Sitting of 24 July 1900

PRIVATE BILL BUSINESS.

  PRIVATE BILLS [Lords] (STANDING ORDERS NOT PREVIOUSLY INQUIRED INTO COMPLIED WITH).
  Mr. SPEAKER Mr. SPEAKER laid upon the Table Report from one of the Examiners of Petitions for Private Bills, That, in the case of the following Bill, originating in the Lords, and referred on the First Heading thereof, the Standing Orders not previously inquired into, and which are applicable thereto, have been complied with, viz.:—
  Midland Great Western Railway of Ireland Bill [Lords.]
  Ordered, That the Bill be read a second time.

  STANDING COMMITTEE ON LAW, ETC.
  Ordered, That the Standing Committee on Law, etc., have leave to sit this day during the Sitting of the House.—(Mr. T. W. Russell.)
  BURNLEY CORPORATION BILL [Lords].
  Lords Amendment to Commons Amendments considered, and agreed to.
GREAT NORTHERN RAILWAY BILL.
  MIDLAND RAILWAY BILL.
  Lords Amendments considered, and agreed to.
  ROTHERHAM CORPORATION BILL [Lords].
  Read the third time, and passed, with Amendments.

  GLASGOW BUILDING REGULATIONS BILL [Lords].
  As amended, considered; Amendments made.
  Ordered, That Standing Orders 223 and 243 be suspended, and that the Bill be now read the third time.—(Mr. Caldwell.)
  Bill accordingly read the third time, and passed, with Amendments.

  SOUTH SHIELDS CORPORATION BILL [Lords].
  As amended, considered; to be read the third time.

  MOTHERWELL AND I5ELLSHILL RAIL WAY BILL [Lords] (BY ORDER).
  As amended, considered.
  Ordered, That Standing Orders 223 and 243 be suspended, and that the Bill be now read the third time.—(Mr. Caldwell.)
  Bill accordingly read the third time, and passed, with Amendments.

  TRAMWAYS ORDERS CONFIRMATION (No. 1) BILL [Lords].
  Read the third time, and passed, with Amendments.
  EDUCATION BOARD PROVISIONAL ORDER CONFIRMATION (LONDON) BILL [Lords].
  As amended, considered; to be read the third time To-morrow.
TRAMWAYS ORDERS CONFIRMATION (No. 3) BILL [Lords].
  TRAMWAYS ORDERS CONFIRMATION (No. 4) BILL [Lords].
  Read a second time, and committed.

  CRYSTAL PALACE COMPANY BILL [Lords].
  Reported, without amendment; Report to lie upon the Table.
  Bill to be read the third time.

  ROE'S PATENT BILL [Lords].
  Reported, without amendment; Report to lie upon the Table.
  Bill to be read the third time.

SALFORD CORPORATION BILL [Lords].
  WITHINGTON URBAN DISTRICT COUNCIL BILL [Lords].

    SOUTH EASTERN AND LONDON, CHAT HAM, AND DOVER RAILWAYS BILL [Lords].
    IPSWICH CORPORATION TRAMWAYS BILL [Lords].
    BUENOS AYRES AND ROSARIO RAILWAY BILL [Lords].
    Reported with Amendments; Reports to lie upon the Table, and to be printed.

    COSTA RICA RAILWAY COMPANY BILL [Lords].
    Reported, without amendment; Reports to lie upon the Table, and to be printed

    MESSAGE FROM THE LORDS.
    That they have agreed to—London (St. Luke) Provisional Order Bill, London (Southwark) Provisional Order Bill, without amendment.
    That they have agreed to—South Metropolitan Gas Bill, London and South Western Railway Bill, Aberdeen Corporation Tramways Bill, Great Western Railway Bill, with Amendments.
    That they have agreed to Amendments to —Edinburgh Corporation Bill [Lords], Mersey Railway Bill [Lords], Raw-marsh Urban District Council (Tramways) Bill [Lords], without amendment.

  PETITIONS.
    SALE OF INTOXICATING LIQUORS TO CHILDREN (No. 2) BILL.
    Petitions in favour, from Truro and East Bristol; to lie upon the Table.
    SUNDAY CLOSING (MONMOUTHSHIRE) BILL.
    Petitions in favour, from Hastings and Battle; to lie upon the Table.
RETURNS, REPORTS, ETC.
  SHEBEENS IN TOWNS (IRELAND).
  Return [presented 23rd July] to be printed. [No. 295.]
  POLICE ACT, 1890.
  Copy presented, of correspondence relative to the refusal of the Secretary of State's Certificate under Section 17 (2) of the Act to the River Tyne Police Force, for the year ended 29th September, 1899 [by Act]; to lie upon the Table.
  QUEEN'S COLLEGE (BELFAST).
  Copy presented, of Annual Report of the President for the Session 1899–1900 [by Command]; to lie upon the Table.
  ARMY.
  Copy presented, of Statement of Stores transferred from Navy to Land Service for South Africa up to 31st December, 1899 [by Command]; to lie upon the Table.
  CONTRACTS FOR LOCAL AUTHORI TIES (WAGES).
  Return presented, relative thereto [ordered 9th April; Sir Charles Dilke]; to lie upon the table, and to be printed. [No. 296.]
  TRADE REPORTS (ANNUAL SERIES).
  Copy presented, of Diplomatic and Consular Reports, Annual Series, No. 2484 [by Command]; to lie upon the Table.
  TREATY SERIES (No. 15, 1900).
  Copy presented, of Convention between the United Kingdom and Uruguay, renewing the Treaty of Friendship, Commerce, and Navigation of 13th November, 1885. Signed at Monte Video, 15th July, 1899. Ratifications exchanged at Monte Video, 9th June, 1900 [by Command]; to lie upon the Table.
  NATAL CORRESPONDENCE.
  Return presented, relative thereto [Ad-dross 9th July; Captain Sinclair]; to lie upon the Table.
QUESTIONS.

  CHINA —BRITISH REPRESENTATION —CONSUL GENERAL WARREN.
  SIR EDWARD SASSOON: I beg to ask the Under Secretary of State for Foreign Affairs whether, in view of the fact that the centre of European authority is now transferred to Shanghai, Her Majesty's Government see any ob-

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  jection to the immediate appointment of Mr. Pelham Warren, acting Charge d'Affaires in China.
  THE UNDER SECRETARY OF STATE FOR FOREIGN AFFAIRS (Mr. BRODRICK,): As I stated on the 20th instant, Mr. Warren has full powers to take all necessary action, but it is not considered desirable in the present state of affairs to make the change suggested by the question.
  SIR EDWARD SASSOON: Might not the appointment be made as a temporary measure?
  The question was not answered.

  EXPORTS OF MUNITIONS OF WAR TO CHINA.
  COLONEL PILKINGTON: I beg to ask the Under Secretary of State for Foreign Affairs whether the Government have come to any decision with regard to stopping the export of arms and ammunition from this country to China for the use of the Chinese; and, if so, whether he will communicate the nature of such decision to the House; and whether any ironclads, torpedo boats, or other vessels of war are now being constructed for the Chinese by British firms, or are in course of transit from British builders to the Chinese; and, if so, whether the Government intend to stop these vessels, either on the water or in the building yards.
  MR. BRODRICK: In reply to the first portion of the question the Bill announced by the First Lord of the Treasury in reply to the hon. Member for East Mayo, on Friday last, was introduced in another place on that day, and was read a second time yesterday. No ironclads, torpedo boats, or other vessels of war are now being constructed for the Chinese by British firms in this country. None are in transit from British builders to the Chinese. So far as is known none are under orders from China to be built in the United Kingdom.

  RECENT NEWS FROM CHINA.
  MR. JAMES LOWTHER: Is there any news from China?
  MR. BRODRICK: I am afraid we have no fresh news to communicate.

  SOUTH AFRICAN WAR—HOSPITAL AND MEDICAL ARRANGEMENTS INQUIRY.
  MR. PICKERSGILL: I beg to ask the First Lord of the Treasury whether the persons appointed to report on the arrangements for the care and treatment of the sick and wounded in South Africa will have any, and what, powers to enforce the attendance of witnesses, to examine witnesses on oath, and to compel the production of documents; and, how it is proposed to protect witnesses who give evidence; and whether, with a view to extend to witnesses the protection afforded by The Witnesses (Public Inquiries) Protection Act, 1892, he will consider the propriety of holding the proposed inquiry under the authority of a Royal Commission.
  THE FIRST LORD OF THE TREASURY (Mr. A. J. BALFOUR,): As the hon. Member is probably aware, there is no power under any form of Commission other than a Statutory Commission to take evidence on oath. This Commission, like all Commissions not directly appointed by Parliament, will therefore be without that power. I understand that the chairman of the Commission has already made public the very elaborate precautions which the Commission propose to take for the protection of witnesses, and I doubt whether any statute would give a protection so absolute. At the same time, as Parliament has passed a statute protecting witnesses before Royal Commissions—a protection which does not extend to commissions otherwise appointed—this Commission will be made a Royal Commission.
  MR. SWIFT MACNEILL: Will the Commission have compulsory powers to insist on bringing witnesses before them?
  MR. A. J. BALFOUR: I have already stated that no Commission not appointed by Parliament except one appointed by statute has those compulsory powers.
  MR. SWIFT MACNEILL: This Commission is a farce.
  MR. BURDETT-COUTTS: Has a Royal Commission which derives its authority from the executive power of the Crown not those compulsory powers?
  MR. A. J. BALFOUR: No, Sir; I have twice said so.
  MR. BURDETT-COUTTS: Then I will ask the right hon. Gentleman another question. I admit that it is rather a long question, but it can be briefly answered. In cases of Regular soldiers who believe that they will be marked men and would be ruined for life, and, therefore, will not speak; in the case of more humble people in some kind of active employment in connection with the Army Medical Department who have the same feeling and, therefore, will not speak; in the case of civilian surgeons in the employment of the Army Medical Department and dependent for their daily livelihood on the continuance of that employment and therefore will not speak; and in the case of civilian doctors—
  MR. SPEAKER: Order, order! The hon. Member is really delivering a speech and an argument. An answer has been given to the question, but the hon. Member is now proceeding to point out a number of cases in which he considers that witnesses require protection. If move information is required he should give notice of the question.
  MR. BURDETT-COUTTS: I had no intention of making a speech, I was only enumerating certain cases with regard to which I desired to ask a question. I will, however, stop the enumeration and will ask the right hon. Gentleman how, with regard to all those cases of people dependent on their employment for their existence, he proposes to obtain such important evidence without compulsory powers, and whether he proposes to give the witnesses protection?
  MR. A. J. BALFOUR: In my opinion the question conveys a perfectly unmerited insult upon persons who do not deserve it at his hands or anybody else's. If the hon. Gentleman will wait until he sees in print the statement made by Lord Justice Romer this morning, he will see what precautions have boon taken by the Commission

  BOER PRISONERS AT PRETORIA — ATTEMPT TO BLOW UP MAGAZINE.
  MR. PATRICK O'BRIEN: I beg to ask the Under Secretary of State for War if he will inquire whether Lieu-
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  tenant Tossel, of the Transvaal Police, and Mr. Solomon Gillingham have been condemned to death in Pretoria for alleged complicity in a plot to blow up the magazine; and whether he can say if Mr. Gillingham holds military rank in the Republican Army, or what is his occupation; when the trial took place; before what tribunal; what was the evidence of guilt; when the sentence is to be carried into effect; and in what manner.
  THE UNDER SECRETARY OF STATE FOR WAR (Mr. WYNDHAM,): There is no information at the War Office in regard to the matter referred to in the question, and it is not proposed to make any inquiry.
  MR. PATRICK O'BRIEN: Will the hon. Gentleman inquire if the War Office have received any intimation that it is the intention of the Boer military authorities to shoot some important prisoners they hold—among them two Irish lords —if these men are put to death?

  BOER WOMEN SENT TO ENEMY'S LINES.
  DR. TANNER: I beg to ask the Under Secretary of State for War whether the wives of all Boers now alleged to be fighting are ordered to report themselves in order that they may be sent into the enemy's lines; and, if so, can he give the reason for this order.
  MR. WYNDHAM: No information on this matter has reached the War Office.
  SIR WILFRID LAWSON: Will the hon. Gentleman make inquiry?
  MR. WYNDHAM: I see no cause for inquiry.
  DR. TANNER: I will put a question again next Tuesday.

  DOCTORS AND NURSES IN THE ORANGE RIVER COLONY.
  DR. TANNER: I beg to ask the Under Secretary of State for War if he has any official information showing that, in consequence of the arrangements, out of twenty-four nurses employed in the Orange River Colony, fourteen have succumbed; and whether 100 more doctors and 200 nurses are now required,

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  and stores stacked at base are to be sent up to the front.
  MR. WYNDHAM: Eight nurses have died in South Africa. Lord Roberts has quite recently asked for twenty more surgeons and fifty nurses. These are being sent. It is visual for stores to be stacked at the base and sent up as required.

  ARTILLERY AMMUNITION SUPPLIES.
  MR. YERBURGH: I beg to ask the Under Secretary of State for War what was the reserve of field and horse artillery in this country when the South African Republic declared war; and how many rounds per gun were sent to South Africa with the Army Corps; and how many rounds per gun wore sent with the batteries which went from India to Durban; and whether, in order to make up the artillery ammunition required for the war, recourse was had to foreign manufacturers.
  MR. WYNDHAM: In introducing a Supplementary Estimate on Friday, I propose to make a statement dealing with reserves of ammunition and other equipment. Perhaps the hon. Member will allow me to defer replying to him till then.

  INOCULATION AGAINST TYPHOID.
  MR. CHANNING: I beg to ask the Under Secretary of State for War whether he is aware that the Director General of the Army Medical Department, at the Indian Medical Service dinner on 14th June, stated that the results of inoculation for typhoid, while it afforded some protection against contracting the disease, rather increased the risk of death when contracted, but that this only applied to the men, as both the incidence and case mortality among officers appeared to be increased by inoculation; and whether the recent statistics of Professor Wright, of Netley, which show that both attacks and deaths from typhoid are seven times less in the inoculated than in the uninoculated, applied equally to officers and men separately.
  MR. WYNDHAM: I have no know ledge of the statement attributed to the Director General of the Army Medical Department, and, as I have already explained to the House on more than
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  one occasion, the statistics at present available are not sufficient to enable me to give a satisfactory reply to the question.
  MR. SWIFT MACNEILL: Will the hon. Gentleman inquire of the Director General if he made the statement?
  MR. WYNDHAM: I am not in the habit of asking my friends what they say in after-dinner speeches.

  VOLUNTEERS AND GARRISON DUTY.
  MR. SEELY: I beg to ask the Under Secretary of State for War whether he can state to the House how many Volunteer regiments offered their services to the Government last winter for garrison duty, and whether any were asked to undertake it and were unable to do so.
  MR. WYNDHAM: No Volunteer corps has been asked to undertake garrison duty. Sixteen corps offered their services for various purposes in the course of last winter, but it was not found necessary to take advantage of these patriotic offers. It is difficult to give an answer which will not mislead. Excepting regular garrison artillery at military ports, there are no fixed garrisons in this country so long as an attack on it is not apprehended. There is a certain amount of barrack accommodation, and that has been overcrowded since the beginning of the war. At this moment we have 50,000 more Regulars and Militia than we could accommodate in barracks when the camping season is over. So that it would have been impossible to accept offers from Volunteers for home service in the winter.

  SMALL ARM AMMUNITION SUPPLIES.
  MR. FABER: I beg to ask the Under Secretary of State for War, at the time when he stated that it was intended to use Mark IV. ammunition at foreign stations for practice purposes only, what was the amount of other serviceable small arms ammunition available in the country, and when the manufacture of Mark II. ammunition was commenced.
  MR. WYNDHAM: The hon. Member will no doubt see that it is not expedient to give such information except in general terms. On the date mentioned — namely, 24th July,

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  1899, taking the authorised reserve at 400 rounds per man armed with a rifle, 200 rounds per man with carbine—infantry, maximum, 28,000; cavalry, maximum, 45,000—we had an excess of 7,000,000 rounds above that reserve so calculated. In spite of the subsequent adoption of Mark V. and readoption of Mark II., we have been able to secure an ample output from the factory to the trade.

  STORES BORROWED BY ARMY FROM NAVY.
  MR. EDMUND ROBERTSON: I beg to ask the Under Secretary of State for War if he can state when the promised Return of warlike stores borrowed by the Army from the Navy will be laid upon the Table.
  MR. WYNDHAM: The preparation of this Return has been delayed in order to make it as complete as possible in the imperfect state of our information, but it will be laid on the Table to-night, and I hope that advance copies will be available this evening.

  SOUTH DENES CAMP—SISTERS OF NAZARETH.
  DR. TANNER: I beg to ask the Under Secretary of State for War whether his attention has been called to the regulations issued by Colonel Brownrigg, inspecting the Volunteers on the South Denes, Yarmouth, forbidding the Sisters of Nazareth to collect pennies from the 4,000 Volunteers now in camp; whether Colonel Brownrigg has any authority for issuing such regulations; if he is aware that the sisterhood who were sent back are of the same order as that which was so highly commended for nursing the sick and wounded in South Africa; and if there were 1,000 Catholic Volunteers in the camp at the time.
  MR. WYNDHAM: I must apologise to the hon. Member for having unintentionally misinformed him in reply to his former question on this subject. I told him that the matter was within the competence of Colonel Brownrigg, and that the War Office did not interfere. I now learn that a circular was issued by the Adjutant General in October last, prohibiting the practice of ladies entering barracks for the purpose of collecting alms. It was under this order that Colonel Brownrigg acted, and he had, of course, no option but to do so.

  PUBLIC SCHOOL ARMY COMMIS SIONS-ETON.
  MAJOR RASCH: I beg to ask the Under Secretary of State for War whether certain commissions for the Army have been allotted to the head master of Eton; and will the recipients be allowed to pass without the usual competitive examination.
  MR. WYNDHAM: Nineteen commissions have been assigned to public schools, of which two have been allotted to Eton. The nominees will be treated like the other recipients of direct commissions, and will not be required to pass a competitive examination.
  MAJOR RASCH: What is the reason for this extraordinary preference?
  MR. WYNDHAM: I pointed out some time ago that all those who received direct commissions were to be twenty years of age. I announced that twenty commissions would be given to public schools, and as a matter of fact nineteen have been given.

  1ST VOLUNTEER BATTALION LEICES TERS—SUPPLY OF RIFLES.
  MAJOR RASCH: I beg to ask the Under Secretary of State for War whether he is aware that the 1st Volunteer Battalion Leicesters is 1,560 strong, that they have only (19th July) five rifles to six men, and that they indented for 230 on 5th June, twenty-one on 12th June, and fifty on 12th July, and were informed that none were available; and whether, as they go into camp on Salisbury Plain, 5th August, and must have the arms to earn the additional grant, the War Office will consider the propriety of supplying them.
  MR. WYNDHAM: This battalion has up to date demanded 261 rifles, and these were sent from Weedon on the 17th instant.

  THE CHANNEL AND MEDITER RANEAN FLEETS.
  SIR J. COLOMB: I beg to ask the First Lord of the Admiralty whether Returns are furnished by the Admirals commanding the Channel and Mediterranean Fleets showing the time spent in harbour, the time spent at sea, the duration and nature of evolutions

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  practised at sea, the state of the weather prevailing during such evolutions, and all such information as may be necessary to enable the Admiralty to record and judge the nature and extent of opportunities given for the sea-training of officers and men of these fleets; and, if so, are such Returns furnished quarterly or half-yearly.
  THE FIRST LORD OF THE ADMIRALTY (Mr. GOSCHEN,): The Returns and reports furnished by Admirals in command of squadrons, together with the programmes of their proposed movements which are submitted for approval, are such as to enable the Admiralty to judge of the nature and extent of the cruises taken by them, and of the opportunities for sea-training to the officers and men afforded by them. Some of these Returns are quarterly, but reports of proceedings are received at shorter intervals.
  MR. ARNOLD-FORSTER: May I ask whether it is not a fact that the time spent at sea has been singularly short in the last two years?
  MR. GOSCHEN: No, Sir.

  NAVAL COURTS MARTIAL—LAW OF EVIDENCE.
  MR. H. D. GREENE: I beg to ask the First Lord of the Admiralty whether, in fulfilment of his promise, he has consulted the Lords of the Admiralty as to extending the provisions of the Criminal Evidence Act, 1898, to naval courts martial, and with what result.
  MR. GOSCHEN: Yes, Sir; steps will be taken to extend the provisions of the Criminal Evidence Act, 1898, to naval courts martial.

  PORT GUARDSHIP FOR THE MERSEY —RECRUITING.
  MR. CHARLES M'ARTHURI beg to ask the First Lord of the Admiralty whether he has considered the desirability of placing a port guardship in the Mersey; or, if that course is impracticable, of arranging for the more frequent visit of one or more of Her Majesty's ships to the port of Liverpool; and whether, having regard to the efforts made locally to arouse public
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  interest in the Navy, and to the number of respectable lads who might volunteer for the service if the opportunity were afforded to them, it would be possible to provide some further facilities for the enlistment and training of recruits for the Royal Navy or Royal Naval Reserve.
  MR. GOSCHEN: In 1884 the port guardship was removed to Holyhead, as the Mersey was found an unsuitable anchorage on account of the strong tides and crowded state of the river and great steamer traffic; boat work was difficult, and collisions took place with passing steamers. For these reasons it is not contemplated to again place a ship in the Mersey. The "Northampton" visits Liverpool occasionally for recruiting purposes, and will most likely do so again next year. Her last visit was in 1897. With reference to the last paragraph of the hon. Gentleman's question, recruiting at Liverpool has been quite up to the mark as compared with other recruiting centres.

  NORTHERN TERRITORY OF AUSTRALIA.
  MR. HOGAN: I beg to ask the Secretary of State for the Colonies whether the administration of the Northern Territory by South Australia is of a permanent or temporary character; what rights, if any, in this territory are still retained by the Imperial Government; and in what relation will the Northern Territory stand towards the Government of the Australian Commonwealth.
  THE SECRETARY OF STATE FOR THE COLONIES (Mr. J. CHAMBERLAIN,): The Northern Territory was annexed to South Australia by Letters Patent in 1863, Her Majesty reserving full right to revoke or amend these Letters Patent. So long as these remain unaltered the territory is an integral part of the colony. The Imperial Government have exactly the same rights in the Northern Territory as in any other part of the colony, which will enter the Commonwealth as a whole, and will stand in the same relation to the Government of the Commonwealth as the rest of the colony.

  TONGA PROTECTORATE.
  MR. HOGAN: I beg to ask the Secretary of State for the Colonies whether he

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  is now in receipt of detailed official information concerning the circumstances under which a protectorate over Tonga was proclaimed; and, if so, whether such information shows that no protectorate flag was hoisted and no reply given by the Tongan Government to the salute of twenty-one guns fired from H.M.S. "Porpoise."
  MR. J. CHAMBERLAIN: Mr. Thomson's report has been received and is now under consideration. I do not understand what is meant by a protectorate flag. The British flag is not hoisted when a protectorate is proclaimed, but only when a country is taken possession of by Her Majesty. I am not aware that the circumstances in which the salute was fired by Her Majesty's ship "Porpoise" were such as to call for a reply from the Tonga Government. I may state, however, that in accordance with the usual practice in protectorates the British flag was hoisted by the Tongan Government alongside the Tongan flag on Her Majesty's birthday, and duly saluted with twenty-one guns.

  INDIAN FAMINE—PRIVATE CHARITY.
  SIR WILLIAM WEDDEEBURN: I beg to ask the Secretary of State for India whether, with a view to stimulate liberality in subscriptions to the Indian Famine Fund, he will, by a detailed statement, make clear to the public what branches of relief are undertaken by the Indian Government and what branches are dependent upon private charity; and whether he can give a rough estimate of the total expenditure required from the Government of India and from private charity respectively in order to deal suitably with the present calamity.
  THE SECRETARY OF STATE FOR INDIA (Lord G. HAMILTON, Middlesex, Ealing): If the hon. Baronet will read any of the statements which I have sent to the Lord Mayor, or the various published letters I have written to the different organisations who have been, and are collecting funds for the Indian Charitable Famine Fund, he will there find clearly stated the branches of relief work undertaken by the Government and the subsidiary spheres of work reserved for charity. As regards the second question, the hon. Baronet will perhaps allow me to reserve till Thursday
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  the general and detailed statement I shall be ready to make upon the famine expenditure.

  CANADA AND THE INDIAN FAMINE.
  SIR WILLIAM WEDDERBURN: I beg to ask the Secretary of State for India whether he is aware that in April last several Members of the Canadian House of Commons urged the Colonial Government to make a substantial grant to the Indian famine fund; and that the Premier, in reply, announced that the Government was in communication with the Homo authorities on the subject; and whether he can state what was the result of this communication.
  MR. J. CHAMBERLAIN: Yes; I have seen the report of the discussion to which the hon. Member refers. I have not yet, however, received any communication from the Dominion Government on the subject.

  RANGOON OUTRAGE—COMMAND OF THE ROYAL WEST KENT REGI-MENT.
  SIR LEWIS M'IVERI beg to ask the Secretary of State for India whether Brigadier General Rolland was removed from his command as Brigadier on the ground of alleged apathy and inaction in what is known as the Royal West Kent Regiment case; and, if so, whether the Secretary of State can name any specific act or omission on the part of Colonel Rolland justifying this charge: and whether he can state anything in the matter which Colonel Rolland could have done, or ought to, have done, and which he failed to do.
  LORD G. HAMILTON: The ground upon which Colonel Rolland was removed from his command in connection with the gross outrage committed at Rangoon in April, 1899, was that, being in immediate command at Rangoon, and primarily responsible for discipline at the station, he showed an apathy and inaction which conduced to a miscarriage of justice. His case was most carefully considered by the Commander in Chief in India, by the Government of India, and by myself in Council; and, in allowing Colonel Rolland to remain in the Service, I adopted the most lenient course that was open to me under the circumstances.

  FIELD BATTERIES IN INDIA.
  SIR CHARLES DILKE: I beg to ask the Secretary of State for India whether no such decision, tending to the reduction of guns in heavy field batteries in India, has been taken, as is suggested in the Blue-book containing the financial statement and debate in the Viceroy's Council, recently laid before Parliament.
  LORD G. HAMILTON: The question of the conversion of four heavy field batteries of four guns each into two howitzer batteries of six guns each is inseparably connected with other large questions of artillery organisation which are under consideration in communication with the War Office, and it has not yet been decided.

  RECEIVING HOMES FOR PAUPER CHILDREN.
  MR. FLOWER: I beg to ask the President of the Local Government Board whether the Lambeth Guardians have accepted the suggestion of the Board to establish a receiving home for pauper children; and, if not, whether the Board are prepared to insist upon their proposal being carried out.
  THE PRESIDENT OF THE LOCAL GOVERNMENT BOARD (Mr. CHAPLIN,): The guardians have not yet accepted the suggestion made by the Local Government Board in this matter, and the Board are still in communication with them on the subject.

  FEEBLE-MINDED PAUPERS.
  MR. FLOWER: I beg to ask the President of the Local Government Board whether he is able to comply with the request contained in the memorial presented to him by the Association for Promoting the Welfare of the Feeble-Minded, and will cause an inquiry to be hold as to the number and condition of feeble-minded paupers, not certifiable as lunatics.
  MR. CHAPLIN: This matter is receiving my consideration, and I propose in the first instance to endeavour to obtain from the guardians information with respect to the number and condition of persons of the class referred to who are in workhouses.

  WANDSWORTH GUARDIANS AND DESERTED CHILDREN.
  MR. FLOWER: I beg to ask the President of the Local Government Board if his attention has been drawn to the issue of a public notice by the Wandsworth Board of Guardians, in which a free pardon was offered to the parents of some 300 children who should reclaim them on a given data; can he state whether the issue of such notice was sanctioned by the Local Government Board; and, whether they have addressed any communication to the guardians on the matter.
  MR. CHAPLIN: I have made inquiry on this subject, and I am informed that a committee of the guardians, in going through the list of children chargeable to the Union, found that there were between two and three hundred cases in which the parents had been lost sight of, and in very few of which the guardians could prove desertion or take any proceedings. The notice is stated to have been issued for the purpose of inviting parents, who had left their children for years, to call on the guardians and arrange to take their children away. In consequence of the notice about thirty children were handed over to their parents. No sanction to the notice was given by the Local Government Board. The notice appears to me to have been open to objection, and a letter has been sent to the guardians pointing this out, and stating that in the opinion of the Board the practice of issuing such a notice should be discontinued.

  TUBERCULOSIS IN WEST CHESHIRE.
  MR. FIELD: I beg to ask the President of the Local Government Board, whether he is aware that at a recent meeting of the North-wich Rural Council a communication was received from the county medical officer of health, Dr. Vacher, stating that he was informed by the medical officer of health for Manchester that a cow with a tuberculosis udder had been found on a farm in West Cheshire; that Dr. Nevin wrote to Dr. Vacher advising to isolate the infected cow, to dry her at once, and have her fed for slaughter; whether the Local Government Board have sanctioned such a system; and whether he is aware that Dr. Vacher, in conjunction with the late Inspector Wagstaffe, inaugurated and

  1055
  carried out a series of tuberculosis prosecutions in Birkenhead.
  MR. CHAPLIN: The facts appear to be substantially as stated in the first paragraph of the question. The cow, however, was not sold, but was destroyed by the farmer. The answer to the second paragraph of the question is in the negative. Dr. Vacher, before becoming county medical officer was medical officer of health for Birkenhead, and I am informed that during this period the Birkenhead Town Council, as advised by him, arranged for a much more thorough inspection of meat intended for the food of man than had previously been attempted, and appointed Mr. Wagstaffe to give his whole time to the work. Dr. Vacher appears, however, to have had nothing to do with the present case, except to inform the Northwich Rural District Council of the communication he had received from Dr. Nevin.

  WIMBLEDON—PROPOSED SCHOOL BOARD.
  MR. PRICE: I beg to ask the Vice-President of the Committee of Council on Education whether the Education Department has received the resolution adopted by the ratepayers of Wimbledon on 9th July, asking for a school board for the parish; and whether an order for the election has been issued; if not, when it will be issued.
  THE VICE-PRESIDENT OF THE COMMITTEE OF COUNCIL ox EDUCATION (Sir J. GORST, Cambridge University): The answer to the first paragraph is in the affirmative. The order for election has not yet been issued. The matter is still under consideration.

  HOLYHEAD NATIONAL SCHOOL— RELIGIOUS FREEDOM OF TEACHERS.
  MR. ELLIS J. GRIFFITH: I beg to ask the Vice President of the Committee of Council on Education whether his attention has been called to the fact that repeated demands have been made by the Education Department upon the managers of the Holyhead National School that they should sign the memorandum of agreement of Nellie Roberts, a pupil teacher at the infants' department of that school, but that, although she has been a recognised pupil teacher for over three years, these demands have
  1056
  not yet been complied with; and what reasons are assigned by the managers for their non-compliance.
  SIR J. GORST: Notice of this question was only received this morning, and I have not yet been able to obtain the information.
  MR. ELLIS J. GRIFFITH: I beg to ask the Vice-President of the Committee of Council on Education whether he is aware that, on the 11th of April last, the Rev. Canon Thomas, one of the managers of the Holyhead National School, called Nellie Roberts and another pupil teacher before him, in the presence of the head teachers, and after inquiring of each if they were willing to attend the services of the Church of England and to assist in the Sunday School, and being answered by the first negatively and by the second affirmatively, that he proceeded to sign the memorandum of agreement of the latter and informed Nellie Roberts that he would leave her agreement unsigned for a time, so as to give her an opportunity of deciding whether she would comply with his demands that she should renounce her Nonconformity; and will he cause inquiry to be made in this case.
  SIR J. GORST: The Board of Education have no control over the conditions in respect of religion under which pupil teachers are engaged. But I will inquire into the allegations of the hon. Member.
  MR. ELLIS J. GRIFFITH: I beg to-ask the Vice-President of the Committee of Council on Education, whether he is aware that the managers of the Holyhead National School habitually bring pressure to boar upon all their teachers to attend Church of England services and to be confirmed, and that out of nine Nonconformists employed at the school seven have been obliged to comply with these demands, although the parents are Nonconformists, and that this is the only school available for a Nonconformist district; and whether, seeing that repeated applications by the Holyhead School Board to be allowed to build a school have been refused, and that the National school is generally overcrowded, he will state what steps the Board of Education will take in this matter.
  SIR J. GOEST: The Board of Education have no power to interfere in a matter of this kind. I will inquire into the matter referred to in the second paragraph.
  MR. ELLIS J. GRIFFITH: I beg to ask the Vice President of the Committee of Council on Education whether his attention has been called to the fact that nearly all the pupil teachers in the Holy-head National School are paid one shilling per week less than the amount agreed upon by the managers and specified in their memoranda of agreement; and what measures the Board of Education intend taking to enforce the proper carrying out of Clauses 1 and 3 of the memorandum of agreement.
  SIR J. GORST: No complaint of the non-fulfilment by the managers of the Holyhead National School of the conditions of their agreement with pupil teachers has, so far as I know, reached the Board of Education. If such complaint were made it would at once be inquired into.

  SCIENCE AND ART INSTRUCTION IN LONDON BOARD SCHOOLS.
  MR. EVELYN CECIL: I beg to ask the Vice-President of the Committee of Council on Education whether he is aware that numerous scholars nominally in public elementary schools under the London School Board, who receive instruction exclusively under the regulations of the Science and Art Directory and not under the Code, have their attendances registered both on the registers of the Science and Art Department and in duplicate on the attendance books of the public elementary schools; and that this duplicate registration brings the cost of the instruction so given to science and art scholars into the accounts of the ordinary elementary school, and thus causes it to be paid for out of the School Board rate levied for elementary education only; and whether, seeing that this registration of science and art scholars on the books of the public elementary school is prohibited by Clause 18 of the Science and Art Directory, he will state what steps he has taken or proposes to take in the matter.
  SIR J. GORST: The answer to the first paragraph is in the affirmative. The
  1058
  Board of Education have refused to pay Science and Art Grants in respect of any scholar registered in the manner described.
  MR. EVELYN CECIL: Does my right hon. friend mean that the officials of the Board of Education have been sustaining what I cannot but describe as a serious public fraud?

  GENERAL POST OFFICE—REMOVAL TO MOUNT PLEASANT—OVERTIME ALLOWANCES.
  MR. STEADMAN: I beg to ask the Secretary to the Treasury, as representing the Postmaster General, if the London postmen whoso deliveries have been protracted by the recent removal to St. Martin's-le-Grand, and particulars of whose cases have already been submitted to him, are to be paid for the overtime thus worked.
  THE FINANCIAL SECRETARY TO THE TREASURY (Mr. HANBURY,): Yes, Sir; arrangements are in progress for distributing the payments for overtime.

  LONDON POSTAL DELAYS—SUG GESTED INQUIRY.
  MR. STEADMAN: I beg to ask the First Lord of the Treasury if, in view of the fact that sorters and postmen have been charged by officials of the Department with malingering and with being responsible for recent postal delays in London, he will appoint a Committee to inquire with whom the responsibility really rests.
  MR. A. J. BALFOUR: The Postmaster General informs me that, as far as he is aware, no definite charges of the kind referred to by the hon. Member have been made. There seems to be no useful purpose likely to be served by such a Commission as he suggests.
  MR. STEADMAN: Although, perhaps, the Postmaster General has not heard of the charges made against the men, is the right hon. Gentleman aware that officials under the Postmaster General have brought charges against the men in the public press?
  MR. A. J. BALFOUR: I am not aware of that. Perhaps the hon. Gentleman will give me some information as to the

  1059
  details, but at present the information is not in harmony with that I have received from the Postmaster General.
  MR. STEADMAN: I will take the earliest opportunity afforded by the rules of the House to state the case of the men to the right hon. Gentleman.

  THE WIDENING OF PICCADILLY.
  MR. COGHILL: I beg to ask the First Commissioner of Works whether he has made any proposal to the County Council to add part of the Green Park to Piccadilly, and whether his proposal will be submitted to the House of Commons.
  THE FIRST COMMISSIONER OF WORKS (Mr. AKERS DOUGLAS,): I have made a proposal to the London County Council to the effect that if they will undertake the cost of widening Piccadilly, according to a plan which has been laid before them, I will endeavour to procure the necessary Royal Warrant to obtain a strip of the Green Park required for the purpose. The work, if carried out according to the plan, will in no way injure the park, but will confer an immense boon upon the public at large. I shall be very happy to explain the plan to my hon. friend, and will see that it is placed in the Tea Room for the inspection of hon. Members. As no public money is involved, no Estimate will be submitted to Parliament, but the question could, of course, be discussed on Class II., Vote 25, which still remains to be taken. The procedure in this case is in exact accordance with those precedents where land has been taken from Royal parks for the purpose of widening public streets, where no other conditions are involved.
  MR. GIBSON BOWLES (Lynn Regis): To what extent will the road be widened?
  MR. AKERS DOUGLAS: For the greater portion of the way it will be practically 70 feet wide, and wider at Park Lane.

  DIETARY IN TRISH WORKHOUSES.
  CAPTAIN DONELAN: On behalf of the hon. Member for South Monaghan, I beg to ask the Chief Secretary to the Lord Lieutenant of Ireland
  1060
  whether he is aware that at a recent meeting of the Halstead Board of Guardians, Mr. Bagenal, Local Government Board Inspector, said that the Local Government Board would soon issue an order putting the guardians of the workhouse on a different footing with regard to the dietary of the inmates; whether he is aware that Mr. Bagenal said that the guardians would not be tied down to any particular dietary, and that so long as nutritious food was given to the inmates the Local Government Board would not interfere; and whether he can say if he will direct the Local Government Board in Ireland to give greater freedom to the guardians in Ireland in their treatment of the poor and management of the workhouses, as the Local Government Board in England are about doing with the English Boards of Guardians.
  THE CHIEF SECRETARY FOR IRELAND (Mr. G. W. BALFOUR,): I have no information regarding the first and second paragraphs. With reference to the third paragraph, boards of guardians in Ireland, provided they do not reduce their scale of dietary below the minimum scale laid down by the General Regulations, have practically quite as free a hand as the English boards in carrying out any improvements or variations in the dietary which their medical officer suggests. The minimum scale now in force in Ireland was fixed in the year 1849, when the standard of comfort of the poorer classes was very much lower than it is at present, but as the boards of guardians have been gradually improving the dietary of workhouse inmates it has not been found necesssry to bind the guardians down to any new or uniform scale. A considerable difference, however, exists in the scales of dietary in use in the various workhouses throughout Ireland, and many are open to much improvement. In November last the Local Government Board addressed a circular to the several boards of guardians calling attention to this diversity and expressing the opinion that the existing dietaries might, in many instances, be revised on more varied lines with regard to the dietary of the children, the infirm and lunatic classes. The Board requested the guardians, after consultation with their medical officer, to take the matter into consideration, and also forwarded for the guardians' infor-

  1061
  mation a copy of a suggested dietary scale. As a result, a number of unions have adopted either the scale suggested by the Board or some modification of it.

