The Sun.
London, England, 1859-08-13 00:00:00

EDINBURGH AND BATHGATE.

The half-yearly meeting of the shareholders was
held at Edinburgh on Thursday, Mr. T. Hill in the
chair.

The dividend account showed that out of the
half-year's rent due on the 31st of July of £4,750
there remained, after payment of debenture interest,
&c., a balance of £3,295 applicable to dividend.
The receipts on the capital account amounted to
£251,886, which had all been expended, except a
balance of £l2O, and of the above capital £62,700
consisted of debentures, on £25,000 of which 4/ per
cent. was paid, and on the remainder 4 per cent.
The report stated that the directors were enabled
at last Whitsunday to renew the debenture bonds
then falling due at a reduction from 5 to 4 per cent.
The directors recommended a dividend at the rate
of 6s. 3d. per share, free of income tax, and 4 per
cent. on sums paid in anticipation of calls.
The CHAIRMAN moved the approval of the report,
and, in answer to questions, stated that 'with the
reduced rate of debenture interest, the dividend
would be increased next half-year; and that the
traffic was satisfactorily increasing, giving them the
prospect of eventually receiving the half of the
surplus profits.
The report was unanimously approved.

ITALIAN JUNCTION.

The first section of this railway, between Bouveret
and Martigny, was opened for traffic on the 14th ult.,
and the inauguration took place on the 6th inst.
The proceedings commenced with the ceremony of
blessing the engines by the clergy of the district,
and were concluded by a dinner in the usual man-
ner. This portion of the line is about 25 miles long,
and commences at the eastern end of the Lake of
Geneva, running up the valley of the Rhone. The
heart of Switzerland is thus connected by means of
railway and steamer with Paris and London. A
further section of the railway will probably be
opened in October next, and a third section to Sion
in April, 1860. Th:s railway forms the nearest
route between Paris and Milan, and the effect of
the late peace will probably be very advantageous
to it. When complete it will place Geneva in direct
railway communication with Milan and the rest of
Italy. The gradients are considered good, the
steepest being 1 in 100.

THE PROFITS ON RAILWAYS.

For years past the commercial public have con-
sidered that although a multitude of legal encum-
brances to the transaction of business still remain,
the tendency of Parliamentary action steadily sets
towards their removal, and that, whatever caution
may be requisite in sweeping away old follies,
every new measure now passed involves some step
in the direction of sound principles. This is a
popular delusion. Cases showing that modern
economists and free-traders can acquiesce in errors
no less gross than those which prompted the finan-
ciers of half a century ago could be cited every
week, and one of the latest and most prominent
has just been described in the annual railway report
of Captain Douglas Galton to the Board of Trade.
The paternal control exercised over this branch of
enterprise ft om its commencement, and which has
led to results notorious throughout the world, is
being ex tended with greater vigour every year, and
has received its highest development in 1858. The
total of their capital, the extent of their borrowing
powers, the limits of the liability of the share-
holders, the direction of the lines and the tariff of
charges of the various companies having been all
dictated by the wisdom of the Legislature, it has
lately been thought fit for their especial protection
to prescribe the terms upon which the shareholders
shall deal with their own profits, so far as those
profits may be turned to account as a security
to enable them to borrow money on the best
terms. L.: recent railway bills a clause is ac-
cordingly introduced prohibiting the company
from creating any preference shares entitled
to a fixed dividend. They. may issue such
shares nominally bearing a certain interest, but this
interest is to be dependent on the net profits for
the year; or in some instances even the half-year.
They must not go into the market and say, " Our
annual receipts have upon the average been of such
and such an amount, and have in the main shown
a steady increase. They are obviously sufficient to
render the payment of a 5 per cent. dividend on
£lOO,OOO a matter of coot linty, although accidental
fluctuations have occurred, so that shortcomings in
the year would have to be made up in the next.
We will pledge ourselves to this 5 per cent. Will
any one lend us the required amount ? The very
existence of the railway, the completion of some
important link that will make all the difference be-
tween traffic and no traffic, may depend upon the
money being obtained, but Parliament forbids the
transaction unless the public will lend the money
in a speculative manner—that is to say, with the
possibility of finding in occasional half-years that
their investment will yield them no income what-
ever. Of course, the result is, that the loan is re-
fused, except at such a rate of interest as will com-
pensate for this uncertainty, and, as the charges
for risk are always calculated at their extreme point
the protected company find themselves compelled
to submit to those extra and onerous conditions,
always enforced in a restricted field. The public
cannot fail to discern that if a company is bound to
pay dividends to a certain class of persons out of
the profits only of a certain number of mouths,
it will usually be to its' advantage to throw
the cost of any serious accident upon the immediate
period, instead of spreading it, as in all properly
managed concerns, over a rational average of time.
For instance, if there are £lOO,OOO 5 per cent.
preference shares outstanding, and the annual profits
of the company with an ordinary share capital of
£500,000, fire RlO,OOO, and sonic damage is sustain ed
to the. o,un
t.
embankments, o
0;n0e0n0t, from
any a
will be the object of the directors to meet it entirely
out of the revenue of the next two years, since there
s o sother collision
cause, or • theiit
hen be no profit to show, and the preference
shareholders will consequently be deprived of divi-
dends; whereas, if, the total had been spread over
10 years, these persons would still get regularly
paid, and the full loss would be borne by the cem•
pony, whose divisable profits for the term would be
reduced from £5,000 per annum to £3,000. The
law, in fact, to use the words of Captain Galion,
" places it to some extent in the power of the direc-
tors so to adjust the time of payment of outgoings
chargeable to revenue (e.g., for renewal of extensive