The Sun.
London, England, 1858-08-28 00:00:00

106
1$ 6

more conducive to the interests of the associated companies.
There are two instances amongst others which I could name
if time permitted. It is all important that this development
should take place as soon as possible, because the time cannot
be far distant when the terms of amalgamation must be
considered. The fact is the sooner that amalgamation is
brought about the better. At present we are three compa-
nies, three boards, and three expenses, all bearing a certain
divided interest, and the sooner it is put an end to the
better. It is most desirable fcr the interests of this
company that the amalgamation should take place at the
earliest possible moment, and it is quite as desirable
that it should take place on terms fair and equitable
as regards yourselves. The result cannot in my opinion
be obtained until the traffic of the districts is fully and
fairly developed, and the more so because your position
in regard to the system is very peculiar. The Norfolk con-
solidated stock is vary generally misunderstood by the
public. In truth, it is in the nature almost of guaranteed
stock, except that it has advantages over anal above that
stock, because unless the traffic of the Eastern Counties
system should permanently decrease, there is no probability
that our dividend will be affected at all. On the other band,
you must participate in the gradual increase which is taking
place in all railways, and we believe must continue to
take place for many years to come; therefore, you cannot
reason upon the present state of things in reference to the
way in which the associated stock cf the respective com-
panies should be brought together until the traffic of the
district is more completely developed and its value better
ascertained. While upon this subject, I will call attention
to what has been the dividend received by this company
since the amalgamation. In the year 1854 it was 21 per
cent. upon the stock of this company; in the year 1855
it was 3 per cent. ' • iii 1856 it was 31 per cent.; in 1857 it
was 21- per cent. The first half-year's dividend, which we
propose to-day will be £1 17s. 6d. per cent. ; and if the
increase which has taken place in the Eastern Counties
traffic for the last seven weeks continues, the half-a-crown
loss on the present half-year, compared with the correspond-
ing half-year of 1857, will be made up in the current half-
year. Therefore the dividend will, I trust, be 31 per cent.
even on the current year. I think that is a statement
which shows the great value of the amalgamation to this
company. I could easily show that it has been attended
with equal advantage to the other companies. But this
brings me to notice a protest which has been banded in by
a shareholder against paying interest upon the capital in-
vested in the Fakenham and Wells Railway. Now, I will
call your attention to the origin of that railway. That rail-
way was promoted by this company in the same year in
which the Amalgamation Bill was sought for, and very much
upon my recommendation, because I knew that the local
interest in favour of it was so great that, unless this com-
pany had aided in obtaining the act for the Fakenham and
Wells Railway, it was sufficient to imperil, if not alto-
gether to prevent, the Amalgamation Bill passing into an
Act of Parliament. Therefore, for a gentleman receiving
all the advantages which have accrued from the Amal-
gamation Act to shrink from bearing a fair share of the
responsibility attending it, I must say is conduct altogether
un-English and illiberal, and I hope we shall hear no more
upon this subject. (Cheers.) While upon the matter of
the Fakenham and Wells Railway, I would mention that
the traffic for the last seven months, although that has been
a very bad part of the year—the worst half of the year—
although paying 65 per cent. for working expenses to the
Eastern Counties Company, and a very large rate of in-
terest on the debenture debt, because their credit is not
such as to enable them to raise it upon more moderate terms,
shows a deficiency of somewhere abeutil2o for that period.
