The Stourbridge Observer, Cradley Heath, Halesowen & District Chronicle.
Stourbridge, West Midlands, England, 1873-06-21 00:00:00

LORD DERBY on the STATE PURCHASE

of RAILWAYS.

The Earl of Derby presided at a special meeting of
he members of the Society of Arts held in London, on
Friday in lokt week, at which Mr. William Galt read
an important totper on the Purchase of Railways by
the state, and among those present were the Marquai
of Clanricarle, Lotd Henry Lennox, MY., Admiral
Lord Clarence Paget, Admiral Ommanney, Sir Walter
Stirling, Dr. Farr, President of the Statistical Society;
Mr. It B. Martin, Colonel Strange, Mr. EdwinChads
wick, C. 11., awl Mr. Robert Rawlinson, C. B.
_ . '

Mr. Galt, who was introduced to the meeting by the
chairmen, first of all gave a sketch of our railway leelsla- •
tem previously to 1944, wheti Parliament passed an Act en.
ablieg Government to purchase, on certain specided terms, I
all the railways in the United Kingdom which from that
trete forward rhould ice constructed, but providing that 21
years should elapse before any change should be effected,
or the riehts of proprietorship in any way interfered with.
The gut. tern, therefore, was whether or not it wan desirable
In the interests of the eation to carry out the object for
which the Act was passed. Ile freely admitted at the outset
that those woo advocated the purchase et railways by the
State were called ,m to make out an overwhelming can in
support of their views before they had any right to ask the
country to adopt them. It could not be denied that what
they demandot was wholly opposed to the traditional policy
of this cenntry. The mile complaints preferred against the
companies were—first, excessive charges compered air h the
coat of conveyance ; secondly, arbitrary and exorbitant rates
impoted upon some towns in comparison with others ;
thirdly, refusing to separate the rates for carriage from
terminal charges ; fourthly, the great Injury to the trade
and conimerce of the country from the want of unity of
management ; fifthly, the regent to publish a list of charges
from station to station of the several classes of goods. Rail.
roads had become the great high roads of the country, and
he presumed it would uot ha que,t,oned by any one that the
greatest possible facility of transit for penetrates and goods
should be afforded to the public, and that the fares for plumate
ger, and charges for merchandise should be reduced to the
lowest possible rate consistent with the payment of working
expenses and interest the capital invested in the cenetruc.
lion of the line.. Assumine that in the case of State
.pur-
chase the Legislature wished to reduce the fares one nalf,
what, he asked, would be the extra expenses for conveyance
of the increased number of • passengers l The witnesses
examined before the Royal Commission and the Joint Com-
mittee in reference to the eroposed arnalgematien of the
London and North Western and Lancashire and Yorkshire
Companies agreed that there would be an ea' 'rmous saving ,
In working expenses by the amalgamation of the commode.
Mr. Stewart stated that if the whole trait° of the country.
was worked harmoniously together there would be a saving
of 20 per cent in the workieg a:peens—in the London and
North. Western they would be able to nave £600,000 a year.
Other competent witnesses calculated it at 25 per emit In
addition to that great saving, if the railways were bought at
a fade price, mid the stierettelders were WI in G .vernmeet
stock, there woald be a very large profit to the State, lass
mach an a £lOO railway share paying 3 per cent. was worth
only £6O, but Government stock paying the same interest
was worth £O2 lie (Mr. Galt) was examined before the
Cemnrittee, and et their desire ho furnished them With
a return of the then existing railways, and the cost
of eaeh, with their market value, so far as that could be
ascertained. Ile dirtied them into two classes, The
firat contained all the principal railways in the kingdom;
they were 4) to number, they had cost £59,630.0 0, and
their market velue was £71,734,000 The second list con-
tained all the railways in course of construction, and nearly
completed, and cost then a 8,160 000, and their value was
ell 613,000, so that all the capital at that time invested in
railways amounted to £67,790000, and its market value
rright be taken at £88,347,000. He now proposed to con-
sider the terms of purchase by which the State was to buy
a property that had cost nearly £600,010,t00. Ile urged
that the theory that the value of railways, or indeed Any
other kind of property, could be estimated by the interest
or dividend which it paid. was altogether erroneeus
The Repel Commitment', in their Report of 1867, and the
Joint Committee in their Report of last year, stet., that the
railways coull not be purchand wider the Act of ISA and
it might, one day be worth considering if the market price
cocci e with justice to both nettles, be male the standard of
value. If an Act had been passed authorizing the Govern-
ment to take the railways at their market price at a date
previous MIN, time of purchase, with whatever bonus the
Legislature might have thought proper to add, the Act