  IRISH LAND PURCHASE—THE ASH BOURNE ACT.
  CAPTAIN DONELAN: On behalf of the hon. Member for South Monaghan, I beg to ask the Chief Secretary to the Lord Lieutenant of Ireland whether he is aware that purchasers of land in Ireland under the Ashbourne Act are not placed in as favourable a position as purchasers under the Land Purchase Acts of 1892 and 1896, both with regard to the sinking fund and a reduction of the instalments every ten years; and whether, seeing that purchasers under the Ashbourne Acts bought when judicial rents were higher, he will consider the necessity and justice of placing these purchasers on as good terms as the purchasers under the Land Purchase Acts of 1892 and 1896 with reference to the sinking fund and payment of future instalments.
  MR. G. W. BALFOUR: On the 3rd inst. I replied very fully to a similar question addressed by me to the hon. Member for South Monaghan,* and to that reply I have nothing to add.

  BOATING IN HOWTH HARBOUR.
  MR. PATRICK O'BRIEN: On behalf of the hon. Member for Dublin County, N., I beg to ask the Chief Secretary to the Lord Lieutenant of Ireland whether his attention has been drawn to the fact that at the last Howth (county Dublin) Petty Sessions, four boatmen were prosecuted at the suit of the Royal Irish Constabulary for plying for hire with their boats in Howth Harbour without having obtained the necessary licence from the Board of Works; can he state who authorised the constabulary to prosecute; and whether it is a part of their duty to act for the Board of Works when required to do so by that body; and whether it is the intention of the Government to enforce the payment of the fines or costs that have been imposed in the cases referred to.
  MR. G. W. BALFOUR: The prosecutions in these cases were at the suit, not of the constabulary, but of the Commissioners of Public Works. The police
  * See, preceding volume of The Parliamentary Debates, page 410.
  1062
  do not act for the Commissioners in matters of this kind. As regards the last paragraph, the question of the enforcement of the fines or costs is one for the consideration of the Board of Works.
  MR. PATRICK O'BRIEN: On behalf of the hon. Member for Dublin County, N., I beg to ask the Secretary to the Treasury whether his attention has been drawn to the case of four boatmen who were last week prosecuted at Howth (county Dublin) Petty Sessions for plying for hire with boats without a licence from the Board of Works; whether it was with the sanction of the Board of Works that this prosecution was instituted; and whether, if the Board of Works insist on boatmen who ply for hire with boats obtaining a licence to do so, it will cause the harbour to be so dredged that it will not be necessary, as the boatmen referred to declared, to carry passengers on their backs across a portion of Howth Harbour.
  MR. HANBURY: The prosecution was instituted by the Board of Works, who are the Commissioners of the harbour. In three of the cases no licence had been taken out for two years, and in the fourth case for four years. Dredging is impracticable over about half of the harbour because of the rockiness of the bed. But it is carried on where feasible at the East Pier, and in any case several flights of steps are available for embarking and landing passengers both at the east and west pier at all states of the tide. The harbour master reports that he has never seen nor heard of licensed boatmen having to carry passengers on their backs to reach the boats.

  FAIR RENT APPEALS IN CORK.
  MR. MAURICE HEALY: I beg to ask the Chief Secretary to the Lord Lieutenant of Ireland whether he is aware that only one sitting of a Sub-commission for the hearing of fair rent applications has been held in the Cork Union during the present year, and that at that sitting no case was listed in which the notice was served later than December, 1898; and whether any steps will be taken to expedite the hearing of pending fair rent applications.
  MR. G. W. BALFOUR: The most recent list of fair rent applications for hearing in the County Cork contains all cases from the union of Cork in which

  1063
  the applications were received prior to Christmas 1898. A Sub-commission has sat in Cork upon two occasions during the present year. There are only forty-one cases from that district received to the present date which have not yet been listed for hearing.

  BELFAST POSTAL ARRANGEMENTS.
  SIR JAMES HASLETT: I beg to ask the Secretary to the Treasury, as representing the Postmaster General, whether he is aware that in the districts of Belfast, Fortwilliam, Lisburn Road, Malone Road, Belmont, and Bloomfield, the latest delivery of letters is four o'clock in the evening; and whether steps will be taken to have a later delivery arranged for.
  MR. HANBURY: Portions of Lisburn Road and Malone Road are within the town delivery of Belfast, and have a delivery of letters commencing as late as 8 p.m. The remaining portions of those roads and the other places referred to by the hon. Member are outside the town postal district, and the latest delivery takes place at about 4 p.m. as stated by the hon. Member. The question of giving a later delivery in those districts will be considered.

  NEWBLISS RURAL POSTMAN.
  MR. MACALEESE: I beg to ask the Secretary to the Treasury, as representing the Postmaster General, whether he is aware that William Taylor, rural postman, Newbliss, attended the Orange demonstration at Clones on the 12th inst., and performed as a drummer, in one of the party bands upon that occasion; and does conduct of this kind on the part of postmen receive the sanction of the Department, or will any remonstrance be addressed to Taylor.
  MR. HANBURY: William Taylor is employed about four hours a day as a rural auxiliary postman at Newbliss. He attended at the Orange demonstration at Clones, and acted as drummer. He was off duty at the time, and was not in uniform, and the matter is not one of which it is thought necessary to take any official notice.

  WEST CLARE FISHERIES.
  MAJOR JAMESON: I beg-to ask the Vice-President of the Department of Agriculture for Ireland, in reference to the recent deputation and correspondence on the subject of assistance
  1064
  being given by the Government to the fishing industry of West Clare, will the Department of Agriculture give assistance in aid of the fishing industry in West Clare; and, if so, what sum will the Department of Agriculture allocate to West Clare out of the grant by Government voted for that purpose.
  THE VICE-PRESIDENT OF THE DEPARTMENT OF AGRICULTURE FOR IRELAND (Mr. PLUNKETT,): The Department is considering what steps may be taken to develop the fishing industry in West Clare. The amount of money available for the purpose cannot be stated until the requirements of other districts are ascertained.

  SALARIES OF IRISH NATIONAL TEACHERS.
  MR. PATRICK O'BRIEN: I beg to ask the Chief Secretary to the Lord Lieutenant of Ireland whether he is aware that in numerous instances the salaries of Irish National teachers for the quarter ended 30th June have been delayed in payment beyond the day appointed for the purpose by the Commissioners, and that this delay has occurred notwithstanding that the quarterly returns were received in the Education Office in due time and in correct form; and, whether he will inquire into the causes of the delay, and if steps will be taken to guard against a repetition of this irregularity, which is productive of inconvenience to the teachers.
  MR. G. W. BALFOUR: The salaries of the teachers have not been delayed in payment in numerous cases as stated, when the claims were received in due time and were regular in form. If any specific case of delay is brought under the notice of the Commissioners, they will, as they always have done, order a strict investigation into the matter.

MONEY-LENDING BILL [Lords].
Reported from the Standing Committee on Law, etc., with Amendments.
Report to lie upon the Table, and to be printed. [No. 297.]
Minutes of Proceedings of the Standing Committee to be printed. [No. 297.]
Bill, as amended (in the Standing Committee), to be considered upon Thursday, and to be printed. [Bill 312.]

COMPANIES BILL.
As amended (by the Standing Committee) considered.
MR. SPEAKER: The motion on the Paper in the name of the hon. Member for Northampton is not in order, as this is a Bill to amend the law relating to registered companies only, and does not relate to chartered companies.
A Clause (Application of the Act to Scotland)—(The Lord Advocate)—brought up, and read the first and second time, and added.
COLONEL WELBY: I beg to move that Clause 2 be omitted.
Question proposed, "That Clause 2 stand part of the Bill."
MR. RADCLIFFE COOKE: I suppose the right hon. Gentleman in charge of this Bill will also accept the omission of the following clause?
THE PRESIDENT OF THE BOARD OF TRADE (Mr. RITCHIE,): I find myself unable to resist the Amendment of my hon. and gallant friend. As those who are acquainted with what took place in the Grand Committee will remember, I made a similar recommendation there, but it was not adopted by the Committee. I will state the reason why I now feel bound to accept the Amendment. I do not propose to enter into the merits of this clause or of the next one. I admit that there are evils which require to be remedied, but I do not desire to commit myself to the particular mode of amendment embodied in these clauses. My main reason for assenting to the Amendment of my hon. friend is that in my opinion these clauses are not germane to the Bill, and I think that to attempt to introduce definitions as to what businesses may or may not be carried on by a company would be to run counter to all precedent, and would cause excessive inconvenience. Therefore, as I desire to say nothing against the principle of the clauses, I suggest to the House that it would do well to accept the Amendment and omit these two clauses.
MR. BRYCE: When this Bill was before the Grand Committee I expressed the opinion that it would
1066
be better to leave these clauses out of the Bill, as they had nothing whatever to do with its main object and scope. They relate to an extremely important subject, which I am inclined to think should be dealt with even more strongly than is proposed in these clauses. But I repeat that it would be better to omit this portion of the Bill altogether, as it raises an entirely different set of questions to that dealt with by the rest of the Bill.
MR. GIBSON BOWLES: Considering that everybody connected with the Bill is under the belief that the clauses have nothing whatever to do with it, I think some explanation should be afforded us as to how they got into the Bill. Can the President of the Board of Trade explain how, in spite of the forms and orders of the House, clauses were inserted in a Bill with which they had nothing whatever to do?
MR. RITCHIE: The clauses were put in the Bill in the House of Lords, and I, of course, am not capable of explaining the reasons why. As, however, they were inserted, I deemed it only right and courteous to the House that the Bill should be introduced here in the form in which it was sent down last session.
MR. GIBSON BOWLES: That renders it more inexplicable than ever. The House of Lords sent the Bill to a Select Committee, which was charged with the duty of crossing the "t's" and dotting the "i's," and I therefore cannot comprehend how they came to pass clauses which the President of the Board of Trade and his predecessor are both agreed have been improperly inserted. Under the circumstances, of course the House will agree to their omission.
SIR WALTER FOSTER: I hope that the House will not do anything of the kind. These clauses are the result of a great deal of consideration. They have been introduced into this Bill in two successive sessions, and they were also introduced in a separate Bill. The Lord Chancellor, in introducing the Bill, deliberately recommended these clauses as the best method of regulating certain dangers and difficulties to which the public are exposed under the existing state of the law. It was done after deliberate consultation with persons affected. I am

1067
perfectly aware that I cannot discuss the merits of Clause 3 at the present time, although the right hon. Gentleman has indicated that that clause will have to go if the one now under discussion is omitted. I feel bound in the public interest to support the retention of the clause. I feel that in yielding the right hon. Gentleman is yielding to the clamour of a class, because the clause interferes to a certain extent with large trading concerns. If the clauses are not retained I feel that an opportunity will have been lost of putting on the Statute-book provision likely to he of great good to the public by protecting them against many forms of illegal practice in pharmacy, medicine, and dentistry. I speak in the interest of the public, and I hope the House will consider carefully before it yields to a panic on the part of the right hon. Gentleman caused by the opposition of certain trade interests.
SIR JAMES HASLETTsaid the second clause proposed that a company should be entitled to assume a title which no individual might take unless he passed a certain examination. Surely that was a bad policy. He did not claim any special immunity so far as Ireland was concerned. They might start as many companies as they liked there. It was a poor country, its business was poor. If a man got a Sunday dinner, he lived on the recollection of it for two or three days, and then he lived on the anticipation of another Sunday dinner for the rest of the week. But he did ask the House to be true to itself. It had passed a Pharmaceutical Act which required a man to pass an examination before he was entitled to do certain things or to assume a certain title. Now it was proposed to absolutely wipe out that qualification, and to enable a company to carry on the business without examination; the only point in its favour being that it was possessed of pounds, shillings, and pence. He thought the Government had very wisely decided that these clauses had nothing whatever to do with a Companies Bill, and should therefore be omitted.
MR. LAWSON WALTON: I should not have intervened in this discussion had it not been for the suggestion that the Government in agreeing to the omission of these clauses was yielding to
1068
clamour. I entirely share the views of the right hon. Gentleman the President of the Board of Trade that the clauses are alien to the Bill. I hold that our statutes should be so framed that they can be easily determined; they should not contain cross references which only lead to confusion, and therefore a Bill dealing with company law ought not to contain legislation affecting chemists, who are subject to a different Act of Parliament. I therefore hope the House will agree to the omission of these clauses.
COLONEL LONGexpressed the opinion that the reasons put forward by the President of the Board of Trade for the rejection of the clauses—namely, that they were not germane to the Bill— were not sufficiently strong to justify their omission. The object of the Bill was to do away with certain abuses in our system of trading by companies. Abuses were believed to exist by means of which people who were not qualified chemists and dentists carried on those businesses, to the danger of the public. The Lord Chancellor, who was supposed to understand evidence, had been convinced that such abuses did exist, and ought to be remedied, therefore he inserted the clauses, and they ought not to be thrown out on the weak grounds stated.
SIR J. B. TUKEalso regretted that Clause 3 was to be dropped, as its operation would have put a stop to practices which served to paralyse the action of the Medical Acts in certain important particulars. Under the law as it now stood persons in no way connected with the medical profession were able to form companies, the object of which was to act as physicians, surgeons, and dentists. Over such companies the Medical Council could exercise no jurisdiction, and one of the main objects of the Medical Acts was inoperative. The public were the sufferers, as it was rendered impossible to distinguish between qualified and non-qualified practitioners. He recognised that the clause was not germane to the general terms of the Bill, but he felt so strongly on the subject that next session he would take an early opportunity to introduce a Bill dealing with it.
Question put, and negatived.
MR. MADDISON: I beg to move the omission of Clause 3. I can only express my satisfaction that the President of the Board of Trade has agreed to the omission of this clause.
Question, that Clause 3 stand part of the Bill, put and negatived.
MR. ATHERLEY-JONES: I have to move the omission from Clause 4 of the following words—
" (ii) either signed the Memorandum of Association for a number of shares not less than his qualification (if any) or signed and filed with the registrar a contract in writing to take from the company and pay for his qualification shares (if any)."
The law as it at present stands requires that a director of a company shall qualify for his position by taking up the number of shares defined in the Articles of Association. It is not unusual, I believe, for directors of companies to receive their qualifications from the promoters, and if I understand the object of the right hon. Gentleman aright, it is, by including this clause in the Bill, to prevent directors of companies from receiving their qualifications from the promoters. In other words, he desires to deal with that class of directors described as "guinea-pig" directors. But the Bill will not effect that object, because I observe that, by a later clause, on page 8, there is a provision that the director is to make a statement "of all sums paid or agreed to be paid to him in cash or shares by any person, either to qualify him as a director or otherwise, for services rendered by him in connection with the formation of the company." Therefore, I take it, the very evil which this clause is intended to defeat is countenanced and regulated by a subsequent clause. I agree that very considerable evil attaches to the provision of qualifications for directors. There are two grounds for resisting the inclusion of this clause in the Bill. The first is that it does not attain the object in view, because it is quite possible to have an elusive arrangement with intending directors to defeat the object aimed at by this provision. But the second is a far more important reason. Suppose a man is invited to serve on a board, and he is to receive a salary, by way of director's fees, of £200 a year. He may be a peer of the realm,
1070
a Member of Parliament, an ex-Governor General, or some other more or less distinguished personage. His qualification is to be £200, and it is obvious that he will have no difficulty in finding it, for he is not going to deprive himself of this opportunity of earning £200 a year. It will, therefore, be perfectly easy for him to enter into an arrangement of a nature which it will not be necessary to disclose. Another very forcible reason is that you are making a law which you cannot effectively enforce. It is most desirable that obvious acts of misconduct in connection with the formation and maintenance of companies should, as far as possible, be checked by legislation. But if you lay down a moral law which it is impossible effectively to enforce, you at once bring your legislation into contempt, and you defeat the very object which you have in view. On the ground that these words are calculated to produce further elusive acts of fraud, and to accentuate the evil which it is desired to suppress, I beg to move the omission of these words.
Amendment proposed—
"In page 2, line 19, to leave out paragraph (ii.), of Sub-section (1), of Clause 4."—(Mr. Atherley-Jones.)
Question proposed, "That the words proposed to be left out to the word 'for,' in line 19, stand part of the Bill."
MR. RITCHIE: The object of this sub-section is clear. It is to secure that under all circumstances, and in all cases, a director shall qualify himself, and shall not receive his qualification from anyone else. I imagine it is quite possible, if the qualification is £200, and he is to receive a salary of £200 a year, for a man to qualify himself by taking shares to the extent of £200. But I do think it a wise thing that gentlemen who put themselves forward as directors of companies should give some security that they have an interest in the company, and should provide themselves with the necessary shares and pay for them. If the hon. Gentleman's Amendment is accepted that security will be done away with.
MR. ATHERLEY - JONES: What about Clause 12?
MR. PERKS: The object of the clause is a highly desirable one, seeing that it is to secure that the director shall not be a mere bogus creature, but that he shall have a substantial interest in the company. That is manifestly a good idea. But still it seems to me it is obvious that if a company which is a reprehensible company desires to have upon its directorate any particular class of person it will be able to secure its object by the simple expedient of reducing the qualification to a nominal amount. I do not think the clause will have the effect anticipated in the case of an unsubstantial or questionable company, but still it would be as well that the words should be retained as some protection against the impecunious or "guinea-pig" director.
MR. LABOUCHEREsaid it did not appear to him that it was possible to secure that a director should pay for his own shares. He might borrow the necessary money on the understanding that it should be paid back out of his fees as director. In fact, he might get over the difficulty in a hundred different ways. But the object of the clause, as he understood it, was to secure that the public should know how many shares each director had. It seemed to him, although he very much doubted whether the clause would afford any real security against the directors obtaining their qualification from promoters, it would be an advantage to the public that they should know how many shares each particular director held.
MR. ATHERLEY - JONES: I beg to ask leave to withdraw my Amendment.
Amendment, by leave, withdrawn.
MR. H. S. FOSTERsaid he desired to move the omission from the same section of the words "for a number of shares not less than his qualification." He took it that the object of his right hon. friend was not to deter good men from coming forward as directors, but he feared that this particular provision might act as a deterrent unless his Amendment was accepted. A gentleman might be asked to join a board of directors, and this section required that he should take up his qualifying shares at a time when he did
1072
not know whether or not the company would go to allotment. The qualification might be £500, and he might be willing to subscribe that amount conditionally that the company went to allotment. But this clause required that he should pay it down, whether the company went to allotment or not. What would be the result? In the case of a company which was registered but did not go to allotment a wrecking solicitor might be tempted to petition for a winding-up order, as he would be sure of his costs, because he would have a number of directors to go against, each of whom would be liable to the amount of his qualifying shares. The effect must be to deter good men from taking any responsibility in the initial stages of a company, whereas he took it that one of the chief objects of the President of the Board of Trade was to secure that good men should become connected with a company at its very inception.
Amendment proposed—
"In page 2, line 10, to leave out the words from the word 'association,' to the word 'or,' in line 20"—(Mr. H. S. Foster.)
Question proposed, "That the words proposed to be left out stand part of the Bill."
MR. RITCHIEsaid he had no reason to find fault with his hon. friend for putting the Amendment on the Paper. What was wanted was that everybody should know what a director's qualification was. He was afraid that whatever risk a director had to run as to whether or not the company would float or not, the director must be left to bear it. He did not think that any inconvenience such as his hon. friend suggested had ensued from the present state of the law, which put directors in the same position in regard to qualifying shares. All that was wanted was that the directors should really take and pay for the necessary qualifying shares.
SIR ROBERT REIDsaid he would agree with the hon. Gentleman if he thought that the Bill as it stood would produce the consequences the hon. Gentleman feared. But he would point out that it was not obligatory on the director to sign the Memorandum of Association; he might sign and file with

1073
the registrar a contract in writing to take and pay for the qualifying shares. If the proposed director was under any apprehension such as was referred to by the hon. Gentleman, he was at liberty to take the second alternative.
MR. TOMLINSONthought the clause as it stood might deter useful men from becoming directors.
Question put, and agreed to.
MR. SYDNEY GEDGEhoped that the President of the Board of Trade would accept the Amendment he now proposed. Suppose the prospectus was for the issue of debentures only, and all the shares had been already subscribed, it would be impossible for a large shareholder to become a director to have his name in the prospectus unless, in addition to the shares he had already got, he were to sign and register a contract to take the qualification shares from the company, though it had none to sell.
Amendment proposed—
"In page 2, line 22, at the end, to insert the words,' or a certificate signed by the secretary or acting secretary of the company that he is the registered holder of his qualification shares, if any."—(Mr. Sydney George.)
Question proposed, "That those words be there inserted."
MR. RITCHIEsaid there was a very great difference between the alternative which his hon. friend asked the House to accept and Sub-section 2 of Clause 4. That subsection endeavoured to secure— whether it would be effective for the purpose or not time only would show—that the proposed director should enter into a contract to take and pay for his qualifying shares. If the Amendment were accepted, all that it would be necessary to do in order to comply with the provision would be for a qualified director or shareholder to transfer into the name of the proposed director certain qualifying shares. There was nothing in the Amendment to show that the qualifying shares should belong to the director, or that he had entered into a contract to buy them. He could not accept the Amendment.
Question put, and negatived.
MR. H. S. FOSTER,in moving the next Amendment, said that the all-
1074
important thing was the issue of the prospectus. The directors might not be appointed at the time of the registration of the Memorandum and Articles of Association.
Amendment proposed—
"In page 2, line 24, after the word 'company,' to insert the words 'or of the prospectus,'"—(Mr. H. S. Foster.)
Question proposed, "That those words be there inserted."
SIR ROBERT FINLAYsubmitted that the House ought not to accept the Amendment.
Amendment, by leave, withdrawn.
Amendment proposed—
"In page 2. line 30, to leave out the word 'passing,' and insert the word 'commencement.'"—[Mr. H. S. Foster.)
Question proposed, "That the word 'passing' stand part of the Bill."
MR. RITCHIEcould not see that there was any hardship in applying this portion of the Bill to a company registered before the passing into law instead of at 1st January, 1901.
Amendment, by leave, withdrawn.
MR. SYDNEY GEDGEsaid the Amendment he now moved would carry out what must be the intention of the Government in Clause 4. "Does" could only relate to the moment of registering, and an invitation given a few days later would defeat the object. He desired to secure it by exchanging something definite for what was vague.
Amendment proposed—
"In page 2, line 31, to leave out the words 'does not issue,' and insert the words 'is prohibited by its memorandum or articles of association from issuing.'"—(Mr. Sydney George.)
Question proposed, "That the words 'does not issue' stand part of the Bill."
THE ATTORNEY GENERAL (Sir ROBERT FINLAY, Inverness Burghs)said the section way introduced for the protection of the public in cases whore a company went to the public asking subscriptions for shares. He did not see what the object of the Amendment was.
MR. PERKSsaid this was a most important question to the investing public. They must not forget that they were dealing with £1,500,000,000 of money invested in this country, and it was very important that they should have some definition or explanation from the authors of the Bill as to what was meant by invitation to the public. Many hon. Members had not had the opportunity of listening to the discussions in the Grand Committee, and they were hopelessly ignorant of what was the meaning of the phrase.
MR. MARKSsaid the portion of the Bill now under consideration dealt with certain things which were to be done before the registration of the articles, and the provision that this particular section should not apply to any company which did not issue an invitation to the public suggested three or four varying and conflicting possibilities. It was impossible to issue an invitation to the public before registration, and there was no period set at which the company was to issue an invitation, if an invitation was to be issued. The suggestion which the section conveyed to his mind was that these formalities were to be complied with before registration, when it was obviously impossible for the company, even if it intended to issue an invitation to the public, to do so, and there was no provision that they might go back to the registrar later on for the purpose of complying with the formalities. There was another point. There seemed to be an idea in the mind of the hon. Gentleman the Attorney General, that the shares which reached the public, and in respect of which there was a general desire that every care and precaution should be taken, were those taken by the public in response to a magical appeal called "invitation to the public." Nothing of the kind was the case. In a large number of cases where investors had lost heavily by abortive enterprises there had been no such thing as an invitation to the public to subscribe, nor had there been any necessity for it. What was done, and what this Bill did not prevent from being done, was this—a company was formed without even such safeguards as were provided by the publication of a prospectus. A company was formed in a hole and corner way by a promoter and
1076
a few others, and the shares were allotted to the promoter's nominees. A pool of these shares was then made, and the services of a few highly respectable jobbers were engaged in order to have the shares floated on the Stock Exchange—one lot at £1, the next at £2, and the next at £3. No prospectus was issued which could be produced in court, but perambulating prospectuses were employed in the form of joint stock promoters or jobbers who gave inspired tips that the shares were going to £4 or £5. Frequently they did go to £4 or £5. The prices were matters of public record. It was thus that great transactions were carried out. The very company which this Bill would exempt from every safeguard was the company in respect of which the public most required protection—the company whose directors floated the concern, which had no prospectus, because they issued no invitation to the public. So far as this clause was concerned it was rendered nugatory by the provision of Subsection 3. It was precisely that company to which the section should apply. It was precisely that company in respect of which the public wished to be protected, the company whose shares were bought by the public at a high premium. They could always trust the investor to invest unwisely, and to wish afterwards to wreak his vengeance on somebody. In the present state of the law the investor could still invest unwisely, and, having lost his money be was at a loss to discover the director responsible for the prospectus, or oven to ascertain the office of the company in which he had lost his money. If some limit were put to the period during which a company would have the option of deciding whether or not an invitation to the public should be issued, there might be something to be said for this sub-section; but as it stood it was useless. It was apparently senseless, but it would be less senseless if the Amendment of his hon. and learned friend were accepted; but he was by no means sure that it would be less useless.
SIR ROBERT REIDsaid his regret was that this Bill did not deal with the making of a market in company shares, and did not, therefore, deal with one of the greatest vices or frauds which were common in company promotion. As far as the particular Amendment under con-

1077
sideration was concerned, he did not think they need trouble to go into the question. But the question was, whether the clause was to have a wide or a comparatively restricted application. The Government proposed that the clause should not apply in the case of companies which did not issue an invitation to the public. That was rather wide. Though he did not attach very much importance to the clause, and though he did not think it would have so great a beneficial effect as the Government hoped, at the same time it was a good clause so far as it went. He wished to have it as widely applied as possible, and, therefore, for that reason he should support the Amendment proposed by the hon. Gentleman. He would ask the Government whether they might not accede to it.
MR. McLARENsaid he thought the intention was that the clause should not apply to private firms which were registered as limited liability companies, and which divided, the capital amongst the partners of the concerns, If that was the intention of the Bill, surely some form of words might be found which would clearly express that intention, so as to prevent inconvenience arising from the rather loose wording of the clause as it stood. All they had to do if they wished to evade the penal section was that somebody should say it was not intended to issue shares to the public. The directors might pass a resolution to that effect, and after an interval of eight or nine months a prospectus might be issued when it would be absolutely too late to apply Sub-section 1. The clause as it stood would open the door to every kind of evasion, and if it had any meaning at all would lead to endless litigation.
SIR ALBERT ROLLITsaid he very much doubted whether it was possible to draw a logical or legal distinction between the two classes of companies—namely, public and private companies. This subject was, however, very much discussed in the Departmental Committee, and he thought the general feeling was that a distinction should be drawn if possible. He reminded the House of the concluding words of the Report of the Committee bearing on that subject. They said—
"It must, however, be admitted that the distinction between the two classes is rather
1078
dangerous ground, and affords a possible loop hole for evasion."
Whatever the law might provide, the real difficulty of the position was that described by the hon. Member for St. George's. He agreed with him that there was a great deal more danger in a private undertaking where a memorandum or circular was issued than there was in connection with a concern which was made public and became the subject of public criticism in the press and elsewhere. For his own part, he thought the section was one which would not be found to serve a practical purpose. The danger foreshadowed by the Committee would probably take place. They had a choice between two forms of words, and the ex-Attorney General preferred the wider form of words. For himself, however, the wider form of words, he concluded, was the one which said that the thing should not be done. Although he agreed to a large extent with the hon. Member who moved the Amendment, he thought after all, the attempt at definition should be based on the words of the Bill rather than the words of the Amendment.
MR. HALDANEsaid he did not think the evil which would be incurred by widening the words was at all to be compared with the evil of keeping them narrow. What did it matter whether this clause was made applicable to a private company or not? All those who had to do with the evils of joint stock company promotion knew that every year developed a new kind of evil. There was the evil connected with the prospectus, and this Bill seemed a little inadequate to deal with that matter. It was a common practice for a dozen persons to promote a company, to form it, to take shares in it, to enter into a pooling agreement, and to appoint half a dozen brokers. The intention was that such a company should become a public company, though the prospectus did not contemplate this form at all. To such a company as that the provisions of this clause should apply, and he saw no reason to think that any serious injury or inconvenience would be caused to anyone. If they got a simple and plain provision which would cover all such cases, he hoped it would prove more efficacious than provisions with similar benevolent objects had proved in the past.
THE SOLICITOR GENERAL (Sir EDWARD CARSON, Dublin University)said he did not think the matter under discussion was really of first-rate importance. This clause had been inserted in the Bill at the suggestion of a number of hon. Members on the Committee who desired as far as possible not to interfere with bonu fide private companies. Those who spoke on behalf of private companies urged that in these cases the public had no concern, and that it was not necessary to know what the qualifications of the directors were, or whether they had subscribed or not. If the Amendment of the hon. and learned Gentlemen were carried it would put an end to the subsection altogether. As the Government were anxious to interfere as little as possible with bona fide private companies, he hoped the House would reject the Amendment.
MR. LABOUCHEREsaid there were many private companies wholly respectable, but we had to deal with a great many companies that were turned into public companies, and which were frauds from the beginning. An arrangement was made with a large number of brokers who received £1 shares at 10s. or 12s. They had the option of taking them at that price and selling them to the public at £1 or more. It really seemed to him preposterous where they were dealing with public companies that they should make the proposal in the clause. Though it might be annoying to certain gentlemen who wished to turn their business into companies to face this publicity, it was a smaller evil than to allow the public to be swindled in these matters with impunity. It would do very little harm to allow these documents to go before Somerset House; but if the Committee left these quasi-private companies to carry out their arrangements this measure would do no good. We should have a greater number of quasi-private companies, and it was most difficult for the public to know anything of these private companies. There was more swindling in these than in the companies brought out by prospectuses.
MR. WALLACEsaid he objected to the words as they stood in the Bill, and still more to the Amendment which the hon. Member for Walsall proposed to insert. There was no reason
1080
whatever why private companies should not come under the section as it stood. There was no hardship inflicted on a private company in requiring that the directors should have their names registered at the time of the formation of the company.
SIR THOMAS LEAsaid a very large proportion of the manufacturing trade of this country was done by private limited companies who did not appeal to the public at all. The hon. Member who had just spoken asked why private companies should not come under a section of this sort. Where were they to draw the line? The result would be that private limited companies would come under the whole of the provisions of the Bill, and it would be against the trade of the country and detrimental to the manufacturing and industrial interests.
MR. BRYCEsaid he hoped the Government would make up its mind to accept the Amendment moved by the hon. Member for Walsall. It was not intended that any hardship should be inflicted on private companies by subjecting them to the provisions of Clause 4. It had not been denied that the evils of bringing out these companies without a prospectus were very grave and serious, and under the circumstances he thought the best course would be to omit the words.
MR. BOND: I think the point might be met by a device with which all people who are cognisant of company law are perfectly familiar. The reason private companies object to being brought under the clause is that the object of the clause is to make directors pay for their shares in cash. They might enter into a contract to take these shares or file with the registrar an undertaking that they are willing to take these shares. That would be obviously inconvenient in the case of a private company, because probably the whole of the capital of the company would be divided, if not amongst the directors themselves, amongst the directors and a few other people. The directors have a very large number of shares, and probably, if any qualification is mentioned in the Articles of Association, it is a very large qualification. But they do not get these shares by purchase; they get them as part-proprietors of the

1081
business. The object, I take it, is to pre-vent gentlemen in that position from being saddled with the obligation to buy shares, there being none in the market. That difficulty would be got over if each of the directors signed the Memorandum for one share only, and if one share was made in the Articles the qualification of a director. That would not in any way injure the business, be cause we are assuming the business to be a private one, confined to a small number of people, the shares in which are put forward before the public for subscription. I think, therefore, the best plan is to leave out the words and put nothing in their place.
SIR JAMES JOICEYknew of many companies in the north of England which had prohibitions upon the sale of their shares outside the particular family interested in the business, and he was afraid that many Members did not realise that there were numbers of companies in regard to which no cash payment whatever took place. The shares were simply divided amongst the family interested in the concern, and it was unreasonable to expect those people
to make all their affairs public. At the same time, the clause was not at all clear. There were words which nobody could really explain, and the only way in which they would be explained would be by litigation, whereas it was the duty of the House, whenever possible, to avoid causes of litigation. Attention had been called to the particular words "issuing any invitation to the public." It was impossible to construe those words, and there were many others of the same character. There had not been a Bill passed for some years likely to give rise to so much litigation as the present Bill. Every clause would have to be construed by the courts. The Government in pressing the measure in its present form were not acting wisely either in their own interests or in the interests of the country. It would really be better, after the discussion which had taken place, that the Government should withdraw the Bill and bring forward another measure dealing with the matter in a much better way.
Question pat.
The House divided:—Ayes, 168; Noes, 109. (Division List No. 234.

AYES.

Acland-Hood, Capt. Sir Alex. F.

Chelsea, Viscount

Gull, Sir Cameron

Allsopp, Hon. George

Coddington, Sir William

Halsey, Thomas Frederick

Atkinson, Rt. Hon. John

Coghill, Douglas Harry

Hamilton, Rt. Hon. Lord George

Baillie, James E. B. (Inverness)

Collings, Rt. Hon. Jesse

Hanbury, Rt. Hon. Robert Wm.

Balcarres, Lord

Cooke, C. W. Radcliffe (Herefd)

Haslett, Sir James Homer

Balfour, Rt. Hon. A. J. (Manch'r

Cross, H. Shepherd (Bolton)

Healy, Maurice (Cork)

Balfour, Rt. Hn. Gerald W (Leeds

Cubitt, Hon. Henry

Helder, Augustus

Banbury, Frederick George

Curzon, Viscount

Hernon-Hodge, R. Trotter

Barnes, Frederic Gorell

Dalrymple, Sir Charles

Hickman, Sir Alfred

Bartley, George C. T.

Douglas. Rt. Hon. A. Akers-

Hoare, Sir Samuel (Norwich)

Beach, Rt. Hn. Sir M. H (Bristol)

Doxford, Sir William Theodore

Holland, William Henry

Begg, Ferdinand Faithfull

Elliot, Hon. A. Ralph Douglas

Hornby, Sir William Henry

Bethell, Commander

Faber, George Denison

Howard, Joseph

Bhownaggree, Sir M. M.

Fardell, Sir T. George

Howell, William Tudor

Bigwood, James

Fellowes, Hon. Ailwyn Edwd. b

Hozier, Hon. Jas. Henry Cecil

Bill, Charles

Finch, George H.

Johnstone, Heywood (Sussex)

Blundell, Colonel Henry

Finlay, Sir Robert Bannatyne

Lafone, Alfred

Boulnois, Edmund

Fisher, William Hayes

Laurie, Lieut.-General

Bowles, Capt. H. F. (Middlesex)

FitzGerald, Sir Robt. Penrose-

Lawrence, Sir E. Durning-(Corn)

Bowles, T Gibson (King's Lynn)

Fitz Wygram, General Sir F.

Lawson, John Grant (Yorks.)

Brodrick, Rt. Hon. St. John

Flannery, Sir Fortescue

Lea, Sir Thomas (Londonderry)

Brown, Alexander H.

Fletcher, Sir Henry

Llewelyn, Sir Dillwyn-(Swans.)

Burdett-Coutts, W.

Flower, Ernest

Loder, Gerald Walter Erskine

Butcher, John George

Fry, Lewis

Lonsdale, John Brownlee

Campbell, Rt. Hn. J. A. (Glasgw)

Garfit, William

Lopes, Henry Yarde Buller

Carson, Rt. Hon. Sir. Edw. H.

Gibbons, J. Lloyd

Lowe, Francis William

Cavendish, V. C. W. (Derbys.

Gibbs, Hn. A. G. H (City of Lond.)

Lowles, John

Cayzer, Sir Charles William

Giles, Charles Tyrrell

Loyd, Archie Kirkman

Cecil, Evelyn (Hertford, East)

Gorst, Rt. Hon. Sir J. Eldon

Lucas-Shadwell, William

Cecil, Lord Hugh (Greenwich)

Goschen, Rt. Hn. G. J. (St George's)

Macartney, W. G. Ellison

Chamberlain, Rt. Hon. J. (Birm)

Goschen, George J. (Sussex)

Macdona, John Cumming

Chamberlain, J Austen (Wore'r)

Goulding, Edward Alfred

Maclure, Sir John William

Chaplin, Rt. Hon. Henry

Gray, Ernest (West, Ham)

M' Arthur Charles (Liverpool)

M' Iver, Sir L. (Edinburgh, W.)

Plunkett, Rt. Hon. Horace C

Stirling-Maxwell, Sir John M.

Malcolm, Ian

Powell, Sir Francis Sharp

Stone, Sir Benjamin

Maxwell, Rt. Hn. Sir Herbert E

Purvis, Robert

Sturt, Hon. Humphry Napier

Mellor, Colonel (Lancashire)

Pym, C. Guy

Sutherland, Sir Thomas

Melville, Beresford Valentine

Rankin, Sir James

Thornton, Percy M.

Meysey-Thompson, Sir H M.

Rasch, Major Frederic Carne

Tritton, Charles Ernest

Middlemore, J. Throgmorton

Rentoul, James Alexander

Tuke, Sir John Batty

Milward, Colonel Victor

Richardson, Sir T. (Hartlep'l)

Vincent, Sir Edgar (Exeter)

Monk, Charles James

Ridley, Rt. Hon. Sir M. W.

Warr, Augustus Frederick

Moon, Edward Robert Pacy

Ritchie, Rt. Hon. C. Thomson

Welby, Lt-Col. A. C. E. (Tauntn

More, Robt. Jasper (Shropshire)

Rothschild, Hon. Lionel W.

