I have received a long communication from the Chief Justice which cannot be dealt with before the next mail, when it will be forwarded to Your Lordship.
126 The Daily Press. HONGKONG, NOVEMBER 17TH, 1876.
THE COMPANIES' ORDINANCE, The GOVERNOR-I move the second reading of an Ordinance, to amend "The Companies' Ordinance, 1865,” and to repeal Ordinance No. 4 of 1876. The Attorney-General will state the objects and reasons of the measure.
The ACTING ATTORNEY-GENERAL-This Ordinance, as stated on the first reading, is brought in for the double purpose of repealing No. 4 of 1876, which was a special Ordinance passed here in April last to enable the China Traders' Insurance Company to reduce their shares and amending the Companies' Ordinance of 1865. This Ordinance which, as well as the statement of objects and reasons appended, has been published in the Gazette, is the same Ordinance virtually as that before the Council in March 1876, which was fully discussed then. After much correspondence and consideration it was thought better to bring in a general measure so that other companies may obtain the same advantages that No. 4 of 1876 had conferred on the China Traders. The matter was so fully discussed on the previous occasion that I do not think it necessary to detain the Council with any remarks now. I am glad the Chief-Justice is now present, as he took particular interest in the subject when it was last before the Council. I have gone carefully over the bill; and if it was good and right for the China Traders, it is more statesman-like to bring in a general measure so that other companies may be able to take advantage of it,
The statement of objects and reasons appended to the Bill is as follows:-"This Ordinance is introduced to confer on all companies limited by shares and registered in the Colony the power of subdividing their shares partially granted by Ordinance No. 4 of 1876. The present Ordinance therefore proposes to repeal No. 4 of 1876, to enact a more general measure founded on the English Act of 1867, and to amend The Companies' Ordinance, 1865." Section XXXVIII. is adopted from a short Imperial Act passed in 1870, for facilitating compromises and arrangements between the liquidators and creditors of companies that are being wound-up, and is introduced in order to place Colonial companies upon the same footing as companies formed and worked under the English statutes. Several sections of the Act of 1867 have been omitted, which, as dealing with the county courts, have no application in the Colony. Section XXXIX. is also omitted, as it appears to be scarcely necessary, having regard to the circumstances of the Colony. The rest of the Act has been included in this Ordinance without change, except by inserting the word "hereafter" in section XXXVI, so as to avoid any appearance of dealing with contracts that may have been made before the passing of the Ordinance. The Ordinance has the following objects in view :- Enabling companies to be constituted, if so desired, with limited liability in the members, and unlimited liability in the directors; enabling companies to reduce their capital; enabling companies to subdivide their shares; enabling associations formed for any useful object, which does not involve the payment of a dividend to the members, to register themselves as limited companies, without annexing the word 'limited' to their names; enabling companies to issue preference shares, and requiring all shares to be paid for in cash, unless issued under a registered contract; enabling a transferor of shares to enforce a registry of the transfer; enabling warrants for fully paid up shares or stock to be issued to bearer; defining the mode in which contracts by a company are to be executed; requiring a general meeting of a company to be held within four months after registration; facilitating compromises between companies that are being wound-up, and their creditors; placing a restriction on persons buying shares, for the purpose of enabling them to petition for the winding-up of a company.”
The CHIEF JUSTICE-I move that this Ordinance be not now proceeded with. This is the first moment that I knew of it, I have to apologise for such being the case, but until I came into this room I did not know that the Ordinance was before the Council at all. That is my fault entirely. The Gazette came to me in the usual course, but having been very much engaged I did not read it, and I put that as my excuse. The introducing of this Bill now does seem to me to be a most unusual thing. Within half a year of the full discussion of the former one when it was thrown out, that the bill should be substituted for it is a thing without precedent, in my mind, according to my experience, however limited that may be. I say it is without precedent that such a step as this should be taken so lately after the final rejection of the question. If I recollect rightly this very Bill was negatived, and when it was said what a great hardship it would be to this China Traders' Company, another Bill was introduced upon that deliberation, the whole argument was gone into as to the perfectly dangerous state of things, and as the shares in this Company were $5,000, this particular boon was given to that Company because it said it could not go on without it.
The principle of the Bill was then and there absolutely and entirely negatived. There has not been a single word said as to why this measure has been introduced now, in the interregnum of the attorney-generalship. It has not been said that some great wrong is impending on the Colony. It is virtually a repetition of a Bill that was brought in and negatived, and there is not one word said, not even so much as-
The ACTING ATTORNEY-GENERAL-It was all said before.
The CHIEF-JUSTICE-All that was then said was negatived. There is one principle of legislation which I always look to as applicable to all countries, and especially to colonies, and that is, unless you can show good reason the fewer new bills you have the better. That is a principle of legislation, I say, which ought to pervade every country and more especially to pervade colonies, where it is especially difficult for a person to know what the law is. If this Bill pass I shall feel it my duty to send in a protest against it, and let it go home to be there discussed and there considered.
