Sitting of 1 February 1856

MINUTES.
PUBLIC BILLS.—1° Partnership Amendment; Joint-stock Companies.

TENANTS' COMPENSATION (IRELAND) BILL—QUESTION.
MR. VINCENT SCULLYsaid, he would beg to ask the noble Lord at the head of the Government what were the precise intentions of Her Majesty's Ministers as regarded the Tenants' Compensation (Ireland) Bill; and whether it was intended to introduce it as a Government measure, and pass it through its several stages early in the present Session?
VISCOUNT PALMERSTON: Sir, it will be in the recollection of the House that last year a Bill upon this subject was brought in by an independent Member, which at his request was afterwards adopted by Her Majesty's Government, and that we undertook to do all we could to carry it through the House. We redeemed our pledge; we made every effort which we could to induce the House to pass the measure, but we met with difficulties from quarters where we least expected them. And, indeed in truth, I am obliged to say, that some of those difficulties have proceeded from the very quarter from which the request had been made
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that we should undertake the conduct of the measure. A good deal of time was spent in discussions upon the subject which resulted in no successful issue, and certainly the encouragement which we received last year was not such as to induce us to undertake the same task in the present Session. Under these circumstances I have to state, that it is not the intention of the Government either to propose any measure upon that subject, or to take charge of any such measure if it should be brought forward by an independent Member.

THE GUARDS' MEMORIAL—QUESTION.
VISCOUNT GODERICHsaid, he wished to ask the hon. Under Secretary of State for War whether the attention of the noble Lord the Secretary for War had been directed to a memorial lately addressed by the colonels of the respective regiments of Foot Guards to Her Majesty the Queen; and whether it was the intention of the Government, in consequence of the representations of that memorial, to make any alteration in the warrant regulating promotion and retirement in the army, dated the 6th day of October, 1854?
MR. FREDERICK PEELsaid, that the memorial in question had been brought under the consideration of the Secretary for War, and the delay that had occurred in answering it had arisen from the necessity of going carefully into the statistical returns on which it was based. But he (Mr. Peel) was already able to say that the inquiry into those comparative tables had been carried far enough to show that the memorial had been founded on an error in calculation; and that there had, in reality, been no such difference as the memorialists supposed in the promotion of officers of the Guards and of officers of the line. He could not say, therefore, that there was any prospect of an alteration being made in the warrant of the 6th of October, 1854, in consequence of that memorial.

ALIEN ACT—COLONEL TÜRR— QUESTION.
MR. T. DUNCOMBEsaid, he wished to inquire whether it was the intention of the Government to introduce any Bill for the alteration or amendment of the laws affecting aliens. He also wished to ask whether it was true that the release of Colonel Türr by the Austrian Government had taken place, and whether that officer

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was at liberty to return to the employment of the Crown of England? The noble Lord, perhaps, would at the same time have the kindness to state what steps were taken by Her Majesty's Ministers with respect to that gross violation of international law, as regarded Turkey, and insult to the Crown of England?
MR. ROEBUCK: Perhaps the hon. Member will allow me to suggest an addition to his question.
MR. T. DUNCOMBE: Perhaps my hon. and learned Friend will amend my question after hearing the reply of the noble Lord.
VISCOUNT PALMERSTON: With regard, Sir, to the first question of my hon. Friend, I have to state that Her Majesty's Government have at present no intention of proposing any new law upon the subject. As to the second question, I have the satisfaction of stating that the result of communications which have passed between Her Majesty's Government and the Government of Austria has been that the Austrian Government have declared themselves ready to deliver up Colonel Türr to any military authority which may be authorised by this country to receive him, and he will therefore be perfectly free to perform any duty which may be assigned to him. With regard to the request to have the whole of the communications which have passed between the two Governments, I think the House will be of opinion that, as the matter has ended in a satisfactory manner by the liberation of Colonel Türr, it is useless going into those details. The question was not altogether so simple as my hon. Friend imagines. It was complicated by a great variety of conflicting circumstances. All I can say is, that while, on the one hand, the Austrian Government have insisted on the assertion of certain rights, on the other hand they have shown every disposition to meet the wishes of Her Majesty's Government as far as was consistent with the rights which they deemed it their duty to maintain. The result was that Colonel T—uuml;rr was tried by a military tribunal on a charge of desertion from the Austrian army. He was convicted of that offence. The transaction was perfectly well known, and he never denied it. The conviction having taken place, the Austrian Government, in deference to the wishes of Her Majesty's Government, immediately ordered Colonel Türr to be released in the manner I have described.
MR. ROEBUCK: Allow me now to put my emendation of the question—whether Colonel Türr is liberated without indignity?
VISCOUNT PALMEESTON: As far as I am aware, there is nothing further than a pure and simple liberation.

JUVENILE REFORMATORIES.
On the Question that the House at its rising should adjourn until Monday next,
SIR JOHN PAKINGTONsaid, he rose, pursuant to notice, to ask the right hon. Baronet the Secretary of State for the Home Department what were the intentions of Her Majesty's Government with respect to the future support and regulation of Juvenile Reformatories? He would not detain the House at any length upon that occasion, when he was aware that he could not address them except by an abuse of the forms of the House, although that abuse was one to which the House itself had repeatedly given its sanction. His object was to ascertain what were the intentions of Her Majesty's Government upon a subject which was at present exciting very considerable interest in the country, and which, in his opinion, required the careful attention and the decided action of the right hon. Gentleman at the head of the Home Office. It was his belief that the House and the country were hardly aware of the magnitude which that question had assumed within a very short period of time. He believed he was not at all exaggerating when he stated that upwards of thirty counties had already either established reformatory institutions, or were engaged in doing so. But he believed he was also right in saying that hardly any two of those counties acted in the matter exactly with the same objects, or exactly on the same principle. Some of them had raised the necessary sums of money to build very large establishments, while others had appropriated mere cottages for the reception of juvenile offenders. Again, some of them had resolved on subscribing considerable sums annually for the maintenance of those establishments, while others had made no such provision for the future. It appeared that in some counties a strong opinion prevailed, in which he confessed that he shared, that the support of those institutions ought not to be left to the efforts of private charity. He wished further to remind the House, that while those establishments were springing up in every direction, they were springing

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up without any regulation having been laid down for their government; and he doubted whether the public were aware of the very large powers which the Act passed two years ago had conferred on all the Courts of this country—not only on the principal Courts—not only on the Courts of Assize and the Courts of Quarter Sessions, hut on every Court of Petty Session—on every Court in which two justices sat. These latter Courts, as well as the superior Courts, had the power, without the intervention of a jury, of confining those juvenile criminals for a period of five years; and that large power was given without any regulation having been laid down by the Government or by Parliament for the purpose of providing that due care should be taken of those youthful criminals during the time of their detention. They were left to the discretion, or the want of discretion as the case might be, of men who were animated, he admitted, by the most admirable motives, but many of whom were enthusiasts, who ought hardly to be trusted with the duty of carrying out such a system. Then, again, he was not aware that the scanty security taken by Parliament for the proper management of those establishments in requiring a certificate in their favour from a prison inspector—he was not aware that that scanty security was enforced by the Government in a manner that could ensure its operation. He believed the inspector might recall within a certain time the certificate he might have given. But he wished to know from the Home Secretary whether the Government had called for any Reports with respect to those establishments. In his opinion it was not only desirable that such Reports should be obtained by the Government, but they ought even, he thought, in consequence of the magnitude which the question had assumed, to be laid before Parliament from time to time. Another point was that there was no security for the continuance of these establishments when once they were set on foot. The Government at present allowed 5s. a week for each boy confined in those establishments; but it was notorious that that sum was insufficient to defray the expenses actually incurred, and it was generally understood in the counties anxious for the establishment of Juvenile Reformatories, that a sum of £300 to £400 a year should be raised by charitable contributions for their maintenance, in addition to the sum obtained from the State. Now he wished to remind
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the House and the Government that the existence of those establishments involved two most important social questions. It involved the administration of the criminal law, and it involved the care and the training of thousands of young criminals scattered all over the country; and that being the case, it appeared to him that the matter ought not to be left in its present state, but that the Government were bound to extend to it their care and supervision. He thought it was most desirable that the House and the country should know at once whether Her Majesty's Ministers intended to propose any further legislation upon that subject during the present Session, lie believed that legislation with respect to it was necessary, and he wished to know whether the Government coincided with him in that belief, and, if so, how far they were disposed to carry it into operation?
SIR GEORGE GREYsaid, that the question to which the right hon. Gentleman had directed the attention of the House and of the Government was one of undoubted importance. But before the House committed itself to the opinion that the present law upon the subject ought to be altered, and before the Government could pledge themselves to propose any such alteration, they should recollect what had already passed upon the matter. Only two years ago the Act had been passed, chiefly through the exertions of the hon. Member for North Staffordshire (Mr. Adderley), by which the present system of dealing with juvenile offenders had been established, and established avowedly as an experiment. It was then thought desirable that institutions should be sanctioned in which juvenile offenders who had undergone a penal sentence on correction, should afterwards be subject to a training, having for its object to redeem them as far as possible from those habits of vice and crime in which they had been early initiated. By that enactment, it was provided that if a prison inspector should report that any such institution was useful and efficient for the purpose of a juvenile reformatory, after a certificate to this effect from the Secretary of State, juvenile offenders on the expiration of their sentence might be committed to it for a term not exceeding five years, and a certain sum might be paid by the State for the maintenance of the children confined in it. The right hon. Gentleman wished to know the course pursued in these cases. In

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reply to that question, he could state that a detailed report was made by the inspector, stating the grounds upon which he considered that the particular reformatory school was entitled to a certificate, and there had been instances in which, upon the report of the inspector, the certificate had been withheld.
SIR JOHN PAKINGTONsaid, he wished to know whether any steps would be adopted to prevent the increase of such schools, until the general principle upon which they were to be conducted should he settled, and also if there were to be periodical reports as to the state of the existing reformatories?
SIR GEORGE GREYsaid, that many such schools were now in the course of being established, and meetings had been held throughout the country in promotion of the object. The existing Act provided for the revocation of the certificate in case they should not be conducted in a satisfactory manner. It was clear, therefore, that there must be a periodical inspection and periodical reports from the inspectors as to the condition of those institutions. He agreed with the right hon. Gentleman opposite that those reports ought to be laid before Parliament. As Parliament had decided two years ago that the experiment should be tried through the agency of gentlemen actuated by very benevolent motives, who had devoted a great deal of time and money to the object of reforming offenders, and as their efforts had hitherto been attended with success, twenty-five reformatory schools in Great Britain having been certified under the provisions of the 17 & 18 Vict., see. 38, in addition to those certified under another Act of Parliament, applicable to vagrant children in Scotland, it appeared to him that it would be inexpedient to interfere with an Act that was working upon the whole most beneficially, until some further experience had been obtained of the effect of its operation. The right hon. Gentleman had remarked that some of those institutions were very large, while others were very small. Undoubtedly such was the case, but as an experiment it was desirable that it should be tried in establishments of different kinds. He did not believe that the right hon. Gentleman was correct in stating that some of those which had been certified were held in mere cottages—although there might be temporary buildings hired for the purpose—because such buildings would be inconsistent with the safe detention
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of the inmates. In connection with this subject, he noticed that there had been a petition presented that night by the hon. Member for East Somersetshire (Mr. Miles), praying that power might be given to county magistrates to establish reformatory schools out of the rates. If this were done, he (Sir G. Grey) doubted whether the result would be beneficial. The institutions in that case must come within the penal establishments of the country, and the Government must frame the regulations under which they were to be conducted, which would take the management of them in great measure out of the hands of those benevolent individuals to whom he had before referred, and would, therefore, hardly meet the views of the right hon. Baronet opposite. Then, again, he was by no means satisfied that a permissive power to establish and support such institutions out of the county rates would be generally exercised, and it would be necessary to make it compulsory upon counties and boroughs to establish and support those institutions as they did prisons and lunatic asylums. What had been the result of the Act passed two years ago for the purpose of establishing a reformatory in the county of Middlesex? Although the powers of that Act were not permissive but compulsory, it had not yet been established. A committee of the magistrates had taken measures for its formation; but though a year and a half had elapsed since the Bill was passed, nothing decisive had as yet been done in the matter, while in other counties where no such power existed such institutions had already sprung up. He wished, however, to guard himself from saying that, after the experiment had received a fair trial, an alteration of the law might not be desirable. He had likewise been asked whether the Government were willing to alter the mode of passing sentence, the Act at present prescribing the insertion of the name of a particular reformatory establishment to which the boy should be sent. There must be some limit as to the place; and if, under the present state of the law, the system should become general, he did not anticipate that any inconvenience would arise, inasmuch as a magistrate of Devon would naturally send a boy convicted before him to the Devon reformatory, or if any difficulty arose in consequence of overcrowding the establishment, the Secretary of State had always power to remove the children to another

