From the earliest moment of there being any prospect of railways, operated by locomotives in place of animal power, coming into general use, the attitude of the State towards their promoters was one less of sympathy than of distrust; and this distrust was directly due to the experience the country had already had of the waterway interests, whose merciless exactions and huge dividends had led to the fear that if the railway companies, in turn, were to get a monopoly of the transport facilities of the country, they might follow in the footsteps of the inland navigation companies unless they were restrained either by law or by the enforcement of the principle of competition.
Public sentiment, which Parliament is assumed to represent, and of which our legislation is supposed to be the outcome, was divided between, on the one hand, the landed gentry, the canal proprietors (each alike hostile to the railways until they found they had more to hope for from exploiting them), and the inevitable opponents of innovations of any kind; and, on the other hand, the traders, by whom the railways were being cordially welcomed, not only because of the greater and better transport facilities they offered, but also because they presented an alternative to the canals, the earlier enthusiasm for which had been greatly moderated by the prospect of an improved means of transport.
Without adopting wholeheartedly the views of either of these two opposing parties, Parliament regarded the position with much concern lest there might be a renewal, in another form, of what we have seen to be the grasping tendencies of monopolistic canal companies; and the distrust inspired, under these particular circumstances, and from the very outset, towards railway companies which were preparing to create a revolution in the transport conditions of the {259}country—a revolution the State was not itself disposed to effect or to finance—was powerfully to influence much of the subsequent railway legislation, if, indeed, it has even to-day entirely disappeared.
At first it was assumed that competition in rail transport would be assured, and the dangers in question proportionately reduced, by different carriers using their own locomotives, coaches and carriages on the railway lines, which alone, it was thought, would be owned by the railway companies constructing them. In some of the earlier railway Acts there was even a provision that the railway companies could lease their tolls, as turnpike trustees were doing. But the apparent safeguard in the form of competition between rival carriers disappeared when it was found (1) that, although a railway company was required to allow a trader's own horse or locomotive to use the line, it was under no obligation to afford him access to stations and watering-places, or to provide him with any other facilities, however indispensable these might be to the carrier's business; (2) that the tolls charged by the railway companies were heavier than the carriers could afford to pay; (3) that the entire operation of a line of railway worked by locomotives must necessarily be under the control of the owning and responsible company; and (4) that railway companies would have to become carriers of goods as well as owners of rails.
A Parliamentary Committee which sat in 1840, and of which Sir Robert Peel was a member, had reported in the strongest terms that the form of competition originally designed was both impracticable and undesirable, and that monopoly upon the same line, at all events as regarded passengers, must be looked upon as inevitable. "Your Committee," said the report, "deems it indispensable both for the safety and convenience of the public, that as far as locomotive powers are concerned, the rivalry of competing parties on the same line should be prohibited"; though, as some check to the consequent monopoly of the railway companies, they suggested that the Board of Trade should act as a supervising authority, with power to hear complaints, consider bye-laws, etc.
A witness for the Grand Junction Railway Company, who gave evidence before this Committee, said that any person {260}might run his own engine on the Grand Junction, and in one instance this was done by a trader who had a locomotive on the company's line for drawing his own coal; but the witness apprehended the greatest possible inconvenience from any general resort to such powers. On the Liverpool and Manchester, also, anyone might run his own engines on the line; but, the witness added, "no one does."
The Royal Commission of 1865 summed up the position thus:—"No sooner were railways worked on a large scale with locomotive power than it was found impracticable for the general public to use the line with carriages and engines, and railway companies were compelled to embark in the business of common carriers on their own line, and conduct the whole operations."
When, in these circumstances, it was made certain that any idea of competition between carriers using a railway company's lines in the same manner as an ordinary highway would have to be abandoned, it became the established policy of the State to promote competition between the railway companies themselves by encouraging the construction of competitive lines or otherwise, thus still protecting, as was thought, the interests of railway users, and checking any monopolistic tendencies on the part of the railway companies. The futility, however, of seeking to compel railway companies to compete with one another had already been pointed out by Mr James Morrison, whose speech on the subject in the House of Commons on May 17, 1836, confirms, also, the theory I have suggested as to the attitude adopted towards the railway companies being traceable to fears engendered by the undue prosperity of the canal and navigation companies.
