The Sun.
London, England, 1866-01-05 00:00:00

ing, Guildford, and Reigate; and £993,300 to the
London and Greenwich. One favourable element
in South Eastern finance is the large amount of
ordinary capital taken up. Thus at tl e close of
January the South Eastern had issue 1 £7,993,090
of ordinary capital, upon which a dividend of
5 per cent. for 1864 was paid ; the Reading, Guild-
ford, and Reigate, £BOO,OOO, which received 5i per
cent. for the year ; and the London and Greenwich
£550,000, which received £2 14s. 2d. per cent. for
the year. Of the whole capital raised by the South-
Eastern and its allies in January, 1865, £9,343,090,
or rather more than 53 per cent., was thus ordinary
stock. The preferential capital in existence in Jan.
was as follows:—South-Eastern, £2,348,592, at
per cent., and £1,517,450 at 5 per cent; London
and Greenwich, £210,000 at 5 percent. The South-
Eastern had also issued in January £67,810 of 4 per
cent. debenture stock. The state of the debenture
debt account, Jan. 31, 1865, was as follows :
South-Eastern, £1,313,146 at 4 per cent., £627,875
at 4k per cent., £1,912,581 at 41 percent., £142,600
at 44 per cent., and £563,595 per cent.; and Lon-
don and Greenwich, £233,300 at 4 per cent. The
average rate of interest paid on the debenture debt
has been gradually advancing, having been £4 3s.
3id. per cent., Jan. 31, 1863 ; £4 3s. Oid. per cent.,
July 31, 1863; £4 3s. sd. per cent., Jan. 31, 1864 ;
£4 4s. 21d. per cent., July 31, 1864; £4 7s. 3id,
per cent., Jan. 31, 1865; and £4 Bs. 6d. per cent.,
July 31, 1865. We have shown that the capital
account has been largely extended during the last
two years, but a great deal has of course been done
for the money. Thus, the original Charing-cross
undertaking has been carried out, and the works of
the City Terminus Extension have now well ad-
vanced, so that it is expected that the city station
will be available for traffic by the beginning of 1866.
A portion of the new direct line to Tunbridge, ex-
tending from Lewisham to Bickley and Chiselhurst,
was opened for traffic on July 1, 1865. The works
on the remainder of the line as far as Tunbridge
are proceeding, and are expected to be completed in
the course of 1866. This line will shorten the main
route 18 miles, and will place the company in a
more favourable position with respect to Ramsgate
and Margate traffic. The works are rather heavy,
comprising, as they do, a tunnel at Chelsfield 594
yards in length, another at Polhill 2,530 yards in
length, and another at Sevenoaks 3,451 yards, or
very nearly two miles, in length. It was the magni-
tude and difficulty of these works which doubtless
caused the abandonment of this route in the first
instance. If it had been chosen it is possible that
the South-Eastern might have preserved intact its
originally prosperous position. We may add that
the Chelsfield tunnel has been completed, while the
Polhill and Sevenoaks tunnels are advancing at the
rate of 30 yards per week.
Although the South-Eastern has been contending
with very keen opposition for the last three or four
years, there is an immense vitality in the passenger
traffic. Thus, while the number of passengers con-
veyed in the year ending January 31, 1865, was
15,008,755, it was only 13,455,053 in the year end
ing January 31, 1864 ; 12,354,363 in the year end
ing January 31, 1863 ; 11,598,827 in the year end
ing January 31, 1862 ; 11,113,794 in the year end
ing January 31, 1861; 10,531,101 in the year end
ing January 31, 1860 ; 9,588,331 in the year end
ing January 31, 1859 ; 9,295,089 in the year end

ing January 31, 1858 ; 9,241,462 in the year end-
ing January 31, 1857 ; and 8,709,197 in the year
ending January 31, 1856. There has thus been
a steady and unchecked progress year by year in
the number of passengers conveyed. There have
been some fluctuations as regards classes, but the
general total has been ever onwards ; at the same
time, the great increase has been in third-class pas-

sengers, so that the receipts from passengers have
perhaps not displayed quite so much progress as
might have been expected. Annexed is the yearly
revenue from passengers during the last ten years,
ending January 31 in each year :-1856, £685,046;
1857, £703,666 ; 1858, £707,956 ; 1859, £700,681 ;
1860, £737,190 ; 1861, £765,455 ; 1862, £729,217 ;