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reformatory. He thought there would be great objection to repeal altogether the existing restriction in the Act as to the reformatory to which a boy is to be sent, though this point may require further consideration.
MR. MILESsaid, he thought the suggestions contained in the petition to which reference had been made by the right hon. Baronet (Sir G. Grey) were such as were calculated fully to carry out the objects contemplated by the Legislature. When the House considered the enormous number of children to whom such institutions were applicable, and how few were at this time in existence, it would perceive that at present it was impossible that anything like justice could be done to the boys themselves. The right hon. Baronet had stated that no county reformatory had yet succeeded; but he (Mr. Miles) would refer the right hon. Gentleman to the Devonshire Reformatory, which had accomplished a vast amount of good. The difficulty of getting proper persons to superintend and manage such establishments was well known, but that difficulty would in a great measure be obviated by the establishment of large county reformatories, where masses of children might be placed under one general treatment and discipline. He hoped that, notwithstanding what had fallen from the right hon. Baronet opposite, the House would recognise the necessity of such institutions, which had become more than ever apparent since the cessation of transportation; and that, as it was much to be feared that the older classes of criminals were in too hopeless a condition to be influenced by such measures, care would be taken to endeavour to influence the minds of juvenile offenders, and thus rescue thousands of miserable children from the gulf of sin. In order to show that reformatory schools on a large scale would be beneficial, he appealed to the success of the establishment at Redhill, and asked whether anything could be better conducted than that institution? Yet Redhill was an uncertified reformatory school, promoted by private individuals, and only sanctioned by the Government to the extent of sending children there in certain cases. Why then, having that power, did they hesitate to put the magistrates in the various counties in a situation to establish similar institutions for the instruction and reform of the young criminals convicted under the Juvenile Offenders Act; and why nut allow them to raise
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rates for the support of such establishments? So strongly were the people of the county of Somerset in favour of their establishment, that for three years they had contributed £500 a year, in the hope that the Government would take the matter up and introduce a general system. In his opinion, the question was one of vital importance, and ought to be taken into consideration as early as possible; he trusted, therefore, that if the right hon. Baronet would not listen to the solicitations made to him from various quarters, and submit a Bill himself, he would not impede the introduction or progress of any sound measure brought forward upon that question, either by the right hon. Baronet (Sir J. Pakington) or any other hon. Member of that House.
SIR STAFFORD NORTHCOTEsaid, that, in order to show the inconvenience attending the present system, he would mention a case which had been brought under his own knowledge a fortnight ago. A boy had been convicted by the magistrates of Dorsetshire, in which county there was no reformatory, and had been ordered to be sent to the Devonshire school. When the communication was made to the magistrates connected with the Devonshire Reformatory, they replied that they had not room. A request was then made to the right hon. Gentleman the Secretary of State, that the sentence might be altered, so that the boy should be sent to another reformatory, where accommodation could be found; but the right hon. Baronet had replied that he could not make the order unless he was received into the Devonshire school in the first instance. As it happened, they were enabled eventually to get him received there; but such might not have been the case, and their object would then have failed altogether. The Act as at present constituted was extremely defective, and he could not see why it should not be permitted to the magistrates to sentence a boy to be sent to some reformatory establishment, leaving the precise school to be afterwards named, apprehending that no difficulty would arise from overcrowding, because the managers of the school would have to certify in the first instance whether they had room or not.
LORD ROBERT GROSVENORsaid, he wished to correct a mistake into which the right hon. Baronet below him (Sir G. Grey) had fallen, with respect to the formation of the Middlesex Reformatory.

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The right hon. Baronet had stated that no practical steps had been taken towards the establishment of a reformatory school for the county of Middlesex, an Act having been obtained enabling its promoters to support it entirely by means of a county rate. So far from that being the case, the very day after the Royal Assent was given to the Act, a committee was appointed to carry it into effect, but extreme difficulty was experienced in obtaining a proper site, which had retarded its establishment. That difficulty had, he was happy to say, now been entirely overcome, and in a short time plans would be submitted for the erection of a school in all respects conformable with the wishes of those who had promoted the scheme. He entirely agreed with the observations which had fallen from the hon. Member for East Somersetshire (Mr. Miles), and entertained a strong opinion that the House ought not to allow the present Session to pass away without giving its sanction to a general measure for the establishment of reformatories.
SIR WILLIAM JOLLIFFEsaid, he wished to point out an anomaly in the present law, in consequence of the existence of which the managers of reformatories had the power to refuse admission to boys who had been sent there by the magistrates. In any alteration of the law such an anomaly ought to be abolished.
MR. MONCKTON MILNESsaid, he must deprecate an irregular discussion on so important a subject at the present moment; but such a discussion having arisen, he thought it right to mention, as a matter of complaint, that a large portion of the West Riding of Yorkshire derived no advantage whatever from the law as it at present existed in reference to this matter, and were obliged to seek a remedy for the evil by other means. If a proper system were adopted, thousands of young men might be prevented from entering into criminal courses which could end in nothing but their own misery and ruin.
MR. ADDERLEYsaid, he joined in the regret that the subject had been brought forward prematurely, but, at the same time, he must admit that there were great defects in the present law; he thought, however, that the Secretary of State would do wisely to wait until he had consulted those practically acquainted with the subject before he attempted to make any alterations. It could not be denied that hitherto the Act had been most successful,
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and he did not believe that any measure had met with a more speedy adoption by the country. In little more than twelve months there had been established, in consequence of that Act, twenty-five reformatories, and what was wanted was, to develop the system more comprehensively throughout the country. The hon. Member for East Somersetshire thought that an Act to enable county magistrates to levy rates, which should be devoted to the establishment and support of such institutions, would be the best plan that could be adopted; but he (Mr. Adderley) did not believe, in spite of what the noble Lord the Member for Middlesex (Lord R. Grosvenor) had said, that institutions founded upon such principles would be successful. Hon. Members must bear in mind that the existing Act enabled the Treasury to make grants that would defray the whole cost of such institutions, and therefore it was in their power at once to meet the object of the hon. Member for East Somersetshire, and he would tell the right hon. Baronet the Home Secretary that, before many days were over, several gentlemen interested in the subject would request an interview with him, with a view of inducing him to increase such grants. The experience, however, of those most competent to judge, induced them to believe that it would not be wise to dispense altogether with private benevolence, but that the Government grants might be considerably increased with great advantage to the community at large. Whatever might be the plans proposed for the amelioration of the law upon the subject, he hoped that the right hon. Baronet would, as he had promised, take the matter into his grave consideration, and not bring forward a measure till he had well considered it. Redhill had been mentioned as an instance of the success of the voluntary system; but although Redhill was governed by a private corporation, it received a greater amount of money from the Government than all the rest of such institutions put together, and had more advantages generally than any other reformatory.
LORD ROBERT CECILsaid he wished to ask whether it was the intention of the Government, in any changes in the law, to do away with the necessity of a previous servitude in prison before sending boys to reformatories? The object, as he understood, was to prevent them from receiving the contamination of a prison, and it

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seemed an anomaly to send them there as a condition of their being admitted into a reformatory.
SIR GEORGE GREYsaid he must decline, on the present occasion, to go into the merits of the question suggested by the noble Lord who had last spoken. The Act was passed only two years ago, when he had not the honour of holding his present office, and he remembered it had then been fully discussed; and he agreed with hon. Gentlemen opposite, that it was inexpedient to treat a question of such a nature with petty legislation and perpetual meddling. All he could say was, that if anything were done by Government on the subject, it should only be after due deliberation, and on the opinions of men possessing knowledge and experience on the subject.
The Motion for the adjournment of the House to Monday was then agreed to.

THE ADDRESS—EDUCATION.
The Report of the Committee upon the Address was brought up by Mr. BYNG.
On the Question that the Address, as reported, be agreed to,
SIR JOHN PAKINGTONsaid, that he did not rise with any intention to revive the discussion which took place yesterday on the subject of the Address, or to depart in any degree from the tone which marked the discussion on that occasion. On the contrary, for himself he most cordially concurred in the tone then adopted, though he could not help remarking that the tone seemed to imply that the two Houses had changed their characteristics, and that solemn dignity had become the characteristic of the House of Commons, and vivacity of debate the characteristic of the other House. His object in now addressing the House was to remark on one of those omissions in the Speech from the Throne which was adverted to in the course of the debates on the previous evening. There were several rather remarkable omissions, but his present object was to comment on one only of them. He found in the Speech from the Throne the following sentence—"There are many subjects connected with internal improvements which I recommend to your attentive consideration." Now, he quite understood that the Ministers, in advising the Speech from the Throne, might have considered that the question of peace or war was, at the present moment, a question of such transcendent and paramount
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interest that that circumstance justified the passing over that reference which the Speech from the Throne usually made to many topics of domestic policy. Still, as the Government advised Her Majesty to advert to questions of internal improvement, he did not understand why it was that they omitted altogether any reference to a subject which, in his humble opinion, was, beyond all comparison, the most important of all internal questions at the present day, and that which excited the greatest interest in the country—he meant the question of National Education. He felt very great disappointment that the Government had altogether omitted such an important subject from Her Majesty's Speech, and he felt the disappointment the more strongly on account of what had occurred in that House last Session. When he then ventured to submit to the House proposals on that great subject, he had expressed a very strong opinion that, among other things, the present constitution of the Committee of Council was not satisfactory, and that the time had come when the large grant annually made by Parliament for the encouragement of education, ought to be under the management of some educational department responsible to Parliament and duly represented in the House of Commons. He had pressed that matter very strongly on the Government, and at a late period of the Session, when he withdrew the Bill he had introduced on the subject, he again adverted to the point, and he now wished to call the attention of the noble Lord at the head of the Government and of the House to the language used by the noble Lord the Member for London (Lord J. Russell), then a Minister of the Crown, and speaking on behalf of the Government of the present Prime Minister, with which the noble Lord was then connected. The noble Lord the Member for London, in the course of his speech, when he withdrew his Bill, after stating the reason why he had thought it desirable in the first instance to constitute the Committee of Privy Council in the shape in which it existed, proceeded to use the following words—
"But circumstances had since changed, and he thought that it would be for the benefit of the public service if the President of the Committee of Council were to be acknowledged as the Minister of Education, and that the department of education should be represented in that House by a person who might, perhaps, hold the rank of a Privy Councillor, and who might be able to

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defend any measure that might be adopted, and who would be prepared at all times to explain the views of the Government with regard to the general question of education. As to the steps necessary to be taken to carry that view into effect, he could assure the House that the whole subject was under the earnest consideration of the Government, and they hoped in an early Session to be able to lay before Parliament a scheme for the regulation of an educational department."—[3 Hansard, cxxxix. 386.]
He thought that language, spoken with the authority of a Minister of the Crown, was perfectly satisfactory, and he heard it with the greatest pleasure. Not long afterwards the noble Lord the Member for London resigned office, and ceased to be a Minister, and, consequently, when the annual Vote for Education came under the consideration of the House, he (Sir J. Pakington) made an appeal to the noble Lord the Prime Minister, and, adverting to what had fallen from the Member for London, expressed a hope that he had spoken in the name of the Government, and not merely in his own name; and that, though that noble Lord had ceased to be a member of the Government, the Prime Minister would consider himself bound by what the noble Lord had said. The noble Lord at the head of the Government met that appeal in the same tone and spirit in which the Member for London had spoken, and, though not formally addressing the House, intimated across the table that the observations of the noble Member for London were concurred in by him, and that he intended to act on them. Considering, then, that the Government last year concurred in those views, and had expressed an announcement of their intention on the subject, it was disappointing that so important a matter had been altogether passed over in silence in the Queen's Speech. While on the subject he could not help adverting to the notice given by the noble Member for London yesterday. He (Sir J. Pakington) stated last year, on more than one occasion, that, having thought it his duty to make some efforts on that great question, the last idea that ever entered his mind was, that of any feeling of rivalry with reference to the noble Member for London, who had so long paid attention to the subject with so much honour to himself and benefit to the country. Indeed, he should be well satisfied in any way to co-operate with the noble Lord if their views should be identical on the question. But he was much disappointed when he heard so high
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an authority as the noble Member for London give notice for March—the Ides of March—that he would then bring forward, not another measure, but only a series of Resolutions on the subject. Of course he (Sir J. Pakington) could not tell what the nature of those Resolutions might be, but he must express his fear that no Resolutions the noble Lord could move would educate the people of this country. The Resolutions, however skilfully framed, would stand on the Journals of the House, while darkness and ignorance pervaded the mass of the population. What the country wanted on the subject was something more tangible. Increased means and increased money for so great an object were wanted in the first place, and, in the second, a better and more effective supervision and control. He feared these objects could only be attained by legislation, and legislation there must be ere long, though it might not be in the present or even in the next year. Of the noble Lord's intentions he wished to speak with the greatest respect. The noble Lord was, doubtless, influenced by the dread of the difficulties of the subject, and might think some other moment more opportune than the present for legislation; but what the country desired was legislation, and a fair but comprehensive measure to supply the great deficiencies now existing. In the meantime, while the question of legislation was pending, it was most important that the management of the grants given by the House and the superintendence of the system, such as it was at present, should be under the management of a responsible Minister, and that the distribution of the grants now given should be controlled by such a Minister. And as the Government, notwithstanding what had passed last year, and notwithstanding the declarations which had been made, had passed over the subject in utter silence, he appealed to the Government in the hope that they would not recede from those declarations, and that they would be prepared to express their opinions and announce their intentions on the subject.
SIR GEORGE GREYsaid, he could assure the right hon. Gentleman that the omission of the subject of the education of the people from the Royal Speech was not caused in the least degree by the Government undervaluing its importance. They had frequently recognised it, but it was unusual to insert any topic in the Speech from the Throne unless the Government

