they were so,) they had been entered into only as a matter of necessity. They all arose out of the mania of 1845-6. He, as far as he was concerned, had not only not promoted these projects, but he had taken every means in his power to check them. In January, 1846, in his place in parliament, he had predicted the results, if some steps were not at once adopted to put a curb on reckless speculation; but most unfortunetely for all parties, that was not the view which was taken by the House of Commons. Mr. Hudson and other gentlemen maintained that the course he recommended would be an unfair interference with private enterprise; and the consequence was that schemes involving altogether the sum of £25,000,000, passed through the legislature in that year. The Great Western had remonstrated with the President and Vice-President of the Board of Trade; and, left to their own resources, they had been compelled in self-defence, to look to their own interests, by getting hold of all the rival, or contemplated rival Lines."

We may see here how necessarily one false step leads to many others. Had the legislature, in delivering over the communications of the country to private associations, taken any adequate security in behalf of the public against excessive exactions, all these struggles to retain, by means of Extensions, Branches, Amalgamations, and purchases of rivals, an excessive return on investments could not have taken place. The object of the struggles is to keep at a distance rivals, who by accommodating the public for lower fares might compel the monopolists to a reduction in turn. The Extensions and Branches, however, having

been in most instances much less productive than the main Lines, they, in the degree in which they were less productive, lowered the general dividend. This effect would not, however, seem to have been generally anticipated, in the era of extravagant speculation; for the new shares were, with the premiums, equal to the prices of the old shares, calculated on the old scale of profits. In the first instance, enormous sums are realized by the premiums on the issue of the new shares; but as, in the degree in which investments become less profitable, the general return is lowered, the price of shares also necessarily falls. The London and Birmingham shareholders, for instance, realized by the issue of shares down to 1846, £4,294,825, while their original outlay was £5,750,000; but the new undertakings have had the effect of lowering the dividend of the North Western to 8 per cent. This result was anticipated by Mr. Glynn, and more than once foretold at the Meetings of the Company; and the reduction of the dividend from 10 to 8 per cent., is not, therefore, as was stated by Lord George Bentinck, in the House of Commons, the fruit of any reduction of fares, but the consequence of the investment of capital in less productive undertakings than the original Line. It is stated in the Report submitted to the last half-yearly Meeting of the London and North Western, on the 18th of February last, "that the passenger traffic, notwithstanding the general depression, has equalled that of the corresponding period of last year; and, both in general merchandise and coal, the gross receipts have exhibited a considerable increase." The effect of the branches and amalgamations on the revenue was very candidly stated by Mr. Glynn,

in his evidence before the Railway Acts Enactments Committee.*

"Have the branches paid their full dividend?-We do not make any distinction in the mode of payment, except in one particular case, and that is, the money that was raised purposely for the Northampton and Peterborough Line; in that case, the dividend will not begin to accrue until the 1st of January next year, and it will be paid to the 30th of June, (1847,) at the same rate as the others.

"That branch is not a loss to the Company ?-We do not know the proportion; but as the shares have been created and issued in every instance to the proprietors, they reap the benefit of the profit arising from the whole concern; we treat it as one.

"Supposing your dividend to be 10 per cent., would the receipts on the Northampton and Peterborough Line pay 10 per cent. upon the outlay?—No. The Leamington and Warwick would not bear 10 per cent; it would be between six and seven.

*** *

"Had you any lease?—We have a lease of the Aylesbury Line, for which we paid £2,000 per annum.

"That was a short lease?—Yes. Under the Act, of seven years.

"A single Line?—Yes. It was 4 per cent. on their capital. It is amalgamated, now at par."

* Second Report, Railway Acts Enactments, Min. of Evid. pp. 111, 112.

"So that whether you require capital to make a Branch, or an Extension, or improvements of stations, or whether you subscribe to other Lines, the capital is provided in the same way in each case?-Exactly in the same way, by the issue of new shares."

In some cases it would appear the revenue of Lines was so great as even to alarm the proprietors, who, under all circumstances, deemed it safer to guarantee unproductive purchases and Lines, that they might have an opportunity of realizing money by the sale of shares, which would have the effect of lowering the amount of the dividends to the desired rate. The process is described by Captain Laws, in his evidence in 1844 :*"There is the York and Scarborough Line, a single Line of rails from York, over a poor country almost all the way to Scarborough: Scarborough is a little fishing town on the coast of Yorkshire. Those shares are at £17 premium, £2. 10s. paid; and they are worth the money, because they are amalgamated with the York and North Midland. The York and North Midland Company will have a revenue sufficient to divide 20 per cent.; but they look upon that as rather dangerous, and therefore they say, We will throw out a branch to Scarborough; we will take it ourselves, and get 10 per cent. upon the Scarborough Line, which of itself might not pay 2 per cent., and the same upon the Leeds and Selby Line. If we can get 10 per cent. upon all this, it comes to the same thing, and it is much safer and more certain to retain than to be getting 25 per cent. upon a line from York to Methley." These operations were no doubt highly profitable to many individuals; but in the long run they have reacted on * Fifth Report, Railways, (1844) Min. of Evid. p. 481.

the shareholders, and account for much of the discredit, under which Railways now generally labour, as a means of permanent investment. Let us, for instance, compare the half-yearly statements of the Great Western on the 18th February, 1847, and the 17th February, 1848. The sum to be divided in both cases was nearly the same. On the 18th February, 1847, it was £211,002. 4s. 9d.; and on the 17th February, 1848, it was £215,526. 10s. But the former of these sums corresponded to a dividend of 8 per cent. ; and the latter only to a dividend of 7 per cent.; that is, the shares on which 8 per cent. was paid on the 18th February, 1847, must have amounted to about £5,275,000, and those on which 7 per cent. was paid on the 17th February last, to about £6,157,900. On the latter occasion more guests sat down to a table which had only the same quantity of viands, so that a smaller proportion fell to the lot of each. The rate of dividend may not always be a correct index of the state of a Company, for the power to borrow on debenture may have been abused; but without entering into this question, and speaking merely with reference to receipts from Lines, it will be found that in proportion as additional outlays yield a smaller return than former outlays, in that proportion must the intrinsic value of the shares be lowered. The intrinsic value of the shares of the Great Western, calculated according to nett revenue, without reference to the market price, is just one-eighth less in 1848 than it was in 1847. This may be taken as a specimen of the working of the Branch and Extension system.

But the fall in the price of shares is out of all propor