House of Commons
Wednesday, July 25, 1928
The House met at a Quarter before Three of the Clock, Mr. SPEAKER in the Chair.
Private Business
Cleveland and Durham County Electric Power Bill [ Lords ],
As amended, considered; to be read the Third time.
North Metropolitan Electric Power Supply (Consolidation) Bill [ Lords ],
As amended, considered; Amendments made; Bill to be read the Third time.
Poole Corporation Bill [ Lords ],
As amended, to be considered Tomorrow, at half-past Seven of the clock.
Oral Answers to Questions
Questions
International Copyright Conference
asked the Secretary of State for Foreign Affairs why Great Britain did not appoint its Ambassador to the recent International Copyright Convention at Rome, although all other countries having an embassy in Rome did so?
The hon. Member is under a misapprehension. Out of the seven countries which took part in the Conference and which are represented at Rome by Ambassadors only four were actually represented by their Ambassadors. The reason why His Majesty's Government decided not to appoint Sir Ronald Graham as chief delegate was that the Conference was of a purely technical nature.
Poland and Lithuania
asked the Secretary of State for Foreign Affairs whether His Majesty's Government has recently made representations, either at its own instance or in conjunction with another Power, to the Governments of Poland and Lithuania in relation to the adjustment of differences between those two nations?
His Majesty's Minister at Riga has been instructed to urge informally upon the Lithuanian Minister for Foreign Affairs the desirability of giving effect to the recommendations of the Council of the League of Nations. I understand that similar representations have been made by the French and German Ministers at Kovno.
Has my right hon. Friend had any reply from our representative at Riga as to the result of these representations?
No.
Mexico (British Interests)
asked the Secretary of State for Foreign Affairs whether any special measures are being adopted by His Majesty's Government to safeguard British interests in Mexico, in view of possible disturbances following recent events in that country?
I have no information which would appear to necessitate any special measures being adopted by His Majesty's Government. His Majesty's Minister is keeping me fully informed on the situation.
Egypt
asked the Secretary of State for Foreign Affairs whether he will make any statement to the House on the new situation created in Egypt through the suspension of the parliamentary régime for three years?
asked the Secretary of State for Foreign Affairs whether he can make any statement respecting recent affairs in Egypt?
I can add nothing to the replies which I returned on the 23rd instant to my hon. Friend the Member for Kidderminster (Mr. Wardlaw-Milne), the hon. Member for Brightside (Mr. Ponsonby), and the hon. and gallant Member for Central Hull (Lieut.-Commander Kenworthy), and those hon. Members who then questioned me.
International Relief Union
asked the Secretary of State for Foreign Affairs whether his attention has been drawn to the fact that 30 States, belonging to four different continents, including India and all the most important European States, have signed the Convention of the International Relief Union, founded at Geneva in July, 1927; that the adhesion of His Majesty's Government would bring about the coming into force of the Convention by securing the requisite number of shares, as laid down in Article 18 of the Convention; that the existence of such an organisation as the International Relief Union would have greatly facilitated the relief of the victims of the recent earthquake disasters in Bulgaria and Greece; and whether he will consider the desirability of now signing this Convention?
As the hon. Member is aware, the Convention will become operative as soon as it has been ratified by 12 signatory Powers, whose combined contributions amount to 600 shares. As far as I am aware, no State has yet ratified the Convention. The accession of His Majesty's Government in Great Britain would not therefore bring the Convention into force nor, in the circumstances, would it have enabled relief to have been granted to the victims of the earthquake disasters in Bulgaria and Greece. The question of the accession of His Majesty's Government in Great Britain is still under consideration.
Is the right hon. Gentleman aware that I have received letters from the secretary of this Relief Fund informing me that the facts stated in the question are quite accurate; and will he make further investigations?
My information is that the facts are not correctly stated.
Will the right hon. Gentleman make further investigation and give me further information, as I have received personal letters from the secretary giving the correct information?
I think the hon. Member is giving me incorrect information and that it is I who am giving him correct information. Perhaps he will make further inquiry himself.
American Bonds (British Holders)
asked the Secretary of State for Foreign Affairs whether he is aware that the State of West Virginia, which had repudiated a liability of 15¼ million dollars, its share of the debt of Virginia as apportioned by the Funding Act of 1871, was held by the Supreme Court of the United States to be liable for the sum of 12¾ million dollars with interest at 5 per cent., and that this State completed the arrangements to meet this liability in 1921; and whether, in view of this arrangement, he is prepared to take any action regarding the debts which, have been repudiated by other States in the United States?
The answer to the first part of the question is in the affirmative. As regards the second part, the dispute between the States of Virginia and West Virginia as to the liability of the latter for an equitable proportion of the debt of the former, settled through a decision of the United States Supreme Court, is not a matter with which His Majesty's Government appear to be concerned.
:Is the right hon. Gentleman not aware that this question is merely illustrative of what has already been done in regard to a repudiated debt? I am asking him in the latter part of the question, the real essence of the question, if he will take any action, or make any representation to the United States Government with regard to the other repudiated debts of the Southern States.
Looking at the Report of the Council of Foreign Bondholders, I do not find the State of Virginia or the State of West Virginia included among the defaulting States.
But, looking at the Report of the Bondholders Council, does the right hon. Gentleman not find that the State of West Virginia did pay the debt repudiated in 1871, and will he therefore go further into the matter?
The decision of the Supreme Court of the United States in a litigation between the old State of Virginia and the State of West Virginia really had no bearing, I think, on the claims which British bondholders have on certain loans on which default has taken place.
But is the right hon. Gentleman not aware that the State of West Virginia has met the repudiated debt, that the debt repudiated in 1871 has been paid by West Virginia?
The decision of the United States Supreme Court was as to the respective shares of the old debt of the State of Virginia which were to be borne by Virginia and West Virginia respectively. As I have said, neither of those States are among the defaulting States, but that decision does not bear upon the case of the defaulting States.
Is the right hon. Gentleman not aware that these States were among the defaulting States prior to the decision of the United States Supreme Court, and that the obligation has now been met—up to 13,000,000 dollars, at any rate?
I am very glad that that should be so, but the point in dispute was what proportion of the debt of the old State of Virginia was to be assumed by the new State of West Virginia. That point was decided by the Supreme Court, and apparently the two States of Virginia and West Virginia have fulfilled their obligations.
And in any case is not this a matter for the States themselves and not for the Federal Government at Washington?
Royal Navy
Estimates, 1929
asked the First Lord of the Admiralty what reduction he proposes to make next year in his demands upon the Exchequer for the requirements of the Navy, as a result of the signing of the Kellogg Pact by His Majesty's Government?
I am afraid that it is not possible for me to anticipate what provision will be made in next year's Navy Estimates.
Can the right hon. Gentleman not make some estimate?
That is merely repeating the question on the Paper.
In making arrangements in relation to this proposed Pact, will the right hon. Gentleman take care that the efficiency of the Navy is preserved and maintained?
In considering this question, will the right hon. Gentleman consult his colleague the Home Secretary who gave vent to sentiments in accordance with the question last Saturday?
Are not the Admiralty now preparing Estimates for next year, and is it not the right hon. Gentleman's duty, in view of the Foreign Secretary's proposed signature of this Treaty, to issue a Minute instructing the Department to reduce the Estimates?
It is quite true that we are beginning to consider the Estimates for next year, but it would be a most unusual course to announce to the House at this time what we are likely to do then. As far as the Kellogg Pact goes, it does not affect the right of a nation to self-defence, and it is on that basis that the Cabinet are primarily guided in making their decision as to what shall be the Navy Estimates for any particular year.
Will the right hon. Gentleman take the Kellogg Pact into. consideration in connection with the Estimates?
Of course I shall. If the hon. Gentleman will refer to the proposal which I made at Geneva about this time last year, he will find that there is very little difference between that and what has been recently agreed to.
General Messing System
asked the First Lord of that the Admiralty if he is aware that the proposed general messing ashore is unpopular with the chief and petty officers and that, in the opinion of some senior officers, to force this system on these petty officers will not be conducive to good discipline or contentment; and if he will appoint a small committee of officers to further inquire into the matter of reconsider the decision of the Board?
I would refer my hon. Friend to the reply given to his question on 9th February last (OFFICIAL REPORT, column 263.)
Is the right hon. Gentleman prepared to receive, through the proper channels, representations on these matters form the officers concerned?
No, Sir; I think that the matter has been very fully considered. It is obvious that in an alteration of that sort there will be a certain number of people who dislike the change, and a number who like it. We have considered the two arguments very carefully one against another, and I am not prepared to reconsider the decision.
Dockyard EmployéS, Portsmouth
asked the Parliamentary Secretary to the Admiralty the number of workmen of all classes emloyed in His Majesty's dockyard, Portsmouth, in June, 1914, and in June, 1928?
The numbers borne on the dockyard books were 15,521 in June, 1914, and 13,430 in June, 1928.
Do the figures for this year include the people who have been transferred from Pembroke and Rosyth?
Yes, the figures would certainly include transfers.
How many would there be?
I cannot say without notice, but I can easily find out.
Does the answer include the women who are employed in the dockyard at Portsmouth?
I am not quite sure about that, but I will find out. My answer gives the number borne on the Dockyard Vote.
Arms Traffic (Red Sea)
asked the First Lord of the Admiralty how many vessels landing, or attempting to land, munitions in violation of the Arms Convention have been stopped by British vessels in the Red Sea during the last 12 months; and how many have been Italian vessels?
No vessels have been stopped.
Biscuit-Making Trade (Wages)
asked the Minister of Labour whether he is aware that girls of 14 years of age are employed in the biscuit trade at a wage of 11s. per week; and whether, seeing that the Government is pledged to extend the Trade Board Acts wherever unsatisfactory working and wage conditions exist, he will cause immediate steps to be taken to investigate the conditions in the biscuit-making industry??
The rate of wages in question, of which I was aware, is not lower than that fixed for girls of 14 by 33 of the 44 trade boards. The existence of that rate in the biscuit-making trade, therefore, affords no ground for the investigation suggested by the hon. Member.
Is the Minister aware of the large profits that are being made by the biscuit-making firms, and in view of that fact will he consider it?
I observe the profits that are being made by the biscuit-making firms, but I do not think that that has any reference to this question.
Can the hon. Gentleman do something to draw the attention of the firms to the low rate in view of the high profits?
I have made inquiries in this matter, and I find that the Co-operative Wholesale Society pay exactly these rates to girls of 14.
Unemployment
Miners, Wales
asked the Minister of Labour what is the total number of unemployed miners, men and boys, respectively, on the register of the Employment Exchange at Pontypridd,
Employment Exchange. Men. Boys. Wholly Unemployed. Temporarily Stopped. Total. Wholly Unemployed. Temporarily Stopped. Total. Pontypridd 2,153 21 2,174 10 11 21 Pontyclun 341 — 341 3 — 3 Bridgend 318 — 318 — — —
Juvenile Training Centres, Glamorgan and Monmouthshire
asked the Minister of Labour the number of unemployed boys who attended or are attending each of the juvenile training centres in the County of Glamorgan and in Monmouthshire; and can he state how many of these boys have been procured employment within each of these two counties, and how many without the two counties, up to the 30th June, 1928, or the latest available date?
As the reply contains a number of figures, I will, with the hon. Member's permission, circulate the information in the OFFICIAL REPORT.
Can the hon. Gentleman give us any information as to whether there is any improvement in the training of these juveniles?
That is an entirely different question. If the hon. Member will put it down, I shall be glad to answer it. What I have done in my reply is to give a very comprehensive set of figures which answer the question.
Has the hon. Gentleman's Department taken any steps to find work for boys under 14?
The question does not arise.
Following is the information:
The average number of unemployed boys who attended each of the Juvenile Pontyclun, and Bridgend on the 30th June, 1928?
As the reply includes a number of figures, I will, with the hon. Member's permission, circulate a statement in the OFFICIAL REPORT.
Following is the reply:
Unemployment Centres in the Counties of Glamorganshire and Monmouthshire during the week which ended Friday, 20th July, was as follows:
Glamorganshire. Aberdare 142 Bargoed 93 Maesteg 130 Neath 84 Pontypridd 70 Port Talbot 108 Ferndale 107 Tonypandy 107 Merthyr 72 Swansea 144 Cardiff 107 Monmouthshire. Abertillery 72 Blaina 69 Ebbw Vale 65 Pontypool 181
All these Centres, with the exception of those at Swansea and Cardiff, have been set up since the middle of last December. Up to the 21st July, 149 boys from the Glamorganshire Mining Centres and 25 from the Monmouthshire Centres had been placed in employment in their own country, while 337 boys from the Glamorganshire Mining Centres and 100 from the Monmouthshire Centres had been placed in employment in England or other parts of Wales.
In addition, since the beginning of the year, up to the 16th July, 729 Cardiff boys have been placed in employment locally and six in England or other parts of Wales while, during the same period, 145 Swansea boys have been placed in employment locally and nine in England or other parts of Wales.
Insurance Fund
asked the Minister of Labour the debt of the unemployment insurance fund at 19th April, 1927, and 17th July, 1927; and the number of unemployed in receipt of benefit at those dates, respectively, in 1927 and 1928.
As the reply involves a number of figures, I will, with the hon. Member's permission, circulate it in the OFFICIAL REPORT.
Can the hon. Gentleman say if there has been an increase in July?
I cannot answer that question. Perhaps the hon. and gallant Gentleman will put it down.
Following is the reply:
The debt of the Unemployment Fund to the Treasury on 19th April, 1927, was £24,530,000 and on 17th July, 1927, was £23,690,000.
Statistics of the numbers of persons actually in receipt of benefit are not available, but the number of claims admitted and under consideration at the dates nearest to those specified by the hon. Member for which figures are available were as follow:—
18th April, 1927 928,627 18th July, 1927 882,939 23rd April, 1928 902,657 16th July, 1928 1,103,684
Benefit Disallowed
asked the Minister of Labour the number of fresh and renewal claims to benefit made at Employment Exchanges in the Glasgow area during the period 24th April to 11th June, 1927, and the number disallowed in the period 19th April to 11th June, 1927?
During the period 12th April, 1927, to 13th June, 1927, 50,029 fresh and renewal claims to unemployment benefit were made at Employment Exchanges in the Glasgow area. During the same period, 6,121 claims for extended benefit were recommended for disallowance by local employ- ment committees in the Glasgow area. Statistics of the disallowance of claims for standard benefit in the area are not available for the period in question.
Will the Minister compare these figures with the figures for 1928, and, in view of the largely increased number of disallowances in 1928, will he look into the matter?
No, Sir; the figures are not directly comparable, because the figures which I have given for 1927 refer only to extended benefit, whereas the figures for a similar period in 1928 refer to all kinds of benefit.
asked the Minister of Labour if he will give figures as to the number of insured persons who have failed to qualify for unemployment benefit since the 19th April, 1928, to the latest available date in the Tonypandy and Treorchy Exchanges, the Rhondda Valley, and South Wales, respectively?
In the period 19th April to 9th July, 1928, 7,934 claims to unemployment benefit made at Employment Exchanges and branch employment offices in South Wales were disallowed by insurance officers. This figure includes 1,084 claims made at Exchanges in the Rhondda Valley, of which 235 were at the Tonypany Exchange, and 174 at the Treorchy Exchange. The disallowances by insurance officers are those recorded during the period, and relate in a proportion of cases to claims made earlier. They also include cases in which the decisions were reversed on appeal.
asked the Minister of Laabour the number of insured persons whose claims for extended benefit were considered by the rota committees between 19th May, 1927, and 19th May,. 1928, at the Tonypany, Treorchy, Ferndale, and Porth Employment Exchanges, respectively; the number of claims granted by the rota committees; and the number refused by him after approval by the rota committees?
As the reply includes a number of figures, I will, with the hon. Member's permission, circulate a statement in the OFFICIAL REPORT.
Following is the statement:
Extended Benefit and the work of Rota Committees was discontinued as from 19th April, 1928, under the provisions of the Unemployment Insurance Act, 1927. Figures are therefore given for the period of twelve months April 1927 to April 1928.
Applications for extended benefit considered by the Local Employment Committees at Tonypandy, Treorchy and Ferndale * in the period 12th April, 1927, to 18th April, 1928.
Local Employment. Committee. Claims Considered. Applications recommended for— Claims recommended for allowance but subsequently disallowed. Allowance. Disallowance. Tonypandy 28,198 27,649 549 321 Treorchy 11,584 11,206 378 244 Ferndale * 37,322 36,207 1,115 278 * Including Porth, Pontyclun and Taff's Well Including Porth, Pontyclun and Taff's Well
Imperial Airways, Ltd. (Contract)
asked the Secretary of State for Air if he will cause to have placed in the Library of the House a copy of the new contract entered into with Imperial Airways, Limited?
The contract will probably not be signed for some months to come, and in view of the desire expressed in several quarters of the House for early information, my right hon. Friend thought it better for that reason and to save expense, to issue at once the White Paper Cmd. 3143, which gives the essential particulars. If he is satisfied that there is any general desire to see the contract itself, which will be a lengthy document, my right hon. Friend will be glad to have a copy placed yin the Library when it is available.
asked the Secretary of State for Air when negotiations for the increased subsidy to Imperial Airways, Limited, were commenced, and the date on which the increased subsidy, as set forth in Cmd. 3143, was agreed upon with the company's representatives?
Proposals for a through service between England and India, involving a revision of the existing subsidies, were first put forward in the summer of last year, and the Heads, of Agreement for such a service were initialled in April, 1928.
asked the Secretary of State for Air the value of the two Calcutta flying boats which are to be handed over to Imperial Airways, Limited?
£40,000.
To whom did these Calcutta flying boats belong before they were handed over?
To the Air Ministry.
By whom were they built?
Land Drainage, Wales
asked the Minister of Agriculture whether he will give the acreage of land in Wales which, if drained, could be cultivated?
I would refer the hon. and gallant Member to the reply I gave on the 19th April to the hon. Member for Anglesey (Sir R. Thomas), a copy of which I am sending to him.
Will the right hon. Gentleman consider putting into effect the Report of the Royal Commission on Land Drainage?
We are already at work on the surveys in connection with it.
Do we understand that the draft Bill will be circulated?
That cannot be taken from my answer. There is a lot of survey work to be done before we can reach the stage of a draft Bill.
Are the county councils in Wales taking action to see that their powers with regard to drainage are put into operation?
We have already assisted two drainage boards in Wales, but I should have to have notice as to what action is being taken by the county councils.
Coal Industry (Closed Mines, Wales)
asked the Secretary for Mines the number of coal pits in Wales which have been closed down since 1923 permanently and temporarily, respectively?
Since 1923, 364 pits in Wales, employing 61,500 wage-earners, have been closed down, of which 117, employing 11,800 wage-earners, have been notified as abandoned.
In view of the very large number of mines that have been closed down permanently during the past five years, has the hon. and gallant Gentleman satisfied himself that his Department have a proper record of them in the schedule of abandoned mines; and has he taken the necessary precautions to make sure that these abandoned mines, most of which, if not all of which, will become flooded, are not a menace to the adjoining mines and a danger to the future development of the whole district, because of the well-known neglect of companies which have abandoned their mines?
I certainly think that the schedule of abandoned mines kept by my Department is correct. The second supplementary question does not arise.
Are we to understand that the Mines Department have no power to protect the future working of mines on grounds of safety and national economy?
I do not accept the proposition that the abandoned mines will have any future working.
Does the hon. and gallant Gentleman not realise that abandoned mines are a menace to existing mines adjoining them owing to flooding? This is a very important point, and it is high time that the Mines Department woke up.
That does not arise out of the answer.
Tuberculosis
asked the Minister of Health whether he is aware that there has been since 1910 little reduction in the tuberculosis mortality rate for males between the ages of 15 and 25, while for females between these ages the rate has increased; and what measures does he propose to take to improve the position?
The answer to the first part of the question is in the affirmative, but the rate for both males and females between these ages appears at the present time to be decreasing. The discrepancy between the rate of decrease in the mortality from tuberculosis in the general population and that in the groups referred by the hon. Member has been under consideration in my Department, but my right hon. Friend is advised that its causes are obscure. Investigation is proceeding, and the tuberculosis officers of local authorities will be asked to give special attention to the question.
Does the Minister think that the reduction of milk in maternity centres is going to increase the health of the population?
That is a hypothetical question.
If the right hon. Gentleman is in charge of the health of the country, why is a question about a reduction in the supply of milk to the children hypothetical?
Registration Service
asked the Minister of Health whether, in the proposed legislation for reforming the Poor Law by the transfer of services to other authorities, it is the intention of the Government to include in such transfer the appointment of superintendent registrars and assistant registrars to the appropriate local authority, with powers to appoint such officials at salaries payable, as now, by fees?
As stated in my reply of the 18th instant to the hon. Member for Newcastle, North (Sir N. Grattan-Doyle), the exact arrangements to be made in regard to the registration service in connection with the scheme of local government reform are still under my consideration; and my right hon. Friend regrets that he is not in a position to make a statement upon any detailed inquiries with regard thereto. I can assure the hon. Member, however, that the consideration of these arrangements will not be prejudged by anything contained in the Registration Bill now before the House, which is designed for interim purposes to deal with the long standing hardships of individual registration officers.
Do I understand that the right hon. Gentleman can give no undertaking that, if the proposed alteration in the law as regards Poor Law guardians takes place, these officers will be transferred to the town councils or the county councils, as the other services will be?
Of course, I could not anticipate the decision on that matter, but the hon. Member will, I hope, have full opportunity of raising the matter when we come to the proposals.
Can the right hon. Gentleman say when he is going to proceed with the Registration (Births, Deaths and Marriages) Bill?
If the hon. and gallant Member had been here last evening, he would know that it received the Third Reading.
National Health Insurance
asked the Minister of Hearth what amount was discounted from the accounts of the chemists who supplied drugs and appliances in Wales during 1927 at the average cost of 29.5 pence per insured person; and, seeing that the amount available to meet these accounts was more than sufficient to pay them in full and the surplus which arose in Wales was taken to meet deficiencies in England, will he now reconsider his objection to allow a representative of the Association of Welsh Insurance Committees to become a member of the Drug Distributing Committee upon which he invited the Association of English Insurance Committees to nominate a member?
The reply to the first part of the question is, approximately, £5,400. If the hon. Member will refer to the reply given on the 4th April to the hon. Baronet the Member for Anglesey (Sir R. Thomas), he will see that the assumption in the second part of the question is incorrect. The third part does not, therefore, arise.
Housing (Subsidy)
asked the Minister of Health the total amount of subsidy paid in connection with the various housing schemes in England and Wales up to 31st March, 1928?
The total amount of-Exchequer subsidy paid in respect of housing schemes of local authorities and houses erected by private builders in England and Wales up to 31st March, 1928, is £63,534,657.
Can the right hon. Gentleman explain how it is that the right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George) says the Government have done nothing for housing?
British Army
Retired Pay
asked the Secretary of State for War under what article of the Royal Warrant the Army Council refuses to allow certain substantive colonels to count towards retired pay part of their service in that rank, as defined in the Royal Warrant and recorded in the London Gazette and Official Army List?
I am not aware of any case in which service which the Royal Warrant allows to count towards retired pay has not been so counted.
Discharged Soldier's Gratuity (Alfred Lines)
asked the Secretary of State for War whether his attention has been called to the case of Alfred Lines, late regimental No. 6197319 (whose blue medical sheet was endorsed fit for service in any part of the world), who joined the Middlesex Regiment on 4th June, 1926, served with the Shanghai Defence Force in China until afflicted with sleeping sickness, returned to England and was discharged from Netley Hospital as physically unfit for any form of military service on 11th November, 1927, with a sum of 21, and who, after waiting for his official discharge papers, received a communication from Chelsea Hospital, Form 81998F, dated 5th December, 1927, stating that he was not entitled to any discharge pension and offering him a gratuity of £6 only, less deduction of any advances that had been made to him; and whether, having regard to the fact that his panel doctor has certified that Lines wilt never be able to work again and that the symptoms of the disease which necessitated his discharge from the Army first appeared during his military service, with the Shanghai Defence Force, he will consider granting this man some compensation more adequate than the amount of 7s. 9d. actually paid him as the balance of the gratuity of £6?
This case has been carefully reviewed at the War Office, and the Army medical authorities are satisfied that the disability was not caused by military service. In the circumstances, Mr. Lines has no claim to compensation, and the small gratuity awarded is the appropriate grant in his case.
I am sure that my hon. Friend will admit that this is an exceptionally hard case, and, that being so, is it not possible to make something in the nature of a compassionate grant to supplement this miserable pittance of 7s. 9d.?
I am afraid there is no evidence at all that the illness with which this man is afflicted was due to his military service or to having been sent abroad. We could not allow the principle to be established that anybody who happened to fall ill while on military service should by that fact alone be entitled to some compensation.
Will the hon. Member say whether there is any evidence that if this man had not been sent abroad he would have been afflicted with this illness?
There is no evidence to show that his illness was in any way connected with his being sent abroad. It is not an illness to which soldiers are subject through being sent abroad.
Then can the hon. Member say what the 7s. 9d. is for?
It is what he was entitled to on being discharged as medically unfit.
In that case is it not fair to relate the amount to the disability?
No, Sir, riot if the disability is not caused by his service.
Will the hon. Gentleman reconsider the decision in this matter, in view of the apparent injustice caused to this man and to others who may be suffering in a similar manner?
If any further facts can be brought forward the case will certainly be reconsidered, but it has already been considered in the light of the facts at present available.
Iron and Steel Industry
asked the President of the Board of Trade whether he can give the increase or decrease in the number of furnaces in blast as compared with the beginning of 1924 for Great Britain, Germany, France and Belgium?
The number of furnaces reported as in blast in Great Britain at the beginning of the year 1924 was 204, and at the beginning of June, 1928, 148. Corresponding figures for Germany were 66 and 104 respectively, for France 127 and 150, and for Belgium 42 and 56.
asked the Prime Minister whether, in view of the urgency of affording some measure of safeguarding to the steel industry, he will consider the advisability of advising the postponement of the prorogation of Parliament until this matter has been dealt with?
I am afraid I cannot see my way to ask the House to postpone the prorogation of Parliament.
Imperial Wireless and Cable Conference (Report)
asked the Prime Minister on what date he intends to take the discussion on the Report of the Committee of the Imperial Conference on Wireless and Cable Communications?
This will be arranged if possible through the usual channels.
Postmen (Summer Uniform)
asked the Postmaster-General whether he will consider supplying the men engaged in public delivery services with lighter uniform during the summer months?
No, Sir. A change in this respect was made some years ago and the material now used for postmen's uniforms in both winter and summer is the same as that formerly supplied for summer wear. For winter wear an overcoat is added. This arrangement appears to be satisfactory and no alteration is contemplated.
Will the Noble Lord consult some of the men on the rounds in East London during this sweltering heat? Would he like to take a turn himself in one of the tunics?
We shall at all times be pleased to consider further representations from the staff in the matter.
Government Departments
Home Office (Woman Inspector)
asked the Secretary of State for the Home Department what are the duties allocated to the woman inspector under the children's Branch?
The woman inspector is mainly employed in the inspection of Home Office Schools, especially those for girls: she also inspects places of detention, visits certain homes in respect of which a visitation is ordered under Section 25 of the Children Act, and makes other visits and inquiries in connection with the work of the Children's Branch.
May I ask whether this is a new appointment, and, if not, how long this inspector has been in office?
It is not a new appointment, and I cannot say how long the inspector has been appointed.
Does the hon. and gallant Member consider that one woman is enough for the work?
At the moment.
Does the hon. and gallant Member consider that she can get round to all the reformatories and industrial schools and also do the probation work she is supposed to do?
I think she can carry out the work quite satisfactorily at the present time.
Public Trustee's Office (Lady Visitor)
asked the Financial Secretary to the Treasury what are the duties upon which the lady visitor attached to the office of the Public Trustee is employed?
I have been asked to reply. The duty of the lady visitor is to advise the Public Trustee in his discharge of his duties as trustee or guardian for infant children, or in any other matter relating to the administration of any trust committed to him upon which he desires her advice.
Temporary Woman Clerks
asked the Financial Secretary to the Treasury whether those paragraphs of the Treasury circular of September, 1918, relating to the employment of Grade 4 temporary women clerks, have since been cancelled in a later Treasury circular or are still effective?
The duties assigned to Grade IV temporary women clerks are broadly as defined in the Treasury Circular of 7th September, 1918: but the rates of pay prescribed by that circular are no longer in force, the terms of remuneration of temporary women clerks being now governed by the Agreement of 22nd May, 1924, as modified by Industrial Court Award No. 1327 of 29th July, 1927.
Consular Service (Boulogne)
asked the Secretary of State for Foreign Affairs whether he will consider the appointment of a full-time Consul at the busy port of Boulogne where, at all times, there are many British subjects?
The present Vice-Consul at Boulogne gives practically his whole time to his official duties, and I am completely satisfied with his conduct of affairs.
Police
Summer Clothing
asked the Home Secretary whether he has considered the advisability of supplying the Metropolitan Police with lighter helmets and clothing during periods of hot weather?
The Metropolitan Police are already supplied with lighter clothing in the hot weather than in the cold weather. A new helmet of reduced weight was issued for use all the year round in 1923.
Will the hon. and gallant Member consider the advisability of the Metropolitan Police Force copying the example of some of the provincial police forces, which do provide straw helmets and a much lighter uniform?
I have no doubt the authorities will be ready to consider that suggestion.
Has the hon. and gallant Member noticed how the men who simply stand about in this building perspire with the heat?
So do we.
Is there any reason why a policeman in a place like this should have to wear a helmet?
In view of our average climate, would not fur coats be almost better than straw helmets?
It was stated by my right hon. Friend some time ago, in reply to a similar question, as far as I can recollect, that, so far as concerns men employed in the building, he saw no reason why they should not take off their helmets; but, of course, that could not be allowed in the case of men on duty outside.
Is that known?
I saw the answer to the question this morning, so I imagine it is known.
Female Prisoners (Matrons)
asked the Home Secretary whether there are any police stations at which no provision is made for a female searcher or matron to be retained at the station after a female prisoner has been lodged in the cells; and, in that case, will he state the regulations governing the periodic visits of station officers to the cells without emergency having arisen?
A matron is engaged to be and remain in attendance so long as a female prisoner is detained at any police station throughout the Metropolitan Police district, and a similar arrangement is general elsewhere.
Are the regulations perfectly explicit on that matter?
So far as I am aware. If the hon. Member has any particular point in mind, perhaps he wilt let me know.
Tea Sales (Bonus)
asked the Home Secretary whether his attention has been drawn to the number of recent cases in Courts throughout the country against tea-bonus firms; and whether in any of these cases the proceedings have been instituted on his instructions?
The answer to the first part of the question is in the affirmative and to the second in the negative. As my right hon. Friend explained in reply to the hon. Member on the 5th instant, most of the proceedings have been County Court proceedings by private persons.
In view of the statements made by Judges in various parts of the country in these cases, that the method of carrying on business by these tea-bonus firms is an act of fraud upon the public, why is it left to individuals to take proceedings against them?
As my right hon. Friend informed the hon. Member when he asked a similar question, he has been advised so far that there is no ground for taking criminal proceedings, and he must, of course, be guided by the advice which he receives.
Have the papers in these cases been submitted by the Secretary of State to the Director of Public Prosecutions?
I presume that they have; otherwise, my right hon. Friend would not make such a statement.
Bastardy Cases (Witnesses)
asked the Home Secretary whether he is aware that Section 70 of the Poor Law Amendment Act, 1844 (which gave power to Justices of the Peace to compel the appearance of witnesses in affiliation proceedings), was repealed as from 1st October, 1927, by the Poor Law Act, 1927, and, as Section 35 of the Summary Jurisdiction. Act, 1848, and Section 54 of the Summary Jurisdiction Act, 1879, make it clear that Section 7 of the Act of 1848 (which gives power to Justices to enforce the attendance of witnesses) does not apply to affiliation proceedings, it is now necessary for an applicant or respondent in such proceedings who wishes witnesses summoned to go to the expense and trouble of obtaining Crown Office subpoenas; and whether he will take steps to have this hindrance to the easy administration of justice removed?
I would refer the hon. and learned Member to my right hon. Friend's reply on the 19th instant to a question by the hon. Member for East Ham, North (Miss Lawrence).
Isle of Man (Contributory Pensions)
asked the Home Secretary if he will arrange for Members of the House of Commons to have copies of the Isle of Man Bill dealing with old age, widows, and orphans which was passed by both branches but which was refused the Royal Assent.
I am afraid my right hon. Friend cannot undertake to do this. There are no spare copies of the Bill in my possession but if any Member who desires to have a copy will let me know I will see whether I can obtain one for him.
Is the hon. and gallant Gentleman aware of the reason why this Bill was refused the Royal Assent?
Yes, Sir.
Seeing that the Bill passed by the Manx Legislature was a much better Bill than the one passed by this Government, can each Member of this House be supplied with a copy in order to show the superiority of the Manx Legislation?
As I have just told the hon. Member, no further copies are available, and there is no justification for incurring the expenditure which would be necessary to provide further copies.
What was the main reason for refusing the Royal Assent to this Bill?
I think the hon. Member had better put that question down on the Paper.
Has this House any jurisdiction whatever over the affairs of the Isle of Man?
Yes, Sir.
Members of Parliament (Railway Vouchers)
asked the Chancellor of the Exchequer whether he has given consideration to the suggestion that the railway vouchers of Members of Parliament should be replaced by season tickets, and with what result.
The question whether it would be more economical to issue season tickets, instead of vouchers, to Members of the House of Commons was considered two years ago. It was found that a large increase of expenditure would be involved. The Public Accounts Committee have recently suggested that the question should again be considered in the light of the experience now accumulated, and my right hon. Friend is giving instructions accordingly.
When the noble Lord speaks of "giving instructions accordingly" does he mean instructions for the issue of season tickets or instructions to go into the matter?
Mombasa (Land Sales)
asked the Secretary of State for the Colonies whether he is aware that more Government land at Mombasa is now to be sold under a stipulation that no bid from an Indian is to be accepted; and whether this rule can be postponed until there is time to test its legality?
I assume that the question relates to the sale of residential plots at Mombasa referred to in the General Notice No. 714 in the OFFICIAL GAZETTE of the 3rd July. It appears from that Notice that the plots in question are included in the areas at Mombasa in which, as explained in reply to the question of the right hon. and gallant Member of the 10th June, 1926, racial restrictions as to leases and occupation will have to continue owing to previous legal commitments, and in these circumstances I do not feel called upon to intervene.
Will the right hon. Gentleman intimate to the public in Mombasa exactly what the area is where Indians are not allowed to buy land?
That was fixed by previous Ordinances.
Does that apply to all Government land in Mombasa?
I cannot say without notice.
Does the right hon. Gentleman agree that those on the spot are best able to judge?
indicated assent.
Colonial Reparation Claims (Maltese Seamen)
asked the Secretary of State for the Colonies why seamen of the Maltese mercantile marine have not been paid compensation for War damage, seeing that English-born seamen have received the amounts due as compensation for such damage?
The assessment of Colonial reparation claims, which is a necessary preliminary to the distribution of German reparation receipts among the Colonies and Protectorates, and consequently to the payment of ex-gratia grants to British nationals belonging to the Colonies and Protectorates, is not yet finally concluded but I have every hope that the work will be completed in the near future.
In view of the answer given many months ago that this matter was under consideration, and seeing that these people are suffering great hardship through the losses they have sustained, will the right hon. Gentleman hasten the process?
I believe the work is going on, and I hope there will be a result quite soon.
May we anticipate that there will be no discrimination between Maltese and British people?
Oh, yes.
British Army of Occupation
asked the Secretary of State for Foreign Affairs whether he can give the annual cost of the British Army of Occupation in Germany; whether the payment of this sum reduces the sum received by this country for reparations; and, if so, by how much?
The total annual cost of the British Army of Occupation in Germany is £1,299,700, and the amount received by this country out of the Dawes Annuities in respect of this is £950,000. If the British troops were withdrawn, we should cease to receive this £950,000 in payment of the cost of the Army of Occupation.
Am I right in assuming that in that case the benefit to this country in cash of withdrawing the troops would be £300,000 a year?
I do not think there would be any benefit.
Would the right hon. Gentleman inquire into this matter with the Treasury to see what the actual cash benefit would be to this country if we are paid the reparation instead of the reparation being paid for the troops?
I think the right hon. and gallant Gentleman is under a misapprehension. Supposing that no further costs were incurred by other parties in regard to the armies of occupation, we might get back 22 per cent. in additional reparations to what we now get for the cost of our troops. It is by no means certain, and it is perhaps even unlikely, that if we withdrew our troops without agreement they would not be replaced by others, and in that case there would be a total loss.
French Foreign Legion (British Subjects)
5 and 6.
asked the Secretary of State for Foreign Affairs (1) whether, in the case of British boys who have enlisted in the French Foreign Legion with the assistance of the French authorities in this country, and who are under the age of 21, although they may have given a wrong age, he will ascertain if the French authorities would be prepared to release such boys on the expenses of their return being discharged by their parents, particularly in the cases where the parents are anxious to have their sons back and where the sons are anxious to return;
(2) whether his attention has been called to the fact that the French diplomatic authorities in London pay the fares to France of applicants for enlistment in the French Foreign Legion; whether, seeing that this is a violation of the Foreign Enlistment Act, he will represent to the French authorities the inadvisability of continuing this practice; and whether he will ascertain from the French authorities if they would be prepared to release British citizens whose enlistment in the Foreign Legion has been thus facilitated when these citizens express their desire to obtain their discharge?
I am aware of the procedure adopted by the French authorities in this country. This procedure is not a violation of the Foreign Enlistment Act which, as stated in the Preamble to the Act, only applies to His Majesty's subjects during the existence of hostilities between foreign States with which His Majesty is at peace. As my right hon. Friend informed the hon. Member on the 17th of July, the French Government decline to consider the release of any person from the Legion unless he was under 18 years of age when he enlisted. Consequently, I am unable to adopt the suggestions put forward by the hon. Member.
Does not the right hon. Gentleman think it is a very sad position that the French authorities in London should advance money to young Englishmen who are in temporary difficulties in order that they may go to Boulogne, when they will repent as soon as they get there; and will he represent once more to the. French authorities that they cannot gain very much by this procedure, whereas a great deal of misery is caused to homes in England?
I would do anything I could to prevent young Englishmen enlisting in the Foreign Legions of other Powers. I think there are a great number of cases in which they regret it, and it is certainly not in the interests of our Government to permit it. The French take all reasonable precautions to see that those who offer themselves are not under 18 years of age. They may sometimes be mistaken or they are given false information which is not on the face of it untrue, and then incidents of this kind arise. We have made representations in the past, and it is quite clear that I could not make them successfully now.
I thank the right hon. Gentleman for his reply. I would like to ask him if he could request the French authorities not to advance this money.
No, Sir, I have really no right to make a request of that kind. They enlist nobody here, but if a man comes to them apparently over 18 years of age—in fact I think it is 21—
Eighteen.
They will not release them if they are over 18 years of age, but I do not think they take them unless they declare their age to be higher than that. If a person declares his desire to enlist, they pay his passage to France in order that he may be examined there, and they provide him with a return ticket, so that he can get back to this country if he is not accepted.
Could not the Foreign Secretary make himself almost disagreeable to the French Government? Would not that be almost worth while seeing the misery which is caused to these men. I know the Foreign Minister does what he can, but perhaps he may be willing to go a little further.
It is not my business as Foreign Minister to make myself disagreeable. As I have said, I will do anything I can to deter British subjects from enlisting in Foreign Legions, and, if they take the warning given by debates in this House, they will not do so.
Treaties (Approval)
asked the Secretary of State for Foreign Affairs whether the provisions of the constitu- tions of France, Germany, and the United States require the approval of their representative institutions before treaties signed by their Governments can become effective?
Yes, Sir. In France the consent of both Chambers is required; in Germany that of the Reichstag; and in the United States that of the Senate by a two-thirds majority of the Senators present.
Outlawry of War
asked the Secretary of State for Foreign Affairs whether he has received any communication from the United States Government in reply to his Note of 18th July accepting the proposed treaty in the form transmitted on 23rd June; and whether the United States Government has given an indication of the time and place it proposes to arrange for the purpose of signing the treaty?
I have had no communication from the Government of the United States of America on either matter.
International Labour Conventions (Northern Ireland)
asked the Minister of Labour whether, in view of the statement made by the British delegate at the recent International Labour Conference, he can state which Government is in practice responsible for the application in Northern Ireland of international Labour conventions which have been ratified by the British Government?
The Government of Northern Ireland is responsible for the administration of Labour matters in Northern Ireland, but has no power to conclude international conventions. Northern Ireland is bound by any obligation assumed by His Majesty's Government in respect of Northern Ireland. It is, of course, the practice to consult the Government of Northern Ireland in regard to all international Labour conventions.
Prosecutions (Children's Evidence)
asked the Attorney-General whether, in view of a recent experience, consideration will be given to the desirability of introducing legislation to prohibit a child being called to give evidence against his or her mother?
I have been asked to reply to this question. I would refer the hon. Member to the reply which my right hon. Friend gave to the hon. Member for the Central Division of Southwark (Mr. Day) on the 12th instant.
Business of the House
With reference to the Motion on the Paper in the name of the
Prime Minister, will the right hon. Gentleman kindly say whether it is intended to sit late to-night, and whether he proposes to take any other Orders in addition to the first Order?
I hope it will not be necessary to sit late, but we must get the Companies Bill by tomorrow night. As to other Orders, we want only one, namely, the Third Reading of the Post Office and Telegraph (Money) Bill.
Motion made, and Question put,
"That the Proceedings on Government Business be exempted, at this day's Sitting, from the provisions of the Standing Order (Sittings of the House)."—[ The Prime Minister. ]
The House divided: Ayes, 205; Noes, 127.
