The Sun.
London, England, 1848-10-28 00:00:00

. .
son's letter to which -we may allinfe with a special
gratification. We, refer .to what -he says of 1 the
Weekly Stock Exchange. List. Our jenrnal, now five
or
"six weeks ago, was the first to direct attention to' the
unspeakable mischief which ' this pubUcation, by its
gross misstatements, was weekly working. ' We cha-
racterised the course it was pursuing in the strongest
terms which it 'would have been prudent for ut to
employ. *Norelid we spare the Stock Exchange Com-
mittee, under whose. sanction it was issued, any. niore
than we did its conductors. It was idle for therm to
cause an intimation to be put into it, that they were'not
to be held responsible. for the opinions it expressed; er
the statements it contained. It came out avowedly
under their auspices and at the very moment they were
disclaiming responsibility for what it contained, 'the
conductors were neutralizing the value of the
disclaimer by publishing in all the public journals
that they had got the sanction of the Committee
of the Stock-Exchange to the insertion of ed-
vertisementi in the List. This clearly showed
that the publication was entirely under their control.
So, at any rate, the public understood the matter. .And
so understanding it, it - was no wonder if the price of
railway shares tumbled down, day after day, when a
publication, issued under the authority of the Stock Ex-
change COmmittee, boldly asserted that stock which was
paying six and seven percent.' was not in a position to
'pay.more than three or four per cent. Mr. Hudson comes
forward and indorses all we have said respecting this
mischievous publication.
, 1
" I wish, says 'that gentleman, " I could call the
serious and grave attention 'of the Chairman of the
London Stock Exchange to a publication, which is issued
weekly, professing to be under the sanction of that
body. lam aware that the statements which appear in
that paper are stated not to be published under the
authority of the Stock' xchange; tut I cannot close my
eyes to the effect that they produce on the mind of the'
public, who naturally consider that they have that sanc-
tion. If these statements were correct and true, no per-
son would- have a right to complain; but when they are
almost in every in, Lance iiicorrect, and their general
tendency is to depreciate 'railway property; it would be
well that the StOck Exchange should disavow a publica-
tion
which is calculated to do so much mischief.'
Such pointed observations, coming from such a quarter,
cannot be without their effect. The Stock Exchange
Committee are now bound, in justice to their own
character, as well as in justice to the holders of railway
shares, to withdraw their sanction entirely 'from the
publication. This they are bound to do at once, and 'in
the most public manner, so that no one may hereafter'be
misled by its erroneous representations. If this be done,
the publication will cease to do mischief by ceasing to
exist.—[Since the above was put into the hands of the
printer, we have received the gratifying intelligence that
this mischievous publication has been brought under the
special consideration of the Committee of the Stock Ex-
change, and that they have come to the resolution of
prohibiting the insertion of any more " statements" re-
garding railway accounts. The resolution is thus
worded—
" That Mr. Slaughter be required in future to limit
the contents of the Weekly Share List to the usual
tabular railway statistics, prices, •and official corre-
spondence."
So, then, our object is accomplished. The sting has
been extracted from the wasp. Henceforth the Weekly
Exchange List will be as harmless as a dove. This is
one essential service which has been rendered to the
railway world.]
CHRONICLE.—We publish this day the exposé,
officially promulgated by the North-Western Railway
Company, of their financial position and prospects. It
presents a detailed and elaborate picture of the past ex-
penditure, and the existing liabilities of the company,
arranged under four distinct heads, with a summary,
forming a fifth schedule, of the total capital which re-
mains to be provided for each class of liabilities. The
result of this statement, which is plain and distinct
enough even for persons little practised in accounts to
' comprehend, must tend, we think, to dissipate the wild
rumours which have been ignorantly or designedly
circulated within the last few weeks respecting the
situation of some of the leading companies, and to
disabuse the minds of shareholders of those
panic terrors which have led them at once to sacrifice
their own interests and that of the commercial commu-
nity'upon whom this new mania of apprehension has, in
various ways, operated most injuriously. The classifica-
tion adopted in the tables before us appears to be an ac-
curate and a convenient one. The first head exhibits
the expenditure and liabilities upon the main line and
branches now producing revenue. The extent of rail-
way included under this division is 438 miles. The total
amount authorised to be created in shares, was 1,047,7471.
