taking is entered upon, and divest itself, unless by violating the right of property, of the power to reduce that rate in all time to come, how greatly soever it may exceed what would be a liberal return for the capital vested in the undertaking. I need not add, that it is of the greatest importance to the interests of the public that the cost of internal communication should be reduced as low as possible. The limitation of the dividend is a practice found to be as ineffectual as the fixing a maximum on the rate of charge. The public has no check on the system of management, nor can it explore the thousand channels in which profits may be distributed under other names among the subscribers, nor has it any means of preventing the wanton and extravagant outlay of money on the works, &c. To make the provision for limiting the dividends good for anything, it would be necessary that all the proceedings of a company so limited should be controlled by Commissioners appointed by Government. But I am aware that the objections to this are so numerous and obvious that I do not press this part of my resolution on the House.

For these, and a variety of reasons, I am clearly of opinion that Parliament should, when it establishes companies for the formation of canals, railroads, or such-like undertakings, invariably reserve to itself the power to make such periodical revisions of the rates of charge, as it may under the then circumstances deem expedient. It should have the power to examine into the whole management and affairs of each company, to correct what may have been amiss in the former, and to fix the rates of charge for another period of years: always taking care that the proprietors are allowed a fair return for the original outlay of capital, as well as compensation for the risk which such undertakings are generally more or less subject to.

There is not the shadow of a reason for thinking that the reservation of the power to revise the tariff of charges, at defined periods, would prevent any undertaking from being entered upon, that promised a reasonable return; and in most cases, it would be a waste of the public capital, to engage in any other. Those who take shares in canals and railroads, with the intention of holding them, do not look to exorbitant, but to reasonable profits for remuneration; and these would not be affected by the proposed provision.

When peculiar privileges, and a substantial monopoly, are conferred on any set of persons, the public interests ought always to be secured against their abuse: if competition afforded this security, it would be unnecessary, and therefore improper, for the legislature to interfere; but in cases of this sort competition can do really nothing, so that security against abuse must (if sought for at all) be sought for in positive regulations.

The principle for which I have been contending is not a new one; it is one indeed which is frequently acted upon, and has, in many cases, received the sanction of the legislature. The limitation of rates, and of dividends, to which I have already adverted,

involves in fact the principle for which I am contending; and our Turnpike Acts, which are generally, I believe, granted for 21 years, are somewhat analogous. The cases of the Smalls', the Longships', the Dungenness' Lights, and other private LightHouses, are instances in point. The parties by whom these LightHouses were erected, were authorized to charge certain rates for a specified term of years, on all ships coming within a certain distance of their lights; the Light-Houses becoming, at the end of such terms, the property of the crown or the public: and yet though this be a more stringent regulation than any I propose introducing, the arrangement has always been regarded, and with justice, as a most improvident one, on the part of the public. The Smalls' Light yielded its proprietors in 1831—32, a nett revenue of 10,9731., and when the Trinity-House proposed to purchase it, the price asked for the residue of the term was 148,000l. The case of the Skerries' Light-House is even more striking: it was made over for ever to private individuals by an Act of the 3rd of Geo. II., when the rates of charge were fixed; and it now produces, such has been the increase of trade, above 12,500l. a year, nett revenue, over and above what is necessary for its maintenance.

But important as it is to have the charges on account of lights as low as possible, it is infinitely more important that the charges on the principal lines of inland communication should be regu. lated by the lowest standard that will suffice for their establishment and efficient maintenance. If the giving of power to the proprietors of the Smalls' Light House, to exact certain fees on all shipping for 99 years, evinced a culpable inattention to the public interest; what are we to think of allowing the proprietors of Railways to charge certain fees on all parties using them, in all time to come, though the traffic upon them be increased a hundred or a thousand fold? The history of the London water companies shows, also, how important it is that some such power as I am contending for, should be retained in the hands of the Legislature, when creating associations to which the ordinary principles of competition do not apply.

The Americans have set us a good example in the management of their public works, and in the proceedings in their legislatures. Whether their practice in this respect be owing to the peculiarities of their social condition or the nature of their political institutions, or to what other cause, I will not venture to conjecture. The Erie Canal in the state of New York, one of the most important public works in the world, was completed only in 1825. It has proved a very prosperous concern; and notwithstanding that tolls have been progressively reduced, (between 1832 and 1834, two years only, as much as 35 per cent.,) the revenue has increased. But not only have the tolls been reduced, there is already accumulated a surplus of 5 millions of dollars; in the year 1837 the whole outlay will be repaid, and this magnificent undertaking will in twelve years have paid the whole cost of its construction and

other expenses, and become the property of the State, leaving whatever revenue the legislature may think it expedient to raise beyond the necessary expenses of management and repair, to be applied to the formation of other public works, or to remit taxes raised for the general expenses of the State. In the United States I believe there is no railroad so ancient as that between Manchester and Liverpool, the first having been completed in 1827; but they are, to borrow a phrase from that country, "progressing" at an extraordinary rate. I find the state of New York alone granted acts of incorporation to 24 railroad companies as far back as 1832, and others are forming, I believe, at this time in every state of the Union. I will trouble the House with some particulars of one only. They refer to that between Boston and Providence.-By Act of Legislature the dividends are limited to 10 per cent; at the expiration of 20 years the State may take the property, paying the stock-holders at par, and making up the dividends at 10 per cent, for the whole 20 years, if the revenue should fall short of the

amount.