Wharton, Rt. Hn. John Lloyd

Morrison, Jas. A. (Wilts, S.)

Russell, T. W. (Tyrone)

Whiteley, H. (Ashton-under-L.)

Morton, A. H. A. (Deptford)

Sandon, Viscount

Williams, Jos. Powell- (Birm.

Muntz, Philip A.

Savory, Sir Joseph

Wilson, John (Falkirk)

Murray, Rt. Hon. A. G. (Bute)

Seely, Charles Hilton

Wilson-Todd, W. H. (Yorks.)

Murray, Charles J. (Coventry)

Sharpe, William Edward T.

Wodehouse, Rt. Hn. E. R. (Bath

Murray, Col. Wyndham (Bath)

Shaw-Stewart, M. H. (Renfrew)

Wortley, Rt. Hn. C. B. Stuart-

Myers, William Henry

Sinclair, Louis (Romford)

Wylie, Alexander

Nicol, Donal Ninian

Smith, James Parker (Lanarks.)

Wyndham George

O'Connor, Arthur (Donegal)

Smith, Hon. W. F. D. (Strand)

Young, Commander (Berks, E.)

Pease, Herb. Pike (Darlington)

Spencer, Ernest

Young, Samuel (Cavan, East)

Percy, Earl

Stanley, Hn. Arthur (Ormskirk)

TELLERS FOR THE AYES—

Phillpotts, Captain Arthur

Stanley, Edw. Jas. (Somerset)

Sir William Walrond and

Platt-Higgins, Frederick

Stanley, Sir H. M. (Lambeth)

Mr. Anstruther.

NOES.

Allison, Robert Andrew

Gladstone, Rt. Hon. Herb. J.

Palmer, Sir Charles M. (Durham)

Ashton, Thomas Gair

Gourley, Sir E. Temperley

Perks, Robert William

Asquith, Rt. Hn. Herbert Henry

Greene, Henry D. (Shrewsbury)

Pickersgill, Edward Hare

Atherley-Jones, L.

Grey, Sir Edward (Berwick)

Pilkington, Sir G. A. (Lancs SW.)

Austin, M. (Limerick, W.)

Haldane, Richard Burdon

Power, Patrick Joseph

Baker, Sir John

Hayden, John Patrick

Price, Robert John

Bayley, Thomas (Derbyshire)

Hayne, Rt. Hon. Charles Seale-

Reid, Sir Robert Threshie

Beaumont, Wentworth C. B.

Healy, Timothy M. (N. Louth)

Rollit, Sir Albert Kaye

Billson, Alfred

Hedderwick, Thomas Chas. H.

Samuel, J. (Stockton-on-Tees)

Birrell, Augustine

Hogan, James Francis

Scott, Chas. Prestwich (Leigh

Blake, Edward

Horniman, Frederick John

Sinclair, Capt. J. (Forfarshire)

Bond, Edward

Joicey, Sir James

Spicer, Albert

Bramsdon, Thomas Arthur

Jones, William (Carnarvonsh.)

Stanhope, Hon. Philip J.

Bryce, Rt. Hon. James

Labouchere, Henry

Stevenson, Francis S.

Buchanan, Thomas Ryburn

Langley, Ratty

Strachey, Edward

Burt, Thomas

Lawson, Sir Wilfrid (Cumberl'd.)

Sullivan, Donal (Westmeath)

Buxton, Sydney Charles

Lough, Thomas

Sullivan, T. D. (Donegal, W.)

Caldwell, James

Luttrell, Hugh Fownes

Tanner, Charles Kearns

Campbell-Bannerman, Sir H.

Macaleese, Daniel

Tennant, Harold John

Carvill, Patrick G. Hamilton

MacDonnell, Dr M A (Queen'sC)

Tomlinson, Wm. Edw. Murray

Channing, Francis Allston

MacNeill, John Gordon Swift

Trevelyan, Charles Philips

Clark, Dr. G. B

M' Arthur, William (Cornwall)

Ure, Alexander

Courtney, Rt. Hon. L. H.

M' Dermott, Patrick

Walton, J. Lawson (Leeds, S.)

Crilly, Daniel

M' Ghee, Richard

Walton, Joseph (Barnsley)

Crombie, John William

M' Hugh, Patrick A. (Leitrim)

Wedderburn, Sir William

Dilke, Rt. Hon. Sir Charles

M' Laren, Charles Benjamin

Whiteley, George (Stockport)

Donelan, Captain A.

M' Leod, John

Whittaker, Thomas Palmer

Doogan, P. C.

Maddison, Fred.

Wills, Sir William Henry

Duckworth, James

Mappin, Sir Frederick Thorpe

Wilson, Charles Henry (Hull)

Dunn, Sir William

Marks, Henry Hananel

Wilson, Hy. J. (York, W. R.)

Emmott, Alfred

Mather, William

Wilson, John (Durham, Mid)

Esmonde, Sir Thomas

Mendl, Sigismund Ferdinand

Wilson, John (Govan)

Evans, Sir F. H. (Southampton)

Morgan, W. Pritchard (Merthyr)

Yoxall, James Henry

Fenwick, Charles

O' Brien, James F. X. (Cork)

Fitzmaurice, Lord Edmond

O' Brien, Patrick (Kilkenny)

TELLERS FOR THE NOES—

Foster, Sir Walter (Derby Co.)

O' Connor, T. P. (Liverpool)

Mr. Robert Wallace and

Fox, Dr. Joseph Francis

Oldroyd, Mark

Mr. Hazell.

Gedge, Sydney

O' Malley, William

Question put, and agreed to.

Mr. SYDNEY GEDGEsaid that Sub-section 6, to which his Amendment referred, was not in the Bill, but on the white paper under his name. As the Bill stood no allotment of any share capital could be made unless certain conditions
1084
were complied with. The provision was intended to prevent a company starting with a totally insufficient capital, and to prevent people having shares allotted to them when the capital was entirely insufficient. Suppose a company asked for a capital of

1085
£500,000 and they only obtained £400,000 or £450,000, while by throwing over some part of their undertaking they might proceed to carry on business with £450,000. Applicants might have applied for shares on the understanding that £500,000 would be subscribed, but if all of them were willing to take their shares and go on he saw no reason why they should be prohibited from doing so. If they liked to commence business with £450,000, why should they not do so? As the Bill stood they would have to wind up that company and go through the whole process again, and they would be put to great expense. With the object of leaving them free to do what they liked with their own, and proceed with a diminished capital if they thought fit, he proposed later on to move to insert at the end of Clause 6 the following words, which, with the permission of the Speaker, he would read—
"Provided always, that nothing herein contained shall prevent the allotment of shares to any applicant who, after Slaving received notice in writing from the company that the minimum subscription has not been obtained, shall have consented in writing to take allotment of the shares subscribed by him or any less number, and whenever any allotment shall have been so made by consent, notice thereof shall be given forthwith to the registrar, and the total number of shares comprised in such allotments and notice shall be the minimum subscription for the purposes of section eight of this Act."
There would be very full notice given, and everybody would know exactly what he was doing. He submitted to the Government and to the House that there could be no reason why, because the subscriptions had fallen short, that the whole thing should come to an end, all the expense be thrown away, and the parties sent home without being able to join in the undertaking which they desired to promote. He begged to move the Amendment standing in his name.
Amendment proposed—
"In page 3, line 16, after the word 'allotment,' to insert the words 'save as provided by sub-section six of this section.'"—(Mr. Sydney Gedge.)
Question proposed, "That those words be there inserted."
MR. RITCHIE: I hope the House will not consent to the Amendment of my hon. friend. The House has already given its assent to a proposition that at the formation of these companies the public should be informed as to what is the minimum amount which the directors consider they require to proceed with. Whatever may be the amount of the capital, the directors have to say what, in their opinion, is the smallest amount they can go to allotment upon, which means that they have decided that that amount of capital is required for carrying on the business. My hon. friend desires to drive a coach and four through the provision which has already been assented to by the House, and say that, in the case of this minimum subscription not being reached, the company may proceed to business on a lesser sum than the minimum provided. I do not think we ought to proceed in that way. I think we should not allow this minimum to be set aside simply because the shareholders desire to proceed on a smaller capital than what the directors say is necessary. The hon. Member has argued as if it was a question for shareholders only, but it is nothing of the kind, for it is a question for the creditors as well, and a company proceeding to allotment on a smaller capital is calculated, though not intentionally, to deceive the public. I trust the House will adhere to the clause as it stands.
MR. PERKS: This Amendment shows how delusive this provision is. First of all you are dealing, in the majority of cases, with perfectly capable and solvent companies which would not dream of going to allotment unless they had a sufficient amount of subscribed capital. It is not unfrequently the case that they state in the prospectus that that is the intention of the directors. I think the Board of Trade have been wisely advised in adopting some such provision as this. As I pointed out on Clause 4 in regard to the qualifications of directors, it is capable of being set aside by fixing in the Articles that the qualification should only be one share or a very nominal sum. Therefore, in connection with this supposed protection to the public of a minimum subscription, all that is necessary is for a joint stock company to state that the minimum subscription is to be a mere nominal figure. I know the answer will be that

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at all events the public will have notice, and I admit that that is a very good answer to a certain point. I wish, however, to point out the danger of grafting upon joint stock company laws a number of harassing and futile conditions, when it is perfectly well known that the cases of fraud which you are trying to protect the public against are only an infinitesimal proportion. There are a number of companies who do not need those harassing restrictions placed upon them, and I think that point ought be well borne in mind by the right hon. Gentleman. There is also another restriction about the amount of money which each shareholder has to pay on application; but there again, it is merely a nominal amount, which will not bring any substantial sum into the coffers of the company for the purpose of protecting the creditors, and this particular clause we are now considering is the passing of a minimum which will be perfectly fair.
SIR ALFRED HICKMAN: The explanation is very simple. No man in his senses would sub scribe to a company, the minimum subscription of which was placed at a merely nominal figure. We can never protect persons so silly as to do that, but that is no reason why we should not protect others.
SIR ALBERT ROLLIT: The evil which this clause strike? at is probably the very worst which has occurred in company administration, namely, proceeding to allotment on insufficient capital. The vendors and others receive their money, and then the company is left without sufficient assets to conduct its business. The clause is required, and I cannot concur with my hon. friend that it might be eluded by stating the nominal amount at which allotment would take place. What would the public think of a company with a nominal capital of £100,000, the directors of which proposed to proceed to allotment on £10? I should like the House, nevertheless, to consider whether my hon. friend the Member for Walsall has not introduced an Amendment which may have an advantageous effect. I admit at once the evil, and I think this clause provides a remedy. What form does the evil take? Why this, that the directors of a com-
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pany at a meeting of the Board proceed to allotment without consulting the shareholders at all. They act independently of the shareholders, and that is a very great evil indeed. My hon. friend's Amendment provides that the directors shall take the shareholders into their confidence, and if the shareholders deliberately advise the directors to proceed to allotment on the capital subscribed, that is a fair and reasonable corollary to the clause. Suppose it was provided that £100,000 was the minimum, and that the subscription fell short of that amount by only £100, that would be an embarrassing situation, and a great deal of money would be lost, although it might be found quite practicable to deal with the company, with the assent of the shareholders. If a company in such a position had to be dissolved, the stamp duty and all the preliminary expenses would be lost. It may be said that this Amendment opens the door to abuse. I admit there may be cases in which it may be abused, but I think the principle of the Amendment is right—insufficient subscription by a small amount, the practical performance of every object by the company, and the directors acting, not of their own accord, but with the consent of the shareholders. I think it is a very strong proposal.
SIR ROBERT REIDsaid he agreed with the President of the Board of Trade, and also with the observations which had been made with regard to the abuses which had arisen in proceeding to allotment on insufficient capital. He thought this clause would not produce very good results, partly for the reasons which had been already stated, and also because there was nothing to prevent collusive applications. That was a very common form of clause, but he thought a coach and six might be run through it by an ingenious company promoter. He felt that the clause would very likely prove of very small value.
SIR JAMES JOICEYsaid that if what he would call fraudulent promoters wore allowed to go to allotment with a very small capital, they would probably make a market of the shares, as was done in eases where no prospectus was issued. He thought it would be unwise to accept the Amendment. After all, people did not go into a company because of the amount

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of qualification which the directors held. They went into the company on the character of the directors.
Question put and negatived.
Amendment proposed,
"In Clause 6, page 3, line 17, to leave out 'for public,' and insert 'to the public for.' "— (Mr. Ritchie.)
Amendment agreed to.
MR. BOND MR. BOND, in moving the next Amendment, said it was not desirable to multiply formalities beyond what was necessary. He did not understand why the minimum subscription should be inserted both in the Memorandum or Articles of Association and in the prospectus. If the minimum subscription before preceding to allotment was stated in the prospectus, that was all that was necessary to protect the shareholders. People did not generally propose to take shares in a company unless they had the prospectus before them. The provision of the section was entirely new, and had never hitherto been seen in any Articles of Association.
Amendment proposed,
"In page 3, line 19, to leave out the words 'by the Memorandum or Articles of Association.' "—(Mr. Bond.)
Question proposed, "That the words proposed to be left out stand part of the Bill."
MR. RITCHIEsaid the question of capital was one of so important and vital a character in connection with the formation of a company that he thought it ought to be entered in something more than the prospectus. That was why it was thought that it ought to be definitely laid down that the minimum subscription which would entitle a company to go to allotment should be named in the Articles of Association as well as the prospectus.
MR. PERKSsaid the effect of putting it in the Articles of Association would be that it could be altered by special resolution. The effect of putting it in the Memorandum would be that it would be unalterable. The point was this—whether they should now agree that the amount of the
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minimum subscription should not only be in the Memorandum and Articles of Association as well as in the prospectus— three documents.
MR. RITCHIE: In the prospectus, and one or other of the other two.
MR. PERKS: Then, do I understand that it could only be in the prospectus?
MR. RITCHIE: It must be in the prospectus, and it must be incorporated in one of the other two—either in the Memorandum or the Articles of Association, not in both.
MR. PERKS: Very often in the incorporation of a company in the first instance it was impossible to say what was the amount of the minimum capital it would be wise to go to allotment on. Very often when the Articles of Association and the Memorandum were registered for the purchase of a large number of companies—in many cases in the incorporation of banks, and particularly in the case of the Amalgamation of large industrial concerns—it was almost impossible to say how much it would be wise to fix the minimum subscription at.
Other Amendments made.
MR. RITCHIEsaid the Amendment he now moved was to redeem a pledge he gave to the Grand Committee to amend Clause 6 so as to meet the case of the failure of any bank in which money received from applicants for shares was deposited.
Amendment proposed—
"In Clause 6, page 4, line 4, at end to insert 'from the expiration of the forty-eight days, provided that a director shall not be liable if he proves that the loss of the money was not due to any misconduct or negligence on his part.' "—(Mr. Ritchie.)
Question proposed, "That those words be there inserted."
SIR ROBERT REIDsaid he was not a member of the Grand Committee, and was not acquainted with any arrange-

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merit come to in regard to this matter. It was a small matter, and therefore it was not worth while saying many words about it. Still he must say that the Amendment did not commend itself to his sense of equity. If directors took from subscribers sums of money which they were pledged to return if the minimum allotment was not subscribed, it seemed to him that they should be under such obligation to restore it that they would be quite certain that it was in custody where it would be absolutely safe. He would not waste the time of the Committee in pressing the matter, for loss in this way was very unlikely to occur often.
MR. MARKSsaid there were provisions in Sub-section 6 which it would not be desirable to limit to the first allotment of shares. His object in moving the omission of the sub-section was for the purpose of calling attention to a grave defect in the Bill which was discussed in the Committee upstairs, and in respect of which he at least understood that it was to be dealt with at a later stage. By Sub-section 3 of the clause the amount payable on each share on application was 5 per cent. of the nominal amount of the share. The whole of the section did not apply to the allotment of shares subsequent to the first allotment. If there was a point on which the public and others familiar with joint stock companies had been unanimous since this Bill had been before the public it was that companies should not proceed to allotment with insufficient capital. The stock exchanges, the chambers of commerce, the Institute of Secretaries, the Registrar of Joint Stock Companies, and the Inspector-General in Bankruptcy were unanimous as to the extreme importance of not permitting companies, as far as the law could prevent them, to go to allotment with insufficient capital. The first condition of allotment on a sufficient capital was that there should be some guarantee that the applications were made in good faith, that they were not bogus applications, that they were not made for the purpose of carrying on stock market deals, and for the purpose of entrapping the unwary. Five per cent. was the smallest possible amount that should
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be paid on subscription. Small as it was, it was some guarantee of the good faith of the applicant. It created the impression at least that he was not altogether a man of straw. But if it was important in respect of the first allotment of shares that there should be some payment in cash on application, surely it was equally important that on the subsequent allotment of shares there should be some payment in cash. What was the situation created by Sub-section 6? It was this. There was an invitation to the promoter who desired to conduct his business dishonestly—and he assumed that, to a certain extent, this Bill was aimed at dishonest promoters—there was a direct invitation to make the first issue of shares a formal issue. In connection with that issue he had to obey the injunction laid down in the section, but in respect of that first issue only. It might be an issue of 10,000 shares, and it might be worth while to provide 5 per cent. on application, and therefore, so far as the 10,000 shares were concerned, there was a genuine subscription. Having once complied with the law in connection with that purely formal first issue, he was at liberty to ignore all the safeguards contained in that clause. He was at liberty a month or three months after, or at any time, to issue 190,000 shares to the public, and he was not obliged to observe any of the obligations laid down. What was more significant in respect of that subsequent issue was that he was not required to make any amount payable in cash on application. It was infinitely more important that there should be a payment on application in the case of the subsequent issues than in the case of the first issue. He begged to move the omission of the clause.
Another Amendment proposed—
"In page 4, line 8, to leave out Sub-section 6 of Clause 6."—(Mr. Marks.)
Question proposed, "That the words proposed to be left out to the word 'for,' in line 9, stand part of the Bill."
SIR ROBERT FINLAYsaid his hon. friend admitted that the greater part of this provision would be quite inapplicable except to the first allotment. With regard to subsequent applications to the public to take shares, a certain protection was

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given in Clause 6, Sub-section 6, which dealt with the starting of companies. He did not undervalue what his hon. friend had said with regard to subsequent issues to the public, but surely the greater part of the fraud which they had to deal with had been connected with what was termed "proceeding to allotment." He asked his hon. friend not to press his Amendment, but rest content with the fact that they had dealt with the case which was most prevalent.
SIR ROBERT REID: I think the hon. Member has shown by his criticism the weakness of the whole case. Let mo give an illustration from the Report of the Board of Trade. A company named Vimbos had a prospectus with most excellent names for directors and solicitors. The sum of £165,000 was offered for subscription, and the public subscribed £535. There was £44,500 underwritten by bogus subscribers. The company went into liquidation, and it was a downright swindle from beginning to end, and this was only one of many of the land. In this case it was the original application for shares; but as the hon. Member has pointed out, there might have been an original application of a perfectly formal character; and I will undertake to say that this formal application, when this Bill is passed, will become a matter of course, and this swindle might still be perpetrated. What the learned Attorney General has said is quite true, as the hon. Member himself admits—that a considerable part of this clause is not applicable in its terms and forms to anything but the first application for shares; but Sub-section 3 and Sub-section 5 might be left out, and instead of omitting the whole of Sub-section 6 there might be inserted after the word "section" the words "except Sub-sections 3 and 5." That would at least preserve for second applications some of the very small benefits which are conferred by this section. I have nothing more to say in regard to this point; but it is quite clear from the way the clause is drawn that you cannot retain the benefit of the whole of the clause for every application for shares. That is, to my mind, one of the great defects of this Bill, because it does not make any provision for that at all; but by moving the Amendment in the form I
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suggest it might do some good, and make the exception a little wider.
SIR JAMES JOICEY: This only shows the difficulty which arises in every part of this Bill. Supposing this Amendment is accepted, where are you placing yourself in the case of a company which was incorporated twenty years ago, and finds it necessary to issue more capital? Possibly the minimum amount upon which to go to allotment would have to be stated in the Articles of Association or the Memorandum. If it was stated in the Memorandum it could not be altered. I do not see, if this Amendment were accepted, how you could issue other shares and still comply with the Memorandum fixing the minimum on which you should go to allotment. So far as I know, I think it would alter altogether the working of this clause if the Amendment were accepted. I know a most prosperous company in the north of England which has just issued £750,000. It was incorporated twenty years ago, and if this Bill had bean in operation without the section to which the hon. Gentleman opposite objects, then I do not see how they could have complied with the Act at all in their second allotment of shares.
MR. LAWSON WALTON: I hope the House will adopt the Amendment of my hon. friend the Member for St. George's. Some restriction is sought to be put upon the lodging of bogus capital, but a limit of 5 per cent. upon application money is a very small amount. A concrete case will show what it means. Supposing it is desired by a small syndicate to get a capital of £100,000. It will be necessary to subscribe £5,000, and by providing this sum amongst themselves they may got into their hands the whole of the shares, and by a judicious pooling arrangement and sales on the Stock Exchange they may put the shares on the market at a very large premium. This abuse is inadequately dealt with by the machinery of the Bill. You will have, in every case of speculative and fraudulent companies, two issues. You will have a formal issue and allotment, and you will have an effective issue and allotment. The formal issue will necessarily be a small one, because 5 per cent. of it must be subscribed by the persons who take the shares. Suppose it is said in

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the prospectus that the company is to have a capital of £500,000 in shares. The first and formal allotment under the machinery of this Act will probably be an allotment of £25,000. In this case the provision of the clause will have been most scrupulously observed. The first issue on allotment having been made, and the company duly registered, the second and effective allotment will then proceed to be made, and the persons who subscribed for the shares with hands entirely free from all the fetters which this Act imposes will proceed to practise the arts of speculative company promoters. I hope that the right hon. Gentleman will look upon this Amendment with a little more favour.
MR. RITCHIE: It has been admitted on all hands that the clause as it stands would be inapplicable in many respects to second issues. I think my hon. and, learned friend has failed to notice the effect of Sub-section D in Clause 12, which provides—
"The minimum subscription on which the directors may proceed to allotment, and the amount payable on application and allotment on each shave; and in the case of a second or subsequent offer of shares, the amount offered for subscription on each previous allotment, and the amount actually allotted; and the amount, if any, paid on such shares."
Surely that would entirely meet the case which the hop. and learned Member suggests.
MR. BOUSFIELD: I hope the Government will give further consideration to the modified form of the Amendment suggested by the hon. and learned Member opposite. The five per cent. payable on application is a very small matter, and I have no doubt that the hop. Member who has moved this Amendment would be quite willing to accept the suggestion which has been made if the Government could see their way to except Sub-sections 3 and 5. I think this small concession would meet the views of the House.
MR. RITCHIE: I will agree to that.
Amendment, by leave, withdrawn.
Other Amendments made.
MR. LAWSON WALTON: I hope the right hon. Gentleman will see his way to allow some little modification of Sub-clause 2, Section 7. The section runs—
"If any director of a company knowingly contravenes or permits or authorises the contravention of any of the foregoing provisions of this Act with respect to allotment he shall be liable to compensate the company and the allottee respectively for any loss, damages, or costs which the company or the allottee may have sustained or incurred thereby."
So that the liability of the director is to compensate any person who has sustained a loss in consequence of that contravention. Now, the proviso is—
"Provided that proceedings to recover such loss, damages, or costs shall not be commenced after the expiration of one year from the date of the allotment."
I think I shall be supported by the House if I say so brief a limitation attached to a civil liability is almost unknown to our law. The House will see that the director sought to be affected is one who has knowingly contravened the provisions of the Act. The remedy is not given against a neglectful or indifferent director, but a director who knowingly contravenes the Act of Parliament. Now, I submit to the House that this director-is far too leniently treated, because after the expiration of one year from the date of allotment, however flagrant his contravention may be, he escapes scot free. That is far too indulgent to the director who knowingly contravenes the statute. Again, the period within which the remedy is to be enforced is far too short for the person suffering loss. He has only twelve months in which to discover the loss and the breach of duty which caused the loss, and to institute proceedings for the recovery occasioned by the loss. All this is to be done in twelve mouths. If one looks at the analogous periods in this and other statutes it will be found a very much longer limit is allowed. Under Section 6, Subsection 4, there is no period fixed; therefore, I take it, the directors may be compelled to repay the allotment money within six years, inasmuch as in similar circumstances, under the Directors Liability Act of 1890, the Court of Appeal recently decided that an action may be brought any time within six years. In both these cases you have to deal with a defendant whose liability arises from carelessness or indifference. In that case

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a director who causes the prospectus to be issued without having reasonable ground for believing it is true, is liable for six years; but in this case we have a favoured director, who escapes all liability after the expiration of one year from the date of allotment. I fail to see any ground for that exceptional treatment, and, therefore, I say if a limitation is to be allowed at ail, that period should not commence until the person complaining has found out that the breach of duty has been committed. If my Amendment is accepted the section will run—
"provided that proceedings to recover such loss, damages, or costs shall not be commenced after the expiration of one year from the date at which the fault complained of may, by reasonable diligence, have been discovered."
The person complaining then will have to use the utmost diligence, because he has only a year to do it in. These derelictions of duty are never discovered for some time, because those who contravene the Statute always take very good care to cover up their traces.
Amendment proposed—
"In page 4, line 24, to leave out the words 'of the allotment,' and insert the words 'at which the default complained of might by reasonable diligence have been discovered by the persons seeking compensation.' "—(Mr. Lawson Walton.)
Question proposed, "That the words proposed to be left out stand part of the Bill."
SIR ROBERT FINLAY: I hope the House will not accept this Amendment, for this reason. It is very desirable, so far as we can, to make the period of limitation definite. I am quite aware that in certain eases it is necessary to have the statutory period dependent upon knowledge of the fraud. Still, as a general principle, it is desirable to have a definite time from which the statutory liability is to run, and not to say "from the time when the plaintiff might have reasonably discovered the fraud," which would open the door to a great many things which would not be desirable. There are other objections, if one looks at the section, to She form of this Amendment. In the ordinary course of things these irregularities would be found out at the statutory meeting of the company, if not sooner; but if the period of limitation is
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considered too short, and if it will be accepted, to save discussion we would consent to its being made two years instead of one.
MR. HALDANEpointed out that the arguments of the Attorney General would have been of great force had they been introducing a period of limitation of liability in the case of the indifference or neglect of a director, but in this case their limitation was directed against directors who ''knowingly" contravened the Statute. He was not sure as to these irregularities being discovered at the date of the statutory meeting. Some things would not be discovered until the company had gone some way in its history. This clause was for the purpose of protecting innocent persons against directors who knowingly deceived them, and in limiting the period in this form, the Bill went a good deal further than the courts, which laid down the principle that the period of limitation should run from the date when the fraud was discovered.
MR. RITCHIEthought that the director had some claim to consideration, because all directors were not fraudulent. All contraventions of the Statute were not fraudulent. Nor had sufficient weight been given to the argument that an innocent director might have to undergo pains and penalties extending over an indefinite period if the Amendment was accepted. Although a man who was guilty of fraud deserved no consideration, the man who was charged only with fraud, did deserve consideration. The hon. and learned Gentleman looked at this question from a different standpoint from his. He could understand the ardour with which the hon. and learned Gentleman liked the shooting operation, but the person shot at did not like it, especially if the time during which he might be shot at was an indefinite period. For what might happen? The person who thought he was injured, and might subsequently come with an action against the director, might be content to lie quiet so long as the company was prosperous, but if there came a prospect of winding up, this same gentleman, who was quite prepared to submit to all these intolerable grievances while he was

1099
receiving his 5 or 10 per cent. dividend, [would come forward and say, "Good gracious, here is a prospect of my getting out of my liability; I will raise an action at once against the directors." There was no reason to make the period an indefinite one, but the Government was prepared to accept the extension to two years, and if that was accepted by hon. Members opposite, a step would have been taken towards settling one of the difficult points of this Bill.
MR. BRYCEsaid, as hon. Members were anxious to save time, and what was offered by the right hon. Gentleman opposite would be a substantial improvement in the Bill, he hoped the House would accept it.
SIR JAMES JOICEYexpressed surprise that the Government should have accepted the extension of the limit of the two years. It appeared to him that anyone reading the clause must come to the conclusion that every director was expected to know the law in every detail, and that he was brought under the penalty of having to refund the capital of the company if he contravened the Act. From his experience, he could say that every board of directors that he was acquainted with had had to have their solicitors at their elbows in order that they might be told when they were contravening the Act or not. When one considered the liability which directors would take upon themselves when this Bill became an Act, he would be greatly surprised if any honest man, unless he was a fool, would submit to come under such provisions as these.
SIR ALFRED HICKMAN SIR ALFRED HICKMAN, supposing the case of a director dying, asked how his executors would ever be able to wind up his estate if it were to be subject to a liability of this kind for an indefinite period.
MR. HEDDERWICKsaid that he did not understand the tenderness of the right hon. Gentleman towards a director who knowingly contravened the Statute.
MR. RITCHIE: I said distinctly I had no compassion for a director who did
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that, but that I had compassion for a director who was shot at who had not done so.
MR. HEDDERWICKsaid the clause showed undue tenderness towards these persons by limiting the liability to twelve months. There was no such limitation in Clause 6, under which an action at law would lie for six years, and the same principle ought to be applied to this clause. There was no reason for limiting the liability of a director who, in the words of the Bill, "knowingly contravenes or permits or authorises the contravention of any of the foregoing provisions of this Act with respect to allotment."
MR. LABOUCHEREsaid the President of the Board of Trade and those who supported him seemed to have a very curious idea as to what constituted honesty in a director. It was supposed to be something entirely different to that of any other human being, and laws were to be made to allow them to do things which other persons would not be allowed to do, in order to induce them to become directors. The clause said that if a director knowingly contravened the law, or permitted anybody else to do so, he was subject to certain penalties; but if his criminality remained undiscovered for twelve months, he was to be allowed to go scot free. They might as well say that if a director knowingly stole a watch, and the owner did not discover his loss in twelve months, the director should be allowed to go free. He protested against this doctrine of putting a premium on dishonesty, and against the idea that honest men would not become directors unless they were allowed to act dishonestly. He had no desire to treat a director worse than anybody else, but, on the other hand, he had no inclination to treat him better. Possibly a director might have an action brought against him after the expiration of a year, and the individual who brought it might not be able to prove his case; but everyone was liable to that, especially newspaper proprietors, and if this concession was to be made to company directors then newspaper proprietors should be included in it. As to the point raised by the hon. Member opposite as to a director dying, and whether there is any liability upon his executors, he could only say that if a director died

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he might be let off, because in all probability he would be punished in another world; but so long as he was in this world let him remain liable to be punished if necessity arose.
MR. LAWSON WALTONbegged leave to withdraw his Amendment in favour of that of the Attorney General.
Amendment, by leave, withdrawn.
Another Amendment made.
MR. PERKSbegged leave to move the Amendment standing in the name of the hon. Member for North-west Durham. His object in doing so was to call attention to the clause, and to elicit from the Government some explanation with regard to it. The clause seemed to deprive the public of a protection which they had hitherto possessed, and the shareholders of the company of important rights which they had been accustomed to endow themselves with under their Articles of Association. The clause provided certain conditions under which the company might commence business. They had to satisfy the Joint Stock Registrar that they had complied with all the requisite conditions laid down for that purpose. The conditions were that the secretary of the company or one of the directors should make a statutory declaration on two points, and two points only. In the first place, he was to declare—and this was a condition precedent not merely to the commencement of the business, but also to the exercise of any borrowing powers of the company—that the minimum subscription had been provided by the applicants for the shares of the company, and that shares had been allotted to an amount not less in the whole than the minimum subscription. That was the first thing the secretary had to do before the company was launched to the world and commenced business. What was the other condition? It was that the director whose qualification had been specified in the preceding clause must pay to the company on each of the shares taken, or contracted to be taken by him, a proportion equal to the proportion payable on application and allotment on the shares offered for public subscription. Say that
1102
the limit on application would be something like 5 per cent., the director would have to subscribe 1s. per share on application and 1s. on allotment. Thereupon the secretary went to the Registrar of Joint Stock Companies, and made a statutory declaration and came out with a certificate—without, he presumed, any note or comment in it— that the company, which might be a perfectly bogus company, was entitled to commence business. But there was another condition in Sub-section 3 which was very extraordinary, and to his mind totally at variance with what was the ordinary course in limited companies. It was the usage that contracts made by a company before they were entitled to commence business were subject to confirmation by the shareholders.
MR. RITCHIE: That has nothing to do with the Amendment moved by the hon. Member, which is for the omission of Sub-section (b).
MR. PERKSsaid he would put himself in order by moving—as he was entitled to do—the omission of all the words from line 29, page 4, to line 9 on the next page. What he wanted to point out was that this clause was a direct premium given to launching bogus companies on the world with the imprimatur of a Government Department upon them. Directly this certificate was issued by this functionary on these illusory conditions, every contract which had been made before the company commenced business became absolutely binding, and not subject to the confirmation of the shareholders, however absurd or ruinous it might be. He did not think that was according to public policy. He moved the Amendment standing on the Paper.
Another Amendment proposed—
"In page 4, line 30, to leave out paragraph (b), of Sub-section (1), of Clause 8."—(Mr. Perks.)
Question proposed, "That paragraph (b) of Sub-section (1) of Clause 8 stand part of the Bill."
SIR ROBERT FINLAYsaid when the hon. Member found he could not reconcile the Amendment he originally moved

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with his speech he moved another, but finally ended by moving the Amendment standing in the name of the hon. Member for North-west Durham, who was present, but did not himself move it. The 8th Clause, which the hon. Member proposed to deal with in this summary fashion, provided very wholesome restrictions on commencing business. A company was not to commence business, or exercise any borrowing powers, until the shares had been allotted to an amount not less in the whole than the minimum subscription, and until every director had paid to the company on each of the shares taken, or contracted to be taken by him, and for which he was liable to pay in cash, a proportion equal to the proportion payable on application and allotment on the shares offered for public subscription, and further until there had been filed with the registrar a statutory declaration by the secretary or one of the directors that the aforesaid conditions had been complied with. And then there was the provision that any contracts made by the company before the date at which it was entitled to commence business should be provisional only, and should not be binding on the company until that date. Surely these were most wholesome provisions, and their effect would not unduly restrict the operations of a company. He really totally failed to see how the hon. Gentleman could contend that the imposition of these wholesome restrictions would promote the formation of bogus companies, and he hoped the Amendment would not be adopted.
SIR ROBERT REIDsaid that by Subsection 3 contracts made by a company before the date at which it was entitled to commence business would be provisional only, but on that date they were to become binding. Now, the Attorney General was perfectly aware that there were certain classes of contracts entered into antecedent to the formation of the company which were in a suspended state until the directors and shareholders had had full opportunity of considering whether they were light and proper for the company to enter into. Would the Attorney General take steps to insert words to prevent these contracts being made binding by statute on the date the company commenced business?
SIR ROBERT FINLAYsaid the subsection applied only to contracts made by the company, and not by other persons as trustees for the company previous to the formation of the company. Of course, if there was any other objection to the contracts the effect of the subsection would not be to make them binding.
MR. PERKSsaid that after the satisfactory explanation of the Attorney General he would withdraw his Amendment.
Amendment, by leave, withdrawn.
MR. H. S. FOSTERmoved, "In Clause 8, page 5, line 17, to omit the words 'which has commenced business,' in order to insert 'registered.' "The effect of the Amendment would be to exclude the application of the provisions of the section to companies which had been registered before the passing of the Act. There were many companies which during the last few days had been formed with many millions of capital, and they might proceed to allotment without having stated in their prospectus the minimum amount of subscription.
MR. RITCHIEsaid he was inclined to accept the Amendment.
Amendment agreed to.
MR. MARKSmoved to omit Sub-section 7 of Clause 8. The clause itself, he said, contained some very wholesome provisions with reference to the conditions under which a company was to be allowed to commence business. No company was to commence business until it had obtained a certificate from the registrar, and until that event no contract was binding on the company. But by Sub-section 7 this clause was not to apply to a company where there was no intention to ask the public to subscribe for its shares. But if, after registration, and at a later stage, that company issued an invitation to the public to subscribe for its shares, would the section then become operative for the first time; and if so, would the contracts which had been already made absolute cease to be absolute? And must the company cease to carry on business until