Division No. 322.] AYES. [3.38 p.m. Agg-Gardner, Rt. Hon. Sir James T. Cope, Major Sir William Hope, Capt. A. O. J. (Warw'k, Nun.) Albery, Irving James Couper, J. B. Hope, Sir Harry (Forfar) Allen, Sir J. Sandeman Cowan, Sir Wm. Henry (Islingtn., N.) Hopkinson, A. (Lancaster, Mossley) Amery, Rt. Hon. Leopold C. M. S. Craig, Sir Ernest (Chester, Crewe) Hudson, Capt. A. U. M.(Hackney, N). Astbury, Lieut.-Commander F. W. Croft, Brigadier-General Sir H. Hume, Sir G. H. Astor, Viscountess Crooke, J. Smedley (Deritend) Hunter-Weston, Lt.-Gen. Sir Aylmer Atholl, Duchess of Crookshank, Col. C. de W. (Berwick) Inskip, Sir Thomas Walker H. Baldwin, Rt. Hon. Stanley Davies, Maj. Geo. F.(Somerset, Yeovil) Jephcott, A. R. Balniel, Lord Davison, Sir W. H. (Kensington, S.) Joynson-Hicks, Rt. Hon. Sir William Barclay-Harvey C. M. Drewe, C. Kennedy, A. R. (Preston) Beamish, Rear-Admiral T. P. H. Eden, Captain Anthony King, Commodore Henry Douglas Beckett, Sir Gervase (Leeds, N.) Edmondson, Major A. J. Kinloch-Cooke, Sir Clement Bellairs, Commander Carlyon Elliot, Major Walter E. Lamb, J. Q. Benn, Sir A. S. (Plymouth, Drake) Ellis, R. G. Lane Fox, Col. Rt. Hon. George R. Bennett, A. J. Erskine, Lord (Somerset, Weston-s-M.) Lister, Cunliffe-, Rt. Hon. Sir Philip Berry, Sir George Everard, W. Lindsay Locker-Lampson, Rt. Hon. Godfrey Betterton, Henry B. Falle, Sir Bertram G. Looker, Herbert William Birchall, Major J. Dearman Falls, Sir Charles F. Lougher, Lewis Bird, Sir R. B. (Wolverhampton, W.) Fanshawe, Captain G. D. Lowe, Sir Francis William Boothby, R. J. G. Fielden, E. B. Lumley, L. R. Bourne, Captain Robert Croft Finburgh, S. MacAndrew, Major Charles Glen Bowater, Col. Sir T. Vansittart Forestier-Walker, Sir L. Macdonald, Capt. P. D. (I. of W.) Bowyer, Capt. G. E. W. Foster, Sir Harry S. McLean, Major A. Brass, Captain W. Frece, Sir Walter de Macnaghten, Hon. Sir Malcolm Bridgeman, Rt. Hon. William Clive Fremantle, Lieut.-Colonel Francis E. MacRobert, Alexander M. Briggs, J. Harold Gadie, Lieut.-Col. Anthony Makins, Brigadier-General E. Brittain, Sir Harry Ganzoni, Sir John Malone, Major P. B. Brocklebank, C. E. R. Gates, Percy Margesson, Captain D. Brooke, Brigadier-General C. R. I. Gault, Lieut.-Col. Andrew Hamilton Marriott, Sir J. A. R. Buchan, John Gilmour, Lt.-Col. Rt. Hon. Sir John Meller, R. J. Bullock, Captain M. Glyn, Major R. G. C. Meyer, Sir Frank Burman, J. B. Goff, Sir Park Mitchell, W. Foot (Saffron Walden) Burton, Colonel H. W. Grant, Sir J. A. Mitchell, Sir W. Lane (Streatham) Butler, Sir Geoffrey Grotrian, H. Brent Moles, Rt. Hon. Thomas Cadogan, Major Hon. Edward Guinness, Rt. Hon. Walter E. Monsell, Eyres, Com. Rt. Hon. B. M. Cassels, J. D. Gunston, Captain D. W. Moore, Lieut.-Colonel T. C. R. (Ayr) Cautley, Sir Henry S. Hacking, Douglas H. Moore, Sir Newton J. Cayzer, Maj. Sir Herbt. R. (Prtsmth. C.) Hammersley, S. S. Morrison, H. (Wilts, Salisbury) Cecil, Rt. Hon. Sir Evelyn (Aston) Hanbury, C. Nelson, Sir Frank Chadwick, Sir Robert Burton Hannon, Patrick Joseph Henry Nicholson, Col. Rt. Hon. W. G. (Ptrsf'ld.) Chamberlain, Rt. Hon. N. (Ladywood) Harland, A. Nuttall, Ellis Chapman, Sir S. Harrison. G. J. C. O'Neill, Major Rt. Hon. Hugh Christie, J. A. Hartington, Marquess of Oman, Sir Charles William C. Churchill, Rt. Hon. Winston Spencer Harvey, G. (Lambeth, Kennington) Ormsby-Gore, Rt. Hon. William Churchman, Sir Arthur C. Haslam, Henry C. Penny, Frederick George Clarry, Reginald George Headlam, Lieut.-Colonel C. M. Percy, Lord Eustace (Hastings) Cobb, Sir Cyril Henderson, Capt. R. R. (Oxf'd, Henley) Perkins, Colonel E. K. Cochrane, Commander Hon. A. D. Henderson, Lieut.-Col. Sir Vivian Peto, G. (Somerset, Frome) Colfox, Major Wm. Phillips Heneage, Lieut.-Col. Arthur P. Philipson, Mabel Cooper, A. Duff Holbrook, Sir Arthur Richard Plicher, G. Pilditch, Sir Philip Smith, Louis W. (Sheffield, Hallam) Watson, Rt. Hon. W. (Carlisle) Pownall, Sir Assheton Smith-Carington, Neville W. Watts, Sir Thomas Radford, E. A. Smithers, Waldron Wells, S. R. Raine, Sir Walter Sprot, Sir Alexander White, Lieut.-Col. Sir G. Dairymple- Ramsden, E. Stanley, Lieut.-Colonel Rt. Hon. G. F. Williams, A. M. (Cornwall, Northern) Rawson, Sir Cooper Storry-Deans, R. Williams, Com. C. (Devon, Torquay) Rentoul, G. S. Sueter, Rear-Admiral Murray Fraser Williams, Herbert G. (Reading) Rhys, Hon. C. A. U. Templeton, W. P. Winby, Colonel L. P. Richardson, Sir P. W. (Sur'y, Ch'ts'y) Thom, Lt.-Col. J. G. (Dumbarton) Windsor-Clive, Lieut.-Colonel George Rodd, Rt. Hon. Sir James Rennell Thomson, Rt. Hon. Sir W. Mitchell- Withers, John James Ruggles-Brise, Lieut.-Colonel E. A. Tinne, J. A. Wolmer, Viscount Russell, Alexander West (Tynemouth) Titchfield, Major the Marquess of Womersley, W. J. Sandeman, N. Stewart Tryon, Rt. Hon. George Clement Wood, E. (Chest'r, Stalyb'dge & Hyde) Sanders, Sir Robert A. Turton, Sir Edmund Russborough Wood, Rt. Hon. Sir Kingsley Sanderson, Sir Frank Waddington, R. Woodcock, Colonel H. C. Sandon, Lord Wallace, Captain D. E. Sassoon, Sir, Philip Albert Gustave D. Ward, Cot. J. (Stoke-upon-Trent) TELLERS FOR THE AYES.— Savery, S. S. Warner, Brigadier-General W. W. Major Sir George Hennessy and Captain Viscount Curzon. Sheffield, Sir Berkeley Warrender, Sir Victor Skelton, A. N. Watson, Sir F. (Pudsey and Otley)
NOES. Adamson, Rt. Hon. W. (Fife, West) Hartshorn, Rt. Hon. Vernon Roberts, Rt. Hon. F. O. (W. Bromwich) Adamson, W. M. (Staff., Cannock) Henderson, Right Hon. A. (Burnley) Robinson, W. C. (Yorks, W. R., Elland) Alexander, A. V. (Sheffield, Hillsbro') Hirst, G. H. Runciman, Rt. Hon Walter Ammon, Charles George Hirst, W. (Bradford, South) Salter, Dr. Alfred Attlee, Clement Richard Hore-Belisha, Leslie Scrymgeour, E. Baker, Walter Hudson, J. H. (Huddersfield) Scurr, John Barker, G. (Monmouth, Abertillary) Hutchison, Sir Robert (Montrose) Sexton, James Barnes, A. Jenkins, W. (Glamorgan, Neath) Shaw, Rt. Hon. Thomas (Preston) Barr, J. John, William (Rhondda, West) Shiels, Dr. Drummond Batey, Joseph Johnston, Thomas (Dundee) Shinwell, E. Bowerman, Rt. Hon. Charles W. Jones, Henry Haydn (Merioneth) Smilile, Robert Broad, F. A. Jones, Morgan (Caerphilly) Smith, Rennie (Penistene) Bromfield, William Jones, T. I. Mardy (Pontypridd) Snell, Harry Brown, Ernest (Leith) Jones, W. N. (Carmarthen) Snowden, Rt. Hon. Philip Brown, James (Ayr and Bute) Kelly, W. T. Stamford, T. W Cape, Thomas Kennedy, T. Stephen, Campbell Cluse, W. S. Lansbury, George Stewart, J. (St. Rollox) Clynes, Rt. Hon. John R. Lawrence, Susan Sutton, J. E. Connolly, M. Lawson, John James Thomas, Sir Robert John (Anglesey) Cove, W. G. Lee, F. Thurtle, Ernest Cowan, D. M. (Scottish Universities) Livingstone, A. M. Tinker, John Joseph Crawfurd, H. E. Longbottom, A. W. Tomlinson, R. P. Davies, Rhys John (Westhoughton) Lunn, William Trevelyan, Rt. Hon. C. P. Day, Harry MacDonald, Rt. Hon. J. R. (Aberavon) Varley, Frank B. Dennison, R. Mackinder, W. Viant, S P. Duckworth, John MacLaren, Andrew Walsh, Rt. Hon. Stephen Duncan, C. Maclean, Neil (Glasgow, Govan) Watson, W. M. (Dunfermline) Edwards, C. (Monmouth, Bedwellty) Macpherson, Rt. Hon. James I. Watts-Morgan, Lt.-Col. D. (Rhonddel- Gardner, J. P. Malone, C. L'Estrange (N'thampton) Webb, Rt. Hon. Sidney Gibbins, Joseph March, S. Wedgwood, Rt. Hon. Josiah Gosling, Harry Maxton, James Wellock, Wilfred Graham, Rt. Hon. Wm. (Edin., Cent.) Mitchell, E. Rosslyn (Paisley) Westwood, J. Greenall, T. Montague, Frederick Wheatley, Rt. Hon. J. Greenwood, A. (Nelson and Coine) Morrison, R. C. (Tottenham, N.) Wiggins, William Martin Grenfell, D. R. (Glamorgan) Murnin, H. Wilkinson, Ellen C. Griffith, F. Kingsley Oliver, George Harold Williams, C. P. (Denbigh, Wrexham) Griffiths, T. (Monmouth, Pontypool) Owen, Major G. Williams, David (Swansea, East) Groves, T. Palin, John Henry Williams, T. (York, Don Valley) Grundy, T. W. Parkinson, John Allen (Wigan) Wilson, C. H. (Sheffield, Attercliffe Hall, F. (York, W. R., Normanton) Ponsonby, Arthur Wilson, R. J. (Jarrow) Hall, G. H. (Merthyr Tydvil) Potts, John S. Wright, W. Hardie, George D. Richardson, R. (Houghton-le-Spring) Harris, Percy A. Riley, Ben TELLERS FOR THE NOES.— Mr. Hayes and Mr. Whiteley.
Isle of Man (Customs) Bill,
"to amend the Law with respect to Customs in the Isle of Man," presented by Mr. Arthur Michael Samuel; to be read a Second time To-morrow, and to be printed. [Bill 191.]
Bills Reported
Ministry of Health Provisional Orders Confirmation (No. 10) Bill [ Lords ],
Reported, without Amendment [Provisional Orders confirmed]; Report to lie upon the Table.
Bill to be read the Third time Tomorrow.
Ministry of Health Provisional Orders Confirmation (No. 11) Bill [ Lords ],
Reported, without Amendment [Provisional Orders confirmed]; Report to lie upon the Table.
Bill to be read the Third time Tomorrow.
Dagenham Urban District Council Bill [ Lords ],
Reported, with Amendments; Report to lie upon the Table, and to be printed.
Message from the Lords
That they have agreed to,—
Dudley Corporation Bill, with Amendments.
Amendments to—
Nottinghamshire and Derbyshire Tramways (Trolley Vehicles, etc.) Bill [ Lords ],
Dover Gas Bill [ Lords ], without Amendment.
Shops (Hours of Closing) Bill
Lords Amendments to be considered upon Friday, and to be printed. [Bill 192.]
Orders of the Day
Companies Bill
As amended ( in the Standing Committee ) considered.
NEW CLAUSE.—(Transfer of shares or debentures not to be registered except on production of instrument of transfer.)
Notwithstanding anything in its articles it shall not be lawful for a company to register a transfer of shares in or debentures of the company unless a proper instrument of transfer has been delivered to the company.
Provided that nothing in this Section shall prejudice any power of the company to register as shareholder or debenture holder any person to whom the right to any shares in or debentures of the company has been transmitted by operation of law.—[ Sir P. Cunliffe-Lister. ]
Brought up, and read the First time.
I beg to move, "That the Clause be read a Second time."
This is a drafting Amendment, recasting a Clause that was accepted in Committee.
This Clause is to take the place of one moved by the hon. Member for East Ham, North (Miss Lawrence) in Committee. On the whole, the wording is rather more favourable to our point of view than the Clause in the Bill and I propose not to oppose it.
Question put, and agreed to.
Clause read a Second time, and added to the Bill.
NEW CLAUSE.—(Declaration of law as to payments received by directors for loss of office or on retirement.)
(1) It is hereby declared that it is not lawful in connection with the transfer of the whole or any part of the undertaking or property of a company for any payment to be made to any director of the company by way of compensation for loss of office or as consideration for or in connection with his retirement from office unless particulars with respect to the proposed payment, including the amount thereof, have been disclosed to the members of the company and the proposal approved by the company, and where any payment which is hereby declared to be illegal is made to a director of the company the amount re- ceived shall be deemed to have been received by him in trust for the company.
(2) Where any payment is to be made as aforesaid to any director of a company in connection with the transfer to any persons, as a result of an offer made to the general body of shareholders, of all or any of the shares in the company, it shall be the duty of that director to take all reasonable steps to secure that particulars with respect to the proposed payment, including the amount thereof, shall be included in or sent with any notice of the offer made for their shares which is given to any members of the company.
(3) If any such director fails to take reasonable steps as aforesaid, or if any person who has been required by any such director to include the said particulars in or send them with any such notice fails so to do, he shall be liable to a fine not exceeding twenty-five pounds, and if the requirements of the last foregoing Subsection are not complied with in relation to any such payment, any sum received by the director on account of the payment shall be deemed to have been received by him in trust for any persons who have sold their shares as a result of the offer made.
(4) If in connection with any such transfer as aforesaid the price to be paid to any director of the company whose office is to be abolished or who is to retire from office for any shares in a company held by him is in excess of the price which could at the time have been obtained by other holders of the like shares the excess shall, for the purposes of this Section, be deemed to have been a payment made to him by way of compensation for loss of office or as consideration for or in connection with his retirement from office.
(5) Nothing in this Section shall be taken to prejudice the operation of any rule of law requiring disclosure to be made with respect to any such payments as are mentioned in this Section or with respect to any other like payments made or to be made to the directors of a company.—[ Sir P. Cunliffe-Lister. ]
Brought up, and read the First time.
I beg to move, "That the Clause be read a Second time."
This is a recasting of Clause 80 in the Bill. I gave an undertaking that I would so recast it as to provide effectively for, a declaration of the compensation payable to a retiring director. The first Subsection provides that, where the whole or part of the undertaking is sold, particulars have to be disclosed and, if they are not, any amount that is received is to be held in trust for the company. In the second place, if the shareholders are invited to sell their shares and compensation is payable to a retiring director the disclosure, of course, is made to the share- holders and in that case, if there has been a failure to disclose, the money the director receives is not to be held in trust for the company but must be held in trust for the other shareholders. There is a provision which says the directors must take all reasonable steps to secure that these facts are brought to the notice of the shareholders, and there is a penalty Clause for failure to take all reasonable steps.
Lastly, there is a very necessary provision that nothing shall prejudice the law. I notice there are three Amendments down in the name of the hon. Member for Hillsborough (Mr. A. V. Alexander). He wants to leave out the words "all reasonable steps" and make the liability upon the director absolute in every case. I am sure he will see that that would not be a reasonable Amendment. When an offer to buy the shares is made to the shareholders by another company it is not sent out by the retiring director but by the new company, and therefore all that the director can reasonably be asked to do—and I quite agree he should be asked to do it—is to take all reasonable steps to secure that particulars are made known. 1f, as a matter of fact, there should be a failure to disclose completely, not due to the wrongful action of the director, who has done everything he could, but on the part of the purchasing company, I do not think the director ought to be held liable. The Clause has been very carefully considered, and I hope it will be accepted.
I beg to move, in line 14, to leave out the words "take all reasonable steps to."
On a point of Order. Am I right in thinking a Clause cannot be amended until it has been read a Second time?
The hon. and gallant Gentleman is quite right. If the hon. Gentleman wishes to speak on the Question "That the Clause be read a Second time," he can do so, but he cannot amend the Clause until it has been read a Second time.
One was misled by the fact that the President of the Board of Trade, no doubt like ourselves, anxious to save time on a very long Bill, referred to the Amendment in moving the Second Reading of the Clause. I think that it is only reasonable to ask that where contracts of this kind are agreed to and a company is being disposed of, the directors who are interested in the contract or in the compensation to be paid should themselves actually be responsible for seeing that proper notification is made to the shareholders of the company, and, I think also, to the people who may be asked to subscribe to any new company which is going to acquire the holding. The Amendments which we are proposing to move, and which I will move formally after the Debate on the Second Reading, are not unreasonable. They make it perfectly clear that there shall not be a case left for the Court to decide as to whether reasonable steps have been taken or not. That would always lead to very great confusion. There seems to me to be no great reason why a Court should decide under a Statute whether a director has been guilty of an offence or not. If a director is actually going to benefit very materially from contracts or arrangements of this kind, we ought to make it quite plain that he shall make the position public.
I ask the House to consider for one moment whether the proposed Amendments are not desirable Amendments to this excellent Clause. If the Clause is put on Second Reading, we shall all vote for it, but the right hon. Gentleman, in his speech in defence of the Clause, has made it clear that unless we strengthen it, as in the proposed Amendments, the Clause will really be a dead letter in every case that the purchasing company makes an offer to purchase shares to all the shareholders in the old company, and this is going on daily in connection with what is called the rationalisation of industries. If the Clause remains as it stands here, the director is getting what I cannot help calling an unfair advantage by being compensated for loss of office in addition to the sale of his shares. That director can meet the letter of the law, as it will be if this Clause is carried unamended, by merely communicating to the purchasing company, and saying: "Of course, when you offer to purchase the shares of my shareholders, you will tell them that I am getting £5,000." If he does that, he will fulfil all that the law requires if the law is as now proposed by the Government. What under those circumstances will obviously be the course followed by the purchasing companies? They will not mention that damning fact. If they did, the shareholders would see that they were not getting the full value and they would decline to sell their shares or to allow the transaction to go through. Therefore, it is in the interests of the purchasing company not to give away the information that the directors of the old company are getting special consideration. If we make the Amendment which is proposed by my hon. Friend the Member for Hillsborough (Mr. Alexander) that will be impossible. If this Amendment and the subsequent Amendments are carried, then it will be necessary, and then only, for the directors in the old company—not in the purchasing company, but in the old company—to circularise their shareholders with the facts of the case. That is done very often at the present time.
And very often not done.
And very often not done. Observe the cases in which it is not done. It is not done when there is precisely some facts of this sort which they wish to conceal. If we carry the Clause with the proposed Amendments, we shall in every case force the selling company directors to circularise their shareholders advising them on the question of the sale or purchase and mentioning the fact that the directors of the old company are getting so much hard cash. That seems to me to be a very desirable thing. The right hon. Gentleman says that in some cases that is impracticable. It is never impracticable if you choose to go to the expense of circularising your shareholders, but it will, of course, be found to be impracticable if this information does not get out. Is it necessary that this House should go to great trouble to protect directors from the undue demands of the shareholders that they should be informed of a point like this? Ought we to cook the Clause, as we shall be doing, if we carry it in the form which is proposed by the Government, knowing perfectly well that the people who are being protected are the directors who are doing, after all, something which is not in the interests of the shareholders, but something for themselves? I do not want to be squeamish or to go to great trouble to protect these people doing that sort of work. All that we on these benches ask is, that we shall have publicity. We have not had any sort of publicity for it up till now. If this Clause is carried, there will be apparent publicity but nothing more, but, if the Amendments are carried, we shall in every case get the facts of the case disclosed to the selling shareholders, and that will only be doing justice to the selling shareholders and not more than justice to the directors, who are getting a bonus on effecting these transactions.
Question, "That the Clause be read a Second time," put, and agreed to.
Clause read a Second time.
I beg to move, in line 14, to leave out the words "take all reasonable steps to."
I do not want to repeat the arguments already put to the House by myself and my right hon. and gallant Friend the Member for Newcastle-under-Lyme (Colonel Wedgwood), and I merely move my Amendment formally in order to hear what the right hon. Gentleman the President of the Board of Trade has to say.
4.0 p.m.
This is not a matter of principle at all, and all sides of the House are agreed as to what is desired to be done, namely, that when a transaction of this sort is carried through everybody concerned shall know all the material facts about it. That seems to me to be the only consideration that matters. As far as I am concerned, I think that the words in the Clause, as proposed and carried, do meet the object in view. It may be that the word "reasonable" can be replaced by a better word, but I would suggest to the right hon. and gallant Gentleman the Member for Newcastle-under-Lyme (Colonel Wedgwood) that the person who is going to decide whether all reasonable steps have been taken is not himself or myself or any Member of this House; it is the Court. The Court will know perfectly well what is the intention of this Bill when it has become an Act, and it will also know that the intention is that the directors are to communicate with all shareholders and all persons interested and to take all reasonable steps to communicate to them the material facts concerned. It is quite obvious in cases of that sort, with the law reading as it does in this Clause, that no Court will be satisfied if the directors have been perfunctory or have taken formal steps. The Court will require to be shown that the directors have taken, as the Clause says, "all reasonable steps." The Court must obviously realise the meaning of the Clause. If you take out these words, there may be certain cases arise where directors would have acted in a perfectly bona fide manner but for the fact that illness had supervened, and you might in consequence penalise a man who had done his best to carry out the intentions of the law. I really think we ought not to waste very much time on the discussion of this Clause. As I say, it is not a matter of principle, but of whether the particular words do achieve what we all want. As far as I see they do achieve it, and, therefore, I shall support the Clause.
The hon. Member who has just spoken has, I think, correctly stated the position. The words which it is proposed to leave out do no more than state the question which every reasonable man must put to himself to see whether the person in question has fulfilled his duty. The intention of hon. Members opposite as well as ourselves is to see that a certain duty is laid upon the director who receives payment. If we leave out the words "take all reasonable steps," we put ourselves in this absurd position, that we put a duty upon a director, when all that is possible for a human being in this connection is to see that a certain result is achieved. If we leave out these words we put upon a man an absolute duty which he cannot really perform. If hon. Members have a duty to see that some notice is issued to the public, it is quite impossible to superintend the sticking up of every envelope which goes out to members of the public. All that they can possibly do is to give notice to the officials that it is their duty to despatch the notice. They would say, "I wish this notice to be posted, and please see that it is done." It is impossible to stand over typists and clerks to see that the duty is carried out. I do not see that there is any question of principle between us on this matter, and I hope that hon. Members will agree to the common form in which the intention of both parties is expressed.
I am sorry, but I am not at all satisfied with the answer of the Attorney-General. I think the Clause as it stands is going to be comparatively useless. The Courts would have to determine what are reasonable steps, and that means that we are going to invite a great deal of litigation in regard to whether the directors have taken satisfactory steps or not, and the poorer shareholders may be left without adequate protection. I cannot see that the Attorney-General is correct when he says that if you put this absolute responsibility upon a director, it is a responsibility that he cannot fulfil, that it would mean standing over the typists, seeing personally that every circular was addressed and then going with every postman and seeing that he delivered the circular. I believe that that is quite to disregard what will be the effect of this Amendment. There is evidently a very distinctive difference between us. We believe that there should be this absolute responsibility put upon the director. It is his job. The President of the Board of Trade gave an example in connection with the matter, and I myself saw the necessity for the Amendment, because he said a director might take steps but you could not expect him to take more than a certain amount of trouble. The director would make representation to the new company that there should be this statement sent out. He would draw up the statement and say, "Send that out." He would say, "I put it strongly to the new company. I suggest that this information should be given, and I have taken all reasonable steps." But suppose you take out these words. Then the responsibility is laid upon the directors to see that they themselves send out the necessary circulars.
Consequently, I think that the Amendment is very necessary. After all, the only people upon whom there will be any serious burden laid are the people you are seeking to get at by inserting this new Clause. The ordinary director, who is carrying through a perfectly legitimate transaction, will be quite anxious to see that his shareholders get all adequate knowledge. They will see that he, as a business man, has been absolutely loyal to the trust imposed upon him, and the only people who would be affected if the Amendment were accepted by the Government would be the people who are seeking to act unfairly to the shareholders. I hope, therefore, the Amendment will be accepted.
There are two points arising on this Clause to which I should like to direct the attention of my right hon. Friend. They both occur in connection with Sub-section (4).
The hon. Member had better raise them on the Question, "That the Clause be added to the Bill."
I think the last speaker, and also the right hon. and gal lant Member for Newcastle-under-Lyme (Colonel Wedgwood), are under a misapprehension with reference to this Clause. It is the directors of the selling company that must make all these facts known to their shareholders—to record the price they have been offered, and also if any emoluments are coming to them for loss of office. In many cases, we know, the shareholders have not been fully informed in the past. This Clause will make clear to the selling company, When the notice is sent to the shareholders, the price offered for their shares, and, in addition, what the directors are getting, either by a lump sum or annuity, for loss of office as directors.
Question put, "That the words proposed to be left out stand part of the proposed Clause."
The House divided: Ayes, 214; Noes, 112.
Division No. 323.] AYES. [4.10 p.m. Agg-Gardner, Rt. Hon. Sir James T. Crawfurd, H. E. Hills, Major John Walter Albery, Irving James Crooke, J. Smedley (Deritend) Hope, Sir Harry (Forfar) Alexander, E. E. (Leyton) Crookshank, Col. C. de W. (Berwick) Hopkinson, A. (Lancaster, Mossley) Allen, Sir J. Sandeman Curzon, Captain Viscount Horne, Rt. Hon. Sir Robert S. Amery, Rt. Hon. Leopold C. M. S Dalkeith, Earl of Hudson, Capt. A. U. M.(Hackney, N.) Astbury, Lieut.-Commander F. W. Davies, Maj. Geo. F.(Somerset, Yeovil) Hurst, Gerald B. Balniel, Lord Davison, Sir W. H. (Kensington, S.) Hutchison, Sir Robert (Montrose) Barclay-Harvey, C. M. Dawson, Sir Philip Inskip, Sir Thomas Walker H. Beamish, Rear-Admiral T. P. H. Drewe, C. James, Lieut.-Colonel Hon. Cuthbert Beckett, Sir Gervase (Leeds, N.) Duckworth, John Jones, W. N. (Carmarthen) Bellairs, Commander Carlyon Eden, Captain Anthony Joynson-Hicks, Rt. Hon. Sir William Benn, Sir A. S. (Plymouth, Drake) Edmondson, Major A. J. Kennedy, A. R. (Preston) Bennett, A. J. Elliot, Major Walter E. King, Commodore Henry Douglas Bentinck, Lord Henry Cavendish- Ellis, R. G. Kinloch-Cooke, Sir Clement Birchen, Major J. Dearman Erskine, Lord (Somerset, Weston-s.-M.) Lamb, J. Q. Boothby, R. J. G. Everard, W. Lindsay Lane Fox, Col. Rt. Hon. George R. Bourne, Captain Robert Croft Falle, Sir Bertram G. Lister, Cunliffe-, Rt. Hon. Sir Philip Bowater, Col. Sir T. Vansittart Falls, Sir Charles F. Livingstone, A. M. Bowyer, Captain G. E. W. Fanshawe, Captain G. D. Locker-Lampson, Rt. Hon. Godfrey Braithwaite, Major A. N. Fielden, E. B. Looker, Herbert Williarr Brass, Captain W. Forestler-Walker, Sir L. Luce, Maj.-Gen. Sir Richard Harman Brassey, Sir Leonard Foster, Sir Harry S. Lumley, L. R. Bridgeman, Rt. Hon. William Clive Frece, Sir Walter de MacAndrew, Major Charles Glen Briggs, J. Harold Gadie, Lieut.-Colonel Anthony Macdonald, Capt. P. D. (I. of W.) Brittain, Sir Harry Ganzoni, Sir John Macdonald, R. (Glasgow, Cathcart) Brown, Col. D. C. (N'th'l'd., Hexham) Gates, Percy McLean, Major A. Brown, Ernest (Leith) Gilmour, Lt.-Col. Rt. Hon. Sir John Macmillan Captain H. Buckingham, Sir H. Glyn, Major R. G. C. Macnaghten, Hon. Sir Malcolm Bullock, Captain M. Goff, Sir Park MacRobert, Alexander M. Burman, J. B. Grant, Sir J. A. Makins, Brigadier-General E. Butler, Sir Geoffrey Grenfell, Edward C. (City of London) Malone, Major P. B. Campbell, E. T. Griffith, F. Kingsley Manningham-Buller, Sir Mervyn Carver, Major W. H. Grotrian, H. Brent Margesson, Captain D. Cassels, J. D. Guinness, Rt. Hon. Walter E. Marriott, Sir J. A. R. Cautley, Sir Henry S. Hamilton, Sir George Mailer, R. J. Cecil, Rt. Hon. Sir Evelyn (Aston) Hammersiey, S. S. Meyer, Sir Frank Chadwick, Sir Robert Burton Hannon, Patrick Joseph Henry Mitchell, W. Foot (Saffron Walden) Chamberlain, Rt. Hn. Sir J. A.(Birm., W.) Harland, A. Mitchell, Sir W. Lane (Streatham) Chamberlain, Rt. Hon. N. (Ladywood) Harney, E. A Moles, Rt. Hon. Thomas Chapman, Sir S. Harris, Percy A. Monsell, Eyres, Com. Rt. Hon. B. M. Christie, J. A. Harrison, G. J. C. Moore, Lieut.-Colonel T. C. R. (Ayr) Churchman, Sir Arthur C. Hartington, Marquess of Moore, Sir Newton J. Clarry, Reginald George Harvey, G. (Lambeth, Kennington) Morrison, H. (Wilts, Salisbury) Cobb, Sir Cyril Haslam, Henry C. Morrison-Bell, Sir Arthur Clive Cochrane, Commander Hon. A. D. Headlam, Lieut.-Colonel C. M. Nelson, Sir Frank Colfax, Major Wm. Phillips Henderson, Capt. R. R.(Oxf'd, Henley) Newman, Sir R. H. S. D. L. (Exeter) Cooper, A. Duff Henderson, Lieut.-Col. Sir Vivian Nicholson, Col. Rt. Hn. W. G.(Ptrsf'ld.) Cowan, D. M. (Scottish Universities) Heneage, Lieut.-Colonel Arthur P. Nuttall, Ellis Craig, Sir Ernest (Chester, Crewe) Hennessy, Major Sir G. R. J. O'Neill, Major Rt. Hon. Hugh Penny, Frederick George Scott, Rt. Hon. Sir Leslie Watson, Rt. Hon. W. (Carlisle) Percy, Lord Eustace (Hastings) Shepperson, E. W. Watts, Sir Thomas Perkins, Colonel E. K. Skelton, A. N. Wells, S. R. Peto, G. (Somerset, Frome) Smith, Louis W. (Sheffield, Hallam) White, Lieut.-Col. Sir G. Dairymple- Pilcher, G. Smith-Carington, Neville W. Wiggins, William Martin Pilditch, Sir Philip Smithers, Waldron Williams, A. M. (Cornwall, Northern) Pownall, Sir Assheton Sprot, Sir Alexander Williams, Com. C. (Devon, Torquay) Price, Major C. W. M. Stanley, Lieut.-Colonel Rt. Hon. G. F. Williams, C. P. (Denbigh, Wrexham) Radford, E. A. Storry-Deans, R Wilson, Sir C. H. (Leeds, Central) Raine, Sir Walter Strauss, E. A. Wilson, R. R. (Stafford, Lichfield) Ramsden, E. Sueter, Rear-Admiral Murray Fraser Windsor-Clive, Lieut.-Colonel George Rhys, Hon. C. A. U. Sugden, Sir Wilfrid Withers, John James Rodd, Rt. Hon. Sir James Rennell Templeton, W. P. Wolmer, Viscount Ropner, Major L. Thom, Lt.-Col. J. G. (Dumbarton) Womersley, W. J. Ruggles-Brise, Lieut.-Colonel E. A. Thomson, Rt. Hon. Sir W. Mitchell- Wood, E. (Chest'r, Stalyb'dge & Hyde) Runciman, Rt, Hon. Walter Tinne, J. A. Wood, Rt. Hon. Sir Kingsley Russell, Alexander West (Tynemouth) Titchfield, Major the Marquess of Woodcock, Colonel H. C. Salmon, Major I. Tomlinson, R. P. Worthington-Evans, Rt. Hon. Sir L. Sandeman, N. Stewart Tryon, Rt. Hon. George Clement Yerburgh, Major Robert D. T. Sanders, Sir Robert A. Turban, Sir Edmund Russborough Sanderson, Sir Frank Waddington, R. TELLERS FOR THE AYES.— Sandon, Lord Wallace, Captain D. E. Sassoon, Sir Philip Albert Gustave D. Warner, Brigadier-General W. W Major Sir William Cope and Sir Victor Warrender. Savery, S. S. Waterhouse, Captain Charles
NOES. Adamson, Rt. Hon. W. (Fife, West) Hayes, John Henry Shaw, Rt. Hon. Thomas (Preston) Adamson, W. M. (Staff., Cannock) Henderson, Rt. Hon. A. (Burnley) Shepherd, Arthur Lewis Alexander, A. V. (Sheffield, Hillsbro') Hirst, G. H. Shiels, Dr. Drummond Ammon, Charles George Hirst, W. (Bradford, South) Shinwell, E. Attlee, Clement Richard Hudson, J. H. (Huddersfield) Short, Alfred (Wednesbury) Baker, Walter Jenkins, W. (Glamorgan, Neath) Smillie, Robert Barker, G. (Monmouth, Abertillery) John, William (Rhondda, West) Smith, H. B. Lees (Keighley) Barnes, A. Johnston, Thomas (Dundee) Smith, Rennie (Penistone) Barr, J. Jones, J. J. (West Ham, Silvertown) Snell, Harry Batey, Joseph Jones, T. I. Mardy (Pontypridd) Snowden, Rt. Hon. Philip Bowerman, Rt. Hon. Charles W. Kelly, W. T. Stamford, T. W. Broad, F. A. Kennedy, T. Stephen, Campbell Bromfield, William Lansbury, George Stewart, J. (St. Rollox) Brown, James (Ayr and Bute) Lawrence, Susan Sutton, J. E. Buxton, Rt. Hon. Noel Lawson, John James Thomas, Sir Robert John (Anglesey) Cape, Thomas Lee, F. Thorne, W. (West Ham, Plaistow) Cluse, W. S. Longbottom, A. W. Thurtle, Ernest Connolly, M. Lowth, T. Tinker, John Joseph Cove, W. G. Lunn, William Trevelyan, Rt. Hon. C. P. Davies, Rhys John (Westhoughton) Mackinder, W. Varley, Frank B. Day, Harry Maclean, Neil (Glasgow, Govan) viant, S. P. Dennison, R. Malone, C. L'Estrange (N'thampton) Walsh, Rt. Hon. Stephen Duncan, C. March, S. Watson, W. M. (Dunfermline) Dunnico, H. Maxton, James Watts-Morgan, Lt.-Col. D. (Rhondda) Gardner, J. P. Mitchell, E. Rosslyn (Paisley) Wedgwood, Rt. Hon. Josiah Gibbins, Joseph Montague, Frederick Wellock, Wilfred Gillett, George M. Morrison, R. C. (Tottenham, N.) Westwood, J. Gosling, Harry Murnin, H. Wheatley, Rt. Hon. J. Graham, Rt. Hon. Wm. (Edin., Cent.) Oliver, George Harold Whiteley, W. Greenall, T. Palin, John Henry Wilkinson, Ellen C. Greenwood, A. (Nelson and Colne) Ponsonby, Arthur Williams, David (Swansea, E.) Grenfell, D. R. (Glamorgan) Potts, John S. Williams, T. (York, Don Valley) Griffiths, T. (Monmouth, Pontypool) Richardson, R. (Houghton-le-Spring) Wilson, C. H. (Sheffield, Attercliffe) Groves, T Riley, Ben Wilson, R. J. (Jarrow) Grundy, T. W. Roberts, Rt. Hon. F. O. (W, Bromwich) Hall, F. (York, W. R., Normanton) Robinson, W. C. (Yorks, W. R., Elland) TELLERS FOR THE NOES.— Hall. G. H. (Merthyr Tydvil) Salter, Dr. Alfred Mr. Allen Parkinson and Mr. Charles Edwards. Hardie, George D. Scurr, John Hartshorn, Rt. Hon. Vernon Sexton, James
Motion made, and Question proposed, "That the Clause be added to the Bill."
I should like an planation in connection with Sub-section (4) relating to the words
"in excess of the price which could at the time have been obtained."
Is it not necessary to insert there words which would provide how such price could be ascertained when the share has no market quotation? There may be a bar- gain and it may be impossible to say what price could have been obtained at the time. Unless words are put in which provide some machinery for ascertaining the price, this Sub-section may lead to a great deal of uncertainty and a great many loopholes in the operation of the Clause. I should also like to draw attention to the words which follow those which I have already quoted:
"by other holders of the like shares."
I think it is necessary to insert there the words:
"not being directors or nominees of the directors."
Unless you do this it may happen that other directors may be able to secure the same prices as the director whose office is being abolished and for the same reason, while other holders, not being directors, could not obtain their price. In such a case it might be said that other holders could obtain the same price though all other holders could not. The intention is that the director shall not receive as compensation a greater price than an ordinary shareholder could receive unless he discloses it and gets approval.
This Subsection has been very carefully considered and there is no case for the insertion of the words suggested by the hon. Member. The position is that a general offer will be made to the general body of shareholders. That is the test that must be applied, and to attempt to put in some definition which no Court could enforce, would simply encumber the Act and would have an effect opposite to that which the hon. Member desires.
Question put, and agreed to.
Clause added to the Bill.
NEW CLAUSE.—(Disclosure by directors of interest in contracts.)
(1) Subject to the provisions of this Section, it shall be the duty of any director of a company who is in any way, whether directly or indirectly, interested in a contract or proposed contract with the company to declare the nature of his interest at a meeting of the directors of the company.
(2) In the case of a proposed contract the declaration required by this Section to be made by a director shall be made at the meeting of the directors at which the question of entering into the contract is first taken into consideration, or if the director was not at the date of that meeting interested in the proposed contract, at the next meeting of the directors, held after he became so interested, and in a case where the director becomes interested in a contract after it is made, the said declaration shall be made at the first meeting of the directors held after the director becomes so interested.
(3) For the purpose of this Section a general notice given to the directors of a company by any director to the effect that he is a member of a specified company or firm and is to be regarded as interested in any contract which may, after the date of the notice, be made with that company or firm shall be deemed to be a sufficient declaration of interest in relation to any contract so made.
(4) Any director who fails to comply with the provisions of this Section shall be liable to a fine not exceeding one hundred pounds.
(5) Nothing in this Section shall be taken to prejudice the operation of any rule of law restricting directors of a company from having any interest in contracts with the company.—[ The Attorney-General. ]
Brought up, and read the First time.
I beg to move, "That the Clause be read a Second time.
This new Clause is intended to effect the purpose which the hon. Member for Hillsborough had in mind when he moved an Amendment in Committee on this subject. It is a Clause which requires a director to disclose his interest in any contract which it is proposed that the company shall enter into or into which the company has in fact entered. The hon. Member's Amendment in Committee was based upon a form in the Indian Companies (Amendment) Act, but it was defective in this respect that it only required a director to disclose his interest in connection with a contract which the company had already entered into. I think our new Clause is an improvement in that respect, because it requires a director to disclose his interest as soon as discussion begins upon the proposal that a certain contract shall be made. I hope that hon. Members will accept this new Clause as completely satisfactory for the purpose intended.
I welcome this new Clause, but I hope the Attorney-General does not mean it to be the last word on the question of contracts in which company directors are interested. This safeguard to shareholders is a very limited and restricted safeguard and a great deal more is required, because there is a very common article included in the ordinary Articles of Association of companies by which a director if he discloses his interest in a, contract, is not thereby disabled from voting on a particular contract. I think the time has arrived when interested directors should not only disclose their interest but should be precluded from voting on contracts in which they are interested. It is with that object in view that I have put down an Amendment to Clause 77, which apears on page 1213 of the Order Paper. That must be my apology for saying a few words on the new Clause now before the House.
There is a very great danger in the present evolution of the practice of companies by which directors may vote on contracts in which they are interested, and I think that the mere disclosure of that interest is an inadequate safeguard to the ordinary shareholders in the company. Take the case of a holding company who hold, say, 51 per cent, or more of the shares of a subsidiary company. They appoint their nominees as directors of the subsidiary company and they so administer the affairs of the subsidiary company that the subsidiary company is tied hand and foot to the holding company, and the directors as nominees of the holding company look upon any contract from the point of view of the holding company which nominates them and not from the point of view of the minority shareholders in the subsidiary company. The result is that they are interested in making contracts in the interests of the holding company, and the mere fact that the directors make a disclosure of their interest is no safeguard to the minority shareholders. The only way in which this safeguard can be prevented from being illusory, is to add to the legal necessity of disclosure the legal disability for such directors to vote or, alternatively, to give the right to minorities in subsidiary companies to nominate an independent director.
Under the present system, if one body of persons can command a majority of the shares, 51 per cent. or more, they can dominate the board of directors, and the disclosure of interest in a contract is of no value whatever to the minority shareholders. The fact that they disclosed their interest in 99 cases out of 100 does not disable them from voting on contracts, and the minority shareholders are left without a remedy. Of course, in cases where they can show fraud they have a remedy against the directors, but to enter into contracts in which you are interested is not in itself fraud. In the first place, the minority shareholders have not the information to enable them to know whether there is fraud or not and, secondly, the contracts are not necessarily fraudulent; but at the same time they are in many cases contracts in which the interests of the nominated outside body are paramount over the interests of the actual subsidiary company. Therefore, while we welcome the new Clause in its present form, I do hope that it does not mean that the President of the Board of Trade and the Attorney-General are closing their eyes to the need of doing something much more drastic than requiring mere disclosure from directors that they have certain interests, seeing that they are commonly allowed to vote on contracts in which they have a personal interest or in which their nominators have a personal interest.
There are very few words which have been expressed by the hon. and learned Member who has just spoken with which I do not agree, and certainly in Committee our views were not out of harmony with the views which he has expressed but we got very little change from the Government. We are, however, getting a concession and I am very anxious to take what is offered, for fear that we might not get as much if we objected. I moved an Amendment on this matter in Committee but in his reply to me the President of the Board of Trade said that he would ask me to withdraw the Amendment, not because it was wrung for a director to disclose his interest but because it was most undesirable that he should be under a statutory obligation to do it.
I said that I was advised that it was already the law.
From my point of view, the new Clause makes it a statutory obligation to disclose, and the President of the Board of Trade said he thought that was undesirable. The hon. and learned Member for Moss Side (Mr. G. Hurst) opposite will see that we have moved a little way towards the goal which some of us desire to reach, and from that point of view I am grateful to the Government that they have made an effort to meet us on this point. They have met us on very few points; therefore, I am very anxious that we should accept this concession.
Question put, and agreed to.
Clause read a Second time, and added to the Bill.
The next new Clause—( Appointment and Remuneration of Auditors )—standing in the name of the hon. Member for Hillsborough (Mr. A. V. Alexander) would be better as an Amendment to Clause 84. The further new Clause which stands in the name of the hon. Member—( Provisions as to general meetings )—was discussed in Committee.
I think we ought to have a short discussion on the matter, if you would permit it. I see no other Clause or Amendment on the Paper which woud give any opportunity to the House on the Report stage to discuss the abuse which has arisen in the case of one shilling shares. This Clause deals with voting power and would enable us to have a short Debate on that question.
The hon. Member can move the new Clause.
NEW CLAUSE.—(Provisions as to general meetings.)
Notwithstanding anything in the articles of association of a company the directors of the company shall send notice of every general meeting of the company to every member of the company, and every member shall have the right to attend and speak at such meeting and to vote, either personally or by proxy, on all resolutions at such meeting. Every shareholder shall have one vote for every share or shares of the nominal value of one pound, that is to say, for each one pound share he shall have one vote, and for every 20 shares of one shilling each he shall have one vote.—[ Mr. A. V. Alexander. ]
Brought up, and read the First time.
I beg to move, "That the Clause be read a Second time."
