sorting to vary the rate of dividends at pleasure, Mr. Gladstone gave the public no prospect of relief from control or revision till the 10 per cent. had been reached, while he made no provision for auditing accounts, so that all means of ascertaining whether it had been reached or exceeded were withheld. The consequences which might naturally have been expected immediately followed. Companies having now something like a parliamentary guarantee, or what was considered such by many people, began to issue new shares for almost every purpose. The whole system of branches and extensions, purchases, and amalgamations with other Lines and with canals, subscriptions to new Lines, harbours, or any other public works, for all which the means were obtained by the issue of new shares, received its full developement. The new schemes were in many cases by no means eligible with reference to their ultimate productiveness; it was enough, however, that they offered the means by which shareholders could immediately realize a large bonus. The Companies crowded to Parliament with their projects; fought with each other for districts, as fields for enterprise, like so many contending armies; covered the face of the country with hosts of surveyors and engineers; filled every hotel and lodging-house of the metropolis with agents and witnesses; and succeeded in infusing into all ranks and conditions, and both sexes, young and old, an eagerness, amounting almost to frenzy, to partake in the golden harvest. The enormous sums realized by certain great Companies through means supposed to be pow legalized, infected the whole community with an inordinate desire of sudden wealth. For For every million ex

pended under the authorization of Parliament on certain Railways, another million passed into the pockets of the shareholders,* just as effectually as if it had been voted directly to them by the House of Commons, and paid by the Treasury from the public revenue. There is no parallel to be found in the history of the legislation of this or any other country to this gigantic abuse.

Hence the Companies' Clauses Consolidation Act, (the 8 Victoria,) by the sanction which it was understood to give to the creation of fresh shares to be issued at par, and by its securing to the proprietors an equal distribution of the new shares among themselves, which had in former cases of some smaller Joint Stock Companies, been, as they thought, unfairly monopolized by Directors and their favourites, contributed greatly to augment the evil which the previous defective legislation had called into existence.

On the 14th July, 1845, I addressed, at his request, a letter to the Earl of Dalhousie, then at the head of the Railway Department of the Board of Trade, containing the substance of certain suggestions which I had

The

* The large sums received in this way contributed to the advancement of no one beneficial object. The public were in no wise benefited; and so far from benefiting the Railway itself, it was generally injured by the schemes for which the new shares were issued. advantage was confined to the small number of individuals who might happen at the time to be proprietors, and who, in a month afterwards, might be no longer so. Mr. Hudson, when asked what the proprietor of a £50 share in the York and North Midland would have obtained in the way of premiums upon the different issues, answered, "Many men cannot hold; they are obliged to sell;" leaving it to be inferred that the men who pocket the premiums often part with their shares soon afterwards.

ventured in conversation to make to his lordship. In this letter I stated, as universally admitted, "that it is the duty, as it must be the work of Parliament, to provide that the Railways which are endowed with many privileges by the law, should afford to the public the cheapest and most expeditious means of travelling, compatible with a fair remuneration to the capitalist for his outlay. But unfortunately it is difficult in the present state of our knowledge for Committees of the House of Commons to ascertain the true and proper limits of charge, to establish, in other words, a fair tariff; to estimate correctly the amount of necessary expenditure; or to draw that line which, while it provides effectually for the public interest, does no injustice to the constructors of the road. There is at present no record of experience to which the Members of a Committee can refer, and having no knowledge in most cases themselves upon the subject, they are driven to depend upon their own unaided judgment, or to seek for information from parties who, by their position and habits, are likely to afford them anything rather than disinterested and satisfactory information. In similar circumstances it has been the custom of this and other Governments to make systematic inquiries; I need not enumerate the occasions on which this course has been adopted by our own. At the present moment this remarkable circumstance is to be observed in England we have the most perfect mechanical skill and power of any nation in the world;-and we have also at hand, in abundance, labour, iron, coal, and machinery-we have, in fact, all those things in greater abundance, and can obtain them at a cheaper rate than any other nation. The na

tural consequence of such a state of things, we should fancy, would be, that our Railroads would be constructed and worked at a cheaper rate than those of any other people; and that the charge for travelling on them would be lower than among many continental nations: but such is not the case. France, for example, with less admirable machinery, inferior skill, smaller capital, dearer iron and coal, has been able to secure for her people cheaper travelling than we in England enjoy. This remarkable condition, I submit to your lordship, calls for inquiry; and the object of my present letter is to suggest the propriety of instituting such an inquiry, by means of a commission, which should make full search into all the circumstances attending the formation of Railroads in the various countries of Europe, especially where the right to make these roads is conceded to private Companies, and report the whole cost, and the various items of cost, in the construction, the mode and cost of working the Line, and the whole tariff of charges. A body of evidence thus collected from authentic sources would be, in my opinion, of the highest utility to parliament in all our future legislation upon this important subject."

Nothing, however, was done by his lordship to give effect to the suggestions in this letter; and the reason he assigned for this was, that he really could not find a person competent from his qualifications for such a commission, as the Railway Companies had engrossed all the talent available for the purpose. I am quite satisfied that if the determination had rested altogether with Lord Dalhousie, we should be in a far better state with regard to Railways than we now are. It is evident,

from his Reports, that he thoroughly understood the subject, and knew the means by which the public could be most benefited by Railways.

But though no Commission was appointed; it will be seen that several of the points respecting which it was recommended that information should be obtained, received considerable elucidation in the following year.

The next step taken by me was to move that it be left to Committees on Railway Bills in each case to settle the tariffs of fares and charges which the Companies should be allowed to charge. Parliament, however, except in a very few instances, never acted on this Resolution.

In 1846, while speculation was at the height of its madness with regard to Railways, and consequences of a very serious nature were to be apprehended from a continuance in the course we were then pursuing, I deemed it advisable to publish the annexed "Observations illustrative of the Defects of the English System of Railway Legislation, and of its injurious Operations on the Public Interests; with Suggestions for its Improvement." In that publication, I entered very fully into the various bearings of this important subject: and, as the considerations which I then urged have received additional force from recent events, I trust I shall be pardoned for again requesting for them the attention of the reader.*

In 1836 I had assumed that the best Lines had been first seized on; and conceiving the possibility of reconciling the interests of the monopolists with those of the public, I was anxious to guard against an unnecessary expenditure of capital in the construction of new Lines, * See p. 110.