clause of the Bill declared that any Joint-stock Company formed under its provisions would be entitled to the privileges of limited liability only under certain conditions, and all the restrictions of the Joint-stock Companies Act against fraudulent associations and bubble schemes would apply to the partnerships created under this Bill. The Joint-stock Companies Act, no doubt, might be capable of improvement; and, if he continued to hold his present office, it was his intention next year to introduce a Bill to amend that measure in points that past experience of its working had suggested, to simplify the proceedings under it. The noble Earl said that gigantic frauds might be committed by bodies of directors under this Bill, but similar frauds were equally possible under the existing state of the law; and, so far from this change having a tendency to encourage bubble Companies and fraudulent enterprises, it was likely to check them; because at present, the public were induced blindly to trust to the appearance of a few wealthy names, placed as decoy ducks at the head of unsound undertakings, believing that, however badly the business might be conducted, they could always, in case of default, come upon the richer partners who were unlimitedly liable; whereas, if it were understood that the liability was limited, men would feel that it was only by prudence in the management of their business that they could keep themselves safe. With regard to the noble Earl's six or seven different propositions, if they

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were to be all fully discussed, as he suggested the Bill could not emerge from Committee for weeks. If, however, any additional securities could be introduced into the measure, the Government would be happy to consider them in that House. Bills involving a vast variety of details and much machinery were, no doubt, advantageously referred to select Committees; but this measure was almost entirely composed of the principle, and the question whether the parts of it which were omitted in the other House should now be restored might be as well discussed in that House as upstairs in a Select Committee. The adoption of the course recommended by the noble Earl would also be most unwise, and would create much misapprehension in the country, by whom it would be considered that the object of sending it to a Select Committee was to destroy the Bill, and not to improve it.
LORD MONTEAGLEcomplained of the disingenuous manner in which the arguments for referring the Bill to a Select Committee had been met. The noble Earl (Lord Grey) who suggested that proceeding had not condemned the principle of limited liability, under all circumstances; but he wished to examine carefully whether it was proposed in this Bill to apply it in a form that would be safe to the commercial community; and he argued, most justly, that it was necessary for the purpose he had in view to subject the Bill to the calm discussion and examination of a Select Committee. The noble Lord the President of the Board of Trade had quoted the opinions of one of the Commissioners in defence of the Bill; but the Bill recommended differed evidently from that before the House. Mr. Bramwell considered that limited liability ought to be accompanied with efficient safeguards and restrictions; no such safeguards were here provided. The Government themselves had recognised the same necessity, for in their Bill, as originally introduced, they had inserted checks and safeguards, which most unfortunately had been expunged from the Bill now recommended their Lordships. With respect to the alleged advantages to be derived from the operation of this Bill, in its effect and ordinary commercial undertakings, he thought such favourable anticipations altogether unfounded, for there was not an instance on record of the successful application of a chartered joint-stock principle to ordinary commercial objects which could be carried on by private enterprise;
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it is only when the nature and magnitude of an enterprise is beyond the reach of an ordinary partnership. The most striking illustration of such failure of the joint-stock principle applied to commercial pursuits was that of the East India Company, which had notoriously failed as a commercial undertaking. He felt great alarm at the principle on which this Bill was defended in another place. A most unfortunate delusion had, for the first time, been held out to the community of England as a truth. It was suggested that there was an opposition of interest between the capitalist and the industrious classes, thus representing the capitalists as the enemies of productive labour. The arguments professing to be drawn from experience are equally fallacious. If foreign authority was appealed to in favour of the principle of limited liability it ought not to have been relied upon apart from the precaution with which that principle was guarded in foreign countries; for instance, it behoves Parliament to consider and to adopt the precautions with which it was wisely associated by law in America. He doubted, even with these precautions, whether the principle was so successful in the United States as was pretended; compare the commercial character, the state of credit, and the transactions on the Broadway at New York and in England, and he would ask which of the two countries stood the highest in respect to all that characterised its commercial men? It was said that the state of things in France was a recommendation in favour of the proposed change. It was asserted that there was a great deal of capital uninvested in this country Which this Bill, and the Companies formed under it, was expected to bring into action. But was there not also much unemployed capital in France, where the principle of limited liability existed? But had the limited liability principle called into action all, or any great part, of the unemployed capital of the latter country? What had recently occurred there? Why, that there was such a mass of unemployed capital lying in the hands of small proprietors in France, that 176,000,000 l. had been tendered as a subscription by them towards the last open loan. French capital had thus been previously lying dormant, at a time when the principle of limited liability was in full operation, and had long been sanctioned by law. The events, therefore, that had recently taken place in Franco went to disprove the

