The Sun.
London, England, 1858-09-04 00:00:00

THE SUN, LONDON, SATURDAY EVENING, SEPTEMBER 4, 1558.

SUPPRESSION OF THE GOTERNOR-
GENERALSHIP OF ALGERIA.

The Moniteur of yesterday announces the sup-
pression of the office of Governor-General of Algeria,
and publishes the following reports and decrees :

REPORT TO THE EMPEROR.
The creation of a Minister of Algeria and of the
Colonies must necessarily cause some modifications
in the organisation of the public authorities in
Algeria, and the greatest as well as the most im-
portant of these changes is the suppression of the
powers which have hitherto devolved on the Go-
vernor-General. These high .functions must now
be divided between the special minister and the
local authorities by a wise decentralisation. This
arrangement is the more convenient since your
Majesty has chosen' that the new Minister of Al-
geria shOuld exercise his authority in Algeria as
well as in France.
I do not hesitate, then, to propose to your Ma-
jesty to suppress the functions of a Governor-Gene-
ral. A twofold centralisation—at Algiers and at
Paris—is a great inconvenience and a real obstacle
to the prompt despatch of business: Permit me to
explain to your MajCsty what are the fundamental
principles which necessitate the measure which I
propose, and what is the real condition of Algeria.
Strongly desirous of the progress of this country,
the Emperor wishes, while continuing to ensure the
submission and tranquillity of the Arabs by means
of a sufficient army, that the chief end of his go-
vernment should be colonisation. For that, besides
security, more liberty is needed.
Algeria cannot be compared to any of the great
foreign possessions. In India the government is
employed in extending colonisation by means of
native chieftains ; in the United States the estab-
lishment of Europeans takes place' by the extermi-
nation or expulsion of the Indians. Nothing simi-
lar can be accomplished in Africa ; our difficulties
arc much greater ; we have a warlike race to re-
strain and civilise, a population of emigrants to
attract, a fusion of races to obtain a higher civili-
sation, to develop, by the application of the great
discoveries of modern science. We are in the pre-
sence of an armed and vigorous nation, which must
be extinguished by assimilation, and of a rising
European population. We must reconcile all these op-
posing interests. Hence arises the line marked out for
military and civil functions in Algeria. Up to this
moment the results obtained have involved verygreat
sacrifices, occasioned chiefly by the necessity of con-
quest and the obligation of leeping up a considerable
army for the maintenance of complete security.
It is time that the conquered territory, which ex-
tends over two hundred and twenty-five leagues of
coast, and illimitable extent towards the interior,
should produce a revenue sufficient gradually to
cover the expenses and reward the sacrifices of the
mother country.
Algeria is divided into three provinces, which
are themselves subdivided into military territories
and civil territories. The former, in which the
Arab element is almost exclusive, are administered
by generals, because it is acknowledged that mili-
tary authority is best suited to the manners and
traditions of the native inhabitants. The second,
in which the European clement prevails, and which
are sufficiently civilised to admit of a preponderance
of civil institutions, are placed under the charge of
prefets. In the military territories some Arab
chiefs exercise, under the superior authority of the
generals, an influence which we ought to lessen
and gradually destroy altogether. It should be
our aim to develop individual action, and to sub-
stitute for the aggregate action of the tribe indivi-
dual responsibility, property, and taxation, so as
thoroughly to prepare the native populations for
passing under the civil regime. In the civil terri-
tories we must relax the strict guardianship which
is kept over men's persons and interests. The
moment is come for granting freer and more direct
action to local authority, by permitting it to act
with more independence and, as a necessary conse-
quence, more responsibility.
In a word, the Minister must allow the admini-
strators, whether generals or prefets, greater lati-
tude, and only interfere in matters of importance
and general interest. To govern from Paris, and
administer on the spot, dividing the administration
in the way I have just pointed out, this is the plan
which seems to me best adapted to develop rapidly
the prosperity of our possessions in North Africa.
The statesmen who have studied the Algerian ques-