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were prepared to lay before Parliament a measure of some importance with regard to it. The right hon. Gentleman himself, however, seemed scarcely to anticipate the passing of a large and comprehensive measure on the subject during the present Session, and, as the Government had no measure relating to it which could properly be so described, they had not thought it necessary to introduce the topic into the Royal Speech. Still it would be found, from the notices which would be given, and by the Estimates which would be brought forward, that the subject had not been neglected by the Government. A Bill would be introduced in the other House of Parliament by the Lord President of the Council, which, if acceded to by Parliament, would have the effect of greatly increasing the present means of education in the country. That measure, however, could not be called "large and comprehensive," and the Government had not thought it of sufficient importance to be mentioned in the Royal Speech. With reference to the better supervision of the distribution of the funds granted by Parliament for educational purposes, if the right hon. Gentleman had simply asked whether the Government meant to carry into effect the promise made by them last year, he would have received an answer in the affirmative. He had rightly understood the intimation of the noble Lord at the head of the Government, last year, of his concurrence with the opinion before expressed on this subject by the noble Lord the Member for the City of London. It was thought desirable that the distribution of those funds, as well as other duties connected with education, in its largest sense, including matters referring to science and art, which were now under the charge of the Board of Trade, should be placed under the supervision of an individual minister as the head of a department responsible to Parliament, and represented in that House by a Minister, who would be able to answer all questions and give any explanations that might be required. To that intention Her Majesty's Government adhered, and a Bill would be introduced for the purpose of carrying it into effect.

PRUSSIAN NEUTRALITY.
MR. BENTINCKsaid, he rose to direct the attention of the House to certain opinions expressed by the hon. and learned Member for Sheffield (Mr. Roebuck) in
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the course of his speech last night. Anything which fell from an hon. Gentleman of his talents and experience would naturally be diffused widely throughout the country, and command great attention; and it was on that account that he was unwilling to allow those opinions to go forth to the world without some correction. The hon. and learned Gentleman stated his conviction that the people of this country in going to war with Russia had been actuated rather by selfish motives than by any desire for the preservation of Turkey, or the maintenance of the balance of power in Europe. He further stated, too, that in his opinion this country was unable to cope with Russia without the assistance of our great Ally. [Mr. ROEBUCK: I beg the hon. Gentleman's pardon. I said just the reverse.] He was glad to be contradicted on that point at least. The hon. and learned Gentleman also expressed his belief that the result of concluding peace on the terms on which negotiations were now supposed to be going forward would be to put Russia in possession of Constantinople in the course of a certain number of years, and consequently to endanger the security of our Indian possessions. He (Mr. Bentinck) must at once express his decided dissent from those views, and most especially from the latter opinions. He was prepared to pay the fullest tribute of praise to our gallant Ally, during the present war, and he referred with pride to the glorious successes which had attended their combined exertions. But he was disposed to think it was not altogether to those glorious successes the present prospect of peace was to be attributed, and he further contended that England, unaided by any other Power, was able to coerce Russia and compel her to submit to terms of peace. He had had occasion, during the recess, to address his constituents, and he then stated that the vulnerable part of Russia was her foreign commerce, and yet that no attack had been made to put a stop to the resources of Russia in that direction. He contended that the only way to make Russia feel the blow was to enforce the right of search, and take immediate and decisive steps to put an end to that neutrality which had been so profitably turned into account by Prussia during the war. That speech had found its way into the newspapers, and since then he had received a variety of communications, from mercantile and other quarters, in which the writers took the

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same views as he did, and enforced their adoption by very strong arguments. He might especially allude to an article which appeared in a morning organ, which was supposed to express the opinions of the noble Lord at the head of the Government, and to which, consequently, official importance might be attached. The following was an extract from a leading article in The Morning Post, of the 9th of January, in the present year.
"Russia is essentially an agricultural country; her exports consist mainly of raw material supplied to manufacturing nations, and her imports largely of articles of luxury. Her export trade, judging from the quotations of her produce in the markets of Memel, Konigsberg, and other places, and from the extraordinary activity exhibited in the yards of the Prussian shipbuilders, we suspect has not been materially checked; and even if the imports have suffered in larger degree, their nature is not such that the want of them will produce ruin, although it may, and probably does, create discontent. An agricultural country is not so capable for active aggression as a commercial one, but it possesses greater ability to maintain dogged resistance. We do not, therefore, look so much to commercial prostration or monetary pressure for the means of bringing Russia to reason as to downright military and naval attack, threatening her territories with ravage, and her splendid cities, her fine harbours and her strong places, with destruction. It is fear of military, not commercial, results which will bring Russia to assent to terms that will satisfy the Allied Powers, and secure Europe from a revival of aggression. We may thank an energetic and sagacious Administration that we enter upon the new year with our hands full of every means that can be devised to carry the next campaign to a triumphant issue."
The remarks of this journal had much weight attached to them; and it was worthy of notice that a very short time after the leading article appeared from which he had read an extract to the House, the world was astonished by the sudden resolution on the part of the Russian Government to enter into terms of negotiation; and it was declared in all the journals of Europe that that resolution was caused by the intention of the British Government to put a stop to the trade of Russia. That placed the question in a very different position. The delay to exercise the right of search and power of blockade had been one of the main charges against the "Coalition Government." Happily that Government now no longer existed; and the councils of the Crown were no longer labouring under the incubus of association with a certain knot of men whose conduct had connected them indelibly with political tergiversation at home, and public disaster
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abroad. He (Mr. Bentinck) trusted, therefore, that if the present negotiations did not end in the attainment of peace, it was the intention of the Government to carry out the operations which had been declared in the article to which he had referred.
LORD JOHN RUSSELL: Sir, I rose immediately after my right hon. Friend the Secretary of State for the Home Department, to correct a piece of misapprehension on the part of the right hon. Gentleman the Member for Droitwich (Sir J. Pakington). The right hon. Gentleman seems to suppose that I intend to move certain Resolutions, and that, should these be adopted and placed upon the books, then no further proceedings shall be taken; and the right hon. Gentleman having got that notion into his head, adds, very justly, that Resolutions will not educate the people of this country. But if the right hon. Gentleman had reverted both to the ancient precedents of the House, and those of very recent times, he could not but have seen that Resolutions have been very often introduced into this House as preparatory and introductory to measures which have afterwards been adopted by Parliament. It was rather, then, with a view of introducing a subject to Parliament which might hereafter be partly controlled by administration and partly by enactment of Parliament, that I proposed to put it in the form of Resolutions. I am further induced to take this course by what happened in the last Session of Parliament. The right hon. Gentleman introduced a Bill upon the subject of education in a most able speech; discussion afterwards followed for several nights; the right hon. Member for Oxfordshire (Mr. Henley) also, in a most appropriate speech, pointing out the objections to the Bill, threw so many obstacles in his way that if we had given up the whole Session to the right hon. Gentleman's Bill it would have occupied every night, and scarcely then could this House have succeeded in passing it. If I were to take that course, continuing the discussion from Wednesday to Wednesday, as opportunity might afford during the present Session, I should be little more likely than the right hon. Gentleman to succeed in legislating on the subject. But if the House should devote, perhaps, two nights to the discussion of Resolutions, and were then to say what general principles on the subject they would approve of, I think it would then become the business of the Government

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to take care that measures were prepared on the principles which the House had approved of, and that these measures should pass with as little delay as possible. I will take this opportunity of saying that I rejoice at the statement which has just been made by my right hon. Friend the Secretary for the Home Department. I am very glad that the Government are to make the Lord President of the Council, or some Member of the Cabinet, or a Privy Councillor, the responsible Minister of Education, with a seat in this House; it is an arrangement calculated to advance the progress of education, and will give satisfaction to all who concerned themselves with the subject throughout the country. I believe that great progress has already been made in the country in connection with this subject, and the new arrangement proposed will tend very much to accelerate the work which still remains to be done. As I rose to address the House upon this subject, on bringing up the Report upon the Address, I may be allowed to say, in connection with it, that I am very much gratified at the tone of the discussion of last evening. It appears to me that however arduous the situation may be of public affairs, never was there a time when the feeling of the House of Commons was more pleasing than at the present time. We must wait for the event of the negotiations, of which Her Majesty has been pleased to give us information; but at the same time we ought to omit no preparation necessary for the effectual carlying on of the war until these negotiations are terminated. Let me say, further, that I will only hope that those operations at Sebastopol which at one time were attended with so much privation, and at another with so much glory, but at all times with the highest qualities of human nature,—I do trust that the exertions made in the capture of that fortress will be noticed by us in some regular manner, and that we shall hear before long my noble Friend the First Minister of the Crown, or some Member of the Government, giving notice of his intention to move a Vote of Thanks on the part of this House in acknowledgment of those exploits. I need not say more. The House have in their mind how great and how noble have been those exertions; many of them were splendid, but many others were performed in the midst of the dark and snowy nights of winter, and can have no other reward than such as might convey the feelings and
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sympathy of the country with such noble devotion on the part of the army.
MR. ROEBUCKsaid the hon. Gentleman opposite (Mr. Bentinck) had been pleased to direct his attention to him. He (Mr. Roebuck) would remind him of a Scotch proverb, which is to the effect that "his bark is far waur than his bite." The hon. Gentleman began by stating that he (Mr. Roebuck) had said that England of herself was unable to cope with Russia. It seemed to him that the hon. Gentleman was too much occupied with his own speech to attend to his (Mr. Roebuck's); for he thought it was one of the most salient points of what he had said to aver the contrary of that which the hon. Gentleman had attributed to him. He had said that at all times, and more especially at this time, was England able to cope by herself with Russia; and in proof of that, he had adduced the case of the Great Napoleon, under whose conquering legions the very earth trembled as they trod, and whose armies extended from Italy to the Niemen—with him even we were able to cope single-handed, and conquered him; "and shall it be said," he (Mr. Roebuck) asked, "that we cannot now cope with Russia?" And after that the hon. Gentleman turned to him as if he would depreciate the power of this country. He thought he had sufficiently shown how without foundation was that accusation.
The Report on the Address agreed to.