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supposition that the adoption of the principle of the société anonyme, or société en commandite, would necessarily call out and keep in activity the unemployed capital of this country, if such unemployed capital were proved to exist. He believed the effect of the Bill would be, that a certain amount of capital, not now in a latent or dormant state, would be diverted by gambling speculations from the better purposes in which it was now employed. It was said that people should be allowed to take care of themselves, and that their own interests would lead them to decide on the course they thought best. If this were universally true, what right, then, had the Legislature to interfere with lotteries? But it had so interfered, and enacted that no lottery should exist in this country, even for the bonâ fide purposes of disposing of property, or for the profit of the State. Since the time of the South Sea Bubble the commercial legislation of Parliament had been directed to curb the spirit of gambling, little goes, bubble Companies, and fraudulent auctions; and he hoped Parliament would not now for the first time take a step in the contrary direction. He also contended that this Bill, instead of benefiting the poorer classes, as had been urged in its favour, would do them harm. They would possibly see Companies created under this Bill; but what description of Companies? The payment of a few shillings on shares would be sufficient to bring a Company into activity. Did their Lordships believe that these bubble Companies would be got together for the purpose of carrying on a trade? No; one object would be to organise a paid staff of officials who would make a profit on the mere salaries they would receive. Again, another class of men would engage in these Companies, not for the legitimate purposes of trade, but for the purpose of making a traffic in their shares. These and other abuses were proposed to be guarded against by the Government Bill, as introduced into Parliament. But in an evil hour they had been induced to abandon their deliberate intentions, and to adopt the present Bill. Yet, even under these circumstances, the proposal is not to reject the Bill, but to examine its provisions carefully. He thought so reasonable a proposition as that of his noble Friend (Earl Grey) for referring this Bill to a Select Committee could hardly be resisted with common decency. There would be a greater loss of time in
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discussing the measure in a Committee of the whole House than there would be in discussing it in a Committee up stairs. But the Bill is said to be recommended by its popularity. If this argument were sound, on what evidence does it rest as a fact? What petitions had been presented to their Lordships' House in favour of this Bill? He knew of none; nor did he know of any great commercial authority which had recommended the measure now under consideration for their Lordships' adoption, creating, as it did, a limited liability without the addition of any sufficient safeguard or protection. On those grounds he should support the Motion of his noble Friend (Earl Grey), and should he be placed on the Committee, which it was proposed to appoint, he should endeavour to render the Bill, if not useful, yet, at least, as innocuous as might be.
LORD REDESDALEsaid, he should support the motion that the Bill be referred to a Select Committee, because he was most anxious that if the Bill was to be proceeded with at all in that Session, all necessary amendments should be introduced into it in order to make it a safe measure; and he thought that some provision should be inserted, as a protection to poor persons, preventing very small Companies being set up under the Bill, for, otherwise petty Companies of all kinds would be set afloat by lawyers for the purpose of getting long bills paid to them for their services in promoting the schemes. The more he examined the Bill the more he was convinced that it was inconsiderately prepared, and that it required the greatest possible Amendment. Existing Companies would be permitted to come within the operation of the Bill, but no provision was made to ascertain their solvency. Many of the registered Companies now existing consisted of 5l. shares, but under the proposed law those shares must be doubled in amount. He conceived it would be a great hardship to compel the shareholders in those Companies to double the amount of their shares and thus double their liability, and some provision should be made to meet that case. He then came to the third clause, which permitted existing Companies to adopt the principle of limited liability, and he found that no provision was made as to the amount of their shares nor for any inquiry as to their solvency. He thought it highly necessary that there should be a strict independent audit of the

