The Sun.
London, England, 1853-07-28 00:00:00

with a comprehensive regard to the more general wel-
fare of their community. "If you allow," said Mr.
Edmund Denison, in evidence, "a very large amalga-
tion to take plae, I do not know what sort of political
feeling might arise, which might be felt in the House of
Commons. That is an argument against amalgamation."
It has been proposed to render general amalgamation
consistent with the just requirements of the public by a
system of audit, of maximum dividend, and revision of
tariff, whenever that maximum dividend is exceeded.
On the subject of audit, your committee have taken
evidence tending to establish the possibility of subject-
ing the accounts of railway companies to a general
system of audit, if at any future period it shall appear
to be desirable for public purposes. BUt an audit which
would be sufficient for the purpose now more particu-
larly referred to, would necessarily comprehend some of
the most difficult questions of railway management ; as,
for instance, the propriety of charging to capital par-
ticular items of expenditure ; and it will not be neces-
sary to institute it, since your committee are not pre-
pared to recommend the general scheme of amalgama-
tion with which, in the mind of the witnesses examined
before them, the proposal of an audit has been con-
nected.
As regards territorial division, in the high meaning
attached to those words by some of the witnesses,
amounting to an assumption that a concession of a cer-
tain territory should be made to a particular company,
and the faith of Parliament be pledged against the in-
trusion of any rival within the circle so prescribed, your
committee are satisfied that no such engagement can
in reason be asked for from Parliament ; nor would it
be of any enduring value if it were given. The only
security which any
company can obtain for the undi-
vided possession of a particular district in the mainten-
ance of such relations with the inhabitants of that dis-
trict, and with Parliament, the guardian of the general
good, as may render the continuance of that exclusive
possession consistent with an enlightened regard to the
wants and interests of the public.
Your committee consider that the principle heretofore
established at law, that an oct of Parliament constitutes
an engagement between the promoters on the one side
and the public on the other, is a principle deserving of
more consideration than it has hitherto obtained as a
guide to future legislation. This principle, rightly
understood, conveys to the promoters no right that their
privileges shall be exclusively maintained when they
cease to be consistent with the general advantage ; but
it does imply, that having been authorised by the legis-
lature to construct expensive works for public use, the
resources from which their just remuneration was to
spring shall not be taken away upon any other than
clear grounds of public policy. The observance of such
a principle is valuable to the public as well as to share-
holders, since it is of importance to the whole commu-
nity to develop by every judicious means those commu-
nications on which the freedom and facility of trade, and
the safety and convenience of personal locomotion now
depend, and therefore to ensure, to a reasonable extent,
the stability of the property so invested.
It is also to be observed, that while actual amalga-
mation requires the consent of Parliament, combination
of interest, under private agreement, is a matter of
constant occurrence, and produces, to a certain extent,
the same results as regards the public convenience ;
establishing a community of purpose between two or
more companies, and enabling the managers of those
companies to exercise over the traffic a combined con-
trol. It has been contended by some of the witnesses
that since it is not possible wholly to prevent this kind
of combination, it is idle to refuse the formal sanction of
Parliament to the principle of amalgamation. But your
committee are of opinion that there is a wide difference
between arrangements of this nature and actual amalga-
mation by Parliamentary enactment. The latter once
conceded, no change can be made, if at any subsequent
time, either from a change of circumstances, or from a
change of management, it becomes desirable again to
divide the companies which have been thus united. But
if working arrangements, not now valid in law, shall be
sanctioned by Parliament, under definite conditions, and
for limited periods, capable of being renewed by the same
authority when approaching the term of their existence,
it will be in the power of the companies to contract alli-
ances useful for the conduct of traffic, while it will be
open to Parliament to interfere for the prevention of
permanent public mischief.
Your committee, in a former report, took occasion to
remind the house that the bills promoted in the present
session by one company (the London and North-West-
ern) have been stated to your committee to involve the
union, under one control, ofa raised capital 0f60,000, 0001.,
between one-fourth and one-fifth of the railway property
of the king-don', an annual revenue exceeding 4,000,000/.,
and an extent of railway communication of upwards of
1,200 miles, or more than one-sixth of the railways in
the United Kingdom, forming, from the importance of
the towns with which it is connected, a key to the prin-
cipal communications of the country. It was not sur-
prising that the chairman of the Great Northern Com-
pany should inform your committee that, if this amal-
gamation were permitted to proceed, it would be impos-
sible for the company over which he presides (though
possessing a raised capital of 500,0001., and an extent of
283 miles), to maintain an independent existence ; and
it is manifest that before legal validity is given to work-
ing arrangements, the effect which they will have upon
neighbouring companies, and upon that portion of the
public whose interests these neighbouring companies
subserve, should he duly and carefully considered, and
an opportunity afforded to all such parties to be heard.
