The Sun.
London, England, 1856-01-23 00:00:00

and control, which shall strictly examine the receipts and
payments of every description, and shall look into every
source of revenue, and the cost at which that revenue is
obtained. Because if you get a revenue of 10,0001. a week,
and it costs you 9,500/., then you, the third parties, who
come and take the residue of anything that is left, are the
sufferers -- but not the preferential shareholders, or
the bondholders, nor the employes. As to the num-
ber to form the committee, that is a matter for con-
sideration hereafter, but I believe that too much
pains cannot be given to the point of the separa-
tion of capital and revenue, so thalinot the shadow of sus-
picion shall rest on the minds of the public that the one is
appropriated to the other. I believe that we ought to go
as far as this that the capital should be in the custody'of
one set of men, and the revenue in the custody of another,
and that this board of audit and control shall be impera-
tively called upon, on their own responsibility as gentlemen
and men of business, to certify to the shareholders before
any payment is made, as to whether it belongs to revenue
or to capital. (Hear.) It is a common saying, gentlemen,
and one of which I need scarcely remind you, that things
are " made pleasant" at the expense of the capital account.
Now, although the closing of the capital account is one of
the favourite theories of railway shareholders, yet I would
rewind you that the capital account can never be finally
closed, because the important operations of issuing deben-
tures, that is, of creating vast sums of money by bonds
payable to bearer, is continually going ou, and therefore
coo much care cannot be taken to provide funds to meet
these debentures, so that your property shall not be en-
dangered. Therefore that is an object which would occupy
the attention of such a committee as that which I have
suggested. Now, another subject of great suspicion is the
deterioration which is going ou constantly in your roads
and your rolling stock. At the present moment, in con-
sequence of what has occurred on a railway which I need
not name, by the report of the Government Inspector,
Colonel Wynne, it appears that the permanent road has
been miserably neglected, and it is a source of great an-
xiety that any public railway should be in such a state ;
but yet, gentlemen, though there have been meetings in
two or three towns, promulgating the notion that that
ailway is not safe or fit to travel upon, yet so elastic is
the property with which we are called upon to deal that,
if you refer to the returns of the last week, you will find
that there is an increase of 2,0001. in its traffii. There-
fore I say, gentlemen, what reason have we to despair ?
I admit that the coat of railways has exceeded all expec-
tations and all estimates. But I remind you that the re-
turn has also exceeded as much all the estimates by which
it was calculated, and I believe that we have only to adopt
the right course to make those returns as remunerative as
they ought. to be. But it cannot be done without trouble
and attention, and it is for the shareholders to consider
whether it is worth their while to give that attention to
their own affairs or not. Mr. Robert Stephenson, in the
paper to which I before alluded, very properly remarks
that the deterioration, after a course of years, reaches
en annual average, and is a charge just as fixed as the
fuel which you burn or the salaries which you pay.