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affairs of existing Companies. He would propose, if the House went into Committee, to add a clause to the effect that some reserve should be formed to meet the liabilities of Companies in the event of insolvency. He thought that 20 per cent. upon the amount of the shares should remain uncalled up until the Company should be wound up or found to be insolvent. That was the least protection that could be afforded to the creditors of those Companies. He considered, also, that a public audit was necessary to prevent the payment of large dividends out of capital with a view to raise the value of shares in the market, although the Company might be practically insolvent at the time. It was impossible at the present moment to give notice of all the Amendments which the Bill required, but he should propose to add at the end of the Bill a clause, that nothing contained in the Act should exempt any Company from any provisions in any future Act of Parliament which might be passed for the better regulation of such Companies. He then came to Clause 8, which related to the mode of proceeding to execution against Companies, and he found that it differed from the provisions in the Joint-stock Companies Act, inasmuch as in the latter execution was to issue upon the order of the Court, or of a Judge of the Court in which proceedings were taken, while the present Bill only permitted execution to issue upon the order of the Court. The consequence of the variation would be that, as no order could be made by a Judge at chambers, no proceeding for execution could be taken during the long vacation. The alteration would also increase the expense to creditors. The Bill did not prescribe any qualification for directors, who might be persons holding only single shares, and whose liability would consequently be of the most trivial description. He was satisfied that whatever pains they might take in a Committee of the whole House, it would be impossible to bring the Bill into a satisfactory shape. It would be impossible to discuss Amendments or new clauses, for noble Lords had net had time to prepare them. He thought the least the Government could do was to adjourn the consideration of the Bill to another day, by which time Amendments might be prepared. He hoped the speech he had made in asking a question upon this subject would be answered, and some explanation given why the Government treated that House differently from the other House of Parliament, where measures, sent
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down by their Lordships at an early period of the Session, were now withdrawn, upon the ground that there was not time fairly to consider them. The true principle of all legislation was to legislate carefully, and not send forth crude and improper measures upon important subjects. No one could doubt this was an important subject, and he entreated the Government either not to press the Bill at present, or to accede to the proposition of the noble Earl and grant a Select Committee.
EARL GRANVILLEsaid, he had a public duty to perform, and it appeared to him, after what had taken place, it was impossible to agree to the proposition of his noble Friend; for nothing could stultify the House of Lords more than to ask it one day to pass a Resolution that this was a measure of urgency, and the next day to say, it was no question of urgency whatever, and the Government were quite prepared to withdraw the Bill. The question of referring it to a Select Committee had been put very fairly by the noble Lord (Lord St. Leonard's) who was in favour of limited liability and wished to bring the subject to a satisfactory settlement. That course was also supported by his noble and learned Friend (Lord Campbell), who, however, let fall the rather ominous expression, that the object was to make the measure perfectly innocuous, or, he feared, in other words, entirely to destroy its efficiency. With regard to his noble Friend (Earl Grey), there was hardly a person in that House whom he was more sorry to see against, or glad to see with him. His noble Friend, however, like most men of active minds, was apt to raise objections and when he did object to a measure nothing escaped his clear and comprehensive mind, which, like the trunk of the elephant, was capable of taking up the largest or the smallest things at pleasure. It was only two days ago that his noble Friend said he absolutely knew nothing of the Bill. He had his misgivings at the time that his noble Friend would in twenty-four hours find some objections, but he was hardly prepared for the utter denunciations of limited liability and of the Bill with which the noble Earl had favoured them, that the Bill was utterly unimprovable, and, although he would do his best to improve it in a Select Committee, it was almost hopeless. He asked their Lordships whether that speech was very encouraging to one who felt it his public duty to insist upon passing this Bill? He was aware of