If, argued Morrison, after one company had spent a large sum on a line to Liverpool, another company were encouraged to spend as much again, with a view to providing a competition which would keep down the charges, the two would inevitably arrive at some understanding by which the original charges would be confirmed; and the Legislature, he contended—though the Legislature never acted on his contention—was "bound to prevent, as far as it could, the unnecessary waste of capital" on the building of unnecessary lines to promote a competition he held to be futile. The safeguarding of the public interests could, he thought, be effected in another way. {261}"The history of the existing canals, waterworks, etc., afforded," he went on, "abundant evidence of the evils" of allowing too much freedom in the matter of rates; and he quoted the high prices at which the shares of the Loughborough Canal and the Trent and Mersey Canal were then still being sold,[40] adding: "The possession of the best, or, it may be, the only practicable line, and the vast capital required for the formation of new canals, have enabled the associations in question, unchecked by competition, to maintain rates of charges which have realised enormous profits for a long series of years."
The remedy he recommended in preference to competition was that when Parliament established companies for the formation of canals or railroads it should invariably reserve to itself the power to make such periodical revisions of the rates and charges as it might deem expedient, examining into the whole management and affairs of each company, and fixing the rates and charges for another term; the period he favoured being one of twenty years.[41]
There was no suggestion, at this time, that the railway companies had abused their powers. The only suggestion—and expectation—was that because the canal companies had abused theirs, the railway companies might, and doubtless would, do the same, unless they were prevented; and it will {262}be found that this was mainly the position throughout the whole of the subsequent controversies.
Morrison's proposal was approved in the House of Commons, and on May 17 he brought in a Bill for giving effect to it in regard to all new railways, to be sanctioned in that or any subsequent Session. But the prospect of a Parliamentary limitation of the profits a railway might earn had a most depressing effect on the railway interests, and on July 11 Sir Robert Peel urged that the question should be decided without further delay inasmuch as "this branch of commercial enterprise was injured and almost paralysed." On the following day the Bill was brought up again, and it was then defeated.
In the same Session (1836) the Duke of Wellington moved, and carried, in the House of Lords a general clause, to be inserted in all railway Acts, the effect of which would have been to give to Parliament the power of dealing as it might think fit with any railway company during the next year. John Herapath thereupon inserted in the current issue of his "Railway Magazine" a letter addressed to the Duke of Wellington, in the course of which he said:—
"No person can doubt your Grace's intentions are honourable to all parties. Fearful of the consequences of overgrown monopolies, you are anxious to put some salutary restrictions to those bodies riding, as you apprehend, rough-shod over the public; and you are anxious to do this before they become too powerful to be ruled. Every honest and right-minded man must be satisfied that such are needful; nor is there a company got up on honourable principles that would object to any reasonable measure, in which a due regard is paid to their own interests, and a proper consideration is had to all the circumstances of their situation and risk. But in common fairness these must be taken into account."
Defending the railways, and keenly criticising the attitude of the State towards them, Herapath further said:—
"No man knows better than yourself that these works, if they are at all likely to be beneficial to the nation—which everyone in his sober senses admits—will form a great and brilliant era in its prosperity. Nay, my Lord Duke, permit me to ask you if they have not been a Godsend towards the preservation of this country, by giving a new impetus to {263}industry and trade, and saving us from that anarchy and confusion to which distress was fast hurrying a large proportion of our population? With all these advantages staring us in the face, what have the Government done to promote railways? Have they done a single thing? I am not conscious of one. Have they removed a single impediment? Not to my knowledge; but they have raised several. Have they contributed a single farthing? Rather, I believe, by the intolerable and vexatious oppositions permitted in passing the bills, have been the cause of spending many hundred thousands, which, like another national debt, will prey to the end of time on the vitals of public industry."
The Duke's proposed clause was dropped, and was heard of no more; but Herapath's prediction as to the equivalent of "another national debt" being imposed on public industry was to be verified by the course of subsequent events still more than by any avoidable expenditure then already incurred.
If, again, as Herapath said, the Government had done nothing to promote railways, they had not been backward in seeking advantage from them in the interests both of the Exchequer and of the Post Office.