We had a Debate on this subject in Committee, and I do not want to go into the merits of it now, but there is a widespread feeling amongst the investing public and many financial experts that the very large growth of the issue of 1s. shares, by which people obtain undue voting rights in companies is a position which ought to be met by legislation. We are seeking to make it a statutory condition that the voting rights of shareholders shall be on this basis, that they shall have one vote for each share of the nominal value of £1 and one vote for every 20 shares of 1s. each, so that there will be no special advantage in voting power for those people who take up very little financial risk in large blocks of 1s. shares. They will not be able to outvote and exercise undue control over people owning larger blocks of shares people who hold ordinary shares or preference shares, instead of deferred 1s. shares. This is a reasonable view to put to the House, and I hope the President of the Board of Trade will address himself to that specific point. On the Second Reading of the Bill he referred to the undoubted abuses which had arisen in the issue of these 1s. shares, and he said during the proceedings in Committee that he would be favourable to doing something in the way of legislation if he could discover the right way. We consider that our new Clause is a small contribution in the right direction, and if the President of the Board of Trade cannot accept it, we should like to know on what grounds the Government cannot accept this contribution towards a solution of the difficulty.
We had a Debate, a very full Debate, on this matter in the Committee stage, and the reason given then why the Amendment could not be accepted was that voting rights are a matter of contract. When shares are issued the voting rights of each class of share are stated in the prospectus. If we carried this new Clause think what would happen in cases where a prospectus is applied for. Not only would you say that only 20 1s. shares shall have the same voting right as one £1 share, but you would also alter the position of preference shareholders. You have a preference issue in which the preference shareholders have no right of voting at all, but here you would give these preference shareholders the right at once, and you would upset the whole of the contractual obligations upon which the public have subscribed their money. I think this is the last way in which we should proceed to deal with this matter. Let us make it perfectly plain that the voting rights appear in every prospectus—and that is provided in the Bill—and not bring about that there shall be no 1s. shares at all in some such roundabout way as in this Amendment. If there is any abuse it is better to trust to the judgment of the commercial and investing public to stop any such practice. That is a much better way to proceed. The last thing in the world we ought to do is to pass a law which will interfere with the contractual obligations which subsist between shareholders and companies in the thousand and one companies in the country.
What the right hon. Gentleman has said is perfectly true, but there is a much wider principle involved in this new Clause which is worth consideration—namely, that voting power should be proportionate to the money invested in a concern. The right hon. Gentleman says that it interferes at once with all the contractual relations which exist between shareholders in a company and the company. I agree, but when he says that the abuses which arise from an excessive voting power concentrated amongst those with a comparatively small financial interest will be counteracted by the good sense of the commercial and investing public I think he is unduly optimistic. The commercial history of this country in the last two or three years shows this, that there is very little in the way of a commercial proposition which will not attract some capital from somewhere. If the right hon. Gentleman and the hon. Member for Hillsborough (Mr. A. V. Alexander) and myself combined together to form a company with some dubious object—this is purely a hypothetical case—the simplest thing in the world would be for us to go to the City of London, hand in a fair-sized cheque, in return for which we should get a number of books in which are written the names and addresses of so many hundreds of accredited mugs, and if we circularised these people with any form of prospectus we should be bound to get a certain sum of money subscribed.
We have to go a little further than a reliance on the good sense of the investing public, and, although it may be that this new Clause cannot be accepted in this particular Bill, I think the question as to whether we are going to continue to allow the dominating voting power in companies to reside amongst those people who hold a comparatively small portion of the capital will have to engage the attention of the House some day. I know the argument is that those who invest their money in preference shares get 6 and 7 per cent. That is what they contract to get, and if they get their dividend they should be satisfied. That may be true to some extent, but as long as we continue to allow the voting power to reside in those who are not bearing the financial burdens of the concern it leads to grave abuses and the exploitation of the public.
I must express my regret that the President of the Board of Trade cannot see his way to deal with this question in some way or other. I realise the difficulty which arises in the case of preference shares, but I need not remind the right hon. Gentleman that a preference shareholder has an advantage over the ordinary shareholder who may get nothing at all. The contract in the case of the preference shareholder is that he will get so much per cent. and that is the reason why he takes the preference shares. The hon. Member for Hillsborough (Mr. A. V. Alexander) appears to me to have been thinking of the preference shareholder when he drafted this new Clause. For my part it is not the preference shareholder who worries me, but as I see flotations taking place every year with this custom extended it leads one to believe that the system is being abused. The right hon. Gentleman says that the ordinary process of commercial competition and probity is so great that it will correct these abuses, but the Companies Acts are framed on the assumption that we are to prevent people who are not as intelligent as Members of Parliament from the company promoter. That is the whole object of this Bill. Every safeguard is framed with that object, and the right hon. Gentleman would have been bringing about a very salutary reform if he could, with regard to the ordinary and preference shares, have provided that the amount of the investment should really gauge the amount of the voting power. I hope he has not said the last word on this subject but that he will take it into consideration and provide an Amendment, which may be inserted in another place, which will cover the main object of this new Clause which, I think, is supported by the general opinion of hon. Members as a whole.
Question put, "That the Clause be read a Second time."
The House divided: Ayes, 128; Noes, 208.
Division No. 324.] AYES. [4.39 p.m. Adamson, Rt. Hon. W. (Fife, West) Hirst, G. H. Shaw, Rt. Hon. Thomas (Preston) Adamson, W. M. (Staff., Cannock) Hirst, W. (Bradford, South) Shepherd, Arthur Lewis Alexander, A. V. (Sheffield, Hillsbro') Hudson, J. H. (Huddersfield) Shiels, Dr. Drummond Ammon, Charles George Hutchison, Sir Robert (Montrose) Shinwell, E. Baker, Walter Jenkins, W. (Glamorgan, Neath) Short, Alfred (Wednesbury) Barker, G. (Monmouth, Abertillery) John, William (Rhondda, West) Slesser, Sir Henry H. Barnes. A. Johnston, Thomas (Dundee,) Smillie, Robert Barr, J. Jones, Henry Haydn (Merioneth) Smith, H. B. Lees (Keighley) Batey, Joseph Jones, J. J. (West Ham, Silvertown) Smith, Rennie (Penistone) Bowerman, Rt. Hon. Charles W. Jones, T. I. Mardy (Pontypridd) Snell, Harry Broad, F. A. Jones, W. N (Carmarthen) Snowden, Rt. Hon. Philip Bromfield, William Kelly, W. T. Stamford, T. W. Brown, Ernest (Leith) Kennedy, A. R. (Preston) Stephen, Campbell Brown, James (Ayr and Bute) Kennedy, T. Stewart, J. (St. Rollox) Buxton, Rt. Hon. Noel Lansbury, George Strauss, E. A. Cape, Thomas Lawrence, Susan Sutton, J. E. Cluse, W. S. Lawson, John James Thomas, Sir Robert John (Anglesey) Clynes, Rt. Hon. John R. Lee, F. Thorne, W. (West Ham, Plaistow) Connolly, M. Livingstone, A. M. Thurtle, Ernest Cove, W. G. Longbottom, A. W. Tinker, John Joseph Cowan, D. M. (Scottish Universities) Lowth, T. Tomlinson, R. P. Crawfurd, H. E. Lunn, William Trevelyan, Rt. Hon. C. P. Davies, Rhys John (Westhoughton) Mackinder, W. Varley, Frank B. Day, Harry MacLaren, Andrew Viant, S. P. Dennison, R. Maclean, Neil (Glasgow, Govan) Walsh, Rt. Hon. Stephen Duncan, C. Macpherson, Rt. Hon. James I. Watson, W. M. (Dunfermline) Dunnico, H. Malone, C. L'Estrange (N'thampton) Watts-Morgan, Lt.-Col. D. (Rhondda) Gardner, J. P. March, s Webb, Rt. Hon. Sidney George, Rt. Hon. David Lloyd Mitchell, E. Rosslyn (Paisley) Wedgwood, Rt. Hon. Josiah Gibbins, Joseph Montague, Frederick Wellock, Wilfred Gillett, George M. Morrison, R. C. (Tottenham, N.) Westwood, J. Gosling, Harry Murnin, H. Wheatley, Rt. Hon. J. Greenail, T. Oliver, George Harold Whiteley, W. Greenwood, A. (Nelson and Coine) Palin, John Henry Wiggins, William Martin Grenfell, D. R. (Glamorgan) Ponsonby, Arthur Wilkinson, Ellen C. Griffith, F. Kingsley Potts, John S. Williams, C. P. (Denbigh, Wrexham) Griffiths, T. (Monmouth, Pontypool) Richardson, R. (Houghton-le-Spring) Williams, David (Swansea, E.) Groves, T. Riley, Ben Williams, T. (York, Don Valley) Grundy. T. W. Roberts, Rt. Hon. F. O.(W. Bromwich) Wilson, C. H. (Sheffield, Attercliffe) Hall, F. (York, W. R., Normanton) Robinson, W.C. (Yorks, W.R., Elland) Wilson, R. J. (Jarrow) Hall, G. H. (Merthyr Tydvil) Runciman, Rt. Hon. Walter Hardie, George D. Salter, Dr. Alfred TELLERS FOR THE AYES.— Hayes, John Henry Scurr, John Henderson, Right Hon. A. (Burnley) Sexton, James Mr. Allen Parkinson and Mr. Charles Edwards.
NOES. Agg-Gardner, Rt. Hon. Sir James T. Campbell, E. T, Forestier-Walker, Sir L. Albery, Irving James Carver, Major W. H. Foster, Sir Harry S. Alexander, E. E. (Leyton) Cassels. J. D. Frece, Sir Welter de Allen, Sir J. Sandeman Cautley, Sir Henry S. Fremantle, Lieut.-Colonel Francis E. Astor, Viscountess Cecil, Rt. Hon. Sir Evelyn (Aston) Gadle, Lieut.-Col. Anthony Atholl, Duchess of Chadwick, Sir Robert Burton Ganzoni, Sir John Balniel, Lord Chamberlain, Rt. Hon. N. (Ladywood) Gates, Percy Barclay-Harvey, C. M. Chapman, Sir S. Goff, Sir Park Beamish, Rear-Admiral T. P. H. Christie, J. A. Grant, Sir J. A. Beckett, Sir Gervase (Leeds, N.) Churchill, Rt. Hon. Winston Spencer Grenfell, Edward C. (City of London) Bellairs, Commander Carlyon Churchman, Sir Arthur C. Grotrian, H. Brent Benn, Sir A. S. (Plymouth, Drake) Clarry, Reginald George Hamilton, Sir George Bennett, A. J. Cobb, Sir Cyril Hammersley, S. S. Bentinck, Lord Henry Cavendish- Cochrane, Commander Hon. A. D. Hannon, Patrick Joseph Henry Berry, Sir George Colfox, Major Wm. Phillips Harland, A. Betterton, Henry B. Cooper, A. Duff Harney, E. A. Birchall, Major J. Dearman Couper, J. B. Harrison, G. J. C. Boothby, R. J. G. Craig, Sir Ernest (Chester, Crewe) Hartington, Marquess of Bourne, Captain Robert Croft Crooke, J. Smedley (Deritend) Harvey, G. (Lambeth, Kennington) Bowater, Col. Sir T. Vansittart Crookshank, Col. C. de W. (Berwick) Haslam, Henry C. Bowyer, Capt. G. E. W. Curzon, Captain Viscount Headlam, Lieut.-Colonel C. M. Braithwaite, Major A. N. Dalkeith, Earl of Henderson, Capt. R. R. (Oxf'd, Henley) Brass, Captain W. Davies, Maj. Geo. F.(Somerset, Yeovil) Henderson, Lieut.-Col. Sir Vivian Brassey, Sir Leonard Dawson, Sir Philip Heneage, Lieut.-Colonel Arthur P. Bridgeman, Rt. Hon. William Clive Drewe, C. Hennessy, Major Sir G. R. J. Briggs. J. Harold Eden, Captain Anthony Hills, Major John Walter Brittain, Sir Harry Edmondson, Major A. J. Holbrook, Sir Arthur Richard Brocklebank, C. E. R. Ellis, R. G. Hope, Capt. A. O. J. (Warw'k, Nun.) Brooke, Brigadier-General C. R. I. Erskine, Lord (Somerset, Weston-s.-M.) Hope, Sir Harry (Forfar) Brown, Col. D. C. (N'th'I'd., Hexham) Everard, W. Lindsay Hopkinson, A. (Lancaster, Mossley) Buchan, John Falle, Sir Bertram G. Horne, Rt. Hon. Sir Robert S. Buckingham, Sir H. Falls, Sir Charles F. Hudson, Capt. A. U. M.(Hackney, N.) Bullock, Captain M. Fanshawe, Captain G. D. Hume, Sir G. H. Burman, J. B. Fielden, E. B. Hurst, Gerald B. Butler, Sir Geoffrey Finburgh, S. Inskip, Sir Thomas Walker H. Iveagh, Countess of Nicholson, Col. Rt. Hn. W. G. (Ptrsf'ld.) Storry-Deans, R. James, Lieut.-Colonel Hon. Cuthbert Nuttall, Ellis Sueter, Rear-Admiral Murray Fraser Jephcott, A. R. O'Neill, Major Rt. Hon. Hugh Sugden, Sir Wilfrid Joynson-Hicks, Rt. Hon. Sir William Penny, Frederick George Templeton, W. P. King, Commodore Henry Douglas Percy, Lord Eustace (Hastings) Thom, Lt.-Col. J. G. (Dumbarton) Lamb, J. O. Perkins, Colonel E. K. Thomson, Rt. Hon. Sir W. Mitchell. Lister, Cunliffe-, Rt. Hon. Sir Philip Peto, G. (Somerset, Frome) Tinne, J. A. Lloyd, Cyril E. (Dudley) Plicher, G. Titchfield, Major the Marquess of Locker-Lampson, Rt. Hon. Godfrey Pilditch, Sir Philip Tryon, Rt. Hon. George Clement Looker, Herbert William Preston, William Waddington, R. Laugher, Lewis Price, Major C. W. M. Warner, Brigadier-General W. W. Lowe, Sir Francis William Radford, E. A. Warrender, Sir Victor Luce, Major-Gen. Sir Richard Harman Raine, Sir Walter Waterhouse, Captain Charles Lumley, L. P.. Ramsden, E. Watson Sir F. (Pudsey and' Otley) MacAndrew, Major Charles Glen Rawson, Sir Cooper Watson, Rt. Hon. W. (Carlisle) Macdonald, Capt. P. D. (I. of W.) Rentoul, G. S. Watts, Sir Thomas Macdonald, R. (Glasgow, Cathcart) Rhys, Hon. C. A. U. White, Lieut.-Col. Sir G. Dairymple- McLean, Major A. Rodd, Rt. Hon. Sir James Rennell Williams, A. M. (Cornwall, Northern) Macmillan, Captain H. Ropner, Major L. Williams, Com. C. (Devon, Torquay) Macnaghten, Hon. Sir Malcolm Ruggles-Brise, Lieut.-Colonel E. A. Williams, Herbert G. (Reading) Macquisten, F. A. Russell, Alexander West (Tynemouth) Wilson, Sir C. H. (Leeds, Central) MacRobert, Alexander M. Salmon, Major I. Wilson, R. R. (Stafford, Lichfield) Makins, Brigadier-General E. Sandeman, N. Stewart Windsor-Clive, Lieut.-Colonel George Malone, Major P. R. Sanders, Sir Robert A. Withers, John James Margesson, Captain D. Sanderson, Sir Frank Wolmer, Viscount Marriott, Sir J. A. R. Sandon, Lord Womersley, W. J. Meyer, Sir Frank Sassoon, Sir Philip Albert Gustave D. Wood, E. (Chest'r, Staiyb'ge & Hyde) Mitchell, W. Foot (Saffron Walden) Savery, S. S. Wood, Rt. Hon. Sir Kingsley Mitchell, Sir W. Lane (Streatham) Scott, Rt. Hon. Sir Leslie Woodcock, Colonel H. C. Monsell, Eyres, Com. Rt. Hon. B. M. Shepperson, E. W. Worthington-Evans, Rt. Hon. Sir L. Moore, Lieut.-Colonel T. C. R. (Ayr) Skelton, A. N. Yerburgh, Major Robert D. T. Moore, Sir Newton J. Smith, Louis W. (Sheffield, Hallam) Moore-Brabazen, Lieut.-Col. J. T. C. Smith-Caringten, Neville W. TELLERS FOR THE NOES.— Morrison, H. (Wilts, Salisbury) Smithers, Waldron Nelson, Sir Frank Sprot, Sir Alexander Major Sir William Cope and Captain Wallace. Newman, Sir R. H. S. D. L. (Exeter) Stanley, Lieut.-Colonel Rt. Hon. G. F. .
NEW CLAUSE.—(Stock valuation figures.)
In the case of a company the auditors of which are not empowered to employ independent stock valuers the directors shall jointly and severally be responsible for the correctness of the stock valuation figures supplied to the auditors for balance sheet purposes, and in the event of the Court deciding that stock valuation figures have been supplied which do not represent the true position the directors shall be liable to a penalty not exceeding one hundred pounds.—[ Miss Lawrence. ]
Brought up, and read the First time.
I beg to move, That the Clause be read a Second time."
This Clause deals with the question of stock valuations. It proposes that where the auditors are not empowered to appoint independent stock valuers, the directors shall be responsible for the accuracy of the statements in a balance sheet. The matter is of very great importance, particularly to certain classes of shareholders. Anyone will see that in the case of trading companies the correct value of the merchandise may represent the major part of the assets of a company, and that it is a thing of very great importance to the shareholders, and that in the case of the sale of a business it is of great importance to the purchasers of the business that there should be accurate information as to the value of goods. The present law in the matter is in a very unsatisfactory state. There have been comments in the papers lately, particularly in the financial papers, on the fact that the present law does not provide sufficient protection. That is illustrated by a sensational case involving names with which we are all familiar and for which we have a certain amount of affection—Selfridge and Whiteley. I think I may say that the purchasing public have a certain amount of affection for those two great companies.
In the "Financial Times" of 7th March there is the report of a meeting of the shareholders of Selfridge's. Selfridge's had just purchased Whiteley's, and Mr. Gordon Selfridge, in addressing the shareholders, said:
He said, on this subject: proved by a very difficult process. We say that it is important that the responsibility should be clearly placed on some authority, either the auditors or independent valuers. The whole of the Companies Acts aim at one thing, and that is that full and complete information should be given to shareholders. We desire to make it obligatory for the directors to send to the shareholders an accurate picture of the value of the goods.
I beg to second the Motion.
I am very much obliged to the hon. Member for East Ham, North (Miss Lawrence) for the very charming compliment she has paid to me, and on hearing the extract from my speech which she read I thought that what I said was fairly plain. By it I stand. The hon. Lady says that in order to be sure that you always have correct valuation made of stock in any company, you are to make the directors of that company jointly and severally responsible—in every case except where you bring in an independent valuer. It would be utterly wrong in practice to insist upon an independent valuer being brought in in all cases. Anyone with experience of business knows that in the variety of business undertakings the only people who can make an effective valuation are experienced officers of the company itself. The worst thing you can possibly do is to suggest that these are not the proper people to make a valuation, and that an independent valuer, much less competent, ought to be brought in. What is to be the responsibility? The hon. Lady says you must make the directors personally responsible. I say again that it would be a very wrong thing to do, to put upon the directors an obligation which they cannot possibly discharge. The only people who could be directly responsible for the valuation itself must be the people who make that valuation. If you put this obligation on the directors, you make the directors go in and make the valuation.
But there is an obligation upon the directors by the ordinary law, and that is to employ competent people, and to use their business knowledge in the discharge of their duty to see that the people who are appointed are reasonably competent for the purpose. That is all that the directors can be expected to do. That is the position as it stands at present. I am certain that the most unjust thing you could do would be to order directors to be pinned down to something that they could not possibly control. It would be as wrong as to say to the hon. Member that if she was responsible for the education of two brothers and that if she sent them to the best school she could find, and the boys did not behave themselves, she can be made criminally liable for their acts. That would be a very improper step to take and very unfair to her.
There were certainly many of us in the Standing Committee who felt that this question needed some attention, and we rather hoped that the President of the Board of Trade might have found some solution. It has always seemed to me, while agreeing with everything that the right hon. Gentleman said about the person who must make the valuation, that the position would be much improved if we actually got a certificate, carrying with it a personal responsibility. I have never been able to understand why a certificate of valuation could not be given and signed by whatever responsible official has been detailed for the task. I do not want to see any penalty put upon him. The mere fact that he has to sign a certificate in his own name would be a considerable guarantee that he would not put up any valuation which a man in a good position would wish to avoid. If something on those lines could have been introduced into the Bill, it would have interfered in no serious way with our present customs, and it would have considerably improved our company legislation.
One is very disappointed with the general view of the Government on this matter, which was pressed again and again in Committee. The Government do not seem to me to be concerned about one of the main objects of our new Clause, and that is to safeguard the rights of shareholders in companies where very often false stock valuations are included in a balance sheet. On different occasions when we have discussed the famous case of Selfridge's and Whiteley's, we have been asked whether we are concerned about Mr. Gordon Selfridge. We are concerned about him. As a fact I should say that if he so "let in" his own shareholders as to take over a business at a price which was far too much, Mr. Selfridge was very much to blame.
5.0 p.m.
When we come to look behind that, and to see that year after year the shareholders of Whiteley's must have been supplied with annual balance-sheets showing stock carried in at a figure which was wholly incorrect, and that, therefore, eventually, as the business began to go down year by year the interests of the shareholders must have been damnified, surely we have a right to ask that something should be done to prevent untrue statements of this kind being permitted in the balance-sheets of public companies. There seems to be an extraordinarily tender feeling among Members of the Government for directors of joint-stock companies in this country. There was a good deal of amusement in the House yesterday when a reference was made to the number of people in this country who seem to be able to hold directorships in 10 or 20 or even more companies, all at once. The reason why the Government will not give justice to the shareholders in these matters is because they do not want to be too hard on their friends the directors. But what is the job of a director of a joint-stock company? Is he merely to be a figurehead? Is his duty only to appeal to the public in a prospectus, to try to gull the public into subscribing money for some particular joint-stock operation? Is that his duty, or is he paid a fee in order that he may safeguard the best interests of the shareholders and look after the general development of the industrial or commercial purpose for which the company has been formed? If that be the duty of a director, surely nothing can be said against making it a statutory provision that a director must be sufficiently conversant with the details of the business of the company to be able to say whether or not the statements in the balance-sheet are founded on fact or not.
If you take the point as to who is best able to judge what is a proper stock valuation, I agree at once that, in the case of a very large industrial organisation, the particular manager or executive head of a department, dealing with various kinds of raw materials—it may be, or with plant, or with finished products—is, probably, the best person to settle what is the cost or selling-price valuation of the particular articles with which he is dealing. But surely the director who is responsible to the shareholders for the general position, ought to be a person who can be trusted to appoint competent officials. He ought to be able himself to check the work of those officials, and, being able to check their work, he ought to be able to certify that the figures in a balance-sheet represent the true position. It cannot be said that we are asking anything unreasonable. I wonder what view the Income Tax authorities would take if they discovered that stock valuations given for the purposes of a balance-sheet were false. The Income Tax authorities would, I think, soon take legal proceedings against people responsible for the evasion of Income Tax by means of wrong returns in regard to stock valuation.
Why should not shareholders of a company be in a position to be assured that the figures carried in for stock on the asset side of their balance sheet, are correct? To whom can they look for such an assurance but to the directors? It is the directors to whom they have given their confidence by vote. It is they who fix the fees and emoluments of the directors. Having regard to the number of cases in this country where shareholders have been seriously injured by false returns of this character, I think we are only doing our duty in asking that the proposed New Clause should be incorporated in the Bill. When we are dealing with an important change in a series of Statutes like the Companies Acts, and when we, as laymen, make certain propositions in the interests of the general community, surely, it is not the duty of the Government, advised by Law Officers of the Crown, to turn down all such suggestions merely on the ground that they do not comply with the requirements of legal phraseology or do not meet the legal implications of the position. If an ordinary Member of the House of Commons, without any legal training, sees the possibility of a real injury being done to the public and wants to remove that possibility, and if, with that object, he proposes a form of words, surely it is the bounden duty of the Government to supply the necessary legal form of words which can be put into a Statute for the protection of the people. On this as on many other matters which we have discussed in the course of these Debates, the Government have failed in their duty to the general public and to the shareholders.
I have considerable sympathy with the view put forward by hon. Members opposite. One weakness of the present system is the inevitable dependence of the auditors of companies upon the accuracy of the stock figures furnished to them. I do not know whether it would be proper to put this question to the Attorney-General, but I should like to know, assuming that this New Clause is not incorporated in the Bill, what liability is there upon the directors of a company who have certified a stock valuation as being correct and as being on a correct basis—namely, cost or current market value, whichever is the lower—if the facts certified turn out to be unreasonably incorrect? I do not know whether I can fairly put that question to the hon. and learned Gentleman at this stage, but I should like to know if, as long as the directors say that they have accepted the figures of the heads of their various departments, their liability in this respect is covered? There are two points of view on this subject. One is as to the liability of the directors of a private concern who are actively concerned in the management of its affairs. who are probably those who fix values and who give instructions to the people who take the detailed stock. The liability in that case certainly ought to be very definite and clear.
Then, of course, there is the other case of the public company, the directors of which are bound to rely on the heads of the various departments or branches. I feel, in the light of my own experience, that some tightening of the law in this respect is desirable. I know myself of the case of a private company the stock of which must have been grossly overstated over a series of years—not at one jump but by successive jumps. Hon. Members have mentioned the unfairness to the shareholders of having a false position put before them in successive years but, in the case of a small private company where the directors are the princi- pal shareholders, there are other people to be considered, namely, the creditors. It is to be remembered that on these balance sheets of successive years, the company may have secured advances from their bank or extended credit from their suppliers. Undoubtedly this is a matter which deserves the careful scrutiny of the Government. In the interests of commercial morality it is desirable that a balance sheet certified by qualified professional accountants should be a thing on which anyone can stand. Falsification of the value of stock not only makes the balance sheet wrong as regards the assets shown, but it shows that the company has been achieving profits and results which are entirely unjustified. If the hon. and learned Gentleman the Attorney-General can make some statement as to the present position and responsibility of directors, in reference to stock valuations which they have certified, I am sure it will be appreciated by the House.
During the discussions in Committee, the point which we are now considering was, of all those raised, the most difficult. The view put forward by the hon. Member for Hillsborough (Mr. A. V. Alexander) must command sympathy. A balance sheet ought to be one of two things—either a cast-iron statement of fact, or, where that is not possible, a statement giving those who require it, due warning of any weakness which may exist. In Committee I approached this problem with two alternative suggestions. One was that the responsibility of directors should be made more definite with regard to the statements in balance sheets. I think on that point hon. Members above the Gangway rather took the view that the responsibility of the auditors should be made more definite. My other suggestion was that the duty should be laid upon the auditors of attaching a certificate to a balance sheet, where necessary, to indicate that this or that item had not been verified by them or, in other words, indicating the items which they were compelled to take upon the statement of the managers or departmental officials. Let us consider the first suggestion that the responsibility of the directors should be made more definite. It has been suggested that there might be six directors on a board, two of whom would be appointed to have charge of the stocktaking. These two might certify wrong returns, either unconsciously or culpably, but, in either case, if the figures were shown to be wrong, the other four directors, who had no hand or part in the transaction, would suffer under the stigma of having committed an illegal act.
The right hon. and gallant Gentleman the Member for Newcastle-under-Lyme (Colonel Wedgwood) is quite right in saying that directors should accept their full responsibility for everything that is done by the board and every statement issued officially from the board under the signature of the chairman or secretary. Up to a point we must agree with that view, but there is a difficulty. Supposing that by legislation we impose upon directors a responsibility which, in the nature of things, they cannot be expected to meet, it may have the effect of keeping off boards of directors the very type of men we want to see directing companies. They will say: "No, we cannot take that responsibility."
They do not show any reluctance now.
There is no reason why they should, because, at the moment, this responsibility is not upon them. I am only trying to point out the difficulties of the case. What we are trying to do here is to prevent swindling, or to make swindling as difficult as possible, but I think the hon. Member for Hillsborough will agree that it would he wrong if, at the same time, we committed an injustice upon other people. I agree with him when he says that it does not do for the Government merely to say that this is not the right form of words, but we must have regard to the difficulties of the case. You may make your restrictions so stringent that men may become liable to be stigmatised as guilty of crimes or misdemeanours owing to facts over which they have no control. That, as I say, would have the effect of keeping off the boards of directors the very men we want to have on them. If the particular form of words proposed here will not do, there is the alternative that the auditors should have the task of saying clearly, with regard to a particular balance sheet, that they are not able to vouch for certain items and that they take those items on the statement of managers, overseers, or officials of the company.
That is regarded by auditors as incumbent upon them at the present time. It is quite usual to state on the face of a balance sheet that the stock-in-trade is returned as certified by the directors or by responsible officials.
Of course, we know that is the practice, but does not that very statement, in that form, convey the suggestion that the auditors themselves believe in its accuracy? It does. The case quoted by the hon. Member for East Ham, North (Miss Lawrence) was one in point. The shareholders of the company would all have been convinced by looking at the balance-sheet that the stock figures were right, but as a matter of fact they were wrong. I am not prepared, on the evidence put before me by the right hon. Gentleman, to say that this or that way is the right way of dealing with the difficulty, but I think the right hon. Gentleman and the Attorney-General will agree that it is a very important principle that, so far as possible, balance-sheets should state what are facts. We all know of many cases in the past five or six years where they have not done so and where difficulties have arisen as a consequence. We all want to get some method of ensuring that a balance-sheet shall state the exact facts, and that people who read balance-sheets that are duly certified shall be able to be certain that the statements in the balance-sheets are facts. If the learned Attorney-General is going to reply, I would like to hear from him his own view, first of all, as to the importance which the Government attach to the arguments advanced by the hon. Member for Hillsborough and the hon. Member for East Ham, North in favour of this Clause, and, secondly, the hope they can hold out to us that some means will be devised by which the present difficulty with regard to stock figures in balance-sheets can be overcome.
This question was discussed in Committee at greater length probably than any other of the Clauses, and I think every hon. Member wishes to endeavour to get some position by which legislation can be brought to bear to protect people against false balance-sheets. Everybody knows that a balance-sheet can be made or marred by, the stock figures, but I do not think that this Clause will assist us in any way to get over the difficulty. My hon. Friend the Member for South Salford (Mr. Radford), who has professional experience, told us what had happened to, him last year. He cannot be held responsible if directors knowingly abuse that figure, as he told us, year after year to get advances from the bank and to show profits and do various illegal things. I think it is a matter of criminal fraud, in the same way as in the case put before us by the hon. Member for Hillsborough (Mr. A. V. Alexander), the Selfridge and Whiteley case. There is no sympathy, I am sure, for Selfridge, but we have sympathy for the shareholders in that case, and whoever certified that balance-sheet knowing that it was so many thousands of pounds wrong in the stock was, in my view, guilty of fraud.
No company law is going to stop fraud if people mean to commit fraud, but we have to make it as difficult as possible and to leave as few loopholes as possible, and we have to provide punishment for those who do commit fraud. I do not think, however, that any of these Clauses will work in a practical way. The hon. Member for Hillsborough acknowledged that a director who appoints people to give a correct valuation has only to take their word for it. He appoints certain people whom he trusts to do the work of taking stock, but he cannot certify any more than that he has given it out to responsible people, who have given a certificate. My hon. Friend who certifies a balance-sheet makes the reservation that the directors certify that the stock is correct, and the directors who certify that, in a similar way, take the word of-somebody else. We know that the question is important, because the whole profit or loss may be affected by that one figure in the balance-sheet in regard to stock; and if we can get any Clause that will overcome the difficulty, I am in favour of it, but I do not think this Clause is practical.
I was asked by my hon. Friend the Member for South Salford (Mr. Radford) to express some opinion with regard to the existing responsibility of directors in connection with stock valuation, and the hon. Member for West Walthamstow (Mr. Crawfurd) was good enough to ask me to express my own personal opinion as to the arguments that have been advanced in support of the Clause. It is convenient that we should clear our minds both as to the existing liability and responsibility of directors and as to what this Clause will effect by way of a change. Supposing directors issue a balance-sheet over their names which contains something, in the words of my hon. Friend the Member for South Salford, "unreasonably incorrect," those directors may be made responsible. By the phrase "unreasonably incorrect," I understand that my hon. Friend means outrageously inaccurate, beyond the possibility of a mere honest difference of opinion, so incorrect as to be dishonest. If that leads anybody to suffer damage, undoubtedly the directors are liable to damages for fraud. I do not know anything about the case of Whiteley and Selfridge, but, assuming that the directors had issued a balance-sheet which contained something so outrageously wrong as the hon. Member for East Ham, North (Miss Lawrence) has suggested, I should imagine that anybody who suffered loss, whether Mr. Selfridge or anybody else, might have had an action. I am not presuming to express an opinion upon the facts of that case, because I do not know what they were. Mr. Selfridge may or may not have had good reason for not desiring to engage in litigation, and for preferring, possibly, the course which he has taken of publishing the facts and perhaps of advertising that better methods should be employed in business. We had better discuss this matter without considering the facts of a case which are not really before the House. Again, supposing nobody suffered damage in the way in which Mr. Selfridge might have been damaged in that case, but supposing the shareholders suffered damage by reason of the issue of a balance-sheet, the directors again would be liable, in my view, for damages for breach of duty towards the shareholders, so that whether we are considering the outside public who might come in contractual relations with the company or whether we are considering the domestic interests of the shareholders, in either case the directors could be made responsible, either for fraud, or, in the second case, for breach of duty to the shareholders.
What is suggested in this Clause is that the directors shall be responsible under a penalty not exceeding £100, if the Court decides that valuation figures have been supplied which do not represent the true position. I am not boggling merely at the wording of the Clause; I am trying to deal with the substance and not with the form. I understand that it really means that if the Court thinks that the stock valuation was outrageously inaccurate—not merely that the Court takes a different opinion, upon something which is properly a matter for opinion, from those who issued the balance-sheet—if the Court thinks that the directors put something on paper which they did not honestly believe to be right, and did not care whether it was right or wrong, in that case they should be exposed to a penalty of £100. That does not seem to me really to add aything very great to the responsibility of directors under the existing law. They are exposed to the consequences which I have already mentioned, and to say that they shall also be exposed to a penalty of £100 does not seem to add very much to the penalties which they incur for fraudulently or dishonestly stating as a fact that which they know not to be a fact.
I am afraid, in answer to the hon. Member for West Walthamstow, that my opinion about the merits of the argument for the Clause is this, that it would really drive the directors who were careless about their duties to say, "We may come under this penalty, so let us employ an independent valuer," and thus acquit themselves of all responsibility in the matter. I would respectfully suggest that it is much better that the directors should be prepared to assume for themselves a responsibility which is at present theirs. If, recklessly and not caring whether matters are true or false, they issue something which is quite or almost intentionally wrong, they will be made responsible; and, on the whole, I respectfully suggest that it is better that the law should be as it stands than that the directors should have some fanciful responsi- bility of which they can easily acquit themselves, without any corresponding advantage either to the public or to the members of a company.
As I moved this new Clause in Committee, the penalty was a fine not exceeding £100 or imprisonment for three months, or both such fine and imprisonment, and then the view was expressed that the penalty was so severe that it would prevent people from serving as directors. We have endeavoured to meet the views of hon. Members opposite by putting in a penalty of £100 merely.
If you are going to make a still more severe penalty, such as imprisonment, I am sure that the effect of the Clause will be to force directors to divest themselves of such responsibilities as they have, and to employ independent valuers, who, as my right hon. Friend the President of the Board of Trade has explained, are probably the worst persons in the world to express an opinion about the value of the goods that may be in question.
It seems to me that, on the last point which the Attorney-General has raised, as this Clause reads, if the directors honestly employ independent valuers and those valuers make a mistake, the directors will be fined £100, which is an intolerable position. It means that nobody could go on any board unless he was fully capable of making a valuation of that company's particular commodity. Nobody could go on to a railway board who was not capable himself of forming a genuine opinion on the value of all the rolling stock and other property. owned by the railway. Nobody could go on the board of any company supplying flour, meat, or anything else without being able personally to value those goods, because this Clause says that if the directors make a mistake—not a fraudulent or outrageous mistake, or any of the words used by the Attorney-General as interpreting the intention of the Clause—if they make a genuine mistake, having appointed either an independent valuer or one of their own number capable of doing the work, then they would be liable. You would get nobody to serve on any board except a person with full technical knowledge of the particular commodity dealt with by that com- pany; and a board should not be composed only of technical people, but of people with general business knowledge, and management and financial, as well as technical, capacity. Therefore, I think the House would make a great mistake if they passed the Clause in its present form.
It would be a mistake in discussing this Clause to get on to the question of how boards of directors are composed, but, in spite of what the hon. and learned Gentleman said, there is in this country a very strong feeling that it would be desirable if boards of directors were far more representative than they are of the businesses in which they are engaged. The speech of the hon. Baronet the Member for Great Yarmouth (Sir F. Meyer) is typical of what we hear so often from the other side. He objects to the wording of this Clause, but he did not say a word about the principle, that there should be a check upon fraudulent stock valuations.
I would gladly have gone into that question, but it was fully dealt with by the Attorney-General.
Everybody has spoken agaist the wording, meticulously finding fault with the wording of what must necessarily be a roughly-drawn Clause. The question we have to decide is whether we do or do not want in this Bill provision introduced to check fraudulent stock valuations. Let us dismiss from our minds the particular words of the Clause. If it were carried, we could be certain that between now and when the Bill goes to the House of Lords, the Government would polish it up to meet the very obvious difficulties that there are in the way of framing such a Clause.
What we are concerned with now is whether some such provision as this is wanted, and I beg hon. Members to look at it with the eyes of ordinary business men. In 999 cases out of a thousand companies put down honest valuations of their stock, but there are, as everybody knows, certain exceptions where, for various reasons, generally in order to avoid taxation, there is juggling with the stock valuations from year to year. If we want to check it, what machinery should we employ? The obvious way is to say that it shall be a punishable offence. The Attorney-General says that it is at present not a crime, but a cause for civil action, and that a gross misstatement by directors as to the value of their stock would entitle the person buying on the strength of that valuation, or would entitle a shareholder in the company, to sue the directors. What we seek in this Clause is to make them liable for a criminal action. We contend that by making it a criminal offence we should do more than by leaving it to a conscientious shareholder or an accidental purchaser to go to the enormous expense of bringing a civil action. If you leave it to a civil action costing thousands of pounds, you get no action at all. If this Clause goes into the Bill, it will put the State into a position to bring an action against these directors, and thereby provide a real check. It is nonsense to say that if the Clause is inserted people will not join boards of companies as directors. When directors join boards of companies, they are taking on a responsibility and are paid for it. Very often their names are what is paid for. A. man does not always know much about the business, but the public knows his name and trusts him, and if he misuses that trusts, he is guilty of a criminal offence. Therefore, I beg the House not to consider meticulously the wording of the Clause, but to remember the principle, which is that what already renders a director liable for a civil action should render him liable for a criminal action.
My opinion is not the opinion of the Attorney-General, but I clearly hold the view that a director or an officer of a company who
fraudulently makes out a false valuation of stock, is criminally liable to-day. If I am asked under what provisions of the law that liability exists, I should say the Falsification of Accounts Act, under which many persons are from time to time prosecuted for making fraudulently false entries. A person who, whether a director or an officer of a company, fraudulently enters the valuation of the stock at a fictitious figure, would render himself liable to criminal proceedings under that Act. While the Attorney-General dealt primarily with civil liability, it is clear that directors or officers of companies are criminally liable for the very offences which we seek to prevent.
I am against the Clause, because it seems to me that it would render an innocent director liable to a penalty if the valuers put in a fraudulent return of stock. He would have to pay a penalty if the owner of the property put in a false valuation, though he did not know that it was false, and he had not had any opportunity to inspect the books. Under these circumstances, you would not get people to join boards of directors. I am inclined to agree that, if there is fraud, it is punishable by the ordinary law. Any person who occupies the position of director and puts his name on a prospectus holds out to the public that he is honest, and vouches for the accuracy of what he is stating. If it is not accurate, there are ways of dealing with him.
Question put, "That the Clause be read a Second time."
The House divided: Ayes, 122; Noes, 252.