tion for twenty-five years have been almost unani-
mous i~rpointmgout this course, though perhaps
such an opportunity for following it has never oc-
curred before. -With these views, your Majesty
will sec that the centralisation of the government
at Algiers becomes a useless contrivance. In fact,
there are only two rational plans of effecting
the progress which your Majesty wishes ; either
to give more power to the Governor-General by
transporting all the service to Algieria and
making him Minister ; or to supersede the
Governor-General by appointing a special minister.
These two plans have been submitted to you, and
you have chosen the latter. There is urgent need
of satisfying public opinion, which looks for a solu-
tion of these grave questions from the Emperor's
government. Your Majesty will not wish that the
minister, the only person responsible to the Empe-
ror, should bear the weight of a false position -which
he could not get over.
The state of Algeria may be summed us as fel-
lows :—Much good has been done, immense results
have been obtained; but we must not hide from
ourselves that there are abuses to be put an end to,
and that to put an end to them demands vigorous
and unanimous action. The conquest and security
of the country are complete, thanks to the glorious
efforts of our army; crimes are rare, roads and
ypro-
perty are safe, the taxes are paid, and yet there is
scarcely an colonisation—scarcely 200,000 Euro-
peans, of whom half are French; less than 100,000
persons engaged in agriculture, Capital is scarce
and dear, the spirit of enterprise is extinguished,
property has to be established in the greatest part
of the territory, discouragement is created among
the colonists and capitalists who come to fertilise
the soil of Algeria ; such is the real situation of
the country.
The suppression of the functions of Governor-
General will render the action of the government
easier ; it will give to the minister andli the local
authorities full liberty of action, and simp
rity and facilitate obedience. Coming from the
centre of the government, the authority will be
fy
more powerful and more regular, and thus all pos-
sibility of conflicts will disappear. In short, why
keep up, together with a special minister, a Gover-
nor-General for a possession distant 36 hours from
the mother country?
Moreover, an opportunity occurs at this moment.
M. le Marechal Bandon has given in his resigna-
tion. Your Majesty has accepted it. The moment
is favourable. The reform which I propose would
not weaken the services of the high dignitary whom
your Majesty had desired to keep at the head of
the army of Algeria ; it will only establish the suc-
cess of that ruler whose services, during the long
period of his command, have made the new organi-
sation possible, by showing how much his zeal and
devotion have assured our conquest.
But while demanding that the government in
Algeria should become more free and independent,
I reserve altogether the military question. In this
respect the centralisation at Algiers ought to be
kept intact, and the command of the army to re-
main in the hands of a single chief. The military
power of the Governor-General will be exercised
by a commander-in-chief of the army of Africa,
who will be responsible for the security of the
country and its frontiers. He will make use of the
army and the naval force devoted to Algeria, for
the prompt suppression of every attempt at disorder.
The Commander-in-Chief,
whom I propose to sub-
stitute for the Governor-General, will be, with
greater powers, in a position like that of the
marechaux titulaires of the superior commands of
the active and territorial divisions of France. His
relations with the administrative and judicial autho-
rities will be regulated according to the same prin-
ciples ; the prefects administering the civil terri-
tories and particularly the generals administering
the military territories, will report to him all that
concerns the general situation and security of the

country.
Besides, he will provide according to circum-
stances, and under his responsibility, for every
urgent measure required in order to cause the autho-
rity of the Emperor to be respected and to ensure
the execution of the laws. But administration will
be out of the sphere of his attributes both in civil
and in military territory. His relations with the
different ministries of Algeria and the colonies, of
war, and of marine, will be regulated by the rules
approved by your Majesty, in consequence of my
report of July 29. Thus the civil and military
functions at present devolving on the Governor-
General are entirely re-distributed.
We have a right, sire, to expect the best results
from this reorganisation of powers. Each several
authority will have better defined and larger
powers, business will be more promptly settled,
and public and private interests will be placed in
closer communication with those whose duty it will
be to do justice to them. The military authority
rt♦maining, to it 9ught t 9 dtt .concentrated in c/110

hand in Algeria, and the administrative authority
being committed entirely to the prefects in the
civil and to the generals in the military terri-
tory, lastly, the minister haN ing recovered
his liberty of action, and being thus enabled
to accept a serious responsibility—:such will be
the consequences of the measure which I have-Cie-
honour to propose to your Majesty.
YOu- may hope, sire, in this- way to make col°,
nisation fruitful, and to attract the current of Euro-
pean emigration to Algeria, by the simple and salu-
tary principles of security and justice for all—for
Frenchmen, Europeans, and natives—and of the
successful emancipation of men and of interests.
Your Majesty's devoted cousin,
NAPOLEON, Minister, &c.
The foregoing report is followed by imperial de-
crees, suppressing the functions of the Governor-
General of Almeria, together with those of the
council of government assigned to that dignitary,
instituting a superior command of the military- and
naval forces in the colony,-and appointing thereto
Marie-Edme,Patrice-Maurice de M'Mahonr senator
and general of division.