Within two years of the opening of the Liverpool and Manchester line, a tax of one-eighth of a penny per mile for every passenger conveyed on the railway was imposed, and the directors of the Liverpool and Manchester, then struggling into existence, announced that, in consequence of the tax, they would be obliged to charge the public higher fares. By 1840 the Exchequer receipts from the tax amounted to ￡112,000. Two years later, following on a great public agitation, Peel substituted for the mileage tax a tax of five per cent on receipts from passenger traffic, and in 1844 the tax (which had been especially oppressive on the poorer class of travellers) was abolished in the case of third-class passengers carried at fares not exceeding a penny a mile in "Parliamentary trains," stopping at every station.[42]
The local authorities, with Parliamentary sanction, also subjected the railways to a degree of taxation against which {264}Mr G. C. Glynn, chairman of the London and Birmingham Railway, in a speech (at a meeting of his company) quoted by Francis, protested in the following terms: "Then comes the last item of local taxes and parochial rates; these, gentlemen, we do take exception to.... The county assessors and the parties to whom appeal from them is made seem actuated by one principle, namely, to extract every farthing they can from the railway property. We ask no boon, we ask for no favour from Government on this subject; but we do ask for justice."
The railways had to submit to the taxation, but they won the day as against certain excessive and, as they considered, intolerable demands made upon them by or on behalf of the Post Office.
In 1838, based on the recommendations of a select Committee of the House of Commons on the transmission of mails by railway, the Government introduced a Bill which, in effect, placed the entire railway system of the country, then and for all future time, at the command and under the supreme control of the Postmaster-General. That functionary was empowered by the Bill to call upon the railway companies to provide him with—at their own cost—special or ordinary trains for carrying the mails at any hour of the day or night, proceeding at such speed, and calling or not calling at such places, as he might direct, the companies giving security to the Queen by bond for duly complying with all Post Office orders, and being made liable to a penalty of ￡20 in respect to every railway officer, servant or agent, who might disobey any Post Office order. If the Post Office wished to use its own engines and conveyances it was to be at liberty to do so without paying any rates or tolls whatever; and it was, also, to be free to clear away any obstructions to its engines, and use any of the railway company's appliances it wanted. The railway companies were, in return, to be assured a "fair remuneration" for (in effect) the wear and tear of the rails; but, lest this payment might be too much for the Post Office, the Postmaster-General was further authorised to recoup himself by carrying, not simply the mails, but passengers, in the trains he might think fit to command or to run, thus competing on the railway lines with the companies whose property he was virtually to annex.
{265}
The companies declared they were willing to render every reasonable facility to the Post Office; but they protested most vigorously against what they called "the absurd and tyrannical clauses" of the Bill.
These were, nevertheless, defended in the Commons on behalf of the Government, the Attorney-General saying "he had no doubt if the prerogative of the Crown were put in force, the Post Office and the troops and stores might be transmitted along the railroads without the payment of any tolls whatever; though he thought the companies should have a fair remuneration for the accommodation given."
Sir James Graham, on the other hand, wanted to know what were the Queen's rights on the Paddington Canal. He understood that troops were frequently moved from Paddington to Liverpool by canal, but were always paid for as passengers. Lord Sandon, too, declared that the question was whether the public interest conferred a right upon the Post Office to take possession of railroads, and make use of them without the slightest remuneration whatever. That the railways should be subject to control he readily admitted; but there was a wide difference between justifiable control and absolute sway, between fair remuneration and robbery, for such it would be to use the property of these companies without paying for it.
The companies, according to a statement in the "Railway Magazine" for August, 1838, where a summary of the debate will be found, had been "prepared not merely to petition but to act"—whatever this may mean. The Government, however, adopted a more conciliatory attitude towards them by either withdrawing or amending the clauses which had evoked these protests, and an amicable settlement of the future relations between the railways and the Post Office was then effected.
The rejection of Morrison's Bill and the withdrawal of the Duke of Wellington's motion, following on their adverse criticism by the railway interests, had committed the Government still more to their policy of stimulating competition between the railway companies themselves, thus, they considered, diminishing the risk of seeing any of them become too prosperous a monopoly. It was in full accord with this policy that encouragement was given to the creation of {266}many small, independent, and more or less competing lines, and that no attempt was made to encourage the provision, either by individual companies or by groups of companies, of "trunk lines" of the type which Thomas Gray and others had been urging on the country with so much though with such futile persistence.