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the value of a Select Committee, but he was not sure that this Bill was very well suited for it. The Bill adopted the principle of limited liability. The chief safeguard was publicity, and that was insisted upon in the Bill. Every suggestion of further safeguard would, he believed, be entirely illusory, giving great impediments to shareholders, while it encouraged creditors to think there were safeguards to which they might look, instead of regarding all these Companies with suspicion, and only trusting them when they saw their business conducted in such a manner as it would be by honourable men. The description given by his noble Friend of a Company formed for the mere purpose of defrauding the public, going on, not for six or twelve months, but for ten or fifteen years, all the original proprietors making immense fortunes, and the Company then voluntarily becoming bankrupt, was the greatest stretch of imagination he had ever heard. He believed this House was fit to deal with matters in Committee of the Whole House. He could not see in what single respect it was inferior therein to the House of Commons. Their Lordships were certainly calm and patient, and among them were some men well conversant with the business and forms of legislation. If it were to be settled that all important Bills were to be discussed in secret in that House, why should not the same principle be adopted in the House of Commons. The public would then only hear the great principles on which a measure was founded, and would know nothing of the arguments which produced certain decisions on particular clauses. Everybody who had recommended the Bill being referred to a Select Committee had done so with the view to introduce restrictions, and, if restrictions were to be introduced, he was quite sure the large mass of the middle classes ought to be well informed of the arguments upon which they were adopted. For these reasons, and not from any want of respect to their Lordships, he must oppose the going to a Select Committee.
LORD CAMPBELLsaid, the problem was to find a legislative measure which would allow of the formation of an association on the principle of limited liability without application to the Board of Trade, to Parliament, or to the Government for the time being. He (Lord Campbell) was under the impression that the measure would lead to infinite litigation, and if his
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noble Friend had made up his mind that there should be no Select Committee, he (Lord Campbell), if there was a division, would certainly divide with the noble Earl.
LORD ST. LEONARDSbelieved that if the Bill were referred to a Select Committee for two or three hours the Bill might be made satisfactory to the country.
On Question, Whether to agree to the said Amendment? Their Lordships divided:—Content 11; Not Content 28: Majority 17.

List of the CONTENT.

EARL.

Redesdale

Grey

Dynevor

VISCOUNT.

Hawarden

St.Vincent

Harrington

BARONS.

St. Leonards

Campbell

Wynford

Monteagle

Waldegrave

Resolved in the Negative: The original Motion agreed to, and House in Committee accordingly: Then it was moved, That the House be now resumed, objected to; and after Debate, the said Motion was (by leave of the Committee) withdrawn.
Clause 1.
LORD MONTEAGLE LORD MONTEAGLE moved an Amendment to the effect that the capital of a Company established under the Act should not be less than 10,000 l., divided into shares of not less than 25 l. each.
THE LORD CHANCELLORopposed the Amendment on the ground that it could do no good, but would tend to prevent people who had dealings with these Companies from looking after their own interests, by giving them a false impression as to the capital of such Companies. He considered all these proposed safeguards to be mere illusions, and that if the Bill ought not to pass without them it ought not to pass at all.
LORD CAMPBELLsupported the Amendment as affording a protection to the small trader against petty rivalry. The proposal had actually been in the original Bill, but the House of Commons had struck it out;—that, however, was no reason why their Lordships should not reinsert it.
EARL GREYthought no good argument could be urged against this Amendment, and that the objection which the noble and learned Lord (the Lord Chancellor) had stated to it, if sound, Would equally apply to the entire Bill.
THE DUKE OF ARGYLLthought there was no good argument in favour of the