Division No. 325.] AYES. [5.39 p.m. Adamson, Rt. Hon. W. (Fife, West) Connolly, M. Grundy, T. W. Adamson, W. M. (Staff., Cannock) Cove, W. G. Hall, F. (York, W. R., Normanton) Alexander, A. V. (Sheffield, Hillsbro') Dalton, Hugh Hall, G. H. (Merthyr Tydvil) Ammon, Charles George Davies, Rhys John (Westhoughton) Hardie, George D. Attlee, Clement Richard Day, Harry Hartshorn, Rt. Hon. Vernon Baker, J. (Wolverhampton, Bilston) Dennison, R. Hayes, John Henry Baker, Walter Duncan, C. Henderson, Right Hon. A. (Burnley) Barker, G. (Monmouth, Abertillery) Dunnico, H. Hirst, G. H. Barnes, A. Gardner, J. P. Hirst, W. (Bradford, South) Barr, J. Gibbins, Joseph Hollins, A. Batey, Joseph Gillett, George M. Hudson, J. H. (Huddersfield) Bowerman, Rt. Hon. Charles W. Gosling, Harry Jenkins, W. (Glamorgan, Neath) Broad, F. A. Graham, Rt. Hon. Wm. (Edin., Cent.) John, William (Rhondda, West) Bromfield, William Greenail, T. Johnston, Thomas (Dundee) Brown, James (Ayr and Bute) Greenwood, A. (Nelson and Colne) Jones, J. J. (West Ham, Silvertown) Cape, Thomas Grenfell, D. R. (Glamorgan) Jones, Morgan (Caerphilly) Close, W. S. Griffiths, T. (Monmouth, Pontypool) Jones, T. I. Mardy (Pontypridd) Clynes, Rt. Hon. John R. Groves, T. Kelly, W. T. Kennedy, T. Ponsonby, Arthur Sullivan, J. LansburY, George Potts, John S. Sutton, J. E. Lawrence, Susan Richardson, R. (Houghton-le-Spring) Thorne, W. (West Ham, Plaistow) Lawson, John James Riley, Ben Thurtle, Ernest Lee, F. Roberts, Rt. Hon. F. O.(W. Bromwich) Tinker, John Joseph Lindley, F. W. Robinson, W. C. (Yorks, W. R., Elland) Valley, Frank B. Longbottom, A. W. Salter, Dr. Alfred Viant, S. P. Lowth, T. Scrymgeour, E. Walsh, Rt. Hon. Stephen Lunn, William Scurr, John Watson, W. M. (Dunfermline) MacDonald, Rt. Hon. J. R.(Aberavon) Sexton, James Watts-Morgan, Lt.-Col. D. (Rhondda), Mackinder, W. Shaw, Rt. Hon. Thomas (Preston) Webb, Rt. Hon. Sidney MacLaren, Andrew Shepherd, Arthur Lewis Wedgwood, Rt. Hon. Josiah Maclean, Neil (Glasgow, Govan) Shiels, Dr. Drummond Wellock, Wilfred Malone, C. L'Estrange (N'thampton) Shinwell, E. Westwood, J. March, S. Short, Alfred (Wednesbury) Wheatley, Rt. Hon. J. Maxton, James Siesser, Sir Henry H. Wilkinson, Ellen C. Mitchell, E. Rosslyn (Paisley) Smillie, Robert Williams, David (Swansea, East) Montague, Frederick Smith, H. B. Lees (Keighley) Williams, T. (York, Don Valley) Morrison, R. C. (Tottenham, N.) Smith, Rennie (Penistone) Wilson, C. H. (Sheffield, Attercliffe) Murnin, H. Snell, Harry Wilson, R. J. (Jarrow) Naylor, T. E. Snowden, Rt. Hon. Philip Oliver, George Harold Stamford, T. W. TELLERS FOR THE AYES.— Palin, John Henry Stephen, Campbell Mr. Whiteley and Mr. Charles Edwards. Parkinson, John Allen (Wigan) Stewart, J. (St. Rollox)
NOES. Agg-Gardner, Rt. Hon. Sir James T. Cowan, D. M. (Scottish Universities) Henderson, Capt. R. R. (Oxt'd, Henley) Ainsworth, Lieut.-Col. Charles Craig, Sir Ernest (Chester, Crewe) Heneage, Lieut.-Colonel Arthur P. Albery, Irving James Crawfurd, H. E. Henn, Sir Sydney H. Alexander, E. E. (Leyton) Croft, Brigadier-General Sir H. Hennessy, Major Sir G. R. J. Allen, Sir J. Sandeman Crooke, J. Smedley (Deritend) Hills, Major John Waller Atholl, Duchess of Crookshank, Col. C. de W. (Berwick) Hohler, Sir Gerald Fitzroy Baldwin, Rt. Hon. Stanley Curzon, Captain Viscount Hope, Capt. A. O. J. (Warw'k, Nun.) Balniel, Lord Daikeith, Earl of Hope, Sir Harry (Forfar) Barclay-Harvey, C. M. Davies, Ellis (Denbigh, Denbigh) Hopkins, J. W. W. Barnett, Major Sir Richard Davies, Maj. Geo. F. (Somerset, Yeovil) Hudson, Capt. A. U. M. (Hackney, N.) Beamish, Rear-Admiral T. P. H. Dawson, Sir Philip Hume, Sir G. H. Beckett, Sir Gervase (Leeds, N.) Drewe, C. Hunter-Weston, Lt.-Gen. Sir Aylmer Bellairs, Commander Carlyon Duckworth, John Hurd, Percy A. Benn, Sir A. S. (Plymouth, Drake) Eden, Captain Anthony Hurst, Gerald B. Bennett, A. J Edge, Sir William Hutchison, Sir Robert (Montrose) Bentinck, Lord Henry Cavendish- Edmondson, Major A. J. Inskip, Sir Thomas Walker H. Berry, Sir George Ellis, R. G. Iveagh, Countess of Betterton, Henry B. Erskine, Lord (Somerset, Weston-s.-M.) Jackson, Sir H. (Wandsworth, Cen'l) Birchall, Major J. Dearman Everard, W. Lindsay James Lieut.-Colonel Hon. Cuthbert Bourne, Captain Robert Croft Falie, Sir Bertram G. Jephcott, A. R. Bowater, Col. Sir T. Vansittart Falls, Sir Charles F. Jones, Henry Haydn (Merioneth) Bowyer, Capt. G. E. W. Fanshawe, Captain G. D. Jones, W. N. (Carmarthen) Boyd-Carpenter, Major Sir A. B. Fielden, E. B. Joynson-Hicks, Rt. Hon. Sir William, Braithwaite, Major A. N. Finburgh, S. Kennedy, A. R. (Preston). Brass, Captain W. Forestler-Walker, Sir L. King, Commodore Henry Douglas Brassey, Sir Leonard Forrest, W. Kinloch-Cooke, Sir Clement Briggs, J. Harold Foster, Sir Harry S. Lamb, J. Q. Brocklebank, C. E. R. Fraser, Captain Ian Lane Fox, Col. Rt. Hon. George R. Brooke, Brigadier-General C. R. I. Frece, Sir Walter de Lister, Cunliffe, Rt. Hon. Sir Philip Broun-Lindsay, Major H. Fremantle, Lieut.-Colonel Francis E. Livingstone, A. M. Brown, Col. D. C. (N'th'l'd., Hexham) Gadie, Lieut.-Col. Anthony Lloyd, Cyril E. (Dudley) Brown, Ernest (Leith) Ganzoni, Sir John Locker-Lampson, Rt. Hon. Godfrey Buchan, John Garro-Jones, Captain G. M. Long, Major Eric Buckingham, Sir H. Gates, Percy Looker, Herbert William Bullock, Captain M. Gilmour, Lt.-Col. Rt. Hon. Sir John Lougher, Lewis Burgoyne, Lieut.-Colonel Sir Alan Goff, Sir Park Lowe, Sir Francis William Burman, J. B. Gower, Sir Robert Luce, Major-Gee. Sir Richard Harman Burton, Colonel H. W. Graham, Fergus (Cumberland, N.) Lumley, L. R. Butler, Sir Geoffrey Grant, Sir J. A. MacAndrew, Major Charles Glen Cadogan, Major Hon. Edward Greaves-Lord, Sir Walter Macdonald, Capt. P. D. (I. of W.) Campbell, E. T. Grenfell, Edward C. (City of London) Macdonald, R. (Glasgow, Cathcart) Carver, Major W. N. Griffith, F. Kingsley McLean, Major A. Cautley, Sir Henry S. Grotrian, H. Brent Macmillan, Captain H. Cayzer, Maj. Sir Herbt. R. (Prtsmth. S.) Guinness, Rt. Hon. Walter E. Macnaghten, Hon. Sir Malcolm Chamberlain, Rt. Hn. Sir J. A. (Birm., W.) Gunston, Captain D. W. Macqulsten, F. A. Chamberlain, Rt. Hon. N. (Ladywood) Hacking, Douglas H. MacRobert, Alexander M. Chapman, Sir S Hamilton, Sir George Makins, Brigadier-General E. Charteris, Brigadier-General J. Hammersley, S. S. Malone, Major P. B. Christie, J. A. Hannon, Patrick Joseph Henry Margesson, Capt. D Churchman, Sir Arthur C. Harland, A. Marriott, Sir J. A. R. Cobb, Sir Cyril Harney, E. A. Merriman, Sir F. Boyd Cochrane, Commander Hon. A. D. Harrison, G. J. C. Meyer, Sir Frank Colfox, Major Wm. Phillips Hartington, Marquess of Mitchell, S. (Lanark, Lanark) Cooper, A. Duff Harvey, G. (Lambeth, Kennington) Mitchell, W. Foot (Saffron Walden) Cope, Major Sir William Haslam, Henry C Mitchell, Sir W. Lane (Streatham) Couper, J. B. Headlam, Lieut.-Colonel C. M. Moles, Rt. Hon. Thomas Monsell, Eyres, Com. Rt. Hon. B. M. Sandeman, N. Stewart Turton, Sir Edmund Russborough Moore, Sir Newton J. Sanders, Sir Robert A. Waddington, R. Morrison, H. (Wilts, Salisbury) Sanderson, Sir Frank Warner, Brigadier-General W. W. Nelson, Sir Frank Sandon, Lord Warrender, Sir Victor Newton, Sir D. G. C. (Cambridge) Sassoon, Sir Philip Albert Gustave D. Waterhouse, Captain Charles Nicholson, Col. Rt. Hon. W. G. (Ptrsf'ld.) Savery, S. S. Watson, Sir F. (Pudsey and Otley) Nuttall, Ellis Scott, Rt. Hon. Sir Leslie Watson, Rt. Hon. W. (Carlisle) O'Neill, Major Rt. Hon. Hugh Sheffield Sir Berkeley Watts, Sir Thomas Oman, Sir Charles William C. Shepperson, E. W. Wells, S. R. Owen, Major G. Simms, Dr. John M. (Co. Down) White, Lieut.-Col. Sir G. Dairymple- Penny, Frederick George Skelton, A. N. Wiggins, William Martin Percy, Lord Eustace (Hastings) Smith, Louis W. (Sheffield, Hallam) Williams, A. M. (Cornwall, Northern) Perkins, Colonel E. K. Smith-Carington, Neville W. Williams, Com. C. (Devon, Torquay) Peto, G. (Somerset, Frome) Smithers, Waldron Williams, C. P. (Denbigh, Wrexham) Preston, William Sprot, Sir Alexander Williams, Herbert G. (Reading) Price, Major C. W. M. Stanley, Lieut.-Colonel Rt. Hon. G. F. Wilson, Sir C. H. (Leeds, Central) Radford, E. A. Stanley, Hon. O. F. G. (Westm'eland) Wilson, R. R. (Stafford, Lichfield) Raine, Sir Walter Strauss, E. A. Windsor-Clive, Lieut-Colonel George Ramsden, E. Streatfeild, Captain S. R. Withers, John James Rawson, Sir Cooper Sueter, Rear-Admiral Murray Fraser Wormer, Viscount Rentoul, G. S. Sugden, Sir Wilfrid Womersley, W. J. Rhys, Hon. C. A. U. Templeton, W. P. Wood, E. (Chest'r, Stalyb'ge & Hyde) Richardson, Sir P. W. (Sur'y, Ch'ts'y) Thom, Lt.-Col. J. G. (Dumbarton) Wood, Rt. Hon. Sir Kingsley Roberts, Sir Samuel (Hereford) Thomas, Sir Robert John (Anglesey) Woodcock, Colonel H. C. Rodd, Rt. Hon. Sir James Rennell Thompson, Luke (Sunderland) Worthington-Evans, Rt. Hon. Sir L. Ropner, Major L. Thomson, Rt. Hon. Sir W. Mitchell- Yerburgh, Major Robert D. T. Ruggles-Brise, Lieut.-Colonel E. A. Tinne, J. A. Russell, Alexander West (Tynemouth) Tomlinson, R. P. TELLERS FOR THE NOES.— Salmon, Major I. Tryon, Rt. Hon. George Clement Major the Marquess of Titchfield and Captain Wallace.
NEW CLAUSE.—(Amendment of Section 174 of principal Act.)
Section one hundred and seventy-four of the principal Act shall be amended as follows:—
In Sub-seciton (1), after the words "concerning the," there shall be inserted the words "promotion, formation."—[ Mr. A. R. Kennedy. ]
Brought up, and read the First time.
I beg to move, "That the Clause be read a Second time."
I can accept this Clause.
In those circumstances, I shall not have the opportunity of explaining it.
Does anyone second the Motion?
I beg to second the Motion.
It is a matter for congratulation that a Conservative Member of the House has managed to get a concession on this Bill from the Conservative Government. Hon. Members opposite tackled the President of the Board of Trade so often in Committee that it really is satisfactory to find that at last he has conceded something. It is a small concession, but it does strengthen the powers exercised in connection with the winding up of companies, and it will be very useful.
Question put, and agreed to.
Clause read a Second time, and added to the Bill.
CLAUSE 1.—(Restriction, on registration of companies by certain names.)
I beg to move, in page 1, line 9, after the word "municipal," to insert the words "or chartered."
I think the object of this Amendment is obvious. There are in this country certain old-established chartered institutions which seem to me to merit the same protection as is extended to municipal bodies.
I beg to second the Amendment.
I think this is a useful Amendment. I do not think the names referred to in the Clause ought to be used by any company for a sinister purpose. We ought to be satisfied that they are properly used.
I am glad this Amendment has been accepted. Chartered companies ought to have this protection. But I would point out that, following this Amendment, there is one by which a number of Conservative Members are seeking to remove this protection from other concerns which are equally deserving of protection with chartered companies. If Conservative Members want the support of hon. Members on this side for this Amendment, I hope they will give us an assurance that they will give us equal support against their colleagues who are endeavouring to take away a protection which was secured in Committee for co-operative bodies.
Amendment agreed to.
Further Amendment made: In page 1, line 14, at the end, insert the words "or society or body incorporated by Royal Charter."—[Mr. Lloyd.]
The next Amendment, which stands in the name of the hon. and gallant Member for Everton (Colonel Woodcock)—[in page 1, line 15, to leave out Sub-section (2)]—is not selected.
On a point of Order. May I ask whether it is possible for this Amendment to be called, as this matter had very little discussion in Committee? It was passed on the first day of the sittings of the Committee, and I think it is a very important matter and should be brought before the House.
I am afraid that I cannot depart from the instructions on this matter.
CLAUSE 6.—(Amendment of s. 26 of principal Act.)
I beg to move, in page 4, line 8, at end, to insert the words:
"(a) In Sub-section (1), for the words 'make a list,' there shall be substituted the words 'make a return containing a list.'"
This Amendment, and the following Amendments to this Clause standing in my name, are practically drafting Amendments. We decided in Committee that there was to be an alphabetical list of the members of the company, but I find on inquiry that in many cases, it is difficult to keep a complete alphabetical list in the share register, and therefore I propose that where the list is not kept in alphabetical order it shall be accompanied by an alphabetical index. In regard to the other Amendments, the words "return" and "list" have been used rather promiscuously, and the correct word is now to be inserted in each case.
Amendment agreed to.
Further Amendments made:
In page 4, leave out from "sub-section (2), in line 9 to the first word "and," in
"before the words 'must contain' there shall be inserted the words 'if the names therein are not arranged in alphabetical order, must have annexed to it an index sufficient to enable the name of any person in the list to be readily found.'
'The return must also state the address of the registered office of the company and.'"
In page 4, line 24, leave out the word "list," and insert instead thereof the word "return."—[ Sir P. Cunliffe Lister ]
I beg to move, in page 4, line 36, to leave out the. words "Except where the company is a. private company."
I understand that it would be convenient if on this Amendment we had a. general discussion of the whole position of private companies under the Bill, and thereafter should not have any further discussion on the Amendments dealing with private companies, except that relating to subsidiary companies. If that be the decision of Mr. Speaker, we shall readily acquiesce in it, and have the general discussion now and only divide on the other Amendments.
Mr. Speaker did intimate that he thought that would be a convenient arrangement, presuming that the House agreed.
I think that would obviously be the most convenient course.
It is understood, of course, that we reserve the right to discuss separately the, point about subsidiary companies. We are moving this Amendment because we object to the provision which excepts private companies from the obligation to file with the annual list a properly audited balance-sheet. For some reason or other the Government have been unable all through this Bill to acquiesce in our desire that private companies should be placed very much on the same basis as public companies, though we submit that it is very important they should be. It is, of course, well known to the business men in the House that of about 90,000 to 100,000 registered companies at least 90 per cent. are private companies, though it is probably not so well known to hon. Members who are not engaged in business, or to the general public, that as regards nine-tenths of the limited liability incorporations in this country, the general provisions of the Companies Acts do not very largely apply. We submit that it is of great importance that those provisions should apply, from two points of view, first in the general public interest, and, secondly, in the interests of the shareholders and creditors. I do not know whether hon. Members have been following with attention the development in the past few years of really large industrial and commercial undertakings in the form of private companies. Every time we come to this House we cannot fail to notice a large new building overlooking the Thames which is, we understand, to be the home of the Imperial Chemical Company. The great Mond combine, governing the sale of chemicals, which is going to have so much influence in so many trades, and is going to have so much to do with the lives and conditions of the workers of the country, is not a public company, it does not file its accounts at Somerset House. It is a private company and is exempt from filing the ordinary particulars at Somerset House which would be required if it were a public company. I think it is not in the public interest that a great block of the business of the country, having so very great an effect upon the community as a whole, should be done under conditions which do not afford reasonable publicity. Take the case of some of the vital trades, the food trades. During the War and in the early post-War period we had a number of inquiries and commissions dealing with the operations of certain companies some of which knew a little bit about profiteering in food. Mr. John Hilton, of the Ministry of Labour, in a Memorandum prepared for the Standing Committee on Trusts, said: quired to file at Somerset House at least the same amount of information as is required in the case of public companies.
In the second place, we submit that this is necessary from the point of view of the shareholders. It is sometimes overlooked that to-day a private company can include up to 50 shareholders before it is forced to register as a public company. Private companies are becoming so mixed up with holding companies, and the business is becoming so much involved with new issues to the public, that it is essential in the interests of the investing public, and of the shareholders of public companies who may be taking over the businesses of private companies, that there should be more information in the returns which have to be filed at Somerset House by those private companies.
6.0 p.m
What about the position of the creditors? If general tradespeople are dealing with a public company, it may be that they are not always satisfied with the amount of information which they can get as regards the financial standing of the company. It is true that they can get at Somerset House an audited statement of the liabilities and assets of a particular public company with whom they propose to do business, but in the case of private companies they have no such means of ascertaining whether they would be justified or not in giving extensive business credits to a particular private company. The various concerns of the private company might be heavily mortgaged, and there might be no real information obtainable by the people who are likely to become creditors of the company.
It is necessary in the interests of the trade creditors of the country that these private companies should supply full information showing the actual financial position of those companies. There is abundant information available showing that these private companies have been used again and again for fraudulent purposes. So far as I can see, in the majority of cases, where fraud has been discovered and action has been taken by the Director of Public Prosecutions, the reason has been that they have been mixed up with some other legislation than the companies legislation, and they have used industrial assurance or the Indus- trial Providence Societies Act for some fraudulent purpose. It ought to be possible to get the information I am asking for under the Companies Act.
I would like the House to consider for a moment the case which I brought before the Standing Committee upstairs which was an action taken by the Assistant Chief Registrar of Friendly Societies. I will quote from the report of the inspector, Mr. John Fox, who was appointed to deal with the case of the House Coal Association, which is a case of comparatively recent date. The constitution of the Board of Directors will no doubt be remembered by hon. Members. In the report of that case Mr. Fox said:
I could quote many other instances, but I will not do so because I am anxious that this Bill should go through. The President of the Board of Trade knows full well that if I spoke all that was in my mind there would be little chance of this Measure going through in two days. It is only because I want to save what is good in this Measure that I am not taking up more time on the Report stage. Considering the large block of business done by private companies and knowing the number of cases of misfeasance, negligence and the defrauding of tht public which has bone on in the past, I think we should not be doing our duty if we did not insist upon the fullest publicity being given to the accounts of private companies. I want hon. Members to bear in mind that there has been a wholesale extension in this country of the transfer of business which used to be done by public companies and it is now being done by private companies. In these circumstances it is not a bit of use hon. Members saying to the workers employed by these private companies: "We want you to do your part in promoting industrial peace." What is the use of saying that when all the time negotiations have to be carried on in the dark as to the real financial position of the company with whom the workers are negotiating. At the present time any person is able to go to the office of the Chief Registrar or Friendly Society and discover to the last penny the financial strength of any trade union, and surely we ought to be in a position to find out the exact financial standing of private companies which may employ a large number of workmen. If hon. Members really want peace in industry, they must provide for the same amount of publicity in the case of private companies as in the case of public companies, although we shall try later on to show that the publicity required in the case of public companies is quite inadequate.
I beg to second the Amendment.
There is no part of the Greene Report which is more disappointing than that dealing with private companies, and that subject is dismissed in the Report simply by a statement that it is not desirable to inquire further into the affairs of private traders and small businesses. My hon. Friend the Member for Hillsborough (Mr. A. V. Alexander) has pointed out that private companies cover an enormous field of business. You can have private companies which are really only holding companies; you can have private companies which are mere departments of other companies, and we shall discuss those matters on Amendments later on. You can have private companies which are very small affairs indeed, and more in the nature of partnerships than anything else.
I do not want to go over the ground which has been traversed by my hon. Friend the Member for Hillsborough, but I will content myself by summarising evidence which hardly appears at all in the Greene Report, and the evidence I will quote is very formidable. The way in which the company law has been used for the protection of people who are little better than common thieves is scandalous. We have evidence on this question from people who have been accustomed to deal with this class of business. We have the evidence of the Official Receiver for Manchester, and we also have the evidence of the Director of Public Prosecutions. I want to point out something which is hardly mentioned in the Greene Report, and it is that there is a growing practice on the part of unscrupulous people to use the Companies Law as a cover for their bad deeds. In the Greene Report Mr. Topham says: In that case I think it can be said that the persons concerned found it far more easy to get credit under the name of a company that was reminiscent of an exceedingly respectable concern than under their own name, with the result that devastation—that is not too strong a word to use—was caused in my own district. As in the cases mentioned by the Director of Public Prosecutions, the persons concerned did not appear to be in any kind of straitened financial circumstances, although it is perfectly certain that the company was insolvent. Attention has been called, not by cranks, not by foolish people, but by the Director of Public Prosecutions and by Receivers in bankruptcy, to the way in which the company law is used by unscrupulous persons for the prosecution of what are really fraudulent undertakings.
The Director of Public Prosecutions referred to a very interesting case, which is too intricate to quote, but which I will just summarise. Two ingenious gentlemen with a capital of £500 floated a company, and then another company, conducted their affairs to a triumphant bankruptcy for £80,000, and apparently, escaped unhurt as far as the Director of Public Prosecutions was concerned. A failure for £80,000 meant, of course, that a great number of innocent people were ruined or very much hurt, and what I complain of in regard to the Greene Report is that, with all the evidence that was before the Committee, it has done nothing whatever to strengthen the company law so as to make it more difficult to float fraudulent undertakings. I will not go on to repeat the evils to which my hon. Friend referred in connection with private companies which are as large as public companies, and at the same time receive all the protection afforded by the company law. The great edifice of the company law is thus used to protect fraudulent persons who take advantage of the provisions with regard to private companies, and if, in such cases as that to which I have referred, there were a published list of the shareholders, the assets and all the rest of it, that would have been enough to prevent anyone but a fool from giving that company any credit whatever.
The hon. Member for Hillsborough (Mr. A. V. Alexander) asks the House to alter what has been the considered law of this country for a large number of years. For many years the law has been that a private company should have the right to register as a limited liability company without being subject to all the Regulations which apply to public companies making their appeal to the general public for subscriptions of capital. If a great change is to be made in what has been the law and practice of this land for many years, it must be made upon a strong case, I am sure that any of us could cite dozens of cases in favour of any alteration of the law that we might like to suggest. I am sure that I could propose to the House any sort of restriction of such liberty as is still left to the subject, on the ground that this or that person having such a measure of liberty had abused it. Cases of that kind are responsible for the proverb, "Hard cases make bad law."
The hon. Member for East Ham, North (Miss Lawrence) expressed disappointment with the Greene Committee because, on certain evidence which she quoted, they did not find in favour of her view. In the first place, I would point out that there could not have been a much better tribunal to assess where the balance of public convenience lay than the Greene Committee. It was presided over by one of the greatest lawyers of the day, and it included some of the ablest accountants in this country, as well as others who had had great business experience—
But not shareholders.
Certainly, shareholders as well as others were represented. I do not know whether the right hon. and gallant Gentleman himself gave evidence, but one of the most prolific witnesses before the Committee was the hon. Member for Hillsborough.
My hon. Friend the Member for Hillsborough gave evidence from the point of view of the cooperative societies, but no one gave evidence from the point of view of the public or of the shareholders.
If the right hon. and gallant Gentleman really thought that this Committee was not capable of taking into account that point of view, he might himself have volunteered to give evidence, but I think it is a little too much to ask the House to suppose that a Committee of men of such great experience had not the fullest sense of what was due to the whole of every section of the people of this country. The hon. Member for East Ham, North certainly cited a great deal of evidence, but she did not cite all of the evidence given before the Greene Committee. She cited the evidence of witnesses who were in favour of altering the law in this, respect, but, of course, she was careful not to go through all the other evidence which represented the large majority view of accountants and lawyers against a change in the law. The Greene Committee, after having heard all the evidence submitted to them, summed up their conclusions, and, although they were expressed in but few words, I do not think that they are any the worse because they were put shortly instead of at length. Therefore, I say that, when the case has been tried out in that way, and when there is this regular practice embodied in the law which has been a very great convenience to business in this country, a very strong case would be needed to convince one of the necessity for an alteration.
It is suggested that every private company should be treated exactly as a public company—in fact, that private companies should be abolished altogether—and that is suggested first of all in the interests of the creditors. Creditors, however, do not give credit to the word "limited," or, at any rate, they are very foolish people if they do. They give credit according to what they know of the manner in which a business is conducted. The type of person who gives unlimited credit on the strength of the word "limited" is the kind of person who would forfeit his money to anyone who can do a three-card trick upon him, whether in connection with a limited liability company or in a social party on the way to the racecourse. The hon. Member for East Ham, North, said that if, in the case which she cited, she had only been able to see the list of shareholders, she and her friends would never have been taken in—
I said that the creditors would not have been taken in if they had been able to see the list. I myself was not a creditor.
I beg pardon; I am so sorry; I am sure that I was doing the hon. Member less than justice, and that she would not have become a creditor of such a concern. I am sure that, had she been consulted in time, she would have told her friends that, if they wanted to see the list of shareholders in order to decide whether they should give credit or not, they had only to go to Somerset House and they would have found it there. A private company has to file a list of its shareholders and a list of its mortgages in exactly the same way as a public company. Therefore, the great argument upon which this case has been founded—the argument of the public interest of the creditors—entirely goes by the board.
The next argument was in regard to subsidiary companies, and it was suggested that the whole law should be altered because subsidiary companies can be private companies. That, however, is really a reason why the law should not be altered. There are cases of holding companies whose subsidiaries happen to be two or three large companies in which the holding company has acquired control. I may point out that the position of a holding company is dealt with in Clause 40 of this Bill, and the holding company has to show in its balance sheet how the accounts of the subsidiary companies which it controls are dealt with.
That point, therefore, is met, but there is a very real reason why subsidiary companies in many cases should not have to publish their balance sheets, and it is this, that, acting under the law as it stands to-day, quite a large number of companies are, for convenience, operating by means of branches, either in this country or abroad, which are limited liability companies—which are private companies, and which are subsidiary companies; and, if you were to force disclosure upon those companies, it would be exactly the same as saying that one company which operated as a single entity would have to disclose what each of its branches was doing. It would be most unfair to place such information at the disposal of the competitors of that company. It is suggested that the whole law should be altered because these cases have occurred. I am perfectly sure, however, that you cannot save every fool from his folly, and that, if you prevent 99,990 honest business people from carrying on their work in the way in which the law has permitted and encouraged them to carry it on hitherto, in the hope that four or five will cease their manipulations, you will put all the other people to great inconvenience, and the four or five will go and manipulate in some different way, so that really no good will be done at all.
The last argument was that the private company should be abolished because, when it comes to wage negotiations, the worker cannot get a square deal unless a balance sheet of the private company is filed at Somerset House. The hon. Member for Hillsborough is, I think, a much better wage negotiator than that. I am perfectly certain that, if he represented a trade union and were going into a negotiation on behalf of his union, he would not be content merely with seeing a rather jejune balance sheet, but would want to know, and quite rightly, not what were the accounts of a year ago, relating to trade transactions occurring, perhaps, two years before, but he would want to see the current contracts, to see what was going on at the present time, and whether the particular business in question was prospering at that moment. Surely, it is an argument that is not worthy of him or of this House to say that balance sheets of all private companies must be filed at Somerset House because they are vital to wage negotiations between the industries concerned and the great trade unions of this country. I have summarised, I hope successfully, the arguments against the particular cases that have been brought forward, and I submit that nothing has been adduced that should make us alter what has been the considered law of this country, and what I think most Members of this House know by experience is in fact a general convenience to the trade and commerce of this country.
The President of the Board of Trade has just given us some reasons why the Amendment which has been proposed should not be pressed upon the House. May I be allowed to supplement what he said with regard to private companies by putting a purely business point of view? As I understand the proposal of the hon. Member for Hillsborough (Mr. A. V. Alexander) he would like to get rid of private com- panies altogether, and nothing short of that would really satisfy him. He thinks that private companies are a danger to industrial peace, that they lead innocent people into losses which they ought not to incur, and that they give rise to a good deal of false hope and confidence which is not justified by the businesses concerned. How does he propose to get over that difficulty? The proposal is to get rid of private companies altogether, and make all companies public companies. I wonder whether the hon. Gentleman has really considered that there is another alternative open to those who want to conduct business along irregular lines. If they want to perpetrate fraud, they do not need to become public companies. They can become private firms. He will have no control over them. The private partnership is a recognised custom of the country, well embedded in all our legislation. It is indeed so much a part of our ordinary business economy that you could not get rid of it even if you tried to. It exists in one form or another in every grade of society and in every walk of life, and you could not get rid of it. Private partnership is open to far more dangers than any of the dangers the hon. Member thinks he sees in private companies.
They have not the protection of limited liability that companies have.
No, but the hon. Gentleman is leaving out of account that there are four ways of conducting business. It may be a private partnership, or it may be a company which has not limited liability, of which there are very many, or it may be a private company with limited liability or a public company with limited liability. Some people prefer to have companies with no limited liability—I presume the hon. Gentleman would not wish to wipe them out altogether—so that the safeguard of the advantage he speaks about, of limited liability, does not accrue to the private companies any more than it accrues to private firms. Is there not great advantage in having private companies which have limited liability? I look at it, not from the Point of view of prejudiced opposition to private companies because there have been a great many frauds amongst the proprietors of private companies. I take the larger view of how far it facilitates the commerce and industry of the country. There has been no movement which has been of greater advantage to everyone concerned with industry and commerce, to the workers as well as to the proprietors, than the spread of the company system. The company system has enabled us to obtain small as well as large contributions of capital for our industry and commerce, and they have provided that accretion of capital without which we could never have expanded our trade and commerce as we have. Amongst them the pioneers have frequently, though not always, been private companies, and the tendency has been not for more public companies to become private companies, but for more private firms to become private limited companies.
Having that limited liability has been a great advantage. You can have no expansion of industry and commerce unless you have adventure. You must take risks. If you are prevented from taking risks, if you are always to adopt a purely conservative line, carrying through no transactions but those that are so safe as to become uninteresting, it stands to reason that there could be no expansion, and it is only from that spirit of adventure that there has been any expansion at home or abroad. That spirit of expansion is furthered by the limited liability law. It has enabled an immense amount of capital to be brought in, industries to be expanded, and risks to be undertaken which could never have been undertaken by private partnerships. I very much regret that the private firm system is shrinking. There was a great deal to be said for the old commercial dynasties of the past, but it is not in conformity with the social and economic movement of the day. The spread of the shareholding system has now become much more prevalent all over the country. Whereas formerly shareholders were numbered by tens of thousands, you now have millions. I take one single example of the way in which shareholding has spread, even in our own time. Two generations ago the banks were in the hands of a small number of rather rich men. Now they are owned by shareholders. The bank with which I am connected has no fewer than 72,0u0 shareholders—not great capitalists, but an immense number of people who have small share holdings. That has helped us to get together capital and make it available for the purpose of loans and long investments, as well as short, for transactions abroad as well as at home, which were not open two generations ago, and this spread of the company system has been of equal advantage within the range of private companies as of public companies.
The hon. Gentleman says the disadvantage of the private company is that it does not make full disclosure. It does not file its information. Information is filed at the Board of Trade, and I am not saying anything cynical when I remark that the file at the Board of Trade does not give very much away, and it is impossible for us by legislation, or for the Board of Trade by Regulation, to insist on having filed at the Board of Trade, or at the company's office, or wherever you wish to have it, information which will be of such value that no one need ever be taken in, no creditor will ever lose his money and no simple people can be defrauded. Fraud is a thing to be provided against, but you do not provide against it by saying that private limited companies are not to exist at all. I wrote down the three things on which the hon. Gentleman specially laid emphasis. He says we cannot tell, if they are private companies, whether they should have credit. That is equally true of a private firm. He says we do not know whether they are mortgaged. I think he is wrong there, because the returns of the Board of Trade provide for the publication of mortgages. He says we cannot tell whether they are fraudulent. There are a good many tests we can apply to private companies, but one you cannot apply is by Board of Trade form to discover the moral character of those who are conducting the business.
Having said so much in criticism of the hon. Gentleman, let me say that I agree with him fully that we should do everything we can by legislation to prevent fraud. What I quarrel with him about is that he thinks he can prevent fraud by blotting out what has now become a most important section of the commercial organisation of the country, making it of no avail to the ordinary private firm, and preventing the private firm having the encouragement and protection of the limited liability law and taking full advantage of it. The advantage which has accrued to the country is so great that there is no justification for the hon. Gentleman's proposal.
I have sat, metaphorically, at the right hon. Gentleman's feet for 24 years, and never can I recall an occasion when I differed from him so profoundly. The awful fact remains that he has spoken against an Amendment which he has not read. He has made a most eloquent, touching appeal to the House which was absolutely unnecessary. We are all in favour of private limited companies. We have not the slightest desire to abolish them. I think he is mistaken in thinking that everything that has happened in this country has been subsequent to the introduction of limited liability. That spirit of adventure and taking risks, which he so rightly lauds, was even more prominent when liability was unlimited than when it has now become limited. We are all in favour of private limited companies. The greater part of the business of the country is conducted by private limited companies, and long may it continue. All we ask in the Amendment is that private limited companies should file at Somerset House an annual statement, the balance-sheet of the company. It would not hurt any private company to have its balance-sheet filed at Somerset House and published. It would not injure business in the least. Balance-sheets, unfortunately, are not always very obvious documents, and private companies could do what public companies have done with perfect success and ease, and without the slightest inconvenience to themselves, for the last 40 years. We must remember that the world moves. We are legislating for the next generation. There will not be another amendment of the Companies Act for some time.
What is the general trend of events in these recent years, and what may we expect more and more as time goes on? All the industry in this country is being rationalised, a most regrettable performance in my opinion, but still it has come to stay and it is going to increase. Rationalism means in every case that a public holding company buys up a number of companies which up till now have been producing companies—public companies in many cases. Imperial Chemical Industries is a case in point. It is a public company. It is clearly a holding company. It owns the shares in its various components—Nobel, United Alkali, Brunner Mond, and some others whose names I have forgotten. They were all public companies, and their balance sheets went to Somerset House every year, and the shareholders could get hold of them. Now the sole shareholder in Brunner Mond, the sole shareholder in United Alkali, the sole shareholder in Nobel is Imperial Chemical Industries, with the result that every one of those companies has become a private company. Up to now their balance sheets have been sent to Somerset House. Henceforth Somerset House is not to see them. Will the conduct of this business be benefited by the withholding of those balance sheets? It will not. Every Member must know dozens of companies in which he is interested which have gradually become holding companies, and whose balance sheets merely show the interest on the shares held through the different subsidiaries. The subsidiaries have ceased to be public companies and to publish their balance sheets. The holding company publishes a balance sheet which gives no information.
Obviously, as rationalisation extends, more and more producing companies will be absorbed by holding companies, and their accounts, if we leave the law as it is, will cease to be sent to Somerset House and will no longer be available to the public. It seems to me that we ought to take account of that gradual change in the form in which trade and industry are carried on. All we ask for in the Amendment is that an annual balance sheet should be filed at Somerset House as it was filed in the past when it was a public company. It is nonsense to say the information given in that balance sheet will ruin the company, and that its competitors will find out all about it. Up to now they have been sent to Somerset House, and if their competitors could have used them they would have done so. The whole question is whether, in the interests of the public and the shareholders, we ought to have these balance sheets. The President of the Board of Trade ridiculed the suggestion made by the hon. Member for East Ham, North (Miss Lawrence), because she could have gone to Somerset House and seen the list of shareholders in the fraudulent company she mentioned. Of course she could, and if the creditors of the company had gone and seen the last annual balance sheet they would have known perfectly well that the company was not paying dividends. As long as that information is withheld, creditors are at a disadvantage.
I make an appeal to the right hon. Gentleman on these grounds. He and I are opposed to interference with public and private business. No one is stronger than he is in standing up for the rights of a person to conduct his business on his own lines. I would certainly deprecate the periodic inspections of the Board of Trade—safeguarding some industries and ruining others. But we do not ask in this Amendment for any interference with private industry. All that we ask for is publicity, and there is nothing better than publicity to prevent fraud and to assist British trade. What we want in this country now is cheap capital, and lots of it. It is your money that we want! We want it in order that industry in this country may get its capital cheaply, and in order to provide the sinews of production cheaply. Does the House not think that getting money cheaply in this country is to inspire in the minds of the possible investor the greatest idea of the security of a British investment? You have a chance in this Bill of saying to all possible investors in the world that under British company law the security of anybody who invests in British companies is greater than is the case anywhere else in the world.
Why, therefore, do you not allow us by this Amendment to secure just that publicity which gives confidence? It is true that it may not give all the confidence that I should like. It is just one of those Amendments where a little more publicity means a little more confidence, a little cheaper money, and a little more money for British industry. Here you have British industry to-day becoming More and more secluded—the holding company keeping everything down. All we are asking for in this Amendment is a litle more light, so that the holding company—the company of the future—shall, at any rate, file at Somerset House the annual balance sheets of its subsidiary companies.
I was very much interested in the remarks made by the right hon. Gentleman the Member for West Swansea (Mr. Runciman), whose business ability we all recognise. It appeared to me that his arguments were not directed against the Amendment before the House. The purpose of this Amendment, for which a good deal of sympathy was expressed in Committee upstairs, is to bring the private companies into line with the public companies as far as publicity regarding their affairs is concerned. In Committee we argued at great length the necessity for the publication of facts concerning industry. My hon. Friend the Member for Hillsborough (Mr. A. V. Alexander) in his speech ably dealt with that. We are told to-day—and I think the right hon. Gentleman the Member for West Swansea will agree—that what is necessary, as far as industry is concerned, is to face facts. The purpose of this Amendment is to get facts. We have, as far as 10 per cent. of the companies are concerned, publicity regarding balance sheets. It is perfectly true, as the right hon. Gentleman said, that the information contained in the balance sheets and the information filed at Somerset House might very often be misleading, but still it is some information, and it is better than no information. In regard to trade union negotiations and the necessity for facing facts for bringing about industrial peace, I want to say in this House what I said in Committee. If we are to have industrial peace in this country, then not only one side of the negotiators will have to lay their cards upon the table, but both sides will have to do so.
I cannot help thinking that the opposition to this Amendment comes from those who give lip service to the facing of facts and are not prepared to face up to the situation when the crucial moment comes. In Committee we emphasised as ably as we could as working men the necessity for peace in industry and we asked that the facts that would bring peace in industry should be laid before us in connection with this Bill. As I said, a good deal of sympathy was expressed, but we were told that this was not the Bill to give effect to our desires. We were told that if we wanted company law such as Would give in these facts, we ought to bring in another Bill. We know that that is futile. We know that in the lifetime of this Government there is no chance whatever of our bringing in a Bill that will enable us to obtain the facts for which we ask. We are making this last attempt on the Report stage of this Bill to get certain Amendments accepted for which we strove upstairs. This Amendment would bring the private companies into line with the public companies, and would give to us who lead the work-people, who can make peace in industry, the facts that we are seeking. The facts concern the accretion of values in industry. The right hon. Gentleman the Member for West Swansea is one of the heads of a most successful company that has shown very marked accretions of value. We can get some part of the information about these accretions of values from the Stock Exchange Year Book and from the balance sheets, but, as I have said, this only applies to 10 per cent. of the industrial concerns of this country. We want to obtain the facts concerning the 100 per cent., and that is why we are moving this Amendment.
We have, for instance, in trade union negotiations been able to bring forward the accretion of values shown by balance sheets in such companies as I mentioned upstairs. One company gave 20 shares for one share on re-organisation; another company gave 12½ shares for one share, and, in another very extreme case, a company well known in the country, an engineering and ship repairing firm, gave actually £4 for a share scrip issued for a shilling originally invested. If we can get these facts with regard to public companies, why should the right hon. Gentleman rise in his place here and say that we should be denied the same facts concerning private companies? The right hon. Gentleman the Member for West Swansea gave a very able dissertation upon the business methods of this country. We want to know more about the business methods of the country and we are prepared to learn, but we are not getting the facts which will bring about peace in industry. I remember at an Industrial Court across the road, certain facts being given to us concerning 47 trades representing 5,250,000 workmen. These facts were supposed to concern the firms with which we were negotiating, but they were absolutely wrong. We were able to get the actual information. I was one of the Members who was able to get it, and it enabled us to contradict the facts which had been given. We were asked where we obtained our information and we told them that we got it from the Stock Exchange Year Book and balance sheet.
We want the information contained in the Stock Exchange Year Book, and the information concerning the private companies so that we who are leaders of the working class movement and of trade unions can help to bring about that peace so desirable in the industry of this country. That information was denied upstairs, and it is denied here from the Conservative Benches. I am sorry to say that it also appears to be denied to us from Members on the Liberal Benches who supported us upstairs. We are asking for information which will alone enable trade union negotiators to go before employers' boards and negotiate with them, and then to return to their trades unions and constituents and be able to say to them that, as far as an advance of wages is concerned or a proposed reduction is concerned: "We have ascertained all the facts, and we are in a position to advise you whether to leave off work or to continue." If we are not in that position—we are not at the present moment, and we shall never be in that position in existing circumstances—you will never have peace in industry. My last words to the House is to repeat to Members who really have this question of peace in industry at heart, the appeal which I made upstairs to give us this Amendment.
I must express my surprise at the remarks of the right hon. Gentleman the Member for West Swansea (Mr. Runciman), who, apparently, will have been a party to the now well-known "Yellow Book," in which the Liberal party in their proposals for Britain's industrial future make certain suggestions with regard to publicity for private and public companies. The right hon. Gentleman, in a splendid dissertation upon private and public limited companies and all sorts of companies, suggested that the Amendment moved by my hon. Friend the Member for Hillsborough (Mr. A. V. Alexander) is not only going to destroy private companies, and retard the development of our normal trade and commerce, but is going to put our companies at a tremendous disadvantage one with another. Yet in this Yellow Book the Liberal party are all for more, and yet more, and still more publicity. One of the passages in that part of the book dealing with public companies reads as follows: mendation of the Liberal party, or of the compilers of this report. They say:
I am rather astonished to find the right hon. Gentleman, who, apparently, on the face of it, would be a wholehearted supporter of this wonderful Liberal document, in a very vital particular comes solidly down against the recorded opinions of all the experts who came together for a very long period with regard to public companies and publicity, and the general welfare of the shareholders and of the general community. It seems to me that this Amendment is a very reasonable one, and, in spite of all the arguments of the right hon. Gentleman for allowing things to remain just as they are, there are sound reasons why a change ought to be made. There is no doubt about one statement made in this document, namely, that the American situation has proved the absolute necessity for giving all the publicity that is required, and it has gone to show that there is no necessity for secrecy any longer. I submit to the right hon. Gentleman that while he may put up a case in the ordinary orthodox sense for the retention of the law as it stands as far as private companies are concerned, he is failing to move forward with the times, and I think it would serve the interests not only of his own party but of private and public companies, of the general community and especially of shareholders, if he would accept the Amendment.
Question put, "That the words proposed to be left out stand part of the Bill."
The House divided: Ayes, 234; Noes, 134.