The advent of the new means of transport was, in fact, marked by the complete absence of any centralised effort with a view to securing the network of a railway system, so planned or so co-ordinated as to make the best possible provision for the country as a whole, and especially for the rapidly increasing necessities of trade, commerce and industry. The failure to act on these lines was, however, only in accordance with the previous policy, or no-policy, which had successively left the improvement of rivers, the making of roads, the construction of canals and the provision of turnpikes either to private benevolence or to private enterprise, influenced mainly by considerations of local or personal interests.
Much had certainly been done in these various directions by those to whom the State had thus relegated the carrying out of public works which in most other countries—as regards main routes, at least—are regarded as a matter of national obligation. But, apart from any question of providing State funds, the lack even of intelligent direction and efficient supervision by a central power, qualified to advise or to organise private effort, had led both to a prodigious waste of money and to results either unsatisfactory in themselves or in no way commensurate with the expenditure incurred. The same conditions now were to lead, in regard to the railways, to a further waste of money, to disastrous speculation, to infinite confusion, to the piling up of a huge railway debt, and to the provision of innumerable small lines which were to remain more or less independent and disconnected fragments of a railway system until the more enterprising companies began, on their own initiative, to amalgamate them into through routes of traffic.[43]
The general position at the period here in question was well stated by G. R. Porter in his "Progress of the Nation" {267}(1846), where he wrote, on the subject of railway development:—
"The laissez faire system which is pursued in this country to such an extent that it has become an axiom with the Government to undertake nothing and to interfere with nothing which can be accomplished by individual enterprise, or by the associated means of private parties has been pregnant with great loss and inconvenience to the country in carrying forward the railway system. Perhaps there never was an occasion in which the Government could with equal propriety have interfered to reconcile the conflicting interests involved, and to prevent public injury arising from the false steps so likely to be made at first in bringing about a total revolution in the internal communication of the country. It is not meant by these remarks to infer that Government should have taken into its own hands the construction of all or any of the railroads called for by the wants of the community; but only to suggest the propriety and advantage that must have resulted from a preliminary inquiry, made by competent and uninterested professional men with a view to ascertain the comparative advantages and facilities offered by different lines for the accomplishment of the object in view. If this course had been adopted before any of the numerous projects were brought forward for the construction of lines of railway between all imaginable places, and if it had been laid down as a rule by the legislature that no such projected line could be sanctioned or even entertained by Parliament which was not in accordance with the reports and recommendations of the Government engineers, the saving of money would have been immense. The expensive contests between rival companies in which large capitals had been so needlessly sunk would then have been wholly avoided; and it might further have followed from this cause that, a kind of public sanction having been given to particular lines and localities, much of that personal opposition which has thrown difficulties in the way of works of great and acknowledged utility would never have been brought forward."
In making these remarks, Porter was only giving expression to views entertained in various influential quarters, and to a certain extent he did but anticipate, or re-echo, according to the precise date at which his observations had been {268}written, certain views and proposals put forward by the select Committee of 1844, of which Mr Gladstone (then President of the Board of Trade) was chairman. In the Fifth Report of this Committee it is said:—
"The Committee entertain very strongly the opinion that in the future proceedings of Parliament railway schemes ought not to be regarded as merely projects of local improvement, but that each new line should be viewed as a member of a great system of communication, binding together the various districts of the country with a closeness and intimacy of relation in many respects heretofore unknown."
So long, the Report continued, as railways were considered to be of problematical benefit, and were in general subject to extensive opposition on the part of the owners and occupiers of land, and of the inhabitants of the districts they traversed, there might have been reasons for ensuring a very full, and, in some points of view, a disproportionately full, representation to local interests; but "The considerations which tend to attach to railways a national rather than a local character gain weight from year to year as those undertakings are progressively consolidated among themselves, as the points of contact between them are multiplied, and as those that were first isolated in comparison are thus brought into relation with gradually extending ranges of space, traffic and population."