woulci have had to provide for other matters best,e.s de-
terminicg the market value of the shares. It would be
necessary to have heel the ho' ks of the companies examined,
and also to ascertain if the prices quoted were genuine, and
not the result of stock-jobbing operation.. It would he im-
possible under the Act for Government to purchase a single
railway with the knowledge at the time of purchase of the
Sum which they might ultimately be called on to pay, as each
company, in adeltiou to the 25 years' purchase of the
profits, would of course make a large demeed for their
prospects." So they might dismiss entirely any idea of
compulsory perches.. Was there, he asked, ally probability
of the companies being willing to accept moderate terms
for their properly. Taking the returns of 1871, it
was seen that the railways cost £153.000,000, of which
sum £323.00e,000 was debenture and preference stock, and
.4130,. 00,000 ordinary stock, end that the sum distributed
In profits that year was 625,740,000, or about £4 135. per
cent, on the Invested capital. The market value of the
property, accordieg to Six R. le Martin, who appeared to ,
have made a very liberal estimate, was £b07,010,000. Now,
eccordlog to the best authorities, they could not purchase
that property for le.. than 1,00'000,000. Mr. Allport
said it could not be put chaeed seen for that sum ; ani
several other gentlemen of equally food authority agreed
wi:h Lim in that opinion, or, hi other words, that the
shareholders would not be satisfied with the payment of
400,000,000 sterling in lieu of "cons, quential peens."
They iniett, therefore, also dismiss at 011ee tire i• lea of pur-
chase, u such terms., end it must he remembered tint they
welt not in a po diem to enforce any terms inconeictaut
with the Act of 18;4. They could well imagine, after tlic ir
experi,ce about the telegraph ehareamarket, the effect which
weuld be produced upon the Stock• Exchange by unauthentic
at neuncement this; Geveremeet hiterided to recommend to
I' ...lenient the pu chase by the State of all the rallway• in
the United Ktegd• m. Taking the price paid for toe tele-
graphs alone, their market value, ass fair standard to regu-
late the price which should be paid .or railways, a berms of
£400,000 000 woulol certainly be required. Toe railways of
this country migbt, one day be purchased by the State. but
If ever that day should come it would be when the position
of parties was changed ; when the directors of the c,nipanlia
must come to the Governineet, and not when the Govern-
ment we uhl be obliged to go to the directorn. It was generally
known that a indecent leelteg prevailed throughout Ire-
land that her railways Should be purchased by the State,
emalgemated ender one System of mana(ement. and that a
low and uniform tariff should be establehed throughout
the country. The capital Weeded in the Gish railway. was
£12700,01.0, and pied at present about 41 per cent. ; on the
Engliih railways it was sic tut a half per cent. more.
Government had, however, lately expressed a decided opinion
against the palicy of the Government under any carman
stances becoming a trailer, awe therefere declined to be
in any way a party to the purchase of the Irl,h relive'''.
But it would be hard to say whether the feeblest in It elend
In favour of the purchase of the rail gays by the State Of
the exteurtion of the railwey system was the stringer of fir
two. No one could question the right of the Legislature to
authorize Govorument to cmstruct railways, awl the asser-
ti n of these rights was particul trly applicable to the state
of Ireland. There were 2,100 milea ei railway completcd,
and It would take about 1,200 more to complete the Ireth
railway eystem. 1 horn lines could not be constructed under
a cominereial ayse m, be, hate there was 00 present prebe-
bility of the iv payieg 5 pt r cent : but the counties throueh
av etch they would pace would only he too happy to be sup-
plied with railways, giving a guarantee on the c .tuity rates
that Govertment interests weied be paid. In that case we
should establish tic Irelane a mind system, as le Belgium
and Germany, by which the public mind In klngland would
he directed to the suhjec, in a much More dentonstrative
e,rin then was tile ease at present The English people
p. osesseil the abstract right t construct their own railways,
ant when that right was practically asserted the daiin of
400 000,00 d for consequential profits would oisappear iii
• the same way as the claim for the sante ameuut had el.')
peered for consequential damages. Bu; to obtain that end
the proper means mutt be used. In regard to a reform of
our railway system. it leei yet scarcely arrived at the first
tinge of existence, but one day it might become • living
principle. New it was a mere idea, but in the carte ot
time that idea might be developed Into a great plan recog-
nized by the teatime adopted by the Legelature, and work-
ing for the benefit of the whole Collthalluity through all
chum of society.

A discussion ensued, in which Mr. Vignoles, Mr.
Bransw,ll, Mr. Cotterell, Mr. Elliott, Mr. J. 11.
Elliott, Mr. Saywell, and Mr. Edwin Lawrence took
part, and lir. Edwin Chadwick, C. 8., then moved the
adjournment of the debate.