Division No. 326.] AYES. [7.4 p.m. Agg-Gardner, Rt. Hon. Sir James T. Gilmour, Lt.-Col. Rt. Hon. Sir John O'Neill, Major Rt. Hon. Hugh Albery, Irving James Glyn, Major R. G. C. Ormsby-Gore, Rt. Hon. William Alexander, E. E. (Leyton) Graham, Fergus (Cumberland, N.) Percy, Lord Eustace (Hastings) Alexander, Sir Wm. (Glasgow, Cent'l) Grattan-Doyle, Sir N. Perkins, Colonel E. K. Allen, Sir J. Sandeman Greaves-Lord, Sir Walter Pete, G. (Somerset, Frome) Amery, Rt. Hon. Leopold C. M. S. Grenfell, Edward C. (City of London) Pilcher, G. Atholl, Duchess of Griffith, F. Kingsley Pilditch, Sir Philip Atkinson, C. Grotrian, H. Brent Preston, William Balfour, George (Hampstead) Guinness, Rt. Hon. Walter E. Price, Major C. W. M. Balniel, Lord Gunston, Captain D. W. Radford, E. A. Barclay-Harvey, C. M. Hacking, Douglas H. Raine, Sir Walter Barnett, Major Sir Richard Hamilton, Sir George Rawson, Sir Cooper Beamish, Rear-Admiral T. P. H. Hammersley, S. S. Reid, D. D. (County Down) Beckett, Sir Gervase (Leeds, N.) Hannon, Patrick Joseph Henry Rantoul, G. S. Bellairs, Commander Carlyon Hartington, Marquess of Rhys, Hon. C. A. U. Bentinck, Lord Henry Cavendish- Harvey, G. (Lambeth, Kennington) Richardson, Sir P. W. (Sur'y, Ch'ts'y) Berry, Sir George Haslam, Henry C. Roberts, Sir Samuel (Hereford) Birchall, Major J. Dearman Headlam, Lieut.-Colonel C. M. Robinson, Sir T. (Lancs., Stretford) Bourne, Captain Robert Croft Henderson, Capt. R. R. (Oxf'd, Henley) Rodd, Rt. Hon. Sir James Rennell Bowater, Col. Sir T. Vansittart Henderson, Lieut.-Col. Sir Vivian Ropner, Major L. Brass, Captain W. Heneage, Lieut.-Colonel Arthur P. Ruggles-Brise, Lieut.-Colonel E. A. Brassey, Sir Leonard Henn, Sir Sydney H. Runciman, Rt. Hon. Walter Bridgeman, Rt. Hon. William Clive Hennessy, Major Sir G. R. J. Runciman, Rt. Hon. Walter Briggs, J. Harold Hills, Major John Waller Russell, Alexander West (Tynemouth) Brocklebank, C. E. R. Hilton, Cecil Salmon, Major I. Brooke, Brigadier-General C. R. I. Hohler, Sir Gerald Fitzroy Samuel, A. M. (Surrey, Farnham) Broun-Lindsay, Major H. Hope, Capt. A. O. J. (Warw'k, Nun.) Sandeman, N. Stewart Brown, Col. D. C. (N'th'l'd., Hexham) Hope, Sir Harry (Forfar) Sanders, Sir Robert A. Brown, Brig.-Gen. H. C. (Berks, Newb'y) Hopkins, J. W. W. Sanderson, Sir Frank Buchan, John Hopkinson. A. (Lancaster, Mossley) Sandon, Lord Burman, J. B. Hudson, Capt. A. U. M. (Hackney, N.) Savery, S. S. Burton, Colonel H. W. Hume, Sir G. H. Sheffield, Sir Berkeley Butler, Sir Geoffrey Hunter-Weston, Lt.-Gen. Sir Aylmer Shepperson, E. W. Cadogan, Major Hon. Edward Hurd, Percy A. Simms, Dr. John M. (Co. Down) Campbell, E. T. Hurst, Gerald B. Skelton, A. N. Carver, Major W. H. Hutchison, Sir Robert (Montrose) Slaney, Major P. Kenyon Cassels, J. D. Inskip, Sir Thomas Walker H. Smith, Louis W. (Sheffield, Hallam) Cautley, Sir Henry S. Iveagh, Countess of Smith-Carington, Neville W. Cayzer, Maj. Sir Herbt. R. (Prtsmth, S.) Jackson, Sir H. (Wandsworth, Can'l) Smithers, Waldron Cazelet, Captain Victor A. James, Lieut.-Colonel Hon. Cuthbert Stanley, Lieut.-Colonel Rt. Hon. G. F. Cecil, Rt. Hon. Sir Evelyn (Aston) Jephcott, A. R. Stanley, Hon. O. F. G. (Westm'eland) Chamberlain, Rt. Hn. Sir J. A. (Birm., W.) Joynson-Hicks, Rt. Hon. Sir William Storry-Deans, R. Chamberlain, Rt. Hon. N. (Ladywood) Kennedy, A. R. (Preston) Streatfeild, Captain S. R. Charteris, Brigadier-General J. King, Commodore Henry Douglas Sueter, Rear-Admiral Murray Fraser Christie, J. A. Kinloch-Cooke, Sir Clement Sugden, Sir Wilfrid Cobb, Sir Cyril Lane Fox, Col. Rt. Hon. George R. Templeton, W. P. Cochrane, Commander Hon. A. D. Lister, Cunliffe, Rt. Hon. Sir Philip Thompson, Luke (Sunderland) Colfox, Major Wm. Phillips Livingstone, A. M. Thomson, Rt. Hon. Sir W. Mitchell- Cooper, A. Duff Lloyd, Cyril E. (Dudley) Tinne, J. A. Cope, Major Sir William Long, Major Eric Titchfield, Major the Marquess of Cowan, Sir Wm. Henry (Islington, N.) Looker, Herbert William Tomlinson, R. P. Craig, Sir Ernest (Chester, Crewe) Lougher, Lewis Tryon, Rt. Hon. George Clement Croft, Brigadier-General Sir H. Luce, Maj.-Gen. Sir Richard Harman Turton, Sir Edmund Russborough Crooke, J. Smedley (Deritend) Lumley, L. R. Wallace, Captain D. E. Crookshank, Col. C. de W. (Berwick) Lynn, Sir R. J. Warner, Brigadier-General W. W. Curzon, Captain Viscount MacAndrew Major Charles Glen Warrender, Sir Victor Davidson, Major-General Sir J. H. Macdonald, Capt. P. D. (I. of W.) Waterhouse, Captain Charles Davies, Maj. Geo. F. (somerset, Yeovil) Macdonald, R. (Glasgow, Cathcart) Watson, Rt. Hon. W. (Carlisle) Dawson, Sir Philip McLean, Major A. Watts, Sir Thomas Drewe, C. Macmillan, Captain H. Wells, S. R. Eden, Captain Anthony Macquisten, F. A. White, Lieut.-Col. Sir G. Dairymple- Edmondson, Major A. J. MacRobert, Alexander M. Williams, A. M. (Cornwall, Northern) Elliot, Major Walter E. Malone, Major P. B. Williams, Com. C. (Devon, Torquay) Ellis, R. G. Margesson, Captain D. Williams, Herbert G. (Reading) Erskine, Lord (Somerset, Weston-s.-M.) Marriott, Sir J. A. R. Wilson, Sir C. H. (Leeds, Central) Everard, W. Lindsay Merriman, Sir F. Boyd Wilson, R. R. (Stafford, Litchfield) Fairfax, Captain J. G. Mitchell, S. (Lanark, Lanark) Windsor-Clive, Lieut.-Colonel George Falls, Sir Bertram G. Mitchell, Sir W. Lane (Streatham) Withers, John James Falls, Sir Charles F. Moles, Rt. Hon. Thomas Wolmer, Viscount Fermoy, Lord Monsell, Eyres, Com. Rt. Hon. B. M. Womersley, W. J. Fleiden, E. B. Moore, Sir Newton J. Wood, E. (Chester, Stalyb'ge & Hyde) Foster, Sir Harry S. Morrison, H. (Wilts, Salisbury) Wood, Rt. Hon. Sir Kingsley Fraser, Captain Ian Morrison-Bell, Sir Arthur Clive Woodcock, Colonel H. C. Frece, Sir Walter de Nall, Colonel Sir Joseph Worthington-Evans, Rt. Hon. Sir L. Fremantle, Lieut.-Colonel Francis E. Neville, Sir Reginald J. Yerburgh, Major Robert D. T. Cecile, Lieut.-Col. Anthony Newman, Sir R. H. S. D. L. (Exeter) Young, Rt. Hon. Sir Hilton (Norwich) Galbraith, J. F. W. Nicholson, O. (Westminster) Ganzoni, Sir John Nicholson, Col. Rt. Hn. W. G. (Ptrsf'ld.) TELLERS FOR THE AYES.— Gates, Percy Nuttall, Ellis Captain Bowyer and Mr. Penny.
NOES. Adamson, Rt. Hon. W. (File, West) Harris, Percy A. Scurr, John Adamson, W. M. (Staff., Cannock) Hartshorn, Rt. Hon. Vernon Sexton, James Alexander, A. V. (Sheffield, Hillsbro') Hayes, John Henry Shaw, Rt. Hon. Thomas (Preston) Ammon, Charles George Henderson, Rt. Hon. A. (Burnley) Shepherd, Arthur Lewis Baker, J. (Wolverhampton, Bliston) Hirst, G. H. Shiels, Dr. Drummond Baker, Walter Hirst, W. (Bradford, South) Shinwell, E. Barker, G. (Monmouth, Abertillery) Hollins, A. Short, Alfred (Wednesbury) Barr, J. Hore-Belisha, Leslie Sitch, Charles H. Bowerman, Rt. Hon. Charles W. Hudson, J. H. (Huddersfield) Slesser, Sir Henry H. Broad, F. A. Jenkins, W. (Glamorgan, Neath) Smillie, Robert Bromfield, William John, William (Rhondda, West) Smith, Ben (Bermondsey, Rotherhithe, Bromley, J. Johnston, Thomas (Dundee) Smith, H. B. Lees (Keighley) Brown, Ernest (Leith) Jones, J. J. (West Ham, Silvertown) Smith, Rennie (Penistone) Brown, James (Ayr and Bute) Kelly, W. T. Snell, Harry Buchanan, G. Kennedy, T. Snowden, Rt. Hon. Philip Cape, Thomas Kirkwood, D. Stamford, T. W. Cluse, W. S. Lansbury, George Stephen, Campbell Clynes, Rt. Hon. John R. Lawrence, Susan Strauss, E. A. Connolly, M Lawson, John James Sullivan, J. Cove, W. G. Lee, F. Sutton, J. E. Cowan, D. M. (Scottish Universities) Lindley, F. W. Thorne, W. (West Ham, Plaistow) Crawfurd, H. E. Longbottom, A. W. Thurtle, Ernest Dalton, Hugh Lowth, T. Tinker, John Joseph Davies, Ellis (Denbigh, Denbigh) Lunn, William Trevelyan, Rt. Hon. C. P. Davies, Rhys John (westhoughton) MacDonald, Rt. Hon, J. R. (Aberavon) Varley, Frank B. Day, Harry Mackinder, W. Viant, S. P. Dennison, R. MacLaren, Andrew Walsh, Rt. Hon. Stephen Duncan, C. Maclean, Neil (Glasgow, Govan) Ward, Col. J. (Stoke-upon-Trent) Dunnico, H Malone, C. L'Estrange (N'thampton) Watson, W. M. (Dunfermline) Edwards, C. (Monmouth, Bedwelity) March, S. Webb, Rt. Hon. Sidney Gardner, J. P. Maxton, James Wedgwood, Rt. Hon. Josiah Garro-Jones, Captain G. M. Mitchell, E. Rosslyn (Paisley) Wellock, Wilfred Gibbins, Joseph Montague, Frederick Westwood, J. Gillett, George M. Morrison, R. C. (Tottenham, N.) Wheatley, Rt. Hon. J. Gosling, Harry Murnin, H. Wiggins, William Martin Graham, D. M. (Lanark, Hamilton) Naylor, T. E. Wilkinson, Ellen C. Graham, Rt. Hon. Wm. (Edin., Cent.) Oliver, George Harol. Williams, C. P. (Denbigh, Wrexham) Greenall, T. Palin, John Henry Williams, David (Swansea, East) Greenwood, A. (Nelson and Coine) Parkinson, John Allen (Wigan) Williams, T. (York, Don Vailey) Grenfell, D. R. (Glamorgan) Pethick-Lawrence, F. W. Wilson, C. H. (Sheffield, Attercliffe) Griffiths, T. (Monmouth, Pontypool) Ponsonby, Arthur Wilson, R. J. (Jarrow) Groves, T. Potts, John S. Young, Robert (Lancaster, Newton) Grundy, T. W. Richardson, R. (Houghton-le-Spring) Hall, F. (York, W. R., Normanton) Riley, Ben TELLERS FOR THE NOES.— Hall. G. H. (Merthyr Tydvil) Roberts, Rt. Hon. F. O.(W. Bromwich) Mr. Whiteley and Mr. A. Barnes. Hardie, George D. Robinson, W. C.(Yorks, W.R., Elland)
Further Amendments made:
In page 4, line 37, leave out the words "list aforesaid," and insert instead thereof the words "annual return."
In page 5, line 18, after the words "Sub-section (4)," insert the words:
"the words 'annual return' shall be substituted for the words 'above list and summary.'"
In page 5, line 25, leave out paragraph (f).—[ Mr. H. Williams. ]
CLAUSE 7.—(Annual return to be made by company not having share capital.)
"( c ) except in the case of a mutual insurance company all persons who, on the fourteenth day after the first or only ordinary general meeting in the year, are members of the company and all persons who have ceased to be members, since the date of the return, or (in the case of the first return) of the incorporation of the company."
Do I gather that the Chair is not calling upon the hon. Member for East Ham, North (Miss Lawrence) to move the Amendment standing in her name?
No, I am not calling the Amendment.
With all respect, this is an Amendment in regard to which consideration was promised by the Government before the Report stage. The objection was raised by the Government in Committee that if this Amendment were included, it would be very detrimental to the case of the Mutual Insurance Company, and we thereupon withdrew the Amendment on the promise that it should be considered before the Report stage. We excluded mutual insurance companies from this Amendment for the special purpose of asking the Government to meet us in that.
I had not consulted the Government on that point, and I did not know that was the case. Perhaps the representative of the Government would give me some enlightenment on that point.
I believe that the reason the Amendment was put down in this form was that when I was replying for the Government I used the mutual insurance companies by way of example, but that by no means exhausted the examples I could furnish, and if this Amendment were moved I should propose to give other examples.
The hon. Gentleman promised to give it consideration.
Amendment made:
In page 6, line 20, leave out from the word "re-enacted" to end of Clause.—[ Mr. H. Williams. ]
CLAUSE 8.—(Amendment of Section 28 of principal Act.)
Amendment made:
In line 23, leave out Clause 8.—[ Mr. H. Williams. ]
CLAUSE 9.—(Amendment of Section 30 of principal Act.)
I beg to move, in page 6, line 37, to leave out the word "seven" and to insert instead thereof the word "ten."
When the scheme was originally proposed a period of seven days was allowed. A period of 14 days was allowed for calling a meeting but later we altered that period to 21 days. It would be more desirable to have more time for preparing the list, and therefore we propose to alter the period in this case from seven days to 10 days.
The Parliamentary Secretary has been curiously brief in the explanation which he has given for the reversal of a decision of the Committee. I should have appreciated it if he had been a little more explanatory. After the discussions we had in Committee, the period of seven days now included in the Bill was really a compromise. It was suggested by supporters of the Government in the Committee and one of them moved that the period should be six days. The Government at that time tried very hard to get their hon. Friends to support them in making the period 10 days, but they failed, and the compromise of a period of seven days was included on my suggestion. Now, we get a very brief statement made to the House in connection with the Government's proposal to reverse, on the Report stage, a decision which was come to in Committee. There is no earthly reason why that decision should be upset. We consider that it is in the interest of the shareholders who may at any time have a difference of opinion with the directors that they should have sufficient notice and sufficient time between the notice being received and the time of the meeting so that they may have an equal opportunity with the directors with whom they do not agree to obtain proxy support at the meeting. You may get a very large block of shareholders who may actually form a, minority of a company, although they cover a considerable body of interests, and it is essential that they should be properly protected.
Let me refer to a case which came up at Question Time last week when I asked the President of the Board of Trade how it was that certain information had not been given to the shareholders of Radiation, Limited. They covered shareholding interests of nearly £500,000 and yet they only formed about 21 per cent. of the total shareholders. They had been unable to get any redress of their grievance because the other part of the company had made it impossible for them to get a special meeting called to consider their grievance, which they could not get unless they could command at least 26 per cent. of the shareholders. Although they represented nearly £500,000 interest in the company, they only held 21 per cent. of the shares. If there is to be any matter considered at a general meeting in which a great block of shareholders are interested, is it not reasonable to ask that they should have sufficient notice given to them between the receipt of the notice and the date of the meeting to have reasonable opportunity along with the directors, with whom they may not agree, to secure proxy support at the meeting? That is the whole of our case, and we say that to extend the time in the Bill from seven days to 10 days in contra-distinction to what was decided in Committee is unreasonable and unfair to minority groups of shareholders. We shall be compelled to oppose the Amendment unless the Government adhere to what they themselves expected when we were considering the Bill in Committee.
The original proposal for the period for delivering a copy of the register of members to shareholders was a period beginning with seven days and running up to 21 days, graduated according to the total membership of the company. In Committee, for reasons which were pointed out very fully, seven days was accepted as being all that was necessary, but it will be remembered that the period of the notice for a special meeting was subsequently extended from 14 days to 21 days, and it was extended on the understanding, so we took it, that that would ease the situation as regards what was thought to be a short time in the case of a big company with a large membership. It is for that reason that we think it would be more reasonable, seeing that we subsequently extended the other period from 14 days to 21 days, that extra time of three days should be given to the company. We are not acting on our own initiative. Some of the
big companies have intimated that it would be practically impossible to supply the lists within seven days. It is essential from the practical point of view that a little longer than seven days should be given, and we now propose that it should be 10 days. It is essential that we should give the 10 days if we can. I hope that the House will accept the Amendment.
In view of the fact that a copy will only be sent to a person who requests that a copy should be sent, I would like to ask the Lord Advocate a question arising out of his suggestion that a huge company with 100,000 or 50,000 shareholders will be faced with difficulty in getting out the lists. Are we to understand that this number of requests will be made and that within a short space of time the response must be made by the company? That does not work out in practice. I suggest that the extension of seven days to ten days in view of what took place in Committee is altogether unfair. There seems to me no real necessity for the extension, and we shall be justified in dividing the House because of the methods employed by the Government.
Question put, "That the word 'seven' stand part of the Bill."
The House divided: Ayes, 133; Noes, 215.
Division No. 327.] AYES. [7.25 p.m. Adamson, Rt. Hon. W. (Fife, West) Gibbins, Joseph Lawrence, Susan Adamson, W. M. (Staff., Cannock) Gillett, George M. Lawson, John James Alexander, A. V. (Sheffield, Hillsbro') Gosling, Harry Lee, F. Ammon, Charles George Graham, D. M. (Lanark, Hamilton) Lindley, F. W. Baker, J. (Wolverhampton, Bilston) Greenail, T. Livingstone, A. M. Baker, Waiter Greenwood, A. (Nelson and Coine) Longbottom, A. W. Barker, G. (Monmouth, Abertillery) Grenfell, D. R. (Glamorgan) Lowth, T. Barr, J. Griffith, F. Kingsley Lunn, William Bowerman, Rt. Hon. Charles W. Griffiths, T. (Monmouth, Pontypool) MacDonald, Rt. Hon. J. R. (Aberavon) Broad, F. A. Grundy, T. W. Mackinder, W. Bromfield, William Hall, F. (York, W. R., Normanton) Maclean, Nell (Glasgow, Govan) Bromley, J. Hall, G. H. (Merthyr Tydvil) Malone, C. L'Estrange (Nithampton) Brown, Ernest (Leith) Hardie, George D. March, S. Brown, James (Ayr and Bute) Hartshorn, Rt. Hon. Vernon Montague, Frederick Cape, Thomas Heyday, Arthur Morrison, R. C. (Tottenham, N.) Cluse, W. S. Hayes, John Henry Murnin, H. Clynes, Rt. Hon. John R. Henderson, Right Hon. A. (Burnley) Naylor, T. E. Connolly, M. Hirst, G. H. Oliver, George Harold Cove, W. G. Hirst, W. (Bradford, South) Palin, John Henry Cowan, D. M. (Scottish Universities) Hollins, A. Parkinson, John Allen (Wigan) Crawford, H. E. Hore-Belisha, Leslie Pethick-Lawrence, F. W. Dalton, Hugh Hudson, J. H. (Huddersfield) Ponsonby, Arthur Davies, Ellis (Denbigh, Denbigh) Hutchison, Sir Robert (Montrose) Potts, John S. Davies, Rhys John (Westhoughton) Jenkins, W. (Glamorgan, Neath) Richardson, R. (Houghton-le-Spring) Day, Harry John, William (Rhondda, West) Riley, Ben Dennison, R. Johnston, Thomas (Dundee) Roberts, Rt. Hon. F. O.(W. Bromwich) Duncan, C. Jones, J. J. (West Ham, Silvertown) Robinson, W. C. (Yorks, W. R., Elland) Dunnico, H. Kelly, W. T. Runciman, Hilda (Cornwall, St. Ives) Edwards, C. (Monmouth, Bedwellty) Kennedy, T. Runciman, Rt. Hon. Walter Gardner, J. P. Kirkwood, D. Scurr John Garro-Jones, Captain G. M. Lansbury, George Sexton, James Shaw, Rt. Hon. Thomas (Preston) Stamford, T. W. Webb, Rt. Hon. Sidney Shepherd, Arthur Lewis Strauss, E. A. Wedgwood, RL Hon. Josiah Shiels, Dr. Drummond Sullivan, J. Wellock, Wilfred Shinwell, E. Sutton, J. E. Westwood, J. Short, Alfred (Wednesbury) Thorne, G. R. (Wolverhampton, E.) Wiggins, William Martin Simon, Rt. Hon. Sir John Thorne, W. (West Ham, Plaistow) Wilkinson, Ellen C. Sitch, Charles H. Thurtle, Ernest Williams, C. P. (Denbigh, Wrexham) Siesser, Sir Henry H. Tinker, John Joseph Williams, David (Swansea, E.) Smillie, Robert Tomlinson, R. P. Williams, T. (York, Don Valley) Smith, Ben (Bermondsey, Rotherhithe) Trevelyan, Rt. Hon. C. P. Wilson, R. J. (Jarrow) Smith, H. B. Lees (Keighley) Varley, Frank B. Wright, W. Smith, Rennie (Penistone) Viant, S. P. Young, Robert (Lancaster, Newton) Snell, Harry Walsh, Rt. Hon. Stephen Snowden, Rt. Hon. Philip Watson, W. M. (Dunfermline) TELLERS FOR THE AYES.— Mr. A. Barnes and Mr. Whiteley.
NOES. Agg-Gardner, Rt. Hon. Sir James T. Foster, Sir Harry S. Mitchell, S. (Lanark, Lanark) Ainsworth, Lieut.-Col. Charles Fraser, Captain Ian Mitchell, Sir W. Lane (Streatham) Albery, Irving James Frece, Sir Walter de Moles, Rt. Hon. Thomas Alexander, E. E. (Leyton) Fremantle, Lieut.-Colonel Francis E. Moore, Sir Newton J. Alexander, Sir Wm. (Glasgow, Cent'l) Gadie, Lieut.-Col. Anthony Morrison, H. (Wilts, Salisbury) Allen, Sir J. Sandeman Galbraith, J. F. W. Morrison-Bell, Sir Arthur Crive Atholl, Duchess of Ganzoni, Sir John Nall, Colonel Sir Joseph Atkinson, C. Gates, Percy Nelson, Sir Frank Balfour, George (Hampstead) Gilmour, Lt.-Col. Rt. Hon. Sir John Neville, Sir Reginald J. Balniel, Lord Glyn, Major R. G. C. Newman, Sir R. H. S. D. L. (Exeter) Barclay-Harvey, C. M. Grattan-Doyle, Sir N. Nicholson, O. (Westminster) Barnett, Major Sir Richard Greaves-Lord, Sir Walter Nicholson, Col. Rt. Hon. W. G. (Ptrsf'ld.) Beamish, Rear-Admiral T. P. H, Greene, W. P. Crawford Nuttall, Ellis Beckett, Sir Gervase (Leeds, N.) Grenfell, Edward C. (City of London) O'Neill, Major Rt. Hon. Hugh Bellairs, Commander Carlyon Grotrian, H. Brent Ormsby-Gore, Rt. Hon. William Birchen, Major J. Dearman Guinness, Rt. Hon. Walter E. Percy, Lord Eustace (Hastings) Bourne, Captain Robert Croft Gunston, Captain D. W. Perkins, Colonel E. K. Bowater, Col. Sir T. Vansittart Hacking, Douglas H. Peto, G. (Somerset, Frome) Bowyer, Capt. G. E. W. Hamilton, Sir George Pilcher, G. Brass, Captain W. Hammersley, S. S. Pilditch, Sir Philip Brassey, Sir Leonard Hannon, Patrick Joseph Henry Preston, William Bridgeman, Rt. Hon. William Clive Hartington, Marquess of Price, Major C. W. M. Briggs, J. Harold Harvey, G. (Lambeth, Kennington) Radford, E. A. Brocklebank, C. E. R. Haslam, Henry C. Raine, Sir Walter Brooke, Brigadier-General C. R. I. Headlam, Lieut.-Colonel C. M. Rhys, Hon. C. A. U. Broun-Lindsay, Major H. Henderson, Capt. R. R.(Oxf'd, Henley) Richardson, Sir P. W. (Sur'y, Ch'ts'y) Brown, Col. D. C. (N'th'l'd., Hexham) Henderson, Lieut.-Col. Sir Vivian Roberts, Sir Samuel (Hereford) Brown, Brig.-Gen. H. C.(Berks, Newb'y) Heneage, Lieut.-Col. Arthur P. Robinson, Sir T. (Lancs., Stretford) Buchan, John Hennessy, Major Sir G. R. J. Rodd, Rt. Hon. Sir James Rennell Burman, J. B. Hills, Major John Waller Ropner, Major L. Burton, Colonel H. W. Hilton, Cecl' Ruggles-Brise, Lieut.-Colonel E. A. Butler, Sir Geoffrey Hohler, Sir Gerald Fitzroy Russell, Alexander West (Tynemouth) Cadogan, Major Hon. Edward Hope, Capt. A. O. J. (Warw'k, Nun.) Salmon, Major I. Campbell, E. T. Hope, Sir Harry (Forfar) Samuel, A. M. (Surrey, Farnham) Carver, Major W. H. Hopkins, J. W. W. Sandeman, N. Stewart Cassels, J. D. Hopkinson, A. (Lancaster, Mossley) Sanders, Sir Robert A. Cautley, Sir Henry S, Hudson, Capt. A. U. M. (Hackney, N.) Sanderson, Sir Frank Cayzer, Maj. Sir Herbt. R. (Prtsmth. S) Hume, Sir G. H. Sanden, Lord Cazalet, Captain Victor A. Hunter-Weston, Lt.-Gen. Sir Aylmer Savery, S. S. Cecil, Rt. Hon. Sir Evelyn (Aston) Hurd, Percy A. Sheffield, Sir Berkeley Chamberlain, Rt. Hon. N. (Ladywnod) Hurst, Gerald B. Shepperson, E. W. Charteris, Brigadier-General J. Inskip, Sir Thomas Walker H. Skelton, A. N. Christie, J. A. Jackson, Sir H. (Wandsworth, Cen'l) Slaney, Major P. Kenyon Cobb, Sir Cyril James, Lieut.-Colonel Hon. Cuthbert Smith, Louis W. (Sheffield, Hallam) Cochrane, Commander Hon. A. D. Jephcott, A. R. Smith-Carington, Neville W. Colfax, Major Wm. Phillips Joynson-Hicks, Rt. Hon. Sir William Smithers, Waldron Cooper, A. Doff Kennedy, A. R. (Preston) Sprot, Sir Alexander Cope, Major Sir William King, Commodore Henry Douglas Stanley, Lieut.-Colonel Rt. Hon. G. F Cowan, Sir Wm. Henry (Islingtn. N.) Kinloch-Cooke, Sir Clement Stanley, Hon. O. F. G. (Westm'eland) Craig, Sir Ernest (Chester, Crewe) Lane Fox, Col. Rt. Hon. George R. Storry-Deans, R. Croft, Brigadier-General Sir H Lister, Cunliffe-, Rt. Hon. Sir Philip Streatfeild, Captain S. R. Crooke, J. Smedley (Deritend) Lougher, Lewis Sueter, Rear-Admiral Murray Fraser Crookshank, Col. C. de W. (Berwick) Luce, Major-Gen. Sir Richard Harman Sugden, Sir Wilfrid Curzon, Captain Viscount Lumley, L. R. Templeton, W. P. Davies, Maj. Geo. F. (Somerset, Yeovil) Lynn, Sir R. J. Thom, Lt -Col. J. G. (Dumbarton) Dawson, Sir Philip MacAndrew Major Charles Glen Thompson, Luke (Sunderland) Drewe, C. Macdonald, Capt. P. D. (I. of W.) Thomson, Rt. Hon. Sir W. Mitchell. Eden, Captain Anthony Macdonald, R. (Glasgow, Cathcart) Tinne, J. A. Edmondson, Major A. J. McLean, Major A. Titchfield, Major the Marquess of Ellis, R. G. Macmillan, Captain H. Tryon, Rt. Hon. George Clement Erskine, Lard (Somerset, Weston-s.-M.) Macqulsten, F. A. Turton, Sir Edmund Russborough Everard, W. Lindsay MacRobert, Alexander M. Warner, Brigadier-General W. W. Fairfax, Captain J. G. Malone, Major P. B. Warrender, Sir Victor Falle, Sir Bertram G. Margesson, Captain D. Waterhouse, Captain Charles Falls, Sir Charles F. Marriott, Sir J. A. R. Watson. Rt. Hon. W. (Carlisle) Fermoy, Lord Merriman, Sir F. Boyd Watts, Sir Thomas Wells, S. R. Windsor-Clive, Lieut.-Colonel George Worthington-Evans, Rt. Hon. Sir L. White, Lieut.-Col. Sir G. Dairymple- Withers, John James Yerburgh, Major Robert D. T. Williams, A. M. (Cornwall, Northern) Wolmer, Viscount Young, Rt. Hon. Sir Hilton (Norwich) Williams, Com. C. (Devon, Torquay) Womersley, W. J Williams, Herbert G. (Reading) Wood, E. (Chest'r, Stalyb'ge & Hyde) TELLERS FOR THE NOES.— Wilson, Sir C. H. (Leeds, Central) Wood, Rt. Hon. Sir Kingsley Mr. Penny and Captain Wallace. Wilson, R. R. (Stafford, Lichfield) Woodcock, Colonel H. C.
Question, "that the word 'ten' be there inserted in the Bill," put, and agreed to.
CLAUSE 10.—(Amendments with respect to colonial registers.)
I beg to move, in page 8, line 12, to leave out the word "list" and to insert instead thereof the words "annual return."
This is a drafting Amendment and is consequential on an Amendment made a few moments ago.
I beg to second the Amendment.
I accept it.
Amendment agreed to.
Further Amendments made:
In page 8, leave out from the word "Act," in line 13, to the second word "be, in line 15.
In page 8, line 16, leave out the words "list and summary" and insert instead thereof the words "annual return."—[ Major McLean. ]
CLAUSE 13.—(Amendment of Sub-section (2) of Section 41 of principal Act.)
Amendment made:
In page 9, line 14, leave out the second word "the."—[ Mr. H. Williams. ]
CLAUSE 16.—(Prohibition of provision of financial assistance by company for purpose of its own shares.)
I beg to move, in page 11, line 1, after the word "of" to insert the words "fully-paid."
I need not detain the House very long because this matter is a somewhat simple one. Clause 16 lays down specifically that it shall not be lawful to lend money under certain conditions; but it provides three exceptions. It says:
I beg to second the Amendment.
It must be clear to the House that if you are going to extend this scheme of profit sharing it is absolutely essential that those people who are going into the scheme should know exactly the amount of their liability. If they know that they are going to get their shares without any further liability, it will be of great value to the scheme. It will not lead to any misconceptions.
I had some doubt about this Amendment at first sight, because there may be cases in which shares are being fully paid up by a series of fixed instalments, and they are not fully paid until all the installments are paid. I am sure the hon. Member does not want to prevent such cases being covered by this particular proposal. They are really fully paid shares with a liability in law, and it is possible for the company to provide the necessary money to meet the instalments in the meantime. There would be no objection to that. On the whole, I think the Government is prepared to accept the Amendment subject to the provision that I should like to consider the words more carefully to see whether by any chance the case to which I have referred is affected.
Amendment agreed to.
Further Amendment made:
In page 11, line 9, after the word "purchase" insert the words "fully paid."—( Mr. Albery. )
I beg to move, in page 11, line 9, at the end, to insert the words:
"to be held by themselves by way of beneficial ownership."
I think these words are put in in order to encourage the system of co-partnership. I should like to point out that in the Committee stage the President of the Board of Trade said that this was not a Bill in which anything could be done in connection with co-partnership, but I gather that his opinion has been revised.
An Amendment was put down by the hon. Member for Hillsborough in the Committee stage and the President of the Board of Trade promised to take further legal advice as to whether an Amendment could be inserted to make sure that the person to whom the money is lent is acquiring it for his own beneficial ownership. After consideration he has put down this Amendment.
Amendment agreed to.
CLAUSE 18.—(Power to issue redeemable preference shares.)
I beg to move, in page 14, to leave out from the word "company" in line 6 to the end of Sub-section (5) and to insert instead thereof the words "for the general purposes of the company."
I beg to second the Amendment.
I hope the House will not accept this Amendment, because it is rather dangerous. When this Bill was before another place last Session this question was considered and the Lord Chancellor promised to give some reconsideration to it on the Report stage. As a result of that promise the matter was investigated very carefully indeed. Substantially, this is a proposal to make it possible to pay dividends out of funds which ought to be regarded as capital funds, and I think the general opinion of the House is against that being permitted. On these grounds I ask the House to reject the Amendment.
I beg to ask leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
CLAUSE 20.—(Amendment of Section 62 of principal Act.)
I beg to move, in page 15, line 10, to leave out the word "fourteen," and to insert instead thereof the word "twenty-eight."
This is really consequential on an Amendment which was made in Committee. Through inadvertence, we omitted to make this further Amendment in the Bill.
The Parliamentary Secretary is again very brief. He cannot expect us to accept things like that. The Amendment as originally accepted dealt with the period in which notification of the place of business was to be given, but the alteration he now proposes is in an entirely different regard. It is to apply to the change of address of a company. Let me draw his attention to Section 62 of the principal Act. It says:
"(1) Every company shall have a registered office to which all communications and notices may be addressed.
(2) Notice of the situation of the registered office, and of any change therein, shall be given to the registrar of companies, who shall record the same."
I think it is essential, if companies which are registered under this Act are going to change their offices, that notice of the change should be sent within a reasonable period. I think 14 days is quite long enough. If you are going to change the place at which the offices of a company can be found you are going to give them 28 days during which they can make all kinds of "getaways" without notice. It is essential that we should adhere to the shortest possible time that is reasonable for requiring notice of change of address. I certainly cannot accept for a moment the plea that this is a consequential Amendment. It is an entirely different Amendment, and, unless the Parliamentary Secretary has a great deal more to say to show its reasonableness, we must oppose it.
I am sorry that there should be so much trouble over what is a very small matter. In Committee my right hon. Friend the President of the Board of Trade, when 14 days was altered to 28 days on an earlier Amendment, pointed out that there must be a consequential change at this point. I see that the hon. Member for Hillsborough (Mr. A. V. Alexander)
spoke afterwards and took no exception to that statement. I do not know why he takes exception now.
Amendment agreed to.
CLAUSE 21.—(Amendment of Section 65 of principal Act.)
I beg to move, in page 15, line 33, at the end, to insert the words:
"( b ) Sub-section (10) shall cease to have effect."
We do not wish to debate this question again, but we do wish to record a decision of the House on it. This is one of the points that we discussed while you, Mr. Speaker, were out of the Chair, when it was understood that we should have a general discussion and then divide on Amendments.
Question put, "That those words be there inserted in the Bill."
The House divided: Ayes, 124; Noes, 221.
Division No. 328] AYES. [7.50 p.m. Adamson, Rt. Hon. W. (Fife, West) Hardle, George D. Shaw, Rt. Hon. Thomas (Preston) Adamson, W. M. (Staff., Cannock) Hayday, Arthur Shepherd, Arthur Lewis Alexander, A. V. (Sheffield, Hillsbro') Hayes, John Henry Shiels, Dr. Drummond Ammon, Charles George Henderson, Rt. Hon. A. (Burnley) Shinwell, E. Baker, J. (Wolverhampton, Bliston) Hirst, G. H. Short, Alfred (Wednesbury) Baker, Walter Hirst, W. (Bradford, South) Sitch, Charles H. Barker, G. (Monmouth, Abertillery) Hollins, A. Slesser, Sir Henry H. Barr, J. Hore-Belisha, Leslie Smilile, Robert Batey, Joseph Hudson, J. H. (Huddersfield) Smith, Ben (Bermondsey, Rotherhithe) Bowerman, Rt. Hon. Charles W. Jenkins, W. (Glamorgan, Neath) Smith, H. B. Lees- (Keighley) Broad, F. A. John, William (Rhondda, West) Smith, Rennie (Penistone) Bromfield, William Johnston, Thomas (Dundee) Snell, Harry Bromley, J. Jones, J. J. (West Ham, Silvertown) Snowden, Rt. Hon. Philip Brown, Ernest (Leith) Kelly, W. T. Stamford, T. W. Brown, James (Ayr and Bute) Kennedy, T. Sutton, J. E. Cape, Thomas Kirkwood, D. Thorne, G. R. (Wolverhampton, E.) Close, W. S. Lawrence, Susan Thorne, W. (West Ham, Plaistow) Clynes, Rt. Hon. John R. Lawson, John James Thurtle, Ernest Connolly, M. Lee, F. Tinker, John Joseph Cove, W. G. Lindley, F. W. Townend, A. E. Cowan, D. M. (Scottish Universities) Longbottom, A. W Trevelyan, Rt. Hon. C. P. Dalton, Hugh Lowth, T. Varley, Frank B. Davies, Ellis (Denbigh, Denbigh) Lunn, William Viant, S. P. Davies, Rhys John (Westhoughton) MacDonald, Rt. Hon. J. R.(Aberavon) Walsh, Rt. Hon. Stephen Day, Harry Mackinder, W. Watson, W. M. (Dunfermline) Dennison, R. MacLaren, Andrew Webb, Rt. Hon. Sidney Duncan, C. Maclean, Neil (Glasgow, Govan) Wedgwood, Rt. Hon. Josiah Donnico, H. Malone, C. L'Estrange (N'thampton) Wellock, Wilfred Edwards, C. (Monmouth, Bedwellty) March, S. Westwood, J. Gardner, J. P. Montague, Frederick Whiteley, W. Garro-Jones, Captain G. M. Morrison, R. C. (Tottenham, N.) Wiggins, William Martin Gibbins, Joseph Murnin, H. Wilkinson, Ellen C Gillett, George M. Naylor, T. E. Williams, C. P. (Denbigh, Wrexham) Gosling, Harry Oliver, George Harold Williams, David (Swansea, E.) Graham, D. M. (Lanark, Hamilton) Palin, John Henry Williams, T. (York, Don Valley) Greenall, T. Pethick-Lawrence, F. W. Wilson, R. J. (Jarrow) Greenwood, A. (Nelson and Colne) Potts, John S. Wright, W. Grenfell, D. R. (Glamorgan) Richardson, R. (Houghton-le-Spring) Young, Robert (Lancaster, Newton), Griffiths, T. (Monmouth, Pontypool) Riley, Ben Groves, T. Roberts, Rt. Hon. F. O. (W. Bromwich) TELLERS FOR THE AYES.— Grundy, T. W. Robinson, W. C. (Yorks, W. R., Elland) Mr. Allen Parkinson and Mr. A. Barnes. Hall, F. (York, W. R., Normanton) Scurr John Hall, G. H. (Merthyr Tydvil) Sexton, James
NOES. Agg-Gardner, Rt. Hon. Sir James T. Greene, W. P. Crawford Peto, G. (Somerset, Frome) Ainsworth, Lieut.-Col. Charles Grenfell, Edward C. (City of London) Pilcher, G. Albery, Irving James Griffith, F. Kingsley Pliditch, Sir Philip Alexander, E. E. (Leyton) Grotrian, H. Brent Preston, William Alexander, Sir Wm. (Glasgow, Cent'l) Guinness, Rt. Hon. Walter E. Price, Major C. W. M. Allen, Sir J. Sandeman Gunston, Captain D. W. Radford, E. A. Atholl, Duchess of Hacking, Douglas H. Raine, Sir Walter Atkinson, C. Hamilton, Sir George Rhys, Hon. C. A. U. Balfour, George (Hampstead) Hammersley, S. S. Richardson, Sir P. W. (Sur'y, Ch'ts'y) Balniel, Lord Hannon, Patrick Joseph Henry Roberts, Sir Samuel (Hereford) Barclay-Harvey, C. M. Harland, A. Robinson, Sir T. (Lancs., Stretford) Barnett, Major Sir Richard Hartington, Marquess of Rodd, Rt. Hon. Sir James Rennell Beamish, Rear-Admiral T. P. H. Harvey, G. (Lambeth, Kennington) Ropner, Major L. Beckett, Sir Gervase (Leeds, N.) Haslam, Henry C. Ruggles-Brise, Lieut.-Colonel E. A. Bellairs, Commander Canyon Headlam, Lieut.-Colonel C. M. Runciman, Rt Hon. Walter Bennett, A. J. Henderson, Capt. R. R. (Oxf'd, Henley) Russell, Alexander West (Tynemouth) Birchall, Major J. Dearman Henderson, Lieut.-Col. Sir Vivian Salmon, Major I. Bourne, Captain Robert Croft Heneage, Lieut.-Colonel Arthur P. Samuel, A. M. (Surrey, Farnham) Bowater, Col. Sir T. Vansittart Hennessy, Major Sir G. R. J. Sandeman, N. Stewart Braithwaite, Major A. N. Hills, Major John Waller Sanders, Sir Robert A. Brass, Captain W. Hilton, Cecil Sanderson, Sir Frank Brassey, Sir Leonard Hohler, Sir Gerald Fitzroy Sandon, Lord Briggs, J. Harold Hope, Capt. A. O. J. (Warw'k, Nun.) Sassoon, Sir Philip Albert Gustave D. Brocklebank, C. E. R. Hope, Sir Harry (Forfar) Savery, S. S. Brooke, Brigadier-General C. R. I. Hopkins, J. W. W. Shepperson, E. W. Broun-Lindsay, Major H. Hopkinson, A. (Lancaster, Mossley) Simms, Dr. John M. (Co. Down) Brown, Col. D. C. (N'th'l'd., Hexham) Hudson, Capt. A. U. M.(Hackney, N.) Simon, Rt. Hon. Sir John Buchan, John Hume, Sir G. H. Skelton, A. N. Burman, J. B. Hunter-Weston, Lt.-Gen. Sir Aylmer Slaney, Major P. Kenyon Burton, Colonel H. W. Hurd, Percy A. Smith, Louis W. (Sheffield, Hallam) Butler, Sir Geoffrey Hurst, Gerald B. Smith-Carington, Neville W. Cadogan, Major Hon. Edward Hutchison, Sir Robert (Montrose) Smithers, Waldron Campbell, E. T. Inskip, Sir Thomas Walker H. Sprot, Sir Alexander Cassels, J. D. Jackson, Sir H. (Wandsworth, Cen'l) Stanley, Lieut.-Colonel Rt. Hon. G. F. Cautley, Sir Henry S. James, Lieut.-Colonel Hon. Cuthbert Stanley, Hon. O. F. G. (Westm'eland) Cayzer, Maj. Sir Herbt. R. (Prtsmth. S.) Jephcott, A. R. Storry-Deans, R. Cazalet, Captain Victor A. Kennedy, A. R. (Preston) Strauss, E. A. Cecil, Rt. Hon. Sir Evelyn (Aston) Lamb, J. Q. Streatfeild, Captain S. R. Christie, J. A. Lane Fox, Col. Rt. Hon. George R. Sugden, Sir Wilfrid Cobb, Sir Cyril Lister, Canliffe-, Rt. Hon. Sir Philip Templeton, W. P. Cochrane, Commander Hon. A. D. Little, Dr. E. Graham Thom, Lt.-Col. J. G. (Dumbarton) Cohen, Major J. Brunel Livingstone, A. M. Thompson, Luke (Sunderland) Colfox, Malor Wm. Phillips Lloyd, Cyril E. (Dudley) Thomson, Rt. Hon. Sir W. Mitchell- Cooper, A. Duff Looker, Herbert William Tinne, J. A. Cope, Major Sir William Lougher, Lewis Titchfield, Major the Marquess of Couper, J. B. Luce, Major-Gen. Sir Richard Harman Tomlinson, R. P. Cowan, Sir Wm. Henry (Islingtn., N.) Lumley, L. R. Tryon, Rt. Hon. George Clement Craig, Sir Ernest (Chester, Crewe) Lynn, Sir R. J. Turton, Sir Edmund Russborough Croft, Brigadier-General Sir H. MacAndrew, Major Charles Glen Wallace, Captain D. E. Crooke, J. Smedley (Deritend) Macdonald, Capt. P. D. (I. of W.) Ward, Lt.-Col. A. L.(Kingston-on-Hull) Crookshank, Col. C. de W. (Berwick) Macdonald, R. (Glasgow, Cathcart) Warrender, Sir Victor Curzon, Captain Viscount McLean, Major A. Waterhouse, Captain Charles Dalkeith, Earl of Macmillan, Captain H. Watson, Rt. Hon. W. (Carlisle) Davidson, Major-General Sir J. H. Macquisten, F. A. Watts, Sir Thomas Dawson, Sir Philip MacRobert, Alexander M. Wells, S. R. Dean, Arthur Wellesley Malone, Major P. B. White, Lieut.-Colonel G. Dairymple Drewe, C. Margesson, Captain D. Williams, A. M. (Cornwall, Northern) Eden, Captain Anthony Merriman, Sir F. Boyd Williams, Com. C. (Devon, Torquay) Edmondson, Major A. J. Mitchell, S. (Lanark, Lanark) Williams, Herbert G. (Reading) Ellis, R. G. Mitchell, Sir W. Lane (Streatham) Wilson, Sir C. H. (Leeds, Central) Erskine, Lord (Somerset, Weston-s.-M.) Moles, Rt. Hon. Thomas Wilson, R. R. (Stafford, Lichfield) Everard, W. Lindsay Moore, Sir Newton J. Windsor-Clive, Lieut.-Colonel George Fairfax, Captain J. G. Morrison, H. (Wilts, Salisbury) Withers, John James Falle, Sir Bertram G. Morrison-Bell, Sir Arthur Clive Wolmer, Viscount Falls, Sir Charles F. Nelson, Sir Frank Womersley, W. J. Fermoy, Lord Neville, Sir Reginald J. Wood, E. (Chest'r, Stalyb'dge & Hyde) Foster, Sir Harry S. Newman, Sir R. H. S. D. L. (Exeter) Wood, Rt. Hon. Sir Kingsley Fraser, Captain Ian Nicholson, O. (Westminster) Woodcock, Colonel H. C. Frece, Sir Walter de Nicholson, Col. Rt. Hon. W. G. (Ptrsf'ld.) Worthington-Evans, Rt. Hon. Sir L. Fremantle, Lieut.-Colonel Francis E. Nuttall, Ellis Yerburgh, Major Robert D. T. Gadle, Lieut.-Col. Anthony O'Neill, Major Rt. Hon. Hugh Young, Rt. Hon. Hilton (Norwich) Galbraith, J. F. W. Oman, Sir Charles William C. Gates, Percy Ormsby-Gore, Rt. Hon. William TELLERS FOR THE NOES.— Grattan-Doyle, Sir N. Percy, Lord Eustace (Hastings) Captain Bowyer and Mr. Penny. Greaves-Lord, Sir Walter Perkins, Colonel E. K.