TRUE REMEDY FOR THE DISTRESS
OF THE RAILWAY INTEREST.

Under this head the following letter has been
circulated :

• July, 1858.
Sir,—llaving for several years taken an active part in the
direction of one of the leading railway companies, I ven-
ture to address you, as chairman of the committee lately
appointed by thellonsrat Commons to consider the state
of legislation with regard to railways, in the hope that I
may be able to throw some light on the nature and causes
of the adverse circumstances under which they are labour-
ing.
It is absurd to call railways a commercial speculation or
investment, or a partnership body, in the ordinary sense of
those words. Not only does Parliament, in granting powers
to construct a railway, undertake by causes as to tolls, con-
trol, &c., to protect the public on one side, but by such limi-
tations it also gives the railway company a title to expect
that as far as the district granted is concerned, Parliament
will not prevent its having a fair return on the capital
authorised to be expended, the amount of which Parliament
also has controlled, either by limiting it to tue proved estimate
of cost of construction, or by compelling, in many cases, a
larger expenditure than for the. simple construction would
be deemed necessary, in deference to the wishes of a locality
or the views of the Board of Trade.
The present depression of the railway interest is owing to
two causes :-Ist. Want of action of the proprietary body,
by which the entire management is thrown into the hands
of a self-perpetuated body of directors, who for the most
part have very little interest in the success of the under-
taking. 2d. The injurious manner in which the powers of
legislation are exercised by Parliament.
The entire absence of action on important points of the
proprietary body, except under the most exceptional and ex-
traordinary circumstances, must bo admitted as a fact by all
in any way conversant with railways. The cause of this is
obvious—it arises from the difficulty, amounting to impos-
sibility, of moving a body consisting, in the case of the larger
railway companies, of many thousands of individuals (a large
proportion females and trustees*) in opposition to their re-
cognised leaders. The half-yearly meetings, which alone
are tolerably attended, usually do not comprise a twentieth
part of the whole body of proprietors ; so that let a case be
ever so clear, let the meeting be ever so unanimous, the
directors can always carry their point by means of the
proxies which their position enables them to procure.
This is souniversally recognised thaeopposition is scarcely
ever attempted, and when attempted has still more rarely
been successful. Such success has never been attained ex-
cept as the result of an organisation. continued for a consi-
derable period, sometimes for years, always attended with
great labour and expense, and has usually been too late to
obviate the mischief sought to be remedied. In a recent
case, in which the affairs of one of the leading companies
presented a spectacle of the greatest and most accumulative
disaster, resulting entirely from the reckless policy pursued
by the directors for a series of years, a well organised at-
tempt‘to produce some change in the constitution of that
body entirely failed of success. So much for the cause o;
want of action of the proprietors ; now for its consequences.
The directors of the company, after the first election, are
practically appointed by their OUR body. The sole qualifi-
cation is holding a certain amount of the stock of the com-
pany, usually £l,OOO, never more than £2,000, and this may
consist entirely of preference stock, guaranteed a dividend
by the shareholders at large. The qualification of a direc-
tor in a leading railway which has recently been promi-
nently before the public XManclirte›,§lieffield, and Lin-
colnshire), is at this moment puicliaseable in .the market
for £365. On the other hand, the remuneration received
by the directors is usually merely nominal, and rarely
exceeding the salary of a third-rate clerk. It is true that a
direction almost always includes some members who have a
large pecuniary interest in the concern ; but the instances
in which that interest bears so considerable a proportion to
the whole fortune of the holder as to make it worth his
while to give much of his time, thought, and attention to
the affairs of the company, are very rare indeed, so rare as
to leave little hope from the self-interest of :directors, be-
sides that something more than zeal, good intentions, and
.eisure are requisite to make a director's services. really