Therefore, to attempt to put it off and create depreciated
funds, and put into them less money one year than you
Tend in that year, and shifting the burden to the future,
is not dealing with the subject in that wise and prudent
manner in which it ought to be dealt with, because, what
is the effect of under-rating expenditure ? If you do so,
you make a mistake in that most important point, the rata
at which you can carry goods or passengers ; and one error
leads to another. It is said that the Irish railways are
better managed than the English, but I am not sufficiently
acquainted with the subject to say whether it is so or not,
but I think it is possible that the want is provided in f re-
land which is the ruin of those that we represent. Look-
ing to the other side of the Channel, I would allude to a
leading article which appeared in a morning paper. In
that article a comparison is given between the French and
English lines. The article begins with stating that on the
Ist Jan last 31 British railways, on which capital was ex-
pended of 121,000,000 e, were only worth, at the market
price of the day, 89,000,0001. At the same time 13 French
railways, on which 31,030,0001. have been expended, at
the quotations of the day were worth 60,000,0001. There,
fore, while the British railways had depreciated more than
a third of the money actually expended, the French rail-
ways had actually doubled, or nearly so, their capital, the
dividend on the French lines being 10 7-4 per cent., after
providing funds out of which to redeem the capital ; for,
as you are aware, after a certain lapse of time the railways
in Frances revert to the Government of the country. Now,
gentlemen, there is one delusion under which I believe the
railway world is very much depressed ; it is that the ex-
tensions and guarantees have Jtotally ruined railway pro-
perty. If that were true all our efforts would be iu vain,
necau.se if their ruin proceeded from that cause we might
save ourselves at once the trouble of any further conside-
ration about it. Bet that is not the fact. I shall refer
to the London and North-Western Railway Company,
not in the slightest spirit of hostility, but Wellies it ie
the head and crown of all the railway undertakings. Ey
its magnitude and length and strength of pocket it will
• uin its neighbours, but at the same time it may ruin it-
self, and I merely make the comparison with that line for
the purpose of observing that, unless we can get them to
act with prudence and with wisdom, it will be quite in
vain' to attempt to enforce better measures in other rail-
ways. On the let of Jan., 1846, the capital invested iu
the rolling stock of the London and North-Western Rail-
way Company was 851.412/., and the net earning of the
year 1$ l 6 was 1,197,8391. The number of engines employed
was 220; that is nine years ago. On the let of Jan., last
veer, the capital invested in their reeling stock was
2,404,7181 The net earnings were only 931,9611., although
the engines were thrice as numerous—viz , 653 so that by
tripling the engines from 220 to 653, the net traffic revenue
of the North-Western had been reduced from 1,197,8391. to
931,961/., being 265,8781. less for the work of 653 engines
than for the work of 2?.0. Therefore, gentlemen, I ask- you
not to despair of tailway property, and not to suppose that
these extensions have ruined you. I admit that they have
injured you, but the thing that is creating the ruin under
which the railway world is groaning is the working in many
eases for nothing. I believe the passenger traffic is paying
extremely well. Calculations which have been carefully
gone into show that the working and unavoidable expenses
are not so heavy that they impose any real impediment to
railways paying as well in England as they do abroad.
But the figure of our country is much less favourable than
that of France, because ours is a long and narrow country,
aid you can go to any principal town in the king lone
along two or three lines of railway. But not so with
France, which is a square block of country, and in which
railways enjoy not only Governmental, but territorial,
monopoly. It is for railway proprietors to neutralise
this conformation of our country, and insure by mutual
concession and goodwill that very moderate profit which
you require to pay your dividends. Now, I think, gen-
tlemen, that it should be an instillation from the society
(which I hope we shall be able to enforce) that all railway
managers, in making calculations of the cost at which they
can carry goods or passengers, should add to them interest
at least of 4 per cent. to the ordinary shareholders, because
interest for your capital is just as much an expense which
you incur as the coke which you burn in your engines. It
is true that you can be deprived of it, but that does not
prevent its being an expense of daily occurrence, and it
ought not to prevent such expenditure being charged
among the common working expenses, instead of being
confined to the 50 per cent, ordinarily allowed for work-
ing expenses. The next item—debenture interest —is just
as much a charge as coke. Until you get 4 per cent. for
your capital you get nothing; because without the trouble
incidental to the management of the line your money
would pay that amount at simple inierest ; but with all
this trouble you do not get simple interest. Another sub-
ject of great anxiety to us is the way in which Parliament
deals with railway property. Parliament, you will recol-
lect, gentlemen, is the representative of the people; but we
form a very important section of the people also, for Mr.