I think that that company has been somewhat hardly dealt
with. A small company like that which has expended some
£BO,OOO to £OO,OOO for an extension of nine or ten miles to
a sea-port should be dealt with in a liberal and just spirit,
and I think instead of paying 65 per cent. it ought to be
worked for a sum not exceeding 50 per cent. I will tell
you why. That company, it may be assumed, is now in
receipt of £2,000 to £3,500 a-year. In the ordinary nature
of railway property it cannot be long before it will reach
£5,000. The difference between 65 and 50 per cent. upon
that sum makes £750 a-year. Suppose that to be a dead
loss; suppose the loss equally distributed amongst the three
companies; that we take our fair shares—the Eastern Coun-
ties theirs, and the Eastern Union theirs—it would entail
upon this company a loss of £lOO, upon the Eastern Union
£lOO, and upon the Eastern Counties £5OO. That would be
the debtor side. But the traffic of the Fakenham and Wells
Railway could not be earning £5,000 per annum without
bringing a large accession of traffic upon the Eastern
Counties system—this £5,000 would be earned upon nine or
ten miles of railway. A gr,at part cf this traffic goes to
Louuou with, and Lowestoft and Cambridge, and
Yarmouth, and an increase of £5,000 would be represented
by an increase of from £lO,OOO to £15,000 to the associated
companies. Our share of that would be upwards of £1,000;
the Eastern Union share would be £l,OOO, and the Eastern
Counties Company would have between £6,000 and £7,000.
It would be only wise and liberal that the Eastern Counties
Company should undertake so much for the Fakenham and
Wells, and that we should take our share of any loss. I
must say that I am of opinion that it would he wise, not
only for the Eastern Counties Company, but for all railway
companies, to assist in the formation of branch lines by
landowners; that where landowners are prepared to make
their own branch railways at their own cost, the companies
should undertake to work them at a small rate per cent.,
even though it entailed some loss on the mere working, for
the chance of getting an increase of traffic on their main
system, and of getting the co-operation of the whole district,
in working with them, and supporting their interest when-
ever it should become necessary to ask for it. I throw this
observation out for general consideration,because I think
my suggestion if realised would be attended with very great
advantages to all railway companies. It has occurred to
me that we are in a position of such safety, and the small-
ness of the attendance to-day so far proves it to be the fact,
that we are so little affected by commercial crises that the
shareholders think they are certain of their dividend, and
that they may leave matters very much in our hands, that
we shall protect their interests, and that we as shareholders
of the Norfolk Railway Company may very securely discuss
railway politics generally without feeling any concern with
regard to our own position. Every railway company
has bad to meet its proprietors with a long apology
for a shortened dividend, arising from various circum-
stances. Our traffic is of an agricultural character ;
as long as people require their stomachs to be filled, the
traffic of the Eastern Counties districts cannot he materially
affected. That is an advantage which we enjoy from our
position. But no one can be Indifferent to the great depres-
sion under which railway property is suffering. I for one,
owing my prosperity in lite to railways, cannot but deplore
it. I can give a very satisfactory reason for it, but per-
haps it is scarcely necessary to occupy your time in that
way. I will, however, make this remark for your consi-
deration, that all;the disastrous effects perceptible in the
southern districts—l speak of the South-Eastern, the
Brighton, and the South-Western Companies, but particu-
larly of the South-Eastern—have arisen from the original
mistake in the direction of the Brighton Railway. Nearly
all the depression in the midland and northern districts has
arisen from the misdirection of the original Grand Junction
Railway from Warrington-by-Madeley to Birmingham; and
in the eastern districts, to the misplacing of the railway from
London to Colchester. That has been the foundation of a
vast amount of railway disaster in this country; but in
addition to that, the excitement of 1846 bringing a vast
number of railways before the world, many of them to die a
natural death, but a great many to receive the sanction of
Parliament, has contributed to the result—it would have
been better for the interest of the country if such powers had
never been granted. But that is not all. The consequences of
the excitement of 1846 gave rise to rivalries and embittered
feelings which have prevented railway companies from com-
ing together in a fair and moderate spirit to consider such
arrangements as would be best for their mutual interests and
for the public advantage. Those feelings do prevail to a large
extent among railways, and I see very little hope of those feel-
ings being allayed unless a new state of things with regard to
railways should arise. The Legislature, in originally granting
Acts of Parliament for railways, considered them in the light
of canals, and the directors to be in the position of toll col-
lectors. It was considered that any man who could start a
steam engine might run it on paying the ordinary rate of toll
demanded, the directors only having to take toll. But this
state of things it was found impossible to allow to exist, and
railway companies became of necessity carriers. In the
earlier system it was easy, because the great lines having a
monopoly—there being no other lines to affect their inte-
rest in the district—could dictate their own terms. The line
from London to Liverpool commanded a large amount of
profits on any system it chose to enforce. But when a rail-
way going from London to Bristol competes for the traffic
to Liverpool, and another going from London to York also
competes for the Manchester, and even for the Liverpool
traffic, the details become so complicated, and the know-
ledge necessary to conduct the traffic so vast, not merely as
to the rate of tolls, but taking into consideration all the
great commercial questions as 'to the value of produc'e and
the nature of the articles conveyed, that it became impossible
for a board of directors to deal with the matter efficiently.
