The Sun.
London, England, 1837-05-02 00:00:00

RAIL WAY SUBSCRIPTION

CONTRACTS.

(From a Correspondent.)
The First Report from the Select Committee on the
Deptford and Dover Subscription List has been published.
This document affords matter of grave consideration for
Parliament and the public.
To parties unacquainted -with the course hitherto inva-
riably adopted by Railway Companies in providing their
Subscription Lists, the disclosure, through this Report, of
an every-day occurrence, doubtless presents the character of
fraud ; or, if not of actual fraud, of something closely akin
to it. But what is the fact ? The Standing Orders with
respect to Railway Bills require a Subscription List, pro-
portionate to the capital of the Company, to be deposited
in certain offices before the Bill can be proceeded with.
This document binds the parties signing it, their " heirs,
executors, administrators, or assigns," for the payment of
the money so subscribed. All Railway Acts contain a
clause, empowering those parties who have so signed the
contract to absolve themselves from their preliminary en-
gdgement, by certain forms, after the Act has been obtained.
These forms consist in the voluntary registration of certain
other parties, as holders of these shares, who become sub-
ject to the same legal obligations which are imposed upon
thb original subscribers.
This is a plain statement of the fact. Now what has
been the practice ? Why, to lodge a document, entitled a
Subscription Contract, signed as required. Who, either in
or out of Parliament, before the present Railway struggle,
ever dreamt of inquiring who the parties were who had
signed this contract ? The production of the document,
complete in its requirement, was all that Parliament re-
quired, and all that it could require, as neither Parliament
nor any other authority has a constitutional right of insti-
tuting a public inquiry into the private affairs of any sub-
ject on the abstract question of solvency or insolvency.
Both Parliament and the Public know, however much they
may now plead ignorance of the fact, that the generality of
signatures have been attached to subscription deeds solely
with a view to obtain the profits likely to arise froin the
shares commanding a premium in the money market, after
an Act of Parliament may have been obtained ; or, in
other words, that nearly all Railway subscribers have been
speculators for prgfit, and not subscribers for the under-
taking. Will this be denied in the House of Commons, or
out of it ? Will the many great and powerful of this land,
who have signed these contracts for double, treble, aye, ten
times the sums they could by possibility pay up if called
upon to do so, now cast the stone of obloquy on less influen-
tial, but possibly not more needy, persons, who have but
followed their example under the same hope of profit ? But
let us see where, and on whom, the real responsibility of
these Railway schemes lies.
It has been already stated, that to obtain a locus standi
before Parliament on any Railway Bill, certain forms must
be first complied with by the promoters of the undertaking.
These forms, of which the Subscription List is one, are
but stepping-stones to inquiry into the merits of the under-
taking itself. The entire case, that is, the undertaking itself,
not the Subscription List, undergoes a minute scrutiny be-
fore a Committee appointed for the purpose. The prehinble
of the Bill, together with its several appendices of detail,
are reported to the House, proved, or otherwise, as the
case may be. A third reading takes place after the presen-
tation of the Report, and the Bill is granted or rejected.
Both Houses adopt this course, and on the decision of Par-
liament being known, the whole transaction at once assumes
an entirely new character. All that which in the first case,
pending the inquiry, was but provisional, at once assumes '
a legal character.

The liability of Shareholders, which in the first case was
limited to the amount of their deposits, is, in the second
case, extended to the amount of their subscription to the
contract deed ; but simultaneously with this extension of
liability, the Legislature, in the very Act granted for the
execution of the work, gives a clear and distinct power tb
each -original and future Shareholder of absolving himself
from his engagement ; thus stamping the whole transaction
as a marketable, speculative, and money-making process.
This power of absolution from the responsibility first entered
into, consists in the power of legal transfer after registration,
as before referred to. But it may be urged, that without a
buyer there can be no seller, and consequently no real
power of getting quit of the shares. Here lies the whole
and entire safety of the previous proceedings—safety to
Parliament—safety to the public—and, lastly, safety to the
Shareholder himself, who, after all, is entitled to the least
consideration, having voluntarily incurred his own risk.

When the Act for the execution of the projected work
is obtained, the first requirement of the Act is to convene
the Shareholders. At the first meeting of these Share-
holders, which must be held within a time specified in the
Act, all preliminary and previous arrangements and appoint-
ments cease and determine ; th© whole power of election
and direction reverts to the Shareholders themselves, as it
shoUld do, and they then have the power either to proceed
or suspend operations altogether.
They may refuse to re-elect Directors, or if Directors be
elected, they have power to make such bye-laws for did/•
guidance as still to keep the power of procedure or suspen-
sion in their own hands. If the scheme be a good one,
sanctioned by Parliament, and in favour with the Public,
the original Shareholders transfer their shares with their
first anticipated profits ; on the contrary, if not so in favour
with the Public, the undertaking stands stik time shortly
destroys the power conferred by the Act, and on the origi-
nal speculative subscriber remains the responsibility of his
own deed, who alone has to pay the cost of his experiment.
Upon this. individual responsibility of each subscriber
rests the whole fabric of commercial enterprise and confi-
dence. Let Parliament but once interfere and lessen this
personal responsibility, and a fatal blow is given to credit in
all its ramifications.

Let the Legislature, then, pause before it likens to the
demand of speculators to rip up Subscription Contracts,
which have hitherto obtained their uses, and proved correc-
tives of themselves. Nothing can bi more fatal to the
development of our national energies than Parliament en-
couraging one party to accuse another, on the most bare-
faced grounds, of selfish and personal interests, when both
parties are equally liable to the same imputation ; and such
Parliament would do, were it to listen to petitions seeking
to defeat Bills on the grounds of their prospects being 'now
more unfavourable than when they were first entertained.
A defeated party, or a disappointed Shareholder, has now
but to attack the subscription deed of his adversary, and
delays, expenses, and every species of annoyance, may be
occasioned to Directors, who have but one object in view,
and that is, doing their best for the interests of their Share-
holders and the public.
Railway Companies are, in reference to their Subscription
Contracts, not singular in their mode of proceeding. Go-
vernment loans and debentures, for carrying on public
works, are all founded on the same speculative principle.
This principle has provided us with the East and West In-
dia Docks, with Railways and Canals innumerable, and
will carry out the present system of railway communication
throughout the empire, if 12ft to its own influence, free and
unembarrassed. Check this principle, founded on individual
and personal responsibility, and the progress of civilization
will be arrested, the application of science to lessen the
cost of production be impeded, and our population will in-
crease, on a decreaping, or at least stationary, power of
production, to the manifest and immediate depreciation of
property.