8.—12.

55

decided, the first question being one between the proprietors of the great existing lines and the promoters of new lines. It was not in the interest of the great lines to promote or encourage competi-' tion. The great lines had obtained the greater part of their capital by the evasion of this Standing Order; and, having broken down that bridge, they were desirous of preventing any one else from passing over. But their interest was not the interest of the public. They asserted that their desire was not to discourage railway enterprise, but to put a stop to bogus companies. But the effect of this Standing Order was to discourage enterprise. What was the meaning of the term " bogus enterprise," as applied to railway undertakings? If it meant an enterprise that did not give good returns, then the London, Chatham, and Dover, the Metropolitan, and the Great Eastern Eailway Companies were bogus enterprises, for up to the present moment they had not paid more than 1 per cent, on their capital. But their undertakings had been of very great advantage to the country; and he felt bound to say that he was less inclined to protect those investors whose losses were 'of the greatest possible benefit to the country. According to the supporters of the great companies, enterprise was not to be encouraged unless it paid 4 per cent. There could be no absolute law against speculation ; but he believed that the moderate proposals of the Chairman would prove beneficial, whereas proposals of a more stringent character would prove useless. These proposals having received the support of three Chairmen of Committees, and also having given effect to the recommendations of a Select Committee, he hoped the House would give them its support. Mr. Hubbaed said it appeared to him that the main reason for abrogating the Order now in force was because it had been in existence for so long a time. He failed to see the force of that argument. He thought the honourable member for Durham had done good service in bringing the matter before the House. It was most essential that the House should not sanction a false principle. Mr. Muntz said he had heard the strangest proposition to-day—-namely, that because a rule was evaded it ought to be abrogated. The real question before the House was, was the House prepared to sanction the payment of interest out of principal ? To pass a resolution sanctioning 4-per-cent, payments was quite unprecedented, and he trusted the House would not agree to the proposal. Mr. Molloy thought' it was unfair to occupy the time of the House on this matter, to the exclusion of an important Irish measure, which stood first on the Paper. As a protest against this misuse of the time of the House, he begged to move the adjournment of the debate. Mr. O'C. Powee said that, as the discussion had been introduced by the Chairman of Ways and Means, the Government could not be exonerated from blame in this matter. He should support the motion for adjournment. Sir W. Haecouet said that the Government had really nothing to do with the order of business on Wednesdays. He appealed to the honourable member to withdraw his motion. Colonel Makins supported the motion for adjournment, on the ground that the question was too important to be dealt with by way of resolution. Sir A. Otway was sorry that it had been necessary to postpone an important Bill; but the question he had raised was also important, and had been several times postponed. A decision one way or the other was absolutely necessary ; and the only result of an adjournment of the debate would be that it would have to be resumed on another Wednesday. After a few words from Mr. Shaw, the motion for the adjournment of the debate was withdrawn, and the House divided on Sir A. Otway's resolution. The numbers were—For the resolution, 131; against, 123 : majority, 8

Enclosure 5 in No. 3. [Extract from the Times, Thursday, 7th June, 1883.1 Payment op Inteeest out op Capital. The main discussion, however, arose upon a motion by Sir Arthur Otway to amend the Standing Order which forbids railway companies to pay interest out of capital. He proposed that a Committee on a Eailway Bill should be empowered to authorize payment of interest out of capital upon the following conditions: That the rate of interest shall not exceed 4 per cent.; that it shall be payable only during the construction of the line; that it shall not be payable until the Board of Trade has certified that two-thirds of the share capital has been allotted; that it shall not be payable upon calls in arrear; that it shall be stated in the Bill, and that notice of power to pay it be given in all advertisements and prospectuses of the company; that the half-yearly accounts shall show the sums paid as interest; and, finally, that penalties shall be imposed for infringement of these conditions. The Standing Order which the House of Commons has thus modified was made in 1847, with the view of checking the excessive speculation in railways which at that time was doing much mischief and causing widespread distress. Circumstances have greatly changed since that date. Nearly eight hundred millions have now been invested in railways, and our system is so far complete that no recurrence of the mania for railway construction need be apprehended. All that we have to do is to keep pace with the growth and displacement of population, and no field remains for the numerous and gigantic enterprises of forty years ago. On the contrary, the limited and local character of the lines now to be constructed operates to discourage investors, and the Standing Order originally framed to check excessive speculation has become a serious obstacle to legitimate enterprise. As always happens in such cases, means have been found to evade it, and the House of Commons is really compelled to consider whether it will recognize the alterations brought about by time and circumstances, or whether it will adhere to its old rule, and devise new and more stringent methods of making it operative. Sir J. Pease argued that we may as well abolish the laws against theft because some thieves go at large, as modify the Standing