—the sum at present received upon shares is 14,044.5741.;
upon debentures 9,186,672 L ; making together 23,231,2461.
The expenditure incurred, down to Ist July last, was
18,145,624/., the aggregate estimated outlay being
18,598,5561. So that the sum remaining to be expended
on account of the whole of the main line and branches,
at present yielding revenue, is little more than 450,0001.
The second schedule shows the branch lines in course of
construction, and not yet productive. These are nine in
number, but the extent is only sixty-two miles. Among
(
the most considerable of these works are the enlarge-
ment of stations at Liverpool, Manchester, Crewe, Bir-
mingham, &e. The total estimated outlay is 2,318,225/.
Of this sum 1,481,3294 has been incurred ; 836,8961. is
yet to be expended. Schedule 3 is that to which the
public and the shareholders will probably look with
most solicitude. It specifies the subsidiary lines in
which the company are interested by subscription, con-
tribution, or guarantee. There are nineteen lines in-
cluded in this category. To fifteen out of this
number the company had, up to the 30th of
June last, subscribed to the amount of
3,098,433. They are still under engagement
to subseribe:;l,B46,79Bl. The sum is undoubtedly
large, and, at present prices, the subscriptions to the
Caledonian, the' Chester and Holyhead, the Bucking-
hamshire, and some other concerns' may not appear to
have been very advantageous investments ; but then it
should be recollected that these were not mere specula-
tive adventures. The concerns embarked in are all
naturally connected with the company's main line ; they
are calculated to further the development of its traffic ;
and the influence which a participation in the property
of them affords, is of essential importance to the
North-Western directors. Adverting next to the gua-
rantees, we mast acknowledge that, 'whatever may
have been the sins of other companies, we find here
little to support the imputation of improvident bargains
against the London and North-Western. Some of the
higher guarantees, such as the North Union and the
Scottish Central, have been undertaken jointly with other
companies, and, even if the arrangements should not prove
remunerative, the amount of these liabilities is compara-
tively inconsiderable. In other cases, the rate cannot be
deemed immoderate; nor, according to the test of the
Share Market, has it at any time been so viewed by the
people. The engagement to the Buckinghamshire line
is 4 per cent., to the Coventry and Nuneaton 5, to the
Huddersfield, Manchester, Leeds, and Dewsdury 7-10ths
of the North- Western dividend for the time being, to the
Stour Valley 2-3ds of the same, to the Shropshire Union
one half. The return which these lines will yield must,
of course, be at present problematical; but upon what-
ever data they may be computed, there appears to be
little ground for charging the directors with having sa-
crificed the interests of the proprietors by any very ex-
travagant bargains, or outrageous concessions. In the
majority of cases, the - amounts which the com-
pany has undertaken to pay are not more
than a reasonable indemnity to the under-
takers for their enterprise ; and, taking _ one
lino with another, •we believe that the anticipation, that
in a few years they may be expected to yield a margin
of profit to the North-Western Company, is by no means
over sanguine. Schedule 4 comprises a class of under-
takings which, if not actually abandoned for good and all,
may, we trust, be considered as' indefinitely postponed.
The outlay which they would absorb is set down at
3,876,963/. The expenditure as yet incurred is stated to
be nil. The Parliamentary expenses which must have
been incurred 'hi obtaining the Acts, we presume, are
charged elsewhere. Bat the lines themselves not having
been commenced, there can,. be little question, under
the present circumstances of the company, and of the
times, that there will be no disposition, either on the
part of directors or proprietary, to add 'these four
millions to their capital ' account. Several years
will probably elapse before the fifteen -branches
and extensions enumerated in this schedule will be
called for, to'- satisfy the demands of the' public, or
will excite the cupidity of the shareholders. 'The sum-
mary of the several classes above specified (the last be-
ing excluditd), ShOws that the total ultimate amount of
capital to be expended upon the works anderntrege eruntetits
I
of the Company will -be 25,862,012/..