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it had obtained another certificate from the registrar under the provisions of this clause? According to the clause no company could commence business unless it issued a prospectus on the same day that it applied for registration.
Amendment proposed—
"In page 5, line 19, to leave out Sub-section 7."—(Mr. Marks.)
Question proposed, "That Sub-section (7) stand part of the Bill."
SIR ROBERT FINLAYsaid that he could not agree with his hon. friend, although he admitted there might be some ambiguity in the sub-section. He did not think that the words, "Where there is no invitation to the public to subscribe for its shares," could be taken in the sense which the hon. Member sought to impute to them. In the case of a private company the clause would not apply; but where shares were put upon the market the restrictions of the clause ought to apply.
MR. FAITHFULL BEGGasked whether there was any definition of the phrase, "invitation to the public to subscribe." Unless there was such definition they would never know whether a company had applied to the public for subscriptions. Advertisement was a well-known means of invitation, but would the printing of a prospectus and sending it out marked "private and confidential"—which was quite a common case—be an invitation to the public to subscribe? That would be practically an appeal to the public, although technically it might not.
MR. RITCHIEsaid that the question had already been answered. Of course the clause did not give an absolute and final definition of what was "an invitation to the public to subscribe." He should say that it meant generally when the public were asked to subscribe for shares. He agreed with the Attorney General that his hon. friend's fears were groundless, but suggested that the following words might meet the objection raised:— "This section shall not apply to any company where the shares of the company are not already offered to the public for subscription."
MR. BILLSONsaid that the shares might be held by the promoters for a month or two and then offered to the public. He did not think the Attorney General had disposed of the difficulty which the hon. Member had raised.
MR. BRYCEhoped the House would see how serious the difficulty was. The Attorney General was obliged to admit that the construction put upon the clause by the hon. Member for St. George's was a possible construction. The suggested Amendment of the President of the Board of Trade did not carry them much further. Moreover it was an admission that there was considerable uncertainty about the clause. They did not want to give more work to the lawyers. As it was the Bill would give plenty. Therefore he hoped that, in one way or another, the Government would see their way to have the clause redrafted.
MR. RITCHIEsaid that after the criticisms that had been made he would undertake to confer upon the matter with the Lord Chancellor.
MR. MARKSsaid that after the undertaking of his right hon. friend he was willing to withdraw his Amendment.
MR. H. S. FOSTERsaid there was a certain class of companies which would not have to go to the registrar for a certificate to commence business, so long as they could say of themselves that they were a private company. But that private company might find it necessary to make an appeal to the public afterwards, and would the provisions of the clause come into operation then, or would they have a retrospective effect? He trusted his right hon. friend would direct attention to the point so that it could be considered in another place.
SIR JAMES JOICEYquite recognised the importance of having this matter thoroughly reconsidered, as, unless there was some provision of the kind now proposed, the whole clause would be useless. The more he saw of these clauses the more satisfied was he that the Bill was not understood by even its framers.
MR. PERKSasked whether all the existing rights of registration were reserved in the case of private companies.
MR. RITCHIE: That is the intention.
MR. PERKSinstanced the case of a company which, registered for private and family purposes with a large amount of capital, was about to make a public issue. When such a company had adopted, or would in future adopt as a private company, the existing proceedure, and then later on made a public issue, would it have to go to the Joint Stock Registry for a certificate to enable it to commence business, and comply with the different conditions laid down in this clause?
SIR EDWARD CARSONpointed out that in such a case the company would have already commenced business. The clause would apply only to new companies. A great deal of the difficulty which had been raised by hon. Members would have been disposed of if they had read the section already passed, providing that allotments should not be made until the minimum subscription of capital was forthcoming. The whole question hinged upon that, and the two clauses must be read together.
MR. TOMLINSONsaid that the difficulty was occasioned by trying to make one set of words fit two quite distinct states of circumstances. The cases of issues before and after the company had commenced business had better have been dealt with separately.
Amendment, by leave, withdrawn.
MR. H. S. FOSTERmoved to insert in Clause 9, line 22, after the word "shares," the words "as the result of a public issue." This clause required a return within a limited period after allotment. Manifestly the allotment was the general allotment of shares; but it frequently happened that a small number were allotted at various times, and there clearly could be no object in enacting that in such cases the return should be made under pain of heavy penalties.
Amendment proposed—
"In page 5, line 22, after the word 'shares,' to insert the words 'as the result of a public issue.'"—(Mr. Harry Foster.)
Question proposed, "That those words be there inserted."
MR. SYDNEY GEDGEpointed out that the issue of shares took place after the allotment, and therefore an allotment, while it might be the result of an invitation to the public, could not possibly be the result of an issue.
MR. MARKS: I hope the Amendment will not be adopted, as it will take all the value from the provision. It is of the utmost importance that records of allotments, and the other matters set forth in this section, should be open to public inspection, and should be filed more particularly in the case of those companies which do not make public issues. The House will remember that there are other ways of selling shares than by means of public issues, and it is particularly desirable that an eye should be kept on the companies which do not make public issues, but do make allotments.
Amendment, by leave, withdrawn.
MR. RITCHIEstated that the series of Amendments standing next in his name were with reference to a clause interpolated in Committee at the instance of the right hon. Gentleman the Member for South Aberdeen. The Government had consented to the repeal of Section 25 of the Companies Act, which imposed a very onerous fine upon any person holding shares other than shares paid for in cash, and which had not been registered. The result of non-registration in the case of an innocent holder might years afterwards be very serious, and the Government accepted the Amendment with the general consent of the Committee, but these slight Amendments were necessary.
MR. BRYCEagreed with the statements of the right hon. Gentleman as to the proceedings in the Standing Committee. The Amendment to repeal Section

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25 of the Companies Act was accepted by the Government, but the Chancellor of the Exchequer made the condition that certain words should be introduced to safeguard the Treasury and provide against the diminution of revenue which might arise. That was understood by the Committee, and therefore there was no objection to these Amendments.
Amendments agreed to.
Amendment proposed—
"In page 5, line 31, to leave out the word 'number.' and insert the word 'numbers.'"— (Mr. Sydney Gedge.)
Question proposed, "That the word 'number' stand part of the Bill."
MR. FAITHFULL BEGGsaid there was more in this Amendment than appeared on the surface. The alteration might be a very serious matter. The "number" of shares would be taken to mean the gross quantity, but to call upon a company to decide what particular numbers should be attached to particular shares was imposing a very serious obligation; and he failed to see what good could possibly be obtained thereby.
MR. RITCHIEremarked that the Amendments he was moving were Treasury Amendments, which he had consented to ask the House to insert, and it would be rather dangerous to depart from the arrangement he had made. He therefore could not accept the Amendment.
Amendment, by leave, withdrawn.
Other Amendments made.
MR. ATHERLEY - JONESmoved the omission of Clause 10. It was difficult to understand why the clause, if it was useful with regard to companies which invited public subscriptions, should not be equally applicable to companies of a private character. He objected to the clause on two grounds. The clause aimed at the prevention of payments of commissions or bonuses to persons for underwriting. The clause enabled that to be done providing there were disclosed on
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the prospectus the amount and other particulars; but it was totally illegal to do it otherwise. Such a provision would be altogether fatuous in its operation, and would simply multiply the opportunities for fraud. One of the results contemplated was that the purchase-money would be enhanced, that the promoter would receive something more than the real purchase money, and that that "something more" should be given by the promoter to the underwriter. How in the name of common sense did the right, hon. Gentle man suppose he was going to follow a transaction of that kind? Unless a punitive law could be made effective it was far better not to attempt to apply such a law. Another objection was that by the clause a considerable amount of mischief would be done to legitimate company enterprise. Underwriting was an exceedingly common form of putting a company on the market, and it was not only a perfectly legitimate process, but a perfectly proper one. When the public knew that astute business men were willing to underwrite shares, it was a certain assurance that the enterprise was of considerable value. This clause would not only stop the fraudulent and improper company-mongers, but it would materially injure perfectly legitimate ventures. The amount paid for underwriting was regulated not by the fraudulent character of the company, but by the character of the enterprise and the risk inherent thereto. He trusted the public would not be given the idea that by a prospectus having to pass through these various methods of Government discipline they were thereby relieved of the necessity of inquiring into the nature of concerns to which they were invited to subscribe. This was a piece of vicious legislation, and it was being forced upon the House at a most improper rate of speed. He ventured respectfully to press upon the right hon. Gentleman the President of the Board of Trade that he should seriously consider the desirability of pressing this clause, which, in the view of a very large number of people interested in public companies, was contrary to the interests not merely of companies, but of the public generally.
Amendment proposed—
"In page 5, line 38, to leave out Clause 10." —(Mr. Atherley-Jones.)
Question proposed, "That the words 'Upon any offer of shares' stand part of the Bill."
MR. PHILLIPSsaid that if this clause applied to companies already in existence, as he believed it did, it would have the effect practically of enabling companies to issue shares at a discount. Except in the case of railway companies and companies incorporated under special Acts, shares could not be issued at a discount. He instanced the case of a company with £10 shares quoted at £9. Until those shares came up to or above par, it was absolutely impossible for that company to issue more shares. If the clause under discussion became law it would be perfectly easy for a company with £10 shares quoted at £2, providing there was a clause in the Articles authorising it to be done, to issue shares at par and pay £9 per share for having it done. With the shares quoted at £2 it would be perfectly easy to get people to underwrite the shares on such conditions, as they would really be buying £2 shares for £1. The shares could be taken up in big lots, and afterwards sold little by little to the public. The real effect would thus be to issue shares at a discount. He did not say whether or not this was an advantage, but it absolutely changed the whole of the present company law, and the House should not take such a serious step without further consideration.
MR. RITCHIEdid not think any clause in the Bill had attracted more public attention than the clause under consideration, nor was there any part of the proceedings connected with company promoting in regard to which more fraudulent practices had been carried out than that of under writing shares. Although the law at present did not permit any commission to be paid for underwriting, it was notorious that underwriting did take place. Instead, however, of being paid for by the company it was paid for by the promoter, who took care to get his money out of the company. In many cases it was alleged that almost fraudulent companies wore started by means of large amounts being paid for underwriting, and subsequently, by means of circulars and otherwise,
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shares which had been taken at 50 per cent. discount were foisted upon the unwary public at practically their full price. The Committee of the Board of Trade in connection with this Bill carefully considered whether or not the practice of underwriting—which, might be perfectly legitimate — should be recognised on proper lines, and it was thought that the best means of dealing with the subject was by legalising that which at present was illegal, with the proviso that everything done in this respect should be fully disclosed. Hon. Gentlemen could not have it both ways. He quite admitted that an underwriting commission of 5 per cent. in some companies might be just as necessary as a commission of 1 per cent. in others. It was quite apparent that no men in their senses would take a large block of shares in a now company at a discount of 5 per cent. if they did not believe it was a good company and likely to do well. So far as he was concerned, he did not think there was the least fear of any company being injured by having to disclose the fact that a certain proportion of the capital had been underwritten; whereas if a company came forward which had been reduced to such straits as to offer to a syndicate or body of persons a discount of 50 per cent. in order to take a certain number of shares, then he thought that the public generally would draw from that the conclusion that the shares of that company were not genuine. Whether it was looked at from the one side or the other, he thought it would be wise for the House to accept this proposal. The transaction provided was a perfectly legitimate one. The disclosure to be made would have no ill effect upon a good company, but it would have an ill effect upon a bad company, and it was bad companies that they desired to strike at.
SIR ROBERT REIDsaid that the great mischief arose because promoters made underwriting contracts of a most scandalous character. If they wore prepared to regulate the action of promoters in regard to underwriting contracts he should be very glad to see it done. But what they did in this clause dealt with the company itself, and he wished to point out this fact to the right hon. Gentleman: whereas hitherto the practice of paying money for underwriting had been unlawful for a company, this clause now authorised a

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company to do that very dangerous thing which up to now they were not allowed to do at all by the law. That was authorised by the sub-section of Section 10. The right hon. Gentleman said they might nullify the effect of that by providing for adequate disclosure, but he did not think the right hon. Gentleman had effected that in his clause, because the proposal was that money might be paid for this wretched business of underwriting. The words were—
"If the payment of the commission and the amount or rate per cent. of the commission paid or agreed to be paid are respectively authorised by the Articles of Association and disclosed in the prospectus, and the commission paid or agreed to be paid does not exceed the amount or rate so authorised."'
Those hon. Members who were familiar with these matters knew that, in the first instance, there need not be a prospectus, and nothing would then be disclosed. The point he wished to make was that it was much better to have this tiling, which was a dangerous thing, unlawful as it was now, because they were doing no good by licensing it and then limiting the licence. It had been said that underwriting was a very good thing, and in some few cases it might be. But everybody knew what actually took place, and he would appeal to their experience upon the subject. The promoter himself was the dangerous person, for he often took all the shares himself for the concern, and afterwards handed them over to the company. He generally made a bargain with the stockbroker, or somebody on the Stock Exchange, by which he placed a very large number of those shares on the market at a particular commission, and the stockbroker used all those methods of working the market, and all the rest of it, which caused the scandals with regard to these transactions. But whether underwriting was right or wrong, the point he wished to make was that it, was better to have underwriting unlawful, as at present, rather than to legalise it.
MR. SYDNEY GEDGE: This clause to which objection has been taken is an exceedingly important one, and I only regret that the audience which heard the hon. and learned Member for Dumfries is not now present.
Attention called to the fact that forty Members were not present (Dr. TANNER,
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Cork Co., Mid.). House counted, and forty Members being found present.
MR. SYDNEY GEDGE: The hon. and learned Member for Dumfries objected to this clause, because he thought it was bettor to leave certain existing customs alone than in any way to legalise them. I take a different view. The law as it stands undoubtedly prevents a company issuing any of its shares at a discount, but the obvious necessities of the case have rendered it necessary to evade that law in a very curious way. The advantages of so doing are so great that a very large number of people who ordinarily would not think of disobeying the law or doing anything wrong consider themselves perfectly justified in committing what may be called an evasion of the law. They proceed as follows: It is absolutely necessary to raise the capital required by a new company. This, as has been found by experience, cannot be done in most cases except by finding people to underwrite, as it is called, the minimum capital required to enable the company to commence business. The company cannot do that directly, and therefore the money required to secure the underwriting is added to the price paid to the vendor. He knows what it is, and the directors know what it is, but the existing shareholders and the subscribing public do not. It may be a large sum or a moderate sum, but the public have no knowledge of it. We have, therefore, an evasion of the law, we have secrecy, we have an unknown amount, and we have an abuse which this clause will remedy. The Government have, to my mind, looked this matter fairly in the face. They have recognised facts as they have found them, and have dealt with them accordingly. The mischief is that companies are not permitted to pay directly for underwriting, or, in other words, to issue shares at a discount, and, therefore, have to have recourse to a roundabout way of securing what they require. The Bill as it is framed does away with the indirectness and secrecy, and provides that except in the manner provided—
"No company shall apply any of its shares or capital money, either directly or indirectly, in payment of any commission, discount, or allowance to any person in consideration of his subscribing or agreeing to subscribe, whether absolutely or conditionally, for any shares of

1115
the company, or procuring or agreeing to procure subscriptions, whether absolute or conditional, for any shares in the company, whether the shares or money be so applied by being added to the purchase money of any property acquired by the company or to the contract price of any work to be executed for the company, or the money be paid out of the nominal purchase money or contract price or otherwise."
The Bill removes the illegality of issuing shares at a discount, and renders underwriting lawful under conditions which secure publicity, because the rate per cent. of the commission must be mentioned and the underwriting must be authorised by the Articles of Association, and must be set out in the prospectus. Therefore the investing public will have before them what has taken place. Surely the House will see that that is an infinitely better state of things than the existing law. I do not maintain that it will stop abuses, but it will make them much more difficult, because everyone who subscribes to a company will know what is being done and will know the difference between fair and unfair profit. The underwriter subscribes for a large number of shares, and runs the risk of their being left on his hands, and it is quite fair that he should be paid for that risk. Next I come to the companies already in existence who wish to issue more capital. The first thing is that the Articles of Association will have to be altered, because under existing Articles of Association it would be illegal to issue shares at a discount. The Articles can only be altered by two special meetings of the company, and the alteration must be carried by a majority of three-fourths, and full notice must be given to all concerned; and if there is to be a prospectus issued, the prospectus must give full particulars. I therefore cannot think how, under such circumstances, the hon. and learned Member for Dumfries can prefer the present state of legal evasion to this rational proposal, which secures full publicity.
MR. FAITHFULL BEGG: I hope the Government will adhere to this clause. The only thing which the clause requires is, possibly, that it should be extended so as to include all kinds of companies, and not be limited as it is at present, but that is a matter which will come up for discussion in connection with a later Amendment. I hope the Government will
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adhere to the clause, so that the whole of the transactions which have taken place in connection with a company should be shown. This is a matter which has practically emerged from the Committee with all parties in agreement regarding it. It has become manifest to everyone that some means must be found to enable the underwriting of the capital of a company to be legitimately undertaken in an above-board and straightforward manner. I do not say that under this clause, or under any clause which can be drawn, you will get a state of things that will be ideal, or to which objection cannot be taken; but that under this clause you will get a state of things infinitely better than the existing state of things is beyond question. The hon. and learned Member for Dumfries who spoke against this clause seemed to me to rest his case on exceedingly flimsy grounds. He practically gave his case away when he spoke of "this wretched underwriting business." Why should the principle of underwriting be recognised in connection with all other matters of business in which risk is involved, and not in connection with companies? Why it should be spoken of as a wretched business seems to be inexplicable. To underwrite a vessel at sea, or the immunity of a house from fire or any other risk, is a legitimate piece of business, but it is considered improper and illegal to underwrite the capital of a company offering its shares for public subscription. It might be vital to that company that a certain amount of capital should be secured in advance, and there is no other plan of doing that except by getting certain persons to take this underwriting risk. The law hitherto in this country—though it is not the case in other countries — has nominally prohibited the underwriting of capital; but practically, as my hon. friend has explained, the law has been evaded. Nowadays no prospectus is ever issued to the public without a statement that some contracts have been entered into which may come under the regulations of the Companies Acts as they exist, and acceptance of which is taken as waiving the right to challenge these contracts. What has been the result? The prices have been unduly inflated, and exactly that which the hon. and learned Gentleman opposite said might take place, has been done, but in an infinitely more vicious

1117
form than will be possible if this clause becomes law, and transaction of the kind has to be disclosed. I quite agree with my hon. and learned friend opposite, who said that we ought to have further consideration of certain clauses of the Bill, but I think he was entirely wrong in saying that we have not had full opportunity of considering this particular clause. This matter has been before the country in one form and another for four or five years. There is nothing in the direction of the Amendment of the Companies Acts which has been more thoroughly threshed out, and I hope that the Government will adhere to the clause, and thus enable us to get rid of this constant scandal. Under the protection of the clause the public will be able to know exactly what it is they are subscribing for, in the sense that there is no loading or watering of the stock of which they are not aware.
MR. LABOUCHEREsaid they had been told that at present underwriting was illegal; but whether illegal or not they knew that it took place in numbers of companies, and practically the company paid for the underwriting. The clause recognised underwriting as an existing fact, and declared that it should be permitted provided it was disclosed in the prospectus. One could form a pretty accurate estimate of the character of a company when the amount paid for underwriting was known. If 1, 2, or 3 per cent. was paid, then that company must be worth something; but suppose it ran up to 90 per cent., then they knew that that was a perfectly speculative and gambling transaction. The amount paid for underwriting was, in fact, a natural barometer, showing what a company was in the estimate of business men. He hoped the right hon. Gentleman would stand to the clause; in truth, the Bill without it would be a perfect farce. He would ask whether a promoter would have a right to underwrite a company?
SIR ROBERT FINLAY: The promoter may do that at his own expense, but he cannot got the cost of the underwriting out of the company.
MR. LABOUCHEREsaid there was another point on which he desired some light. Sub-section 3 said that "nothing
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in this section should affect the power of any company to pay such brokerage as it has heretofore been lawful for a company to pay." What did that mean? It meant that they might pay any broker— not necessarily a man on the Stock Exchange—any amount of money to place shares.
MR. FAITHFULL BEGG: There is a limit.
MR. LABOUCHERE: The hon. Gentleman said there was a limit; but the limit had not been fixed. The words were, "Such brokerage as has heretofore been lawful." Brokerage was paid to brokers, and it might be there had hitherto been some limitations. What was underwriting? It was a species of brokerage, but the underwriter guaranteed that a certain number of shares would be taken, and therefore he was the better man than the broker. The underwriter said, ''I will guarantee to take so many shares if you pay me 5 per cent." The broker said, "If you pay me 5s. per share I will try and place the shares among my clients." It seemed to him that, if they insisted on the amount paid for underwriting being disclosed, the payments for brokerage should be disclosed also.
SIR ROBERT FINLAYsaid he found himself in entire accordance with the hon. Gentleman who had just spoken as to what he stated in regard to the existence of underwriting and the desirability of recognising the fact which could not be prevented—precautions being taken at the same time to prevent an abuse of the practice. These precautions were to secure that the public would know what allowance was being made to the underwriter. As long as that was known he could not help thinking that the more judicious course was that indicated in the clause. His hon. and learned friend seemed to think that they ought not to recognise anything so unholy as underwriting.
SIR ROBERT REID: By a company.
SIR ROBERT FINLAY: By a company. But did his hon. and learned friend suppose that it would not go on very much as before? The promoter

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paid the underwriter a commission, and then he added that to the purchase money which he got out of the public. Surely the more sensible course was to recognise the facts, and to take such precautions as would pre vent mischief being done to the public.
MR. LABOUCHEREasked if the Attorney General would be kind enough to say whether the promoter must add the commission paid for underwriting, and the commission paid to the broker.
SIR ROBERT FINLAYsaid that what was proposed to be done was to secure entire publicity, and except under that publicity the company should not directly or indirectly be concerned in payment for underwriting. What the sub-section said was—
"Save as aforesaid no company shall apply any of its shares or capital money either directly or indirectly in payment of any commission, discount, or allowance to any person in consideration of his subscribing or agreeing to subscribe, whether absolutely or conditionally, for any shares of the company, or procuring or agreeing to procure subscriptions, whether absolute or conditional, for any shares in the company, whether the shares or money be so applied by being added to the purchase money of any property acquired by the company or to the contract price of any work to be executed for the company, or the money paid out of the nominal purchase money or contract price, or otherwise."
Now, surely if it was possible to forbid a company doing indirectly what they desired to prevent, the words of the clause would have that effect. If the promoter chose to pay commission for underwriting, in future he would have to do it out of his own pocket, because there was an express prohibition to prevent him doing it otherwise.
MR. LABOUCHEREsaid that the promoter received the money; he did not have to say, "I am going to use it in underwriting, "but he said," it is worth my while to pay 5 or 10 per cent. to have these shares taken up."
SIR ROBERT FINLAYsaid that if the price was a fair price the promoter might pay it out of his own pocket; but if it was not a fair price it was expressly forbidden to be done. Of course there might be evasions in every case. No Act was so broad that it would be impossible
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that it should be evaded. The hon. Gentleman referred to the subject of brokerage. Brokerage was perfectly distinct from underwriting. An underwriter had to guarantee that the shares would be taken up by the public or that he would take them up himself. In the case of brokerage the broker guaranteed nothing of the kind, and it had been held that it was the law that a company might pay brokerage for having shares placed.
MR. LABOUCHERE: To any amount?
SIR ROBERT FINLAY: No; a proper amount.
AN HON. MEMBER: What is a proper amount?
SIR ROBERT FINLAY: No actual limit has been fixed, but the amount of brokerage as distinguished from commission for underwriting is very small indeed —an eighth or a quarter per cent. If a broker was found charging beyond those figures it was not really brokerage but commission for underwriting with a guarantee that the shares would be taken up by himself or his friends. What had been done by this clause was to recognise what was at present the law as regarded brokerage. Every lawyer knew that payment of brokerage was at present not illegal—say an eighth or a quarter—for placing shares of a company. According; to the section, it was proposed to enact that a company might pay a certain commission for underwriting so long as everything was above board and the public were fully aware of what was being done. Under the circumstances, he hoped the House would not refuse to agree to a clause which promised to have a very beneficial effect.
MR. BRYCEsaid, as he understood from what they hoard in Grand Committee, that brokerage was to some extent elastic, but it was a pretty well established rule that it should not go above a half or three-quarters per cent. If that was agreed to, the result of the clause which the Government proposed to pass was that when any brokerage had been paid by the company it would be for those who endeavoured to justify brokerage to

1121
show that it was really brokerage, leaving it to the court to decide whether it was a secret or unlawful form of underwriting and the payment of a secret commission. He could not feel quite satisfied with the answer of the Attorney General to the criticisms of his hon. and learned friend with regard to the position of the promoter. If the promoter knew, to begin with, that it was he rather than the company who had an interest in planting the shares, and ought to undertake the underwriting, he would estimate how much he had to pay for underwriting before selling to the company, and add that to the amount for which he was going to sell. The Attorney General said that that must be a fair price, but who was to say what was a fair price? How was it possible, where the vendor was the promoter, and was selling the business to a company, to estimate within any fair distance of the truth what was a reasonable price to pay? They all knew how excessively vague was the estimate that was put on the worth of a company's business—not only of the tangible assets but of the goodwill. Therefore he said that it would not be possible under this clause to catch the promoter, and he feared they must at present acquiesce in the probability that promoters would continue to pay secret commissions as they had hitherto done. But was it not better if they could compel the company to a full disclosure that they should do so, even if they could not got at the promoter? This matter had been very fully debated by an exceedingly strong Departmental Committee, which included four of Her Majesty's judges, upon whose labours this Bill was founded; and the Committee said that it would be tar safer to practically prohibit these underwriting commissions unless they were disclosed, rather than have the secret practice continued.
MR. MARKSventured to say that the most pregnant observation made in the course of the debate on this section was that made by the President of the Board of Trade. He pointed out the great advantage it would be to a company which decided to pay a certain amount for underwriting their shares if the rate of underwriting commission were set forth in the prospectus and in the memorandum
1122
and articles of association. He was inclined to the view of the right hon. Gentleman that if the underwriting commission was of a reasonable and moderate amount, it would induce the public to come in and take shares. It was within the knowledge of anyone who took an interest in the matter that these underwriting commissions had not hitherto been paid by the company, but by the promoter; and it was absolutely impossible to prevent the promoter from taking the amount of his underwriting risk into consideration when he fixed the price of the property of which he was the vendor. The price was always inclusive of the underwriting commission. But the company might come in and say to the promoter, "According to what you and your friends have told us you are willing to underwrite these shares at a penny," and he would reply, "Oh, yes; my friends say that they are so confident in the success of the company that they will underwrite it at a penny." Thereupon the company would pay the penny, and a prospectus would then be issued, in which it would be set forth that; the directors were so happy to state that they had succeeded in underwriting the shares at a penny. Was that a protection to the public? Was it not to open the door to another trap to the public? Again, it was said that the company would have to disclose all the facts; but they could not fix on the company that they knew all that had been done by the underwriter behind their back. There is this one thing to beware of. By this power to underwrite or pay commission for underwriting to an indefinite and unlimited extent you will introduce into your limited company business an evil which has been the greatest evil in this business in the United States of America, the issue of shares at a discount "treasury stock," as it is called, which is one of the greatest evils in the States. A company is required to state in its Memorandum and Articles of Association not the amount going to be paid, but what the company takes power to pay in respect to underwriting. The company issues its prospectus and states that it takes power to issue shares at a discount at 19s. in the £, and they may so issue. Who is to know six months after the statutory meeting has been called, which is the only protection given by this Bill

1123
to the general public, that the £1 shares then upon the market were issued at 19s.? They may be valuable assets in the case of bankruptcy, but they are not valuable assets to the investing public. There ought to be a legitimate power to underwrite, but there should be some limit beyond which the company should not go. The great evil of this clause seems to be that it gives a power to the company to put into its prospectus statements with respect to underwriting which might be a direct incentive to the public to come in and take shares. The promoters will not find fault with this clause, it does not touch them; nothing in this Bill does touch them in their powers as to underwriting, and in my opinion nothing in any Bill could. That is a fact that it is as well should be known, and it cannot be known too soon.
MR. BANBURYthought there might be something to be said for disclosing in the prospectus every commission paid, but the first to be disclosed should be the commission paid to brokers; that was far more important than the commission paid to underwriters. The commission paid to brokers, as a rule, would be one-eighth or quarter per cent., but how was anybody to find out until too late what commission had been paid? The great thing to consider was how the public were most likely to be safeguarded, and he thought that they would best be safeguarded if there was declared in the prospectus the commissions that had been paid to everybody, brokers, solicitors, stockbrokers, etc. Without such a provision, all the solicitor had to do was to put a stamp upon the paper and to send the prospectus to people whom he thought were likely to invest, and nobody would be the wiser and able to find out until too late what had been done. As to underwriting, after a sound company came into existence it might be found necessary to issue debentures or preference shares in order to obtain capital to carry on a legitimate enterprise, and it was necessary to get that money by a certain date. Then, with the sanction of the shareholders, the company went to an underwriter and paid 2½ per cent. to him, and he subscribed in the hope that in a few
1124
months he would be able to recoup him" self. That was a legitimate transaction, and such a transaction did no harm to the company. If this clause was to be passed he thought every commission that was paid ought to be disclosed.
MR. LAWSON WALTONagreed with the hon. Member for St. George's that the abuse of underwriting was entirely unaffected by the clause of the Bill as it stood. But he thought that the clause was a stop in the right direction, because it made underwriting, instead of being a secret process, a legitimate operation performed in the open light of day. Was it not better to legitimatise such an operation, and to provide that the companies should give full notice of the terms which wore paid for the services rendered to it? The tendency of such legislation would be to put an end to furtive and secret operations, and make them legitimate, and it would also bring the law into harmony with the practice and the views of commercial men upon the question.
MR. BOUSFIELDhoped that the House would not go to a division on the motion to omit the clause. Although the discussion had been most valuable, he did not see that the result desired would be attained by rejecting the. clause, and he hoped some way would be found of utilising two or three of the points which had been raised. Every-one was anxious to put down secret underwriting, and he thought that the form of underwriting by the company itself, as was suggested by the clause, was the right way of proceeding. The whole matter was a question of evolution, and that process had gone so far now that company directors them-selves were putting into the prospectus statements that no underwriting had been undertaken. But these matters were put in the prospectus merely to catch the unwary, and people were now beginning to look for some legislation of this kind. It was possible that a double set of commissions might be paid, and that that state of things might coincide with the secret and unannounced fact that promoters them-selves had been paid a large amount by way of commission for underwriting

1125
Therefore it seemed to him that in order to carry out the policy of the clause as drafted, and to prevent its being used in an illegitimate way, the clause ought to go further as regards disclosure of underwriting contracts, by providing that these should be stated, at all events so far as known to the directors and vendors. This would tend to put underwriting in the hands of the company, where it might very well be. As regards brokerage, too, he suggested that it was desirable to put something more definite into the clause instead of merely a permission to pay such brokerage "as had hitherto been lawful."
MR. RITCHIEsaid that considerable time had now been spent in discussing the clause, and a good deal of business yet remained to be done, and he therefore hoped that the House would now consider that discussion was practically exhausted, and that they would come to a decision upon it.
MR. LOUGHsaid that the appeal of the right hon. Gentleman was, he thought, far from being reasonable. The Bill had been rushed through the Committee, whose Report was not yet in the hands of Members, and this discussion was very valuable.
MR, RITCHIEsaid he could not agree with the hon. Member, seeing that the Committee sat day after day, and of the discussions which had taken place the House had been kept fully informed.
MR. LOUGHquite agreed that the proceedings of the Committee had been distributed day by day, but was of opinion that a great deal of trouble was necessary to discover what had actually taken place in Committee. He submitted that the House ought to be treated with greater respect, and not be hurried along in a matter of this importance before a proper Report of the Committee had been issued. The arguments urged to recommend this clause were that the clause would have a tendency to restrict the evil practice of underwriting if it were passed, but the object of the clause was to enable companies to pay underwriting commissions out of their capital, and thus legalise
1126
underwriting. That was a fundamental change in regard to companies, which ought not to be made in too great a hurry. The Government practically said, "Although we legalise the practice, we will prevent any harm arising by taking precautions"; but then the question arose as to whether those precautions would be sufficient; he did not think they would. After this Bill was passed the company would be empowered to pay large commissions for underwriting out of their capital, and it would be absolutely impossible to find out what capital they had left. He thought that the clause was an attempt to make people honest by Act of Parliament, and he did not think it would succeed.
MR. H. S. FOSTERsupported the view that this difficult and complex question was being discussed under most unfortunate circumstances through hon. Members not having the Report of the Committee before them. This question had engaged the attention of a Committee of the House of Lords for five years, and was practically pitchforked into the House of Commons, which was asked to discuss and settle a most difficult problem under exceedingly difficult circumstances. This clause, if passed, would create much greater evils than it sought to remedy. It would give a company power to under write or issue their own shares at a discount, a power which at present was very wisely withheld from them. A great deal had been said of the illegality of underwriting, but it was perfectly legal; the only illegality there could be would be in the company being allowed to underwrite. A company was a nonentity until it had gone to allotment, and the underwriting was antecedent to that stage. It was a scheme to call a company into existence and provide the necessary funds, and a certain amount was paid to recoup the underwriter for the necessary risk. Therefore, the company itself could never be asked to underwrite its own shares, for the reason that a company was unable to enter into a contract until after it started business. The remedy which he would suggest was that the President of the Board of Trade should provide in the clause that the underwriting contract entered into between the promoters and the underwriters should be disclosed in the pro-

1127
spectus, and that unless that was so disclosed the contract should be void.
MR. LAWSON WALTON: There is an Amendment further down on the Paper to effect that very object.
MR. H. S. FOSTERsaid that in that way publicity would be ensured in the most effective way.
MR. PERKSsaid that underwriting was simply gambling and betting in public companies, involving large sums of public money, and he thought it was better to leave promoters to run the risks they run at present than to give Parliamentary sanction to a practice which in itself was so reprehensible.
MR. BUTCHERsaid that underwriting was a perfectly fair transaction in itself. An abuse of the process took place when underwriting was done at an exorbitant commission and that fact was concealed from the investing public.
Under proper conditions of disclosure it appeared to him that there could be no objection to underwriting. It had been objected to the clause that there might be two underwriting commissions, one paid by the company, which according to that clause would be disclosed, and one paid by the promoter or vendor, which would not, it was alleged, be disclosed, and that thereby the public would be deceived; but he did not think that would be so, because Sub-section (h) of Clause 12 was drawn up in terms which amounted to a provision that the prospectus issued by a company should set forth on the face of it the amount of underwriting commission, no matter by whom it was paid. It might be that that was not sufficiently clear on the face of it, but he thought the sub-section would provide for cases of this kind, and he supported the clause
Question put.
The Mouse divided:—Ayes, 160; Noes, 32. (Division List No. 235.)

AYES.

Allison, Robert Andrew

Douglas, Rt. Hon. A. Akers-

Labouchere, Henry

Allsopp, Hon. George

Doxford, Sir William T.

Lambert, George

Arnold-Foster, Hugh O.

Dyke, Rt. Hn. Sir W. Hart

Lawrence, Sir E. Durning-(Corn

Atkinson, Rt. Hon. John

Faber, George Denison

Lawson, John Grant (Yorks.)

Bailey, James (Walworth)

Fellowes, Hon. Ailwyn Edward

Lawson, Sir W. (Cumberland)

Baillie, J. E. B. (Inverness)

Fenwick, Charles

Lea, Sir Thomas (Londonderry)

Balcarres, Lord

Finch, George H.

Leigh-Bennett, Henry Currie

Balfour, Rt. Hn. A. J. (Manch'r)

Finlay, Sir Robert Bannatyne

Llewelyn, Sir Dillwyn-(Swans.)

Balfour, Rt. Hn. G. W. (Leeds)

Fisher, William Hayes

Long, Col. Charles W (Evesham

Beach, Rt. Hn. Sir M. H. (Bristol)

FitzGerald, Sir R. Penrose.

Lonsdale, John Brownlee

Begg, Ferdinand Faithfull

Fitzmaurice, Lord Edmond

Lowles, John

Bemrose, Sir Henry Howe

Flower, Ernest

Macartney, W. G. Ellison

Bentinck, Lord Henry C.

Foster, Sir W. (Derby Co.)

Macdona, John Cumming

Bigwood, James

Garfit, William

M'Arthur, Charles (Liverpool)

Bousfield, William Robert

Gedge, Sydney

Malcolm, Ian

Brodrick, Rt. Hon. St. John

Gibbons, J. Lloyd

Marks, Henry Hananel

Bryce, Rt. Hon. James

Gibbs, Hn A. G. H. (City of Lond.

Massey-Mainwaring, Hn. W. F.

Burns, John

Godson, Sir Augustus Frederick

Mellor, Colonel (Lancashire)

Burt, Thomas

Gorst, Rt. Hon. Sir J. Eldon

Melville, Beresford Valentine

Butcher, John George

Goschen, Rt Hn G J (St. George's

Middlemore, Jn. Throgmorton

Caldwell, James

Gray, Ernest (West Ham)

Milward, Colonel Victor

Carson, Rt. Hon. Sir Edw. H.

Green, W. D. (Wednesbury)

Monckton, Edward Philip

Cavendish, V. C. W (Derbyshire)

Gull, Sir Cameron

Monk, Charles James

Cecil, Lord Hugh (Greenwich)

Hamilton, Rt. Hn. Lord Geo.

Moon, Edward Robert Pacy

Chamberlain, Rt. Hn. J. (Birm)

Hanbury, Rt. Hn. Robert W.

More, Robt. Jasper (Shropshire)

Chamberlain, J. Austen (Worc'r)

Haslett, Sir James Horner

Morrell, George Herbert

Charrington, Spencer

Hazell, Walter

Morrison, James A. (Wilts., S)

Coghill, Douglas Harry

Hedderwick, Thomas Chas. H.

Morton, A. H. A. (Deptford)

Cohen, Benjamin Louis

Helder, Augustus

Muntz, Philip A.

Collings, Rt. Hon. Jesse

Henderson, Alexander

Murray, Rt. Hon. A. G. (Bute)

Colomb, Sir John Charles Ready

Hermon-Hodge, Robt. Trotter

Murray, Col. Wyndham (Bath)

Cook, Fred. Lucas (Lambeth)

Hickman, Sir Alfred

Myers, William Henry

Cooke, C. W. Radcliffe (Heref'd)

Hoare, E. Brodie (Hampstead)

Nicol, Donald Ninian

Corbett, A. Cameron (Glasgow)

Hoare, Sir Samuel (Norwich)

Norton, Capt. Cecil William

Cox, Irwin Edward Bainbridge

Holland, William Henry

Oldroyd, Mark

Cross, Herb. Shepherd (Bolton

Houston, R. P.

O'Neill, Hon. Robert Torrens

Curzon, Viscount

Howard, Joseph

Parkes, Ebenezer

Davies, M. Vaughan-(Cardigan

Kearley, Hudson E.

Pease, Herbert P. (Darlington)

Phillpotts, Captain Arthur

Shaw, Chas. Edw. (Stafford)

Whittaker, Thomas Palmer

Platt-Higgins, Frederick

Shaw, Thomas (Hawick B.)

Williams, Joseph Powell-(Birm

Plunkett, Rt. Hn. H. Curzon

Sinclair, Louis (Romford)

Willox, Sir John Archibald

Purvis, Robert

Skewes-Cox, Thomas

Wilson, John (Falkirk)

Rankin, Sir James

Smith, J. Parker (Lanarks.)

Wilson-Todd, Wm. H. (Yorks.)

Remnant, James Farquharson

Spencer, Ernest

Wodehouse, Rt. Hn. E. R. (Bath)

Richardson, Sir T. (Hartlep'l)

Stewart, Sir Mark J. M 'Taggart

Wortley, Rt. Hn. C. B. Stuart-

Rickett, J. Compton

Stone, Sir Benjamin

Wrightson, Thomas

Ridley, Rt. Hn. Sir Matthew W.

Tollemache, Henry James

Wylie, Alexander

Ritchie, Rt. Hn. Chas. Thomson

Tomlinson, Wm. Edw. M.

Young, Commander (Berks, E.)

Robertson, Herbert (Hackney)

Tritton, Charles Ernest

Young, Samuel (Cavan, East)

Robson, William Snowdon

Tuke, Sir John Batty

Yoxall, James Henry

Russell, T. W. (Tyrone)

Wallace, Robert

Samuel, J. (Stockton-on-Tees)

Walton, J. Lawson (Leeds, S.)

TELLERS FOR THE AYES—

Saunderson, Rt. Hn. Col. E. J.

Warde, Lieut.-Col. C. E. (Kent)

Sir William Walrond and

Seely, Charles Hilton

Warr, Augustus Frederick

Mr. Anstruther.

Sharpe, William Edward T.

Wentworth, Bruce C. Vernon-

NOES.