To show what sort of considerations influence the question,
I may instance the cattle traffic from Denmark to London.
The natural cattle traffic of this company arises mainly from
Norfolk; it must come by railway; and for that we charge
the
directors fair sum of about ld. per mile per head. But when
directors had to consider the case of cattle coming from Den-
mark, another state of things arose. The General Staoae.
mr
Company carries the cattle to London all the way. 1337 water.
The question is, how a portion of that can be diverted to -
Lowestoft. The rate must, then, be less by one .half than
that which is charged by us for the traffic arising in our
own district. The directors must say, therefore, if we are
to get this traffic we must charge one-half what we get for
our local cattle traffic; if not, we shallosttiZo
one- it at
one-half
r
Therefore, if they found that they could
get 2s. or 3s. per head for the cattle profit,
I mention that
they were jus-
tified and bound to do so, and they do so.
to show that it is not a mere questioriofa. MII of one penny
or one halfpenny, or a farthing a mile—itis a question of
great commercial difficulty, requiring considerable com-
mercial knowledge, and a careful investigation into the
circumstances of almost every particular traffic which arises
inaugural promulgated
te
from any district accommodated by railw
plrloravuel come
to this conclusion—it is not my owni .d ea, it was m
first by Mr. R. Stephenson in his address to the
Institution of Civil Engineers—that railways will never be
in a proper position until they are worked by subsidiary
companies or parties, and the functions of directors restricted
to what they ought to be, viz., those of toll or rent takers, at
the same time exercising a proper supervision to see that the
covenants of any agreement are fairly and properly carried
out, and that the best terms are obtained whenever a con-
tract is entered upon. What would be the advantages of
this system ? You would have individual responsibility—
not only that, but a man entering on a foolish competition
would find himself corrected by having his own banker's
account affected to the extent probably of £4,000 or £5,000
in the very first week. That would have a moderating effect
in abating the ardour of any gentleman inclined to indulge
his own pride or personal feeling in risking a competition,
and would unquestionably bring him to his senses. But it
may ha remarked that in the old coach-days people did in-
dulge in this sort of thing—a man would carry a passenger
100 miles for nothing and give him a dinner; but that state
of things did not last long, and I believe it would be of still
shorter duration in connection with railways. I do not think
that the carrying for ss. to Manchester would last a fortnight
under such a new state of circumstances. The effect of these
agreements would be to give greater security to railway
property, the dividends would be more secure, especially if a
peoper guarantee fund were a condition, and I am quite
certain that it would be a very profitable thing to the sub-
sidiary companies, for subsidiary companies could give better
'iividendsthan are likely to be earned by railway companies,
at the same time securing to themselves a large profit,
arising not only from the better development of the traffic,
but the economical arrangements that they would have a
greater interest in effecting. If the Legislature are to do
anything, let them facilitate such au arrangement as I have
suggested. I have continued my remarks to a greater
length than I had intended ; but I hope you will think that
I have not unnecessarily occupied your time.
Mr. M'LAREN had listened to the address of the chairman
with very great satisfaction, and he might remark that now
that the palmy days of contractors and engineers had gone
by—clearly gone—a new scheme for working railways was
to be brought forward as introduced by the chairman, !Inc!.
which wt simply for the purpose of bending over tog united