The select Committee went on to give their reasons for considering that the ordinary machinery of Private Bill Committees, with their separate and unconnected proceedings, and an individual existence commencing and ending with each particular Bill, was inadequate and unsatisfactory; and they especially pointed to the fact that hitherto it had not been customary to examine railway Bills "systematically and at large with reference to public interests." There were various questions which could not be thoroughly sifted under the mode of procedure then in vogue, and the Committee recommended that, with a view to assisting the judgment of the Houses of the Legislature, all future railway Bills should, previously to coming before Parliament, be submitted to the Board of Trade for their report thereon. They further said—and these observations have a special significance in view of events that were to follow:—
{269}
"The Committee entertain the opinion that the announcement of an intention on the part of Parliament to sift with care the particulars of railway schemes, to associate them with the public interest (in the cases of all future schemes and of all subsisting companies which may voluntarily accede to such an arrangement) ... will produce very beneficial effects in deterring parties from the attempt to entrap the public by dishonest projects, in securing railway projects against the shocks to which in periods of great commercial excitement it must otherwise be liable from such causes," etc.
Praiseworthy as was the design thus put forward by Mr Gladstone's Committee, it failed to bring about the results anticipated.
In accordance with the recommendations made, a special department of the Board of Trade, under the direction of Lord Dalhousie, was created, in August, 1844, to inquire into and report to Parliament on all new railway schemes and Bills, with a view to guiding the Private Bill Committees of both Houses. The special department was more especially to report as to the positive and comparative advantages to the public of any Bills proposed for the construction of competing lines.
A great deal was hoped for from this new arrangement, and the decisions of the department as to which of the schemes then being promoted they would recommend for first consideration by Parliament were keenly awaited.
The expansion of the railway system had, by this time, proceeded so far that by the end of 1843 Parliament had authorised the construction of 2390 miles of railway, of which 2036 miles were then open for traffic. The capital of these lines was ￡82,800,000, and of this amount about ￡66,000,000 had been raised. A good deal of wild speculation in 1836-7 had been followed by a reaction, and the railway market was still depressed in 1843; but in 1844 interest in railway enterprise was greatly stimulated by the announcement that the Liverpool and Manchester, the Grand Junction, the London and Birmingham and the York and Midland were paying dividends of from ten to twelve per cent each, and that the Stockton and Darlington was paying fifteen per cent. The shares in existing companies rose in value, a number of new companies were formed, and companies already operating {270}projected branches in defence of their own interests against threatened competition. It was at this juncture that Mr Gladstone's Committee presented its Report and that, following thereon, the special department of the Board of Trade was called upon to undertake its responsible duties.
On November 28, 1844, the department intimated that the points it would particularly inquire into in regard to railway Bills then before it were (1) ability and bona fide intentions of the promoters to prosecute their application to Parliament in the following Session; (2) national advantages to be gained; (3) local advantages; (4) engineering conditions; and (5) cost of construction, prospective traffic and working expenses. On the last day of the year the department announced which Bills they proposed to recommend, and subsequently they issued reports giving their reasons. Strong protests were raised by the disappointed projectors, and on the opening of the Session of 1845 Sir Robert Peel announced that the Government intended to leave railway Bills, as before, to the judgment of the Private Bill Committees.
This meant the virtual setting aside of the newly-formed department, though its actual existence was not terminated until the following August. It meant—since each Private Bill Committee would deal only with the merits of a particular scheme—the definite abandonment of any opportunity for securing, through an authority dealing with railway projects as a whole, the realisation of the ideal of Mr Gladstone's Committee that "each new line should be viewed as a member of a great system of communication, binding together the various districts of the country with a closeness and intimacy of relation" previously unknown. It meant, also, the adoption of a policy of free trade in railways, without protection for established interests, and to any and every honest promoter or dishonest speculator who had a scheme to propose it gave, in effect, carte blanche to bring it forward.