valuable.
It may be said that proprietors can elect whom the;,
please, and the responsibility is on them to see that fit per
sus are appointed ; but here again, also, it must be remem-o
bered that only a small portion of the directorial body is by
act of Parliament removable annually, that the board has
the most favourable position for procuring proxies to secure
the re-election of its retiring members, that so large a pro-
portion of the whole capital is held by females, trustees or
executors, parties unaccustomed or indifferent to these
things, that under the present scale of voting it is possible
for a small set of men to split their shores and carry a meet-
ing, that individual parliamentary influence, rather than
business habits, of the candidates is at present essential for
protection of the property, and that there is no inducement
attached to the office for men of commercial experience to
join themselves to these boards.
In the old stage competitions, and in the conduct of
ordinary mercantile or manufacturing business, those who
manage have their own property at stake ; but the pecu-
liarity of the railway case is that these great concerns are
in the hands of directors whose pecuniary interest in the re-
sult of the business is very small. The affairs of a great
railwas company are of the most extensive and complicated
character requiring a knowledge of every branch of com-
mercial business, demanding constant exercise of the highest
powers of application and judgment. When affairs of this
kind are submitted to a body of mere amateurs, such as are
the great bulk of railway directors, is it surprising that the
entire control should be usurped by secretaries, managers,
and other officials, who by their more unremitting attention
possess just that degree of knowledge of the subject in hand
which enables them to defeat all suggestions with regard to
it but their own ? The result is that railway companie sare
always drifting into or out of difficulties in accordance with
the varying humours or quarrels of their officers ; while
the directors, without reference to the general guidance of
the business they have undertaken to manage, give their
decisions on partial and imperfect knowledge, put the seal
of their own character and nominal responsibility on the
actions of managing officers behind, who are virtually ir-
responsible, and who, whatever amount of injury they may
inflict upon the the concern, are left not merely without
animadversion, but with undisturbed power to lead it
it into new disasters. I would adduce in confirmation of
the views I have just endeavoured to unfold, the case Of
she largest of the railways, viz., the London and North-
Western. If you will direct your attention to the vast
amount of capital brought into play by this company since
its consolidation in 1846 t (at which date the capital expen-
diture amounted to £16,300,000 againss £33,000,000 in
1857, to say nothing of guarantees to the extent of several
millions which the company had, in the meantime, under-
taken), and if you reflect upon the very small portion of
his amount which can be regarded as profitably invested ;
if you think upon how large a proportion the loss is enor-
mous, upon how very considerable a proportion it is total
if, moreover, you take into consideration, in connection
with these circumstances, the fact that throughout the en-
tire period the affairs of this company have been ostensibly
under the control of a body of directors, including in their
number many men of great ability, of extensive acquaint-
ance with railway matters and general business, and of un-
impeachable honour, it will, I think, be evident that such
a series of errors, such a uniformity of misfortune, could
not have occurred without some radical defect of spstem. I
think it impossible to believe that, if each addition to the
original undertaking had been. submitted to the judgment
of a body of men of adequate intelligence, and actuated by
a proper sense of the responsibility attaching to their posi-
tion, sufficiently numerous to obviate the danger of defer-
ringj to individual udgment, nor yet too many to allow of
each member mastering the prospects, not merely of the
particular scheme, but also its general bearings on the un-
dertaking at large---the results would not have been very
different from what we actually find them. The position
of the Great Western Company, incorporated in 1835, and
now, after 23 ears' existence, not paying one iota of divi-

" In the London and North-Western Company alone, it
is estimated that £6,000,000 out of a total share capital of
£25,500,000 is held by females and trustees, exclusive of
trusts in single names, clergymen and executorships.
t In the latter half of 1846 the company distributed
amongst its shareholders, in dividend, upwards of £600,000,
which had been earned by lines costing only about
£14,000,000. In the present half-year, after the expendi-
ture of 20 additional millions, the sum paid, as dividend,
will be less than £500,000. It would be difficult to point
out £2,000,000 of the additional capital which has not been
A kWh - •

decd to the original prorietors on a capital of several mil-
lions sterling, might be exhibited as another example, even
yet stronger, in confirmation of Whas has been said, but it
is not needed._ •
Undoubtedly the course pursued by'the Legislature has
tended materially to stimulate and aggravate the disastrous
,ktate of things. When Parliament adopted unreservedly the.
plinciple of competition, lines were set on foot which, in
themselves, were worthless and in no way desirable; except
as enabling one company to rob another of advantages of
which is :was in the enjoyment, to the certain eventual injury
of both parties ; or as pntting it in the power of speculators.