The GOVERNOR-The matter has been discussed at home.
The CHIEF-JUSTICE—Then it has been sent home without my argument being heard, and I shall send home my protest. It may be treated as waste paper when it reaches there, but with that I have nothing to do. Suppose this Bill passes, the China Traders' may reduce their shares to a dollar a piece, and the insurers of ships will be in the hands of the lowest of the low among the Chinese. It will be a gambling speculation altogether; and if investors are to trust to such people for their insurance I wish them joy of their security. I object to this Bill because there is no occasion for it. You never legislate except for a remedy. Every Bill that is introduced at home is to remedy some want of a proper law. Now, who has said that anyone of these clauses in the Bill before us is necessary for the well-being of the Colony! I do not say that it would not be convenient to have a limited liability of directors if that was the sole object. But I have said before, and have always felt, that the system of giving facilities to popularise joint stock companies is of the most prejudicial character, and it is only tending to convert these companies into gambling speculations. I do object to any company sub-dividing its shares. That portion from section 9 to section 21 ("reduction of capital and shares") has been rejected absolutely by this Council as it then stood, and as to all the other clauses, all I have to say is they are uncalled for; if introduced by themselves they might be worth consideration. I therefore, for many reasons which I have stated before and do not wish to trouble the Council with now, beg to move that the Bill be not read a second time.
Mr. RYRI-I have great pleasure in seconding the amendment of the Chief Justice. I quite approve of everything he has said about the Companies here, And I still say there is no call in the Colony for the Ordinance now before us. I would recommend that the Company, which has made such strenuous efforts to have the Ordinance passed, had better let well alone for their own credit.
The COLONIAL SECRETARY (who was almost inaudible) said--If any company feels oppressed by the law and comes to the Government it is bound to relieve it. On that principle we proceeded in this instance. We introduced a general Bill which was rejected. Subsequently another Bill was introduced and passed. It was sent home to the Secretary of State. His Lordship returned it to us objecting to it, with instructions to bring before the Council the Bill that is now introduced. That is just how we stand.
240
I have
received
a long
Caumunica-
tion from the Chief Justice which cannot be dealt with before the
M
next mail, when it will be
)
forwarded) to Your Zondliche.
205
126
The Daily
Press.
HONGKONG, NOVEMBER 17TH, 1876.
THE COMPANIES' ORDINANCE, The GOVERNOR-i move the second reading of an Ordinance, to amend "The Companies" Ordinance, 1865,” and to repeal Ordinance No. 4 of 1876. The Attorney-General will state the objects and reasons of the measure.
The ACTING ATTORNEY-GENERAL-This Ordinance, as stated on the first reading, is brought in for the double purpose of repealing No. 4 of 1876, which was a special Ordinance pasard here in April last to enable the China Traders' Insurance Company to reduce their shares and amending the Companies' Ordinance of 1865. This Ordinance which, as well as the statement of objects and reasons appended, has been published in the Gazette, is the same Ordinance virtually as that before the Council in March 1876, which was fully discussed then. After much correspondence and con- sideration it was thought better to bring in a general measure so that other com- panies may obtain the same advantages that No, 4 of 1876 had conferred on the China Traders. The matter was so fully discussed on the prs. vions occasion that I do not think it necessary to detain the Council with any remarks now. I am glad the Chief-Justice is now present, as he took particular interest in the subject when it was last before the Council. I have gone care- faily over the bill; and if it was good and right for the China Traders, it is more statesman- like to bring in a general measure so that other, companies may be able to take advantage of it,
The statement of objects and reasons ap- pended to the Bill is as follows:-" This Ordi. bauce is introduced to confer on all companies limited by shares and registered in the Colony the power of subdividing their shares partially grant d by Ordinance No. 4 of 1876. The present Ordinance therefore proposes to repeal No. 4 of 1876, to enact a more general measure founded on the English Act of 1867, and to awend The Companies' Ordinance, 1865." Section XXXVIII. is adopted from a short Imperial Act passed in 1870, for facilitating compromises and arrangements between the liquidators and creditors of companies that are being wound-up, and is introduced in order to place Oclonial companies upon the same footing as companies formed and worked under the English statutes. Several sections of the Act of 1867 have been omitted, which, as dealing with the county courts, have no application in the Colony. Section XXXIX. is also omitted, as it appears to be scarcely necessary, having regard to the circumstances of the Colony. The rest of the Act has been included in this Ordinance without change, ex- cept by inserting the word "bereafter" in section XXXVI, so as to avoid any appearauos of dealing with contracts that may have been made before the passing of the Ordinance. The Ordinance bas the following objects in view :- Enabling companies to be constitatod, if so desired, with limited liability in the! members, and unlimited liability; in the direo- tors enabling companies to reduce their capital; enabling companies to subdivide their ' shares; enabling associations formed for any useful object, which does not involve the payment of a dividend to the members, to register themselves as limited companies, without annexing the word 'limited' to their names; enabling companies to issue preference shares, and requiring all shares to be paid for in cash, uutess issued under a registered contract; enabling a transferor of shares to enforce a registry of the transfer, enabling warrants for fully paid up shares or stock to be issued to beaver; defining the mode in which contracts by a company are to be executed; re- quiring a general meeting of a company to be beld within four months after registration; facilitating compromises between companies that are being wound-up, and their creditors; placing a restriction on persona buying shares, for the purpose of enabling them to petition for the winding-up of a company.”