Much disappointment was felt at this collapse of Mr Gladstone's apparently well-devised scheme, and the policy adopted in regard to it was keenly criticised. Francis quotes, for instance, the following passages from "Railway Legislation," the authorship of which, however, I have been unable to trace:—
"Swayed by motives which it is difficult to fathom, the {271}two Houses, with singular unanimity, agreed ... to give unrestricted scope to competition.... Little regard was paid to the claims and interests of existing railway companies, still less to the interests of the unfortunate persons who were induced to embark in the new projects for no better reason than that they had been sanctioned by Parliament.... The opportunity of confining the exceptional gauge within its original territory was also for ever thrown away. By an inconceivable want of statesmanlike views and foresight, no effort was made to connect the isolated railways which then existed by new links into one great and combined system in the form in which they would be most subservient to the wants of the community and to the great ends of domestic government and national defence. Further, the sudden change from the one extreme of determined rejection or dilatory acquiescence to the opposite extreme of unlimited concession gave a powerful stimulus to the spirit of speculation, and turned nearly the whole nation into gamblers."
Francis himself says of the position thus brought about:—
"All hope of applying great general principles passed away. Every chance of directing the course of railways to form a national system of communication was lost.... The legislative body—to appropriate the idea of Mr Morrison—committed the mistake of converting the Kingdom into a great stock exchange, and of stimulating the various members of the railway system to a deep and deadly struggle, destructive of order and fruitful of vice."
This may seem to be unduly strong language; but what actually and immediately followed on the course of events here in question was—the Railway Mania of 1845-6.
By the summer of 1845 the country had gone railway mad. In the Session of 1843 the number of railway Acts passed had been twenty-four, showing no more than a normal development of the railway system in meeting the legitimate needs of the country. In the Session of 1844 the number increased to thirty-seven. In the Session of 1845 there were no fewer than 248 railway Bills. In the next Session Bills were deposited with the Board of Trade for the construction of 815 new lines of railway, with a length of 20,687 miles, and capital powers to the extent of ￡350,000,000. Of these 815 Bills many were abortive for technical reasons, or {272}because the necessary deposit was not paid; but over 700 of them reached the Private Bill Office.
How every class of society joined in the scramble for shares; how extravagant prices were given for the scrip of lines which, when completed, could not for years have covered their working expenses; how half-pay officers, ticket-porters and men, even, in receipt of parish relief put down their names on the "subscription" lists for thousands of pounds' worth of shares, on their being paid a fee—sometimes as low as five shillings—for so doing; how "frenzy seized the whole nation"; how "there was scarcely a family in England which was not directly or indirectly interested in the fortunes of the rail"; and how the inevitable collapse reached every hearth and saddened every heart in the Metropolis, bringing many families both there and elsewhere to ruin, will be found recorded in detail by John Francis, in his "History of the English Railway," and need not be enlarged upon here.
In referring to the events of this period, the Report of the Joint Committee on the Amalgamation of Railway Companies, 1872, admits that "One effect of the favour shown by Parliament to competing schemes was to encourage a large number of speculative enterprises." Leaving aside the enterprises, of whatever type, that did not survive the passage through Parliament, I compile, from figures given in Clifford's "History of Private Bill Legislation," the following table showing new lines of railway actually sanctioned by Parliament during the Sessions 1845-7:—
Year. Number. Miles. Capital.
1845 118 2700 ￡56,000,000
1846 270 4538 ￡132,000,000
1847 190 1354 ￡39,460,000
—— —— ——————
Totals 578 8592 ￡227,460,000
These figures indicate sufficiently the magnitude of the schemes in respect to which, during so short a period as three years, Parliament assumed the responsibility of giving its express sanction and approval.
The period of speculation was followed by the inevitable reaction, and in 1850 it was found necessary to pass an Act {273}"to facilitate the abandonment of railways and the dissolution of railway companies." Of the 8592 miles of railway sanctioned in the three Sessions, 1845-7, no fewer than 1560 miles were (as shown by the Report of the Royal Commission on Railways, 1867), abandoned by the promoters under the authority of the Act; while a further 2000 miles of railway, requiring 40 millions of capital, are said by the Report of the 1853 Committee to have been abandoned without the consent of Parliament.
To the extent indicated by these abandonments the railway situation was certainly relieved. But the mania and the resultant panic had serious consequences in regard not alone to investors in the schemes that failed but also to the companies that survived.