Banbury, Frederick George

Humphreys-Owen, Arthur C.

Perks, Robert William

Bond, Edward

Jameson, Major J. Eustace

Pickersgill, Edward Hare

Cameron, Robert (Durham)

Jones, William (Carnarvonsh.)

Provand, Andrew Dryburgh

Donelan, Captain A.

Lough, Thomas

Reid, Sir Robert Threshie

Doogan, P. C.

Macaleese, Daniel

Steadman, William Charles

Dunn, Sir William

Mac Neill, John Gordon Swift

Sullivan, Donal (Westmeath)

Foster, Harry S. (Suffolk)

M' Dermott, Patrick

Tanner, Charles Kearns

Gourley, Sir Edw. Temperley

M' Ghee, Richard

Wilson, John (Durham, Mid)

Hayden, John Patrick

M' Leod, John

Healy, Maurice (Cork)

Molloy, Bernard Charles

TELLERS FOR THE NOES—

Healy, Timothy M. (N. Louth)

Morgan, W Pritchard (Merthyr)

Mr. Atherley-Jones and

Horniman, Frederick John

O'Brien, Patrick (Kilkenny)

Mr. Billson.

Amendment proposed—
"In page 5, line 38, to leave out the words 'for public,' and insert the words 'to the public for.'"—(Mr. Ritchie.)
Question proposed, "That the words 'for public' stand part of the Bill."
MR. FAITHFULL BEGGsaid that the Amendment left matters as regarded private companies exactly where they were. Was it not possible to extend the provisions of the clause to all companies? If the clause was a good one there could be no reason why it should not equally apply to private companies equally as to public companies. To limit whatever privilege the clause conferred to one class of subscribers was a mistake. If the word 'public' were struck out altogether the permissive power would extend to both public and private subscribers.
MR. SYDNEY GEDGEsuggested that the words of the Amendment would exactly meet the object of the hon. Member.
MR. RITCHIEsaid it was manifest that where no appeal was made to the public the clause would be inappropriate;
1130
its object was the protection of the public. He could not accept the proposal of the hon. Gentleman.
MR. H. S. FOSTERargued that if it was right to clothe a public company with such power as the clause gave to pay a commission to subscribers, it could not be wrong to clothe a company which did not make an appeal to the public with similar power, should that company desire to pay commission to private subscribers.
SIR THOMAS LEAsaid he had an Amendment dealing with this particular point, and the very close division in the Grand Committee when this point was discussed at length justified raising it in the House. He thought that a private company should at least have the same privilege in this matter as was conceded to a public company.
MR. SYDNEY GEDGEcontended that it was perfectly reasonable that shareholders should be able to take up shares at a discount, and to raise further capital among themselves. If it was lawful for directors to give this boon to the public, why not to their own shareholders?
MR. LOUGHsaid that although this was described as a verbal Amendment, it was of a very substantial character. If the Amendment of the President of the Board of Trade was adopted, it would be impossible to make the important alteration suggested by the hon. Member for St. Rollox.
MR. RITCHIEpointed out that he was merely proposing to do in this clause the same as had been done in other clauses where the words "for public subscription" had been used. Instead of "for public subscription" the words "to the public for subscription," were to be inserted. It was purely verbal.
MR. LOUGHcould not agree with the view of the right hon. Gentleman. If this alteration were agreed to it would be very difficult, if not impossible, to make the Amendment suggested by the hon. Member for St. Rollox. It was evident there was a considerable consensus of opinion in the House of Commons, and a very considerable minority of opinion in the Grand Committee, that whatever benefits this clause conferred on public companies should be conferred on private companies also. The matter certainly required further consideration. There was no definition in the Bill of a "public" company or of a "private" company; the one ran into the other, and practically it was very hard to draw a line between the two. This point ought to be cleared up before the Government asked the House to vote for the Amendment.
MR. BOUSFIELDsaid that while it was quite true that this matter was raised in the form of a purely drafting Amendment, it came just at a critical point when the House wanted to discuss whether the provisions of the clause should be limited to cases where shares were offered for public subscription, or whether they ought not also to apply to cases where the shares were offered privately for subscription. The best way of settling the matter would be merely to leave out the word "public." With regard to the substance of the question, it seemed to be supposed that there was some distinction in law or in the Bill between public and private companies, and that supposition very much
1132
confused the issue before the House. There was no such distinction. Every company was in the eye of the law a public company, even though it was what was commonly called a private company. The question at issue was not whether the clause ought to apply to private as well as public companies, but whether it was to apply to shares offered privately as well as to shares offered publicly for subscription. It was difficult to see why this disability should be maintained in the case of private issues if it was removed in the case of public issues, and it would seem far better, and would greatly simplify matters, if the disability were removed in both cases. Moreover, private issues and public issues so merged the one into the other that it was very difficult in practice to distinguish between the two. Take the case of a company with a large body of shareholders. If that company wanted to issue further shares, and sent out a memorandum to all its shareholders offering these shares for subscription, would the Attorney General consider that to be a public or a private issue? There was no real distinction to be drawn, and the best way would be for the Government to omit the word "public" altogether.
MAJOR JAMESONcontended there never was an Amendment which opened the way to more litigation than this so-called purely verbal alteration. All the talent on the front bench was unable to define the difference between a public and a private company, and he agreed with the previous speaker that the word "public" had better be omitted.
Question put, and negatived.
Question proposed, "That the words 'to the public for' be there inserted."
Amendment proposed to the proposed Amendment—
"To leave out the words 'to the public' "— (Mr. Sydney Gedge.)
Question proposed, "That the words 'to the public' stand part of the proposed Amendment."
MR. H. S. FOSTERhoped the Attorney General would respond to the appeal

1133
which had been made, and define whether, in a given case, an issue was for public or private subscription. The point under discussion was decided by a very narrow majority in the Committee, and as a supposed concession to the minority this verbal alteration was being made. But it was really no concession whatever, and did not remove the objection of those who desired that the one class of companies should not labour under disabilities from which the other were free.
SIR ROBERT FINLAY: The answer to the question which has been raised is very simple. The issue is not offered to the public if it is offered only to a particular class of persons. It does not; matter whether the shareholders of the company are many or few; as long as the offer is only to that particular class it is not an offer to the public for subscription.
MR. BOUSFIELD MR. BOUSFIELD said the reply of the Attorney General did not at all improve matters, and he appealed to the Government to reconsider the question and see whether they could not do away with the distinction altogether.
MR. MARKSpointed out that the reply of the Attorney General simply emphasised the peculiar difficulty which this clause would cause. According to that reply an issue of shares to the 70,000 shareholders in Lipton's would not be a public issue, but an' issue to a company with 1,000 shareholders, if only ton outsiders came in, would be a public issue. Absurdity could really go no farther.
MR. PHILIPPSasked the Attorney General to define a "class." If a company which was going to issue shipping shares sent prospectuses marked "private" to the shareholders in another shipping company, would that be an issue to a class? Or if it was proposed to turn a political club in any constituency into a company, and the shares were offered to the members of that club, would that be an issue to a class? Many such instances at once occurred to one's mind, and it was certain that such a provision would lead to endless litigation. The least the Government could do was to define what they meant by a private or public issue, as, if the Bill went out in its present form, countless lawsuits would be the result.
MR. TOMLINSONhoped the Government would see their way to allow this Amendment to be made. If a privilege was to be given to one sorbs of company, why should it be withheld from another class in regard to which it could do no harm, and might do much good?
MR. BRYCE: I am not quite sure that the effect of this Amendment is generally apprehended. I understand that if we agreed to the Amendment now being made it would be possible for a company not making a public issue to pay underwriting commission. That is the very thing we do not wish a company to have power to do. We say there are certain arguments which may justify the payment of underwriting commissions in cases where there is a public issue, and whore all the facts are disclosed in the prospectus, but we think—and this was the view argued out in the Standing Committee—that those arguments do not apply to companies not going to the public for subscription, and that in such cases there ought not to be any provision whatever for underwriting. I therefore hope the Government will adhere to the Bill as it stands.
COLONEL MILWARD (Warwickshire, Stratford-upon-Avon)hoped the Amendment would be adopted. It was quite evident that private companies were placed under disadvantages in this clause. It was impossible in an Act of Parliament to draw any distinction between a public and a private company, and under the circumstances it would be advisable that the Amendment should be accepted.
MAJOR JAMESONsupported the Amendment. He absolutely denied that it was ever the intention that private companies should come under the Bill, while the definition given by the Attorney General was the most absurd statement ever made. The Bill was of the utmost importance to the country, and he strongly protested against it being rushed through the House with such unwarrantable speed.
MR. FAITHFULL BEGGthought perhaps the right hon. Gentleman had overlooked the precise wording of the clause itself. The provision was not limited to the case of a man who took a largo number of

1135
shares and afterwards endeavoured to get other people to buy them, but it extended to the case of a man who agreed, whether absolutely or conditionally, to take shares in a company. The provision would permit a company to make a payment to a man who took shares for his own use and profit, and the House were discussing a privilege which went far beyond the question of underwriting.
MR. PERKS: I notice that the minority of fifteen who voted against the Government in the Standing Committee consisted entirely of gentlemen who usually vote with the Government. I think that is some reason why the Government should not consider unfavourably the proposal to extend the operation of this clause to all companies alike, whether they are called "private" or "public." I quite agree with the hon. and learned Member for North Hackney as to the great difficulty of drawing a line between the two classes of companies; in fact, I believe it is absolutely impossible. At least half a dozen appeals have been made to the Law Officers to define the difference, but we have had no information on the point at all. I wish to call attention to a statement on this particular point made by a counsel well known at the Equity Bar, and one who has probably more experience than any other in connection with joint stock company enterprises—I mean Mr. Palmer. In his letter to The Times a few days ago, dealing specifically with this question—and I think his opinion is worth considering—he says—
"As to Clause 10, this limits the power to pay commission for placing shares to cases in which an offer of shares for public subscription is made. It should be extended to all cases, for there is no reason why a private company should not be at liberty to pay a commission for placing shares, or why it should not be allowable to pay a commission where the shares, as in the case of a reconstruction, are offered not to the public, but only to the shareholders in the reconstructing company. Therefore, the clause should be amended by inserting after the word 'public' the words' or 'private,' and by inserting the words 'if any after the word 'prospectus.'"
That is the opinion not of a mere child. but of a man who has had probably more experience than any counsel at the Equity Bar on this matter, and I venture to commend it to the attention of Her Majesty's Government.
MR. BRODIE HOAREsaid it really did not very much matter whether the word "public" was omitted or not, as anybody with the smallest ingenuity could get round the provision. All a private company would have to do would be to print enough circulars and prospectuses to go round to all its shareholders, and one hundred additional, which could be scattered broadcast about the streets or anywhere. The issue would then become a public issue, and be within the provisions of the clause. The whole thing was not worth fighting about, and he hoped the right hon. Gentleman would accept the Amendment.
MR. LAWSON WALTONcontended that no reason whatever had been shown why a private company should be allowed to pay underwriting commission on the placing of shares which were not issued to the public. In other words, it was argued that a private company should be allowed to pay underwriting commission for issuing shares to its own shareholders. He could understand a commission being paid for outside assistance in inducing members of the public to subscribe, as in that case the consideration for the payment was the service thus rendered. If a company was not going to make a public issue why should they be allowed to use these agents? The whole of the limitations were placed not upon shares held by the public, but upon those held by persons who were not members of the public. He thought it was clear that an issue to the public was an issue to any member of the public who came forward and took shares in the ordinary way. Why should they give power to a company to detract from the nominal value of the capital by the employment of brokers, who ought not to be required? He hoped the Government would not yield to the pressure which was being put upon them from all quarters of the House.
MR. BONDpointed out that the effect of the clause was simply to enable companies to issue shares at a discount. Why should a company be allowed to issue its shares at a discount?
MR. LOUGHsaid he only wished to answer one question. The hon. Member who had just sat down asked, why should a company be allowed to offer shares to

1137
its own shareholders at a discount? At such times as those shares were offered there might be some very good reason. It might be difficult to get money, and it might be advisable to take advantage of some bargain that had been offered to the company. In such circumstances the company would be offering to all its shareholders some advantage. He wished to ask his hon. and learned friend why should it be an unlawful proceeding with
these particular companies, while it might be quite lawful in the case of some other companies? He hoped the House would take a common-sense view of this question.
Question put.
The House divided:—Ayes, 136; Noes, 61. (Division List No. 236.)

AYES.

Allsopp, Hon. George

Flower, Ernest

Murray, C. J. (Coventry)

Arnold-Forster, Hugh O.

Foster, Sir Walter (Derby Co.)

Murray, Col. Wyndham (Bath)

Atkinson, Rt. Hon. John

Gibbons, J. Lloyd

Nicol, Donald Ninian

Bailey, James (Walworth)

Gibbs, Hn. A. G. H. (City of Lond.)

Parkes, Ebenezer

Baillie, James E. B. (Inverness)

Godson, Sir Augustus Fred.

Phillpotts, Captain Arthur

Balcarres, Lord

Gorst, Rt. Hn. Sir John Eldon

Plunkett, Rt. Hn. Horace Curz'n

Balfour, Rt. Hn. A. J. (Manch'r)

Goschen, Rt. Hn. G J (St. George's)

Powell, Sir Francis Sharp

Balfour, Rt. Hn. Gerald W (Leeds)

Goschen, George J. (Sussex)

Purvis, Robert

Banbury, Frederick George

Gray, Ernest (West Ham)

Rankin, Sir James

Beach, Rt. Hn. Sir M. H. (Bristol)

Greville, Hon. Ronald

Remnant, James Farquharson

Bemrose, Sir Henry Howe

Gull, Sir Cameron

Rentoul, James Alexander

Bentinck, Lord Henry C.

Hamilton, Rt. Hon. Lord George

Richardson, Sir T. (Hartlepool)

Bethell, Commander

Hanbury, Rt. Hon. Robert Wm.

Rickett, J. Compton

Bigwood, James

Harwood, George

Ridley, Rt. Hon. Sir Matt. W.

Blundell, Colonel Henry

Hayne, Rt. Hon. Charles Seale-

Ritchie, Rt. Hn. Chas. Thomson

Brodrick, Rt. Hon. St. John

Hedderwick, Thomas Chas. H.

Robson, William Snowdon

Bryce, Rt. Hn. James

Helder, Augustus

Russell, T. W. (Tyrone)

Butcher, John George

Henderson, Alexander

Saunderson, Rt. Hon. Col Edw. J.

Caldwell, James

Hermon-Hodge, Robert Trotter

Seeley, Charles Hilton

Carson, Rt. Hon. Sir Edw. H.

Hoare, Sir Samuel (Norwich)

Sharpe, William Edward T.

Cavendish, V. C. W.(Derbysh.)

Holland, William Henry

Shaw, Thomas (Hawick B.)

Cecil, Evelyn (Hertford, East)

Houston, R. P.

Sinclair, Louis (Romford)

Cecil, Lord Hugh (Greenwich)

Jackson, Rt. Hn. Wm. Lawies

Skewes-Cox, Thomas

Chamberlain, Rt. Hon. J. (Bir.)

Kay-Shuttleworth, Rt. Hn. Sir U

Smith, James Parker (Lanark)

Chamberlain, J. A. (Worc'r)

Kearley, Hudson E.

Stanley, Edward J. (Somerset)

Chaplin, Rt. Hon. Henry

Keswick, William

Stewart, Sir Mark J. M' Taggart

Charrington, Spencer

Lambert, George

Stone, Sir Benjamin

Coghill, Douglas Harry

Lawrence, Sir E. Durning-(Corn)

Tritton, Charles Ernest

Cohen, Benjamin Louis

Lawson, John Grant (Yorks.)

Tuke, Sir John Batty

Collings, Rt. Hon. Jesse

Lawson, Sir Wilfrid (Cum'land)

Wallace, Robert

Colomb, Sir John Charles Ready

Leigh-Bennett, Henry Currie

Walton, John Lawson (Leeds, S.)

Cook, Fred. Lucas (Lambeth)

Lowles, John

Warde, Lieut.-Col. C. E. (Kent)

Corbett, A. Cameron (Glasgow

Macartney, W. G. Ellison

Wentworth, B. C. Vernon-

Crombie, John William

Macdona, John Cumming

Williams, J. Powell- (Birm.)

Cross, H. Shepherd (Bolton)

M' Arthur, William (Cornwall)

Willox, Sir John Archibald

Curzon, Viscount

Massey-Mainwaring, Hn. W. F.

Wilson, John (Falkirk)

Davies, M. Vaughan-(Cardigan)

Melville, Beresford Valentine

Wodehouse, Rt. Hn. E. R. (Bath)

Douglas, Rt. Hon. A. Akers-

Monckton, Edward Philip

Wortley, Rt. Hn. C. B. Stuart-

Dunn, Sir William

Monk, Charles James

Wrightson, Thomas

Dyke, Rt. Hon. Sir William Hart

Moon, Edward Robert Pacy

Wylie, Alexander

Faber, George Denison

More, Robt. Jasper (Shropshire)

Wyndham, George

Fellowes, Hon. Ailwyn Edward

Morgan, Hon. F. (Monm'thsh.)

Young, Commander (Berks, E.)

Finch, George H.

Morrell, George Herbert

Finlay, Sir Robert Bannatyne

Morrison, Jas. A. (Wilts., S.)

TELLERS FOR THE AYES—

Fisher, William Hayes

Morton, A. H. A. (Deptford)

Sir William Walrond and

FitzGerald, Sir Robert Penrose-

Muntz, Philip A.

Mr. Anstruther.

Fletcher, Sir Henry

Murray, Rt. Hn. A. G. (Bute)

NOES.

Allison, Robert Andrew

Bond, Edward

Emmott, Alfred

Ashton, Thomas Gair

Bonsor, Henry Cosmo Orme

Fenwick, Charles

Austin, M. (Limerick, W.)

Bousfield, William Robert

Foster, Harry S. (Suffolk)

Bainbridge, Emerson

Clark, Dr. G. B.

Green, W. D. (Wednesbury)

Bayley, Thomas (Derbyshire)

Cooke, C. W. Radcliffe (Heref'd)

Hayden, John Patrick

Billson, Alfred

Doogan, P. C.

Healy, Maurice (Cork)

Bolton, Thomas Dolling

Duckworth, James

Healy, Timothy M. (N. Louth)

Hoare, Ed. Brodie (Hampstead)

Morgan, W Pritchard (Merthyr

Steadman, William Charles

Horniman, Frederick John

Norton, Capt. Cecil William

Sullivan, Donal (Westmeath)

Howard, Joseph

O'Hrien, Patrick (Kilkenny)

Tanner, Charles Kearns

Jameson, Major J. Eustace

Oldroyd, Mark

Tollemache, Henry James

Jones, William (Carnarvonash.)

Pease, H. Pike (Darlington)

Tomlinson, Wm. Edw. Murray

Lea, Sir Thomas (Londonderry

Perks, Robert William

Walton, Joseph (Barnsley)

Long, Col. Chas. W. (Evesham)

Philipps, John Wynford

Wedderburn, Sir William

Lonsdale, John Brownlee

Pickersgill, Edward Hare

Whittaker, Thomas Palmer

Lough, Thomas

Platt-Higgins, Frederick

Wilson, John (Durham, Mid)

Macaleese, Daniel

Provand, Andrew Dryburgh

Yoxall, James Henry

MacNeill, John Gordon Swift

Reckitt, Harold James

M'Arthur, Charles (Liverpool)

Robertson, Herbert (Hackney)

TELLERS FOR THE NOES—

M'Ghee, Richard

Samuel, J. (Stock on-on-Tees)

Mr. Sydney Gedge and

M'Leod, John

Scott, Chas. Prestwich (Leigh

Mr. Faithfull Begg.

Milward, Colonel Victor

Shaw, Charles Edw. (Stafford)

Words inserted.

Words inserted.
MR. HENDERSONsaid that the effect of the Amendment he had to move was to treat all underwriters in the same way. It was a fact that today a colonial or a foreign issue might be dealt with in this way without disclosing the fact. Why should they make a distinction between a colonial or a foreign company and the interests of an English company? Suppose a company already in existence determined upon making a new issue for the purpose of purchasing some additional property. That property might be purchasable to-day, but before the company could get its money to effect the purchase it had to call its shareholders together, which would take from seven to fourteen days. The company would have to hold a confirmatory meeting, and at least a month would lapse between the time the company was in a position to obtain the money by publication. That company might go to the underwriters who would for a small commission agree to underwrite the transaction, and then the company could proceed at once to make its bargain. Therefore it was essential that this underwriting should be done, and where the commission was a small one he did not see why the issue should be prejudiced by disclosure. That it would be prejudiced was clearly proved by the fact that it is not uncommon to find it stated in prospectuses as an inducement to the public to subscribe that no part of the capital has been underwritten. Therefore the effect of disclosing that the capital had been underwritten must be detrimental. Where a large commission of a very excessive character was paid it should be disclosed, for that would do away with a good deal of fraud and dishonesty, but where the sum paid did not exceed two and a-half
1140
per cent. he did not think it was necessary to disclose it. He thought the right hon. Gentleman in charge of the Bill might very well accept the words of his Amendment.
Amendment proposed-
"In page 6, line 4, after the first word 'and,' to insert the words 'in case the said commission, with brokerage, exceeds two and a half per cent. are.' "-(Mr. Henderson.)
Question proposed, "That those words be there inserted."
MR. RITCHIE: I can assure my hon. friend that if I could possibly see my way I should be only too glad to accept his proposal. I will briefly state the reasons why I think it would be unwise for the Committee to accept this Amendment. The effect of it would be to create two classes of underwriters, one class disclosed and the other class not disclosed. You would thus divide companies into two categories, and the effect might very well be to leave an impression on the public mind that those companies which did not disclose were really of a superior kind to those companies which did disclose -which paid a brokerage of over 2½ per cent., and consequently were obliged to disclose. I think that would give an erroneous impression, because it might be just as reasonable to pay 4 or 5 per cent. in one case as to pay 2½per cent. in another. It is clear that there is in some cases a greater element of risk, but that does not imply that one company is necessarily a bettor company than the other because it has been underwritten at a smaller rate. There is no slur attached to any company which pays a commission of 5 per cent. It is quite clear that the drawing of this distinction between companies paying 2½ per cent. and not disclosing and companies paying 5 per cent. and dis-

1141
closing would involve an invidious comparison between the two companies. That is the reason why I think it would be unwise to accept the Amendment of my hon, friend, and I hope he will not press it.
MR. CAWLEY: I really cannot see that the right hon. Gentleman has given any argument against this proposal at all. If the public discriminate by the fact that only 2½ per cent. is paid, then they are very much the gainers, because anybody who knows anything about company promoting knows that no large financial firm would take over the responsibility of a large issue at 2½ per cent. unless it was a good company which would commend itself to the public generally. I think the right hon. Gentleman's argument in regard to discriminating between 2½ per cent. and a larger commission tells in favour of the Amendment. In several cases it may be imperative for certain companies to have money at a certain time, and if they are to go to a large issuing office and tell them that they want the money immediately, and that the underwriting will have to be disclosed, that prejudices them before the public, and they have to pay a larger amount for underwriting. Therefore, I think the Amendment ought to recommend itself to the House, and I shall be extremely glad to support it. Underwriting is an assurance that the issue will go on, and as far as I know it is a very legitimate thing to have an insurance for a large issue.
MR. PHILIPPS: I hope the Government will see their way to accept the Amendment moved by the hon. Member for West Staffordshire, who is an authority upon this class of business. From such experience as I have had, I am convinced that the hon. Gentleman is right when he says that with high class established companies the fact that they should be compelled to disclose when a commission larger than 2½ per cent. was paid would be detrimental to the success of those high class companies and would act as a check to a class of business which we ought to encourage rather than discourage. The right hon. Gentleman in charge of the Bill said, if we accepted this Amendment it would lead to two classes
1142
of underwriting, and that you would have disclosed and undisclosed underwriting. I do not know whether the Attorney General fondly imagines that by this clause he is going to limit the question to disclosed and undisclosed underwriting. I am convinced that if this clause becomes law as it stands, it is going to open the door to more swindles than the Bill it self is going to stop. It has to be remembered that in dealing with company promoters you are dealing with one of the cleverest and one of the most unscrupulous classes in the country. The right hon. Gentleman said some little time ago that it would be a most excellent thing for a company to be able to say in its prospectus that it had paid five per cent. for issuing its capital. Supposing a manufacturing concern is issued to the public in £1 shares, and the directors say in perfect good faith in the prospectus that they have underwritten the £1 shares to the extent of 3d. a share. In that case it would have a very good effect on the public, and would induce them to subscribe. What is going to prevent the promoter of a shady company from lotting the directors pay one and a quarter per cent. while he pays the rest himself?
MR. LOUGHsaid he thought that the Amendment was a very moderate one, and that the House did not realise the careful limit which was embodied in it. Any hon. Member who had listened to the speeches must have felt that if the Amendment were not accepted a certain class of very good business would be put a stop to. Supposing that half a million of money were required, a prospectus could not be got out in an hour or a day, but the money could be obtained in a few hours by paying brokerage. The right hon. Gentleman in charge of the Bill seemed to think that a statement in the prospectus that brokerage had been paid would prejudice the issue; but people would say when they read that statement that they would also take shares if they got 2½ per cent. brokerage, but they could not then get it, because it had been paid for getting the money perhaps months before. That was the worst of such skilfully drawn clauses. They often interfered with business that was not fraudulent or undesirable, and he thought the House -should consider well before rejecting the Amendment.
MR. BOUSFIELDsaid that the arguments which had been used in favour of the Amendment were in his opinion rather against it. It was urged that if 2½ percent. brokerage had been paid, and if that fact were published in the prospectus, it would prejudice the success of the issue. It seemed to him that if such a statement of fact did prejudice the issue it ought to be disclosed to the public. According to the hypothesis of the hon. Members who supported the Amendment, if he read the prospectus without knowing that the
shares had been underwritten, he might subscribe, but if he did know he would not subscribe. The clause only made certain things legal which were hitherto illegal, and it was quite right to impose on a company the obligation of stating in its prospectus that a commission had been paid.
Question put.
The House divided:—Ayes, 44; Noes, 128. (Division List No. 237.)

AYES.

Austin, M. (Limerick, W.)

Healy, Timothy M. (N. Louth)

Provand, Andrew Dryburgh

Bainbridge, Emerson

Jameson, Major J. Eustace

Remnant, James Farquharson

Banbury, Frederick George

Lawson, Sir Wilfrid (Cumb'land

Samuel, J. (Stockton-on-Tees)

Billson, Alfred

Lea, Sir Thomas(Londonderry)

Smith, James Parker (Lanarks.)

Bolton, Thomas Dolling

Long, Col. Chas. W.(Evesham)

Steadman, William Charles

Bonsor, Henry Cosmo Orme

Lough, Thomas

Sullivan, Donal (Westmeath)

Charrington, Spencer

Macaleese, Daniel

Tanner, Charles Kearns

Clark, Dr. G. B.

M'Ghee, Richard

Wedderhurn, Sir William

Cohen, Benjamin Louis

M'Leod, John

Wentworth, Bruce C. Vernon-

Colomb, Sir John Chas. Ready

Morgan, W. P. (Merthyr)

Wilson, John (Durham, Mid.)

Doogan, P. C.

Morton, Edw. J. C. (Devonport)

Wortley, Rt. Hn. C. B. Stuart -

Duckworth, James

Muntz, Philip A.

Yoxall, James Henry

Foster, Harry S. (Suffolk)

O' Brien, Patrick (Kilkenny)

Gibbs, Hn. A. G. H. (Cy of Lond.)

Pease, Herbert Pike(Darlingt'n

TELLERS FOR THE AYES—

Harwood, George

Perks, Robert William

Mr. Henderson and Mr. Cawley.

Hayden, John Patrick

Philipps, John Wynford

NOES.

Ashton, Thomas Gair

Douglas, Rt. Hon. A. Akers-

Lawrence, Sir E. Durning-(Corn)

Atkinson, Rt. Hon. John

Dyke, Rt. Hon. Sir William Hart

Lawson, John Grant (Yorks)

Balcarres, Lord

Emmott, Alfred

Leigh-Bennett, Henry Currie

Balfour, Rt. Hn. A. J. (Manch'r)

Faber, George Denison

Lonsdale, John Brownlee

Balfour, Rt. Hn. G. W. (Leeds)

Fellowes, Hon. Ailwyn Edward

Lowles, John

Bayley, Thomas (Derbyshire)

Finch, George H.

Macartney, W. G. Ellison

Beach, Rt. Hn. Sir M. H. (Bristol)

Finlay, Sir Robert Bannatyne

Macdona, John Cumming

Begg, Ferdinand Faithfull

Fisher, William Hayes

M' Arthur, Charles (Liverpool)

Bemrose, Sir Henry Howe

FitzGerald, Sir Rbt. Penrose-

M' Arthur, William (Cornwall)

Bentinck, Lord Henry C.

Fitz Wygram, General Sir F.

Marks, Henry Hananel

Bethell, Commander

Fletcher, Sir Henry

Massey-Mainwaring, Hn. W. F.

Blundell, Colonel Henry

Flower, Ernest

Melville, Beresford Valentine

Bond, Edward

Gedge, Sydney

Milward, Colonel Victor

Bousfield, William Robert

Gibbons, J. Lloyd

Monckton, Edward Philip

Brodrick, Rt. Hn. St. John

Godson, Sir Augustus Fred.

Monk, Charles James

Bryce, Rt. Hon. James

Gorst, Rt. Hon. Sir J. Eldon

More, Robt. J. (Shropshire)

Butcher, John George

Goschen, Rt. Hn. G J (St. George's)

Morgan, Hn. F. (Monm'thsh.)

Caldwell, James

Goschen, George J. (Sussex)

Morrell, George Herbert

Carson, Rt. Hon. Sir Edw. H.

Green, W. D. (Wednesbury)

Morrison, J. A. (Wilts., S.)

Cavendish, Y. C. W. (Derbys.)

Greville, Hon. Ronald

Morton, Arthur H. A. (Deptford)

Cecil, Evelyn (Hertford, East)

Gull, Sir Cameron

Murray, Rt. Hn. A. G. (Bute)

Cecil, Lord Hugh (Greenwich)

Hamilton, Rt. Hon. Lord Geo.

Murray, Charles J. (Coventry)

Chamberlain, Rt. Hon. J. (Birm.

Hanbury, Rt. Hon. Robert W.

Murray, Col. Wyndham(Bath)

Chamberlain, J. Austen(Wore'r)

Hayne, Rt. Hon. Charles Seale-

Nicol, Donald Ninian

Chaplin, Rt. Hon. Henry

Healey, Maurice (Cork)

Oldroyd, Mark

Coghill, Douglas Harry

Hedderwick, Thomas Charles H

Phillpotts, Captain Arthur

Collings, Rt. Hon. Jesse

Hoare, Edw. Brodie (Hampste'd)

Platt-Higgins, Frederick

Cooke, C. W. R. (Hereford)

Holland, William Henry

Plunkett, Rt. Hn. Horace Curzon

Corbett, A. Cameron (Glasgow)

Horniman, Frederick John

Powell, Sir Francis Sharp

Crombie, John William

Houston, R. P.

Purvis, Robert

Cross, H. Shepherd (Bolton)

Jones, William (Carnarvonsh')

Rankin, Sir James

Curzon, Viscount

Kay-Shuttleworth, Rt. Hn. Sir U

Reckitt, Harold James

Davies, M. Vaughan-(Cardigan

Kearley, Hudson E.

Rentoul, James Alexander

Disraeli, Coningsby Ralph

Lambert, George

Richards, Henry Charles

Richardson, Sir T. (Hartlep'l.)

Stanley, Edw. Jas. (Somerset

Wilson, John (Falkirk)

Ridley, Rt. Hn. Sir Matthew W.

Stewart, Sir Mark J. M' Taggart

Wodehouse, Rt. Hn. E. R. (Bath)

Ritchie, Rt. Hn. Chas. Thomson

Sturt, Hon. Humphrey N.

Wrightson, Thomas

Robertson, Herbert (Hackney)

Tollemache, Henry James

Wylie, Alexander

Robson, William Snowdon

Tomlinson, Wm. Edw. Murray

Wyndham, George

Russell, T. W. (Tyrone)

Tuke, Sir John Batty

Young, Commander (Berks, E.

Sharpe, William Edward T.

Walton, John L. (Leeds, S.)

Shaw, Charles Edw. (Stafford)

Warde, Lt.-Col. C. E. (Kent)

TELLERS FOR THE NOES—

Shaw, Thomas (Hawick B.)

Williams, Jos. Powell-(Birm.

Sir William Walrond and

Sinclair, Louis (Romford)

Willox, Sir John Archibald

Mr. Anstruther.

MR. LAWSON WALTON: The Amendment which I now move provides that "where no prospectus is issued a memorandum complying with the terms of this section shall be filed." The House will have observed that the machinery of this Bill provides that the prospectus of a company should contain certain particulars, and that the discipline which is exercised by the Bill, is exercised largely by means of the prospectus. It is necessary that the prospectus shall contain the names of the vendors, the amount of the purchase money and various other particulars, and after the prospectus has been issued to the public, there is a provision that it must be filed. There are, therefore, two steps to be taken for the public protection. One is the issue of prospectus containing certain information, and the second is the filing of the prospectus, giving the documentary history of the company, and the first steps which were taken with reference to it. The result is that two classes of the community receive valuable assistance-one, the persons who are appealed to to subscribe for shares, and the other, the persons who might be invited to give credit to the company. There is a door, however, in the provision which I hope to close. There is a large number of companies that issue no prospectuses, because it is inconvenient, and the promoters may be able to place the capital by some other means. The syndicate which forms the company manages by means of personal recommendation to place its original capital, and having placed its original capital, it is then enabled to create a market for the shares, and the mere transactions on the market and the quotations of the shares advertise the company, and the public are drawn in without knowing anything about it except that the shares are being dealt in and are likely to go to a premium. That is the state of things under the existing law, and it will be enormously increased by the present Bill, which imposes such stringent restrictions
1146
on the issue of prospectuses. If under the existing law there are a number of companies which issue no prospectuses, how many more will not come before the public without the instrumentality of a prospectus when under this Bill various stringent requirements must be complied with by all persons issuing documents of that kind. Therefore I propose to check the abuse by enabling any shareholder or creditor to find out the history, main features, and formation of such companies. A company is registered, its shares are placed, but without this Amendment there will be no record filed of the original shareholders or directors, or the subscribed capital, or any of the particulars that are required to be given in a prospectus. What I propose is that where a company issues no prospectus, a memorandum compiled under the requirements of this section shall be placed upon record, and shall be accessible to every shareholder who may have bought shares in the company, and to every person who may, perhaps, have given credit to the company. We have what has been described already as one man companies. The one man company is a private concern; it does not issue its capital to the public, and all the shares are hold by one man and by one or two other persons under his control. There is a case of a one-man company which will be found in the House of Lords Reports for 1897. It is the case of Solomon v. Solomon and Co. The company had a capital of 30,007 shares, of which 30,000 were held by Mr. Solomon and the remaining seven by seven of his nominees. Not only did Mr. Solomon hold all the share capital, but he also held £20,000 of debentures, and he controlled the company with respect to all its transactions and in relation to the whole of its profits. Under this Bill, unless my Amendment is adopted, such a condition of things will not be recorded, and a company not issuing a prospectus will not come within the operation of this section. The transactions will be carried out in

1147
complete secrecy, and at a subsequent date, after the shares have been placed on the market, a shareholder may say, "I want to know something about this company. Had it ever a prospectus?" and the answer will be, "I do not know.'' Then the shareholder may ask, "Under what circumstances was it issued?" and the answer will be, "No one can toll."' There is no memorandum availably either for the information of subsequent investors or, what may be more important to the community, to enable traders to ascertain whether they are dealing with a company which is responsible for its debts. It is said that this Amendment will press hardly on honest private companies. Assuming that a private company places its capital without issuing a prospectus, I ask the House to consider whether, with perhaps one exception, any of the requirements of this section are such as any honest company could object to. For instance, no honest company would object to stating the names of its shareholders, how many shares had been allotted, and other similar information. But even if there is some secrecy in regard to these matters, is it not reasonable that these companies, for the very great advantage they obtain in the way of limiting their liability, should conform to some standard of publicity as regards their origin? If a private concern seeks to have the immense advantage of limiting its liability, should it not give to the public some information with regard to its formation, and enable traders to judge whether or not a concern to which they are invited to give credit is or is not responsible? I hope the House will not lightly dismiss this Amendment. I am quite sure that many Members regard it as vital to the Bill, and I feel satisfied that unless you distinctly intimate to future company promoters that this information must be given either by means of a memorandum or in a prospectus you will leave the investor in the future quite as much in the dark as to a company's origin as he is at present, and will give the creditor no means of obtaining the information to which he is entitled, and which he will obtain if this Amendment is adopted.
Amendment proposed —
"in page 6, line 33, after the word 'filed,' to insert as a new sub-section the words' (4) Where no prospectus is issued a memorandum
1148
complying with the terms of this section shall be filed in manner aforesaid.'"—(Mr. Lawson Walton.)
Question proposed, "That those words be there inserted."
SIR ROBERT FINLAY: I would point out to the House that we would be occasioning very considerable hardship if we were to impose all the requirements of Section 12 on a very large and respectable class of companies which are solely private companies. They would resent being required to give these particulars. My hon. and learned friend says that if we do not require such a statement as he suggests we leave the door open to very great abuse. We have endeavoured to provide by Section 12 for the protection of the public whenever a prospectus is issued, and when the public are invited to subscribe for shares. The argument of my hon. and learned friend is that companies will endeavour to avoid the requirements of Section 13 by having no prospectus at all, that all the shares will be allotted to the promoter or an agent of his, and that then the promoter will sell the shares on the Stock Exchange, and that by that means a market will be created for them. The trick against which my hon. and learned friend wishes to guard is not a very common one, although it has come before the courts on certain occasions. If my hon. and learned friend apprehends that shoddy companies will avoid the issue of prospectuses in order that their shares may be put upon the market by the promoters, the Amendment will not meet the case. The public will look askance at any undertaking launched in that way, and I would ask the House not to accept the proposal, which would put upon perfectly respectable people a burden they would very much resent, in order to prevent a possible evil, the extent of which I think has been very greatly exaggerated. I think the House will agree with me that the evil is one which will tend to cure itself, because if a shady company appears without a prospectus the public will avoid it, and for these reasons I trust the House will not accept the Amendment.
MR. MARKSsaid that the view of the public with regard to companies which did not issue prospectuses was not quite

1149
the same as the Attorney General seemed to imagine. On the contrary, the company which issued a prospectus did not stand in such great favour with the speculating public as the company which did not. There was a certain charm about mystery, and the public were induced by this, that, and the other rumour to rush in and buy certain shares, so that when the inevitable collapse came it was impossible to bring home the responsibility to the authors of the scheme. He therefore considered the suggestion embodied in the Amendment of the hon. and learned Member for South Leeds to be an admirable one in itself, and one which was vital to the perfection of the scheme before the House. The public which required protection was not the public assailed with prospectuses. A prospectus could be laid before experienced people; contracts might be inspected, and inquiries made; but when no prospectus whatever was issued the public were at the mercy of the hidden promoter, and that was the class of company in regard to which people required to be protected. But the Bill before the House gave no protection whatever in that direction. They were told that if any attempt was made to deal with this obvious evil, they would be unduly oppressing purely private companies. What was a purely private company? There were many companies founded to take over the businesses of well-established firms, and the bulk of the shares were distributed amongst the partners in the firm, very few reaching the customers and the general public. So long as the business was profitable the company continued to be a private company, but as soon as the profits commenced to decline the company began gradually to become a public company. One might sometimes test the good faith of the so-called private company by the announcement made in the prospectus that a quotation and settlement would be applied for on the Stock Exchange. If the public were to be protected from this class of scheme, there must be something in the nature of a memorandum filed at the time of the registration of the company. That memorandum need not be of an exhaustive character or reveal any sacred secrets of a private business. It might merely set forth the name of the person who sold the business, the date of the sale, the price paid, how much of that price was in cash
1150
and how much in shares, and the class and numbers of the shares devoted to the purchase-money. The public, if they bought those shares in the market in the future, would then be able to ascertain whether they were buying vendor's shares or not. A few such precautions, without acting detrimentally to genuine private companies, would serve to protect the public. The class of company which had fluctuated in recent years more than any other was the mining class. He believed he was correct in saying that not a single prospectus was issued in connection with any of the Barnato group, and there never was a sot of companies which at one time had stood so high and afterwards come so low. He certainly hoped that some such Amendment as that before the House would be incorporated in the Bill. Such an Amendment would remove a very serious flaw in what might otherwise be an useful measure.
MAJOR JAMESONcharacterised the Amendment as absolute nonsense. By it the House would be legislating for one-man companies, and there was already quite enough such legislation. It seemed to be argued that private companies should have none of the privileges but all the disabilities of Public companies, and he trusted the House would vote with the Government against this Amendment.
MR. BAINBRIDGEapprehended that the intention of the Mill was to protect the ordinary speculator and investor, and he could not conceive the use of the House wasting its time in trying to protect the careless gambler. Nobody who bought shares in a Barnato company deserved to be protected by a Bill passed through the House. Such a man could not claim to have been misled; he simply saw shares rising in the market, and, without any information, made up his mind to speculate in them. The House would not be justified in spending time in protecting people of that class.
Question put.
The House divided—Ayes, 35; Noes, 107. (Division List No. 238.)