And now, Sir, allow me a few words as to the particular motion with which I shall conclude. Some Honourable Members, admitting perhaps the existence and magnitude of the evils I wish to provide against, may not consider the proposed reservation as affording the best or most effectual remedy. They may think that, after a certain term of years the roads ought to become, as in the case I have just cited, the property of the public. I have not ventured so far. There are many serious objections to any such resumption, and I doubt if a single advantage could be obtained by making these roads public property which will not be as effectually secured by the plan I propose, for a revision of the rates after a certain number of years. As to the proposed term of years, it is one to which I am not particularly wedded, a few years more or less being of little importance. It may be said, perhaps, that the intended provision comes too late, seeing that some of the principal lines are already occupied; but this is no reason for deferring the measure, though it be a good one for carrying it into effect, with as little delay as possible. It is high time certainly, that the efforts of the legislature should be directed more effectually to the protection of the public interests in this particular, than it has hitherto been, otherwise great injury will be done, and great public dissatisfaction will eventually be created. I beg, Sir,

to move

"That in all Bills for Railways, or other public works of that description, it be made a condition, with a view to the protection of the public interests, which might otherwise be seriously compromised, that the dividends be limited to a certain rate, or that power be reserved to Parliament of revising and fixing at the end of every twenty years, the tolls chargeable on passengers and goods conveyed."

No. II.

Observations illustrative of the Defects of the English System of Railway Legislation, and of its injurious Operation on the public Interests; with Suggestions for its Improvement. By James Morrison, Esq., M. P.

THE extraordinary number of railways projected during the past year, the excessive speculation in shares to which they have given rise, and the heavy losses thereby entailed on many individuals, have naturally drawn a comparatively large share of the public attention to the subject of railway legislation; which has been further excited by the diversion of capital from other pursuits to the formation of railways, and by the accounts given of the system under which these undertakings are carried on in France. I believe, indeed, that there is no subject which has greater claims upon the immediate and earnest consideration of the country and of the Legislature.

The greater part of the railway schemes projected in the course of last year have failed to qualify themselves for coming before Parliament by the payment into the Bank of England of the parliamentary deposit. But notwithstanding their disappearance, the payment of the deposits on the remaining schemes has produced a very severe pressure on the money market. Indeed, had the time in which this operation has been effected not been one of general prosperity and favourable exchanges in our foreign trade, it would certainly have produced a most disastrous crisis. But, besides the evils which the multiplication of railway projects have already produced, there remains another question too serious to be overlooked; viz.: whether the railways now in the course of being constructed, and those which are likely to be voted by Parliament during the present session, will not require a larger annual outlay of capital than the country can afford? It is, no doubt, impossible to ascertain with any degree of accuracy either the annual amount of the nett savings of the country, or how much of these may, with a due regard to other interests and the general convenience, be spared for investment in railways. It is plain, however, that the amount of savings must be constantly varying from year to year; that it must depend upon the profits of capital and the state of our foreign trade, and more especially upon the produce of our crops.

But we know, that in a country in a progressive state of social and commercial improvement, and in which every branch of industry is rapidly extending, a great demand must exist for investments for a vast variety of objects, having an equal claim with railways to the consideration of Parliament. A large amount of capital is annually required to meet the immense expenditure incurred in adding to our towns, and in the construction of the new establishments which are constantly arising and

spreading on all sides in the great seats of manufacturing industry. And, not to speak of other demands, an outlay of many millions a year will certainly be required for many years to come, in carrying on those most beneficial improvements in draining and agriculture that are now everywhere practised or called for, and that have already made such immense additions to the productive capacities of the country. I am inclined to think that those whose opinion upon such a subject is best entitled to consideration, would regard it as a very liberal estimate were it to be supposed that twenty, or at most five-and-twenty millions a year could be advantageously applied to railways.

But it appears that we are actually expending TWENTY-FOUR millions a year, or thereabouts, on the railways now in progress; and the immense number of railway projects which it is supposed will be sanctioned in the course of the present session, will, if they take effect, double, or it may be, treble this expense; that is they will double or treble the sum which the country can conveniently spare for such projects. So disproportionate a drain on our resources cannot fail greatly to raise the value of money, and consequently to occasion much distress. Indeed there is very little doubt that this effect would have been already produced to such an extent as seriously to inconvenience trade, had not the last two or three years been a period of large, or probably I should say, of unprecedented profits. But it would be dangerous to assume that these will continue. All experience shows that periods of great prosperity are sooner or later followed by a reaction. Should a bad harvest, or a period of great commercial depression and scarcity of money overtake us, while numerous expensive railway undertakings are in different states of progress, it might be impossible for the companies to borrow, and useless for them to make calls; so that the works might be brought to a stand-still, to the great loss of the shareholders and the inconvenience and injury of the public.

An excessive expenditure upon railways would not only raise the value of money, to the great inconvenience of the manufacturing and trading interests, and of landholders whose estates

*Note in 1848.-The Chancellor of the Exchequer in his speech in the House of Commons, on the 30th of November, 1847, on moving the appointment of a Committee to inquire into the cause of the recent Commercial Distress, gave the following as the amounts of the expenditure on Railways:-"In 1841, 1842, and 1843, the amount was about £4,500,000; in 1844, it was £6,500,000; in 1845, it was £14,000,000; in the first half of 1846, it was £9,800,000, and in the last half-year it was £26,000,000; in the first half of 1847, it was £25,720,000; and if the works had been proceeded with, the expenditure in the last half of 1847 would have been £38,000,000 on Railways. * Let it be recollected that a great amount of capital was taken away, which deprived men of the means of carrying on their commercial pursuits, and that we cannot avoid looking to the obvious consequences of converting £50,000,000 of that which had before been floating into £50,000,000 of fixed capital, and thereby taking it out of those commercial channels in which it was hitherto employed." It will be seen therefore, that my conjectural estimate, high as it was, approximated very closely to the reality.