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properly secured to them. But it is evident that if power to make leases, without reservation, and without any conditions previously defined, be given to these companies, they may, and probably will, make terms and conditions which will materially affect the surplus fund of 10 per cent., and thus entirely defeat the intention of Parliament, as expressed in the Bill of last year. I have already spoken of this 10 per cent. clause in terms of disapprobation, but the House must not suppose that I object to the limiting the profits of these companies, or to reducing the fares to the public; my whole argument indeed has been directed to show the advantage that will flow from both these circumstances, and I have endeavoured to point out the necessity under which we labour of immediately adopting some means of attaining these salutary ends, my objections arising from my belief that the 10 per cent. clause does not in reality forward the attainment of either the one or the other.

The proposed scheme of leasing is clearly brought forward for the purpose of securing a monopoly; and many branch lines, I can see, are projected solely with a view and intention of leasing them upon certain terms to the large trunk lines, as the branch lines themselves would never have been proposed for the purpose of the profit to be derived from them alone. But ground is thus occupied which an adverse company might intrude upon, and bring competition too close to be agreeable. In some cases it is probable that this object of keeping a hostile and competing line at a distance, even for a few years, is the sole object of the scheme. The Act will be obtained in such cases, but the road may not be constructed; some provisions ought therefore to be adopted, not only to guard against the danger of the monopoly, but also to ensure the formation of the road; this, in my opinion, might be accomplished by affixing more severe penalties upon non-performance.

If, however, the scheme of amalgamation unchecked by some protective conditions be once carried into effect, it seems not improbable that railway directors will come to be invested with power and patronage beyond what is possessed by any other class or body in the nation. The ramifications of this power will extend to every town and district in England, and these companies will command, by the necessary influence of their large expenditure and wide patronage, the services of the most active minds among us, as well for political as other purposes. I own that I should regard such a power with great alarm and distrust; and the plan that I am about to propose will, I think, afford the community some protection against what I cannot but consider a very serious danger.

It may indeed be said that my plans and safeguards are proposed too late, because all the principal lines of railway are finished. The mischief, if mischief there be, has been done, and you are shutting your stable-door after the steed has been stolen. This, however, is not the case; a great number of most important

trunk lines have yet to be constructed. The Eastern Counties are still unprovided with a trunk line. There is no such line to Dover; for the railway running there is as much a Sussex as a Kent line. There is no direct line to Exeter; the Great Western can only be considered a trunk line as far as Bristol. The report of the Board of Trade upon the Western Railways, states that a direct line from London to Exeter would diminish the distance by railroad upwards of twenty miles. I have been told it would be much greater; at all events this circumstance is an important one, as the comparative shortness of a competing line is now considered a great element in its favour. Again, there is really no trunk line to Manchester, placing London in direct communication with the great northern manufacturing districts. I think then it is evident, that though we may have lost some advantages by not more promptly interfering, still that much good may yet be accomplished, if we directly apply ourselves to the task before us.

Having thus briefly explained the advantages which may be derived from railway travelling, and pointed out the evils with which it threatens us, I next proceed, Sir, to a consideration of the means by which we may, in some measure, at once secure the one and guard against the other; and also, generally, to advert to the principles which ought to regulate our proceedings on this important subject.

In the first place then, it appears to me, that, under present circumstances, 10 per cent. is too high a scale of maximum profit. We are to look to the public interest; and what that interest requires, is, that a rate of profit, just so high, and no higher, should be allowed to the promoters of railway schemes, as shall induce capitalists freely to embark their money in such undertakings. It has been said, indeed,—if you limit your fares, you will reduce your rate of interest, and thus prevent people from embarking in railway schemes. But this, I venture to submit, is a great mistake; for it is evident,

First, in the present condition of the money-market, and of trade generally, when very low rates of interest and low rates of profit prevail, that a return of less even than 7 per cent. would be sufficient to induce capitalists to embark in such speculation;

And, secondly, all experience proves that the surest mode of ensuring large profits on capital in railroads, is to establish low charges; thus stimulating travelling and transport of goods by railway, and gaining a large aggregate return, in small profits upon a large trade.

Now, as regards the first point, let us look to the experience on the Continent. No difficulty in raising money is there experienced. Indeed English capital is flowing abundantly abroad; and surely the same persons who invest their money in foreign railroads, where the tariff is fixed so low-where the property in the road itself is for a term of years only, will not hesitate about laying it out in railroad schemes at home. The list of

Bills on your table, in fact, proves that the desire to invest capital in these speculations requires a check, rather than a stimulus; and I deem the great excitement and reckless speculation which have arisen in the share-market, to be one of the most pernicious effects of the Act of last year. By that Act people were led to expect, indeed I believe it has been generally understood, that a dividend of 10 per cent. certain was to be permanently secured to the shareholders of some of the old lines; and such dividend will, I believe, be the actual result, unless they, by continuing their present high rate of charge, encourage competitors to start up, and thus divide the traffic hereafter with them. People, indeed, were too apt to believe that the Act afforded a sort of guarantee of 10 per cent. on the new lines also; an opinion which bas, in no inconsiderable degree, aided in raising up that spirit of inordinate speculation, which, I trust, the resolutions I intend to propose, will tend to moderate.

I now turn to the consideration of the limitation of the rate of charge-the principles upon which that limitation ought to be established; and the probable results that may be expected from it.

I propose, then, that in all instances, the Railway Committees should, in future, determine the charges upon each particular line by the circumstances peculiar to that line. This has not hitherto been done, but one rate of charge has been applied generally to all railroads, no matter what might be the difference in the cost of constructing them. This is a vicious principle, and ought at once to be given up.