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Amendment. He denied that it was a function of Government to say that there were certain trades which it was better to carry on by Joint-stock Companies, and others which it was not. How was it possible to draw the distinction? They ought not to dictate either to Companies or to individuals what trades they were or were not competent to carry on. He was astonished at the arguments brought forward by the noble Earl against what he considered to be the principle of the Bill.
LORD ST. LEONARDSsaid, he was astonished that the noble Duke should say there was no good argument for the Amendment, seeing that the Government had themselves proposed 20,000 l., which they afterwards reduced to 10,000 l. Now, however, the Government disclaimed their own performance. The measure must surely have been a Cabinet one, yet the noble Duke appeared not to have been cognisant of its provisions. As to Parliament having no right to interfere in such matters, the noble Duke forgot that the very object of this measure was an interference with property, seeing that it took away a part of the security which creditors now enjoyed.
LORD CAMPBELLsaid, that in trading transactions unlimited liability was the rule, and limited liability the exception, and every person should be bound to fulfil his contracts to the utmost extent, unless he could show good reason why he should be indulged with limited liability. He was of opinion that under the circumstances the Amendment to fix the minimum capital of these undertakings at 10,000 l. ought to be adopted.
THE LORD CHANCELLORsaid, that if a number of persons joined together and made a certain stock liable for their engagements they fulfilled their contract; and the object of the Bill was to enable them to enter into a limited instead of an unlimited engagement.
On Question, their Lordships divided; Content 9; Not Content 18; Majority 9.
EARL GREYthen proposed an Amendment, to the effect that Companies should consist of not less than twenty-five shareholders.
LORD STANLEY OF ALDERLEYagreed.
Clause, as amended, was agreed to.
Clause 2.
EARL GREYproposed to add in line thirty-five, after the word "liability," the words "after the affairs of the Company
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shall have been audited by some person appointed by the Board of Trade, and a certificate from the said Board that the complete solvency of such Company has been established to the said auditor's satisfaction."
Amendment agreed to; clause as amended, agreed to.
Clause 3, with a similar Amendment, agreed to.
Clause 4.
LORD CAMPBELLproposed an Amendment to the effect that all negotiable securities issued by Companies with limited liability should have that fact mentioned on them.
Amendment agreed to; clause as amended, agreed to.
Clause 5.
EARL GREYobjected that the clause did not, in its construction, provide that a surplus should be in the hands of Companies beyond their liabilities. He held it as a principle that all Joint-stock Companies should have a fixed property beyond their fixed capital, upon which their creditors could come. He should, therefore, move as an Amendment, "That there be 20 per cent of the capital retained as a reserve fund, to meet any liabilities of the companies."
EARL GRANVILLEobjected to the clause, because its only effect would be to make the shares 20 per cent more than was required. It was much better that the creditors should not look at all to these safeguards.
LORD CAMPBELLthought the Amendment contrary to the principle of the Bill.
LORD MONTEAGLEsubmitted, that every well-conducted Company should make a reserve.
THE DUKE OF ARGYLLsaid, they might make a reserve for trading purposes, but this clause would keep 20 per cent from the operations of the Company for the sake of the creditors.
Amendment negatived; clause agreed to.
Clause 6.
EARL GREYsaid, there had been a practice on the part of some Joint-stock Companies to make delusive and fraudulent dividends, and the only check would be to institute an independent audit. He should propose to adopt as his model the Bill introduced by the noble Earl (Earl Granville) on the subject of railways, and to move the insertion of a clause providing that the Commissioners for Auditing the