entire
ameunt,of authorized litook and share capital should be
fully called Up, winch is contemplated as likely to occur
in 1852, it will reduce the.stina raised upon debentures to
4,814,2650 The great question then arises, as to the
amount of profits which it, will be practicable to divide
upon this capital. Upon this point, the estimates formed
by the Directors in their_.present manifesto are a fair
subject for scrutiny and Criticism, to which they will no
doubt be rigidly subjected. • The public must judge
whether, or no it isayeasnnablo anticipation to assume
that, in four years from ' _this time, the average
receipts upon the main line, increased, as it will
then be, . by the branches specified in Sche-,!ule 2,
and ,by that development 'of traffic from the
completion of the works of . the Subsidiary Com-
.
panies, may be expected to increase to the extent of.
,6,424/. per week over the average of the year ju.t ex-
pired. They must judge, too,' whether the estimate of
a return of 3i per cent.: upon the lines guaranteed and
subscribed to, which are enumerated in schedule 3, be a
modest :or' an over-sanguine estimate. That 40 per
cent. upon the gross income is likely to form, at the
period in.qoestion, a sufficient deduction for working
expensei; will not, perhaps, be much questioned. These
then, are tbedata upon which the directors build their
calculation of a minimum dividend of 7 per cent. upon
the entire capital in 1852. This, of 'course, is not pro-
pounded as the measure.of their hopes, or even of their
expectations, but onlyas a, sale. And cautious estimate of
their ultimate position. . For ourselves, we must avow
that the impression we have formed, upon the
review .of their affairs now taken, is, that the share-
holders in this peat undertaking may repose a well-
founded confidence in the issue of their investment.
The opinion which we have always expressed, as to the
ultimate remunerativeness of railway property, is rather

confirmed than shaken
degree to which commer
their returns. Let thisp:
mania of reckless specula,
be checked (and perhaps
suffering of the recent crisis could have ensured this),
the progression of railway traffic must attend, as it
sill also promote, the extension of wealth, population,
-eptcommerce. If these views are realised, the share
holders of the North-Western Company will, in
all probakility, not • reap the least valuable feuita
.of- the. system. Errors in management there may
have .been, false steps which cannot be retraces,
Urge outlays of capital which tEe wisdom of present ex-
perience must reprobate and regret; but the statement
which is now exhibited to the public, to the good fatal'
of which we
__may consider the character of the di-
rectors to be pledged,
appears tousto
hhave
eeesnt a bulvisdheerd.
this point; at least, that nothing
which
taken or engaged in has, in any degree, compromised
the stability of the corcern—whatever temporary diffi-
culties may be encountered, the basis is sound. We may.
add,lhat if any course' could, more than another, re--
eilitillsh its credit, it is the fulness and franknessot
tt
hh
ee
present disclosures. The public now • know the worst.