LAW OF PARTNERSHIP AND JOINT- STOCK COMPANIES.
MR. LOWE, before moving that the Speaker should leave the chair, should request his opinion on a matter of order. On the previous day, notice was given by his right hon. Friend the Member for Wells (Mr. Hayter), that he (Mr. Lowe) should that day introduce two Bills—one to amend the law of partnership, and the other for the incorporation and regulation of joint-stock companies and other associations. By some accident, a portion of the notice had fallen out, so that the Bill for the amendment of the law of partnership was omitted from the notice, although the words "Law of Partnership" appeared as the title. He wished to know whether, under such circumstances, it would be competent for him to introduce both Bills?
MR. SPEAKERsaid, that, as the error was not on the part of the right hon. Gentleman (Mr. Lowe), he would be entitled to proceed with both Bills. It was important

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that notices should always be given in writing; and in the present instance that had been done.
House in Committee; Acts read; considered in Committee.
MR. LOWE: Sir, it will be in the recollection of the Committee that in the course of last Session a Bill was passed through Parliament for the purpose of enabling joint-stock companies to enjoy the advantages of limited liability. At the time when that measure was under consideration, it was stated that it was founded on the laws already in existence for the regulation of Joint-stock companies, and it was also intimated that it was the intention of Her Majesty's Government to ask next Session for leave to bring in a Bill to alter and amend the enactments in question. The measure of last Session was incorporated therefore in a temporary law, and on that account, if on no other, temporary in its nature. Since that time the whole question has undergone a thorough review by the Government, and I shall now proceed to state the results at which they have arrived. The questions we have now to consider are these:—first, how shall the principle of limited liability be extended to private partnerships?—secondly, in what respect may the laws to which Joint-stock companies are at present amenable be amended and improved? These are two great branches of the same subject, and, that they may be dealt with in a satisfactory manner, it will he necessary to introduce two Bills—the one relating to private partnerships, the other to Joint-stock companies.
I shall endeavour briefly to explain the state of the case with regard to these two measures. And first with regard to private partnerships. The law of private partnerships in England has been very little interfered with by the Legislature; it has heretofore been left very much as it stood at common law. The great grievance complained of is, not the want of limited liability, strictly so called—not the want of a power in a partner, known to the creditors, to contract with those creditors that he shall not be liable to them beyond a certain amount; that is not the ground of grievance as regards private partnerships, but rather the converse of the proposition—namely, that a dormant partner—a partner not visible to the creditors and never known to them—who may have embarked a certain amount of capital in a concern, should, on the failure of the business,
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be made liable not merely in the proportion of the capital he had so embarked in it, but to the extent of all the property he possesses in the world, though the existence of that property was unknown to the creditor, and though it is, in consequence, property on the credit of which not one farthing could have been advanced. This is the nature of this practical grievance, and it now becomes the duty of the Legislature to consider how it will deal with it. There is another question arising out of the present state of the law as affecting private partnerships which has also to be considered. The Committee is aware that by an Act recently passed, the usury laws have been repealed; and though at the time of their repeal it was not foreseen how that measure could affect private partnerships, it is, nevertheless, very certain that it has altered very materially the position of persons making advances to partners by way of loans advanced on terms of receiving, instead of interest, a share of the profits. Mr. Baron Bramwell, a good authority as a political economist, but whose authority as a lawyer—I may say it without disparagement to him—is still higher, gave, in his evidence before the Mercantile Law Commissioners, an opinion which is well deserving of our attentive consideration. That opinion is to the effect that, as the law at present stands, it is perfectly competent for any person to lend money to a private partnership, reserving as a guarantee for repayment the right of demanding interest at the rate of, it might be, 50 per cent, to be considered as a penalty; the agreement being that the right to such interest should not be enforced in case the creditor should be paid a rateable share of the profits of the concern for his loan. This opinion of Mr. Baron Bramwell coincides with one delivered by Lord Eldon, ex parte Hamper; both those distinguished Judges concurring in the view that, as the law at present stands, it is possible for a creditor to lend money to a private partnership, and to receive a share of the profits by way of interest on the loan. It is not the intention of Her Majesty's Government to narrow or diminish the powers and abilities which persons already enjoy to enter into these contracts. We take the question as it stands, and desire rather to enlarge and enable than to contract and to restrict.
It being the present state of the law of private partnerships that property and

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capital not embarked in the concern, and upon which credit was never given, is liable for the debts of the partnership, it remains to be seen what is the proper manner in which to deal with this question of private partnerships. One method would be to carry the present law of limited liability into these partnerships, and to say that any number of persons, however small—even to one, and there could not be a much smaller number than that—that he or they shall be entitled to be formed into a corporation, and to enjoy, as such, the privilege of limited liability. To that proposition I am not disposed to accede; and for this reason—that it appears to me that there is something incompatible and inconsistent between the character of a man acting as a principal in trade, and that of a person being corporator, and whose liability as such shall be limited. There would be a constant ambiguity whether such a person was trading as a principal or as a private individual. There is nothing inconsistent with the character of limited liability in the position of an agent such as a director or manager, but the position of a principal carrying on such business would be ambiguous and uncertain; many of his acts would bear a double construction, and there would always be a struggle on the part of creditors to fix him with individual liability, and on his own part to refer his acts to his corporate capacity. Individual partners would have to guarantee their own partnerships. These difficulties would increase as the partnerships grew smaller, till in the case of little tradesmen they would become absolutely intolerable. Everything would always be said to have been done by the corporation and nothing by the individual, and a door to vexation, quibbling, and perjury would be opened which it is most desirable to keep closed. Seeing that there is no particular demand for such an extension of the law, and bearing in mind that, even though it were adopted, it would be so merely for the sake of a barren consistency and an idle uniformity, I do not think that it would be in any degree desirable to decide the question by such a method as this. Neither should I advise the House to adopt the law of commandite as it is at present practised in Prance. It is not suited to the habits nor to the methods of the people of this country; and its introduction would be tantamount to the enactment of a new law of partnership. I think that if we can remodel the old law
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in such a manner as to adapt it to our wants and usages, and to infuse into it the liberal principles of our modern commercial system, we shall by so doing adopt a far more judicious course than if we were to sweep away the old fabric and erect a new one in its place. Neither should I be satisfied to deal with partnerships merely by way of legalising loans or making them the subject of special legislation. In my opinion it is not any business of the State to favour by special legislation one particular method of dealing in preference to another. It is rather the duty of the State to act with strict impartiality as regards them all, and to leave to every man in the community the option of deciding for himself what is the best system on which to conduct his affairs. But I cannot but think that if we were to facilitate loans to partnerships, without at the same time giving to dormant partners the power of limiting their liability, we should be giving an undue preponderance to the loan system over any other, and should be stimulating perhaps the worst way of dealing by encouraging men to carry on their business rather by means of temporary advances than by embarking capital permanently in the concern; and that thus we should be throwing the weight of legislation into the wrong scale. Into the question of whether it be or be not an improvident practice to carry on business by means of loans I do not now propose to enter; but I cannot think that it would be at all advisable to facilitate the contract of loans unless you at the same time provide that the advance of money or capital on contract to share profit or loss shall not be held to make the lender liable as a partner. But, on the other side, it is not the duty of the Legislature to prohibit persons, if they choose to do so, from carrying on their business by loans. I hold that it is not the business of the State to save men from the effects of their own improvidence; but neither is it desirable to provide facilities for the contraction of loans. The whole evil complained of in the present state of the law, as regards private partnership, resolves itself into this, that a dormant partner, unknown to the creditor at the time of the contracting of the debt, is made responsible to his last shilling or acre for a debt for which he was not known at the time to be a party, and that property of his, on the strength of which not one farthing had been advanced, is confiscated to satisfy the claim of a person who when

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the transaction occurred knew nothing of his or its existence. In reprobating this state of things, I only echo the opinion of some of the most distinguished jurists, and among others of that eminent Judge, Mr. Justice Story, a man by no means prone to rash innovation, who concurs with other great legal authorities in deploring the doctrine laid down in the case of "Waugh v. Carver," and in thinking that it would have been better if it had been decided the other way. The Bill which I now solicit the permission of the House to lay upon the table will overrule the judgment pronounced in that well-known case, and proposes to provide that "the advance of capital or money to be used in any trade or undertaking, not being the trade of a banker, upon a contract with the person carrying on such trade or undertaking, that the person making such advance shall receive a share of the profits, or shall bear a share of the loss of the trade or undertaking, shall not of itself render the person making such advance liable to third parties as a partner in such trade or undertaking." The law will then stand thus—that a man who has embarked a certain sum of money in a concern may become a dormant partner for certain purposes without involving himself in the general liabilities of partnership. In fact, with all that is most beneficial in the French commandite partnership you will also have, without making any great innovation on your old law, the advantages of a loan system, conducted not in a circuitous or evasive but in a direct and intelligible manner; and it will be practicable for any partnership to raise money by way of loan without making the lender or the dormant partner liable beyond the amount of the money he may have advanced. We take things as we find them, and, while we propose to regulate the liabilities of lenders and borrowers, we are not to be understood as pronouncing any opinion as to the wisdom or propriety of either lending or borrowing, on any particular terms. There may be instances where it would be highly improvident to conduct an establishment by means of loans, and on the other hand it is quite possible that there may be cases where a permanent increase of capital would be more injurious to a business than a temporary advance. These are questions with which we have no concern. It is for us to allow men to conduct their affairs on such principles as they shall themselves approve. It is for us to observe an
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impartial demeanour, leaving to every trader the option of determining on what system he may think fit to manage his affairs.
The Bill also contains a clause providing that the remuneration of servants or agents by a share of the profits shall not be held to make them partners. Bankers are omitted out of deference to the course of previous legislation, which has constituted them an exception to the general rule applicable to other occupations. This omission is also made because we do not wish to encumber a question of this kind, which is merely one of limited liability, with questions relating to the banking trade, currency, and other kindred matters: although, for my own part, I see no reason why bankers should not be treated in the same manner as any other class of partners.
Having now disposed of all that I think it necessary to say regarding the smaller Bill, I next approach the subject of the larger measure; and here I must beg that the Committee will bear with me, because, although I shall endeavour to condense my observations as much as possible, yet the question is so very complex in its nature that I cannot hope to render myself intelligible to them without trespassing on their attention for some little time. Now, the state of the law relating to Joint-stock companies is somewhat peculiar. It seems to have been the misfortune of these bodies to be always legislated for by persons in a state of excitement. The first Act relating to them, called "the Bubble Act," was passed during the first paroxysm produced by the bursting of the memorable South Sea bubble, in the reign of George I. Banquo says—
"The earth hath bubbles as the water has,
And these are of them!"
And so our legislators set to work to explode them; and for 100 years the law of this country rendered the formation of Joint-stock companies illegal, and an indictable offence. This I mention not because it is immediately relevant, but that it may act as a caution to us against being led away blindly by precedent. Here is a remarkable instance of a thing being proscribed which is now generally recognised as having proved very beneficial to most communities—namely, the right of association among capitalists. This prohibition remained in force till the year 1825, when it was repealed. The Government at that date still continued

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to look very jealously on these companies; and, although it was then seen that they partook very largely of the nature of corporations, yet it was only by very slow degrees that it could he induced to regard them in that light; for in the first year of the reign of Her present Majesty it was enacted, not that Joint-stock companies should be allowed to sue under a corporate name (that was thought to be too high a privilege for bodies which had so lately lain under the ban of the Legislature), but that they should be allowed to sue and to be sued in the name of their public officer—a most inconvenient and circuitous form of proceeding, and one which showed the absurd and ridiculous distrust with which these associations were regarded. Then we come to the law of 1844—the present Joint-Stock Companies Act. That measure was the result of the Report of a Select Committee, which appears to have conducted its deliberations in a state of mental perturbation scarcely less violent than that which prevailed in the days of George I. For, when I look at their Report, I find the headings of the different sections of what one would generally expect to be a very demure and quiet sort of document running thus:—"Form and Destination of the Plunder," "Circumstances of the Victims," "Impunity of the Offenders," and the like; so that a hurried glance at the contents might make a man fancy he was reading a novel instead of a blue-book. This Committee, however, notwithstanding their excitement, evidently examined the matter with great care, and arrived at a conclusion to which I invite the attention of the House, because it illustrates the animus and the principles on which the Act that I am about to discuss was founded. The decision of the Committee—although I do not blame them for coming to it at the time when they considered this intricate subject—is nevertheless hardly one which this House will now be disposed to sanction or support. They divided these companies into three distinct classes—the first being those which, faulty in their nature, were based on unsound calculations, and could not possibly succeed; the second, those which, let their objects be good or bad, were so ill constituted as to render it probable that miscarriages or failures incidental to mismanagement would attend them; and the third, those which were fraudulent in their constitution and never intended to work at all, being started only
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to create shares for jobbing purposes, or to secure, under the pretence of carrying on legitimate business, an opportunity of raising funds to be divided among the adventurers who projected them. The Committee state that, for the third class of companies, the remedy is easy; that the compulsory publication of the names of the shareholders and directors would suffice to baffle every case of fraud that had come under their notice; that, in fact, the only class that "did not admit of certain cure," were those which were faulty in their nature and based on miscalculations, such as two and two make five. This Act appears, therefore, to have been introduced in the belief that it was in the power of the Legislature, by its enactments, to correct every evil relating to these bodies except those growing out of flagrant miscalculation. It was then confidently asserted that a certain cure could be effected in these matters; but I wish to show the House how ill the performance has kept pace with the expectation held out, and how signally the machinery, which was supposed so very efficient, has broken down in the hands of those intrusted with its working. The Joint-Stock Companies Act, 7 & 8 Vict., chap. 110, was passed. It provides that there shall be a provisional registration—that is, that the promoters of a company shall register their names, their objects, and other matters of that kind, before they are allowed to allot the shares, or to do other acts that are specified; and between the periods of provisional and complete registration they are not permitted to deal in shares or in scrip, and they are likewise then forbidden to do anything except provisionally. Next, they are required to execute a deed containing eleven requisites which are enumerated in the body of the Act, and thirty-eight more that are comprised in the schedule which the Registrar is to see inserted in the Act. This is to be signed by at least one-fourth of the shareholders, holding one-fourth of the stock; after due compliance with which formality the company is entitled to complete registration. The rest of the Act is taken up with clauses, either dealing in minute detail with the internal government of the company, or specifying a vast number of returns to be made by it upon different matters connected with its affairs, and a provision for the shareholders, which has turned out totally inadequate. Such is a general outline of that measure, as far as it is necessary for me now to describe it. Upon