In coming to a conclusion on this branch of the
subject, your committee have borne in mind that
the system of railway communication ought not
by any means to be considered as having attained
its full maturity, but that, on the contrary, much is
yet to be learnt, both as regards the legal effect of Par-
liamentary enactments and the practical consequences
of improved management. They attach great weight to
the following opinion expressed, in the course of his
evidence, by Mr. Baxter, the eminent railway solicitor :
" Is it your opinion that the power of the companies
is large enough already, and that that power would be
raised to a dangerous height if it were allowed to absorb
other great companies ?—Just so ; what may be called
the fighting powers of railways have been much de-
veloped, of late years, by the contests that have been
going on with great companies ; and those fighting
powers are of a Most serious description.
"By fighting powers you mean the inclination of
a company, the source of whose revenue are gene-'
rally diffused, to lose revenue in the particular place
where they desire to direct the edge of competition ?
—Yes ; where a company with an income of 70,0001.
a week is competing with another company whom
it desires to reduce into obedience, it will make
its mind up to lose 2,0001. or 3,0001. a week
for six months, knowing that it can afford to lose that
sum and the other company cannot afford to lose that
sum. The effect on the larger company may be a very
small fraction of a dividend ; the effect on the smaller
company will be a very serious reduction of the dividend,
and the consequence of that is, that in the feverish state
of all railway shareholders, the company whose income
is greatly reduced would immediately be revolutionised,
and the shareholders would in all probability quarrel
with the directors, and in the midst of the revolution
other arrangements would be proposed, and those, most
probably, would be sonic union or agreement with the
larger company.
"Then do you lay down as your chief principle, that
amalgamations should not be allowed to go to so great
an extent as to to create single corporations, whose
power is able to overhear all the other corporations in
its neighbourhood 9—Clearly so ; and because the pre-
sent system of Parliamentary regulation, if we may sup-
pose that there is a regulation at all, is to allow compe-
tition generally between companies merely stepping in
upon certain occasions to interfere with that competitions
and such competition could not co-exist with the com-
pany beyond a certain scale of magnitude.
"Are you of opinion that the universal fusion to which
you have referred in your formal answer could be carried
into effect with a due regard to the interests of the corn-
munity?—l am clearly and strongly of opinion that such a
measure could not, at the present moment, be Carried
into effect, because there is no public department sniff-
ciently educated to take the command which would be
necessary in such a state of things. The science of rail-
way government is one of a most intricate character.
Gentlemen of the greatest talent and general business,
when they come to apply those talents to railway man-
agement, are perfectly at a loss. I have met the most
acute minded public men upon railway subjects, and
found that when we descended into the details of rail-
way management, the subject is too intricate to allow
them to exercise a safe judgment upon it ; and I con-
ceive that no man, whatever be his powers, can take up
such a subject newly and understand it for two or three
years at least ; he must have two or three years' expe-
rience before he is competent safely to deal with it.
"You have spoken very justly of the want of experi-
ence and knowledge that a public department might be
expected to bring.to the task of railway management ;
now, extending the nature of that observation, do you
think the general progress of science, with respect to
railway management, has been such that we may sup-
pose it has already arrived at perfection, or, on the con-
trary, may we not reasonably expect that new improve-
ments will from time to time be made, and that the
progress of science in railway management in affording
facilities for railway communication will hereafter be
very great ?—No doubt, the science of railway manage-
ment is by no means perfected ; you can scarcely say it
has yet attained manhood, either if you regard the gene-
ral policy of railways, as to which most incredible mis-
takes are still made under railway management, or if
you regard the particular mode of transmitting your
traffic and your passengers ; improvements will be made
in both departments without a question as experience
goes on, and there are no means of educing these im-
provements so satisfactorily as leaving the matter to a
modified competition.
universal that W there were a universal fusion, and that
al fusion was regulated by an executive depart-
ment, a great barrienraw would, in your judgment, be created
in the wy
railways a
? of the natural
only utlral progress and improvement of
that, but I believe railways would
go
Withk a
tli agavin view, therefore,
, of securhw to the railway
companies and to the public, as far as% bepossible,
all the advantages of amalgaination,
facilities to
and yet ofret '
retain-
In in the hands of Parliament all the power wh'ehal
. be necessary to employ in future for better securing
from time to time the application of railway
the general good of the community, your
would advise that working arrangements, for a time to
he limited, confirming intimate relations between diffe.
rent companies on the subject of the regulation of their
traffic and the division of the proceeds, may with pro-
priety be sanctioned.
In immediate connection with this subject, your com-
mittee would advert to that of running clauses, or
powers conceded to one company of using, without per-
mission, the line of another. This whole subject of the
intercommunication of traffic between one railway sys-
tem and another, is a subject encircled with difficulty.