We think they may be well justified in hoping for
best. We will only add our earnest recommendation to
the other companies which haie been similarly assailed,
that they should go and.do likewise. •
HERALD.—At ,the conclusion of these observations
we give
.the official statement,of the London and
.North-
Western -Conipany's financial position, the prasparation
and publication of which have been renderedenccessary
by the erroneous details recently issued in a sort of semi
official shape in the Weekly Share List, and which, with
some leading and mischievous remarks thereon, found a
prominent place in the columns of our contemporary the
Times. The statement originally published iu the
Weekly Share List is' one which bears, upon the face of
it, an air of great candour, and the observations of the
Times wear also the semblance of sincerity and condo-
lence, but a slight investigation of the one and but a Jae
consideration of the other will show that the apparently
semi-official statement is most• injuriously incomplete,
and the cominents of the journalist hasty, crude; and
groundlessly mischievous. What are the facts? The
Tintes, in some introductory remarks, by which it pre-
faces, in its City article, its quotation of the financial
statement from the Weekly Share List, "of the engage-
inents of the London and North. Western Railway Com-
pany, together with an estimate of the traffic receipts
that would be required, Supposing these engagements all
-carried -out, to maintain -the present dividend- Of 7
per cent.," informs- its readers that " the statement
hypears' to' have been made with great care, 411, on the
most favourable assumption," scud it then says. " We add
also a table of comparative I•esults, which will tend to
open the eyes of the publin. to-the extent and pressure
or the. schemes to which Parliamentary sanction have
been granted in individual cases, and alas as to the ad-
ditional amount of railroad travelling that must take
place throughout the country to realise the dividends
that have been promised." . The language is, in fact,
merely an echo of what the writereef the statement in
the Weekly Share List himself observes. His estimate
is to be depended upon " provided- all the share capital
of the London and North-Western should be called
up, and the whole of the leased and amalgamated
lines be brought into operation." Every person at
all acquainted with the general character of .the
new lines -which the old companies felt it necessary
to go to Parliament for in 1845 and 1846, knows
very well that they were mostly of a protective
character, and that the applications for them were in
most'cases.matters not of choice, but of compulsion. The
chief point, therefore, on which the compiler of such an
estimate as the one we are dealing with should be clear,
is manifestly the extent to which such lines are likely to
be carried out. Without a correct knOveledge of this
portion of the expenditure of a companb-an estimate of
the probable amount of share capital, 39j of the probable
amount of receipts, is worse than uselss—it is calculated
to lead to most erroneous, and perhas--tnd indeed such
has been the operation of it in tail-etisse—most
mis-
chievous conclusions. It is true that the Writ* bf the
statement in the Weekly Share List quotes a passage
from a letter written by Mr. Creed on the Ist of July
last, in which that gentleman says the -expenditure
of capital for branch and subsidiary lines had been
contracted to a great extent, and that several of itch lines;
for the construction of which the company have powers,
would not be made. But we must remark that these as-
surances weigh very little against, and are forgotten by
the London and North-Western shareholder, in the con-
templation of an array of figures, from which he learns
that , the liabilities of his company amount to about
36,000,0004 and that while 44,0004 per week is requi-
site to pay 7 percent. on the present capital, no less a
sum than 70,000 L per week will be required to pay the
same dividend, "provided all the share capital should be
called up," &c. Having quoted from the Weekly Share
List the statement in question, the Times, in a leading
article on the same day, declares that—" The sooner all
the railways of this country are referred to a Parlia-
mentary commission—we will not say of bankruptcy--
the better for the country and for the shareholders.
Such a process involves no stigma—let misfortune be the
plea." And having indulged in some general remarks,
our contemporary says—" Let every company put out
such a scheme as shall remove all suspicion and defy all
cavil. Let all the liabilities, debentures, or preference
shares be clearly stated, and let the speculation be
exhibited in its complete and working form. The
public will then sets what chance there is of a good bona
fide dividend thred or four years hence." Here we have
an apparently semi-official journal, the Weekly Share
List, proving to us, in a statement which the Times tells
us " appears to have been made with great care and on
the most favourable assumptions," that the London and
North-Western Company must, contingent on certain
events, about which nothing of a guiding character is
given to the reader, take an additional 24,000/. per week
to pay 7 per cent upon its capital, and then in another
column we have the Times itself suggesting the reference
of railways to a Parliamentary C.:minission—" it will
not say of baukruptey"—and throwing out something
like an insinuation that railway shareholders stand but a
poor chance of having " a good bona fide dividend three
or four years hence." We repeat that the operation which
such a statement and such observations were calculated
to have upon the public was clear and manifest—vise
to depreciate the value of London and North-Western
property. To us the principle on which such a publica - tion should be conducted seems obvious enough. None
of its statements of the financial position of railway
companies should be imperfect or open to the charge of
a panic tendency. In the absence of official information,
the better plan would be the omission altogether of any.