Robert Stephenson shows at least one in 50 of the whole
population is entirely dependent bn the existence of rail-
ways. Now, if we embrace so large a portion as one in 50
of the population, and a very large section of all the men
of property in the kingdom, we possess au amount of Par-
liamentary influence which should save us in the hour of
need P • and I believe that our great object should be that
we should exercise all that Parliamentary interest which
we can, and so prevent that reckless ruin of our pro-
perty that has been going on for so many years. I think
I shall not trespass further on your attention than by
stating that resolutions will now be proposed to you, com-
bining the neojects which I have so feebly laid before you,
and that this meeting will be adjourned till the 31st
inst. ; and in the meantime we may be enabled to collect
such a body together as shall give us power to exercise in
our own affairs that influence wbich, when united, we
ought to possess; and I feel confident that if our aesocia-
ti ut is sufficiently numerous, and its affairs are conducted
with prudence and discretion, we shall very soon see our
Property placed on a very advantageous footing. Our ob-
ject was also to ask you for any suggestions which you have
to make. We are not wedded to any plan of our own, but
all thane points will form the subject of discussion before
the committee or council which may be appointed ' • and
when you find that the saving of a single farthing per train
mile will add to the gross profits of the railways of this
country of 80,1'00/, per annum, you can readily believe that
no suggestion, however minute, will be considered unim-
portant. We have already received numerous letters ap-
proving in the very highest terms the objects which we
propose to carry out; and gentlemen holding very large
interests in railway property express very confident opi-
nions and hopes that if this movement is followed up it
will be attended with the greatest possihle benefit. I see
before tue gentlemen of great experience in railway matters,
whose opinions I have ascertained in conferences with
them, and they all take the same view. Therefore, gen-
tlemen, I call upon you to give us your support in this as-
soci Alien. (Cheers.)
Mr. MITMELL proposed a resolution to the effect that a
society be now formed, to be called "The Railway Proprie-
tors' Association, the object being for the protection of
railway property and its restoration to a fair and logja-
m de value, restricting sand closing the capital account, and
the suppression of ruieotte tariffs by territorial arrange-
rnents. Ito thought if they were to take an account of
their stock they would find that it had been depreciated
fully 10 per cent. during the past year, and that within
the past three years it had been depreciated from 25 to 30
per cent, below what it was in 1853. The charges for ac-
commodation had not been framerlin accorlance with the
first cost of the article to the public. The chief
causes of the depreciation in railway eroperty arose
from the increase in the capital accounts, competi-
tion, and unremunerative taritle. The latter was what
they had principally to complain of. With regard to the
unjustifiable increase of capital, be would al'ude to one
company that had expended 31,345,0001. in 1853, and had
increased the amount in the course of eighteen mouths by
2,026,0001., increasing the preference charges by 109,2601,
for the year, while the working expenses had been in-
creased by 127,8151. The Great Western Company had
increased their capital account by 2,978,9891. in the course
of re months, the preference charges in proportion, and
the working expenses 46,9231. There had been no increase
in the charges fir the conveyance of traffic on those lines,
while the cost of working the traffic had increased 20 per
cent. The affairs of railway companies had in en carried on
in contravention of every gonad commercial principle.
Efforts had been male to prevent competition. They
were told at the meetings of the Great Western, the Lon-
don and North-Western, and the Great Northern that
they were compelled to charge low rates for goo is in con-
sequence of the competition of other lines. He believed if
they succeeded in forming the assooiation of proprietors
they would he enabled to put a step to that state of things.
They would be enabled to bring their power to bear at each
meeting. The chairman and directors would, e f :ourse,
tell them it was not their fault, but the fault of the direc-
tors of some other company. Another very foolish thing
was done by the directors of the metropolitan lines in re-
spect to the excursion traffic; just at the time that every
one was preparing to leavetown excursion trains were started
to convey them for fares considerably below the ordinary
rates. It was clear that if innkeepers were to charge only
one-half or one-quarter the usual rates when their houses
were filled with 'customers the effect would be disastrous.
The tariff on such occasions charged by the Eastern Coun-
ties Company was particularly low, and he would say unre-
munorative. The London and North-Western Company
did not sin so much in that respect as others, although
their excursion fares to Liverpool, Birmingham, and other
places were less than they ought to be. The great fault