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Public Accounts should appoint competent persons from time to time to audit the accounts of Joint-stock Companies entitled to limited liability. If this clause were adopted, he purposed to follow it up by another, giving the necessary powers to the officers so appointed.
EARL GRANVILLEdoubted, whether the two cases of railways and the Companies to be formed under this Bill were analogous. It would be impracticable to have a system of audit for these associations of the kind he had once proposed for railway Companies.
LORD MONTEAGLEbelieved, there would be some difficulty in instituting an independent audit of these Companies, but the experiment was worth trying.
LORD CAMPBELLthought, there would be greater difficulty in carrying out a system of audit with these Companies than with railways.
LORD DENMANsaw no objection to the appointment of one independent auditor.
LORD STANLEY OF ALDERLEYthought increased expense would be entailed on the Companies by the adoption of the noble Earl's proposition.
EARL GREYcould not understand how his Amendment could involve any additional expense. Its object was to correct an abuse which was known to exist, and no valid objection to it had been stated.
In reply to LORD CAMPBELL,
EARL GREYstated that, if his Amendment should be adopted, he proposed to follow it up with a clause conferring upon the auditors the same powers which were possessed by the auditors appointed under the Joint-stock Companies Act.
LORD CAMPBELLthought that if there was to be an audit, it was imperative that it should be of an independent character, and the appointment of auditors by a public department would not involve any greater difficulty or expense than would be incurred by the appointment of auditors by the Companies themselves.
On Question, their Lordships divided; Contents 10; Not Contents 18; Majority 8.
EARL GREY,adverting to the diminished
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number of Peers in attendance, moved that the House do now resume.
After a short discussion on Question, resolved in the negative.
Clause agreed to.
Clause 8 agreed to.
EARL GREYthen moved to insert a clause providing that if the directors of any Company formed under the Bill declared and paid a dividend when the undertaking was insolvent, they should be jointly and severally liable for the whole of the debts of the Company; exemption, however, to be allowed to any director who was proved to have resisted the declaration of such dividend. A provision of this kind had been found necessary in America and in other countries where limited liability prevailed.
LORD STANLEY OF ALDERLEYopposed the clause on the ground that it created a difference in the liability of shareholders and directors, and said that if it were inserted there would be great difficulty in getting respectable persons to become directors.
EARL GREYsaid, that a similar provision was in force in all other countries in which the principle of limited liability was in force.
LORD DENMANobserved, that no respectable directors would ever be guilty of such conduct, but it was exceedingly desirable to introduce such safeguards into this Bill, notwithstanding its coming on so late, as would render limited liability as safe in England as it is in France and America, where the law of bankruptcy is exceedingly severe, and fraudulent bankrupts are returned by extradition from this country to France, while no law renders our bankrupts liable to the same consequences. No doubt "silent leges inter arma," but it is not too late to make this a most beneficial measure, and both safety and honesty will be forwarded by this Amendment, which, proceeding from whichever side of the House it might, he (Lord Denman) would have felt it his bounden duty to support. The great principle is that of the motto inscribed on the Town Hall of Verviers, in Belgium, "Publicitas salus populi," and directors will, like the commandites in France, and the heads of firms having special partners, in America, each of whom is constantly so liable, become liable to the full amount of their fortunes, if they unfairly and secretly risk the property entrusted to them, on limited liability; while the creditors will

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be more ready to trust those who have a paid-up capital and a considerable share of responsibility for its management.
THE LORD CHANCELLORsaid, that he did not see any objection to the clause.
Clause agreed to.
EARL GREYthen proposed the addition of a clause, declaring that no note of hand given by a shareholder should be considered as payment of capital stock—that no loan should be made to a shareholder—and that any officer of a Company making one should be liable to the full extent of the sum so lent.
Clause agreed to.
EARL GREYthen moved a clause, enacting that no Company should be allowed at any one time to contract liabilities to a greater amount than their capital.
After a short conversation,
Clause withdrawn.
EARL GREYthen moved a clause, adopted, like the former ones, from the laws of the State of Massachusetts, subjecting the directors or officers of any Company to unlimited liability in case they were guilty of wilful false representation in any notice or account given or rendered by them in pursuance of the provisions of this or any other act.
THE LORD CHANCELLORsaid, he did not object to the principle of the clause, but he thought that the wording would require alteration.
EARL GREYsaid, under those circumstances he would withdraw the clause, and propose it in an amended form on the bringing up of the Report.
Clause withdrawn.
Clauses 9 and 10 agreed to.
LORD MONTEAGLE LORD MONTEAGLE moved a clause directing the winding up of the affairs of any Company which had lost three-fourths of its subscribed capital.
THE LORD CHANCELLORopposed the clause as unnecessary. The winding-up Act would meet the case.
Clause agreed to; as were also clauses 11 and 12.
Clause 13 and 14 struck out.
Preamble agreed to.
House resumed.
LORD REDESDALEhoped that sufficient time would be given for the consideration of the Report, and with that view he proposed that the Bill should be reported on Monday.
EARL GREYagreed in every word that had fallen from his noble Friend.
After a few words from Lord CAMPBELL,
EARL GRANVILLEsuggested that the third reading of the Bill should be fixed for Monday, and they would then have ample time to consider the Amendments.
EARL GREYprotested against an important commercial measure of this kind being forced through the House without time for consideration.
EARL GRANVILLEconsidered that no Bill had received more consideration during the Session. No Bill had been more fully discussed in detail, or with more ability.
The Report of the Amendments to be received To-morrow.
House adjourned till To-morrow.