tO force from the terrors of a prosperous company, an ex-
orbitant remuneration for a worthless scheme. Take as an
example of the first kind, the Oxford and Birmingham
Railway, bought up by the Great Western at 50 per
cent. premium, for the purpose of enabling the latter to
compete with the North-Western ; as an example of the
second character, the Trent Valley, which was sold to the
North-Western before a sod was turned, for a consideration
which, at that time, was worth 100 per cent. premium ;
there are numerous other examples. It would be beside
my purpose to enlarge on the evils which ensued froni the
reckless rivalry thus' unsparingly encouraged : the millions
of money absolutely wasted in parliamentary contests, the
mad schemes set afloat, the neglect of the real business of
the companies which ensued. There cannot be a doubt,
however, that Parliament did not act fairly in arbitrating.
between the railway proprietors and tho public, and while
neglecting or destroying the interests of the one, it As
equally certain that they have mistaken those of the otyer.
Nist only -content with, protecting the public by maximum
rates of a dividend and by fixed-fares and tolls, &e., subject
to parliamentary revision, as if to render nugatory and im-
possible the latter provision, the principle of competition
has been admitted also,,mid this principle has been acted
on without the slightest inquiry as to whether the line to be
injured is earning excessive or even adequate remuneration.
By continuing to act in this manner, Parliament will eat
out the heart of the enteprise of the country. For several
years past ithas been impossible to raise up an independent
railway company. No man will be mad enough to ad-
vance his money for any such scheme. It is only by
helpless shareholders in companies already constituted,
who are worried to death by fears of Parliament, law-
yers, engineers, and secretaries, that anything of the kind
is attempted. Against those helpless shareholders it is that
Parliament has held out threats that competition would
everywhere be encouraged, at the same time it enticed
them on to destruction by equally holding out that powers
are to be had to buy off that .competition at any price, rising
in proportion to its damaging effect. The principles which
ought to regulate the granting of railway bills have never
been under discussion in Parliament, otherwise the ruinous
fallacies which have so long passed current on this head
would never have been obtained. To suppose that when a
company is in possession of the traffic between two places,
and does not earn half its maximum dividend, the sanction-
ing a competing line between those places will reduce the
freights and fares to the public is the merest fallacy ; and
it is a ruinous fallacy, because not only will no such effect
be produced, but the money wasted in the useless com-
peting line is so much capital lost to the commonwealth.
It is not too much to say that a sum equal to 100 millions
sterling has been lost to the public by railways in this way.
Look back so short a time as the session of 1854-5, and you
will find a committee of the House of Commons requiring
a pledge from the unwilling shareholders of the London and
South-Western Company, under penalty of granting a line
hostile to themselves, that they should complete another
rail Way from London to Exeter by a line intervening be-
tween Salisbury and Exeter, at a cost of £1,600,000, appa-
rently only to compete with and destroy the west of Eng-
land traffic actually on the Great Western line. Again, in
this present session, powers have been granted to the East
Kent' which can only result in injury to ' its own present
proprietors, as well as to, its greater neighbour, the South-
Eastern, Arose capital has been squandered all the coun-
ty of Kent in circuitous routes, in obedience to Parliamentary
legislation ; nor can I think it becomingin the Legislature of
a great and enlightened country to stand by, or, by granting
the powers now sought from it, to assist in the injury and
privation wantonly being inflicted upon multitudes of indivi-
duals, as in the case of the reckless competition recently
promoted-by the Great Northern and Manchester, Sheffield,
and Lincolnshire Railways between Lancashire and Lon-
don. I believe Parliament, even at this 11th hour, is
bound to do something to stop the powers of mischief
against each other hitherto so gratuitously accorded to rail-
way companies ; and it remains for me, therefore, to show
what can be done.