such statements. It will be seen from the official state-
ment, which appears to be a very candid one, that the
total ultimate expenditure of the company is expected to
be 25,862,0121., and that to pay the present 7 per cent,
dividend, the working expenses being put down as 40
per cent. on the gross income, a weekly take of 48,6181. _
is required. The gross income for the year ending June,
1848, was 2,194,0931., giving an average weekly result
of 42,194 L, so that an additional 6,624/. per week will
have to be realised to give the 7 per cent, upon the ex-
pected total ultimate outlay. The official statement, while
it incidentally justifies the company in the course it pur-
sued in reference to the lines obtained by it in 1845 and
1846, goes briefly, but lucidly and, as it appears to us,
very fairly, through all its guarantees, its subscriptions
to other lines, and its branches, stating the value and
object of' them, and specifying the present or probable
value of them respectively. We refer the reader to this
very satisfactory portion of the statement. The esti•
mate which the company have made of the results of
their engagements under these three heads appears to
be extremely moderate, and a careful attention, both to
the figures and the remarks appended thereto, will
show, that the monetary engagements of the London
and North-Western Company have, considering the cir-
cumstances under which the majority of them were
carried out, been entered into with a degree of prudence
which their opponents have not given them the credit
of possessing. The plea that the construction of lines
and guarantees has been forced upon directors by way of
protection, is, however, not very acceptable to the share-
holders in times like the present. But the London and
North-Western shareholder may with considerable
confidence feel somewhat indifferent upon this
point.- - The official statement appears in
itself a guarantee that the future dividend
will not fall below 7 per cent., while there is good reason
for believing that with the improvements whicitis.rae bjeuind
made in the construction of permanent way,
))
cious re-arrangement of trains and a revision of the lo-
comotive management, the working expenses of the line
may. be considerably reduced. The official statement in-
forms us that " the directors do not overlook the fact
that a certain amount of traffic will be abstracted by com-
peting lines. It will be much less. than is usually sup-
posed, and the general traffic is secure to the concern."
We have always considered that the amount of traffic
likely to be abstracted from the London and North-
estern system of railways by competing lines, has
been considerably overrated, and that the annual increase
of the traffic over the old main lines, in addition to the
development of the through traffic from Ireland via the
Chester and Holyhead line, and of the traffic of the
branch lines, would more than balance any such
abstraction. - Large as the goods traffic upon the
London and Nortti-Western line is, it is yet very far
from its full development. Our opinion is that the
additional 6,424/. per week required to make up
a receipt that will yield a 7 per cent. dividend
upon the expected ultimate expenditure of the company
wilt be produced from the goods traffic alone in the
year 1852, " when," as the directors tell us, " all the
capital will be called up, and the subsidiary lines in
operation." We may here opportunely offer a few ob•
servations on the apparently uncomfortable increase
which will have taken place in the capital of the Corn
pany by the year 1852. The share capital paid up on
the 30th June, 1848, was 13,845,615/. Supposing all
the capital to be called up by 31st December, 1852, the
capital account would exhibit a sum of 21,047,6971. ;
that is,. an increase of 7,202,682/. of capital in four
years. But of this 7,202 682/., the sum of 4,366.5254
woUld go its diminution of loans, and of this 3,704,360/. ,will bear interest up to December, 1852, at 4 per cent.
.only—a rate more favourable than that at which deben-
tures could be renewed. As far as we can understand
the -financial statement of the London and Ncrth-
.Wrstern Company,. as given in the Weekly Share List,
the compiler has added this 4,366,5251., or some such
sum, to the 21,047,6971. We cannot otherwise under-
Stand bow he has made out his 36,000,000 L or
4-),000,000/. of capital. Connected with the operation
of financial misstate meats and panic-tendency leading
articles upOn the value of railway shares, we must not
forget the fictitious sales of shares that take• place in
the. market. It will scarcely be credited by those who
do not understand_ the "dodges" of the share market,
that the -"bcina
,fide transfers of London and North-
Western shares have been numerically fewer during the
last six months than they were during the correspond-
ing period of last 3 ear. Such, however, we are assured
is the fact. For the last two months the transfers were
fewer by 300 than they were for the corresponding
period of last year, and for the previous periods of two