The CHIEF JUSTICE-I move that this Ordin. ance be not now proceeded with. This is the first moment that I knew of it, I have to apo- logise for such being the case, but until I came into this room I did not know that the Ordinance was before the Council at all. That is my fault entirely. The Gazelle came to me in the usual
coureo, but having been very much engaged I did ant read it, and I put that as my excuse. The introducing of this Bill now does seem to me to be a most unusual thing. Within half a year of the full discussion of the former one when it was thrown out, that the bill should be substituted for it is a thing without precedent, in my mind, according to my experience, bow. ever limited that may be. I say it is without precedent that such a step as this should be taken so lately after the foal rejection of the question. If I recollect rightly this very 'Bill was negatived, and when it was said what a great hardship it would be to this China Traders' Company, another Bill was introduced upon that deliberation, the whole argument was gone into as to the perfectly dangerous state of things, and na the shares in this Company were $5,000, this particular boon was given to that Company because it said it could not go on without it.
Tus prin. ciple of the Bill was then and there absolutely and entirely negatived. There has not been a single word anid as to why this measure has been introduced now, in the interregun of the attorney-generalship. It has not been said that some great wrong is impending on the Colony. It is virtually a repetition of a Bill that was brought in and negatived, and there is not one word said, not even so much as-
was
The ACTING ATTORNEY-GENERAL-It was all said before.
The CHIEF-JUSTICE-All that was then said was negatived. There is one principle of legių. Iation which I always look to as applicable to all countries, and especially to colonies, and that is, unless you can show good reason the fewer new bille you bave the better. That is a principle of legislation, I say, which ought to pervade every country and more especially Lo pervade colonies, where it is especially difficult for a person to know what the law ia. If this Bill pass I shall feel it my duty to send in a protest against it, and let it go bome to be there discussed aud there considered.
The GOVERNO&-The matter has been dis- cussed at home.
The CHIEF-JUSTICE—Then it has been sent home without my argument being heard, and I shall send home my protest. It may be treated as waste paper when it re ches there, but with that I have nothing to do. Suppose this Bill passes, the China Traders' may reduce their shares to a dollar a piece, and the insurers of ships will be in the bands of the lowest of the low among the Chinese. It will be a gambling speculation altogether; and if inenvers are to trust to such people for their insurance I wish them joy of their aecurity. I object to this Bill because there is no occasion for it. You never legislate except for a remedy. Every Bill that is introduced at home is to remedy some want of a proper law. Now, who has said that any- one of these clanzes in the Bill before us in necessary for the well being of the Colony! I do not say that it would not be conveinent to have a limited liability of directors if that was the sole object. But I have said before, and bave always felt, that the system of giving Facilities to popularise joint stock companies is of the most prejudicial character, and it is only tending to convert these companies into gani- bling speculations. I do object to any com- pany sub-dividing its abarea. That portion from section 9 to section 21 ("reduction of capital and shares") has been rejected absolutely by this Council as it then stood, and as to all the other clauses, alll have to say is they are uncalled for; if introduced by themselves they might be worth consideration. I there. fore, for many reasons which I have stated before and do not wish to trouble the Council with now, beg to move that the Bill be not read a second time.
Mr. RYRI-I have great pleasure in second. ing the amendment of the Chief Justice. I quite approve of everything he has said about the Companies bere, And I still say there is no call in the Colony for the Ordinance now before ns. I would recommend that the Company, which has made such strenuous efforts to have the Ordinance passed, had better let well alone for their own credit.
The COLONIAL SECUNTARY (who was almost ínaudible) said--If any company feels oppressed by the law and comes to the Government it is bound to relieve it. On that principle we proceeded in this instance. We introduced a general Bill which was rejected. Subsequently another Bill was introduced and passed. It was sent home to the Secretary of State. His Lordship returned it to us objecting to it, with instructione to bring before the Council the Bill that is now introduced. That is just how we stand.
240
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