Parliament has already provided for the protection of the
public : Maximum rates of dividend ; maximum fares and
tolls, with power of revision ; penny a mile fares for parlia-
mentary trains ; forced conveyance of the mails ; compen-
sation in cases of accident; 5 per cent. tax on passeng,r re-
ceipts ; penalties for delay in transit or delivery of goods ;
Caidwell's clauses to ensure the shortest route ; Athlone
clause, in one case in Ireland, to protect a particular dis-
trict from having to bear the loss which the railway corn -
pany might choose to incur in order to compete at low and
losing rates with another company in the district of the
latter ; surveillance of the Board of Trade to protect the
public in all complaints ; limitation of amount of capital to
be raised to amount proved before committees of both
houses necessary to be expended; restriction of the powers
to borrow ; parliamentary contract for capital to be raised ;
forfeiture of deposit, and in the case of established compa-
nies, suspension of dividends if lines not complete within a
fixed time.
• And for protection of shareholders only : Prescribed num-
ber of directors and qualification ; audit of accounts ; mode
of voting; Wharneliffe meeting for approving of bills
passed the House of Commons.
These provisions protect the public, but not the share-
holders, who, by encouragement to competition, have been
deprived of a fair return for their capital.
What Parliament should do is to protect each district
for the companies already in that district, checking the
railway for the benefit of the public, either as is done in all
similar cases of gas and water companies, by limiting the
dividend, and so compelling the spread of further capital
over the district ; or, as in the case of some of the older
railways, by occasional revision of the tolls, or by granting
other advantages to the public from time to time.
Only in some such way as this can railway property be-
come other than it is, a property to which the holders are
indifferent, because of its precarious character, and their
fluctuating and passing interest, it being easier to realise
the loss and get rid of it, than to cope with the apparently
insurmountable difficulties. This is the true and equitable
solution ; but there is also great and pressing want of more
certainty in the legislation.
For this purpose there should be created one fixed and
permanent tribunal, acting for both houses, before which all
bills should be presented, and thoroughly canvassed, being
then passed as a matter of course, unless some very flagrant
case of injustice were to occur, and amongst its guiding
principles should be the following :
That the parliamentary estimate of cost include road,
stations, signals, and everything complete, proved to the
satisfaction of two responsible engineers.
The parliamentary contract to be for the full amount of
capital required to be raised, to be signed by responsible
parties (not nominally as at present) ; and in case of the
constituted board failing to make the necessary calls to com-
plete the line within the prescribed periods, the Board of
Trade to appoint directors, who shall make the required
calls on the shareholders; in all cases (to prevent the pre-
sent practice of transferring the liability to men of straw)
the parties signing the parliamentary contract to continue
liable for the calls, if the parties to whom they may have
transferred their shares are unable to pay. No certificate
of unused powers by an existing company to be received as
applicable to a new parliamentary contract, but in all cases
such contract to be signed by individual and responsible

parties.
Wharncliffe meeting to require the positive assent of
three-fifths of the shareholders in a company.
No more preference shares or borrowing powers to be
allowed.
Short branch lines to be allowed per se; but no amalga-
mations or leases by agreement for mileage, reduction of
rates, or guaranteed dividends to be allowed.
Before any new line is opened, Board of Trade or Public
Accountant (hereafter suggested) and the directors to
certify that no premium has been given to any contractor
or other party to take shares, either by way of bonus, or
addition to the price of his tender, but that such contractor
has been paid bona fide in money for the work at cash
prices.
The Athlone clause, before referred to, obliging a railway
company to reduce all intermediate rates if not in propor-
tion to the rates between any two points ;
and clauses to
insure that traffic shall take the shortest route. Parlia-
mentary or arbitration tolls to be inserted in all bills.
Before any bill is presented to the new tribunal, Board of
Trade to report as regards its legal status, interests of the
public, and of the other railway companies affected by it ;
whether they have abused their powers, are earning more
than the fair maximum dividend, &c., as well as on the
en-
gineering fitness of the new line, and if laid out most ad-
vantageonsly for accommodating the district.
Public auditor to be appointed at the expense of Govern-
ment, payable out of the present tax of 5 per cent. on pas-
senger receipts---to declare whether any charges aro pro-
perly or improperly placed to capital account, and to pre-
vent payments to other companies or parties not strictly
legal, under powers of the act, performing generally duties
similar to those of an analogous officer---the Poor-law
Auditor.
voting at Public, Meetings.--One vote in all cases for
every. ordinary share in the company paid up in full, and
in proportion to the amount paid up on any other shares
I not fully called up. No preference or guaranteed share-
'radix to Faye any Vote, except for approyal of exercise of