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this was ingrafted, in the last Session of Parliament, the Limited Liability Act, which provides that, in addition to all that is requisite in order to enable a company to obtain a certificate of complete registration with limited liability under the Joint-Stock Companies Act of 1844, a deed shall be executed by twenty-five partners, holding three-fourths of the company's capital, and paying up 20 per cent each, upon which a certificate of complete registration with limited liability shall be granted to such company. That, then, is the state of the law at present; and of course, before I ask the Committee to agree to alter it, I am bound to show them that it labours under various and serious defects. Unfortunately, I shall have no difficulty in executing that task.
And, first, as to provisional registration. It was no doubt intended by provisional registration that the law should watch over an infant company, as (if I may so express myself) it would watch over a child, so as to guard against its committing itself by doing any act that would irretrievably and permanently damage its interests before it has arrived at years of discretion—in a manner, in fact, analogous to that in which an infant in law was protected until it had attained the toga virllis—like infants, they were allowed to contract only for necessaries. Now, however reasonable this view may be in theory, it has proved to be one far too refined for actual practice; for the result has been that some companies have treated provisional registration as the only registration that is necessary, and have gone on ever since without complete registration in open defiance of the law; while others have treated this registration (to use the language in vogue among diplomatists) as non avenu, and have subsequently come out with totally different aims and objects from those which they originally contemplated. The Act has, therefore, been practically set aside, and has no effect whatever even in prohibiting the sale of scrip, because, unfortunately, the prohibition was addressed to the Stock Exchange (which I will not call a lawless body, for it is actuated by the highest of all laws—the law of honour); hut like all bodies acting under that law, it is independent of Parliament, and therefore, although the statute says that the Stock Exchange shall not negotiate the scrip of provisionally-registered companies, yet the Stock Exchange in this case is an imperium in imperio,
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and such shares are as freely bought and sold there as though the companies were completely registered. The object which the framers of the Act had in view was no doubt a good one, being intended to put a restriction upon half-formed and immature companies, which are not ripe for uncontrolled action. A better principle, however, would have been to accelerate the attainment of their majority by the companies, and to declare in fact that none of them should be permitted to come into existence before the public until they were able to undertake all the liabilities and duties of a company. Thus quasi companies would not have been allowed, as at present, to be started, until all the preliminary negotiations incidental to their getting up had been fully perfected. I should not expose them, in relation to the execution of a deed with eleven requisitions of one class to be complied with, and thirty-eight more of another, to all the trouble and expense to which they are now subject; and this, too, in regard to matters which the companies are quite competent to manage for themselves, and which are exclusively personal to them, the public having no possible interest in them. There is also another provision as to the subscription of one quarter of the shareholders holding one quarter of the stock of the company, which is deserving of attention. It was clearly established in evidence before the Committee moved for two years ago by my hon. Friend the Member for Westbury (Mr. J. Wilson) that, in the case of very exorbitant individuals for the sum of one shilling, and in others for the more moderate consideration of a pint of beer, as many so-called shareholders could he got to sign the subscription list of a company as the projector pleased. As this matter is one of great importance, seeing that the whole foundation of the law I am about to propose to the Committee turns upon it, I will take the liberty of reading a few brief extracts from the Report of the Committee. I find that the Registrar of Joint-Stock Companies, Mr. Whitmarsh, who was examined before that tribunal, states very compendiously that the returns which the Act requires, and which are enormously burdensome and expensive, are worth nothing—that the Act is very much evaded, companies being frequently formed with no other foundation than that supplied by men of straw. Such is the testimony of the Registrar himself; and I beg

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the House to compare this testimony with the prognostications of certain cure made in the Report of the Select Committee to which I have previously referred, because I cite this in support of the inference which I wish to deduce—viz. that it is quite impossible by any legislation that we can devise really to protect the public in matters in which they are fully able to protect themselves. I will first refer to a very remarkable prediction made by Mr. Bellenden Ker in 1837. That gentleman is a high authority on the subject, having been engaged in settling the deeds of Joint-stock companies for many years past, and he says:—
"In the consideration of this part of the subject other points of importance occur; first, whether, previously to the formation of such partnerships"—Joint-stock companies—"It should be made requisite that a certain part of the capital should be paid up, or that there should be any regulations concerning periodical returns of the state of the affairs of the company, or for the appointment of auditors of the accounts by the shareholders at large. It is probable, however, that the best course would be to leave these matters to the agreements and provisions of the parties interested, more especially as any measure requiring that the capital, or a part of it, should be paid up would be liable to evasion, and, moreover, would be of difficult application in many cases. It is also to be observed, the provisions proposed do not confer any privilege or immunity on these companies, but merely bring them within the effectual reach of the law, and only accomplish, as regards all partnerships, what is now the law regarding banking partnerships, and what is frequently permitted to companies by private acts, charters, or letters patent."
It appears that this gentleman, a man of great experience, seven years before this Act was passed foresaw, and clearly predicted, that all the provisions intended to protect the public would end in affording no protection at all—that they would be nugatory; if not absolutely mischievous. I will next read an extract from the Report of the Committee appointed on the Motion of the hon. Member for Westbury to inquire into the state of Insurance Societies. They say in their Report referring to this subject:—
"With regard to provisional registration, it appears that the law as it now stands does not afford the security which was contemplated by the Act of 1844, inasmuch as the representations made by the prospectuses and advertisements issued by new companies often vary very materially from the objects for which they have been provisionally registered; and there appears to be no means at present to prevent deception and misrepresentation being practised on the public in this way. Nor are the regulations required in order to obtain complete registration more perfect
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for that purpose. It is required by the law that the deed of settlement should be signed by shareholders equal to one-fourth in number, and representing one-fourth of the proposed capital of such companies; but it appears from the evidence of Mr. Whitmarsh that this provision has been extensively abused by means of false and fraudulent signatures, and has thus proved to be a very insufficient security for the objects contemplated. It appears also that it has been frequently evaded"—there are other means of evasion, and their name is Legion—"by companies commencing business with a very small capital, and, immediately upon obtaining complete registration, greatly increasing its amount, which they are enabled to do without further recourse to the office of the Registrar."
It appears, then, that these provisions can be evaded, and some of the witnesses examined before my hon. Friend's Committee stated, with great courage, that we should not suffer them to be evaded any longer, and that the whole fault was in the insufficiency of the law. It is always the case, with regard to restrictive laws, that where a restrictive law is once enacted there is a craving for further restriction. The restrictions you impose in the first instance are admitted to be of some value, but you are told they do not go far enough, and that if they are meant to do any good they must be carried still further and further. It is said that these projects are frequently originated by men of straw. "Oh, then," says one of the witnesses, "arm the Registrar with inquisitorial power, and let him inquire into the circumstances and responsibility of every promoter." That is one suggestion. But it is also true that companies may begin with a small capital under these restrictions, and that when they have gone on for a little while with a small capital they can double or treble that capital without any restriction. Now, can you prevent that? Are you able to say that companies shall not increase their capital? Will you empower the Registrar, or any other person, to judge what capital these trading companies shall raise? You begin by encroaching upon natural liberty, and, in order to make that encroachment effectual, you find that you must proceed to an utter deprivation of liberty, until, to carry out your principle logically, you will have to take the whole management of these companies out of the hands of the people to whom it belongs, and vest it in the Board of Trade, or in some branch of the Government. I leave the Committee to imagine what would be the result of such a course. The evidence taken before the

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Committee on Assurance Societies shows that the result of the Parliamentary provision for the regulation of these companies has been to afford facilities for frauds which could not otherwise have been accomplished. With regard to the operation of the present law, the Committee say:—
"That the Acts which have already been passed with a view of controlling the operations of insurance societies have been rather hurtful than beneficial for the very objects they had in view;"—and what is said of insurance societies is quite as true of others—"that an apparent compliance with the provisions of an Act of Parliament, and a certificate of complete registration, while they have proved entirely ineffectual for their professed objects, and no real security to the public, have afforded facilities, under the sanction of Parliamentary authority, embodied in regulations administered by a public department, for the formation of companies and the perpetration of frauds which could not otherwise have been accomplished."
So it appears that those provisions which, it was believed, would have worked a certain cure have been the very means by which fraud has been perpetrated.
"And it has been further contended that it is impossible to make such regulations consistent with the free development of private enterprise, which, so far as the public is concerned, will not prove more prejudicial by lulling private prudence and vigilance, than beneficial in respect to any increased security which they can confer."
It seems, then, upon the opinion of very competent witnesses, that these Acts, so far from having been a means of preventing fraud, have only afforded facilities for its commission, because fraudulent persons have availed themselves of the sort of prestige which is gained among ignorant people by a presumed association with the Government, and have announced companies as "established by Act of Parliament," or as "provisionally registered," and have thus given them a colour of respectability which their own merits would not obtain. It therefore appears to me that when the Government attempt, by a system of artificial restraints, to test the worth of any commercial undertaking, they endeavour to do what they are not able to accomplish. Indeed, they really have not the means of effecting such an object. The formal restraints which they devise will be complied with by the honest trader, who requires no coercion, and will be evaded by the fraudulent, who laughs at such restraints. But not only do these provisions prove nugatory—they serve as traps to the unwary. They give credit to
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unsound and unsubstantial concerns, and in a great degree facilitate those very frauds which they were intended to prevent.
Having now described the Acts which we propose to repeal—for the proposition of the Government is to repeal the Joint-Stock Companies Act and the Limited Liability Act of last Session—it may save time if, before I state the details of the measure which I shall ask leave to introduce, I explain as briefly as I can the principles upon which we believe that future legislation should be based. We entirely repudiate as the basis of legislation the principle upon which the present Joint-Stock Companies Act is founded—that it is in the power of the Government to prevent the institution of fraudulent companies. We do not believe that it is in the power of the Government to supersede the vigilance of individuals, who are actuated by the strongest personal interests to detect these frauds; and, although I do not mean to say that many frauds will not still continue to occur, I believe that is a necessary incident of a large commercial society, and that it is an evil which cannot be met or cured by way of anticipation by any legal enactment whatever. I do not think it is a fair or right principle to embarrass, perhaps, a hundred honest, sound, bonâ fide concerns, in the vain and futile effort to correct the hundred-and-first, which may be of a contrary character. I think that, in such a case, with the view of doing a little good, you would do enormous harm, and you would set up a principle inimical to the well-being of civilised society: for, unless we deal with each other upon some presumption of confidence—unless we assume that a man is honest until he is proved to be a rogue—the disruption of human society must necessarily follow. Fraud and wickedness are not to be presumed in individuals. Why, then, when individuals are united together in society, should fraud and wickedness be presumed in those societies, which, after all, are but an aggregate of individuals, but individuals in the case of each of whom there is the presumption of innocence? We must base these laws upon the principle by which human transactions are guided, and the rule upon which men in business everywhere act is that persons are to be treated with confidence until something is proved against their character. The commercial intercourse of countries and of this great city and empire could not go on if a contrary rule were