I beg to move, in page 16, line 4, to leave out the word "of," and to insert instead thereof the words "not exceeding."
This Amendment brings the Clause into line with other Clauses which have been altered in the same sense.
It is true that the Amendment brings the Clause into line with one or two other parts of the Bill. I think the suggestion that is implied, that we should always make penalties "not exceeding" a certain amount, is a mistake. The learned Attorney-General said, on an earlier Amendment, that to fine a director £100 was not much use.
If he was subject to much greater penalties apart from that.
The hon. and learned Gentleman did not say so at first. I do not suppose it is any good for us to argue the point. I object to the principle adopted. The offences which can be committed against the Statue are so grave that we ought to make it possible to levy very seven penalties.
Compare these penalties with the penalties in the Cinematograph Films Bill.
Amendment agreed to.
CLAUSE 22.—(Amendment of Section 66 of principal Act.)
I beg to move, in page 16, line 14, to leave out the word "representing," and to insert instead thereof the word "holding."
This Amendment is for the purpose of clearing up the situation. As the Bill stands it would be the case that if preference shareholders were anxious to call a meeting, in the case of a company in which they were not entitled to vote unless their dividend was in arrear, they would be forced to find one-tenth of the total capital of the company instead of one-tenth of the preference capital. What we are seeking to do by this and a subsequent Amendment, is to give rights to one-tenth of the aggrieved parties, if we may so describe them. As the Bill stands it might be interpreted as requiring one-tenth of the whole issue of capital whereas as we propose to amend it it would be only one-tenth of the preference share capital. The hon. Member for Hillsborough (Mr. Alexander) has taken me to task on more than one occasion because I have not used sufficient words to describe the purposes of our Amend- ments but I hope on this occasion I have succeeded in making the matter clear.
Amendment agreed to.
Further Amendment made:
In page 16, leave out from the word "of" in line 16, to the word "forthwith" in line 21, and insert the words:
"such of the paid up capital of the company as at the date of the deposit carries the right of voting at general meetings of the company, or, in the case of a company not having a share capital, members of the company representing not less than one-tenth of the total voting right of all the members having at the said date a right to vote at general meetings of the company."—[ Mr. H. Williams. ]
I beg to move, in page 16, line 38, after the word "directors" to insert the word "duly."
This is, in effect, a drafting Amendment. Sub-section (7) defines what the word "duly" means, and we want to insert the word at this point in order to bring Sub-section (6) into line.
Amendment agreed to.
CLAUSE 25.—(Amendment of Section 69 of principal Act.)
I beg to move, in page 20, to leave out from the second word "demanded" in line 1, to the end of the Clause, and to insert instead thereof the words
"( a ) by such number of members for the time being entitled under the articles to vote at the meeting as may be specified in the articles, so, however, that it shall not in any case be necessary for more than five members to make the demand; or
( b ) if no provision is made by the articles with respect to the right to demand the poll, by three members so entitled or by one member or two members so entitled, if that member holds or those two members together hold not less than 15 per cent. of the paid up share capital of the company."
On a point of Order. Can we discuss the whole question of the poll on the Amendment now before us?
It can be discussed up to a certain point. I do not select the Amendment standing in the name of the hon. Member on the subject, because it is a matter for the articles of association. I do not think we ought to go into those particulars, but, up to a certain point, the hon. Member can discuss it on the Amendment which is now being moved.
We are informed that this matter is being regarded with great attention by certain shareholders' associations, who want to provide in the Statute, rather than in the articles of association, some power under which they can take proper steps to secure proxies after statements have been made at a general meeting, instead of the poll being taken directly after the statement of the directors at a general meeting. Unless we can get that change in the Statute, it is certain that all these articles of association will continue to inflict the same hardship as at present on minorities in this réspect.
That is the way in which it can be discussed.
In explanation of this Amendment may I say that the Clause as it stands contains the conditions under which a poll may be demanded, but a perusal of the Clause will show anybody that it might be drafted in clearer language. The Amendment sets out the same provisions in substance but they are contained in two propositions which are lettered ( a ) and ( b ). The first condition of a poll is that a number of members entitled under the articles to vote at the meeting, must demand it and it is provided that the number need not be more than five. The second condition which will enable a poll to be taken is in reference to a case where no provision is made by the articles, and, then, a poll may be demanded, either by three members, or else by one member or two members provided that they hold not less than 15 per cent. of the paid-up share capital. These provisions are substantially in the Bill as it stands, but are expressed more clearly in the Amendment.
Clause 25 of the Bill even if amended leaves the position very unsatisfactory. This is a peculiarly vicious example of legislation by reference. We are here engaged in amending Section 69 of the Companies Act of 1908. That Section deals with the manner in which meetings are to be conducted, at which special resolutions are to be passed. The existing law provides under Sub-section (2) of Section 69, that such resolution has to be passed at a special meeting and under Sub-section (2, b ) it has to be confirmed at a second meeting of which due notice has been given. By this Clause of the Bill we are dropping out Sub-section (2, b ) of Section 69—that is to say, we are taking away the duty and the right of having a second meeting to confirm a special resolution. We are very slightly amending the manner in which the poll can be called for. In Section 69 it is provided that, if a dispute arises, a poll of the shareholders may be taken. The taking of a poll at a shareholders' meeting does not mean circulating again all the shareholders and requesting them to vote "aye" or "no" on the resolution. It means simply what we on these benches understand as taking a card vote. At the meeting the directors themselves, and, sometimes, some of the shareholders, hold large blocks of proxies and taking a poll, either under Section 69 of the original Act, or under the slightly amended form proposed in Clause 25 which we are now discussing, simply means that the chairman of the meeting having first called for a show of hands, then on a poll being demanded proxies held by the voters are counted. As very often happens at other meetings the decision given on a show of hands is reversed on the card vote.
Our point is that before the meeting many persons, in all good faith, give their proxies to directors or others but may wish to change their votes afterwards. When the special resolution or extraordinary resolution has been discussed at the meeting, those who have heard the speeches may feel that the speeches put a different complexion on the matter, and that they would like to alter their opinion and perhaps vote against a resolution which at first sight they may have favoured. If you do away with the second meeting and if you allow the polling arrangement to remain as now proposed, persons who have heard the speeches or have read the report of the meeting, will not be able to give effect to any change of opinion on their part. We all know of cases where a special resolution has been explained at a shareholders' meeting, causing a large amount of disturbance among those present. The resolution may perhaps be turned down on a show of hands, but on a "card vote" being demanded, it is carried by the power of the absent shareholders. Our view is that if you take away the second meeting you ought to make the poll a reality by insisting that notice should be given of it and that new proxies should be sent in. It is difficult to explain a matter of this kind because of the multitude of cross-references involved, but, shortly, our point is that if you do away with the obligatory second meeting for confirming a special resolution, the shareholders ought to be circularised and those who have already given proxies ought to be able to change those proxies if the proceedings at the meeting have induced them to change their minds.
I hope the Government do not regard this Amendment as a final concession on the matter. We were disappointed that in Committee we did not get more sympathy for the wider Amendment which we moved. The hon. Member who has just spoken has been a little tender to the Government in not quoting some notorious examples of company meetings which have led some of us to make the proposals which we have made on this point. Take a case like that reported in the "Evening News" of 12th March of a meeting of the Keffi Consolidated Tin Company held to consider a proposal to amalgamate with another company. The report states: that a proposal for the reduction of capital was debated for about 4½ hours At the end of that time the report and balance-sheet were declared carried on a show of hands. A poll was demanded and the matter was decided by the proxy votes which were given to the directors 48 hours before the meeting, without any real knowledge of what the facts would prove to be when explained at the meeting. It is announced subsequently in the Press that the resolution desired by the directors was passed by a large majority. That is a very unsatisfactory position in which to place great minorities of shareholders.
I have already pointed out that you have large numbers of companies to-day where less than 25 per cent. of the shareholders may, in fact, amount to enormous sums of capital. I quoted Radiation, Limited, to show that, with a capital of nearly £500,000 in the hands of less than 21 per cent. of the shareholders. It is very unfair that, if very important share interests of that kind find themselves in a minority, and want to have the opportunity of explaining their views after the directors have given to a general meeting the directors' view, they should not have the opportunity, on a poll being demanded, of getting their views actually communicated to the shareholders and a fresh poll taken. If the Government had been reasonable, they would have accepted our Amendment or suggested some words which would have given to us the principle for which we are asking; and unless they are prepared to do that, I cannot help thinking that they are a little negligent of the widest and best interests of the shareholders. I think they might be more concerned about the views of these people, who are so often found in a position of injury as the result of proceedings of this kind.
I cannot speak with experience myself, because I have never had holdings in joint stock companies, and I do not propose to have any such holdings, as I am quite satisfied with my own savings as they accumulate going into our own organisation. That organisation gives full protection for its shareholders, and if there was equal protection for company shareholders, it would be very much better for joint stock companies. Although I have, as I say, no experience, I can feel very sincerely for people who are induced, by the use of certain names on boards of directors, by prospectuses which are highly painted, and by all kinds of promises as to what is going to be done, to put their money into a concern, and then find, sometimes at the end of less than a couple of years, that the thing is apparently worthless.
There have been some comments recently in the "Investors' Review," but it would not be in order to discuss them in detail now. Some people with poor incomes were victims in the Marconi Company, where a poll was demanded after four and a-half hours' debate, and their holdings were written down by at least one-half their value. It is only reasonable to ask that we should have some provision which would enable a proper poll to be taken, and to be taken upon intelligent information given to the various shareholders. In nine cases out of 10, when a poll is demanded to-day, thousands of proxy votes come from people who have never heard the case either for the directors or against the directors, in general meeting assembled, and that is why we ask that if the Government cannot give us the Amendment we have on the paper, they should at least secure some form of words for the purpose we have in view between now and the time when the Bill passes through another place.
We take the view quite definitely that it is really, on balance, undesirable to prescribe in precise detail the way in which companies shall decide to carry on their business. The hon. Member for Hillsborough (Mr. A. V. Alexander) said that at some meeting of which he had read people shouted and screamed and carried on in a discreditable manner; but they will do that under any kind of constitution. We have in this country a wonderful Constitution, and we have a wonderful set of Standing Orders in this House, but that has not prevented hon. Members from time to time being requested to retire, or being
forced to retire, as the result of a Resolution of the House, and sometimes assistance has been necessary, in days gone by, to get them to retire. Any kind of rules will not prevent rows at meetings by people who want to make rows, but to propose that you should say precisely how a poll should be conducted may be undesirable and unnecessary, and we think it very much better to leave it as we propose in this Amendment.
The Parliamentary Secretary to the Board of Trade has not met the case put up by my hon. Friend the Member for East Ham, North (Miss Lawrence). She put forward the important point that you are actually altering the law by repealing Section 69, Sub-section (2, b ) of the original Act. If you are getting rid of the second or confirmatory meeting, in which, after all, it could be alleged that the shareholders had an opportunity of reconsidering their first vote, given at the first meeting, there must surely be some provision made under which they would have protection. If they have given their proxy 48 hours before the meeting, without any knowledge at all of the situation, simply having accepted for the time being the statement of the directors, and then have found that those statements are inaccurate or do not fully represent the facts, I think there ought to be protection given to those shareholders; and I submit that the representative of the Government has not met that point. I, therefore, appeal to the President of the Board of Trade to .give this matter further consideration and to see if he cannot, when this Bill reaches another place, insert a safeguard for shareholders who may take a different view after having given their proxy at the beginning.
Question put, "That the words proposed to be left out stand part of the Bill."
The House divided: Ayes, 126; Noes, 209.
Division No. 329] AYES. [8.25 p.m. Adamson, Rt. Hon. W. (Fife, West) Barnes, A. Cape, Thomas Adamson, W. M. (Staff. Cannock) Barr, J. Cluse, W. S. Alexander, A. V. (Sheffield, Hillsbro') Batey, Joseph Clynes, Rt. Hon. John R. Ammon, Charles George Bowerman, Rt. Hon. Charles W. Connolly, M. Attlee, Clement Richard Broad, F. A. Cove, W. G. Baker, J. (Wolverhampton, Bilston) Bromfield, William Cowan, D. M. (Scottish Universities) Baker, Walter Bromley, J. Dalton, Hugh Barker, G. (Monmouth, Abertillery) Brown, James (Ayr and Bute) Davies, Ellis (Denbigh, Denbigh) Davies, Rhys John (Westhoughton) Kirkwood, D. Smillie, Robert Day, Harry Lawrence, Susan Smith, Ben (Bermondsey, Rotherhiths) Dennison, R. Lawson, John James Smith, H. B. Lees (Keighley) Duncan, C. Lee, F. Smith, Rennie (Penistone) Dunnico, H. Lindley, F. W. Snell, Harry Edwards, C. (Monmouth, Bedwellty) Longbottom, A. W. Snowden, Rt. Hon. Philip Gardner, J. P. Lowth, T. Stamford, T. W. Gibbins, Joseph Lunn, William Stewart, J. (St. Rollox) Gillett, George M. MacDonald, Rt. Hon. J. R. (Aberavon) Sullivan, J. Gosling, Harry Mackinder, W. Sutton, J. E. Graham, D. M. (Lanark, Hamilton) MacLaren, Andrew Thorne, G. R. (Wolverhampton, E,) Graham, Rt. Hon. Wm. (Edin., Cent.) Maclean, Neil (Glasgow, Govan) Thorne, W. (West Ham, Plaistow) Greenall, T. Malone, C. L'Estrange (N'thampton) Thurtle, Ernest Grenfell, D. R. (Glamorgan) March, S. Tinker, John Joseph Griffith, F. Kingsley Montague, Frederick Townend, A. E. Griffiths, T. (Monmouth, Pontypool) Morrison, R. C. (Tottenham, N.) Trevelyan, Rt. Hon. C. P. Groves, T. Murnin, H. Varley, Frank B. Grundy, T. W. Naylor, T. E. Viant, S. P. Hall, F. (York, W. R., Normanton) Oliver, George Harold Walsh, Rt. Hon. Stephen Hall, G. H. (Merthyr Tydvil) Palin, John Henry Watson, W. M. (Dunfermline) Hardie, George D. Potts, John S. Webb, Rt. Hon. Sidney Heyday, Arthur Richardson, R. (Houghton-le-Spring) Wellock, Wilfred Henderson, Right Hon. A. (Burnley) Riley, Ben Westwood, J. Hirst, G. H Roberts, Rt. Hon. F. O. (W. Bromwich) Wiggins, William Martin Hirst, W. (Bradford, South) Robinson, W. C. (Yorks, W. R., Elland) Wilkinson, Ellen C. Hollins, A. Scurr John Williams, C. P. (Denbigh, Wrexham) Hors-Belisha, Leslie Sexton, James Williams, David (Swansea, East) Hudson, J. H. (Huddersfield) Shaw, Rt. Hon. Thomas (Preston) Williams, T. (York, Don Valley) Hutchison, Sir Robert (Montrose) Shepherd, Arthur Lewis Wilson, C. H. (Sheffield, Attercliffe) Jenkins, W. (Glamorgan, Neath) Shiels, Dr. Drummond Wilson, R. J. (Jarrow) John, William (Rhondda, West) Shinwell, E. Wright, W. Johnston, Thomas (Dundee) Short, Alfred (Wednesbury) Young, Robert (Lancaster, Newton) Jones, J. J. (West Ham, Silvertown) Simon, Rt. Hon Sir John Kelly, W. T. Sitch, Charles H. TELLERS FOR THE AYES.— Kennedy, T. Slesser, Sir Henry H. Mr. Allen Parkinson and Mr. Whiteley.
NOES. Agg-Gardner, Rt. Hon. Sir James T. Cope, Major Sir William Henn, Sir Sydney H. Ainsworth, Lieut.-Col. Charles Couper, J. B. Hennessy, Major Sir G. R. J. Albery, Irving James Courtauld, Major J. S. Hills, Major John Waller Alexander, E. E. (Leyton) Cowan, Sir Wm. Henry (Islington, N) Hilton, Cecil Alexander, Sir Wm. (Glasgow, Cent'l) Craig, Sir Ernest (Chester, Crewe) Hope, Sir Harry (Forfar) Alien, Sir J. Sandman Croft, Brigadier-General Sir H. Hopkins, J. W. W. Athoil, Duchess of Crooke, J. Smedley (Deritend) Hopkinson, A. (Lancaster, Mossley) Atkinson, C. Crookshank, Col. C. de W. (Berwick) Hudson, Capt. A. U. M (Hackney, N). Balfour, George (Hampstead) Curzon, Captain Viscount Hume, Sir G. H. Balniel, Lord Dalkeith, Earl of Hunter-Weston, Lt.-Gen. Sir Aylmer Barclay-Harvey, C. M. Davidson, Major-General Sir John H. Hurd, Percy A. Barnett, Major Sir Richard Dawson, Sir Philip Hurst, Gerald B. Beamish, Rear-Admiral T. P. H. Dean, Arthur Wellesley Inskip, Sir Thomas Walker H. Beilairs, Commander Canyon Drewe, C. Jackson, Sir H. (Wandsworth, Cen'l) Bennett, A. J. Eden, Captain Anthony James, Lieut.-Colonel Hon. Cuthbert Birchall, Major J. Dearman Edmondson, Major A. J. Jephcott, A. R. Bird, Sir R. B. (Wolverhampton, W.) Ellis, R. G. Joynson-Hicks. Rt. Hon. Sir William Boothby, R. J. G. Erskine, Lord (Somerset, Weston-s.-M.) Kennedy, A. R. (Preston) Bourne, Captain Robert Croft Everard, W. Lindsay King, Commodore Henry Douglas Bowater, Col. Sir T. Vansittart Fairfax, Captain J. G. Lamb, J. Q. Bowyer, Captain G. E. W. Falle, Sir Bertram G. Lane Fox, Col. Rt. Hon. George R. Braithwaite, Major A. N. Falls, Sir Charles F. Lister, Cunliffe, Rt. Hon. Sir Philip Brass, Captain W. Frece, Sir Walter de Little, Dr. E. Graham Brassey, Sir Leonard Fremantle, Lieut-Colonel Francis E. Lloyd, Cyril E. (Dudley) Briggs, J. Harold Gadie, Lieut.-Col. Anthony Locker-Lampson, Rt. Hon. Godfrey Brittain, Sir Harry Galbraith, J. F. W. Long, Major Eric Brocklebank, C. E. R. Gates, Percy Looker, Herbert William Brooke, Brigadier-General C. R. I. Goff, Sir Park Laugher, Lewis Broun-Lindsay, Major H. Grattan-Doyle, Sir N. Luce, Major-Gen. Sir Richard Harman Brown, Col. D. C. (N'th'l'd., Hexham) Greaves-Lord, Sir Walter Lumley, L. R. Buchan, John Greene, W. P. Crawford Lynn, Sir R. J. Burman, J. B. Grenfell, Edward C. (City of London) MacAndrew, Major Charles Glen Burton, Colonel H. W. Grotrian, H. Brent Macdonald, Capt. P. D. (I. of W.) Butler, Sir Geoffrey Gunston, Captain D. W. Macdonald, R. (Glasgow, Cathcart) Cadogan, Major Hon. Edward Hacking, Douglas H. McLean, Major A. Campbell, E. T. Hamilton, Sir George Macnaghten, Hon. Sir Malcolm Cassels, J. D. Hammersley, S. S. MacRobert, Alexander M. Cayzer, Maj. Sir Herbt. R. (Prtsmth. S.) Hannon, Patrick Joseph Henry Margesson, Captain D. Chapman, Sir S. Harland, A. Merriman, Sir F. Boyd Christie, J. A. Harvey, G. (Lambeth, Kennington) Mitchell, S. (Lanark, Lanark) Cobb, Sir Cyril Haslam, Henry C. Mitchell, Sir W. Lane (Streatham) Cochrane, Commander Hon. A. D Headlam, Lieut.-Colonel C. M. Moles, Rt. Hon. Thomas Cohen, Major J. Brunel Henderson, Capt. R. R. (Oxf'd, Henley) Moore, Sir Newton J. Colfox, Major Wm. Phillips Henderson, Lieut.-Col. Sir Vivian Morrison-Bell, Sir Arthur Clive Cooper, A. Duff Heneage, Lieut.-Colonel Arthur P. Nall, Colonel Sir Joseph Nelson, Sir Frank Salmon, Major I. Tinne, J. A. Newman, Sir R. H. S. D. L. (Exeter) Samuel, A. M. (Surrey, Farnham) Tryon, Rt. Hon. George Clement Nicholson, O. (Westminster) Sandeman, N. Stewart Wallace, Captain D. E. Nuttall, Ellis Sanders, Sir Robert A. Ward, Lt.-Col. A. L.(Kingston-on-Hull) Oman, Sir Charles William C. Sanderson, Sir Frank Watson, Rt. Hon. W. (Carlisle) Ormsby-Gore, Rt. Hon. William Sandon, Lord Watts, Sir Thomas Penny, Frederick George Sassoon, Sir Philip Albert Gustave D Wells, S. R. Percy, Lord Eustace (Hastings) Savery, S. S. White, Lieut.-Col. Sir G. Dairymple- Perkins, Colonel E. K. Shepperson, E. W. Williams, A. M. (Cornwall, Northern) Peto, G. (Somerset, Frome) Simms, Dr. John M. (Co. Down) Williams, Com. C. (Devon, Torquay) Pilcher, G. Skelton, A. N. Williams, Herbert G. (Reading) Pilditch, Sir Philip Slaney, Mayor P. Kenyon. Wilson, Sir C. H. (Leeds, Central) Preston, William Smith, Louis W. (Sheffield, Hallam) Wilson, R. R. (Stafford, Lichfield) Price, Major C. W. M. Smith-Carington, Neville W. Windsor-Clive, Lieut.-Colonel George Radford, E. A. Smithers, Waldron Withers, John James Raine, Sir Walter Southby, Commander A. R. J. Wolmer, Viscount Ramsden, E. Sprot, Sir Alexander Womersley, W. J. Reid, D. D. (County Down) Stanley, Lieut.-Colonel Rt. Hon. G. F. Wood, E. (Chest'r, Stalyb'dge & Hyde) Rhys, Hon. C. A. U. Stanley, Hon. O. F. G. (Westm'eland) Wood, Rt. Hon. Sir Kingsley Richardson, Sir P. W. (Sur'y, Ch'ts'y) Storry-Deans, R. Woodcock, Colonel H. C. Roberts, Sir Samuel (Hereford) Streatfeild, Captain S. R. Yerhurgh, Major Robert D. T. Robinson, Sir T. (Lane., Stretford) Sugden, Sir Wilfrid Young, Rt. Hon. Sir Hilten (Norwich) Rodd, Rt. Hon. Sir James Rennell Tasker, R. Inigo. Ropner, Major L. Templeton, W. P. TELLERS FOR THE NOES.— Ruggles-Brise, Lieut.-Colonel E. A. Thorn, Lt.-Col. J. G. (Dumbarton) Major The Marquess of Titchfield and Sir Victor Warrender. Russell, Alexander West (Tynemouth) Thompson, Luke (Sunderland)
Proposed words there inserted in the Bill.
CLAUSE 33.—(Amendment of Section 81 of principal Act.)
I beg to move, in page 27, line 38, to leave out the word "private."
With your permission, Mr. Deputy-Speaker, I should like also to deal with the following Amendment in my name—in page 27, line 38, after the word "company" to insert the words, "where there is no offer to the public." The object of this Clause, as originally drafted by the Greene Committee, was to give effect to the recommendation that it should be made illegal to issue the application form with an abridged prospectus. The Clause as then drafted, had the effect of making it illegal to issue any form of application for shares in an English company unless the form issued with the prospectus complied with the requirements of the Act of 1908. The only exceptions made were with regard to underwriting agreements, and in relation to the shares or debentures of a private company. I think that it was overlooked that it was very common to register a company, not as a private company but as a public company, that is to say, having more than 50 shareholders although there was no intention of issuing any shares to the public. The effect of this Clause as drawn is to render it obligatory to have a prospectus in the case of those companies. I do not think it was either the intention of the Greene Committee or of the Board of Trade that this should prevent semi-private companies from being subject to the main law, and the two Amendments I have put down are to eliminate "private company" and merge it into a company which has no intention of offering its shares to the public.
I beg to second the Amendment.
I think this Amendment is a distinct improvement in that it does give effect to what was in our minds, and what was certainly our intention in Committee. Those who were members of the Committee will remember that the proposition which I presented to the Committee was that wherever there was an offer to the public there must be a prospectus. We merged the abridged prospectus and all the provisions about the abridged prospectus in the broad, deep provision that where you make a general appeal to the public the application form must be accompanied by all the full paraphernalia of a prospectus such as the law requires. But while we insist that in every case of an appeal to the public there shall be a prospectus as required by the law, it was never our intention to interfere with the ordinary dealings as between a professional man and his clients or between those who are already partners in an enterprise. The last thing that the Committee contemplated was that a recognised broker who is approaching his regular clients, or the members of a syndicate which is in fact a public company appealing to its own members for further capital, shall be required to produce all this vast paraphernalia. Certainly nothing was further from my mind in the expression I gave to the purpose of the Bill when speaking in Committee, and I think nothing was further from the minds of the Committee, and I am quite sure that this Amendment ought to be made. I stand absolutely firm in requiring that where you are appealing to the general public a full disclosure must be made in every case, but as the dealings here are between old partners or between professional men and their regular clients then, plainly, it would be the height of inconvenience to require such procedure to be adopted, and I am very much obliged to my hon. Friend the Member for the City of London (Mr. E. C. Grenfell) for putting down this Amendment which undoubtedly is right, and, but for an oversight in Committee, would not have been required.
The speech of the President of the Board of Trade rather moves me against the Amendment than for it, because he has put much more clearly than the hon. Member for the City of London (Mr. E. C. Grenfell) what is really intended by the Amendment. The purpose of the Clause is to see that in all cases where an offer is made to the public a genuine prospectus shall be published. The hon. Member for the City of London has now moved an Amendment which will relieve from that responsibility public companies as well as private companies. He will proceed in the subsequent Amendment to add words which will apply the provisions to public companies. What is the special reason for making this exception in the case of these public companies? The President of the Board of Trade talks airily about not desiring to interfere between professional men and their clients. What exactly does he mean by that? Who are the general public in such a case? Under this Amendment will it be possible for any professional broker to approach all his clients and ask them to subscribe to a public company? As long as they can be proved to be his regular clients, is he to be allowed to induce them to put money into a public company without submitting a full prospectus? That is what the statement of the President of the Board of Trade amounts to. The most innocent investors, widows and orphans, if you like, may be the regular clients of a broker, and he is to be allowed to induce them to invest in a company without their having seen a complete prospectus such as would have to be published in the public Press if you were making a general appeal to the public.
The hon. Member for the City of London wants all the privileges of a private company for what is, in effect, a public company. It must be remembered that a public company, unlike a private company, can have an unlimited number of shareholders. This proposal does away with the safeguards which the Government are giving to the public in this Clause. If the view I have expressed is not right, perhaps the Attorney-General will explain the exact position; but if the speech of the President of the Board of Trade represents the position, I shall have to divide the House against the Amendment, because it is perfectly plain to me, if what the President of the Board of Trade says is correct, that as long as you are a professional man dealing with clients in the ordinary way of business you can register a company as a public company and go on inducing your clients to invest money in it without any obligation to issue a prospectus.
The hon. Member must not misquote my words. What I said was that this applied to regular professional brokers dealing with their regular clients, and I do not wish him to enlarge that into a suggestion that some professional man, unnamed, is to go and form a company and act in this way. I was very precise in what I said, and everybody who is engaged in business of this character knows precisely what is implied by what I said.
I do not wish to put words into the mouth of the right hon. Gentleman which he did not utter, but what he has just said confirms me in the view I had taken. He talks about a professional broker and his regular clients; therefore, as long as the appeal is made by a regular broker to his regular clients there is no obligation to issue a prospectus to the persons who are to be asked to subscribe the share capital. I say that exception is quite unjustified if it is to apply in the case of a public company, because there is no limit to the number of persons who can be members of a public company.
Question put, "That the word 'private' stand part of the Bill."
The House divided: Ayes, 125; Noes, 214.
Division No. 330] AYES. [8.46 p. m. Adamson, Rt. Hon. W. (Fife, West) Hardie, George D. Sexton, James Adamson, W. M. (Staff., Cannock) Hayday, Arthur Shaw, Rt. Hon. Thomas (Preston) Alexander, A. V. (Sheffield, Hillsbro') Henderson, Rt. Hon. A. (Burnley) Shepherd, Arthur Lewis Ammon, Charles George Hirst, G. H. Shiels, Dr. Drummond Attlee, Clement Richard Hirst, W. (Bradford, South) Shinwell, E. Baker, J. (Wolverhamton, Bliston) Hollins, A. Short, Alfred (Wednesbury) Baker, Walter Hore-Belisha, Leslie Sitch, Charles H. Barker, G. (Monmouth, Abertillery) Hudson, J. H. (Huddersfield) Slesser, Sir Henry H. Barnes, A. Jenkins, W. (Glamorgan, Neath) Smillie, Robert Barr, J. John, William (Rhondda, West) Smith, Ben (Bermondsey, Rotherhithe) Batey, Joseph Johnston, Thomas (Dundee) Smith, H. B. Lees- (Keighley) Bowerman, Rt. Hon. Charles W. Jones, J. J. (West Ham. Silvertown) Smith, Rennie (Penistone) Broad, F. A. Jones, Morgan (Caerphilly) Snell, Harry Bromfield, William Jones, T. I. Mardy (Pontypridd) Snowden, Rt. Hon. Philip Bromley, J. Kelly, W. T. Stamford, T. W. Brown, James (Ayr and Bute) Kennedy, T. Stewart, J. (St. Rollox) Cape, Thomas Kirkwood, D. Strauss, E. A. Cluse, W. S. Lawrence, Susan Sullivan, J. Clynes, Rt. Hon. John R. Lawson, John James Sutton, J. E. Connolly, M. Lee, F. Thorne, G. R. (Wolverhampton, E.) Cove, W. G. Lindleym, F. W. Thorne, W. (West Ham, Plaistow) Cowan, D. M. (Scottish Universities) Longbottom, A. W. Thurtle, Ernest Dalton, Hugh Lowth, T. Tinker, John Joseph Davies, Ellis (Denbigh, Denbigh) Lunn, William Townend, A. E. Davies, Rhys John (Westhoughton) MacDonald, Rt. Hon. J. R. (Aberavon) Trevelyan, Rt. Hon. C. P. Day, Harry Mackinder, W. Varley, Frank B. Dennison, R. Maclean, Nell (Glasgow, Govan) Viant, S. P. Duncan, C. Malone, C. L'Estrange (N'thampton) Walsh, Rt. Hon. Stephen Dunnico, H. March, S. Watson, W. M. (Duntermline) Gardner, J. P. Montague, Frederick Wellock, Wilfred Gibbins, Joseph Morrison, R. C. (Tottenham, N.) Westwood, J. Gillett, George M. Murnin, H. Wiggins, William Martin Gosling, Harry Naylor, T. E. Williams, C. P. (Denbigh, Wrexham) Graham, D. M. (Lanark, Hamilton) Oliver, George Harold Williams, David (Swansea, East) Graham, Rt. Hon. Wm. (Edin., Cent.) Owen, Major G. Williams, T. (York, Don Valley) Greenall, T. Palin, John Henry Wilson, C. H. (Sheffield, Attercliffe) Grenfell, D. R. (Glamorgan) Parkinson, John Allen (Wigan) Wilson, R. J. (Jarrow) Griffith, F. Kingsley Potts, John S. Wright, W. Griffiths, T. (Monmouth, Pontypool) Richardson, R. (Houghton-le-Spring) Young, Robert (Lancaster, Newton) Groves, T. Riley, Ben Grundy, T. W. Roberts, Rt. Hon. F. O. (W. Bromwich) TELLERS FOR THE AYES.— Hall, F. (York, W. R., Normanton) Robinson, W. C. (Yorks, W. R., Elland) Hall, G. H. (Merthyr Tydvil) Scurr, John Mr. Charles Edwards and Mr. Whiteley.
NOES. Agg-Gardner, Rt. Hon. Sir James T. Brocklebank, C. E. R. Crookshank, Col. C. de W. (Berwick) Ainsworth, Lieut.-Col. Charles Brooke, Brigadier-General C. R. I. Curzon, Captain Viscount Albery, Irving James Broun-Lindsay, Major H. Dalkeith, Earl of Alexander, E. E. (Leyton) Brown, Col. D. C. (N'th'l'd., Hexham) Davidson, Major-General Sir John H. Alexander, Sir Wm. (Glasgow, Cent'l) Brown, Brig.-Gen. H. C. (Berks, Newb'y) Dawson, Sir Philip Allen, Sir J. Sandeman Buchan, John Dean, Arthur Wellesley Astbury, Lieut.-Commander F. W. Burman, J. B. Drewe, C. Atholl, Duchess of Burton, Colonel H. W. Eden, Captain Anthony Atkinson, C. Butler, Sir Geoffrey Edmondson, Major A. J. Balfour, George (Hampstead) Butt, Sir Alfred Ellis, R. G. Balniel, Lord Cadogan, Major Hon. Edward Erskine, Lord (Somerset, Weston-s.-M.) Barclay-Harvey, C. M. Campbell, E. T. Everard, W. Lindsay Barnett, Major Sir Richard Carver, Major W. H. Fairfax, Captain J. G. Beamish, Rear-Admiral T. P. H. Cassels, J. D. Fells, Sir Charles F. Bellairs, Commander Carlyon Cayzer, Maj. Sir Herbt. R. (Prtsmth. C.) Frece, Sir Walter de Benn, Sir A. S. (Plymouth, Drake) Charteris, Brigadier-General J. Fremantle, Lieut.-Colonel Francis E. Bennett, A. J. Christie, J. A. Gadie, Lieut.-Col. Anthony Birchall, Major J. Dearman Cobb, Sir Cyril Galbraith, J. F. W. Bird, Sir R. B. (Wolverhampton, W.) Cochrane, Commander Hon. A. D. Gates, Percy Boothby, R. J. G. Cohen, Major J. Brunel Goff, Sir Park Bourne, Captain Robert Croft Colfox, Major Wm. Phillips Grattan-Doyle, Sir N. Bowater, Col. Sir T. Vansittart Cooper, A. Duff Greaves-Lord, Sir Walter Bowyer, Capt. G. E. W. Cope, Major Sir William Greene, W. P. Crawford Braithwaite, Major A. N. Couper, J. B. Grenfell, Edward C. (City of London) Brass, Captain W. Courtauld, Major J. S. Grotrian, H. Brent Brassey, Sir Leonard Cowan, Sir Wm. Henry (Islington, N.) Gunston, Captain D. W. Briggs, J. Harold Craig, Sir Ernest (Chester, Crewe) Hacking, Douglas H. Brittain, Sir Harry Crooke, J. Smedley (Deritend) Hamilton, Sir George Hammersley, S. S. McLean, Major A. Sandon, Lord Hannon, Patrick Joseph Henry Macnaghten, Hon. Sir Malcolm Savery, S. S. Harland, A. MacRobert Alexander M. Shepperson, E. W. Harvey, G. (Lambeth, Kennington) Margesson, Captain D. Simms, Dr. John M. (Co. Down) Haslam, Henry C. Merriman, Sir F. Boyd Skelton, A. N. Headlam, Lieut.-Colonel C. M. Mitchell, S. (Lanark, Lanark) Slaney, Major P. Kenyon Henderson, Capt. R. R.(Oxf'd, Henley) Mitchell, Sir W. Lane (Streatham) Smith, Louis W. (Sheffield, Hallam) Henderson, Lieut.-Col. Sir Vivian Moles, Rt. Hon. Thomas Smith-Carington, Neville W. Heneage, Lieut.-Colonel Arthur P. Moore, Sir Newton J. Smithers, Waldron Henn, Sir Sydney H. Morrison, H. (Wilts, Salisbury) Southby, Commander A. R. J. Hennessy, Major Sir G. R. J. Morrison-Bell, Sir Arthur Clive Sprot, Sir Alexander Hills, Major John Waller Nall, Colonel Sir Joseph Stanley, Lieut.-Colonel Rt. Hon. G. F. Hilton, Cecil Nelson, Sir Frank Storry-Deans, R. Hope, Sir Harry (Forfar) Neville, Sir Reginald J. Streatfeild, Captain S. R. Hopkins, J. W. W. Newman, Sir R. H. S. D. L. (Exeter) Sugden, Sir Wilfrid Hopkinson, A. (Lancaster, Mossley) Nicholson, O. (Westminster) Tasker, R. Inigo. Hudson, Capt. A. U. M. (Hackney, N.) Nuttall, Ellis Templeton, W. P. Hume, Sir G. H. O'Neill, Major Rt. Hon. Hugh Thorn, Lt.-Col. J. G. (Dumbarton) Hunter-Weston. Lt.-Gen. Sir Aylmer Oman, Sir Charles William C. Thompson, Luke (Sunderland) Hurst, Gerald B. Ormsby-Gore, Rt. Hon. William Tinne, J. A. Hutchison, Sir Robert (Montrose) Penny, Frederick George Titchfield, Major the Marquess of Inskip, Sir Thomas Walker H. Percy, Lard Eustace (Hastings) Tryon, Rt. Hon. George Clement Iveagh, Countess of Perkins, Colonel E. K. Ward, Lt.-Col. A. L. (Kingston-on-Hull) Jackson, Sir H. (Wandsworth, Cen'l) Peto, G. (Somerset, Frome) Warner, Brigadier-General W. W. James, Lieut.-Colonel Hon. Cuthbert Pilditch, Sir Philip Watson, Rt. Hon. W. (Carlisle) Jephcott, A. R. Pownall, Sir Assheton Watts, Sir Thomas Joynson-Hicks, Rt. Hon. Sir William Preston, William Wells, S. R. Kennedy, A. R. (Preston) Price, Major C. W. M. Williams, A. M. (Cornwall, Northern) King, Commodore Henry Dougla Radford, E. A. Williams, Com. C. (Devon, Torquay) Lamb, J. Q. Raine, Sir Walter Williams, Herbert G. (Reading) Lane Fox, Col. Rt. Hon. George R. Ramsden, E. Wilson, Sir C. H. (Leeds, Central) Lister, Cunliffe, Rt. Hon. Sir Philip Reid, D. D. (County Down) Wilson, R. R. (Stafford, Lichfield) Little, Dr. E. Graham Rhys, Hon. C. A. U. Windsor-Clive, Lieut.-Colonel George Livingstone, A. M. Richardson, Sir. P. W. (Sur'y, Ch'ts'y) Withers, John James Lloyd, Cyril E. (Dudley) Roberts, Sir Samuel (Hereford) Womersley, W. J. Locker-Lampson, Rt. Hon. Godfrey Robinson, Sir T. (Lanes, Stretford) Wood, E. (Chest'r, Stalyb'ge & Hyde) Long, Major Eric Rodd, Rt. Hon. Sir James Rennell Wood, Rt. Hon. Sir Kingsley Looker, Herbert William Ropner, Major L. Woodcock, Colonel H. C. Lougher, Lewis Ruggles-Brise, Lieut.-Colonel E. A. Yerburgh, Major Robert D. T. Luce, Major-Gen. Sir Richard Harman Russell, Alexander West (Tynemouth) Young, Rt. Hon. Sir Hilton (Norwich) Lumley, L. R. Salmon, Major I. Lynn, Sir R. J. Samuel, A. M. (Surrey, Farnham) TELLERS FOR THE NOES.— MacAndrew, Major Charles Glen Sandeman, N. Stewart Macdonald, Capt. P. D. (I. of W.) Sanders, Sir Robert A. Captain Wallace and Sir Victor Warrender. Macdonald, R. (Glasgow, Cathcart) Sanderson, Sir Frank
I beg to move, in page 27, line 38, after the word "company," to insert the words "where there is no offer to the public."
I beg to second the Amendment.
We had a very short Debate on the first Amendment, but we have had no reply from the Government upon the point which I put before the House.
I think it was understood that this Amendment and the previous one upon which the House has just divided should be taken together, and I do not think I can allow another discussion upon this Amendment.