1863, £763,966; 1864, £755,915; and 1865,
£807,088. It is interesting also to note the gradua'
growth of season-ticket revenue, indicating, as ii
does, the steady development of a residential traffic
—1856, £22,796 ; 1857, £26,362 ; 1858, £26,847
1859, £27,431; 1860, £30,358 ; 1861, £31,013 ;

1862, £32,175; 1863, £33,429 ; 1864, £34,693; and
1865, £37,623. The traffic agreement with the
London, Chatham, 'and Dover has been Concluded
" with the view of avoiding the injurious effects of

undue competition, and of working the traffic of the
two companies more economically and efficiently."
The agreement, we may add, provides for the es-
tablishment of a common fund, into which shall be
paid—first, the gross receipts of each company from
continental traffic ; secondly, the gross receipts of
each company from local traffic ; thirdly, the pro-
portion received or receivable by each company of

through-rates, fares, and charges in respect of traffic
to or from the Continent, or to or from Dover or
Folkestone, brought upon any of the railways of

either company at London from any railway beyond
London, or forwarded by either company by any
other railway from London to places beyond Lon-
don ; and, fourthly, all subsidies or payments re-
ceived by either company, for the carriage of mails
by railway or steamboat, either directly or indi-
rectly, through the medium of any other person in
connection with the companies. The agreement has
a number of clauses defining what is Continental
traffic, what is local traffic, and what is through
traffic, but we have not space to enter upon all these
niceties. It must suffice to say that the common
fund is to be divided between the two companies in
the following proportions :

Year.

London, Chatham, and
Dover.
Per cent.
32
...... 34
• ..... 33
...... 36

South-Eastern.
Per cent.
1863 68
1864 66
1865 65
1866 61
1867 61
1868 59
1869 56
1870 54
1871 52
For 1872 and subsequent years the proportion is
to be 50 per cent. for each company. This agree-
ment may be all very well for the London, Chatham,
and Dover, but it is scarcely so well for the South-
Eastern. Supposing
that by 1872 the London, Chat-
ham, and Dover has reached an average revenue of
£20,000 per week, that result can only be attained
to some extent at the expense of the South-Eastern
system ; but, even if the natural buoyancy of the
traffic of the old network overcomes every obstacle
and continues to expand to an average of £30,000
per week by 1872, how will matters then stand ?
Why, each company will be entitled to £25,000 per
week; and, allowing 50 per cent., for working ex-
penses, the net profits of the South-Eastern will be
at the rate of £650 per annum. Supposing that
the working expenses can be reduced to 45 per
cent., the South-Eastern's net revenue will be in-
creased to £715,000 per annum, as compared with
£600,000 at present. It may seem a nice profit
enough, but there can be little doubt that the
capital rapresented by the South-Eastern system
by 1872 will be £19,000,000 or £20,000,000,
of which £12,000,000 will be preference and loan
capital, for it is not very likely that the directors
will be enabled to issue any fresh ordinary stock.
Taking the average charge of £12,000,000 of pre-
ferential capital of 444 per cent. per annum,
£570,000 of the £715,000 is at once swallowed
up, leaving £145,000 for division upon nearly
£8,000,000, of ordinary stock, or not quite 2 per
cent. This would be a grievous result, and it is
right to state that it would be attenuated by such of
the traffic as is not comprehended in the agreement
entered into, by rents, and by miscellaneous items
of revenue. On the other hand, the receipts of the
two companies must experience an enormous expan-
sion before they attain a total of £50,000 per week
between them. That would be £2,600,000 per an-
num, and in 1864 the revenue of both undertakings
combined was £1,576,000. In other words, traffic
must be developed to the extent of £1,024,000 per
annum between 1864 and 1872 to enable the hypo-
thetical case which we set up to be realized. It may
be that the local and other traffic excepted from the
agreement is of more importance than we suppose ;
but this is a point which must be left to the solution
afforded by time. Meanwhile it does seem that it
would have been better for the directors to have