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adopted. I may further observe that these restraints upon the creation or institution of commercial concerns tend very much to delay, and in such matters delay is fraught with danger. While a company is inchoate—before it is formed—the rights of parties are ill defined, and rest upon no strong or assured basis. That is, no doubt, the evil which was intended to be remedied by provisional registration, but I take it that such an evil is not to be cured by law. Rights in incipient companies are undefined, because men do not know what their rights are, and therefore cannot define them; and they, as in the case of provisional committee-men, often incur responsibilities unknowingly and are plunged into difficulties and embarrassments which they would have avoided had they been able to form their companies at once, and to proceed immediately to action. The condition of monetary affairs in which a company has been formed, perhaps, passes away, and it has to be organised in circumstances under which probably no one would have thought of establishing it; or those by whom the company has been projected are in a difficulty whether to abandon the undertaking and to return the money, or to attempt to carry it on. Every man of business must know that any delay in the formation of a company is frequently attended with such results. It is not for any fancied security, for any supposed advantage, that we ought to lay restrictions on the freedom of mankind in matters like these; and so far as we have yet gone, it would be impossible to show anything that comes near to a necessity for the imposition of such restrictions. The only ground on which you can defend such restriction is that it prevents fraud, which you have no right to assume; or that it secures stability, which it is impossible by any Government regulations whatever to secure. I shall now proceed to consider the nature of the restrictions imposed upon companies, and to show how little validity they have either in fact or in argument; and, in the first place, with respect to the paying up of a certain amount of capital. I admit that in the case of railway companies the principle of enforcing the paying up of a certain amount of capital is a good one, because it affords a protection to the public—it is in the nature of a deposit on the purchase of an estate; and the capital is ready for the purchase of property if required, and, if not, it is there to be returned to the depositors if the concern is
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not carried out; and it is only reasonable that men who come to Parliament, asking powers to take the property of their neighbours, should give evidence of their sincerity by paying up a portion of the amount required. But the case is quite different with regard to other concerns. Taking the Limited Liability Act as it now stands, it is required that 20 per cent of the amount subscribed shall be paid up, and that the fact of such payment having been made shall be proved by a declaration made by two of the promoters. Now, in the case of bonâ fide companies I can imagine nothing more embarrassing than this. It involves such companies in a great deal of difficulty; and I have had strong complaints from various quarters of the trouble and embarrassment which have been experienced in forming bonâ fide companies from this cause alone. This provision was not meant to hit the honest, but the fraudulent; but it is evident that fraudulent companies can easily evade it, for they have nothing more to do than to get two of their promoters to make a declaration to the effect that the amount of capital required by the Statute has been subscribed—it is, as Hamlet says, "as easy as lying,"—it is only required that the declaration shall be made, no power being given to inquire whether it really has been subscribed or not. So that while you are annoying and embarrassing bonâ fide concerns, you are not in the least degree placing a check upon those that are fraudulent. On the contrary, if they succeed in satisfying the Government requisitions, they obtain a spurious merit to which they are by no means entitled. By this enactment also you are taking the business of people out of their own hands. It is often a disadvantage to a concern to start with a great amount of paid-up capital. Sometimes, for example, the money may be wanted for the purchase of mines, but a long time may elapse before such a purchase can be concluded. What worse thing can you do for a company in such a case than to require that it should pay up a large portion of its capital? It is highly injurious in two ways. In the first place, it suggests to the directors a temptation to steal. They have got the money and do not know what to do with it, and in such cases it is apt to stick to people's fingers. In the second place, it very often perpetuates the existence of unsound and unwise concerns after the fallacies on which they may have been based have been found out; whereas, if it

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had had a small capital it would have been wound up at once: those who have the money and are, perhaps, making a good thing of it, think it would be sparing the Egyptians to return it, and thus they go on employing the capital of the shareholders, till it is entirely consumed. I shall say no more on the subject of capital being required to be paid up, as I think I have said sufficient to show that it gives no safety or security to the companies on whom it is imposed. But there is another point on which I have the misfortune to differ from some Gentlemen in this House, for whose opinions I entertain the greatest respect, to which I shall for a moment advert. There are many who would not require companies to pay up a certain amount of capital who yet think it necessary that this House should fix the amount of shares. Now the old Joint-Stock Companies Act, with all its faults, did not fix the amount of shares. Such an interference is wholly unnecessary, and would be productive of evil. I do not think it any part of the business of the Legislature to define whether shares shall be large or small. What presses strongly on my mind, and is with me one of the most powerful arguments against it, is that these small shares are much desired by the poor, and that there are many things in which they take an interest, and with regard to which it would be desirable to obtain their co-operation. There are various enterprises that they would often be inclined to connect themselves with; but if you fix a large amount for shares, this natural wish it would be impossible to realise. I have in my possession letters from persons of that class who are desirous to establish, for example, a cotton-mill by means of a company with £1 shares. I do not say whether such a scheme as that will succeed or not. I am afraid these co-operative undertakings have not been, generally speaking, prosperous. But, whether that be so or not, can we imagine a more impolitic law than that which permits associations to be formed by the rich, but denies them to the poor? While we allow those who are possessed of capital to establish companies for their mutual benefit, when contests take place between capital and wages, shall we forbid the workmen to enter upon the formation of companies for themselves, because we think it right to fix as the amount of shares a sum larger than they can possibly raise? Let them try the experiment, or they never will be satisfied;
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and be assured that there can be no more unjustifiable law than that which gives facilities to the rich and excludes the poor from combining in any matter of trade, or for any legitimate object that they may demand. Take as another example the truck system. We have had many Committees of the House on the truck system. What can be a more natural remedy for people who find that at the only shop to which they have access they are cheated, that they should join together their small earnings, in order to save themselves from the overcharge and the adulteration and all the oppressions to which they are subjected by setting up an opposition establishment? I shall deeply regret if it is not the policy of this House to support the measure which we are prepared to lay before it on this matter—a measure which I believe to be cast in a spirit of comprehensive liberality; or if any difficulty should be felt as to giving facilities to poor persons in the conduct of affairs of which they themselves may be expected to be the best judges. The only argument which I have heard against those small share companies is, that they will lead to gambling in shares. It is not impossible that this may to some extent be so; but if we were to refrain from legislation on all matters that might possibly lead to gambling, the consequences would be more comprehensive than at first sight might be imagined. On this principle we should begin by burning haystacks lest people should draw straws out of them, and bet upon their lengths. If we are to take away one man's rights or property for fear another should make a bad use of them, we should not, indeed, check the bad, but despoil and plunder the good, and give an unnatural extension to the principle inseparable from human society, which already imposes on the good some part of the penalty incurred by the misconduct of the bad.
I come now to another subject, the liberty of incorporation. It is usual to say that, as these companies come to the Legislature for favours and for privileges, we have a right to impose upon them what terms we choose—that we can make them submit to whatever restrictive law we like. Now, I protest against the use of the word "privilege" in such a case as this. In matters of commerce and exchange, of buying and selling, and of contract, it is impossible that under a just Government there can be any privileges. All associations ought to be equal before the law, and

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there can be no greater injustice than for a Government to ask for any undue exactions from any association on the one hand, or to give to any of them advantages above their fellows on the other. But there is no privilege. A partnership with many members ought to be considered in the light of an individual, and it is for the advantage of the public that the incorporation takes place. It is a sort of legal monster that cannot, without the aid of law, comply with the requisitions of the courts of justice, and it is therefore not only for its own convenience, but for that of the public, that it should be incorporated, so that it may both sue and be sued in one single name. It is a matter of procedure more than anything else—it should be encouraged wherever the mischief is likely to arise—that is, wherever such an association is likely to be party to any legal proceedings. It should be held as one single person; and for that reason we should throw no obstacle in the way of incorporation, as it is for the interest of the public as much as for that of the company itself that it should take place. It is no privilege, but a right to be conceded, a state of mischief to be corrected; and it is necessary, because such a company is so numerous that it would be difficult otherwise to proceed against it. I have already observed, that previous to the incorporation of a company, it was neither wise nor right to require any of those restraints and safeguards which had been demanded on behalf of the public. I now propose to show, that the fact of a company being established on the principle of limited liability, does not strengthen the case in favour of those restraints and safeguards. What I said of incorporations may be applied to companies with a limited liability. It is not a question of privilege; if anything, it is a right, and upon that ground we gave our assent to the Act of last Session. The principle is the freedom of contract, and the right of unlimited association—the right of people to make what contracts they please on behalf of themselves, whether those contracts may appear to the Legislature beneficial or not, as long as they do not commit fraud, or otherwise act contrary to the general policy of the law. It is easy to make anything a privilege. Any right, the exercise of which is denied, becomes a privilege, the very term privilege arising from the negation of a natural right. The process is this—it begins with prohibition, then becomes a
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privilege, and last of all a right. Till 1825, the law prohibited the formation of Joint-stock companies. From that time to the present it has been a privilege; but now we propose to recognise it as a right. So with limited liability; at first it was prohibited. Then came the Statute of the 1st Victoria, which gave the Board of Trade power to relax the law in certain cases; and, lastly, the Act of last Session, extended the privileges, but still imposes restrictions. Having thus gone through the first and second stages—prohibition and privilege—we propose now to take our stand upon the only firm foundation on which the law can be placed—the right of individuals to use their own property, and make such contracts as they please, to associate in whatever form they think best, and to deal with their neighbours upon such terms as may be satisfactory to both parties. The restrictions hitherto placed upon trading companies were intended to effect one of two objects—either to secure the stability of the company, or to prevent fraud. Is there anything in the nature of companies with limited liability that should make them less stable or more fraudulent than unlimited companies? I should say the contrary. Fraudulent people will never form a limited liability company. Their own liability, of course, is a mere bagatelle, unworthy of their notice. What they desire is a large credit; and to obtain that they endeavour to get as many persona as possible pledged to the utmost extent of their fortunes. It is plain that to such people an unlimited liability is a hundred times more advantageous than a limited liability. A company formed on the principle of limited liability carries on the face of it something like prudence and caution. Its shareholders seem to say, "we have entered into a partnership, but it is impossible to tell what may happen, and since the company may fail, we will not I risk nil we possess in the undertaking." Such is the nature and composition of a company which is supposed to offer such facilities for fraudulent practices, that it ought to be subject to restrictions which can be justified only on the ground that fraud is actually intended. Nor have we more reason to doubt the stability of a limited than that of an unlimited company. Nobody can tell à priori to which the preference in that respect may belong. The stability of a company depends upon two things—character and capital. But the character of a limited company may be

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quite as good as that of an unlimited company, and its capital may be ns large. People confound unlimited with infinite, and think that the capital of an unlimited company must be large because it is all the shareholders have. There could not he a greater mistake. A limited company may have a capital of one or two millions; while an unlimited company may not be worth a thousand pounds. The capital of the latter is raised with difficulty; that of the former, owing to the terms of the subscription, will often ho larger, and the temptation to borrow money less. Hence it follows that the limited may often be more stable than the unlimited company. My object at present is not to urge the adoption of limited liability. I am arguing in favour of human liberty—that people may be permitted to deal how and with whom they choose, without the officious interference of the State; and my opinion will not he shaken even though very few limited companies be established. Every man has a right to choose for himself between the two principles, and it is ill-advised legislation which steps in between him and the exercise of that right. It is right the experiment should he tried, and, in my judgment, the principle we should adopt is this,—not to throw the slightest obstacle in the way of limited companies being formed—because the effect of that would be to arrest ninety-nine good schemes in order that the bad hundredth might be prevented; but to allow them all to come into existence, and when difficulties arise to arm the courts of justice with sufficient powers to check extravagance or roguery in the management of companies, and to save them from the wreck in which they may be involved. That is the only way in which the Legislature should interfere, with the single exception—a very essential one—of giving the greatest publicity to the affairs of such companies, that everyone may know on what grounds he is dealing.
I now come to explain the provisions of the Bill which I propose to introduce. The Acts we propose to repeal are the Joint-Stock Companies Act, the Act amending the same, and the Winding-tip Acts, the Limited Liability Act of last Session. The new Bill has a double principle—compulsory and permissive. The compulsory clauses provide that all partnerships consisting of more than twenty members, and established for purposes of gain or profit, shall be incorporated for the benefit of the public, and
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in order that any legal proceedings in which they may be engaged may not be unnecessarily embarrassed by the number of partners. By the second part of the Bill—the permissive clauses—all partnerships or associations consisting of more than six, and less than twenty members, having gain and profit for their object, and all associations not having gain or profit for their object, but consisting of upwards of six members, may avail themselves of the benefits of this Act. These last associations may adopt it or not as they please. So that the effect of what I propose is, that associations having gain or profit for their object, and consisting of more than twenty members, must adopt the provisions of the Bill; that associations not consisting of more than six members, and having gain or profit for their object, may adopt them or not; and that all other associations, whether of an educational or religious character, or for whatever purpose they may be formed, if they consist of more than six members, may have the same option. There are two classes of companies omitted from the Bill. I say so with regret, but it has been done in adherence to the principle on which the measure has been framed—to confine ourselves to the amendment of the Joint-Stock Companies Act, and to the application of limited liability to large and small partnerships in the most efficient manner, without interfering in difficult questions, such as those connected with banks. Banking companies have an Act of their own, and therefore we do not propose to include them in the present Bill; though, individually, I should have wished to apply the same law to all companies, and I hope the day will soon arrive when it will be so. The second exception, which I also regret, relates to insurance companies, which have been omitted in deference to opinions that we are bound to respect. I do not think that the provisions of the Bill will ever be applicable to companies established on the principle of mutal assurance, which are not Joint-stock companies at all; but I am convinced they might be applied with advantage to other kinds of assurance companies. We have omitted them, however, in deference to the opinion of a Select Committee of this House, which sat on the subject in 1853, and which declared in its report that the business of assurance companies differed so much from that of ordinary companies that it was desirable to repeal all the provisions of the