Surely we can ask for a reply to our criticisms. The hon. Member for the City of London (Mr. E. C. Grenfell) moved his Amendment, and the President of the Board of Trade immediately accepted it before the Oppo- sition had spoken upon it, or had a chance of considering the statement which was made by the President of the Board of Trade. We have put forward our criticisms of these proposals, but we have had no reply. Before the Division is taken on this Amendment, surely we are entitled to ask for a reply.
If the President of the Board of Trade accepts the hon. Member's invitation to make a reply that will be in order, but I cannot allow any further discussion beyond that.
The hon. Member for Hillsborough (Mr. A. V. Alexander) said he was anxious to get this Bill through as rapidly as possible, and I was anxious not to repeat what I have already said in regard to this Amendment. I stated very clearly to the House the reasons why I accepted these two Amendments, and all I can do, if the hon. Member wishes it, is to repeat verbatim the reasons I have already given. I told the Committee positively when these Clauses were going through that our object was to insist on a full prospectus being given for the information of the public. I said that I was advised that the legal position was that the relations of the regular broker and his client were not covered by the words "a member of the public." That was my intention, that was the intention of the Committee, and that is the common-sense view, unless we want to stop all business that is carried on between brokers and their regular clients in these matters. I do not wish to be discourteous, but I say that that is my answer to the hon. Member, and, whether it satisfies him or not, I think it will satisfy all who have knowledge of the way in which business is conducted by reputable people in the City of London.
May I ask whether I am right in this interpretation? The Clause as it stands confines the exceptions to shareholders and holders of debentures in private companies—
I said that that was an entire mistake.
Does the Amendment that has now been incorporated mean that a broker, if he communicates only with his regular clients, can offer to any number of people holdings in a public company?
Yes, certainly. There is no mystery about it. It is perfectly plain what the relationship between the broker and his regular clients is. There is a very large number
of what are technically called public companies whose shares are often offered by brokers to their clients. The clients desire to have the shares, and they do not require all this paraphernalia exhibited to them; and there is no conceivable reason why the business should not he carried on in that way. It happens in connection with reputable domestic concerns for whose shares there is a limited market, and in connection also with foreign shares which have a limited market, and, unless this Amendment be accepted, there will be an interference with a very valuable reputable business which is carried on in the great stock exchanges of this country. I will not be responsible for doing that.
Amendment agreed to.
CLAUSE 36.—(Obligation to file statement in lieu of prospectus.)
I beg to move, in page 31, line 3, to leave out Sub-section (2).
As We agreed that we should have a general Debate upon the position of private companies, and thereafter divide upon selected Amendments without further Debate, I simply move this Amendment formally.
I beg to second the Amendment.
Question put, "That the words proposed to be left out stand part of the Bill."
The House divided: Ayes, 224; Noes, 121.
[Division No. 331.] AYES. [9.2 p.m. Ainsworth, Lieut.-Col. Charles Brass, Captain W. Cochrane. Commander Hon. A. D. Aibery, Irving James Brassey, Sir Leonard Cohen, Major J. Brunel Alexander, E. E. (Leyton) Briggs, J. Harold Colfox, Major Wm. Phillips Alexander, Sir Wm. (Glasgow, Cent'l) Briscoe, Richard George Cooper, A. Duff Allen, Sir J. Sandeman Brittain, Sir Harry Cope, Major Sir William Astbury, Lieut.-Commander F. W. Brocklebank, C. E. R. Couper, J. B. Atholl, Duchess of Brooke, Brigadier-General C. R. I. Courtauld, Major J. S. Atkinson, C. Broun-Lindsay, Major H. Cowan, Sir Wm. Henry (Islingtn., N.) Balfour, George (Hampstead) Brown, Col. D. C. (N'th'l'd., Hexham) Craig, Sir Ernest (Chester, Crewe) Balniel, Lord Brown, Brig.-Gen. H.C.(Berks, Newb'y) Crooke, J. Smedley (Deritend) Barclay-Harvey, C. M. Buchan, John Crockshank, Col. C. de W. (Berwick) Barnett, Major Sir Richard Burman, J. B. Curzon, Captain Viscount Beamish, Rear-Admiral T. P. H. Burton, Colonel H. W. Davidson, Major-General Sir J. H. Bellairs, Commander Carlyon Butler, Sir Geoffrey Dawson, Sir Philip Bann, Sir A. S. (Plymouth, Drake) Butt, Sir Alfred Dean, Arthur Wellesley Bennett, A. J. Cadogan, Major Hon. Edward Drewe, C. Bevan, S. J Campbell, E. T. Eden, Captain Anthony Birehall, Major J. Dearman Carver, Major W. H. Edmondson, Major A. J. Bird, Sir R. B. (Wolverhampton, W.) Cassels, J. D. Ellis, R. G. Bourne, Captain Robert Croft Cazer, Maj. Sir Herbt. R. (Prtsmth. S.) Erskine, Lord (Somerset, Weston-s.-M .) Bowater, Col. Sir T. Vansittart Charteris, Brigadier-General J. Everard, W. Lindsay Bowyer, Captain G. E. W. Christie, J. A. Fairfax, Captain J. G. Braithwaite, Major A. N. Cobb, Sir Cyril Falle, Sir Bertram G. Falls, Sir Charles F. Looker, Herbert William Sandeman, N. Stewart Frece, Sir Walter de Lougher, Lewis Sanders, Sir Robert A. Fremantle, Lt.-Col. Francis E. Luce, Maj.-Gen. Sir Richard Harman Sanderson, Sir Frank Gadie, Lieut.-Col. Anthony Lumley, L. R. Sandon, Lord Galbraith, J. F. W. Lynn, Sir R. J. Savery, S. S. Gates, Percy MacAndrew, Major Charles Glen Shepperson, E. W. Goff, Sir Park Macdonald, Capt. P. D. (I. of W.) Skelton, A. N. Grattan-Doyle, sir N. Macdonald, R. (Glasgow, Cathcart) Slaney, Major P. Kenyon Greaves-Lord. Sir Walter McLean, Major A. Smith, Louis W. (Sheffield, Hallam) Greene, W. P. Crawford Macnaghten, Hon. Sir Malcolm Smith-Carington, Neville W. Grenfell, Edward C. (City of London) MacRobert, Alexander M. Smithers, Waidron Griffith, F. Kingsley Margesson, Captain D. Southby, Commander A. R. J. Grotrian, H. Brent Marriott, Sir J. A. R. Sprot, Sir Alexander Gunston, Captain D. W. Merriman, Sir F. Boyd Stanley, Lieut.-Colonel Rt. Hon. G. F. Hacking, Douglas H. Mitchell, S. (Lanark, Lanark) Stanley, Hon. O. F. G. (Westm'eland) Hamilton, Sir George Mitchell, Sir W. Lane (Streatham) Storry-Deans, R. Hammersley, S. S. Moles, Rt. Hon. Thomas Strauss, E. A. Hannon, Patrick Joseph Henry Moore, Sir Newton J. Sueter, Rear-Admiral Murray Fraser Harland, A. Morrison, H. (Wilts, Salisbury) Sugden, Sir Wilfrid Harvey, G. (Lambeth, Kennington) Morrison-Bell, Sir Arthur Clive Templeton, W. P. Haslam, Henry C. Nall, Colonel Sir Joseph Thom, Lt-Col. J. G. (Dumbarton) Headlam, Lieut.-Colonel C. M. Nelson, Sir Frank Thomas, Sir Robert John (Anglesey) Henderson, Capt. R. R. (Oxf'd, Henley) Neville, Sir Reginald J. Thompson, Luke (Sunderland) Henderson, Lieut.-Col. Sir Vivian Newman, Sir R. H. S. D. L. (Exeter) Tinne, J. A. Heneage, Lieut.-Col. Arthur P. Nicholson, O. (Westminster) Titchfield, Major the Marquess of Henn, Sir Sydney H. Nuttall, Ellis Tryon, Rt. Hon. George Clement Hennessy, Major Sir G. R. J. O'Neill, Major Rt. Hon. Hugh Waddington, R. Hills, Major John Waller Oman, Sir Charles William C. Wallace, Captain D. E. Hilton, Cecil Ormsby-Gore, Rt. Hon. William Ward, Lt.-Col. A.L.(Kingston-on-Hull) Hope, Capt. A. O. J. (Warw'k, Nun.) Owen, Major G. Warner, Brigadier-General W. W. Hope, Sir Harry (Forfar) Percy, Lord Eustace (Hastings) Waterhouse, Captain Charles Hopkins, J. W. W. Perkins, Colonel E. K. Watson, Rt. Hon. W. (Carlisle) Hopkinson, A. (Lancaster, Mossley) Peto, G. (Somerset, Frome) Watts, Sir Thomas Hudson, Capt. A. U. M. (Hackney, N.) Philipson, Mabel Wayland, Sir William A. Hume, Sir G. H. Pilditch, Sir Philip Wells, S. R. Hunter-Weston, Lt.-Gen. Sir Aylmer Pownall, Sir Assheton Wiggins, William Martin Hurd, Percy A. Preston, William Williams, A. M. (Cornwall, Northern) Hurst, Gerald B. Price, Major C. W. M. Williams, Com. C. (Devon, Torquay) Inskip, Sir Thomas Walker H. Radford, E. A. Williams, C. P. (Denbigh, Wrexham) Iveagh, Countess of Raine, Sir Walter Williams, Herbert G. (Reading) Jackson, Sir H. (Wandsworth, Cen'l) Ramsden, E. Wilson, Sir C. H. (Leeds, Central) James, Lieut.-Colonel Hon. Cuthbert Reid, D. D. (County Down) Wilson, R. R. (Stafford, Lichfield) Jephcott, A. R. Rhys, Hon. C. A. U. Windsor-Clive, Lieut.-Colonel George Kennedy, A. R. (Preston) Richardson, Sir P. W. (Sur'y, Ch'ts'y) Withers, John James King, Commodore Henry Douglas Roberts, Sir Samuel (Hereford) Womersley, W. J. Lamb, J. Q. Robinson, Sir T. (Lancs., Stretford) Wood, E. (Chester, Staly'b'ge & Hyde) Lister, Cunliffe-, Rt. Hon. Sir Philip Rodd, Rt. Hon. Sir James Rennell Wood, Rt. Hon. Sir Kingsley Little, Dr. E. Graham Ropner, Major L. Woodcock, Colonel H. C. Livingstone, A. M. Ruggles-Brise, Lieut.-Colonel E. A. yerburgh, Major Robert D. T. Lloyd, Cyril E. (Dudley) Russell, Alexander West (Tynemouth) Young, Rt. Hon. Hilton (Norwich) Locker-Lampson, Rt. Hon. Godfrey Salmon, Major I. Long, Major Eric Samuel, A. M. (Surrey, Farnham) TELLERS FOR THE AYES.— Mr. Penny and Sir Victor Warrender.
NOES. Adamson, Rt. Hon. W. (Fife, West) Dunnico, H. Jones, J. J. (West Ham, Slivertown) Adamson, W. M. (Staff., Cannock) Edwards, C. (Monmouth, Bedwelity) Jones, Morgan (Caerphilly) Alexander, A. V. (Sheffield, Hillsbro') Gardner, J. P. Jones, T. I. Mardy (Pontypridd) Ammon, Charles George Gibbins, Joseph Kelly, W. T. Attlee, Clement Richard Gillett, George M. Kennedy, T. Baker, J. (Wolverhampton, Bliston) Gosling, Harry Kirkwood, D. Baker, Walter Graham, D. M. (Lanark, Hamilton) Lawrence, Susan Barker, G. (Monmouth, Abertillery) Graham, Rt. Hon. Wm. (Edin., Cent.) Lawson, John James Barnes, A. Greenall, T. Lee, F. Barr, J. Grenfell, D. R. (Glamorgan) Lindley, F. W. Batey, Joseph Griffiths, T. (Monmouth, Pontypool) Longbottom, A. W. Bowerman, Rt. Hon. Charles W. Groves, T. Lowth, T. Broad, F. A. Grundy, T. W. Lunn, William Bromfield, William Hall, F. (York, W. R., Normanton) MacDonald, Rt. Hon. J. R. (Aberavon) Bromley, J. Hall, G. H. (Merthyr Tydvil) Mackinder, W. Brown, Ernest (Leith) Hardle, George D. Maclean, Neil (Glasgow, Govan) Brown, James (Ayr and Bute) Hayday, Arthur Malone, C. L'Estrange (N'thampton) Cape, Thomas Hayes, John Henry Montague, Frederick Cluse, W. S. Henderson, Rt. Hon. A. (Burnley) Morrison, R. C. (Tottenham, N.) Clynes, Rt. Hon. John R. Hirst, G. H. Murnin, H. Connolly, M. Hirst, W. (Bradford, South) Naylor, T. E. Cove, W. G Hollins, A. Oliver, George Harold Cowan, D. M. (Scottish Universities) Hore-Belisha, Leslie Palin, John Henry Dalton, Hugh Hudson, J. H. (Huddersfield) Potts, John S. Davies, Ellis (Denbigh, Denbigh) Hutchison, Sir Robert (Montrose) Richardson, R. (Houghton-le-Spring) Davies, Rhys John (Westhoughton) Jenkins, W. (Glamorgan, Neath) Riley, Ben Day, Harry John, William (Rhondda, West) Roberts, Rt. Hon. F. O.(W. Bromwich) Dennison, R. Johnston, Thomas (Dundee) Robinson, W. C. (Yorks, W. R., Elland) Scurr, John Snowden, Rt. Hon. Philip Watson, W. M. (Dunfermline) Sexton, James Stamford, T. W. Wellock, Wilfred Shaw, Rt. Hon. Thomas (Preston) Stewart, J (St. Rollox) Westwood, J. Shepherd, Arthur Lewis Sullivan, J. Williams, David (Swansea, East) Shiels, Dr. Drummond Sutton, J. E. Williams, T. (York, Don Valley) Shinwell, E. Thorne, G. R. (Wolverhampton, E.) Wilson, C. H. (Sheffield, Attercliffe) Short, Alfred (Wednesbury) Thorne, W. (West Ham, Plaistow) Wilson, R. J. (Jarrow) Sitch, Charles H. Thurtle, Ernest Wright, W. Slesser, Sir Henry H. Tinker, John Joseph Young, Robert (Lancaster, Newton) Smillie, Robert Townend, A. E. Smith, Ben (Bermondsey, Rotherhithe) Trevelyan, Rt. Hon. C. TELLERS FOR THE NOES.— Smith, H. B. Lees- (Keighley) Varley, Frank B. Smith, Rennie (Penistone) Viant, S. P. Mr. Allen Parkinson and Mr. Whiteley. Snell, Harry Walsh, Rt. Hon. Stephen
CLAUSE 37.—(Power to issue shares at a discount.)
I beg to move, in page 31, line 16, to leave out Sub-sections (1) and (2), and to insert instead thereof the words:
(1) Subject as hereinafter provided, it shall be lawful for a company to issue any shares in the company at a discount:
Provided that—
(2) Where a company has passed a resolution authorising the issue of shares at a discount, it may apply to the Court for an order sanctioning the issue, and on any such application the Court, if, having regard to all the circumstances of the case, it thinks proper so to do, may make an order sanctioning the issue on such terms and conditions as it thinks fit."
On the Order Paper, as far as I can see, the next Amendment is to leave out Clause 37.
That Amendment was not selected, and I think that if the hon. Member considers the matter he will realise that it was for an obvious reason. He will have an opportunity of discussing the question of the Clause generally on the Amendment moved by the President of the Board of Trade.
If that be so. I apologise to the House for the interruption, but I consulted Mr. Speaker on the question, and I imagine I must have misunderstood him. I certainly understood that the Amendment was to be called.
I think the point is that the hon. Member can say what he wishes in favour of leaving out the Clause on the Amendment of the President of the Board of Trade.
May I on this Amendment discuss my Amendment on page 31, line 17, to leave out "and the sanction of the Court be obtained."
That is involved in the Amendment I propose, because mine is that the sanction of the Court should be obtained in every case.
I agree. It is a question of a general discussion on the issue of shares at a discount on the Amendment of the President of the Board of Trade.
This is the Clause which permits the issue of shares at a discount. As the Clause was originally introduced, the matter was left generally to the discretion of those who manage the companies. We approved, in Committee, the general principle that in a proper case the right to issue shares at a discount should exist, but the Committee were anxious, I think, rightly, to hedge this in with careful restrictions, because there was a feeling, in which I heartily concurred that the issue of shares at a discount should not be made an easy matter. The only case—this is all I stand for to-night—in which shares at a discount should be issued is where both those who are responsible for the conduct of the business of the company, the company itself by a resolution and the Court by their approval, consider that it is more in the interest of the company that there should be an issue of shares at a discount than that there should be the long expensive business of litigation and reconstruction.
I know that on the one hand there are those, like my hon. Friend the Member for Cambridge University (Mr. Withers), who is anxious that his Amendment should not be overlooked, with very wide experience, who say that we ought to have a right to issue shares at a discount—it is a perfectly straightforward way of doing what, however you legislate, people will do in this or some other way and we had better do it in a frank and open way—and we have on the other hand the anxiety of my hon. Friends who are afraid the process may be abused. Between those two we have the middle course which I am asking the House to take in proposing that there should be a right to issue shares at a discount but that that right should only exist where the company approve of it and where the Court thereafter says it is the right thing to do and, moreover, where the issue has to be made within a reasonable time after the Court has given its approval. This is a rather short cut, but only with the leave of the Court. I have authority for saying that this middle course has the approval of my hon. and learned Friend the Member for Londonderry (Sir M. Macnaghten), who, by the great tradition of which he is the successor, is perhaps more entitled than anyone in the country to speak of what is the value and what are the perils or the merits of issuing shares at a discount. I have taken a great deal of trouble on this Clause. I venture to think that I am now presenting it to the House in a form which all my critics can accept, and in that spirit I commend it to the House.
I think that my right hon. Friend the President of the Board of Trade has found that in defending this Clause he needs all the qualified approval which he can get. I venture to suggest that even the approval of my hon. and learned Friend the Member for Londonderry (Sir M. Macnaghten) is of a very qualified nature, and I notice also that in recommending this Clause to the House my right hon. Friend refrained from putting forward what one might consider a eonclusive argument and de- pended more on the opinions of others which were not translated for the benefit of hon. Members. I shall have to ask the House to bear with me while I go into the history of this matter. I wish to start by saying that I regard Clause 37 of this Bill as being nothing less than bucket-shop finance. There are two classes of people who might originally have found this Clause to be of some assistance. One is the respectable business houses who seek an easier method of reducing their capital than that which is at present provided, namely, by going to the Court and applying for a reduction of capital. It is with that in view, undoubtedly, that the Wrenbury and Greene Committees gave a very qualified and a very guarded sanction to this Clause. The only other class of person who would find this Clause, as it is at present drafted by the President of the Board of Trade, of any assistance is the bucket-shop people who under the Clause, as it is now moved, will be able as far as I can see to issue a £1 share at 2s. 6d. It is true that the sanction of the Court is required, but what will the Court be required to decide? I am not an authority on that subject, and I am quite prepared to listen to those who are better versed on these subjects, but as far as I can see all that it will be required to decide is whether it is a fair and proper thing, taking into account all the circumstances of the case and the money which has already been lost, that these £1 shares shall be offered at 2s. 6d. The bucket shop, having acquired control of the company and issued £1 shares at 2s. 6d., can then engineer on the Stock Exchange what is known as a "ramp," and within two or three months, with possibly a little publicity, the public will be buying these nominal £1 shares issued at 2s. 6d. at 10s. or 12s., in the belief that they are buying a £1 share at 10s. discount, when they are, in fact, paying four or five times the original cost of the shares.
I should like for a moment or two to go into the history of this Clause. The Wrenbury Committee gave a very qualified support to it. They expressed in no uncertain terms their doubts about it. They mentioned some of the evils which might arise from it, and they proceeded to set up a number of safeguards which, in my opinion, rendered the Clause almost valueless and almost inoperative. The Greene Committee came afterwards. They said: "We cannot differ materially from the Wrenbury Committee, but we also see that there are many evils in this Clause, and we should not like it to pass without many safeguards." They said: "Materially, we do not differ from the Wrenbury Committee; we want to see the same safeguards." As a matter of fact, they only made one exception. That was, I believe, that the Wrenbury Committee stipulated that a £1 share should not be issued at less than 5 per cent. under the market value—I believe they afterwards enlarged it to 10 per cent. With that single exception, I do not think that they made any difference in the safeguards demanded by the Wren-bury Committee. Both Committees, as far as I remember, demanded that a share should not be issued at a lower rate of discount than 50 per cent. of the nominal value. What do we find under the Amendment moved by the President of the Board of Trade? Every single safeguard demanded by the Wrenbury Committee, every single safeguard recommended by the Green Committee, is removed. When the Bill was in Commiteet, I would remind the right hon. Gentleman that there was nobody, and suite rightly, who paid more attention to the recommendations of the Greene Committee than the right hon. Gentleman, who remarked: "It is contrary to the Greene Committee or to the Wrenbury Committee."
That is clearly to misrepresent what I am doing. I have put in one greater safeguard, that of the Court, and the Court is not likely to be easily satisfied.
If my right hon. Friend will have a little patience, I will come to that.
I do not like that.
My right hon. Friend must admit that everything I have stated is accurate. There is not one word which I have said that he can repudiate. I now come to the point he raises. He says, in effect: "I have taken out all the safeguards put in by the Wrenbury and Greene Committees, and I have replaced them with a safeguard of my own, and that is, that you should go to the Court." What happened in Committee? It is my opinion—and it is only a personal opinion—that when this Clause was discussed in Committee, it would have been thrown out by the Committee. I have every reason to believe that my right hon. Friend shared that opinion, because at the end of a long morning's discussion he offered this safeguard, that before capital should be issued at a discount, the company should have to go to the Court. At the end of a long morning's discussion, and after a protest from myself, the other members of the Committee, believing that that was, in fact, a big safeguard, accepted the Clause. Well, it was a big safeguard. I believe that it was so big a safeguard that it practically renders the Clause inoperative and of no value. Why was it that the Wrenbury Committee and the Greene Committee did not recommend it? They had considered the whole thing. Why did they not suggest that the sanction of the Court should be obtained? Obviously they did not suggest it because it was the whole object of the Clause, and of those who wanted the Clause to find a more simple, easier, cheaper and quicker means of reducing capital. When you bring in the safeguard of the Court you might just as well have stayed where you were, and let the companies who want to reduce their capital go to the Court and apply to reduce it in the way they reduce it at the present time without having any bucket shop finance such as is at present incorporated in this Clause. I cannot see that there is any justification for it, or that there is any need for it.
There is only one other thing that I want to say. In Committee the question was raised of the issue of shares of no par value, and it was along these lines that the only argument in favour of this Clause was put up. That is an entirely different proposition. If this House were to argue in favour of the issue of shares of no par value, there would be a great deal to be said in favour of it. Since this Bill was in Committee I have considered the matter and I am not prepared to say I would not vote in favour of it myself. It would mean a change in our customs and it should not be introduced without very careful consideration, for I am certain that in this Bill we ought to pay every attention and care to the customs of our country and its trade and commerce. It has undoubtedly been the case in the past that, however much it may have been abused, as it was, people have used as a measure, if inaccurately, the nominal value at which a share has been issued. When a share is issued at £1, the ordinary public judge it, and it is measured to some extent—inaccurately, I admit, and frequently with perhaps disastrous results—by that standard. When a £1 share has been bought for £4 or £5, they do believe they are buying a share of which the original value was approximately £1, and of which the present value is £5. They ask themselves whether in all the circumstances, and bearing in mind the dividend yield and other important factors, the shares are really worth 500 per cent. premium. When they buy a £1 share at 4s., they also believe in the main that they are acquiring a share at 4s. which originally had a potential value of approximately £1. It may be making an investment of a speculative nature, and they take that into account, and say they are buying for 4s. what has cost somebody else approximately £1.
This Clause, as it is worded will cut across the whole of that, and will remove every safeguard, and nobody in the future, if this becomes customary, will ever know where they are. What is at present an imperfect Measure will have become no Measure at all, and nothing adequate will have been put in its place. I regret very much that I am obliged to say this on the Amendment to the Clause. I say, personally, that if it is pressed to a Division, I shall not go into the Lobby against the Government, quite frankly for two reasons. First of all, I am in this House to support the Government; and, secondly, if I went into the Lobby it would not prevent this Clause being passed, and I should have achieved nothing by it. I hope, all the same, as this is not a political Bill, but purely a Bill in which we are endeavouring to put the company law on a better footing, that I may have put certain arguments to my right hon. Friend which may not have occurred to him before. This is a matter of opinion and I may be mistaken in my opinions, though they are sincere opinions, but my right hon. Friend will agree that after what I have said, unless he believes I am absolutely wrong and that he is safe in putting the Clause in, he is doing it on his own responsibility. I shall not assist him.
I suggest that the decision as to the sanction of the Court being obtained is unwise for several reasons. If the Court has to go into all the financial arrangements and satisfy itself as to the value of shares, it may cause a great deal of trouble in the future. The Court is not supposed to be a financial adviser as to values, and the position in regard to valuation will be entirely superseded. Further, supposing it does not go into the financial arrangements of shares, but merely has to see that the conditions imposed by the Bill are observed, then, I think, it is unnecessary altogether.
When I listened to the speech of the hon. Member for Gravesend (Mr. Albery), it seemed absolutely conclusive until we got to the last sentence. He told us that, rightly or wrongly, the public judged shares by these values. Rightly or wrongly, the public outside judged the value of opinions by whether a Member votes for them in the Lobby or not. Those little words at the end of his speech were issued at a discount, for he discounted the whole value of his opinions when he said that, though he felt so strongly about it, he would not oppose the Government because he had been sent here to support them.
I said it was no use.
The hon. Member does not see the lack of moral force in anybody's opinion if he is not prepared to vote for it. Does the hon. Gentleman not see that when he says from his great experience of business that a thing is utterly wrong, and yet does not feel strongly enough to vote against it, he has taken away from his argument the whole of its moral force? We are going to vote against this very largely for the reasons set out. I do want to remind the House that all through these long Debates in Committee the President of the Board of Trade grasped the Greene Report to his bosom, and used it as an absolute line of conduct. However much he might argue that certain portions of the report were ineffective, he took it as an absolute answer to every question if he told us to look at the Greene Report. He said, "That was not the evidence taken before them.' When it was pointed out that the Greene Committee had not dealt adequately with the evidence in regard to all the frauds for which the Companies Act gave an opportunity, the Minister did not discuss that but merely said, "The Greene Committee saw all the evidence and weighed everything. They did not recommend it, and therefore I ask the House to pass this."
When we come to the Greene Report, it is perfectly definite. They begin by saying—some of them—that they regard with the very gravest misgiving the issue of shares at a discount at all. The Committee said in paragraph 19 that many of them hesitated about recommending it. Then they said that they were not prepared to dissent on the whole from the findings of the Wrenbury Committee, but that these findings must be strengthened. Those strengthenings were put down in the Clause which we are now proposing to alter. The Wren-bury Committee, first of all, laid it down that there should be a statutory limit of the discount. The price was not to be lower than 5 per cent. below the market value of similar existing shares if they had a market value, and so on. Then they say it should not be allowed at the beginning or the earlier stages of a company's career. They say: to have some more apposite reasons for abandoning these two great safeguards that were proposed by the Greene Committee. It is no answer to say that some hon. Members behind him, for some reasons not specified, have asked him to do more. We have a right to ask that some responsible member of the Government shall explain why the Greene and. the Wrenbury reports are to be thrown overboard, and why this enormous concession is to be made to some unspecified demands on the part of some unnamed persons.
When the Bill was in Committee I had the honour of moving that this Clause be deleted from the Bill, and I was supported by many of my hon. Friends. Our arguments carried conviction to a considerable number of the Committee, and but for the fact that the hon. Member for East Ham, North (Miss Lawrence) and the hon. Member for Hillsborough (Mr. A. V. Alexander) voted in favour of the Clause, we should have defeated it. In Committee, the hon. Members opposite thought that the Clause was all right, but apparently in the House they think that it is all wrong.
The Clause, as put down originally, incorporated the safeguards suggested by the Greene Committee and the Wrenbury Committee, but the new Clause now throws over the five years' limitation and the discount of shares.
The hon. Member was against the Clause until the President of the Board of Trade announced that he was prepared to accept a proposal that shares should not be issued at a discount, without the sanction of the Court. Then, she and the hon. Member for Hillsborough accepted what they called a compromise, and in accepting that compromise they would not support me in voting for the rejection of the Clause. My view, and the view of the Committee, was that a permit to issue shares at a discount, at the will and pleasure of the company, was a most dangerous thing, that it would undermine the whole foundation of our company law and open the door to all sorts of frauds. I think the Committee were unanimous upon that point. I would have preferred to have seen the Clause omitted, but when the President of the Board of Trade offered us the terms that the issuing of shares at a discount should not be permitted except with the sanction of the Court, some Members of the Committee, and I was one of the number, thought that that safeguard, in substitution for all the illusory safeguards suggested by the Wrenbury and the Greene Committees, might be safely accepted, because we thought that the proposal with that safeguard in it would prove abortive, and that no company would ever apply to the Court for sanction to issue shares at a discount. There may be some cases in which a company may apply and might obtain sanction.
If the President of the Board of Trade thinks that it is worth while to keep the Clause in the Bill, I am prepared to support him; but I would point out that the hon. Member for East Ham, North, and the hon. Member for Hillsborough have been converted in the interval against the Clause, the hon. Member for Cambridge University (Mr. Withers) is discontented with the Clause because it requires the consent of the Court, and my hon. Friend the Member for Gravesend (Mr. Albery) is discontented with the Clause, and I would suggest to the right hon. Gentleman that possibly he would please everybody by withdrawing the Clause. He certainly would not displease me, but if he persists in keeping the Clause I shall give it my support.
I should like to emphasise the point made by the hon. Member for Cambridge University with regard to the sanction of the Court. I am most concerned that we should not put duties upon Courts of Law without defining what those duties are. We have had attempts made in this House before to give a sort of uncertain responsibility to the Courts. I want to know exactly what it is that the Court is required to do under this Clause. It says: ( a ) to ( d ), because unless those conditions are satisfied the whole thing is unlawful in any event. We would like to know what are "the circumstances of the case" which the Court has to consider. What sort of evidence is the Court to require in order to decide whether it shall or shall not sanction an application? When you are dealing with the question of consent in regard, say, to the reduction of capital it is "aye" or "nay" and it is a question of whether the consent has been bona-fide obtained, but when it comes to issuing shares at a discount, if the conditions are not satisfied, it is unlawful. There is a disposition on the part of Governments whenever they are in a difficulty to throw the responsibility on an unfortunate Judge, without telling him what he is to do, how he is to consider the matter and how the circumstances are to affect him, without giving him any guidance at all. This is an extraordinary example of the vice of this kind of legislation, which is covered by some such smooth phrase as "having regard to the circumstances of the case," which means absolutely nothing. What are "the circumstances of the case"? The issuing of shares at a discount in certain circumstances is permissible. The Court cannot say: "In any event the issuing of shares at a discount is wrong, and therefore in any event we shall refuse sanction." Indeed the fact that the Court has to decide the matter indicates that there may be circumstances in which they consider shares ought to be issued at a discount.
The question of the conditions which have to be satisfied is not a matter for the Court to decide because they are laid down. I do not understand that the Court has to satisfy itself that the conditions ( a ) to ( d ) exist. Then I ask: What is left to the Court in its discretion to determine? I hope before we pass this Clause we shall be told what the Government have in mind when they say that the Court shall "have regard to all the circumstances of the case." Is it a moral question? Is it a financial question? Have they to consider the credulity or the responsibility of those who are likely to do this? What is the unfortunate Court to do? And if the Court gives a decision, on what grounds can that decision be impeached? If we give a discretion to the Court the Legislature should indicate on what principles that discretion should be exercised. I think the Clause is utterly defective and I agree with the hon. Member for Cambridge University (Mr. Withers) who has such immense experience in these matters, that the Clause as at present drafted can only be productive of misunderstanding.
The hon. and learned Member for South-East Leeds (Sir H. Slesser) has directed his remarks to one phrase in the Clause. With a simplicity that is almost touching in the inexperience of the Judges of the High Court he expresses great doubt as to whether they would really be able to address their minds to the proper questions unless they receive much more explicit directions as to the circumstances in which it is possible to allow powers of this kind to be used. The hon. and learned Member is always under the impression that the Judges of the High Court agree with his statement of the law. He comes down armed with authority to express the opinion of learned Judges on this subject. No doubt he will produce it. But if he will look at Sections 46 and 50 of the principal Act he will find that the Judges are charged with the duty of considering whether a reduction of capital shall be allowed, and Section 60 uses the expression "if satisfied," without pointing out, as you would in a child's guide, the matters which they must entertain before they arrive at a judicial decision upon the questions laid before them. I should have thought that the words were very plain indeed even for learned Judges, who are so simple as the hon. and learned Member suggests.
The law says that the Judges are to consider "all the circumstances of the case." What are the circumstances of the case? If I understand the English language, it means everything that is material to the proposal that is made before the Judges for their approval. I do not know what better words could be used to show that learned Judges are to consider everything which they consider relevant. The hon. and learned Member must realise that, and appreciate the fact that Judges have been trained in these matters and understand what subjects are relevant and important just as they did in connection with a reduction of capital. We have not experienced any difficulties in obtaining satisfactory decisions from the Judges under the Companies Act as to the circumstances in which capital should be allowed to be reduced, in spite of the fact that we have not set up any long list of circumstances which they are to consider. I really think the hon. and learned Member, in his anxiety to discover some criticism of this Clause, has fastened upon a phrase which, with a little more careful consideration, he would realise is the best that could be used to say that the Judges are to entertain everything that may he relevant to the proposal put before them, and, when they have reviewed all the evidence which they think is necessary to satisfy them, they are to have the power to make the order for which application is made. That being the, case, and learned Judges being men of great experience in these matters, I think the criticism of the hon. and learned Member is quite unfounded.
I tremble at the idea of thrusting into a conflict between two great lawyers across the Floor of the House, but speaking as a plain man and as a plain Member of this House, it seems to me that the Attorney-General has failed entirely to reply to the arguments of the hon. and learned Member for South-East Leeds (Sir H. Slesser). He has told us that Judges are much wiser than we are, that they can make up their minds as to what this Clause means, although we cannot. He adduced the fact that Judges are already required to decide on precisely this point—all the circumstances of the case—when the capital of a company is reconstructed. In that case they have before them definite things upon which to decide. Has the company lost its capital? Are the assets worth less than they stand in the hooks? In that case the Judges have plain facts before them and can decide perfectly, as we could in a matter of fact case of that sort.
This is a case which has nothing whatever to do with the question as to whether a company has lost its capital; it is a question whether the directors think it desirable to issue shares at a discount. I really want to know from some other lawyers in this House whether this is a safeguard which will prevent any shares being ever issued at a discount, as the hon. and learned Member for Londonderry (Sir M. Macnaghten) has said, because the Court will always refuse it, or whether it is, as the hon. Member for Cambridge University (Mr. Withers) said, a safeguard which will stop no company. It is obvious on the face of the Clause that every company which applies to the Court for permission to issue shares at a discount, the Court having no guide at all, will automatically get permission to issue these shares and, therefore, this safeguard is really of little value. The hon. and learned Member for Londonderry chaffed His Majesty's Opposition with being influenced by the eloquence of the President of the Board of Trade in the Committee stage. I can appear in a white sheet in this matter—I did not hear it; and I can also aver that there have been few Clauses in this Bill on which I have received more instruction from the hon. and learned Member than I have on this particular Clause and few Clauses upon which I have found it so difficult to come to a decision. Therefore, I was wisely absent from the Division.
There are two patent facts in connection with this matter. Originally the Clause was opposed by the hon. and learned Member for Londonderry, but the President of the Board of Trade persuaded us to put in this additional safeguard, which we were told would be sufficient, that after a company had come to a decision to issue shares there should be an appeal to a Court of Law. There being no lawyer on the Committee we did not tumble to the fact that there was nothing upon which to appeal to the Judges; that there was no question to put before the Judges. Now, as soon as we had the advantage of a few lawyers we see that this safeguard is utterly illusory. In the original proposal it was a question of issuing the hares at more than a certain discount; but that has gone. Now it is not a question of issuing shares at a discount but whether they shall issue shares of no par value. If you ask Judges whether a company shall issue shares of no par value at all the only thing they can do is to ask, "Have you a resolution of the shareholders carrying out the conditions (A) to (D) in the Clause;" and if they have, the Judges can make no other answer than to say, "Having considered all the circumstances, that is to say, that the company has carried out all the conditions specified in the Bill, we must authorise the company to issue shares of no par value or at a discount." It seems to me that the Clause now going into the Bill is, from the point of view of the hon. and learned Member for Londonderry, far worse than the Clause originally in the Bill.
I am not surprised that there has been a long discussion on this Clause. We had a very long discussion on it in Committee. The President of the Board of Trade tells us that he hopes he has met the whole of our disagreements by the middle course that he is taking. I can assure him and the hon. and learned Member for Londonderry (Sir M. Macnaghten) that he has pleased no one, and I hope that even at this late hour he will see his way to withdraw the Clause altogether. I listened to my hon. Friend the Member for Gravesend (Mr. Albery), who as a business man made a thoroughly practical speech. I was very sorry to hear his last phrases. I am here to do my duty and vote exactly as I think my conscience tells me. I am not going to say which way I shall vote now, but if hon. Members wait and see I hope to give an opportunity for the President of the Board of Trade to take the course which has been so ably suggested by the hon. and learned Member for Londonderry. This issue of shares at a discount is wholly repugnant to City finance. We look upon issuing shares at a discount as a thing that can be abused in every possible way. There are, I know, safeguards in these Clauses, but whether they are going to raise the status of companies or not, I am not prepared to say. I should think that the status of British companies will be lowered rather than raised by Clauses of this sort, providing that they may now issue shares at a discount. This subject has been discussed by two Committees and by a Standing Committee upstairs and no real decision has been reached. Now the President of the Board of Trade tells us that he is taking a middle course. I hope he will take the advice given him to-night and withdraw the Clause altogether.
The discussion has been interesting, if only because the hon. and learned Member for Londonderry (Sir M. Macnaghten) was pleased to have a little tilt at the attitude of myself and the hon. Member for East Ham North (Miss Lawrence) in Committee upstairs. I want to explain our position. If the hon. and learned Member will refer to the OFFICIAL REPORT he will find that at the end of the Debate, after I had interrupted the hon. and gallant Member for Everton (Colonel Woodcock), I said this:
"I had no intention whatever of hurting the feelings of the hon. and gallant Member for Everton. I thought he had suggested a compromise which met with the approval of the President of the Board of Trade. One or two members of the Committee seem to be a little doubtful as to what effect of the compromise would be."
We had only heard it spoken of verbally, and I said:
"It looks like a reasonable compromise and if any objection is taken to it there surely would be time between now and Report stage to consider whether any further Amendment would be necessary."—[OFFICIAL REPORT, Standing Committee B, 24th April, 1928; col. 448.]
Having made that quite plain statement in Committee, it does not lie with the hon. and learned Member for Londonderry to tell us that we have changed our minds. As a matter of fact, we wanted to get that particular discussion finished because it was getting rather late. We were astounded when we saw to-day that the President of the Board of Trade had placed this Amendment on the Paper, having regard to what was in the Clause when the Bill left Committee, for the safeguard with regard to the discount is to be left out entirely by the Amendment
now on the Paper; the President is to leave out entirely Sub-section (4) of the Clause as it left the Standing Committee. I agree with what has been said by the hon. and learned Member as to the effect of including the words in the Clause, if one could be assured that certain Judges were going to operate in the Courts. It would be invidious for me to name too closely certain Judges, but I cannot help thinking of the eloquence of a Judge before one of the learned Committees. I think he has had experience of Chancery, and he said that if there was really a commercial demand companies should be permitted to issue shares at a discount, and that in one or two cases some good had been done, even when the value of shares issued at a discount had been as low as 2s. 6d. for £1, but he did not think it would happen except in cases such as copper, gold mining, tin and similar concerns. I can well imagine that if that particular Judge were to hear a case submitted to him under this Bill, he might give very favourable consideration to an application for the issue of shares at a discount and would not take the view which the hon. and learned Member for Londonderry seemed to think might be taken. Having regard to all the light thrown on the matter since it has left Committee, and in view of the statement quite clearly put to the Committee by the hon. Member for Gravesend (Mr. Albery), added to the sum of knowledge which we received in Committee from the hon. and learned Member for Londonderry, I think it is quite clear now that our duty must be to vote for the deletion of the Clause.
Question put, "That the words proposed to be left out, to the word 'and' in line 17, stand part of the Bill."
The House divided: Ayes, 120; Noes, 232.
Division No. 332.] AYES. [10.5 p.m. Adamson, Rt. Hon. W. (Fife, West) Bromley, J. Gardner, J. P. Adamson, W. M. (Staff., Cannock) Brown, James (Ayr and Bute) Gibbins, Joseph Alexander, A. V. (Sheffield, Hillsbro') Buxton, Rt. Hon. Noel Gillett, George M. Ammon, Charles George Cape, Thomas Gosling, Harry Attlee, Clement Richard Cluse, W. S. Graham, D. M. (Lanark, Hamilton) Baker, J. (Wolverhampton, Bilston) Clynes, Rt. Hon. John R. Graham, Rt. Hon. Wm. (Edin., Cent.) Baker, Walter Connolly, M. Greenall, T. Barker, G. (Monmouth, Abertillery) Cove, W. G. Greenwood, A. (Nelson and Coine) Barnes, A. Dalton, Hugh Grenfell, D. R. (Glamorgan) Barr, J. Davies, Rhys John (Westhoughton) Griffiths, T. (Monmouth, Pontypool) Batey, Joseph Day, Harry Groves, T. Bowerman, Rt. Hon. Charles W. Dennison, R. Grundy, T. W. Broad, F. A. Duncan, C. Hall, F. (York, W. R., Normanton) Bromfield, William Dunnico, H. Hall, G. H. (Merthyr Tydvil) Hayday, Arthur Mitchell, E. Rosslyn (Paisley) Snowden, Rt. Hon. Philip Hayes, John Henry Montague, Frederick Stamford, T. W. Henderson, Right Hon. A. (Burnley) Morrison, R. C. (Tottenham, N.) Stewart, J. (St. Rollox) Hirst, G. H Murnin, H. Sullivan, Joseph Hirst, W. (Bradford, South) Naylor, T. E. Sutton, J. E. Hudson, J. H. (Huddersfield) Oliver, George Harold Thorne, W. (West Ham, Plaistow) Jenkins, W. (Glamorgan, Neath) Palin, John Henry Thurtle, Ernest John, William (Rhondda, West) Parkinson, John Allen (Wigan) Tinker, John Joseph Johnston, Thomas (Dundee) Potts, John S. Townend, A. E. Jones, J. J. (West Ham, Silvertown) Richardson, R. (Houghton-le-Spring) Varley, Frank B. Jones, Morgan (Caerphilly) Riley, Ben Viant, S. P. Jones, T. I. Mardy (Pontypridd) Roberts, Rt. Hon. F. O. (W. Bromwich) Waddington, R. Kelly, W. T. Robinson, W. C. (Yorks, W. R., Elland) Walsh, Rt, Hon. Stephen Kennedy, T. Salter, Dr. Alfred Watson, W. M. (Dunfermline) Kenworthy, Lt.-Com. Hon. Joseph M. Scurr, John Wedgwood, Rt. Hon. Josiah Kirkwood, D. Sexton, James Wellock, Wilfred Lawrence, Susan Shaw, Rt. Hon. Thomas (Preston) Westwood, J. Lawson, John James Shepherd, Arthur Lewis Williams, David (Swansea, East) Lee, F. Shiels, Dr. Drummond Williams, T. (York, Don Valley) Lindley, F. W. Shinwell, E. Wilson, C. H. (Sheffield, Attercliffe) Longbottom, A. W. Short, Alfred (Wednesbury) Wilson, R. J. (Jarrow) Lowth, T. Sitch, Charles H. Woodcock, Colonel H. C. Lunn, William Siesser, Sir Henry H. Wright, W. MacDonald, Rt. Hon. J. R. (Aberavon) Smillie, Robert Young, Robert (Lancaster, Newton) Mackinder, W. Smith, Ben (Bermondsey, Rotherhithe) Maclean, Neil (Glasgow, Govan) Smith, Rennie (Penistone) TELLERS FOR THE AYES.— Malone, C. L'Estrange (N'thampton) Snell, Harry Mr. Charles Edwards and Mr. Whiteley.