AYES.

Austin, M. (Limerick, W.)

Healey, Maurice (Cork)

Reckitt, Harold James

Beaumont, Wentworth C. B.

Healy, Timothy M. (N. Louth)

Remnant, James Farquharson

Bentinck, Lord Henry C.

Hedderwick, Thos. Charles H.

Richards, Henry Charles

Bolton, Thomas Dolling

Horniman, Frederick John

Samuel, J. (Stockton-on-Tees)

Bryce, Rt. Hon. James

Jones, William (Carnarvonsh.)

Shaw, Charles Edw. (Stafford)

Caldwell, James

Lawson, Sir W. (Cumb'land)

Shaw, Thomas (Hawick B.)

Cawley, Frederick

Macaleese, Daniel

Sullivan, Donal (Westmeath)

Clark, Dr. G. B.

M'Arthur, Wm. (Cornwall)

Wedderburn, Sir William

Crombie, John William

Marks, Henry Hananel

Wentworth, Bruce C. Vernon-

Doogan, P. C.

Morton, Ed. J. C. (Devonport)

Duckworth, James

O'Brien, Patrick (Kilkenny)

TELLERS FOR THE AYES—

Hayden, John Patrick

Pease, Herb. Pike (Darlington)

Mr. Lawson Walton and

Hayne, Rt. Hon. Charles Seale-

Provand, Andrew Dryburgh

Mr. Billson.

NOES.

Atkinson, Rt. Hon. John

Foster, Harry S. (Suffolk)

Murray, Rt. Hn. A. Graham(Bute)

Bainbridge, Emerson

Gedge, Sydney

Murray, Chas. J. (Coventry)

Balfour, Rt. Hon. A. J. (Manch'r)

Gibbons, J. Lloyd

Murray, Col. Wyndham(Bath)

Balfour, Rt. Hn. Gerald W. (Leeds)

Gibbs, Hn. A. G. H. (City of Lond.)

Nicol, Donald Ninian

Banbury, Frederick George

Godson, Sir Augustus F.

Phillpotts, Capt. Arthur

Beach, Rt. Hn. Sir M. H. (Bristol)

Goschen, Rt. Hn. G J.(St. George's)

Platt-Higgins, Frederick

Begg, Ferdinand Faithfull

Goschen, George J. (Sussex)

Plunkett, Rt. Hn. Horace Curzon

Bemrose, Sir Henry Howe

Green, W. D. (Wednesbury)

Powell, Sir Francis Sharp

Blundell, Colonel Henry

Greville, Hon. Ronald

Purvis, Robert

Bond, Edward

Gull, Sir Camaron

Rankin, Sir James

Bousfield, William Robert

Hamilton, Rt. Hon. Lord G.

Rentoul, James Alexander

Brodrick, Rt. Hon. St. John

Hanbury, Rt. Hon. Robert W.

Richardson, Sir T. (Hartlep'l)

Carson, Rt. Hon. Sir Edw. H.

Henderson, Alexander

Ridley, Rt. Hn. Sir Matthew W.

Cavendish, V. C. W.(Derbyshire)

Holland, William Henry

Ritchie, Rt. Hon. Charles T.

Cecil, Lord Hugh (Greenwich)

Jameson, Major J. Eustace

Robertson, Herbert (Hackney)

Chamberlain, Rt. Hon J.(Birm.)

Keswick, William

Russell, T, W. (Tyrone)

Chamberlain, J. Austen (Worc'r)

Lawrence, Sir E. Durning-(Corn)

Seely, Charles Hilton

Chaplin, Rt. Hon. Henry

Lawson, John Grant (Yorks.)

Smith, Jas. Parker (Lanarks.)

Charrington, Spencer

Lea, Sir Thomas (Londonderry)

Smith, Hon. W. F. D. (Strand)

Collings, Rt. Hon. Jesse

Leigh-Bennett, Henry Currie

Stanley, Edward J. (Somerset)

Cooke, C. W. Radcliffe (Heref'd)

Lonsdale, John Brownlee

Sturt, Hon. Humphry Napier

Corbett, A. Cameron (Glasgow)

Lough, Thomas

Tanner, Charles Kearns

Cross, Herb. Shepherd (Bolton)

Lowe, Francis William

Tollemache, Henry James

Curzon, Viscount

Lowles, John

Tomlinson, Wm. Edw. Murray

Disraeli, Coningsby Ralph

Macartney, W. G. Ellison

Warde, Lieut.-Col. C. E.(Kent)

Douglas, Rt. Hon. A. Akers-

Macdona, John Cumming

Willox, Sir John Archibald

Dyke, Rt. Hon Sir William Hart

M'Arthur, Charles (Liverpool)

Wilson, John (Falkirk)

Emmott, Alfred

Massey-Mainwaring, Hn. W. F.

Wodehouse, Rt. Hon. E. R.(B'th)

Faber, George Denison

Melville, Beresford Valentine

Wortley, Rt. Hon. C. B. Stuart-

Fellowes, Hon. Ailwyn Edw.

Milward, Colonel Victor

Wrightson, Thomas

Finch, George H.

Monckton, Edward Philip

Wylie, Alexander

Finlay, Sir Robert Bannatyne

Monk, Charles James

Wyndham, George

Fisher, William Hayes

More, Robert J. (Shropshire)

Young, Commander (Berks, E.)

FitzGerald, Sir Robert Penrose-

Morgan, Hn. F. (Monmouthsh.)

Fitz Wygram, General Sir F.

Morrell, George Herbert

TELLERS FOR THE NOES—

Fletcher, Sir Henry

Morrison, James A.(Wilts., S.)

Sir William Walrond and

Flower, Ernest

Morton, A. H. A. (Deptford)

Mr. Anstruther.

MR. SYDNEY GEDGE: I rise now [12.15] to move the adjournment of the debate. I think that the Government have done a very good day's work indeed. Many of us have been here since noon.
MR. SPEAKER: When the House has agreed to suspend the Twelve o'clock Rule it is not the custom for the Chair to accept a motion of this kind so soon after midnight.
MR. SYDNEY GEDGE: We have to meet again to-morrow at twelve o'clock, and in those circumstances I think the Government might consent
1152
to an adjournment. Eleven clauses have now been passed, and the twelfth clause is one which requires very careful consideration. The Standing Committee only reported upon this Bill on Thursday, and we actually did not get the Bill in type until yesterday morning, and we have only had one day to look into the matter. In these circumstances I think the Government might be content with their success in getting eleven clauses passed, and I hope the Government will accept this motion.
MR. T. M. HEALY: On a point of order. Is this a Coercion Act?
MR. SPEAKER: I have the power, under the Standing Order, either to refuse this motion, or to put it to the House forthwith. I will give the House an opportunity of saying whether they approve it or not, and I will put it to the House forthwith.
THE FIRST LORD OK THE TREASURY (MR. A. J. BALFOUR,): Do you desire, Mr. Speaker, that I should say a word, or do you wish to put the question at once?
MR. SPEAKER: Does the right hon. Gentleman accept the motion?
MR. H. S. FOSTERmoved to omit from Clause 12 the provision that every prospectus must contain the names, des-
MR. A. J. BALFOUR: No, Sir.
MR. SPEAKER: Then I will put it to the House.
MR. SYDNEY GEDGE: I have no wish to go to a division.
Question put—
" That further proceeding on consideration, as amended, be now adjourned."
The House divided:—Ayes, 32; Noes, 101. (Division List No. 239.)

AYES.

Austin, M. (Limerick, W.)

Gedge, Sydney

Reckitt, Harold James

Bainbridge, Emerson

Gibbons, J. Lloyd

Shaw, Chas. Edw. (Stafford)

Beaumont, Wentworth C. B.

Hayne, Rt. Hon. Chas. Seale-

Shaw, Thomas (Hawick, B.)

Billson, Alfred

Hedderwick, Thomas C. H.

Sullivan, Donal (Westmeath)

Bolton, Thorne as Dolling

Horniman, Frederick John

Tanner, Charles Kearns

Bryce, Rt. Hon. James

Jameson, Major J. Eustace

Ure, Alexander

Cawley, Frederick

Lawson, Sir Wilfrid (Cum'lamd)

Walton, Jno. Lawson (LeedsS.)

Charrington, Spencer

Lea Sir Thomas (Londonderry)

Wedderburn, Sir William

Crombie, John William

Macaleese, Daniel

Doogan, P. C.

M'Arthur, William(Cornwall)

TELLERS FOR THE AYES—

Emmott, Alfred

Morton, Edw. J. C. (Devonport)

Mr. Lough and Mr. Billson

Foster, Harry S. (Suffolk)

Provand, Andrew Dryburgh

NOES.

Atkinson, Rt. hon. John

Godson, Sir Augustus Fredk.

O' Brien, Patrick (Kilkenny)

Balfour, Rt. Hn. A. J. (Manch'r)

Goschen, Rt Hn G J (St George's)

Pease, Herb. Pike (Darlington)

Balfour, Rt Hn Gerald W (Leeds)

Goschen, Geo. J. (Sussex)

Phillpotts, Captain Arthur

Banbury, Frederick George

Green, W. D. (Wednesbury)

Platt-Higgins, Frederick

Beach, Rt. Hn. Sir M. H. (Bristol)

Greville, Hon. Ronald

Plunkett, Rt. Hon. H. Curzon

Bemrose, Sir Henry Howe

Gull, Sir Cameron

Powell, Sir Francis Sharp

Bentinck, Lord Henry C.

Hamilton, Rt. Hon. Lord G.

Purvis, Robert

Blundell, Colonel Henry

Hanbury, Rt. Hon. Robert W.

Rankin, Sir James

Bond, Edward

Hayden, John Patrick

Remnant, James Farquharson

Bousfield, William Robert

Healy, Maurice (Cork)

Rentoul, James Alexander

Brodrick, Rt. Hon. St. John

Healy Timothy M. (N. Louth)

Richards, Henry Charles

Carson, Rt. Hon. Sir Edw. H.

Henderson, Alexander,

Richardson, Sir T. (Hartlep'l)

Cavendish, V. C. W. (Derbysh

Jones, William (Carnarvonsh.)

Ridley, Rt. Hn. Sir Matthew W.

Cecil, Lord Hugh (Greenwich)

Keswick, William

Ritchie, Rt. Hn. Chas. Thomson

Chamberlain, Rt. Hn. J. (Birm

Lawrence, Sir E. D. (Cornw'll)

Russell, T. W. (Tyrone)

Chamberlain, J. Austen (Wore'

Lawson, John Grant (Yorks)

Seely, Charles Hilton

Chaplin, Rt. Hon. Henry

Leigh-Bennett, Henry Currie

Smith, James Parker (Lanarks)

Collings, Rt. Hon. Jesse

Lonsdale, John Brownlee

Smith, Hon. W. F. D. (Strand)

Cooke, C. W. Radcliffe (Heref'd)

Lowe, Francis William

Stanley, Edward J. (Somerset)

Corbett, A. Cameron (Glasgow)

Macartney, W. G. Ellison

Sturt, Hon. Humphry Napier

Cross, Herb. Shepherd (Bolton)

Macdona, John Cumming.

Tomlinson, William E. Murray

Curzon, Viscount

M'Arthur, Charles (Liverpool)

Warde, Lieut.-Col. C. E. (Kent)

Disraeli, Coningsby Ralph

Massey-Mainwaring, Hn. W. F.

Wentworth, Bruce C. Vernon-

Douglas, Rt. Hon. A. Akers-

Melville, Beresford Valentine

Willox, Sir John Archibald

Dyke, Rt. Hn. Sir Wm. Hart

Milward, Colonel Victor

Wilson, John (Falkirk)

Faber, George Denison

Monckton, Edward Philip

Woodhouse, Rt. Hn. E. R. (Bath)

Fellowes, Hon. Ailwyn Edward

More, Robt. J. (Shropshire)

Wortley, Rt. Hon. C. B. Stuart-

Finch, George H.

Morgan, Hn. Fred. (Monmouth.

Wrightson, Thomas

Finlay, Sir Robert Bannatyne

Morrell, George Herbert

Wylie, Alexander

Fisher, William Hayes

Morrison, James A. (Wilts., S.)

Wyndham, George

FitzGerald, Sir Robert Penrose-

Morton, Arthur H. A. (Deptford

Young, Commander (Berks, E.)

FitzWygram, General Sir F.

Murray, Rt. Hn. A. G. (Bute)

Fletcher, Sir Henry

Murray, Chas. J. (Coventry)

TELLERS FOR THE NOES—

Flower, Ernest

Murray, Col. Wyndham (Bath)

Sir William Walrond and

Gibbs, Hn. A. G. H.(Cy of Lond.)

Nieol, Donald Ninian

Mr. Anstruther

cription, and addresses of the signatories to the Memorandum of Association and the number of shares subscribed for by

1155
them respectively. The prospectus already had to contain a vast number of clauses giving general information. As a matter of fact, the Memorandum was so extensive that it had to be printed in very small type, and it was doubtful whether one person in 10,000 ever read it. It was therefore absurd to require to be added to that the information here provided for, which was perfectly unnecessary, of no value, and would minimise the value of the other information for which the clause provided.
Amendment proposed—
"In Page 6, line 37, to leave out the words from the word 'association,' to the word 'the,' in line 39."—(Mr. H. S. Foster.)
Question proposed, "That the words proposed to be left out stand part of the Bill."
MR. RITCHIEwas of opinion that this information ought to be given to the public in a prospectus.
MR. BRODIE HOARE: Why should it be given?
MR. RITCHIE: For information.
MR. BOUSFIELDdid not think anybody would pay the slightest attention to the persons who signed the Memorandum, as they were usually solicitors' clerks, and there was really no importance attached to it. This certainly was a very trivial matter.
MR. SYDNEY GEDGEsaid there was a very good reason for not burdening a prospectus with valueless information. The more stuff was put in the less likely were people to read it. What was desired was that the pith of the matter should be given. If he desired to take people in he should put into the prospectus every possible bit of nonsense, because then the people would tire of reading it.
MR. BAINBRIDGEthought nothing existed in a prospectus more weighty than the names therein given, and certainly it would take away from their value if the prospectus were crowded with names which were absolutely unimportant.
MAJOR JAMESONcordially agreed with the Amendment. If everything the right hon. Gentleman desired was in-
1156
serted the prospectus would extend to greater length than the New Testament, and to put in line after line which would not have the slightest meaning to the persons concerned was most absurd. The only persons who would benefit by such information being given were, newspaper proprietors, who received 1s. 6d. per line for advertising the prospectuses, but surely that was not the desire of the President of the Board of Trade. So far from people being kept out of difficulty by having lino after line of this rigmarole put in, they would be plunged in deeper and deeper, and not the slightest good would result. The House should, as business men, support the Amendment.
MR. LOWEjoined in the appeal that the Amendment should be accepted. His experience was that the signatories of the Memorandum were not looked upon as at all material: whether a person took five or 500 shares, he usually signed simply for one share, and this information would not be of the slightest value.
MR. BILLSONsaid the reason the Memorandum was usually signed by obscure persons was that it was merely a matter of convenience, but if this provision was made pains would be taken in future that persons having a real interest in the concern should sign. As to benefiting newspaper proprietors, the clause did not require that the names should bn advertised, but merely that the prospectus should contain them. Usually an abridged prospectus was advertised, so there was no force in that objection.
MR. LOUGHbelieved the advertisement of an abridged prospectus was always looked upon with suspicion. The argument that substantial signatories would be obtained simply because they would be published was purely conjectural. Not a single word had been said in favour of the clause, and he thought the Government, in deference to their many supporters who had spoken against this clause, should give some further reason for resisting this Amendment. If the Solicitor General could give some legal reason of any kind for this extraordinary proposal it might not be necessary to go to a division.
MR. T. M. HEALYsaid this Amendment raised a very important question, which was emphasised by the statement of the hon. Member in regard to abridged prospectuses. If the hon. Member would refer to the definition of prospectus in Clause 34 he would find the following explanation—
"The expression 'prospectus' means any prospectus, notice, circular, advertisement,
Amendment proposed—
"In page 7, line 34, after the word 'specifying,' to insert the words 'if possible.'"—(Mr. H. S. Foster.)
Question proposed, "That the words 'if possible' be there inserted."
MR. RITCHIE: It is clear that if no amount has been paid for goodwill it will not be put in, but if any amount has been paid for goodwill then it should be put in.
Question put, and negatived.
or other invitation offering to the public for subscription or purchase any shares or debentures of a company."
Any advertisement issued must contain all the matter provided for in that clause.
Question put.
The House divided:—Ayes, 102; Noes, 18. (Division List No. 240.)

AYES.

Atkinson, Rt. Hon. John

Fletcher, Sir Henry

Nicol, Donald Ninian

Austin, M. (Limerick, W.)

Flower, Ernest

Pease, Herbert Pike (Darlingt'n

Balfour, Rt. Hon. A. J. (Manch'r

Gibbons, J. Lloyd

Phillpotts, Captain Arthur

Balfour, Rt Hn Gerald W (Leeds

Gibbs, Hn. A. G. H. (City of Lon.

Platt-Higgins, Frederick

Banbury, Frederick George

Godson, Sir Augustus Fred.

Plunkett, Rt Hn Horace Curzon

Beach, Rt. Hn. Sir M. H. (Bristol

Goschen, Rt Hn G. J (St George's

Powell, Sir Francis Sharp

Bemrose, Sir Henry Howe

Goschen, George J. (Sussex)

Purvis, Robert

Billson, Alfred

Green, Walford D (Wednesbury

Reckitt, Harold James

Blundell, Colonel Henry

Greville, Hon Ronald

Rentoul, James Alexander

Bond, Edward

Gull, Sir Cameron

Richards, Henry Charles

Bousfield, William Robert

Hamilton, Rt. Hn. Lord George

Richardson, Sir Thos. (Hartlepl

Brodrick, Rt. Hon. St. John

Hanbury, Rt. Hon. Robert Wm.

Ridley, Rt. Hn. Sir Matthew W

Bryce, Rt. Hon. James

Hayne, Rt. Hn. Charles Seale-

Ritchie, Rt. Hn. Chas. Thomson

Caldwell, James

Henderson, Alexander

Russell, T. W. (Tyrone)

Carson, Rt. Hon. Sir Edw. H.

Horniman, Frederick John

Seely, Charles Hilton

Cavendish, V. C. W. (Derbysh.

Jones, William (Carnarv'nshire

Shaw, Charles Edw. (Stafford)

Cecil, Lord Hugh (Greenwich)

Lawrence, Sir E. Durning- (Corn

Shaw, Thomas (Hawick B.)

Chamberlain, Rt. Hon. J (Birm.

Lawson, John Grant (Yorks.)

Smith, James Parker (Lanarks)

Chamberlain, J. A. (Worc'r.)

Leigh-Bennett, Henry Currie

Smith, Hon. W. F. D. (Strand)

Chaplin, Rt. Hon. Henry

Lonsdale, John Brownlee

Stanley, Ewd. Jas. (Somerset)

Charrington, Spencer

Macartney, W. G. Ellison

Sturt, Hon. Humphry Napier

Collings, Rt. Hon Jesse

Macdona, John Cumming

Tomlinson, Wm. Edw. Murray

Cooke, C. W. Radcliffe (Heref'd)

M'Arthur, Charles (Liverpool

Walton, J. Lawson (Leeds, S.)

Corbett, A. Cameron (Glasgow)

Massey-Mainwaring, Hn. W. F.

Warde, Lieut.-Col. C. E. (Kent)

Crombie, John William

Melville, Beresford Valentine

Wentworth, Bruce C. Vernon-

Cross, Herb. Shepherd (Bolton

Milward, Colonel Victor

Willox, Sir John Archibald

Curzon, Viscount

Monckton, Edward Philip

Wilson, John (Falkirk)

Disraeli, Coningsby Ralph

More, R. Jasper (Shropshire)

Wodehouse, Rt. Hn. E. R. (Bath

Douglas, Rt. Hon. A. Akers-

Morgan, Hn. Fred. (Monm'thsh.

Wortley, Rt. Hon. C. B. Stuart-

Emmott, Alfred

Morrell, George Herbert

Wrightson, Thomas

Fellowes, Hon. Ailwyn Edwd.

Morrison, James A. (Wilts, S.)

Wylie, Alexander

Finch, George H.

Morton, A. H. A. (Deptford)

Wyndham, George

Finlay, Sir Robt. Bannatyne

Murray, Rt. Hon. A. G. (Bute)

TELLERS FOR THE AYES—

Fisher, William Hayes

Murray, Chas. J. (Coventry)

Sir William Walrond and

FitzGerald, Sir R. Penrose-

Murray, Col. Wyndham (Bath)

Mr. Anstruther.

NOES.

Bainbridge, Emerson

Lea, Sir Thomas (Londondy.)

Sullivan, Donal (Westmeath)

Doogan, P. C.

Lough, Thomas

Tanner, Charles Kearns

Foster, Harry S. (Suffolk)

Lowe, Francis William

Ure, Alexander

Hayden, John Patrick

Macaleese, Daniel

Wedderburn, Sir William

Healy, Maurice (Cork)

M'Arthur, William (Cornwall

TELLERS FOR THE NOES—

Healy, Timothy M. (N. Louth

O'Brien, Patrick (Kilkenny)

Major Jameson and

Lawson, Sir Wilfrid (Cumb'land

Provand, Andrew Dryburgh

Mr. T. D. Bolton.

MR. BOUSFIELDproposed an Amendment in line 35. Two or three times they had had the ease put which arose under Clause 10 of underwriting a company at a small rate of commission mentioned in the prospectus, while there might be behind that an underwriter at a large commission. The President of the Board of Trade had rightly stated the importance which might be attached by the public to statements of that sort. That state of things was quite misleading, because there might be an undisclosed under-

1159
writing by a promoter at a large commission. It was urged that if there was any money paid by a promoter for underwriting it would have to be disclosed in the prospectus. There was great doubt whether that reading was correct. The clause dealt with commission paid by the company, and he rather gathered from the silence of the Government on the point that the provision did not deal with the case of underwriting paid by the promoter. The opinion of the House, as shown in the discussion, was certainly that the prospectus should contain a statement of all underwriting, and if that was also the intention of the Government it ought to be made clear. He therefore moved to insert after the word "paid" the words "by any person."
Amendment proposed—
" In page 7, line 35, after the word 'paid,' to insert the words 'by any person.'"—(Mr. Bousfield.)
Question proposed, "That those words be there inserted."
MR. RITCHIE: These words would not, I think, in any way alter the meaning of the clause, but if my hon. and learned friend desires to have it explicitly stated I have no objection.
MR. BAINBRIDGEsaid the amount of commission paid might not be known to the person issuing the prospectus, and therefore by passing this Amendment the House might be asking for particulars of which the person issuing the prospectus had no knowledge whatever.
MR. RITCHIEsuggested that the Amendment should be withdrawn, He would undertake that the point should be considered, and if necessary a provision inserted in another place.
MR. H. S. FOSTER,pointed out that underwriting might be, and usually was, done after the prospectus had been settled and passed by the directors. In such a case it would manifestly be impossible for the directors to specify the amount of underwriting commission.
MR. SYDNEY GEDGEsaid that when the question of underwriting was being discussed Members were told it did not matter what the promoter might do, because the money would not come out of the pocket of the company. The promoter avowedly added a certain amount
1160
of money to the fair price of the property he was selling, because he undertook all the preliminary expenses, including underwriting. But now the company was empowered to underwrite it would be very improper for any such addition to be made to the amount paid to the vendor in that respect, and therefore the directors would always have to show that only the fair value was being given for the property or contract purchased. If the principle was introduced that the vendor also might pay for underwriting the House would be legalising a practice which was much bettor not legalised, and taking away the one safeguard the public had that only a fair price was being paid.
MR. RITCHIEthought the observations of the last speaker were very much to the point, and he would take care that nothing was done which would in any way affect the point he had raised.
MR. LAWSON WALTONsaid their present position showed the extreme difficulty of discussing a highly complicated measure in the early hours of the morning; it was almost impossible to understand the moaning of some of these Amendments, and Amendments to Amendments. He failed to see how it was possible to ensure payments by the promoter being put in the prospectus.
MR. RITCHIEexplained that all he had promised was that the point should be considered.
MAJOR JAMESONobjected to the withdrawal of the Amendment. The present confusion was the direct result of the attempt to run the Bill through the House at such an hour. First the right hon. Gentleman agreed to accept the Amendment, and then he said he would not. The only result of a great many of the Amendments which had been made would be to give business to the lawyers, and he could therefore understand learned Members being in favour of them.
Amendment, by leave, withdrawn.
Other Amendments made.
Further proceedings on Consideration, as amended, adjourned till To-morrow.
Motion made, and Question "That this House do now adjourn"— (Sir William Walrond)—put, and agreed to.
Adjourned at a quarter after One of the clock.

PRIVATE BILL BUSINESS.
  SHANNON WATER AND ELECTRIC POWER BILL.
  Witnesses ordered to attend the Select Committee, two to produce documents.
  SOUTH WALES ELECTRICAL POWER DISTRIBUTION BILL.
  Committed. The Committee to be proposed by the Committee of Selection.
GREAT GRIMSBY STREET TRAMWAYS BILL [H.L.]
  MARGATE PIER AND HARBOUR BILL [H.L.]
  Commons Amendments considered, and agreed to.
FARNWORTH URBAN DISTRICT COUNCIL BILL.
  RICKMANSWORTH AND UXBRIDGE VALLEY WATER BILL.
    NEWRY, KEADY, AND TYNAN LIGHT RAILWAY BILL.
    Reported with Amendments.
  LOCAL GOVERNMENT PROVISIONAL ORDERS (No. 9) BILL.
    LOCAL GOVERNMENT PROVISIONAL ORDERS (No. 14) BILL.
    Reported from the Select Committee without amendment, and committed to a Committee of the whole House on Thursday next.
    ST. DAVID'S RAILWAY (ADDITIONAL POWERS) BILL.
    The CHAIRMAN OF COMMITTEES informed the House, That the promoters do not intend to proceed further with the Bill. Ordered that the Bill be not further proceeded with.
    LONDON COUNTY TRAMWAYS (No. 2) BILL.
    Reported from the Select Committee, with Amendments.

    NORTH METROPOLITAN ELECTRIC POWER SUPPLY BILL.
    Moved, That the Order made on the 12th day of March last, "That no Private
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    Bill brought from the House of Commons shall be read a second time after Tuesday the 26th day of June next," be dispensed with, and that the Bill be now read 2a; agreed to. Bill read 2a accordingly, and committed. The Committee to be proposed by the Committee of Selection.

    GREAT INDIAN PENINSULA RAIL WAY COMPANY BILL.
    Read 3a, and passed.
    LONDON COUNTY COUNCIL (MONEY) BILL.
    Read 3a, with the Amendments, and passed, and returned to the Commons.
    ILFRACOMBE IMPROVEMENT BILL.
    Read 3a, with the Amendments; further Amendments made; Bill passed, and returned to the Commons.
LONDON AND NORTH WESTERN RAIL WAY (WALES) BILL.
  EAST LONDON WATER BILL.

    LONDON AND NORTH WESTERN RAILWAY BILL.
    BLACKPOOL, ST. ANNE'S, AND LYTHAM TRAMWAYS BILL.
    Read 3a, with the Amendments, and passed, and returned to the Commons.

LOCAL GOVERNMENT PROVISIONAL ORDERS (No. 1) BILL.
  PIER AND HARBOUR PROVISIONAL ORDERS (No. 2) BILL.

    GREAT NORTHERN RAILWAY BILL.
    HASTINGS TRAMWAYS BILL.
    LAMBETH WATER BILL.
    Returned from the Commons with the Amendments agreed to.

  LANCASHIRE, DERBYSHIRE, AND EAST COAST RAILWAY BILL.
    MIDLAND RAILWAY BILL.
    Returned from the Commons with the Amendments agreed to.
  BURY AND DISTRICT WATER (TRANSFER) BILL [H.L.]
    PRESTON CORPORATION BILL [H.L.]
    Returned from the Commons agreed to, with Amendments; the said Amendments considered, and agreed to.
  SOUTH WALES ELECTRICAL POWER DISTRIBUTION BILL.
    NORTH METROPOLITAN ELECTRIC POWER SUPPLY BILL.
    Report from the Committee of Selection that the five Lords appointed a Select Committee on the Durham (County of) Electric Power Supply, and other Bills, do form the Select Committee for the consideration of the South Wales Electrical Power Distribution Bill and the North Metropolitan Electric Power Supply Bill; read, and agreed to; all petitions referred to the Committee, with leave to the petitioners praying to be heard by counsel against the Bills to be heard as desired, as also counsel for the Bills.
DURHAM (COUNTY OF) ELECTRIC POWER SUPPLY BILL.
  LANCASHIRE ELECTRIC POWER BILL.

    SHANNON WATER AND ELECTRIC POWER BILL.
    SOUTH WALES ELECTRICAL POWER DISTRIBUTION BILL.
    NORTH METROPOLITAN ELECTRIC POWER SUPPLY BILL.
    Report from the Committee of Selection, That the Duke of Argyll be proposed to the House as a member of the Select Committee on the said Bills in the place of the Lord Brassey, and that the Duke of Argyll be Chairman of the said Committee; read, and agreed to.

    LONDON (ST. MARYLEBONE) PRO- VISIONAL ORDER BILL.
    Moved, That the Order made on the 12th day of March last, "That no Provisional Order Confirmation Bill brought i from the House of Commons shall be read a second time after Tuesday, the 26th day of June next," be dispensed with, and that the Bill be now read 2a; agreed to. Bill read 2a accordingly, and committed to a Committee of the whole House.
    LOCAL GOVERNMENT (IRELAND) PRO VISIONAL ORDERS (No. 4) BILL.
    House in Committee (according to Order). Amendments made; Standing Committee negatived. The Report of Amendments to be received on Thursday next.
  RETURNS, REPORTS, ETC.
    ARMY.
    Statement of Stores transferred from Navy to land service for South Africa up to 31st December, 1899.
    QUEEN'S COLLEGE, BELFAST.
    Report of the President for the year 1899–1900.
    TREATY SERIES, No. 15 (1900).
    Convention between the United Kingdom and Uruguay renewing the treaty of friendship, commerce, and navigation of 13th November, 1885; signed at Monte Video 15th July, 1899 (ratifications ex-changed at Monte Video 9th June, 1900).

    TRADE REPORTS.
    Annual Series: No. 2484. Trade of Frankfort-on-Main for the year 1899.
    Presented (by Command), and ordered be lie on the Table.

    POLICE ACT, 1890.
    Correspondence relative to the refusal of the Secretary of State's certificate, under Section 17 (2) of the Act, to the River Tyne Police Force for the year ended 29th September, 1899. Laid before the House (pursuant to Act), and ordered to lie on the Table.
    BOUNTY AND BOROUGH FRANCHISE ASSIMILATION (LONDON) BILL.
    Reported from the Standing Committee without amendment, and to be read 3a on Thursday next.
    TOWN COUNCILS (SCOTLAND) BILL.
    Reported from the Standing Committee with further Amendments; the Report of the Amendments made in Committee of the whole House and by the Standing Committee to be received on Thursday next, and Bill to be printed as amended. (No. 209.)
TITHE RENT-CHARGE (IRELAND) BILL.
Reported from the Standing Committee without further amendment; the Report of the Amendments made in Committee of the whole House to be received on Thursday next.
HOUSING OF THE WORKING CLASSES ACT (1890) AMENDMENT BILL.
Reported from the Standing Committee without further Amendment; the Report of the Amendments made in Committee of the whole House to be received on Thursday next.
CRUELTY TO WILD ANIMALS IN CAP TIVITY BILL.
Amendments reported (according to Order), and Bill to be read 3a on Thursday next.