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Joint-Stock Companies Act, so far as they related to assurance societies, and to deal with them in a separate measure. Now, supposing a company to be in the course of formation under this Bill, I will now state how it is to obtain complete registration. We abolish the present system of registration, and every company affected by the Act is to sign a document which they call in America "a certificate of registration," but which we propose to call a "memorandum of association." That document is to be signed by at least seven shareholders; it is to contain the name of the proposed company; to state the object of the company; whether it is to be limited or unlimited as regards liability; the number of shares into which the capital is to be divided; and, if the company is limited, the word "limited" is to appear. That document is to be filed with the Registrar; and upon its being filed the company is to be entitled to registration, from which it follows that it is incorporated and possesses all the privileges of a corporation, with the right of suing and being sued. The next step relates to the deed of settlement. We have prepared and appended, in the schedule of the Act, the by-laws of a company, which we call the "articles of association." We have taken them from the ordinary rules adopted in Joint-stock companies, and have applied to them the principles of the Railway Consolidation Act. When those articles appear to the persons who have signed the articles of association to be applicable to the company, they may be adopted bodily without any expense; but if it should turn out that those rules are not applicable to a particular company, the company will have the power of filing a document with their memorandum of association, either specifying the whole code which they have agreed upon, or enumerating such of the rules as they do not adopt, and giving those which they substitute for them. There is no compulsion, therefore, in the matter. We leave companies to form their constitutions as they please; but if the constitution provided by the Act be suitable to the promoters, they will have the advantage of being able to adopt it without expense. Next, as to the register of shareholders. The present mode of attempting to keep a register by means of the Public Registrar has, as hon. Gentlemen are no doubt aware, entirely failed. We propose,
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therefore, that the companies shall be compelled, themselves, under penalties, to keep a register of their own shareholders, which shall be accessible to the public at reasonable hours; and that that register shall be conclusive evidence as to who is a shareholder and who is not, together with the transfer of the shares to be signed by the transferee, much in the same manner as in railway companies. This will enable us to get rid of all those embarrassing questions as to what constitutes a contributor, which are frequently found to be so perplexing in winding-up cases. The clauses as to the management of the company I pass over, because the management we leave to the companies themselves. Having given them a pattern the State leaves them to manage their own affairs and has no desire to force on these little republics any particular constitution. One thing, indeed, will be required in reference to publicity, namely, that a balance sheet, which shall contain certain items, shall be filed every year with the Registrar of Companies; this, I think, may be fairly demanded from companies who will be saved so much trouble and expense; and, as we prescribe a form, we shall at least succeed in obtaining an uniform sheet, so that the shareholders will be able to compare the accounts of succeeding years, and to gather information from them, which, from the practice too extensively prevailing of rendering a differently-framed balance-sheet every year, they are now unable to collect. I now come to a new clause, which I hope may be found to be of great benefit to companies in distress. It shall be lawful for shareholders holding one-fifth part of the shares of any company to apply to the Board of Trade, at their own expense, to have the affairs of the company inspected; and the Board of Trade may, according to their discretion, appoint inspectors to investigate the affairs of the company, and to make a report, which report shall be the property of the persons who pay for it. This proceeding will not necessarily be attended with any publicity. It is borrowed in some degree from the New York code; out there is this difference, that in New York the application is made to a court of justice, and therefore involves, as a matter of course, publicity and expense; whereas we propose that the application should be to the discretion of the Board of Trade, and it will not necessarily entail either the

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one or the other. This is a very important provision, and it will do more, I believe, to remove the real grievances under which shareholders labour than any restrictions that could be imposed upon the formation of companies. We propose to repeal the existing Winding-up Act, which has not worked very satisfactorily, and to replace that Act by a new one. The following are the terms upon which we propose by this Bill that a company may be wound up:—A company may be wound up by the Court whenever it is unable to pay its debts, or whenever such winding-up shall be for the benefit of the shareholders. It shall be taken to be "for the benefit of the shareholders" whenever three-fourths in number of the shareholders, holding half the capital, declare so in public meeting assembled; whenever the company does not commence or suspends its business for the space of a whole year; whenever the shareholders are reduced in number to less than seven; or whenever it is declared by the Court that it is for the interest of the shareholders, and not injurious to the public, that the company should be wound up; and a company shall he taken to be "unable to pay its debts" whenever it neglects for three weeks to pay a debt with respect to which a notice has been served, or whenever execution has issued upon a judgment obtained against it. The application for winding up is to be by petition. Both parties will appear before the Court in the first instance; and the Court will be empowered to order either that the company be wound up absolutely, or that it shall be wound up unless its debts be paid within a certain time. This may appear to be a rather summary proceeding against companies; but it must be remembered that we propose to abolish the right of suing individual members of companies, and to require that suits shall be only brought against the companies themselves. In fact, we make these companies corporations, and we endow them with the attributes of corporations. The amount of debt which is fixed upon to warrant such a proceeding is 50 l. This is an alteration of the law of considerable importance, and I think that it is justified by these considerations:—Suppose a company of large capital—it is clearly for the interest of everybody that, if it cannot pay a debt of 50 l. it should be wound up, and I think that there can be no harm in winding up a
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company so summarily when we look at the analogy of the bankrupt laws. The fact of lying in prison for twenty-one days without paying a debt is an act of bankruptcy: and we propose that the non-payment of a debt for three weeks after notice shall be an act of bankruptcy in the case of a company. The principle on which the concerns of individuals are taken out of their own hands and placed in the hands of assignees is this—that when a man is unable to pay his creditors in full they have a kind of joint interest in him; the failure of their absolute rights sets up relative rights, and makes them a sort of quasi corporation. But in the case of a company not only the creditors, but the shareholders also become a quasi corporation—beside a dividend to be paid there may be also a call to be made—and the principle of the bankruptcy law would then require a double application. In the case of companies, with either limited or unlimited liability, it is desirable for the general good that a creditor should be prevented from the assertion of his private rights when the whole body of creditors have an equal interest in recovering from the company. Under the circumstances, therefore, I apprehend it would be wise to deprive parties of the power which they now possess of suing individual members of the corporation; but in order to compensate for that, we ought to give them a more summary and compulsory remedy against the companies in their corporate capacity, and to make the penalty of the non-payment of a debt to be nothing less than the extinction of the company itself. It is also proposed that a company should have the power of voluntarily winding up its affairs whenever three fourths in number of the shareholders, assembled at any extraordinary meeting held for that purpose, and holding not less than one-half in the capital of the company, should pass a resolution for that purpose. And it is likewise proposed to give existing companies the power of bringing themselves under the operation of this Bill by means of a resolution agreed to by three-fourths of the shareholders, so that there shall be one uniform law with respect to such companies, whether formed before or subsequent to this Act.
I understand that the hon. Member for Paisley (Mr. Hastie), who was such a strenuous opponent of the Bill of last Session, has expressed a wish to know

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to what extent the Limited Liability Act has been made available in the commercial world. I am afraid I should find it difficult to satisfy the hon. Gentleman by any answer I may give him. Suppose I were to say that very few companies have taken the benefit of the Act, the reply of the hon. Gentleman, no doubt, would immediately be—"Yes, so I prophesied; your wretched principle has already broken down." If, on the other hand, 1 were to tell the hon. Gentleman that a great many parties have availed themselves of the provisions of that Act, he would, no doubt, with equal earnestness exclaim—"Here is the beginning of the end; here are the foundations laid of vast commercial ruin!!" Therefore, Sir, I cannot give the hon. Gentleman any satisfaction as to the operation of that Act. But I will state to the House what has been done. The whole number of companies which have applied to be registered under the Act is not less than 142; of these eight have obtained limited liability; but the recent commercial crisis has prevented many of them from paying up their capital.
Having, Sir, now gone through the various provisions of this Bill, I would observe that, if any hon. Gentleman thinks that in this measure Her Majesty's Government has gone too far in leaving men to their own individual will and wishes, and has done in the way of Government interference too little, I hope he will remember this—that, among all the Governments that ever existed in the world, probably there has never been one which erred on the side of giving too much freedom to commerce. In the glorious reign of Louis XIV., when Racine, Corneille, Fenelon, and Bossuet flourished and adorned the age, the French Government were so grossly ignorant of the true principles of commerce that it actually prohibited the manufacture of goods, except of certain patterns—more especially of textile fabrics; and those things which were not made according to the prescribed form were nailed to the public gallows. That ought to teach us how cautious we should be in placing confidence in, or being led by, the authority of any man, apart from principle; it ought to teach us how much those matters which we have been in the habit of regarding as sure and certain are the effects only of prejudice; and it ought to make us more anxious to do honour to the principles on which all human transactions are
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founded. When the political economists say "Laissez faire," they do not mean to say, "Leave all matters to blind chance; let everything go on as it may." What they mean by laissez faire is, that we are not to interfere with human laws where other laws so much wiser already exist. Man, Sir, with his free will, his caprices, and his errors, is as much under the rule and government of a natural law as the planet in its orbit, or as water, which always seeks its level. Those laws, planned by Infinite sagacity, have the power of correcting and of compensating errors—one extreme invariably producing another—dearness producing cheapness and cheapness dearness; and thus the great machine of society is constantly kept oscillating to its centre. These laws are not made by a House of Commons; and before any Legislature steps in and attempts to correct them, it would be well that it should consider whether any Legislature can interfere and devise a better code than that which was framed before the first rude essays of mankind, to mould their collective will into a law. Who could have imagined it possible that a state of society resting on the most unlimited and unfettered liberty of action, where everything may be supposed to be subject to free will and arbitrary discretion—would tend more to the prosperity and happiness of man than the most matured decrees of senates and of States? These are the wonders of the science of political economy, and we should do well to profit by the lesson which that science has taught. That lesson is this—To interfere with and abridge men's liberty, and to undertake to do for them what they can do for themselves, is really lulling their vigilance to sleep, and depriving them of that safeguard which Providence intended for them, and helping fraudulent men to mislead and delude them. The right hon. Gentleman concluded by moving to resolve—
"That the Chairman be directed to move the House, That leave be given to bring in a Bill to amend the Law of Partnership.
"That the Chairman be directed to move the House, That leave be given to bring in a Bill for the incorporation and regulation of Joint-stock Companies and other Associations."
MR. COLLIERsaid, he must beg to express his thanks to the right hon. Gentleman for the extremely able and comprehensive speech which he had just delivered on a subject of the greatest commercial

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importance. This was one of two measures in connection with law reform. It was a measure of a right sort, and he wished there were more of them. It was founded on an intelligent and intelligible and legitimate principle; and it carried out that principle. As far as ho understood the object of the first of the two Bills, it was that the man who contracted a debt should pay it and no one else. If a man sold goods to A., knowing nobody but A., then A. alone should be compelled to pay the debt. But the law, as it at present existed, said that if B. had furnished A. with means to carry on his business, B. might receive interest on his money at a rate, however usurious, without incurring any liability; but if, instead of receiving interest, he received any portion of the profits of A., that then he (B.) should be liable for A.'s debt. Why should this be? It was impossible to distinguish between the two modes of remuneration. And was it not far better that a man should be allowed to share in the profits, whatever they might be, than to receive from the trader a certain amount of interest, whether the profits would admit of its payment or not? The second Bill related to partnerships, and its principle affected all associations known under the denomination of Joint-stock companies, such as railways, dock companies, and other enterprises, in which a large amount of capital was invested. Strange to say, these companies, instead of being looked upon as a great national good, had been regarded as public nuisances by our courts of law; and, although thy had been recognised by the Legislature, they were subjected to many severe restrictions, so that a great number of bonâ fide companies had suffered, while many fraudulent companies had not been prevented from pursuing their practices. The Bill now introduced would put all companies on the same footing, and the great principle of the Bill was that any number of persons were at liberty to associate, provided they gave notice of the terms on which their company was formed. This was a valuable principle, and he begged to renew the expression of the great satisfaction with which he had heard this comprehensive measure propounded by the right hon. Gentleman.
MR. MALINSsaid, he cordially joined with the hon. and learned Member who had last addressed the Committee in the
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expression of satisfaction at the statements made by the right hon. Gentleman the Vice President of the Board of Trade in introducing his measures. The subjects of those Bills were of the highest importance to the commercial interests of the country. He had always felt a strong interest in these questions, and he had taken an active part in the discussions that took place in the House last Session upon the Limited Liability Bill. The object of that measure was no doubt good, but the Bill itself was so erroneously framed, that he was confident the restrictions which it imposed should be repealed at the very earliest period of the next Session of Parliament. He had always taken his stand upon the question that a man should be free to enter into any contracts he pleased; but he also felt it was the duty of the Legislature to give the greatest facility to the public to ascertain the precise nature of those contracts. He concurred with the right hon. Gentleman, with perhaps one single exception. He thought that the right hon. Gentleman had adopted the right principle, when he determined to overrule by legislative enactment the decision in the celebrated case referred to as to the liabilities of a dormant partner. He rejoiced that the time had at length arrived—and he believed by the general concurrence of all—that the principle which gave rise to that decision was no longer to prevail, and that the whole subject involved would be reduced to one rational system. A man should only be made liable for what he contracted, and should not be made responsible for that of which he could have had no knowledge. In the general principle of the first Bill of the right hon. Gentleman he fully concurred. He thought it most reasonable that every facility possible should be given for obtaining capital. He believed that they all concurred in the propriety of repealing the usury laws. Then, having removed those restrictions as to the interest of money, the measure proposed by the right hon. Gentleman was only following up the same principle, in declaring that every man should be allowed to invest his money in commerce, and that the utmost freedom as to such speculations should prevail. With regard to the Joint-Stock Companies Registration Bill, the right hon. Gentleman had explained its objects with great clearness and in great detail. He (Mr. Malins) did not propose to go into particulars upon that subject at