NOES. Agg-Gardner, Rt. Hon. Sir James T. Cowan, D. M. (Scottish Universities) Hills, Major John Waller Ainsworth, Lieut.-Col. Charles Cowan, Sir Wm. Henry (Islington, N.) Hilton, Cecil Alexander, E. E. (Leyton) Craig, Sir Ernest (Chester, Crewe) Hope, Capt. A. O. J. (Warw'k, Nun.) Alexander, Sir Wm. (Glasgow, Cent'l) Crawfurd, H. E Hope, Sir Harry (Forfar) Applin, Colonel R. V. K. Crooke, J. Smedley (Deritend) Hopkins, J. W. W. Apsley, Lord Crookshank, Col. C. de W. (Berwick) Hopkinson, A. (Lancaster, Mossley) Astbury, Lieut.-Commander F. W. Crookshank, Cpt. H. (Lindsey, Gainsbro) Hore-Belisha, Leslie Atholl, Duchess of Davidson, Major-General Sir J. H. Hudson, Capt. A. U. M. (Hackney, N.) Atkinson, C. Davies, Ellis (Denbigh, Denbigh) Hume, Sir G. H. Balfour, George (Hampstead) Dawson, Sir Philip Hunter-Weston, Lt.-Gen. Sir Aylmer Balniel, Lord Dean, Arthur Wellesley Hurd, Percy A. Barclay-Harvey, C. M. Drewe, C. Hutchison, Sir Robert (Montrose) Barnett, Major Sir Richard Eden, Captain Anthony Inskip, Sir Thomas Walker H. Bellairs, Commander Carlyon Edmondson, Major A. J. Iveagh, Countess of Bennett, A. J. Ellis, R. G. Jackson, Sir H. (Wandsworth, Cen'l) Bevan, S. J. Evans, Capt. Ernest (Welsh Univer.) James, Lieut.-Colonel Hon. Cuthbert Birchall, Major J. Dearman Everard, W. Lindsay Jephcott, A. R. Bird, Sir R. B. (Wolverhampton, W.) Fairfax, Captain J. G. Kennedy, A. R. (Preston) Boothby, R. J. G. Falle, Sir Bertram G. King, Commodore Henry Douglas Bowater, Col. Sir T. Vansittart Falls, Sir Charles F. Lamb, J. O. Bowyer, Captain G. E. W. Fermoy, Lord Lane Fox, Col. Rt. Hon. George R. Braithwaite, Major A. N. Foster, Sir Harry S. Lister, Cunliffe, Rt. Hon. Sir Philip Brass, Captain W. Frece, Sir Walter de Little, Dr. E. Graham Brassey, Sir Leonard Fremantle, Lt.-Col. Francis E. Lloyd, Cyril E. (Dudley) Briggs, J. Harold Gadle, Lieut.-Col. Anthony Locker-Lampson, Rt. Hon. Godfrey Briscoe, Richard George Canzonl, Sir John Long, Major Eric Brittain, Sir Harry Garro-Jones, Captain G. M. Looker, Herbert William Brocklebank, C. E. R. Gates, Percy Lougher, Lewis Brooke, Brigadier-General C. R I. Gilmour, Lt.-Col. Rt. Hon. Sir John Luce, Maj.-Gen. Sir Richard Harman Broun-Lindsay, Major H. Goff, Sir Park Lumley, L. R. Brown, Col. D. C. (N'th'l'd., Hexham) Grant, Sir J. A. Lynn, Sir R. J. Brown, Brig.-Gen. H.C.(Berks, Newby) Grattan-Doyle, Sir N. MacAndrew, Major Charles Glen Brown, Ernest (Leith) Greaves-Lord, Sir Walter Macdonald, Capt. P. D. (I. of W.) Buchan, John Greene, W. P. Crawford Macdonald, R. (Glasgow, Cathcart) Burman, J. B. Grenfell, Edward C. (City of London) McLean, Major A. Burton, Colonel H. W. Griffith, F. Kingsley Macmillan, Captain H. Butler, Sir Geoffrey Grotrian, H. Brent Macnaghten, Hon. Sir Malcolm Butt, Sir Alfred Guinness, Rt. Hon. Walter E. MacRobert, Alexander M. Cadogan, Major Hon. Edward Gunston, Captain D. W. Marriott, Sir J. A. R. Campbell, E. T. Hacking, Douglas H. Mason, Colonel Glyn K. Carver, Major W. H. Hamilton, Sir George Mitchell, S. (Lanark, Lanark) Cassels, J. D. Hammersley, S. S. Mitchell, Sir W. Lane (Streatham) Cayzer, Maj. Sir Herbt. R. (Prtsmth. S.) Hannon, Patrick Joseph Henry Moles, Rt. Hon. Thomas Cecil, Rt. Hon. Sir Evelyn (Aston) Harland, A. Moore, Sir Newton J. Chadwick, Sir Robert Burton Harrison, G. J. C. Morrison, H. (Wilts, Salisbury) Chapman, Sir S. Harvey, G. (Lambeth, Kennington) Morrison-Bell, Sir Arthur Clive Charteris, Brigadier-General J. Haslam, Henry C. Nall, Colonel Sir Joseph Christie, J. A. Headlam, Lieut.-Colonel C. M. Nelson, Sir Frank Cochrane, Commander Hon. A. D. Henderson, Capt. R. R. (Oxf'd, Henley) Neville, Sir Reginald J. Cohen, Major J. Brunel Henderson, Lieut.-Col. Sir Vivian Nicholson. O. (Westminster) Colfox, Major Wm. Phillips Heneage, Lieut.-Colonel Arthur P. Nuttall, Ellis Cope, Major Sir William Henn, Sir Sydney H. O'Neill, Major Rt. Hon. Hugh Courtauld, Major J. S. Hennessy, Major Sir G. R. J. Ormsby-Gore, Rt. Hon. William Owen, Major G. Sassoon, Sir Philip Albert Gustave D. Warner, Brigadier-General W. W. Penny, Frederick George Savery, S. S. Warrender, Sir Victor Percy, Lord Eustace (Hastings) Shepperson, E. W. Waterhouse, Captain Charles Perkins, Colonel E. K. Skelton, A. N. Watson, Rt. Hon. W. (Carlisle) Pete, G. (Somerset, Frome) Slaney, Major P Kenyon Watts, Sir Thomas Philipson, Mabel Smith, Louis W. (Sheffield, Hallam) Wayland, Sir William A. Pownall, Sir Assheton Smith-Carington, Neville W. Wells, S. R. Preston, William Smithers, Waldron Wiggins, William Martin Price, Major C. W. M. Southby, Commander A. R. J. Williams, A. M. (Cornwall, Northern) Radford, E. A. Sprot, Sir Alexander Williams, Com. C. (Devon, Torquay) Raine, Sir Walter Stanley, Lieut.-Colonel Rt. Hon. G. F. Williams, C. P. (Denbigh, Wrexham) Ramsden, E. Stanley, Hon. O. F. G. (Westm'eland) Williams, Herbert G. (Reading) Reid, D. D. (County Down) Storry-Deans, R. Wilson, Sir C. H. (Leeds, Central) Rhys, Hon. C. A. U. Strauss, E. A. Wilson, R. R. (Stafford, Lichfield) Richardson, Sir P. W. (Sur'y, Ch'ts'y) Streatfeild, Captain S. R. Windsor-Clive, Lieut.-Colonel George Roberts, Sir Samuel (Hereford) Sueter, Rear-Admiral Murray Fraser Withers, John James Ropner, Major L. Sugden, Sir Wilfrid Womersley, W. J. Ruggles-Brise, Lieut.-Colonel E. A. Templeton, W. P. Wood, E. (Chest'r, Stalyb'dge & Hyde) Runciman, Rt. Hon. Walter Thom, Lt.-Col. J. G. (Dumbarton) Wood, Rt. Hon. Sir Kingsley Russell, Alexander West (Tynemouth) Thomas, Sir Robert John (Anglesey) Yerburgh, Major Robert D. T. Salmon. Major I. Thompson, Luke (Sunderland) Young, Rt. Hon. Hilton (Norwich) Samuel, A. M. (Surrey, Farnham) Titchfield, Major the Marquess of Sandeman, N. Stewart Tomlinson, R. P. TELLERS FOR THE NOES.— Sanders, Sir Robert A. Tryon, Rt. Hon. George Clement Sanderson, Sir Frank Wallace, Captain D. E. Captain Viscount Curzon and Captain Marge Sandon, Lord Ward, Lt.-Col. A. L.(Kingston-on-Hull)
Remaining words left out.
Question proposed, "That the proposed words be there inserted in the Bill."
Amendments made to the proposed Amendment:
In line 1, leave out the word "any."
In line 2, after the word "company," insert the words "of a class already issued."—[ Mr. Albery. ]
Questions put, "That the proposed words, as amended, be there inserted in the Bill."
The House divided: Ayes, 224; Noes 135.
Division No. 333] AYES. [10.15 p.m. Agg-Gardner, Rt. Hon. Sir James T. Campbell, E. T. Grant, Sir J. A. Ainsworth, Lieut.-Col. Charles Carver, Major W. H. Grattan-Doyle, Sir N. Albery, Irving James Cassels, J. D. Greaves-Lord, Sir Walter Alexander, E. E. (Leyton) Cayzer, Maj. Sir Herbt. R. (Prtsmth. C.) Greene, W. P. Crawford Alexander, Sir Wm. (Glasgow, Cent'l) Cecil, Rt. Hon. Sir Evelyn (Aston) Grenfell, Edward C. (City of London) Allen, Sir J. Sandeman Chadwick, Sir Robert Burton Grotrian, H. Brent Applin, Colonel R. V. K. Chapman, Sir S. Guinness, Rt. Hon. Walter E. Apsley, Lord Charteris, Brigadier-General J. Gunston, Captain D. W. Astbury, Lieut.-Commander F. W. Christie, J. A. Hacking, Douglas H. Athol, Duchess of Cochrane, Commander Hon. A. D. Hamilton, Sir George Atkinson, C. Cohen, Major J. Brunel Hammersley, S. S. Balfour, George (Hampstead) Colfox, Major Wm. Phillips Hannon, Patrick Joseph Henry Balniel, Lord Cope, Major Sir William Harland, A. Barclay-Harvey, C. M. couper, J. B. Harrison, G. J. C. Barnett, Major Sir Richard Cowan, Sir Wm. Henry (Islington. N.) Hartington, Marquess of Bellairs, Commander Carlyon Craig, Sir Ernest (Chester, Crewe) Harvey, G. (Lambeth, Kennington) Benn, Sir A. S. (Plymouth, Drake) Crooke, J. Smedley (Deritend) Haslam, Henry C. Bennett, A. J. Crookshank, Col. C. de W. (Berwick) Headlam, Lieut.-Colonel C. M. Bevan, S. J. Crookshank, Cpt. H. (Lindsey, Gainsbro) Henderson, Capt. R. R. (Oxf'd, Henley) Birchen, Major J. Dearman Curzon, Captain Viscount Henderson, Lieut.-Col. Sir Vivian Bird. Sir R B. (Wolverhampton. W.) Davidson, Major-General Sir John H. Heneage, Lieut.-Colonel Arthur P. Bourne, Captain Robert Croft Davies, Maj. Geo. F. (Somerset, Yeovil) Henn, Sir Sydney H. Bowater, Col. Sir T. vansittart Dawson, Sir Philip Hennessy, Major Sir G. R. J. Bowyer, Capt. G. E. W. Dean, Arthur Wellesley Hills, Major John Wailer Braithwaite, Major A. N. Drewe, C. Hilton, Cecil Brass, Captain W. Eden, Captain Anthony Hope, Sir Harry (Forfar) Brassey, Sir Leonard Edmondson, Major A. J. Hopkins, J. W. W. Briggs, J. Harold Ellis, R. G. Hopkinson, A. (Lancaster, Mossley) Briscoe, Richard George Everard, W. Lindsay Hudson, Capt. A. U. M. (Hackney, N.) Brittain, Sir Harry Fairfax, Capain J. G. Hume, Sir G. H. Brocklebank, C. E. R. Falle, Sir Bertram G. Hunter-Weston, Lt.-Gen. Sir Aylmer Brooke, Brigadier-General C. R. I. Falls, Sir Charles F. Hurd, Percy A. Broun-Lindsay, Major H. Fermoy, Lord inskip, Sir Thomas Walker H. Brown, Col. D. C. (N'th'l'd., Hexham) Frece, Sir Walter de Iveagh, Countess of Brown, Brig.-Gen. H. c. (Berks, Newb'y) Fremantle, Lieut -Colonel Francis E. Jackson, Sir H. (Wandsworth, Cen'l) Buchan, John Gadie, Lieut.-Col. Anthony James, Lieut.-Colonel Hon. Cuthbert Burman, J. B. Ganzonl, Sir John Jephcott, A. R. Burton, Colonel H. W. Gates, Percy Kennedy, A. R. (Preston) Butler, Sir Geoffrey Gilmour, Lt.-Col. Rt. Hon. Sir John King, Commodore Henry Douglas Butt, Sir Alfred Goff Sir Park Lamb, J. Q. Cadogan, Major Hon. Edward Graham, Fergus (Cumberland, N.) Lane Fox, Col. Rt. Hon. George R. Lister, Cunliffe, Rt. Hon. Sir Philip Peto, G. (Somerset, Frome) Storry-Deans, R. Little, Dr. E. Graham Philipson, Mabel Streatfeild, Captain S. R. Lloyd, Cyril E. (Dudley) Pownall, Sir Assheton Sueter, Rear-Admiral Murray Fraser Locker-Lampoon, Rt. Hon. Godfrey Preston, William Sugden, Sir Wilfrid Long, Major Eric Price, Major C. W. M. Templeton, W. P. Looker, Herbert William Radford, E. A. Thom, Lt.-Col. J. G. (Dumbarton) Lougher, Lewis Raine, Sir Walter Thompson, Luke (Sunderland) Luce, Maj.-Gen. Sir Richard Harman Ramsden, E. Tinne, J. A. Lumley, L. R. Reid, D D. (County Down) Titchfield, Major the Marquess of Lynn, Sir R. J. Rentoul, G. S. Tryon, Rt. Hon. George Clement MacAndrew, Major Charles Glen Rhys, Hon. C. A. U. Wallace, Captain D. E. Macdonald, Capt. P. D. (I. of W.) Richardson, Sir P. W. (Sur'y, Ch'ts'y) Ward, Lt.-Col. A. L. (Kingston-on-Hull) MacDonald, R. (Glasgow, Cathcart) Roberts, Sir Samuel (Hereford) Warner, Brigadier-General W. W McLean, Major A. Ropner, Major L. Waterhouse, Captain Charles Macnaghten, Hon. Sir Malcolm Ruggles-Brise, Lieut.-Colonel E. A. Watson, Rt. Hon. W. (Carlisle) MacRobert, Alexander M. Russell, Alexander West (Tynemouth) Watts, Sir Thomas Marriott, Sir J. A. R. Salmon, Major I. Wayland, Sir William A. Mason, Colonel Glyn K. Samuel, A. M. (Surrey, Farnham) Wells, S. R. Merriman, Sir F. Boyd Sandeman, N. Stewart Williams, A. M. (Cornwall, Northern) Mitchell, S. (Lanark, Lanark) Sanders, Sir Robert A. Williams, Com. C. (Devon, Torquay) Mitchell, Sir W. Lane (Streatham) Sanderson, Sir Frank Williams, Herbert G. (Reading) Moles, Rt. Hon. Thomas Sandon, Lord Wilson, Sir C. H. (Leeds, Central) Moore, Sir Newton J. Sassoon, Sir Philip Albert Gustave D. Wilson, R. R. (Stafford, Lichfield) Morrison, H. (Wilts, Salisbury) Savery, S. S. Windsor-Clive, Lieut.-Colonel George Morrison-Bell, Sir Arthur Clive Sheffield, Sir Berkeley Withers, John James Nelson, Sir Frank Shepperson, E. W. Wolmer, Viscount Neville, Sir Reginald J. Skelton, A. N. Womersley, W. J. Newman, Sir R. H. S. D. L. (Exeter) Slaney, Major P. Kenyon Wood, E. (Chest'r, Stalyb'ge & Hyde) Nicholson, O. (Westminster) Smith, Louis W. (Sheffield, Hallam) Wood, Rt. Hon. Sir Kingsley Nuttall, Ellis Smith-Carington, Neville W. Yerburgh, Major Robert D. T. O'Neill, Major Rt. Hon. Hugh Smithers, Waldron Young, Rt. Hon. Sir Hilton (Norwich) Ormsby-Gore, Rt. Hon. William Southby, Commander A. R. J. Penny, Frederick George Sprot, Sir Alexander TELLERS FOR THE AYES.— Percy, Lord Eustace (Hastings) Stanley, Lieut.-Colonel Rt. Hon. G. F. Perkins, Colonel E. K. Stanley, Hon. O. F. G. (Westm'eland) Captain Margesson and Sir Victor Warrender
NOES. Adamson, Rt. Hon. W. (Fife, West) Grundy, T. W. Robinson, W. C. (Yorks, W. R., Elland) Adamson, W. M. (Staff., Cannock) Hall, F. (York, W. R., Normanton) Runciman, Rt. Hon. Walter Alexander, A. V. (Sheffield, Hillsbro') Hall, G. H. (Merthyr Tydvil) Salter, Dr. Alfred Ammon, Charles George Hardle, George D. Scurr, John Attlee, Clement Richard Hayday, Arthur Sexton, James Baker, J. (Wolverhampton, Bilston) Hayes, John Henry Shaw, Rt. Hon. Thomas (Preston) Baker, Walter Henderson, Rt. Hon. A. (Burnley) Shepherd, Arthur Lewis Barker, G. (Monmouth, Abertillery) Hirst, G. H. Shiels, Dr. Drummond Barnes, A. Hirst, W. (Bradford, South) Shinwell, E. Barr, J. Hore-Belisha, Leslie Short, Alfred (Wednesbury) Batey, Joseph Hudson, J. H. (Huddersfield) Sitch, Charles H. Bowerman, Rt. Hon. Charles W. Hutchison, Sir Robert (Montrose) Siesser, Sir Henry H. Broad, F. A. Jenkins, W. (Glamorgan, Heath) Smillie, Robert Bromfield, William John, William (Rhondda, West) Smith, Ben (Bermondsey, Rotherhithe) Bromley, J. Johnston, Thomas (Dundee) Smith, Rennie (Penistone) Brown, Ernest (Leith) Jones, J. J. (West Ham, Silvertown) Snell, Harry Brown, James (Ayr and Bute) Jones, Morgan (Caerphilly) Snowden, Rt. Hon. Philip Buxton, Rt. Hon. Noel Jones, T. I. Mardy (Pontypridd) Stamford, T. W. Cape, Thomas Kelly, W. T. Stewart, J. (St. Rollox) Cluse, W. S. Kennedy, T. Strauss, E. A. Clynes, Rt. Hon. John R. Kirkwood, D. Sullivan, J. Connolly, M. Lawrence, Susan Sutton, J. E. Cove, W. G. Lawson, John James Thorne, W. (West Ham, Plalstow) Cowan, D. M. (Scottish Universities) Lee, F. Thurtle, Ernest Crawfurd, H. E. Lindley, F. W. Tinker, John Joseph Dalton, Hugh Longbottom, A. W. Tomlinson, R. P. Davies, Ellis (Denbigh, Denbigh) Lowth, T. Townend, A. E. Davies, Rhys John (Westhoughton) Lunn, William Varley, Frank B. Day, Harry MacDonald, Rt. Hon. J. R. (Aberavon) Viant, S. P. Dennison, R. Mackinder, W. Walsh, Rt. Hon. Stephen Duncan, C. Maclean, Neil (Glasgow, Govan) Watson, W. M. (Dunfermline) Dunnico, H. Malone, C. L'Estrange (N'thampton) Wedgwood, Rt. Hon. Josiah Evans, Capt. Ernest (Welsh Unlver.) Mitchell, E. Rosslyn (Paisley) Wellock, Wilfred Gardner, J. P. Montague, Frederick Westwood, J. Garro-Jones, Captain G. M. Morrison, R. C. (Tottenham, N.) Wiggins, William Martin Gibbins, Joseph Murnin, H. Wilkinson, Ellen C. Gillett, George M. Naylor, T. E. Williams, C. P (Denbigh, Wrexham) Gosling, Harry Oliver, George Harold Williams, David (Swansea, East) Graham, D. M. (Lanark, Hamilton) Owen, Major G. Williams. T. (York, Don Valley) Graham, Rt. Hon. Wm. (Edin., Cent.) Palin, John Henry Wilson, C. H. (Sheffield, Attercliffe) Greenall, T. Parkinson, John Allen (Wigan) Wilson, R. J. (Jarrow) Greenwood, A. (Nelson and Coine) Pethick-Lawrence, F. W. Wright, W. Grenfell, D. R. (Glamorgan) Potts, John S. Young, Robert (Lancaster, Newton) Griffith, F. Kingsley Richardson, R. (Houghton-le-Spring) Griffiths, T. (Monmouth, Pontypool) Riley, Ben TELLERS FOR THE NOES.— Groves, T. Roberts, Rt. Hon. F. O. (W. Bromwich) Mr. Charles Edwards and Mr. Whiteley.
I beg to move, in page 32, line 14, to leave out Sub-section (4).
Do I understand that this is one of the Amendments moved without a general discussion?
With great respect, that is so. I explained to the House why it was that I was substituting the proposals in my former Amend-
ment for the details which originally found their place in the Bill. The House will recollect that the hon. Member for Hillsborough (Mr. A. V. Alexander) replied to me, and he said how much he objected on various grounds.
Question put, "That the words proposed to be left out stand part of the Bill."
The House divided: Ayes, 119; Noes, 242.
Division No. 334.] AYES. [10.25 p.m. Adamson, Rt. Hon. W. (Fife, West) Hall, G. H. (Merthyr Tydvil) Robinson, W. C. (Yorks, W. R., Elland) Adamson, W. M. (Staff., Cannock) Hardie, George D. Salter, Dr. Alfred Alexander, A. V. (Sheffield, Hillsbro') Hayday, Arthur Scurr, John Ammon, Charles George Hayes, John Henry Sexton, James Attlee, Clement Richard Henderson, Rt. Hon. A. (Burnley) Shepherd, Arthur Lewis Baker, J. (Wolverhampton, Bilston) Hirst, G. H. Shiels, Dr. Drummond Baker, Walter Hirst, W. (Bradford, South) Shinwell, E. Barker, G. (Monmouth, Abertillery) Hudson, J. H. (Huddersfield) Short, Alfred (Wednesbury) Barnes, A. Jenkins, W. (Glamorgan, Neath) Sitch, Charles H. Barr, J. John, William (Rhondda, West) Slesser, Sir Henry H. Batey, Joseph Johnston, Thomas (Dundee) Smillie, Robert Bowerman, Rt. Hon. Charles W. Jones, J. J. (West Ham, Silvertown) Smith, Ben (Bermondsey, Rotherhithe) Broad, F. A. Jones, Morgan (Caerphilly) Smith, Rennie (Penistone) Bromfield, William Jones, T. I. Mardy (Pontypridd) Snell, Harry Bromley, J. Kelly, W. T. Snowden, Rt. Hon. Philip Brown, James (Ayr and Bute) Kennedy, T. Stamford, T. W. Buxton, Rt. Hon. Noel Kirkwood, D. Stewart, J. (St. Rollox) Cape, Thomas Lawrence, Susan Sullivan, J. Cluse, W. S. Lawson, John James Sutton, J. E. Clynes, Right Hon. John R. Lee, F. Thorne, W. (West Ham, Plaistow) Connolly, M. Lindley, F. W. Thurtle, Ernest Cove, W. G. Longbottom, A. W. Tinker, John Joseph Dalton, Hugh Lowth, T. Townend, A. E. Davies, Rhys John (Westhoughton) Lunn, William Varley, Frank B. Day, Harry MacDonald, Rt. Hon. J. R. (Aberavon) Viant, S. P. Dennison, R. Mackinder, W. Walsh, Rt. Hon. Stephen Duncan, C. Maclean, Nell (Glasgow, Govan) Watson, W. M. (Dunfermline) Dunnico, H Malone, C. L'Estrange (N'thampton) Wedgwood, Rt. Hon. Josiah Gardner, J. P. Mitchell, E. Rosslyn (Paisley) Wellock, Wilfred Gibbins, Joseph Montague, Frederick Westwood, J. Gillett, George M. Morrison, R. C. (Tottenham, N.) Wilkinson, Ellen C. Gosling, Harry Murnin, H. Williams, David (Swansea, East) Graham, D. M. (Lanark, Hamilton) Naylor, T. E. Williams, T. (York, Don Valley) Graham, Rt. Hon. Wm. (Edin., Cent.) Oliver, George Harold Wilson, C. H. (Sheffield, Attercliffe) Greenall, T. Palin, John Henry Wilson, R. J. (Jarrow) Greenwood, A. (Nelson and Coine) Parkinson, John Allen (Wigan) Wright, W. Grenfell, D. R. (Glamorgan) Pethick-Lawrence, F. W. Young, Robert (Lancaster, Newton) Griffiths, T. (Monmouth, Pontypool) Potts, John S. Groves, T. Richardson, R. (Houghton-le-Spring) TELLERS FOR THE AYES.— Grundy, T. W. Riley, Ben Hall, F. (York, W. R., Normanton) Roberts, Rt. Hon. F. O.(W. Bromwich) Mr. Charles Edwards and Mr. Whiteley.
NOES. Agg-Gardner, Rt. Hon. Sir James T. Birchall, Major J. Dearman Burman, J. B Ainsworth, Lieut.-Col. Charles Bird, Sir R. B. (Wolverhampton, W.) Burton, Colonel H. W. Albery, Irving James Boothby, R. J. G. Butler, Sir Geoffrey Alexander, E. E. (Leyton) Bourne, Captain Robert Croft Butt, Sir Alfred Alexander, Sir Wm. (Glasgow, Cent'l) Bowater, Col. Sir T. Vansittart Cadogan, Major Hon. Edward Allen, Sir J. Sandeman Bowyer, Captain G. E. W. Campbell, E. T. Applin, Colonel R. V. K. Braithwaite, Major A. N. Carver, Major W. H. Apsley, Lord Brass, Captain W. Cassels, J. D. Astbury, Lieut.-Commander F. W. Brassey, Sir Leonard Cayzer, Maj. Sir Herbt. R. (Prtsmth. S.) Atholl, Duchess of Briggs, J. Harold Cecil, Rt. Hon. Sir Evelyn (Aston) Atkinson, C. Briscoe, Richard George Chadwick, Sir Robert Burton Balniel, Lord Brittain, Sir Harry Chapman, Sir S. Barclay-Harvey, C. M. Brocklebank, C. E. R. Charteris, Brigadier-General J. Barnett, Major Sir Richard Brooke, Brigadier-General C. R. I. Christie, J. A. Beamish, Rear-Admiral T. P. H. Broun-Lindsay, Major H. Cochrane, Commander Hon. A. D. Bellairs, Commander Carlyon Brown, Col. D. C. (N'th'l'd., Hexham) Cohen, Major J. Brunel Benn, Sir A. S. (Plymouth, Drake) Brown, Brig.-Gen. H.C.(Berks, Newb'y) Colfax, Major Wm. Phillips Bennett, A. J. Brown, Ernest (Leith) Couper, J. B. Bevan, S. J. Buchan, John Courtauld, Major J. S. Cowan, D. M. (Scottish Universities) Hume, Sir G. H. Robinson, Sir T. (Lancs., Stretford) Cowan, Sir Wm. Henry (Islington, N.) Hunter-Weston, Lt.-Gen. Sir Aylmer Ropner, Major L. Craig, Sir Ernest (Chester, Crewe) Hurd, Percy A. Ruggles-Brise, Lieut.-Colonel E. A. Crawfurd, H. F. Hutchison, Sir Robert (Montrose) Runciman, Rt. Hon. Walter Crooke, J. Smedley (Deritend) Iliffe, Sir Edward M. Russell, Alexander West (Tynemouth) Crookshank, Col. C. de W. (Berwick) Inskip, Sir Thomas Walker H. Salmon, Major I. Crookshank, Cpt. H. (Lindsey, Gainsbro) Iveagh, Countess of Samuel, A. M. (Surrey, Farnham) Curzon, Captain Viscount Jackson, Sir H. (Wandsworth, Cen'l) Sandeman, N. Stewart Davidson, Major-General Sir J. H. James, Lieut.-Colonel Hon. Cuthbert Sanders, Sir Robert A. Davies, Maj. Geo. F.(Somerset, Yeovil) Jephcott, A. R. Sandon, Lord Dawson, Sir Philip Kennedy, A. P. (Preston) Sassoon, Sir Philip Albert Gustave D. Dean, Arthur Wellesley King, Commodore Henry Douglas Savery, S. S. Drewe, C. Kinloch-Cooke, Sir Clement Sheffield, Sir Berkeley Eden, Captain Anthony Lamb, J. Q. Shepperson, E. W. Edmondson, Major A. J. Lane Fox, Col. Rt. Hon. George R. Skelton, A. N. Ellis, R. G. Lister, Cunliffe, Rt. Hon. Sir Philip Slaney, Major P. Kenyon Evans, Capt. Ernest (Welsh Univer.) Little, Dr. E. Graham Smith, Louis W. (Sheffield, Hallam) Everard, W. Lindsay Lloyd, Cyril E. (Dudley) Smith-Carington, Neville W. Fairfax, Captain J. G. Locker-Lampson, Rt. Hon. Godfrey Smithers, Waldron Falle, Sir Bertram G. Long, Major Eric Southby, Commander A. R. J. Falls, Sir Charles F. Looker, Herbert William Sprot, Sir Alexander Fermoy, Lord Lougher, Lewis Stanley, Lieut.-Colonel Rt. Hon. G. F. Fremantle, Lieut.-Colonel Francis E. Luce, Maj.-Gen. Sir Richard Harman Stanley, Hon. O. F. G. (Westm'eland) Gadle, Lieut.-Col. Anthony Lumley, L. R. Strauss, E. A. Ganzonl, Sir John Lynn, Sir R. J. Sueter, Rear-Admiral Murray Fraser Garro-Jones, Captain G. M. MacAndrew Major Charles Glen Sugden, Sir Wilfrid Gates, Percy Macdonald, Capt. P. D. (I. of W.) Templeton, W. P. Gilmour, Lt.-Col. Rt. Hon. Sir John Macdonald, R. (Glasgow, Cathcart) Thom, Lt.-Col. J. G. (Dumbarton) Glyn, Major R. G. C. McLean, Major A. Thompson, Luke (Sunderland) Goff, Sir Park Macmillan, Captain H. Tinne, J. A. Graham, Fergus (Cumberland, N.) Macnaghten, Hon. Sir Malcolm Titchfield, Major the Marquess of Grant, Sir J. A. MacRobert, Alexander M. Tomlinson, R. P. Grattan-Doyle, Sir N. Marriott, Sir J. A. R. Tryon, Rt. Hon. George Clement Greaves-Lord, Sir Walter Mason, Colonel Glyn K. Waddington, R. Greene, W. P. Crawford Merriman, Sir F. Boyd Wallace, Captain D. E. Grenfell, Edward C. (City of London) Mitchell, S. (Lanark, Lanark) Ward, Lt.-Col. A. L. (Kingston-on-Hull) Griffith, F. Kingsley Moles, Rt. Hon. Thomas Warner, Brigadier-General W. W. Grotrian, H. Brent Moore, Sir Newton J. Warrender, Sir Victor Guinness, Rt. Hon. Walter E. Morrison, H. (Wilts, Salisbury) Waterhouse, Captain Charles Gunston, Captain D. W. Morrison-Bell, Sir Arthur Clive Watson, Rt. Hon. W. (Carlisle) Hacking, Douglas H. Nall, Colonel Sir Joseph Watts, Sir Thomas Hamilton, Sir George Neville, Sir Reginald J. Wayland, Sir William A. Hammersley, S. S. Newman. Sir R. H. S. D. L. (Exeter) Wells, S. R. Hannon, Patrick Joseph Henry Nicholson, O. (Westminster) Wiggins, William Martin Harland, A. Nuttall, Ellis Williams, A. M. (Cornwall, Northern) Harrison, G. J. C. O'Neill, Major Rt. Hon. Hugh Williams, Com. C. (Devon, Torquay) Hartington, Marquess of Ormsby-Gore, Rt. Hon. William Williams, C. P. (Denbigh, Wrexham) Harvey, G. (Lambeth, Kennington) Owen, Major G. Williams, Herbert G. (Reading) Haslam, Henry C. Penny, Frederick George Wilson, Sir C. H. (Leeds, Central) Headlam, Lieut.-Colonel C. M. Percy, Lord Eustace (Hastings) Wilson, R. R. (Stafford, Lichfield) Henderson, Capt. R. R.(Oxf'd, Henley) Perkins, Colonel E. K. Windsor-Clive, Lieut.-Colonel George Henderson, Lieut.-Col. Sir Vivian Peto, G. (Somerset, Frame) Withers, John James Heneage, Lieut.-Colonel Arthur P. Philipson, Mabel Wolmer, Viscount Henn, Sir Sydney H. Pownall, Sir Assheton Womersley, W. J. Hennessy, Major Sir G. R. J. Preston, William Wood, E. (Chester, Stalyb'dge & Hyde) Hills, Motor John Waller Price, Major C. W. M. Wood, Rt. Hon. Sir Kingsley Hilton, Cecil Radford, E. A. Woodcock, Colonel H. C. Hope, Capt. A. O. J. (Warw'k, Nun.) Raine, Sir Walter Yerburgh, Major Robert D. T. Hope, Sir Harry (Forfar) Reid, D. D. (County Down) Young, Rt. Hon. Sir Hilton (Norwich) Hopkins, J. W. W. Rentoul, G. S. Hopkinson, A. (Lancaster, Mossley) Rhys, Hon. C. A. U. TELLERS FOR THE NOES.— Hore-Bellsha, Leslie Richardson, Sir P. W. (Sur'y, Ch'ts'y) Major Sir William Cope and Captain Margesson. Hudson, Capt. A. U. M. (Hackney, N.) Roberts, Sir Samuel (Hereford)
CLAUSE 39.—(Accounts.)
I beg to move, in page 34, line 13, at the end, to insert the words: principle has been a real protection to the individual who is prepared to risk, say, £10,000 in business, and who, previous to the coming of limited liability, risked, if he were engaged in a business, not only the amount of capital that he put into the business, but everything else that he possessed. The law of limited liability gave him the opportunity of saying that he was prepared to risk a certain sum and no more, and, if the business failed, he lost that sum.
As time has gone on, we have grown beyond that, and to-day a large number of our joint stock companies cannot be regarded as mere private concerns, as industries carried on by individuals for their own private profit, because although the principle of private profit is still recognised in our social economy, we must recognise quite clearly that a large number of these industries to-day are really great public services, and, since they are great public services, growing larger and larger, merging into one another, and having all kinds of relationships with one another, it is becoming more and more imperative that there should be absolute publicity in regard to their transactions, in order that the three partners in the business of industry—the shareholders, the general public, and the workers in the industry—may be able to have the information which is desired.
So far as the present profit and loss arrangement is concerned, I find that Mr. Robert Ashworth, who is a Fellow of the Chartered Institute of Secretaries and of the Incorporated Society of Accountants and Auditors, lecturing at a joint meeting of those two bodies, said this:
To go on with the matters I have put forward in my Amendment, I want to deal particularly with the great necessity there is for publicity in regard to accounts. In Committee, a quotation was made from a speech by the Prime Minister, in which he referred to the fact that some great inventor in the pottery industry many years ago died and took with him a secret process. We gathered that the Prime Minister was absolutely in favour of publicity, not merely in regard to the allocation of profits made by a particular industry, but, what was more important, he rather thought a secret process, in the interests of the community, ought to have been divulged and not kept secret. I agree with that point of view, but, if it is right that secret manufacturing processes should be pooled in the industry and made public, it is even more important that the ways in which profits are made should also be made public. We have heard in the last few months a good deal as to the necessity of what is called peace in industry. I have never been very much impressed with that phrase and I am not at all certain that it is a possibility under the system of society in which we live, but if it is at all possible to be achieved and if there is, in any sense of the word, to be anything done to secure peace, or even to have for the time being a truce of God in industry, it is necessary that all the information regarding the conduct of the industry shall be in the hands not only of the employing, but of the employed section of the community.
We very often find in regard to trade union negotiations that the trade union negotiator is handicapped for lack of knowledge of the industry. He may go before the board of directors of a com- pany which has a subsidiary and claim that there shall be an increase in wages, or that there shall not be a reduction, and he says, "You have paid a dividend of so much per cent. and you are engaged in industry." The directors immediately reply, "It is true we have paid this dividend on the shares of our company but we did not get the profits out of industry. The profits have really come from industry 'y,' which is a subsidiary. We are losing money in industry 'x,' in which your men are employed, and therefore we are unable to meet your demand." If such a proposal as I am outlining is compulsory on every company those things will be on the table for everyone to see and the course of negotiations may be different, and also, because the men will have the information at their disposal, it may very often prevent the disputes which arise at present.
If one looks through the various items which are put forward in this Amendment, one will see that they are absolutely reasonable in every sense of the word. There is, first of all, naturally, the balance which has been brought forward from the previous account, and which is brought into the profit and loss account. It is absolutely essential that the shareholders should know that part of the profit has not been made in the year under review, and that the amount is partly made up of a balance which was already in hand. Then there comes the interest on investments other than bank deposit interest. If a dividend is being paid by a company, then that company is paying its dividend not because of the trade which is being done at the present time, but because of the sound financial policy which has been pursued by the directors in times past, and under which they have built up a reserve fund in other industries, and are now reaping the profit by the interest on those investments. It is absolutely necessary to any one who is thinking of investing in this particular company to know that a certain portion of its profit has not been secured by its present trading operations, but that it has been secured as a result of its investments.
We come to the question of profits and losses of each subsidiary company. I feel quite certain what is going to be the criticism or the reply of the right hon. Gentleman the President of the Board of Trade on this particular Section. He has reiterated the argument on more than one occasion. He tells us that there is a large number of companies who conduct branches either in various parts of the country or in other countries, and these branches are run as subsidiary companies. He claims that it is absolutely unfair that there should be any knowledge given to the public, and that by such knowledge being given to the public it may also be given to their competitors, informing them as to the profits which are made by the individual companies. On the contrary, I venture to suggest that in the public interest this question is very important. There is at the present time in the coal industry a large number of companies which are, as far as their coal interests are concerned, losing money but which have holdings in subsidiary companies dealing with the by-products of the industry which are not losing money. The consequence is that the unfortunate investor finds himself in the very parlous position that all the time there is really and truly being taken out of that industry, by reason of the manipulation of the subsidiary companies, that which really belongs to the industry and ought to be shared, and of which the workmen ought to have their fair share.
I think that, from the point of view of what is called industrial peace, this information ought to be put forward. Profit or loss on the sale of any investment should be stated, also transfers from any reserve account, or to any reserve account, Income Tax, the amount written off any asset or assets, loss on the sale of any asset or assets, profit on trading or business, and then last, but by no means least, the remuneration of other emoluments of the directors of the company, whether of such directors or otherwise. I feel that if anyone looks at these heads, if he has a profit and loss account presented to him in this particular form, he will find that there is information which is of value to the shareholders and to the public, giving the full information and bringing into line, if I may say so, the joint stock companies of this country with that great working-class organisation, the co-operative society. They are not afraid of their competitors. It is sometimes said that this information would play into the hands of competitors. I again quote my authority, Mr. Morgan, that the constant argument that it is not in the interests of the shareholders that they should have information, because competitors may gain some particulars of the business in 99 cases out of 100, is all humbug. Then Mr. Robert Ashford tells us in the "Secretary":
I want to suggest that, after all, joint stock companies are not bodies which are to be run in the interests of directors or managing directors. It has seemed during our Debate to-day, and in Committee upstairs, that there is an idea in the minds of many people that, after all, these bodies have been created for the special benefit o f directors. I want to submit, with all humility, that there are such things as shareholders and that their interests ought to be looked after. It is because I think that their interests will be served by the proposal I have made, that I beg to move this Amendment.
Before I formally submit the Motion that the further consideration of the Bill should he adjourned, I should like to have the understanding which has been arrived at put clearly. I gather that it is the desire of the Opposition that some considerable discussion should take place on this Clause. If we were to adjourn now, I gather that the suggestion would be that we should discuss the relevant matters which arise on Clause 39 when we re-assemble to-morrow, and that we could then take a Division, or a series of Divisions, if that were desired, on the points arising on Clause 39 at or about 6 o'clock to-morrow, and that we should conclude the Report stage of the Bill by about 9 or 9.15, leaving us an hour or so for the Third Reading. If this course is agreeable to all parties in the House—that we should discuss Clause 39 until 6 o'clock, and that the Report stage should conclude about 9 or 9.15, then, if that meets the general convenience of the House, I venture to move that further consideration be now adjourned.
Before the Motion is put, may I say that what the right hon. Gentleman has said will meet the convenience of the Opposition. We are anxious to debate certain main points of the Bill, and when we have got rid of Clauses 39 and 40, and one or two other points, we see no difficulty in the Government getting the Bill through the Report stage by nine o'clock.
Motion made, and Question, "That further Consideration of the Bill, as amended, be now adjourned," put, and agreed to.—[ Sir P. Cunliffe-Lister. ]
Bill, as amended ( in the Standing Committee ), to be further considered To-morrow.
Post Office and Telegraph (Money) Bill
Read the Third time, and passed.
Gas Regulation Act, 1920
Resolved,
"That the draft of a Special Order proposed to he made by the Board of Trade under Section 10 of the Gas Regulation Act, 1920, on the application of the Bollington Urban District Council, which was presented on the 25th June and published, be approved."
Resolved,
"That the draft of a Special Order proposed to be made by the Board of Trade under Section 10 of the Gas Regulation Act, 1920, on the application of the Maryport Urban District Council, which was presented on the 25th June and published, be approved.
Resolved,
"That the draft of a Special Order proposed to be made by the Board of Trade under Section 10 of the Gas Regulation Act, 1920, on the application of the Shirebrook and District Gas Company, which was presented on the 28th June and published, be approved."
Resolved,
"That the draft of a Special Order proposed to be made by the Board of Trade under Section 10 of the Gas Regulation Act, 1920, on the application of the British Gas Light Company, Limited, with respect to the Hull undertaking of that company, which was presented on the 3rd July and published, be approved."
Resolved,
"That the draft of a Special order proposed to be made by the Board of Trade under Section 10 of the Gas Regulation Act, 1920, on the application of the Wrexham Gas Company, which was presented on the 12th July and published, be approved."—[ Mr. H. Williams. ]
The remaining Orders were read, and postponed.
Adjournment
Resolved, "That this House do now adjourn."—[ Sir G. Hennessy. ]
Adjourned accordingly at Two Minutes before Eleven o'Clock.