The Express.
London, England, 1866-10-22 00:00:00

career of the
lees important troubles

Mill, upon the Talus ci railway
yglagetyi arj whatever condemnation it may be
,suet to pass upon this or that company, it is
only right to bear in mind that we are
considering the exception, not the rule.
tlt is, in fact, very well known that at reoent
meetings of many of out largest undertaking
it has been distinctly stated in answer to ques-
tions, that no issue beyond the legal liin4
had taken place. The point, too, was met, not in
that cool, perfunctory manner with which railway
directors are too apt to reply to the inquiries of
their constituents, but seriously, as s matter of
business too important to be trifled with. Under
the growth of our railway system the finan-
cial reputation of a company ranks as h;ghly
in value as that of a foreta government. In
the great majority of cases, fee-afore, the directors
must be especially alive to the fault of anything
approaching illegality. The public, however, appear
to be, as usual, in danger of running intoextremes,
and of confounding good and bad alike. Er sae
dime omnea is the maxim invariably applied, whe-
ther in estima*.ing the profits of a new bank on
the basis of one successfully established for twenty
years, or in judging the demerits of a railway
company by its neweet.and most extravagant
competitor.
The railway interest, as represented in Parlia-
ment, is, we suspect, stongly repenting of the op-
position that they have persistently made to any
system for the registration of debentures. For
what reason it was done it is difficult to conceive,
except from the innate dislike of individuals and
companies to have more to do with the Govern-
ment than they can possibly help. It should also
be remembered that railways have a great
deal to do with the Government, and have
more than ample experience of the impracticability,
routine, red tape, and delays that are the special
characteristics of a " department." There can be
no doubt that a system of registration of deben-
tures would entail much additional trouble end
labour upon managers, secretaries, and solicit-us,
and as these officials are often the wire-pullers of
a company, it is not surprising that they have done
their best to defeat the innovation. At the present
motnerg, however, the boards of directors can hardly
feel altogether easy. A registered railway deben-
ture would form the perrection of a security.
It would rest, as it does now, upon a title
both legal and parliamentary that is impos-
sible to be contravened ; there are no lawyers'
expenses, investigation of deeds, and delay ; a fair
interest is given for the use of the money, and at
a specified period the full capital is sure to be
repaid without the trouble of a formal foreclosure.
Only one danger has been open, the possibility
that the property was over-mortgaged, or in other
words more debentures issued than allowed. A
system of registration would have removed this
solitary defect. Notwithstanding that nine times
out of ten we believe it to be practically unneeded,
the illustration that is afforded by the ladies of
the tenth peccant oomix.ry weighs, although un-
fairly, upon all the others.
It is no light matter that a security that has
been for years readily appreciated and taken,
should at once fall into disfavour. Railway de-
bentures constitute a fair and legitimate channel
of investment, and considering the magnitude of
their total amount, their general discredit would
result in no small amount of evil and inconve-
nience. Already there is sufficient difficulty in
the satisfactory employment of money, so that
loans on the Stock Exchange can be obtained on
Government securities at almost nominal terms.
Suppose that the debenture-holding public should
insist upon being repaid, the end would
be that the existing plethora would be
increased, and that from the sheer dearoi
of good investments money would be squandered
haphazard. It is perfectly true that in this case,
as there is a lender for every borrower, the funds
paid away on the one hand would be received on
the other, and that, therefore, the supply of float-
ing capital would be the same. The distinction is
that it would be in different hands. The lenders
would be shrewd capitalists, making the best use
of their money, and the payees, the general public,
who having got their bank notes, would not know
what to do with them. It is hardly worth while
to dilate upon the possibility of a mania arising,
when it proceeds from the small public,
instead of great capitalists, having too much
money at command. History, as well as every-
day experience, shows that the latter class are
occasionally not deficient in credulity, but as a
matter of habit they are far more careful than
their neighbours.
We trust that the public will for once depart
from their usual practice, and look upon this
question with fair discrimination. Unfounded
alarm and unfounded confidence are equally
foolish, and in the long run equally harmful. The
experience of the late crisis will have taught every
unprejudiced observer that if trust has beenunduly
placed in some institutions, from others it has been
as unduly withdrawn. The lesson cannot fail to
have been duly appreciated by those who will only
give themselves the trouble to look candidly into
the facts. All railway companies are not, we may
say very few are, like the London, Chatham, and
Dover, and it is unjust to visit the discredit that
bad management hasbroughtupon one on all others.
Even in this instance the ill that has been brought
about by one set of Directors can easily, by the
exercise of a moderate amount of prudence, be re-
paired by their successors. At all events, no
course cau be more opposed to common sense than
to condemn without inquiry, and to assume that
all railway companies must be systematically going
wrong because one or two of their number have
admittedly evaded the safeguards imposed by
14 Akin.

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