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the present moment. He would only say that he should be most happy and ready to lend the right hon. Gentleman his best assistance in carrying the general provisions of his Bill into effect. With regard to some of its details, there may be some differences of opinion. He himself thought that there were two or three points open to considerable doubt, and he could not pledge himself to the whole of them. When they went into Committee upon the Bill, and were called upon to consider its details, the right hon. Gentleman would have a much better opportunity of explaining and justifying the particular details of his measure than was afforded him at present. Then would be the proper time to suggest alterations deemed important, and of directing attention to particular points. He would mention one by way of example. The right hon. Gentleman provides, in respect to registration, that, instead of being obliged to go to Serjeants' Inn to inspect the register of shareholders, such a register shall be kept at the office of each company, so that every person dealing with it may, with the greatest facility, ascertain the names of the shareholders and the state of its affairs. In the propriety of such a provision he entirely concurred. But what he thought was open to much doubt was this point of the right hon. Gentleman's statement. He proposed that the fact of registration should be held conclusive evidence as to who the contributories were. Now that appeared to him to be a point not so well considered by the right hon. Gentleman as the other features of his Bill. Surely they might presume that there might be some mistake or even fraud committed in the registration of the company. If a name be erroneously inserted, it would hardly be just or fair to make the person liable, because a creditor had found his name in the list of shareholders. With regard to the other great question—namely, the Winding-up Act, it was important to consider its operation. The Committee were aware that that Act passed through Parliament in 1848. Well, that was an Act which probably occasioned more litigation, and a greater expenditure of money in law, than any other subject of a similar character. Under that Act great injustice had been done, because he thought that its meaning was misconceived. The great litigation, unfortunately, arose in consequence of the judgment of Lord Cottenham upon the construction
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of that measure—a judgment overruling the decision of the present Lord Justice Knight Bruce, then one of the Vice-Chancellors. The latter learned Judge had decided that the Act of 1848 did not apply to abortive railway companies. Lord Cottenham, however, subsequently decided that it did. This judgment of Lord Cottenham led to great litigation, which lasted for years. It rendered it necessary first to consider who were contributors to those companies. Our Chancery reports for five or six years were filled with cases involving the question as to what constituted contributories. Well, after all this litigation the Act had been found most mischievous in its operation, so far as it had been applied to those abortive railway companies. Now, the general principle of the right hon. Gentleman's Bill was most beneficial. He would take a company such as the right hon. Gentleman proposed to make his measure applicable to, namely, one in which the parties, either from insufficient capital, or from other causes, wore unable to carry on their undertaking, and who under such circumstances were desirous of winding up their concern. Now, in such cases the principle of the right hon. Gentleman's Bill would work admirably. There were many imperfections in the former measure which the Bill of the right hon. Gentleman would effectually remove. It was also a wise principle to enact that when a company proposed to incorporate itself under the provisions of the Bill, that such company alone ought to be sued. It was a great misfortune, in his opinion, that the principle of limited liability had not been engrafted on the Joint Stock Registration Act of 1844. The right hon. Gentleman now said most reasonably that the company being incorporated, such company should alone be sued, and that the right of suing individual members under such circumstances should be altogether abolished. The right hon. Gentleman accompanied such a principle with a provision also exceedingly reasonable—namely, if a company be unable to meet their engagements, or should allow a judgment to remain unsatisfied, those facts should be considered as evidence that they were no longer fit to carry on business, and that the company might be wound up. The great evil of the Winding-up Act was, that it gave rise to much litigation as to what constituted a contributory.

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It was thought for a long time that a provisional committeeman was necessarily a contributory to a company, and, therefore, liable to their debts. After much litigation upon that point, the question was carried up to the House of Lords, where it was held that a provisional committeeman was not necessarily a contributory to the company. That decision had let loose thousands of persons who were before held liable to the debts of the numerous abortive railway companies, which had been attempted to be established in the railway mania of 1845. But the right hon. Gentleman proposed the registration of shareholders as a remedy for all this difficulty, and as he (Mr. Malins) understood the principle of his measure, if the company were found to be incompetent to perform their engagements, they might be at once wound up by the court. The court would refer the matter to the proper officer, who would have to take an account of the assets, to call in and collect those assets, to take an account of the debts, and of the capital that had been paid up. If the shares of the company were £20 each, and that £15 had been paid up, then the officer of the court would only have the power of calling for the remaining £5. The assets in the case would be distributed amongst the shareholders. This, in his opinion, would be so plain and reasonable an enactment that he would afford the right hon. Gentleman his best assistance in rendering it effectual. Those who become losers under the provisions of this Act would have no reason to complain, because they would be enabled to ascertain distinctly the nature of the contracts to which they would make themselves parties. And at the same time the measure would confer—what he and, he believed, the commercial community generally, would consider—one of the greatest boons ever bestowed upon the trading interests of the country. It would remove those absurdities which had so long shackled the commercial freedom of the country, and which, in respect to Joint-stock companies, had done such mischief and imperilled the safety of many families. He said that they ought to remove all fetters from our commerce, and all those dangers that beset society. The present state of the law was continually effecting the ruin of families, without giving a single benefit to the community. He heartily concurred in
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the general objects of the measures, and he would give to the right hon. Gentleman his best assistance in the endeavour to render them as effectual in their operation as possible.
VISCOUNT GODERICHsaid, he begged to offer to the right hon. Gentleman the Vice-President of the Board of Trade his best thanks for the measures which he had proposed, reserving, of course, his opinion upon details until a fitter opportunity for discussing them should arrive. Last year he had regretted that the Limited Liability Act was based upon the existing Joint-Stock Companies Act. His views, however, were now entirely changed, and he no longer entertained that objection. The confining the advantages of limited liability to Joint-stock companies was the imperfection of the present law, and that imperfection the right hon. Gentleman proposed to remove. A complete reform would, in his opinion, be effected by consolidating into one Statute, as was now proposed, the laws of limited liability and Joint-stock companies, and such a measure ought not to be confounded with the tinkering legislation which led to the repeal of an Act in the very next Session after it was passed, and to its enactment in another and very different form. Last Session he (Viscount Goderich) proposed an Amendment to the Limited Liability Bill, that there should be no limit to the shares of companies; he was then opposed by the Government, but he was glad to find they had now adopted his view. Without pledging himself to the whole measure, he felt bound to give it his most cordial support, believing that, when passed, it would be a worthy monument of the comprehensive statesmanship of the right hon. Gentleman.
MR. WHITE SIDEsaid, he wished to ask whether the Bill would extend to all parts of the empire?
MR. LOWEreplied that it would extend to Ireland.
MR. CARDWELLsaid, that knowing the difficulty, the complexity, and the extent of minute detail of the subjects which must have come under the notice of the right hon. Gentleman, he was desirous to express his great satisfaction that the measure had fallen into such able hands. If he understood rightly, his right hon. Friend would repeal several Acts of Parliament, most of which had already led to very great inconvenience and difficulty, both in the Courts of Law and in commercial

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transactions, and consolidate the law in a single Act, so as to give lawyers and commercial men the utmost facility of reference. The Act for the Registration of Joint-Stock Companies was passed at a time when much of the experience they now possessed had not been obtained, and it contained many provisions of superabundant prudence, which really gave no protection against the evils they now sought to remedy, but created a fictitious security in the minds of the public, by inducing them to trust to Parliament instead of exercising that caution which they alone could effectually use. His right hon. Friend would repeal all the complicated provisions with regard to provisional registration, and there would be a schedule to the Act, in which would be contained the ordinary forms according to which companies, without the least expense of fees or any legal expense, could be constituted. Those were the most valuable provisions of the measure, because these two points were secured—first, that any company could be incorporated without expense; and, secondly, that if any company adopted different rules and regulations from those in the schedule under the Act attention would be attracted and caution excited in the minds of the public, so as to lead them to inquire whether such variation was reasonable or not. He understood that his right hon. Friend incorporated the Wind-ing-up Acts, which, though passed for a most useful purpose, had given rise to very extensive litigation, and so incorporated them as to take away the causes which had led to litigation, thereby securing to the public the benefit of those Acts without the difficulties which had caused them to be regarded with such disfavour in the Courts of Law. The Act passed last Session with regard to limited liability was also to form part of the new scheme of legislation. There was no objection pressed against the Limited Liability Bill last Session which had greater weight with the House than that it ought to be accompanied with extensive changes and consolidation of all the laws affecting Joint-stock companies. He congratulated his right hon. Friend that that objection would now be removed, and that the law with regard to limited liability would form part of a well-considered system of legislation. It would be idle to enter, at that moment, upon any controverted points in the question of limited liability; but, as he understood, the principle laid down by his right
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hon. Friend was this—that limited liability was not a matter of privilege or right, but a matter of contract and notice, and that no injury could be done to any person who had full notice of liability being limited. It was notorious that under recent legislation there had been a great growth of dishonest companies, which disgraced commerce and lessened the respect of the community for the law of this country; and if his right hon. Friend succeeded in amending the whole law of Joint-stock companies, which had led to such a result, he would identify his name with a work of which any man might well be proud.
MR. J. G. PHILLIMOREsaid, he wished to offer his feeble tribute of praise both to the principles of the measures and the remarkable speech by which they had been introduced. That speech reflected the highest credit upon the sound and enlightened views of the right hon. Gentleman. It did not, however, appear to him (Mr. J. G. Phillimore) that the right hon. Gentleman had followed out his principle to a sound conclusion. He would take the opportunity of showing him how dangerous it was to be led aside by authority in the principles of legislation. He was glad to find that the hon. and learned Gentleman opposite (Mr. Malins) had thrown off his Chancery habits, in coming forward upon the present occasion. The whole of the calamities which had been alluded to as having overtaken families were owing entirely to judicial legislation, that was allowing Judges to take a course totally unfitting their position. All the mischief had arisen from the decision given in the celebrated case of "Waugh v. Carver"—one indeed of the most absurd decisions ever come to by a court of law. It was too often the practice to meet any suggestion made for the improvement of the law by the observation, "How dare you oppose your opinion to a decision that has been ratified by so many eminent authorities?" He would remind the Committee that there was not one of the Judges who did not oppose Sir Samuel Romilly in his measure for the amendment of the criminal law. He thought that the Judges very frequently stepped outside of their province in their decisions upon the construction of the law. He should conclude by again expressing his satisfaction at the measures proposed.
Resolutions agreed to.
House resumed.
Resolutions reported, and Bills ordered to be brought in by Mr. FITZROY, Mr. LOWE, and Viscount PALMERSTON.
Adjourned at half after Eight o'clock till Monday next.

MINUTES.
Sat First in Parliament.—The Marquess Townshend, after the Death of his Cousin.
Took the Oaths.—Several Lords.

THE ANSWER TO THE ADDRESS.
HER MAJESTY'S most gracious Answer to the Address was reported as follows:—
"MY LORDS,
"I THANK you for your loyal and dutiful Address.
"I RELY with Confidence on your cordial Co-operation in all Measures which I may consider necessary to maintain the Honour and Dignity of the Empire, and to promote the permanent Interests and Welfare of My People."
House adjourned to Monday next.