All the evidence relating to the cost of construction and working, the estimates of traffic and expense, will be in the hands of the committees which have to decide upon the cases severally brought before them; and from the various sources of information which will thus be afforded them, I believe they will be able to form a very accurate judgment of what will constitute a remunerating rate of fares and charges. In many, if not in most cases, a scale ranging from one-half to two-thirds of the rates at present charged, would, I contend, be amply sufficient. I do not mean to complain of the high scale of the fares charged at first by the old lines, because when they were constructed the whole scheme was an uncertain, unascertained experiment The case is now altered, the whole system is reduced to a matter of calculation and of certainty, and presents a means of speculation as safe as any other commercial venture for making money, if, indeed, it be not more safe than most of such speculations.

If this plan were adopted, many legitimate advantages would immediately be derived from it, both by the public and by the companies themselves.

To the public the immediate effect would be the power of travelling and of transporting goods at a cheap rate. An indirect, and, as tending very effectively to the same end, not less important effect would be, that immediate advantage would be taken of

every improvement, both in construction and working. Whilst the new lines, by affording the public the benefit of these lower rates of charge, would in fact compel all the old lines, which now possess a dangerous monopoly, to lower their fares, and give up the mischievous power we have unwarily conferred on them.

At present the cost of constructing, working, and keeping lines in repair, may be indefinitely lessened, without the public gaining anything by the improvement. For whether railways are constructed at an expense of 10,000l., 30,000l., or 50,000l. per mile, much the same rate of fares is adopted. But it is obvious that the rate at which fares become remunerative depends upon the original cost and ordinary outlay, combined with the traffic; and in every other speculation in which money is laid out, except in railways, a decrease in the necessary expense of a scheme produces an almost immediate benefit to the public. An improved process, for example, in the manufacture of iron, in a power-loom factory, in the machinery of a cotton-mill, or in any of the thousand ways in which steam-power is employed to diminish the cost of production, causes an immediate benefit to the public, in the shape of the reduced price of the article produced by the machinery so improved. Why should not similar causes produce similar effects in the case of railroads? Every opportunity should be taken to reduce the fares upon this principle, always keeping in mind that we must ensure to the proprietors that rate of profit which we shall determine to be fair and adequate. But we ought never to forget that the public are unjustly treated whenever an improvement is neglected,—whenever, being adopted, the benefit goes to the railway proprietor in the shape of a dividend above that which was deemed fair and remunerative,—or, whenever that advantage is, elusively and in evasion of the law, made to benefit individuals in the shape of unfair expenditure,—and, lastly, the same injustice is done to the public whensoever we raise the maximum profit of the proprietor beyond the point necessary to induce him to lay out his capital in the construction of necessary railways.

If such a low and reasonable rate of charges were imposed on the new lines of railways, the old lines would find that, although they possess, at present, undisturbed possession of their traffic, the only mode of permanently securing their advantage would be the reduction of their charges to such a point, as that it would not be worth the trouble and expense to any other company to construct a railroad in opposition to them. Having the start of all competitors, and possessing the many advantages which that start gives them in experience and confidence, they will be enabled to carry passengers and goods at a cheaper rate than any newly proposed company could offer; and if they be wise, they will profit by these favourable circumstances, and thus prevent a ruinous competition. If, however, they be blind to their true interests, they will find that the principle which I have stated, and which is the true commercial principle will inevitably produce its effects; and they will at last, and without the same benefit to themselves, be compelled

to adopt the low scale of fares. The formation of two lines where only one is really needed, is, indeed, a loss of capital to the public, and of profit to the capitalist. It is an evil only less than that of suffering one monopolising company to coerce the community at large.

In order, however, to obtain the full advantage which I here contemplate, it is necessary that we should embrace the present opportunity. If we let that pass, the rapid construction of new railways upon the old and erroneous system will greatly narrow the field of our operations. By a careful and well-devised scheme we might now so modify the various lines which have yet to be constructed, as to make them, by means of cheaper tolls and charges, as effective without being as mischievous or expensive as the already existing lines. If this be neglected, we shall merely multiply monopolies, and thus strengthen and increase the mischief by the very means which might afford us a remedy and protection.

To devise a plan by which we might secure this benefit which I am now describing, was, I suppose, within the legitimate sphere of action allotted to the railway department of the Board of Trade. To what extent they have fulfilled the task appointed them will come to be considered hereafter. But there are some points in their reports connected directly with the subjects of which I am treating, to which I cannot avoid alluding at the present moment.

In the first place I would observe, upon the extraordinary and unnecessary dread which the Commissioners appear to have entertained of insolvent companies. The notion seems completely to have haunted them, and they have further constantly confounded insolvency with cheapness; for of cheap lines, they have throughout evinced an especial dread. Under this impression they have generally recommended that new lines should be entrusted to old companies, because, as they alleged, the completion of the former undertakings of these companies was a guarantee for their performance of any new scheme proposed by them; and the necessity of such guarantee is enforced by citing examples of schemes not carried out, or which have been delayed for a long term of years. Now, Sir, I cannot draw from these premises the conclusions at which the Board of Trade has arrived. The schemes which they bring forward as having failed, were, in fact, not schemes of insolvent companies, but were unprofitable speculations; and they have remained unfulfilled not because of the insolvency of the proprietors, or because they had not the power of raising money, but simply because the lines did not afford a prospect of remuneration.

I cannot consider it a good policy to encourage the construction of unremunerating lines. If, however, it should be thought necessary to take precautions against the non-completion of proposed schemes, two modes are in our power,-one of precaution, the other of punishment. At present a certain portion of the capital of projected lines is obliged to be paid up, and a certain limited time is allowed to projectors within which they are to complete their scheme. The object of these regulations is clearly to give

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