Apart from projects designed to open up entirely new districts—many of them of a perfectly genuine and desirable character—there were others directly devised to compete with existing lines and capture some of the remunerative traffic these were then handling; and it was, as I have shown, quite in accordance with the accepted principle of State railway-policy that such competition should be encouraged, in preference to any "districting" of the country among particular companies or to the creation or co-ordination of an organised system of railways on the lines proposed by Mr Gladstone's Committee.
The existing companies, finding that the territory already "allotted" to them (as they considered) was being invaded, or was in danger of being invaded, felt themselves forced, for the purposes of self-defence, to enter on a number of protective schemes which might not, at the time, otherwise have been warranted. Clifford says on this point in his "History of Private Bill Legislation": "As the Government took no steps to prevent the promotion of competitive railways, tending to diminish the profits of existing companies, the latter sought to protect themselves as they best could, and justified their many unprofitable extensions and amalgamations as measures forced upon them by the leave-alone policy of the Government."
Confirmation of this statement will be found in a speech delivered on February 23, 1848, by Mr C. Russell, M.P., chairman of the Great Western Railway Company, at the {274}sixth half-yearly meeting, at Paddington, of the South Wales Railway Company (of which he was also chairman), and reported in "The Times" of the following day. Referring to a pamphlet which had been issued attacking the policy of the Great Western Railway Company, Mr Russell said:—
"If their engagements were extensive, and he did not deny that they were so, they had been entered in only as a matter of necessity. They all arose out of the mania of 1845-46, and even in the pamphlet in question it had been admitted that the Great Western was not one of those companies which at that time had promoted any of the many schemes which were afloat. He, as far as he was concerned, had not only not promoted these projects, but 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 upon reckless speculation; but most unfortunately 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 ￡125,000,000 passed through the Legislature in that year. The Great Western had remonstrated with the President and the Vice-President of the Board of Trade, and, left to their own resources, they had been compelled, in self-defence, to look after their own interests by getting hold of all the rival or contemplated rival schemes."
In some instances the existing companies guaranteed interest to the shareholders of branches and extensions which were feared as rivals. F. S. Williams, in "Our Iron Roads," says of such lines as these that while many of them were accepted as feeders they "proved for a time to be only suckers."
The effects of the mania on the finances of existing railway companies was further shown by the fact that, in order to pay their contractors, some of the companies were obliged during the crisis to raise money at from ten to thirty, and, in some instances it is said, even at fifty per cent discount. Then, also, the shares in ten leading companies suffered between 1845 and 1847 a depreciation in value estimated at {275}￡18,000,000. The following are typical examples of the falls experienced:—
COMPANY. SHARES. JULY,1845. APRIL 4,1848. DECLINE.
￡ ￡ ￡ ￡
London and Birmingham 100 243 126 117
Great Western 80(paid) 205 88 117
Midland 100 187 95 92
London and Brighton 50 76 28? 47?
While the general situation in the railway world had been thus developing, there was a revival, in 1846, of the idea that the work of Private Bill Committees in respect to railway schemes should be supplemented by some other form of inquiry into their merits.
Writing on this subject in the issue of his "Railway Magazine" for July, 1837, John Herapath had said:—
"It has long been anxiously expected that Parliament would take some steps to relieve itself from the onerous duties of investigating and deciding on railway matters. Probably no tribunals can be less fitted for inquiries of this kind than Parliamentary Committees, of which the House of Commons has lately given a demonstrative proof in the case of the Brighton line. After Committees of the two Houses had sat nearly the whole of last session, and a Committee of the Commons for thirty-five days of the present; after the Committee's reports had been made on each of the lines and near 300,000l. of the subscribers' money had been wasted, the House of Commons stamped its own opinion of all those labours by giving them the 'go-by,' and referring the whole four lines to the judgment of a military engineer."
As for the element of uncertainty in the decisions of Parliamentary Committees, F. S. Williams is responsible for the statement that six railway Bills rejected by Commons Committees in 1844 were passed on precisely the same evidence in 1845; that of eighteen Bills rejected in 1845 seven were passed unaltered in 1846; and that of six Bills thrown out by Committees of the House of Lords in 1845 four were adopted by other Committees in 1846.
The failure, however, of the special department of the Board of Trade, created on the recommendation of Mr {276}Gladstone's Committee to meet the requirements of the situation, was complete. In giving evi............