AGRICULTURAL HOLDINGS BILL.
[SECOND READING.]
Order of the Day for the Second Reading read.
THE LORD PRIVY SEAL (Viscount CROSS): Your Lordships, no doubt, are aware that the provisions of the Agricultural Holdings Act have been very much discussed up and down the country by chambers of agriculture and other bodies, and that a Commission was appointed to inquire into the working of the Agricultural Holdings Act. That Commission reported in, I think, 1898. In consequence of the Report of that Commission this Bill is now brought forward. I may say at once that the great object of the Bill is to simplify procedure and to relieve friction between landlord and tenant as far as that can be done. The foundation of all compensation—the measure of compensation—must eventually be no doubt the value to the incoming tenant of the improvement done by the outgoing tenant. Whatever the value to the incoming tenant may be, that is the measure of the compensation which ought to be given. Probably, my simplest course will be to go very shortly through the different clauses of the Bill—there are very few of them—and explain their provisions, as I hope I shall be able to do at no very great length. The first clause of the Bill re-enacts the old clause of the Act of 1883, but with this distinction. In the first sub-section it re-enacts the old clause of the Act of 1883, but it leaves out a particular proviso —
"Provided always that in estimating the value of any improvement in the first schedule hereto, there shall not be taken into account as part of the improvement made by the tenant what is justly due to the inherent capabilities of the soil."
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Those words have been left out, and I should not have wasted the time of your Lordships at the present moment in discussing the matter at any length, because it is more a matter for Committee than for this stage; but I see that a noble Earl on the other side of the House (Lord Grey) has given notice to re-insert those words. I would only, in passing, call the attention of the House to the Report of the Commission on that particular point. They say—
"The Central Chamber of Agriculture recommend that those words should be struck out. Mr. Lipscombe, the chairman of the Committee, who drew the Report, said that they had received a great number of suggestions from affiliated Chambers in different parts of the kingdom, and that a great proportion of these Chambers recommended the abolition of the proviso. Giving his own opinion, he said:—'I believe, practically, that it has not at all safe-guarded the interests of the landowner or of the incoming tenant, but that it has afforded an opportunity of cavilling at the Act unfairly…. I believe it has been inoperative, but it is constantly asserted by persons who, perhaps, know more theoretically than practically that it has operated against the outgoing tenant.' "
I should not have referred to that at the present moment if it had not been for the notice of Amendment which has been already given by the noble Earl opposite. That is a matter which will be discussed, of course, when we get into Committee. The second sub - section of the first clause simply refers to the schedules, about which I shall have to say a word or two by - and - by. The third and fourth sub-sections have one very important bearing upon this matter. The first sub-section relates to the compensation payable to the tenant under the principal Act, and says that—
"There shall be taken into account any benefit which the landlord has given or allowed to the tenant in consideration of the tenant executing the improvement."
The 4th Sub-section relates to the question of manures. But the important alteration of the law which is made by this section is this. The foundation of the whole matter is that a claim must be made by the tenant. If the tenant does not make the claim the landlord is left to his own remedy for any breach of covenant that the tenant may have committed; but under the present law if the tenant makes a claim and the landlord makes a counter-claim for damages as against the tenant he may set off any money that he gets in consequence of his claim,

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but he cannot go beyond the original claim of the tenant. Therefore it may be that if the tenant claims so much, and the landlord claims a much larger sum for what has been done against the improvement, although the landlord can set it off against the tenant's claim he cannot go beyond the tenant's claim. The Bill that I present to your Lordships alters that, and says that when it comes to arbitration, if the tenant claims and the landlord counter - claims and the counter-claim exceeds the tenant's claim, the landlord may under this Bill get what he ought to have in the counter-claim, and not simply be confined to a reduction of the claim that is made by the tenant. The 5th Sub-section of Clause 1 is to remedy a very curious state of things which exists under Clause 57 of the present Act. Under that clause the tenant was to come under the Act, and if he came under the Act then he was not to have any other remedy than the Act provided. That was supposed so to work that the Act should always be put into force; but under the existing law the tenant had to give notice of the claim, and therefore if the tenant neglected to give notice, or purposely did not give notice, he kept his right to any other remedy besides that under the Act. Therefore that section of the old Act of 1883 became practically of no avail whatever, and in this particular clause we have said that it leaves the tenant his remedy if he chooses to take it, leaving the law as it stands in practice although not in theory. Then we come to the second clause, which is a matter of, I think, very great importance. The second clause relates to arbitration. The great object of this Bill is to simplify the procedure with regard to arbitration. The Arbitration Act of 1889 may be said to be very simple, but that can hardly be applied to this particular Bill without great modifications, and it must be remembered that the Act of 1889 does not apply to Scotland at all, and therefore it is thought better, as those modifications are very difficult to introduce simply as modifications, to re-enact those parts of the Act of 1889 which are applicable, and to modify such parts as are not applicable and to place all the new procedure in the schedule to this Act so that, as this Act has probably to be worked not by lawyers but by laymen, they should have the whole procedure before them. That has seemed to us a
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very much simpler and better way of drafting the Bill than by reference or modification. Now, of course, the foundation of everything is the tenant's claim. Under the existing law the tenant had to give notice of his claim. That formal notice is by this Bill done away with, and the only limitation that is put on the tenant's right to claim is this—that it must be made before the determination of the tenancy; it cannot be made afterwards. With regard to such a claim when it comes before the court, the provisions of the Bill are certainly, I think, very advantageous both to the landlords and to the tenants. The Bill says—
" (3.) Where any such claim by a tenant for compensation is referred to arbitration, and any sum is claimed to be due to the tenant from the landlord in respect of any breach of contract or otherwise in respect of the holding, or to the landlord from the tenant in respect of any waste wrongfully committed or permitted by the tenant, or in respect of breach of contract or otherwise in respect of the holding, the party claiming such sum may, if he thinks fit, by written notice (not later than seven days from the commencement of the arbitration) to the other party require that the arbitration shall extend to the determination of the claim, and thereupon the provisions of this section, with respect to arbitration shall apply accordingly, and any sum awarded to be paid by a landlord or tenant shall be recoverable in manner provided by the principal Act for the recovery of compensation."
So that to prevent any dispute between the landlord and the tenant it may all be settled in one arbitration with a great saving of expense and trouble and annoyance. That, in my opinion, is a very wise provision in the Bill. It is also provided that unless the parties agree to anything else it shall be decided by a single arbitrator. The 3rd Clause relates to the land charges. They are at the present moment made by the county court in the. cases where land charges apply. That is found very inconvenient for many reasons, and very expensive. In the first place, the county court is not always sitting. It may be some time before you can get the land charges fixed, and therefore it has been decided that the question of the land charges shall be left, not to the county court as at present, but to the Board of Agriculture, who will do the business very much more cheaply and expeditiously than it has been done under the county court. By the 4th Section the provisions of Section 34 of the principal Act are to apply to any

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fixture not simply put up by the tenant according to the existing law, but if he has acquired or bought it. Then comes a new provision which alters the law, and I should say alters the law in a very popular way. The landlord, except by agreement under the present law, has no power to enter on the holding in order to see that the lease, or whatever it may be, is properly carried out, but by Clause 5—
" The landlord of a holding, or any person authorised by him, may at all reasonable times enter on the holding or any part of it for the purpose of viewing the state of the holding"
That seems to me to be really common sense, and a thing I should think there could be no possible objection to. Then there is a new provision in the next clause about penal rents and liquidated damages. This clause puts an end to penal rents and liquidated damages, except in certain peculiar cases. It is—
"Provided that this section shall not apply to any covenant or condition against breaking up permanent pasture, grubbing underwoods, or felling, cutting, lopping, or injuring trees, or regulating the burning of heather."
Those are matters which so very seriously injure the holding that they are purposely excepted from this particular clause. I think I have now gone through most of the provisions of this Bill with which it is necessary to trouble your Lordships at the present time, with one exception, and that is the schedules. I said that I would refer to the schedules later on, and I will do so very shortly. I do not think it is necessary for me at any length at the present moment to go very narrowly into the question of these schedules, but there are two points which are certainly of interest. In the first schedule, which relates to those matters in which you must get the consent of a landlord, a new provision is put in. It is not simply the erection or the enlargement of buildings, but the erection, alteration, or enlargement of buildings, and the word "alteration" has been inserted perfectly rightly, to my mind, and I think it will be a great advantage in working out, but no doubt it is one part of the schedule to which attention will be called by some of your Lordships when we get into Committee. As your Lordships are aware, at the present moment the making or planting of osier beds, the making of gardens, or the planting of orchards or
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fruit bushes, all require the consent of the landlord, but as the Bill now stands, provided that the gardens, or osier beds, or orchards, or fruit bushes do not exceed one acre, then the matter is transferred to the second schedule, in which the consent of the landlord is not wanted, but in which case notice must be given to him, the effect of notice being that when the landlord receives notice, if he chooses, he may do the improvement himself and charge the tenant with a certain rate of interest on the money which is expended. But added to the first schedule, in which not only notice must be given to the landlord, but his consent must also be obtained, the old Act included the making of permanent fences, but the words now introduced are "making or removal of permanent fences," which of course is a great protection to the landlord and one that I think ought to be carried into effect. Those, my Lords, are the provisions of this Bill. I shall be very happy at a future stage to make any further explanation which your Lordships may desire, but I have thought it best to state the provisions as shortly as I can. I hope your Lordships will give the Bill a Second Reading.
Moved, "That the Bill be now read a second time."—(The Lord Privy Seal.)
LORD BURGHCLERE: I hope I may congratulate the noble Viscount on the very lucid manner in which he has explained the provisions of this Bill. It will not be necessary for me, fortunately, to detain your Lordships for more than a very brief time in any remarks which I may venture to make on the measure which the noble Viscount has just introduced. A supporter of Her Majesty's Government in another place, and one who I know from considerable experience is a very competent judge of agricultural matters, has stated that this Bill is merely a "small amending measure." It principally concerns itself, as the Lord Privy Seal has pointed out, with the simplification and cheapening of the existing methods by which arbitration between landlord and tenant is brought about. Now, my Lords, I am sure that all of us at the present moment are agreed that it is highly desirable and highly advantageous, both for the landlord and the tenant, and for the agricultural interests in the country generally, that the culti-

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vator of a holding should have full and fair compensation for any improvements which he may make during his tenancy, and therefore it is obvious that it is very desirable and very advantageous that any settlement of difficulties by arbitration which may arise between landlord and tenant should be as expeditious and as cheap as is consistent with fair play to both parties in the case. As I have said, and as has been pointed out by the noble Viscount, the sole object—the main object, at any rate—of this Bill is to simplify and cheapen the procedure by which the arbitration is brought about between landlord and tenant, and in so far as this measure properly fulfils that very laudable purpose I am sure there will be no feeling in any part of the House except one of welcome to the measure which has just been introduced. But, my Lords, so complicated and technical is the law relating to landlord and tenant in this country, and so very complex is the legislation which deals with those relations in this country, that it is almost impossible to deal with even the fringe of this subject without arousing susceptibilities and inspiring perhaps fears in some quarter or another. This Bill, in my humble opinion, does not depart from that rule, but as those difficulties mainly refer to matters of detail and not to matters of principle, I think that they are more germane to the Committee stage of the Bill than to its Second Reading. There are, however, one or two points of general interest which I should like to be allowed to refer to very briefly. In the first place, as the noble Viscount has pointed out, for the first time in the history of agricultural holdings that oft debated phrase, "the inherent capabilities of the soil," disappears from the Statute book. I hear from the noble Viscount that there are noble Lords in this House who regret the elimination of that phrase, and who wish to see it re-introduced into the legislation of the country. It may be so. I would venture to refer them to the definition which is given of that particular phrase in a text-book which is very often accepted as a proper explanation of the measure, and I do so with greater confidence because I noticed the other day that in another place a very high legal authority, no less a personage than the present Attorney General, when it was suggested to him that the wording of this particular Bill
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compared with the legislation of the country generally was rather difficult to interpret, pointed out that he himself found great difficulty in understanding the statutes, and that when he did so he invariably referred to a text-book on the subject, and he confidently recommended such a course to those who asked him. questions on the subject. Now, I find in a text-book that is very generally accepted this passage—
"The words, 'the inherent capabilities of the soil' may mean anything or they may mean nothing."
THE EARL OF CAMPERDOWN: Would the noble Lord tell us what the text book is?
LORD BURGHCLERE: It is the "Law of Agricultural Holdings," by Sylvain Mayer; it is a well-known book, in general use. If that be a true definition, and if the source to which we were recommended to address ourselves for information by the Attorney General is a competent source, I can hardly think that there would be any noble Lord who would wish to retain on the Statute-book a phrase of such comprehensive uncertainty as the one to which I refer. My Lords, there is an observation I should like to make about one feature of the Bill which was not alluded to by the noble Lord who introduced it. This Bill is in the main a permissive Bill, and the principle of contracting out is maintained in the Bill throughout. Of course I know that there are in many portions of this country highly desirable and advantageous customs which are called the customs of the country, and by making this Bill a purely permissive Bill those customs are maintained in their entirety, and so far I should think it would have the approbation of many noble Lords who understand the subject. But on the other hand I am bound, in justice to the advocates of the Bill, as well as to those who oppose it, to point out to the Government that if the principle of arbitration and the alterations in the principle of arbitration which have been made in this Bill are advantageous and for the good of the country generally, it is a curious thing that they should not be made universal and even compulsory when questions of this nature arise between landlord and tenant. I think it might be alleged by some critics of the

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Bill that this would be advantageous possibly to the poorer and smaller tenants as compared with the larger ones, because it is quite obvious that a rich and well-to-do man is much more able to make good terms for himself than one who is poorer and in a different position. However, the Government have not seen their way to make it other than permissive, and therefore the Act will no doubt go on the Statute-book as a permissive Act and a permissive Act alone. The next remark I shall venture to make on the Bill is in regard to the complications, and I am afraid I must call it the bad drafting which has arisen from the abrupt and I would almost say the not very well-considered attempt to combine Scotch and English legislation in the same Bill. As your Lordships are aware, hitherto without exception there have been separate Acts relating to these matters for England and for Scotland. I venture to think that that course has been adopted not without some sufficient reason; because, if you consider it, the methods of cultivation, the relations of landlords and tenants in many parts of the country, and even the very legal expressions by which those relations are defined in the Statute-book, are often completely different in the two countries, and I therefore think it would have been better, on the whole, perhaps, to have conformed to what has been the universal precedent, and to have brought forward a separate measure for Scotland, in order to amend the separate Scotch Acts, rather than what has been done in this instance by, I venture to think, the somewhat hasty attempt to combine the two Acts, laying the seeds, it may be, of some considerable confusion when the working out of the Act takes place. I would venture to illustrate what I mean by one instance. As the noble Lord pointed out just now, in Part III. of the schedule to the Bill, which contains those improvements which may be made without any consent of the landlord whatever, we find a new one—No. 28, "laying down temporary pasture." Now, I am told—I speak with all submission, and I shall probably be corrected if I am wrong—that in some portions of Scotland, perhaps in Aberdeenshire, temporary pasture is merely one in the ordinary rotation in the crops of that country; whereas, in the South of England, temporary pasture
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may be well maintained to be an improvement on the holding. Therefore it will come about by this Bill that what is in Scotland merely the ordinary course of good husbandry is in another part of the country made into a tenant's improvement, for which he might claim compensation from the landlord. If that proposition be true, I think I have shown one, at least, of the disadvantages of departing from precedent, and endeavouring to combine the Scotch and English Bills into the same measure. My Lords, that reflection naturally leads me to another criticism which I shall venture to make —namely, with regard to the general drafting of the Bill. I think it will be generally admitted that it is better that every measure should as far as possible be couched in plain and understandable language that may be more or less understood by the ordinary layman, and that is, perhaps, more essential in these highly technical measures which refer to the relations of landlord and tenant, and I think it would be desirable that the Bill should be made as far as possible able to be understood by the agricultural interest itself. The measure should be set forth as far as possible in clear and reasonable terms. Now, I ask whether that is the case in this "small amending Bill," which has just been brought in? I will venture to read one of the clauses in the Bill, and I shall be glad if any ordinary mortal can put any understanding to it at all. Let me read to your Lordships Clause 10—
" (1) References to the principal Act and to Sections 29, 30, 32, and 34 thereof shall be construed as references to the Agricultural Holdings (Scotland) Act, 1883, and to Sections 24, 26, 25, and 30 thereof respectively. References to Sections 31 and 39 of the principal Act shall not apply.
" (2) A reference to the Arbitration Act, 1889, shall be construed as a reference to the Arbitration (Scotland) Act, 1894, and a reference to the Marker. Gardeners' Compensation Act, 1895, shall be construed as a reference to the Market Gardeners' Compensation (Scotland) Act, 1897."
Now, I ask noble Lords generally whether that is a clause which is understandable by the ordinary intellect, and whether it would not require a very considerable knowledge of the statutes of the country, to say nothing of some rather distinguished legal knowledge, to be able to make out what on earth is meant by the clause which is put before us? My Lords, I know I shall be told that this is merely

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the ordinary sin of legislation by reference, and it has often been pointed out, and I think truly pointed out, that legislation by reference has its advantages in that it is possible in a highly complicated measure to avoid undue discussion on the subject and undue Amendments which may be drafted at a moment's notice without any serious study of the Bill. That may be so, and this method may have its advantages, but I cannot help thinking that, notwithstanding that, this is a course which is doing evil that good may come. But I have a very humble suggestion to make on the subject to Her Majesty's Government. We were told by the Minister for Agriculture in another place that it is intended to consolidate these Acts in another session. The objections which I have pointed out and the advantages which are gained by legislation by reference do not so much apply to a consolidating Bill, because we all know that in a consolidating Bill no new principle is allowed to come in, and therefore there cannot be the same discussion. Now I would suggest to the Government whether it would not be possible, when this consolidating Bill is brought in, not to legislate by reference, but to embody in the principle of the consolidating measure those clauses which would make it understandable by the common intellect. If that were carried out I think it would be doing something which would be of advantage, especially to the agricultural interest. There is only one general observation which occurs to me, and it shall be a very brief one, with regard to the agricultural legislation of the present Government. The remedial legislation of the present Government consists, I think, mainly of two Bills. One is the Agricultural Rating Act, and the other is the measure which we are considering to-day. That, as I understand it, is the sum total of the remedial legislation which Her Majesty's Government have found themselves able to bring in during their lease of power. My Lords, that is a very remarkable fact, well worth the consideration of the agricultural interest. I say this, I assure noble Lords opposite, in no polemical spirit. No one is more confident than I am that the Government are most anxious to bring in, and those who support the Government in both Houses of Parliament would be most anxious to support
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them in bringing in, any measures which could in any way assist or alleviate agricultural depression or agricultural distress. But it is a remarkable fact, as I have ventured to point out, that after five years of considerable power and a great majority, the most that they are capable of producing —I give noble Lords opposite credit for the intention sincerely to carry out their promises—-but the only thing that they have been able to do is to pass the Rating Act and this "small amending measure." I am sure that no one can be more surprised than are Her Majesty's Government at such a result of their labours, because that was obviously not their intention when they sought and when they accepted office. I very well remember in another place during the three years that the late Government was in power, year after year, session after session, Queen's Speech after Queen's Speech, we were reproached and we were twitted on every side because we neglected the agricultural interest and failed to help it by bringing in remedial legislation. We were told that legislation of this nature was instantly and immediately desired. We were told that during 1892 and 1895. We were told that by very eminent members of the present Government during the General Election of 1895, and even the Commission of Inquiry which we ourselves proposed at that time in order to see whether it was possible to carry out any legislative action in the matter—even that was criticised and condemned, because it was said so instant was the need for remedial legislation that even that Commission was dilatory and unnecessary. I may point out, because I have some interest in that Commission, that notwithstanding that, the Commission has been of the highest possible utility to the present Government, because it is by the Reports of that Commission and by the influence of that Commission that the only two Acts of an agricultural nature which have been brought forward have been suggested and have been adopted by the Government at the present day. But, however, whether that be so or not, and I really do not want to enter into any polemical discussion on the subject—I merely refer to it as a general remark—I say it is most remarkable that after five years, after all the consideration which I have no doubt has been given to it, the only remedial legislation which it has been possible to carry through by the present powerful

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Government is a Eating Act about which great differences of opinion exist in many parts of the country, and this measure, which has been termed by one of the Government's own supporters a "small amending Bill." Finally, my Lords, I must add that I am afraid there will be considerable disappointment in some quarters that this long-expected Bill goes no farther than it does. I do not myself hold any very wildly advanced ideas on questions of land tenure, but I cannot help thinking that even the most moderate-minded agriculturist had been led to expect a somewhat larger measure of reform than that which is offered to us in the measure which has been introduced by the noble Viscount to-night. I know many agriculturists who have often told me that they did not expect at any time any possible benefit to them by any possible alteration of the Agricultural Holdings Act at all, but even these gentlemen I think—after a measure has been talked about, promised in Queen's Speech after Queen's Speech, talked about on the platform, written about in the press—even such moderate-minded gentlemen must have had their hopes raised and expectations aroused, and I consequently fear that there may be some disappointment when the measure that has been introduced to-night comes to be thoroughly understood. However, my Lords, although this measure in many ways does not do what many agriculturists I dare say expected it was going to do, yet, as I have pointed out, it does contain some provisions which undoubtedly will be of benefit to the agricultural classes at large, especially in the matter of establishing arbitration between landlord and tenant. That in itself is a very laudable object, and for my part I venture to welcome the measure that the noble Viscount has introduced.
THE EARL OF CAMPERDOWN: My Lords, I am sure that so far as the principle upon which this Bill is founded there will be no difference of opinion in the House. I am sure that everyone wishes to be perfectly just in any legislation which concerns the relations between landlord and tenant. On the other hand, my noble friend who has just sat down alluded in rather dark terms to certain possible benefits which certain people are expecting or were expecting to derive from any agricultural legislation.
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What those benefits may have been he did not go on to tell us, but according to the line of argument with which he ended his speech, in which there was a reference to the benefits granted by the late Government as compared with those granted by the present Government—
LORD BURGHCLERE: I beg my noble friend's pardon. I made no reference to any benefits conferred by the late Government.
THE EARL OF CAMPERDOWN: I thought the noble Lord said that there were certain proposals made during the tenure of office of the late Government.
LORD BURGHCLERE: No; I made no reference of the kind.
THE EARL OF CAMPERDOWN: Then I beg my noble friend's pardon. At any rate, he threw out certain innuendoes that the present Government had not clone what might have been expected from them on behalf of the agricultural classes. Well, my Lords, I do not propose to enter into that part of the argument; I do not think it is necessary. What we are dealing with to-night is the Second Reading of this Bill, and it is to the principle of the Bill and to the contents of the Bill that I propose to address the few sentences which I have to say to your Lordships. As I said before, with the principle that it is desirable to be perfectly just in any legislation between landlord and tenant, I am sure we are all agreed. When I say the Bill is founded on that principle, it is quite true, as the noble Viscount who introduced it said, that in reality it is a Bill made up of a multiplicity of details rather than a Bill that states a principle which is supposed to have been admitted. Therefore, in considering the Bill, I propose very shortly to follow the example of the noble Viscount, and to go through one or two clauses, more with a view of obtaining information than anything else, which no doubt at a later stage of the Bill will be discussed in considerable detail. On the first clause, which defines the value of an improvement and says it is "such sum as fairly represents the value of the improvement to an incoming tenant," the noble Viscount pointed out to us quite properly that an alteration has been made in this Bill as compared with the existing law, and that that alteration

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consists in omitting the words which refer to the inherent capabilities of the soil. Those words "the inherent capabilities of the soil," it may be as well to remind your Lordships, were the subject of an Amendment which was very fully discussed in the House of Commons in 1883. The value of that Amendment was not admitted by the proposers only, but it was assented to and agreed to by noble Lords on both sides of the House, including the late Lord Herschell, who said that he considered it was necessary and desirable, and in the end it was inserted in the Act with the full concurrence and consent of all parties concerned. This Bill proposes to omit these words. Now with regard to the exact value of the words themselves I do not propose to say much. The noble Lord quoted to us just now a text-book, which he says is a very good one, in which it is stated that those words have no value at all. It has been stated elsewhere that as a matter of fact valuators never took them into account when making an award under the Act, and that has been given as a reason, and the only reason that I have seen forcibly put forward, why it was desirable and possible without doing any injury to omit those words from this Bill. But one must remember that this section is going to be interpreted not by the writer of any text-book, not even by the judges; it is going to be interpreted, in the absence of agreement, by arbitrators appointed by the Board of Agriculture. What I should like to know is this. I do not myself attach any very great importance to the words. If it were now proposed for the first time to put them in I do not know what I might have said or thought about them; but what I want to know now is, what is the effect of omitting those words in this Act which were expressly put in and were supposed and believed to have some considerable value? Supposing that judges were going to interpret this Act, for instance, which they are not, would they or would they not attach any importance to the distinct omission of a proviso of this kind? That is really the whole point. These words may have value or they may not have, but they are to be decided upon by the arbitrators. Now who are the arbitrators likely to be? They are likely to be men, I should suppose, probably of some practical acquaintance with land for this purpose—men who are not as a rule
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very skilful judges of legal phraseology. I should certainly like to hear from some legal authority what they would say in a similar case; but is it not likely that an arbitrator would say, "These words which were very much insisted upon and very much objected to by people outside the House have been struck out by Parliament. It cannot be supposed when Parliament was striking the words out that Parliament meant to do nothing at all; it struck them out on purpose, and it is quite clear that Parliament intended to transfer to the tenant something which was refused to him by the law as it stood up to that time. "My Lords, I have nothing at this point to say upon that matter further than that I should like to know what, in the opinion of the noble Viscount, and, what is of still greater importance, the opinion of the noble Lord on the Woolsack, is the effect which naturally may be expected to flow from the omission of these words under the conditions which I have named. There are no other matters in the first clause which I think it is necessary to refer to, except that in Sub-section 5 it is said—
"Nothing in this section shall prejudice the right of a tenant to claim any compensation to which he may be entitled under custom, agreement, or otherwise."
My Lords, I rather gathered from the noble Lord who spoke last that he himself thought it might have been advisable to make a Bill of this sort compulsory. Fortunately for the good management and easy management of land in this country, I believe that the bulk of the business will be done, as it has been done by custom and by private agreement, which is so well understood and which is different in different parts of the country, and not by laws which have been framed by the House of Commons and by this House. Your Lordships know, just as I do, that it is impossible to put into words many of the relations and transactions and duties which are incumbent upon a landlord in dealing with a tenant, and vice versa. There is so much depends on individuals, so much depends on the country, so much depends on the soil, so much depends on the practice, that custom and agreement must always be superior to the law, and I hope that Parliament will never be so unwise—it never has been hitherto, and I hope it never will be—as to attempt to determine the relations between landlord and tenant.

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In the second sub-section it is stated that—
"Any claim by a tenant for compensation under the principal Act or this Act in respect of any improvement comprised in the first schedule to this Act shall not be made after the determination of the tenancy."
As your Lordships know, at the present time the date in Scotland is four months before the expiration of the tenancy. In England I believe it is two months. I may say that I think this change is a good change. As the Bill originally stood it proposed to give a tenant some time after the expiration of the tenancy—an arrangement which would have produced, no doubt, very great confusion; but as the Bill stands it seems to me that you have done what is very fair and right in allowing the tenant to make his claim at any time before he leaves. The proposal in regard to there being a single arbitrator I imagine will obtain general approval. We all wish to do anything which will cheapen the procedure, and although, of course, we shall run the risk of the proceedings being before an arbitrator who is not a skilled lawyer, and who would labour, therefore, under certain disadvantages in interpreting contracts—although we may labour under certain disadvantages, yet on the whole, and taking the probable outcome from the clause, I think the single arbitrator is preferable, and the doing away with the court of appeal is, on the whole, an advisable course for the Government to have taken. My Lords, I do not think I need trouble your Lordships with anything further until we come to Clause 6, but to that clause I should like to call your Lordships' attention. It says—
"Notwithstanding any provision in a contract of tenancy for the payment by the tenant of an increased rent or other liquidated damages for a breach of a covenant or condition, a landlord shall not be entitled to recover, by distress or otherwise, any sum in respect of a breach of any such covenant or condition in excess of the damage actually suffered by him."
And it goes on with the proviso—
"That this section shall not apply to any covenant or condition against breaking up permanent pasture, grubbing underwoods, or felling, cutting, lopping or injuring trees."
It seems to me that that proviso proclaims the futility of the clause. Unless there be something contrary to public policy, is it not desirable that a landlord and tenant should be left to make any arrangements between themselves they
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may choose? Personally I have no love for penal clauses, but I do not see any reason—and surely some reason should be given—why even a landlord or a tenant may not propose and may not make and may not enforce any covenant which they choose. If it could be shown that it was contrary to public policy, and that public or general damage would ensue from that course, then I could understand Parliament forbidding what have been called penal rents; but, on the other hand, you will see in the clause as it stands you limit the damage which the landlord can recover to the damage which he actually sustains. If the clause stood by itself pure and simple every one of your Lordships knows that there are damages which you could not compensate in money. The Government originally proposed to compensate in money for breaking up permanent pasture. It would be perfectly impossible to assess that damage in money. No one can say what it is. It is entirely different in different places. As the noble Lord who spoke just now said, in some parts of Scotland nothing is easier or commoner than to sow down land to seeds and clover, and you get your clover, and the land will stand for several years in grass, and very good grass it is. If you try to do that in some of the strong land in the south of England no pasture comes at all after the first year or so. If the Government had not inserted this proviso and made it apply to permanent pasture, one would have been able to give them an instance in which the clause would have been absolutely injurious and absolutely unfair; and, so far as I can see, when you apply it to permanent pasture or any similar case, nothing can be fairer than that the landlord who wishes not to obtain payment for the damage done, but to prevent any possibility of the damage being done, should be able to say that if a person took a particular course he should be liable to pay a sum which would be sufficient in amount to prevent any likelihood of the act which it is wished to prevent being done. As I say, personally, looking at it as a purely practical matter, one can find no very great objection to it, but in dealing with it as a principle of law surely nothing can be more undesirable than that Parliament should interfere with the right of contract between landlord and tenant, unless there is some posi-

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tive public reason for so doing. The noble Lord who spoke last made some strictures—and, I thought, very deserved strictures—on the extraordinary phraseology of Clause 10. I do not think I can agree with him altogether in blaming the Government for making the Act applicable both to Scotland and to England. It is desirable to do so if you can do it, and on the whole, having some little knowledge of one part of the country, a part in which there is a good deal of high farming, I have been looking into the clauses, and I may say that I have not been able to see any particular objection to them. I quite admit this—I do not understand them; and I do not think that any other person in this House, or any other Scotchman, possibly could understand them, because they consist simply of references, and I do not think anyone has either the time or the intelligence, and I think probably he is not intended to have either the time or the intelligence, to make himself fully acquainted with their contents; but that is the system which draughtsmen have adopted—some of us think, very deliberately adopted. It has been said before now that this new mode of drafting has been adopted for the purpose of getting Bills through another place, and possibly through this House. I have known recently of cases in which noble Lords have been very much surprised to see things which have happened, and they have been very angry on ascertaining what a particular Bill really meant. Now, my Lords, I come to the schedules. In Part II. of the schedules there are, as the noble Viscount pointed out, some improvements in respect of which notice to the landlord is now to be sufficient where his consent was formerly required. Those matters are the making of gardens, the planting of orchards or fruit bushes, and the making and planting of osier beds. Except in certain rare cases—I believe they are very rare—I do not think it very much matters, because it will not be found very often that the tenants will make gardens or plant orchards or osier beds. They will usually choose to go to their landlords for fruit bushes if they want them, and so far as the making and planting of osier beds is concerned, I dare say they may do that in some places, but those places must be very few. What I want to call attention to is the principle which is involved in
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this second part of the schedule as amended. The ordinary principle on which a holding is held in England and Scotland has been hitherto, as I understand it, this: that the landlord, executing all or very nearly all the permanent improvements, making the fences, the buildings, and all things of that kind, and having, in fact, the full control of the holding, has hitherto had a right to say for what purpose his holding shall be used, and he has had a right to object if that holding was going to be applied to some purpose other than the purpose for which he let it. Now, what does the clause do? It says that, beyond one acre, no man may make a garden or do any of these other things without the consent of his landlord; but when you get below an acre then anyone may make a garden, plant an orchard, or make an osier bed, and he is to be entitled to be compensated for that. If it is a market garden, he is to come under the provisions of Part III., which refers to market gardens. Well, suppose he has made one garden, and suppose he leaves the holding — the tenant, generally speaking, holds on a yearly tenancy — then the next man comes; is he to be entitled to the same thing over again? How many times may it be done? Is there anything in the Bill to restrict the number of times it may be done? It seems to me that this involves a principle which is very much larger than the mere words or the mere effect which the clause is likely to have. I have no doubt that that will be a matter which will be discussed hereafter. I must apologise to your Lordships for having detained you so long. I do not think it is necessary for me to trouble your Lordships any further.
LORD DE RAMSEY: My Lords, there are two matters upon which I wish to address the House, very shortly indeed, and they have arisen out of the two speeches that we have just heard. The noble Lord on the front Opposition bench made a statement which certainly was not very germane to the Second Reading of the Bill, but it was a statement which I can hardly allow to go uncontradicted. He says that the present Government have only passed two Bills which really have aided the agricultural interest. The noble Lord has forgotten one measure passed by the present Government,

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and a most useful measure—namely, the reduction of the land tax to a maximum of one shilling. That measure has brought infinite relief to a great many of those who have been struggling with agricultural depression; but apart from that, if there had not been a single measure of any description passed for the relief of agriculture, I maintain that the firm attitude which has been adopted by our Minister for Agriculture in successfully withstanding all insidious appeals that might have led to the introduction of foot-and-mouth disease and swine fever into this country, has done more good than any legislation that could possibly have been introduced. The other matter I wish to say a word or two upon has been touched upon by the noble Earl opposite, and that is the question of the omission of these words, "the inherent capabilities of the soil." I am well aware that the noble Viscount who introduced this Bill has got, as usual, a Royal Commission at his back, but I do maintain that if Parliament deliberately omits those words that have been in a previous Act people will naturally say, "Well, Parliament did not think it necessary to insert them." And apart from that, in the ordinary industry of agriculture, I submit to your Lordships that a most important element is the inherent capabilities of the soil. Lastly, I touch upon a matter which has been mentioned by both noble Lords, and that is the extraordinary drafting of this Bill. For years we have been engaged in trying to spread the land amongst the smaller people in this kingdom. We have had allotments, we have had small holdings, we are trying small farms, we are doing what we can to enlarge the number of tenants. Will any noble Lord tell me how it is possible, in three-fourths of a sheet of a Bill of this kind, to explain to any of these small men how he stands in relation to this matter? I know it cannot probably be done in this Bill, but I appeal to the noble Viscount, if he is again, as I hope he will be, in a position to help us in the agricultural world, that he will simplify the procedure.
On Question, agreed to. Bill read 2a accordingly, and committed to a Committee of the whole House on Friday next.

LUNACY BOARD (SCOTLAND) (SALARIES, ETC.) BILL.
[SECOND READING.]
Order of the Day for the Second Reading read.
THE SECRETARY FOR SCOTLAND (Lord BALFOUR of BURLEIGH): This Bill is a very simple one. The Lunacy Board! for Scotland has been established for about half a century, and at the time it was established a limit was put on the salaries which the Treasury might pay to the officers engaged by the Board. Since that time the scale of payment has risen. The limit of the secretary's salary, which is £420, is certainly inadequate, and the object of this Bill is simply to repeal the maximum salaries, and to leave these civil servants in the position of nearly all other civil servants in the various departments of the Crown, and to give power to the Treasury to fix a proper scale of remuneration. I ask your Lordships to give a Second Reading to the Bill.
Bill read 2a (according to Order), and committed to a Committee of the whole House on Thursday next.

INEBRIATES' AMENDMENT (SCOT LAND) BILL [H.L.]
Commons Amendment considered (according to Order), and agreed to.
EXECUTORS (SCOTLAND) BILL.
House in Committee (according to Order); an Amendment made; Bill recommitted to the Standing Committee;. and to be printed as amended. (No. 194.)
BEER RETAILERS' AND SPIRIT GRO CERS' LICENCES (IRELAND) (No. 2) BILL.
Read 3a (according to Order), with the Amendments, and passed, and returned to the Commons.
PROHIBITION OF EXPORTATION OF ARMS BILL [H.L.]
House in Committee (according to Order); Bill reported without amendment; Standing Committee negatived; and Bill to be read 3a on Thursday next.

HOUSE OF LORDS OFFICES.
Second Report from the Select Committee considered.
THE CHAIRMAN OF COMMITTEES (The Earl of MORLEY)moved "That the House do agree with the said Report."
LORD TWEEDMOUTH: My Lords, I want to say a very few words upon the last paragraph of this Report, which says that after considering the letter addressed to the Clerk of Parliaments by the Clerk Assistant and certain proposals made by the Lord Chancellor, it was resolved—
"That the Committee, having heard the proposals of the Lord Chancellor, have no recommendation to make to the House."
Now, my Lords, though perhaps it is very discreet of the Committee to have come to this conclusion, I do not think it really represents the mind that was in the minds of members of the Committee. I think I am not misrepresenting the views of large bulk of the Committee if I say the that they were very strongly inclined to the view that the recommendation of the Committee of 1889 was a very reasonable recommendation, and one that it was in the interest of the House to have carried out. The whole question, of course, refers to the appointment of a Reading Clerk to fill the third seat that has been so long vacant at the Table of your Lordships' House. The subject has not been a new one before the House of Lords Offices Committee, and, indeed, if I am not misinformed, it has been much discussed by even a more august body. The facts are these: Prior to the year 1824 the appointment of the Assistant Clerk and of the Reading Clerk was in the hands of the Clerk of Parliaments. It was then transferred to the Lord Chancellor, and since then the Lord Chancellor has had the exercise of the patronage of the two seats at the Table. It has been realised of recent years that the sittings of your Lordships' House are not usually very prolonged, and that therefore the actual work in the House that the Reading Clerk has had to do has not been excessive, and at any rate is not such as to require the full time that a competent man could give to the work. At the same time I think it has been brought very clearly before the House of Lords Offices Committee, both recently during the present session and also on former occasions, that it is desirable that there should be a third clerk at the Table; that great inconvenience might occur through one of the other two clerks being absent, and that though the
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absolute work of the Reading Clerk is not very great, yet he is able during the sittings of the House to give great help in other respects to the other two clerks, and that really it is in the interests of the House that a third clerk should be sitting at the Table. Now the difficulty is this, that you have got a certain amount of work, not a great deal of work, but yet work that it requires an experienced man to perform, and a man who is acquainted with the procedure and Standing Orders of the House. The Committee has, on more than one occasion, held the opinion that such a man could be found amongst the higher clerks already in the service of your Lordships' House, and that it was a very reasonable and convenient arrangement that one of the higher clerks of the House should have added to his duties the duties of the Reading Clerk at the Table. In the year 1889 the Committee reported, and your Lordships' House adopted the Report—
"The Clerk Assistant and the Reading Clerk were formerly appointed by the Clerk of Parliaments. Since 1824 the Lord Chanellor has appointed these offices. The Committee strongly recommend that the appointment of at least one of these clerkships should revert to the Clerk of Parliaments, and that he should promote one of the senior clerks of his department whom he shall consider most fit for the post. The clerk could combine with his duties at the Table the office of chief clerk or headship of a department. This change would, in the opinion of the Committee, conduce to efficiency no less than economy."
Owing to the unfortunate vacancy that took place in the Reading Clerk's appointment, this question came again this session for consideration before the Committee. I think the Committee's opinion, though not expressed, was, after all, very much in accordance with the resolution of 1889: and in the Committee I ventured to move the reassertion of that resolution. Some conversation ensued, and eventually the noble and learned Earl who sits on the Woolsack suggested that the whole matter might be referred to a Sub-committee of the Committee, consisting of the very eminent Peers, Lord Salisbury, Lord Kimberley, and the Duke of Devonshire. In face of that proposal, on the advice of the Lord Chairman, I withdrew my proposal. These noble Lords met. I understand that the Leader on that Bench and the Leader on this Bench agreed to leave the whole decision of the matter to the Duke of Devonshire, who now sits on the Front Bench. Well,

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the noble Duke, I am afraid, did not give the Committee any very great assistance by the recommendation that he made, because, so far as I am able to understand it, all the noble Duke decided was that the Lord Chancellor had the most complete right to appoint whom he liked.
THE LORD CHANCELLOR (The Earl of HALSBURY): That is not quite an accurate statement of what occurred.
LORD TWEEDMOUTH: That was the impression left on the minds of many of us. We received no formal report, and that was the idea left in my mind, at any rate. That, of course, was a power not in the least in dispute, and we most gladly assent to the fact that the power does lie with the Lord Chancellor to appoint whom he chooses. Now, unfortunately, I think rather a personal tone has been given to this question. I am very sorry for it, because I am sure that the very last thought that is the minds of any of us is to cast any reflection whatever on the noble and learned Lord on the Woolsack, and that all we are anxious to do is in the most friendly and considerate way simply to represent to him what our views are. After the Committee sat, the noble and learned Earl then suggested to the Committee that he was quite ready to appoint one of the senior clerks on this occasion to the seat at the Table, which is now vacant, on condition that a Bill should be brought into Parliament for the future transferring the appointment to the Clerk of Parliaments with the further condition that whoever the Clerk of Parliaments should appoint should be a lawyer. Well, that was giving a very new and somewhat unexpected turn to the discussion, because we had not up to that time been informed that the legal service of your Lordships' House had been inefficiently performed under existing arrangements. My Lords, further, I have to point out that when the position of Assistant Clerk was vacant not very long ago, and when the Lord Chancellor made, as we all know, the most excellent appointment in the person of the gentleman who now occupies that position, the noble and learned Lord did not choose a lawyer for that position. Therefore at that time it would seem that there was no great necessity for a further appoint-
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ment in the legal division; but I must say I think the noble Earl on the Woolsack rather gave his own case away in saying that on this occasion he was prepared to appoint to the seat here the clerk now in the service of your Lordships' House. It seems to mo that by offering to do that —and I quite accept and welcome the concession that was made to our views in that offer—yet in making that offer surely the noble and learned Earl did give away his case of the extreme necessity of further legal assistance in respect of the clerks at the Table. As I say, I repudiate any idea of any personal reflection. I am only anxious to see this matter settled in a manner which will be conducive to the efficiency of the service of the House, and also which will prevent any ill-feeling arising between this House and the other House of Parliament. I do hold that we are bound so far as we can to combine economy with efficiency, to endeavour as far as possible to meet the views that have been again and again expressed by the other House, which have also been insisted upon by the Executive, by the Treasury, that as far as possible economy should be exercised with regard to our appointments. I propose to move, as an addition to the motion that this Report be adopted, the following words—
"But this House is of opinion that the appointment of Heading Clerk should revert to the Clerk of Parliaments, and that he should promote one of the senior clerks of his Department whom he shall consider most fit for the purpose."
That is taking practically the words of the recommendation which your Lordships adopted in 1889, applying it only to the Reading Clerk, and I think it is one which your Lordships would do well to accept. It would not at all fetter the action of the noble and learned Earl on the Woolsack, who would be perfectly free to appoint whom he liked; but I hope that were such a resolution carried, the noble Earl would be willing to assent to the wish so expressed—a wish expressed, I can assure him, with every desire to recognise his great abilities and the admirable manner in which he has always discharged his duties in this House.
THE LORD PRESIDENT OF THE COUNCIL (The Duke of DEVONSHIRE): I do not know whether the noble and learned Lord on the Woolsack will think it necessary to make any explanation or reply to the speech