Lord Herby, who on Meng to speak was loudly cheered,
My Lords and Gentlemen, as I have a Committee of
the House of Lords to attend, which will make it impossible
for me to be present at the ad timed debate, perhaps you
will allow me to make • very few remarks on this occasion.
I came here to listen rather than to lay down any propo-
sition upon my own racoon.. Everybody who has listened
to the paper which has been read and the debate which has
emueil must feel that tots Is really an enormous question,
and that we hove only been able to touch a very few points
connected with it, and that It Is a question which will no
doubt be very often again before the public. Therefore,
every discussion, even though slight and brief, is some ad-
dition to our etc ck ci information. I have not the slightest
dotibt, ally more than the author of the paper, that if the
public rea In want the railways puechased try the State it Us
thing which can done. (Near, hear) The question of
price Is not one which woCid present any insuperable ob-
stacle. No doubt It would lie a very serious question ; and
probably, as in the case of the telegraphs, we should find
the State making a &amain which would be very advanta-
geous to the seller, arid not very advantageous to the pur-
chasers. But still It is a matter that could be settled, and
I do not Pry very much Weis upon that oilliulty, nor do I
say anythleff ripen the general argument auto whether State
management Is better or wore than that of individuals and
companies. A very curious change has occurred with regard
to that subject In pub:lc opinion within the lent f ft, en
year. I recollect well the time of the Crimean War, when
anybody would have been hooted down who, at a public
meeting, ventured to propose that anything which was at
i at time In the hand: of privree teraolis or companies
should be taken over nythe State. there •, seat that time a ten-
dency greatly toe: agderate the faults of wt itemanagenieut arid
unduly to magnify the adveistay m.of private management;
but now the tide of public °plume has turned, and I think
we are rather in daner of running into the opposite en-
tr. me,

But what I want the meeting to look stare the difficulties
which really would have to be faced before any such gigantic
change as that which his been proposed could be made?
N the that piece, is it a wise thing, without the very
eerinigest no' esaty compelling you to do it, to make the
State responsible f d 600 or Sel nitili, nit of debt more than
It is responsible for at prison: ? Now, it embody were to
say that railways would be superseded, no doubt It would be
a bold, if not a paradoxical, assertion ; but It is very drat. It
to ex a limit to the inventive power. of mmikied, and I do
not think we are to reclion with very perfect certainty ell
the present form and manner of railway commuoication
being trait which will he ad, peel as aliogethei final. You tray
have very great delve-bees of gayer; you may have pesaili y
to adopt locomotive power to cm mon roads ou may have
various changes and processes which we do not now foresee,
which may have the effect of exceedingly diminishing the vaue
of the capital invested in our present railway imeertakiegs.
And recollect, if you want an illustration, what would have
happened If the State fie rats ago, yielding to arguments of
the kind now brought forward In tavoivr id the purchase of
railways had booght up all the canal property and had under
taken to carry on the coaching busluesa of the country. It
is perfectly clear that upon both those enterpitses there
would have been an enormoes Wit incurred, not to mention
what I only notice its passing—that the State itself woo it
have beet, placed In a pectic,si in which there would have been
the etre ngest possible Inducement to check and prevent any I
alteration In the existing mode of communicatiora (Hear,
hear) No d .übt, it a ceatige occurs vow to aey extent
supersedirg our present ratios)' system, that will be Is a
Lego clam of the i,relet.,ity a very gerbees misfortune, mid
it w.mlti c awe ft great deettesetion oeea,pifwlanddeprociatien
of prot.riy. Nil', it seen Id be a misfort wig which world fell
only ori Individuals, and the State would not directly partici-
pate In It.
"Then there Is a point which wet put fora •ard.by Mr. Law-
renes in the course of this discussion, which has often
occurred to my mind, and It is of considerable importance.
Ills all very well for the State to go into those rather specu-
lative enterprises so long as you can reckon Ulm. • continu-
ous upward movement; hut you have to cone/Aar this—that
if any time. I don't say of plethora decline, bolt of national
difficulty, were to come—fer Instance, raf.vvey receipts
were to fall ,ill—that would be just the time When other ea-
Mural remipts from taxation would be rallies off in the
s ime mentor ; slid, therefore, if, on the one baud, the addi-
tional respoherabity which the State would leave taken upon
itself would, in time et prosperity, Increase its ',amerces, it
would, en the other Mind, in a correapendine,' degree, tend to
diminish Its resourei a just at the moment ashen the lots
would he most seriously felt. (Chorea.)
"Bitt, wart from the question of loss, Is It quite a wise
thlug.Y. fusee so very large a portion of the t eiblic revenue
ar wield he required applied to pay off the let wrest on debt?
(Cheers) We Cannot tome the rate at which stationed debts
have grown up ell over Europe and the elide, eel won u. and
they are growhig stilt. Ever) tell years see the coneetiose in-
'eiite.lness of the great Governments of the %eerii. great er
than In the previous ten years. and I have often teen ,typne-
hostler thet that tendency may eeteluee-1 w en's say here.
but In other coantrte•—to very awkward rev 01y5 Question*
may be raieed which, In all abatract and specAlayies way, It Is
not always vase unto deal with, as th to the a' sae, right of the