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delivered by the noble Lord opposite. I only rise for the purpose of explaining the very small part which I have had in the matter to which the noble Lord has referred. With regard to the motion which the noble Lord has announced his intention of moving, it seems to me it would be a very inconvenient proceeding that such a motion as this should be moved without any notice whatever having been previously given. The House is scarcely in a condition to pronounce a decision on this subject, which has come before the greater part of those Members of the House who are present in an entirely unexpected manner. With regard to the noble Lord's statement, however, my part in this matter has been simply this. I will state it as clearly as I can, although, not knowing that this matter was coming on, I have not the correspondence to which I should have liked to be able to refer. I was not present at the meeting of the Offices Committee when the consideration of the question was delegated, as has been stated by the noble Lord, to the noble Earl opposite and the Prime Minister and myself; but what I understood was that the reference to that sub-committee was to consider what advice should be given to the noble and learned Lord on the Woolsack in the matter. That was the question which I think at the only time we met was to a certain extent discussed. As has been stated, however, the noble Earl opposite and the Prime Minister agreed to delegate their functions to me, and I proceeded—I admit after some interval—to consider as well as I could how I was to discharge this rather difficult duty, and what advice I should suggest should be given to the noble and learned Lord on the Woolsack. After some conversation with the noble and learned Lord and others, I came to the conclusion that although it was perfectly true that the duties of the Reading Clerk at this Table are not extremely arduous, and could be performed by some other clerk in the Parliamentary offices, who would discharge other duties, yet some inconvenience was considered by the noble and learned Lord to exist through the absence, in what I believe is called the judicial department of those offices, of any official possessing the acquirements of a trained lawyer; and the noble and learned Lord considered that in the discharge of its duties as the highest court of appeal, it would be of great advantage that such
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assistance should be provided to the House. What I understood the noble and learned Lord proposed to do if he made the appointment was to appoint a qualified barrister, whose time certainly would not be wholly occupied by his duties at this Table, but whose services would be available for the judicial department of the offices. I therefore informed the Prime Minister and the noble Earl opposite that, as there was no question of the right to the appointment belonging to the noble and learned Lord, he might be advised to exercise his right if he was prepared to do so, having regard to the necessity of additional legal assistance on the part of the House. The noble and learned Lord, I believe, saw the letter in which I communicated to the Prime Minister that opinion of mine. He did not act directly upon it in making the appointment, as I suggested he might do, but he made the proposal which has been stated by the noble Lord. As to that proposal of the noble and learned Lord, I have nothing to say. I merely wanted to state exactly the nature of the part which I took in the matter, which was simply to advise that if the noble and learned Lord thought that the judicial business of the House required additional legal assistance he would be perfectly justified in exercising his right to make this appointment.
THE EARL OF KIMBERLEY: My Lords, as I was deputed, in conjunction with the noble Duke opposite and the Prime Minister, to consider this question, I feel bound to say a few words. In the first place, the whole of what the noble Duke has stated appears to me to be perfectly and entirely accurate. It is a matter of fact that when we met Lord Salisbury suggested to me that inasmuch as the noble Duke was the only one of us three who had not taken some part in the matter before, and therefore was not in any way pledged to certain views, it would be convenient, as we had a colleague in the noble Duke who had had nothing to do with the matter before, that we should refer the matter to him to give us his advice. You have heard what was the result. Now I will state my own view. In the first place, I was, with Lord Salisbury, a member of a sub-committee in the year 1889 which considered very carefully indeed the whole question of the officers of the House, especially with reference to

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the very unpleasant disputes which had been going on with the Treasury, and which had found their echo in the other House, as to the want of economy in these appointments. We recommended to the Committee of Black Rod a variety of changes, all of which, I believe, have been carried into effect, and which, I believe, have in no way impaired the efficiency of the House, and have conduced to very considerable economy. Amongst other changes we suggested that the appointment which is by law vested in the noble and learned Lord on the Woolsack should in future, if the Lord Chancellor would consent, be transferred to the Clerk of Parliaments, and that the post of Reading Clerk should be combined with the duties of one of the general establishment. That certainly seemed to mo at the time a very reasonable proposal. The Lord Chancellor, who undoubtedly possesses the power by Act of Parliament to make the appointment of Reading Clerk, did pursue that course upon the occasion of the vacancy then occurring; but when another vacancy occurred a difficulty arose, and that is the difficulty we are now considering. Certainly my opinion as to the advantages of the change which was recommended by the Committee which sat in 1889 has never changed, except upon this point, which I wish to explain exactly. When we came to consider the point which was referred to the noble Duke and the noble Marquess and myself, we learnt from the noble Duke that after consulting with the Lord Chancellor he had to tell us that the Lord Chancellor was of the opinion that there was not sufficient assistance to the House in the discharge of its very important duties as a Court of Appeal, and that it would be very desirable that the post of Reading Clerk should be held by a trained lawyer. We had the advantage on the Committee of hearing the opinions of the noble and learned Lord on the Woolsack, and if I understood him rightly he based his view upon this—of which, as it seems to me, he is by far the best judge—that with the amount of business which now comes before the House as a Court of Appeal, and looking to the whole conduct of that business, he had satisfied himself that it was desirable for the proper con-duct of that very important branch of the business of this House that a trained lawyer should be appointed who should combine with his duties in the House as
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a Court of Appeal the duty of Reading Clerk. I would just repeat that I entirely agree with the noble Duke that it has been shown that, although there is not sufficient work to be done by the Reading Clerk to occupy the whole of his time, it would be extremely inconvenient to the House that there should not be a third clerk. That, I think, must be very obvious. Our clerks may, like the rest of us, be for a time subject to be absent from illness, and it is obvious that extreme inconvenience might result to the business of the House if there were not a third clerk to take the place of one of the other gentlemen during temporary absence. But, at the same time, it Is also perfectly clear that there is not sufficient business attached to the office of the Reading Clerk to occupy the full time of a competent person. Then when the Lord Chancellor, who, of course is, above ail men in this House, competent to judge what is necessary for the service of the House as regards the discharge of its duty as a Court of Appeal—when the Lord Chancellor states that he has satisfied himself that it was necessary for the proper discharge of those duties that there should be a trained lawyer appointed, then my advice to the Committee was this: Here is a matter of which the Lord Chancellor is above all the best judge. If he informs this House upon his responsibility and with his knowledge that it is desirable, nay more, that it is necessary, for the discharge of the business of the House as a Court of Appeal, that a trained lawyer should be appointed, and that that trained lawyer in his opinion may also properly discharge the duties of Reading Clork, it seemed to me that it was beyond my competence to oppose the Lord Chancellor in taking the course which he thought necessary to provide the House with proper assistance. But as I have personally no knowledge of the Court of Appeal, as I am not myself in any way qualified to judge of the assistance the Court of Appeal may require, I considered that it should be left to the Lord Chancellor upon his responsibility to exercise his statutory power to appoint a clerk, who would also discharge the duties of Reading Clerk. Beyond that I was not disposed to go, and I informed the noble Duke that I practically concurred in his view after full consideration, and I also suggested to the

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Committee that, the state of affairs having been now for a very long time in suspense, it was not desirable that the dispute which had arisen should be pursued further—that although the Committee might some of them have the opinion that the arrangement which was originally proposed was the best one, it was much better for them to leave the Lord Chancellor to take the course which to him seemed to be best, and that therefore we should abstain from expressing any further opinion. That, my Lords, is a complete account of the part I took in this matter, and I have nothing to add except this, that never in the whole course of the business have I had the smallest wish or desire or reason to attribute any evil motives to the Lord Chancellor, or to find fault with any view he may hold if he holds it on his own judgment and responsibility.
THE EARL OF MORLEY: My Lords, I was not aware that there was to be a discussion upon this matter tonight, but as I was Chairman of the Committee I can hardly allow the debate to pass without saying a very few words on the subject. I very much agree with what the noble Lord (Lord Kimberley) said in his last remarks. I certainly have not the means of judging what is required for the discharge of the duties connected with this House as a Court of Appeal, and I quite agree with the noble Earl that there is nobody in this House so capable of judging of those requirements as the noble and learned Lord on the Woolsack. But I do want to lay very great stress upon this, that if an extra officer is required for the Court of Appeal he should be appointed by the Lord Chancellor him self on his own responsibility, and that there should be no transfer to the Clerk of Parliaments or anyone else any patronage connected with that appointment. That I feel very strongly indeed. I always understood that the Clerk of Parliaments, who is a trained lawyer, was a Registrar of the High Court, and that the clerical duties connected with the judicial business were performed by Clerks of the House, who had done their work with ability and with great industry. The late Mr. de Burgh was a very able head of the Judicial department, and I was under the impression that the present department have done their work well, but on that I desire, of course, to
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defer to the judgment of the noble and learned Lord on the Woolsack. But this I do say: that our proposal of 1889 was that a clerk at the head of the establishment of clerks should take the duties of Reading Clerk upon him in addition to his ordinary duties. I wish it to be distinctly understood that we never proposed to add to the patronage of the Clerk of Parliaments. We merely gave him an opportunity of recommending to the Lord Chancellor a clerk who should, in addition to his existing duties, perform the duties at the Table, which, as everyone must admit, are not sufficiently onerous to occupy the whole time of a gentleman of ability. Under those circumstances we consider that as the appointment was limited to the establishment of which the Clerk of Parliaments is the head, it would be reasonable and obviously desirable, he knowing the gentlemen who are comprised in that establishment, that he should have that patronage—well, I will not say patronage, but should nominate the gentleman who should perform those duties. But if it comes to appointing for an absolutely different purpose an extra officer—for such he will be—to perform important duties in the Court of Appeal, then I think the Lord Chancellor himself should have, as he has at present, the statutory power of appointing that officer. That is all I wish to say on the subject. Placing aside the opinion which the Lord Chancellor has given as to the needs of the Court of Appeal, I have always considered that the recommendation of the Sub-committee of 1889-—which was composed of the noble Earl opposite. Lord Kimberley, and the noble Marquess the Prime Minister, and other distinguished Peers—was a very reasonable one, and I would remind the House that it has been communicated with our Reports to the House of Commons and to the Treasury. I am not inclined to change my mind as regards that recommendation, but the point I do lay great stress upon is this: I think it is of very great importance that we should have a third Reading Clerk at the Table. The work, though it is not onerous, requires extreme care. Sometimes we have sixty or seventy notices on the Paper, and the keeping of the Minute requires a very great deal of care, and any little disturbance to the clerk who is keeping the Minute renders the duty very difficult.

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I do most sincerely hope that however the matter is decided we shall be left no longer in suspense, and that the matter will be decided once for all.
THE EARL OF HALSBURY: My Lords, I cannot help feeling that this matter has been sprung upon me by surprise. The documents that I should have wished to refer to are not here, but I think I can sufficiently trust my memory to say what I have to say on the subject. In the first place, I am glad to learn that no personal object of mine is suggested in the course I pursued. The view which I take and which I must say I very strongly take is this: that the highest court in the kingdom ought not to be without one of those auxiliary persons or some of those auxiliary persons who are known in the courts of law as chief clerks or masters, or what not. The House of Lords as a Court of Appeal is the only court that has not one. I am not forgetting that at this moment the Clerk of Parliaments happens to be a lawyer. He need not be, and sometimes the Clerk of Parliaments has not been a lawyer; but as a matter of fact the present Clerk of Parliaments is a lawyer. But, my Lords, it is not the Clerk of Parliaments that is to be considered, it is the judicial staff which is required for the House as a Court of Appeal; and certainly I am very deliberately of opinion that it is something approaching a scandal that the highest Court of Appeal should not have those officials which every other court, down oven to the county court, possesses; and I have been desirous, notwithstanding the Report which was made so long ago as 1889, that that scandal, as I do not hesitate to term it, should be removed. After the conciliatory tone of the speech of the noble Lord who introduced the subject I do not wish to say anything that would conflict with the harmonious spirit in which the matter has been discussed; but for the purpose of informing your Lordships I am obliged to say that the Committee, as it originally sat, thought it right to proceed without the slightest notice to me, and my first notice that such a resolution had been passed, although I was Chancellor at the time, was the fact that I received a notice of the passing of the resolution. I am quite sure it was from no intentional disrespect, but I doubt very much whether any of your Lordships
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would desire to alter the patronage of an office that belonged to a person without thinking it necessary to ask him to attend, so that you might form some judgment after hearing him. I venture to think that the fact of this House being a great court of law was not present to the minds of the Committee. Your Lordships who meet here at half-past four for public business are not aware—at least, it does not occur to you—that some of us have been here since a quarter or half-past ten o'clock in the morning, and it is forgotten that besides its functions as a great legislative body this House is the most important court of law in the kingdom. Certainly, having regard to the business now being done here, and to possible changes that there may be hereafter, I myself am very reluctant that the opportunity should be lost of stregthening the legal part of the House by the appointment of a lawyer to the vacant clerkship. I believe it will be a misfortune if advantage is not taken of that opportunity. Suppose one of these days a question arises as to the staff of the House of Lords as a court of law compared with the staff of other courts of law. Just imagine what would be said when it was shown that the Court of Queen's Bench or the Court of Appeal had trained lawyers as masters or chief clerks, while the highest court of all did not have that assistance. I very much object, however, to be called upon to exercise the power given to me by statute if at the same time I am to be limited in the choice that I am to make, and I thought, and I think still, that the proper course would be to repeal the statute, and, so far as I am concerned, I should not offer the smallest objection to' this patronage being taken from the Lord Chancellor and transferred to the Clerk of Parliaments. But I did object, and I do object to be called upon to exercise the power which the statute gives me and yet be told that my choice is limited. Certainly if anyone were to propose to repeal that statute in the way I have suggested he will not find me opposed to it; but at the same time I have given my deliberate judgment, and I think the opportunity ought to be taken to appoint a lawyer. After what has passed, if your Lordships should confirm the view that I have expressed, I will take uncommonly good care that no one shall suggest that I have any interest in the matter of this appoint-

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ment. It has occurred to me that it would be a very good course to ask the Lord Chief Justice of England to select some person whom I should appoint. I have nothing further to say to your Lordships except this, that I think that those who advised originally in this matter must feel that they made a mistake in not consulting me before that resolution was come to.
THE EARL OF MORLEY: I cannot help reminding the noble and learned Lord that he was a member of the Committee who passed this Report after a great deal of deliberation.
THE EARL OF HALSBURY: The noble Earl is speaking of a subsequent period, because at the time that Report was agreed to I had never heard of there being such a Committee at all. Although I was Chancellor for a short time in 1885 and came in again in 1886, the Committee was never called to my attention. I certainly think that they ought to have asked me to attend, and have called my attention to what was being done. That, as it appears to me, was the error that they committed. However, I have nothing further to say upon the matter.
THE EARL OF KIMBERLEY: I was a member of that Committee, and I am quite free to say that I think it would have been much better if a communication had been made to the Lord Chancellor. But at the same time I must say that I am considerably astonished to hear that the noble and learned Lord, who had then presided over the House for two or three years, was not aware that there was a Black Rod Committee, and was not aware that he was a member of that Committee. I believe notices of the meetings are always sent to every member. No doubt it would have been better if special notice had in this case been sent to the Lord Chancellor, but I suppose that did not occur to any member of the Committee, and unfortunately it was not done. However, my Lords, that is a matter which occurred a very long time ago, and I think it is scarcely necessary or desirable to bring up again anything which occurred then.
LORD TWEEDMOUTH: After the conversation that has taken place I certainly shall not think of troubling your
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Lordships with the motion. I can only say that, so far as the former Committee was concerned, no blame can very well rest upon my shoulders, because I was not a member of your Lordships' House at that time.
On Question, Report agreed to.

EDUCATIONAL GRANTS —DIFFEREN TIAL TREATMENT IN RURAL AND URBAN SCHOOLS.
LORD HENEAGE,in rising to call attention to the Return issued in accordance with an Order of the House of Lords on 5th July, 1900, showing the results of the differential treatment in urban and rural schools, and to move—
"That the experiment of the last four years has been most injurious not only to the agricultural counties as a whole, but to the large majority of the Church of England voluntary schools associations, and should be discontinued,"
said: My Lords, I shall limit my very few remarks to the question of the differential treatment of schools in rural and urban districts. Some two months ago I asked my noble friend the Lord President of the Council if he would let me have a Return, which your Lordships have since had placed in your hands. My noble friend then made the very sensible suggestion that I should move for the Return as unopposed, and that any discussion should be taken after the Return had been laid. The Return has now been laid upon the Table, and we are now in a position to discuss the matter. In Lincolnshire we have lost a great deal of money, taking the rate at 5s. a head under the Act, under the differential treatment, and on two occasions the governing body of the Voluntary Schools Association of Lincolnshire has sent a memorial to the Education Department, which I hold in my hand, but with which I will not trouble your Lordships. Under the Voluntary Schools Act of 1897 the aid grant was to be not more than 5s. a j head, but no precise directions were laid down as to any differential treatment between schools in urban and rural districts. The principle or the experiment, whichever you like to call it, which has now been in practice ever since the Act was passed, I venture to say has not been satisfactory either to the rural schools or to the Church of England. In the few remarks I am going to make I propose to limit myself abso-

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lutely to facts and figures, and I am not going to make the slightest comment upon the Education Department. I think so far as the Departments are concerned they have given the associations every assistance they possibly could. They have shown considerable ability and the greatest courtesy to us when we have had reason to write to them for advice in conducting what has been a new and rather difficult experiment in legislation. I was told after the first year that the experiment had been a failure, and that it was likely not to be continued. Unfortunately it has now gone on for a period of four years. I am only dealing now with the throe years that are put forward in the Return, during which time the rate has been paid at 5s. 9d. per child for every child in the urban districts, and 3s. 3d. per child for every child in the rural districts. I am myself unable to see, and the members of the governing bodies to which I belong are utterly unable to see, why there should be this difference of treatment between the rural and urban districts. So far as we can judge, for what it is worth—and I have been on the executive body or central committee of the Lincolnshire Voluntary Schools Association for four years—it is the rural districts and not the urban districts which require the most favourable treatment. Again, it must be remembered that, although this aid grant is allocated at a differential rate towards urban and rural schools, the money is all pooled together when it arrives in the hands of the association, and the governing body can deal with it exactly as they like. As a matter of fact they do not care whether a school is in an urban or in a rural district. They only look to the necessities of the school, and they treat it as it ought to be treated, with equity and justice. But what is very material with regard to this differential treatment is that in associations where the children in rural schools are a larger number than in urban schools they are very great losers by this differential grant. The large towns and the large urban districts gain largely. The agricultural districts—your Lordships have only to look at the Return yourselves to see this—lose enormously, but they require the aid very much more, in my opinion, than the urban districts. In the large towns in most cases there are school boards, and therefore, looking at it entirely from an
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educational point of view, the children would receive education whether there were voluntary schools or not, but in the rural districts they would be without education altogether in a large proportion of the parishes if it were not for voluntary schools. You could not have boards at all—you could not get the men fitted to sit on the board; you could not get the rate to pay for the schools; these schools are very small schools. In Lincolnshire—I am speaking now from what I know—they do not average more than an attendance of thirty or forty children, and anyone who takes any interest in the education given in these very small schools knows that they get a very small education grant because there are so very few children to earn the grant. They are, therefore, in a very great difficulty in that respect, while if a competent staff is to be kept up to teach the children in their parishes as you would have them taught, it is kept up at greater relative expense. Therefore these small schools require special assistance, and I do not see why the grant to them should be less than the grant to the urban districts. I will give your Lordships only one example—I could give you a great number—of how absurd and ridiculous this distinction becomes. I am not going to say that there are not good reasons for it—no doubt the noble Duke will give your Lordships what he considers good reasons; but let me deal with three parishes close together in the north of Lincolnshire. Roxby, with a population of 378, has one school with an average attendance of 43 children. But that is an urban district, so that the allocation of the aid grant is at the rate of 5s. 9d. per child. The school is solvent and non-necessitous, and receives no aid grant. Close by are the two combined parishes —really one parish—Barsow-on-Humber and New Holland. They have two schools. Their population is 3,200. In the one school the average attendance is 222, and the school is non-necessitous; in the other the average attendance is 241, and the school is specially necessitous. Both these schools are in rural districts, and the money is paid on account of them to the governing association only at the rate of 3s. 3d. per child. Yet they want all the assistance that it is possible to give them. Now, I will not detain your Lordships at any length, but I should like to quote one or two figures to prove my

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case. I will ask your Lordships to allow me to deal with the results of the differential system of allocation of the Aid Grant on the agricultural county of Lincoln so far as the Church of England schools are concerned. In 1897 we had 44,253 children in average attendance. Of these 20,400 were in urban district schools, and were paid for at 5s. 9d. a head, and we received on their account £5,867 17s. 6d. The other children, 23,843, were at rural schools, and we received at the rate of 3s. 3d. a head for them, making £3,874 9s. 9d. So that, although there were 3,000 more children in the rural schools than in the urban schools, we received £2,000 less on account of payment of Aid Grant to deal with them. Similar results (I will not trouble your Lordships with the details) were arrived at in 1898 and 1899. In each of those three years we received, putting all the money together, at the rate of 4s. 5d. per head of the children. The total received in 1897 was £9,742 7s. 3d., instead of what we should have received at 5s. per head, £11,063 5s. In 1898 it was £9,731 2s., instead of £11,021 10s. In 1899 it was £9,692 3s., instead of £10,983 10s., or an actual loss of £3,759 19s. 5d. in three years, notwithstanding that we received 5s. 9d. for the children in the urban districts. Now, I have quoted the actual sums that were received on the allocation of the grant. Take those figures, in order to compare them with the figures in the Return, and you must add the second allotment, which is received some months afterwards, and in Lincolnshire amounts to one penny per child. I only say that because that shows the difference between the figures. Now, the general effect of this on the whole of the schools is that in forty-six Church of England Association schools only eight received at the rate of 5s. per head, whilst of those eight, five—London, Liverpool, Manchester, Wakefield, and Rochester—received at the rate of 5s. 6d. and upwards. The remaining thirty eight Church of England Association schools lose on an average 10 per cent. of the present differential rate allocated. As a consequence of this principle (I do not for a moment say that it is intentional) the Roman Catholic, the British and the Wesleyan schools gain very largely, because they are schools in the urban
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and not in rural districts. I may quote to your Lordships a paper which has been prepared upon this point which appears to me to be very accurate and worthy of notice. It is stated in the Schoolmaster of the 14th July that—
"In 1897 the Church Federations of London, Liverpool, and Manchester score no smaller amount than £15,295 above the 5s. limit, the chief losers being Gloucestershire, Lincolnshire, Oxfordshire, Hertfordshire, Norfolk, Wilts, Berkshire, Kent, Cumberland, Sussex, Dorset, Durham, and Essex."
Therefore, it is practically at the cost of these other counties that these privileged federations receive their contributions. Thirty-eight Church Federations lose £27,684; that is, taking it at 5s. a head. Eight Church Federations gain £17,402, so that there is a net loss to the Church schools of over £10,000. That is the case I wish to bring forward. The memorial presented by the governing body last year, and which was again sent this year is as follows —
"The governing body of the Lincoln Diocesan Association of Voluntary Schools desire to represent to the Education Department that, in consequence of the different rates fixed for town and country schools, between which the distinction is in may cases artificial and anomalous, the total Aid Grant allotted to their Association fell short by no less a sum than £1,320 17s. 9d. of the amount which would have been received if 5s. per head had been given to town and country schools alike. The Association, having to deal with a large number of small country schools, in which the average cost per head of efficient maintenance must be greater than in any other class of schools, has therefore been unable to recommend grants adequate to help and increase the efficiency of many of the necessitous schools in its area; and it cannot with the present rates of allotment make satisfactory provision for improved training of pupil teachers, and for such objects as manual instruction in cookery."
That is the case I have to present on behalf of the Lincolnshire governing body, and I am very sorry that it should have to come on at such a late period of the session and in so small a House. I am also exceeding sorry that I had to put this matter off from Friday last until this evening, because Lord Reay, who takes a very great interest in this matter, is unable to be here.
THE LORD BISHOP OF MAN-CHESTER: My Lords, as the Diocesan Associations of Liverpool and Manchester have been referred to as having been specially benefited by the

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distinction made between urban and rural schools, I think I should say a few words in favour of the discrimination. There are, I have no doubt, anomalies in special cases which it would be difficult to explain; but on the large scale I venture to think that there are very good reasons to be given for the present system. For instance, if you notice the number of children in the urban districts, that are spoken of rather depreciatingly by the noble Lord—
LORD HENEAGE: I did not intend to depreciate them at all.
THE LORD BISHOP OF MAN -CHESTER: I simply meant speaking of them depreciatingly in respect of the fact that they are a very small minority of the schools. I am trying to point out that, though they may seem to be a minority of the associations, they contain an enormous number of children in average attendance, and the London schools have as many as 120,000 children in average attendance, so that the number of children affected by any change in the present system will be considerable. Now I agree that if there be nothing different in the circumstances of the urban and village schools to justify discrimination there ought to be none; but I venture to think, at any rate, that these two reasons may be given for making the discrimination in Lancashire: first, the enormous number of school boards that exist there, the necessity of providing for rates in aid of these Board schools and also at the same time providing voluntary contributions, and the very much larger salaries that we are obliged to pay to our schoolmasters and our staff because of the competition of the Board schools making our expenses very much more than they would be. But the principal reason is this. There was an Act passed which if I am not misinformed (the Lord President will no doubt tell us) was intended mainly to benefit agricultural schools, an Act which enabled the parent of any child to demand that that child should be educated free of cost. Now that, I have no doubt, benefited greatly the agricultural districts. The fees paid there were very small, and the remission of the fee was therefore quite easy, but in the north the fees paid were very considerable— from 3d. to 6d. a week per child, and
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those fees wore easily paid because we had a large industrial population receiving high wages. It was never felt to be a burden. We had no difficulty in obtaining the money, but the moment the opportunity was afforded to those who were the poorer amongst the parents to demand free education, of course they demanded it. Further, I would venture to say to your Lordships, because I know it to be a fact, that a number of those who are unfriendly to Voluntary schools stimulated parents to make these demands with a view to making it more difficult to conduct voluntary schools, and then a feeling of chivalry on the part of those better paid of the working classes made them feel "Rather than leave the poorer of our brethren in an invidious position we will make the demand for free education." The result is that we have lost a very large proportion of the funds upon which we relied for the maintenance of elementary schools. That deficiency must be supplied in some way. I venture to say that the defency is small in agricultural districts because the fees charged were small and the remission was easy. The fees charged in manufacturing districts were considerable, and therefore their remission was a blow to the prosperity of the schools. Therefore, as they have those particular disabilities, I venture to submit to your Lordships it is fair that they should have a certain number of compensating advantages.
THE BISHOP OF HEREFORD: My Lords, as representing a diocese quite at the opposite pole to that of my brother of Manchester, I should like to say a few words on this subject. I do not propose to follow him through the arguments that he has put before us, and I am not sure that I should agree absolutely and entirely with him, but my desire is rather to address myself to this question as representing one of the most rural of all the dioceses, and a diocese which has, if I may venture to say so, been more hardly hit by this method of distribution than any other diocese in the kingdom with possibly one or two exceptions. I was surprised that in the list of dioceses that had suffered the diocese of Hereford was not mentioned. The facts as put before us in this Return are that if the distribution had been at the rate of 5s. per child, we should have

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received for the Hereford diocese something like £5,914. As a matter of fact, we only received £4,795 a year, thus losing a sum of £1,119, or suffering, that is to say, to the extent of nearly 20 per cent. If we look at the rate per child which is received by my two associations, the Association of Hereford and the Association of Ludlow, it only averages 4s. 1d. per child. I venture to ask your Lordships to notice that this is one of the very lowest of all the averages throughout the kingdom. Now, my Lords, I wish to join with the noble Lord who has put this question to this extent, and to say that in the diocese of Hereford there is no doubt a good deal of feeling that we do not receive more than 4s. 1d. per child; but for myself I could not go further than saying that I shall be extremely grateful to the noble Duke if he sees his way by any means to give us a larger share of this Special Aid Grant, and in appealing to him I would venture to urge two reasons—both of them I feel to be strong reasons—why he should consider the possibility of giving us a little more money for our rural schools. One is that our schools throughout my diocese are many of them so very poor that we are obliged to employ a very large number of teachers, assistant teachers in particular, with qualifications which I am sure would not satisfy your Lordships. In my diocese, even in the city of Hereford, there are a very large number of teachers who are known in the language of the Education Department as Article 68. Now, my Lords, what is an Article 68? It is simply a respectable young woman who is eighteen years of age, and she has to present no other qualification whatever for employment as a teacher. Now, some of these young women are excellent teachers, but I cannot help thinking that it is unsatisfactory that, as part of our National school system, we should be obliged to employ so many assistant teachers who are not duly qualified. Many of them, I am bound to confess, are, in intellectual qualifications, hardly fitted to be teachers of the children of our rural population. Therefore, on this ground of want of more means—for these teachers are very poorly paid; indeed, the reason they are employed is that they can be got so cheap—I venture to appeal to the noble Duke to consider as favourably as possible this application. If he does entertain it he may rest assured that
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any additional money given for this purpose will be well administered. I have in my hands the report of my association, and I cannot but feel that it will be satisfactory for your Lordships to know how the Special Aid Grant which we have received has been spent. I find on looking at the matter that no less than 62 per cent. of the money that we receive has-been spent on the improvement of the salaries of the teachers—to my mind the very best and most economical way of spending such money, Then I find that 30 per cent. of this money has been spent on the improvement of furniture, books, apparatus, buildings, playgrounds, and the sanitary arrangement of the schools. So that on the whole sum that we have received under the Special Aid Grant something like 92 per cent. has. been expended on these most excellent improvements. That I cannot but hope the noble Duke will consider gives us some claim for any additional help which he feels able to bestow upon us. But, my Lords, having said so much, I am bound to say that, looking to the facts of the case, I should not envy the noble Duke if he were to take away from the urban districts—from my brother of Manchester and others—the money which has been allocated to them. It is a task which I hope he may be able to accomplish, but from which I should shrink. I am bound also to confess, having some knowledge of town schools as well as rural schools, that many of our urban schools are no Jess necessitous than those in the country. For myself, if I may be permitted to add a word or two, I must acknowledge that I look to other sources of help rather than to an additional share of the Special Aid Grant. In this connection I think it right that, as representing the schools in my district, I should express my gratitude to the noble Duke for having given us the prospect of additional help through the proposed block grant. It must not be forgotten that the working of that proposed method of the block grant, so far as I have been able to investigate, and as I understand it, is likely to bring very substantial additional assistance to our country schools. I have taken occasion to look into two or three of our typical schools and see what will be the probable effect of the new block grant, and I find that, taking one of our weak schools—and I am sorry to say that

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we have a great many of them, just as they have in Lincolnshire—I find it is a reasonable expectation that a school which has been receiving a grant of between £29 and £30 per annum will receive £33, so that that school will receive an advantage of something like 12 per cent. But turning to another school, of which we have a much larger proportion, that is the fair average country school—somewhat small —I find that such a school which has received £59 or £60 in the way of grants will probably receive over £70. For that addition we are very grateful. There is another class of school—there are not so many of them as we should all like to see —and that is the really good school. Now, the really good school in my district will hardly profit at all by the block grant system. A school which is receiving, perhaps, £240 or £245 per annum will be likely to lose about £5 per annum, and that, if I may venture to say so, is one of the defects of the proposed change to the block grant, that it does not give so much assistance and encouragement as I think they deserve to the best class of schools. One cannot help thinking that in every educational reform it is desirable to encourage the highest and best schools, and this change, unless it can be in some way amended, will, I fear, rather tend to lower the standard of education in some respects than to raise it. I find that the block grant has been received by the teaching profession with acclamation, and I am not surprised, because teachers are human like other people. The best teachers welcome it because it will give them more liberty to teach in the best way, and the other teachers welcome it because it gives them more freedom from minute regulation. I am afraid that under that system some slackness may come in, and individual children may be neglected, and the education may not advance in consequence as the noble Duke would desire. Therefore I hope some special care may be taken as to the instructions issued to the inspectors in order that this system may not do some harm as against the direct financial good that it will do. But, my Lords, there is still another point that I desire to urge upon the noble Duke in connection with this matter, and that is that he may give us in our best country schools very material assistance if he will make the new higher education minute apply to our good country schools.
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If it is simply to apply to a separate school, such as a higher grade school in a town where it is not always very welcome, then it will be almost entirely inoperative in a diocese like mine and will do practically no good, but if it could be extended so that in any good, efficient elementary country school the managers might be at liberty to add a higher elementary top, that would be a great boon to us in the country and a great assistance to our rural education. My Lords, there is just one other remark I may venture to make, and that is that while we are grateful for the additional assistance given us under the block grant, while we shall be grateful if we can have more of the Special Aid Grant, I have the profound conviction that we shall never be able to put our rural schools on a satisfactory basis, or to give the children of our rural population the sort of education that we ought to give them until Her Majesty's Government can devise some means of putting our parish schools under public management. I cannot but hope that this may be done, that the noble Duke may before long see his way to do it by introducing some Bill which will enable the managers of Voluntary schools to approach, let us say, the parish council, with a view to a parish education committee, all religious education to be reasonably safeguarded. On that parish education committee, of course, the parish council should have the majority of managers, the other managers being representatives of the trustees of the school and the parents of the children. In that case the parish would have power to levy a rate, and so to give that adequate financial support to our rural schools of which they are in such sore need in many districts.
THE DUKE OF DEVONSHIRE: My Lords, I think it is scarcely necessary or desirable that I should attempt to follow the right rev. Prelate into a discussion of the effect of the provisions as to the block grant in the new Code, or as to the future development of higher elementary schools. The suggestions which the right rev. Prelate made are no doubt important and well deserve full consideration, but I do not think probably it would be convenient to your Lordships that I should follow him into that part of the subject at present. My Lords, I am

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somewhat at a loss to understand what object my noble friend who has brought forward this resolution had in moving for a Return, and in giving us the calculations which he has founded upon it. I could have told my noble friend without any Return and without any calculations that when the Special Aid Grant is divided between urban and rural schools in the respective proportions of 5s. 9d. and 3s. 3d. the districts which contain a largo number of urban schools would gain a great deal more than districts which contain a large number of rural schools. My noble friend's contention is that which I believe he has always consistently maintained. He objects to the discrimination. But it was not necessary to produce a very elaborate array of figures in order to show that the discrimination which was provided for in the Act, and which has been put into effect by the Board of Education would have the effect which it has had. That effect could have been calculated with considerable accuracy beforehand. The noble Lord said that the experiment had failed. If by failure he means that in consequence of the discrimination various districts have received various amounts, failure was inevitable; but I do not know in what way failure is proved, because, in our opinion, the discrimination has had mainly the effect which it was intended to have, and has given the greater share of the grant to what we believe to be the most necessitous cases. The reasons which induced Parliament and the Department to make this discrimination were shortly these: In the first place the rural districts generally had gained and urban districts had lost through the operation of the Fee Grant, inasmuch as in urban districts fees for 1891 were in excess of 10s., and in rural districts they were considerably under 10s. In the next place the local interest of the well-to-do classes in the maintenance of Voluntary schools is generally greater in the rural than in the urban districts; the power to raise voluntary contributions being greater, the need for further assistance is less. In the next place special provision is made for the most necessitous schools in rural districts under Articles 104 and 105 of the Code. I may say a word upon that subject by-and-by. In the next place the cost of living and therefore the amount paid for salaries is higher in the urban than in the rural dis-
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tricts. It may also be added that in rural districts the proportion of schools which possess liberal endowments, and are therefore not necessitous, is greater than in urban districts. Presumably in urban districts new endowments have not kept pace with the growth of population. The experience of the past three years has on the whole justified the conclusions which we drew from those facts. The rates of Aid Grant for town and country schools were fixed so as to secure as nearly as possible that the actual allotment of aid grant to the several associations should range from 4s. to 5s. 6d. per head. Now, my Lords, I refer to Articles 104 and 105 of the Code, which are articles which provide for schools in districts of very small population. The small schools in the Norwich Association (which is one of those which apparently receive a very low rate from the Special Aid Grant) received £3,930 under these articles, or 1s. 5d. per head on the attendance of all schools in the association. In the Sudbury Association they received £1,285, or nearly 2s. per head. In the Lincolnshire Association (the case of which my noble friend has brought forward) they received £4,105, or 1s. 10¼d. per head. In contrast with these figures, the schools of the London Diocesan Association received £35, or an infinitesimal fraction of a penny per head, and those of the Manchester Association received £395, or a trifle over a halfpenny per head. I think I have only to add that the Right Rev. Prelate who has just spoken was also perfectly right in saying that the new provision for a Block Grant would be a considerable assistance to schools in the rural districts. Therefore, whatever case my noble friend may have had previously to the introduction of that change, his case is somewhat weaker than it was. My Lords, I quite admit that a larger amount of assistance would be very acceptable, and probably would be admirably expended, if it were in our power to give it to rural schools, which in many districts are no doubt extremely necessitous, but, as the right rev. Prelate said just now, we could only do this at the expense of other schools which we believe to be still more necessitous, and therefore, for the present at all events, and until we see reason from further experience, I cannot hold out any hope that we shall be likely to alter the rates which the present Code has fixed.
LORD HENEAGE: I beg leave to; withdraw the motion.
Motion, by leave of the House, withdrawn.

INEBRIATES AMENDMENT (SCOT LAND) BILL [H.L.]
Order of Friday last, for printing of Commons Amendment, discharged.
House adjourned at a live minutes past Seven of the clock, to Thursday next, at half past Ten of the clock.