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valuable light was thrown on Railways, both British and Foreign.

Freedom of inter-communication belongs, as a matter of course, to the members of every social union. The very idea of society implies intercourse; and a road is always one of the very first objects of solicitude to the men who quit their native land for a home in the wilderness. Our highways were of course free, with this limitation, that occasionally, for the sake of the public convenience, parties were allowed to expend money on their improvement, for which they were permitted to indemnify themselves by a toll. Railways are improved highways, and must more and more supersede them: they are highways, however, that can only be used under regulation and control. The public safety, as well as the economy by which alone a Railway may be made to yield a return for the expense of construction and working, require that the passengers and goods shall proceed along it in trains of vehicles, at certain fixed periods. This difference between the highway and the Railway renders it necessary that the latter should be placed under a particular management, whether conducted by public functionaries, or by the servants of those who have obtained from the legislature a cession of the Lines, with the privilege of indemnifying themselves by fares for the outlay.

In some countries Railways have been constructed by the state; in others, partly by individuals and partly by the state. When constructed by associations of individuals, cessions of the Lines have been granted either for terms of years or in perpetuity. In this country, all the

Lines have been ceded in perpetuity. Where the object can be attained by a cession for a term of years, a cession in perpetuity is of course objectionable; but whether the cession be for a term or in perpetuity, it is quite clear that the legislature, as guardians of the public interests, ought to have taken especial care that the exactions from the public should be no more than would afford a suitable return to the associations for their outlay. The cession was of the nature of a contract between the Companies and the public, and if the legislature conceded more to the Companies in this contract than was a just equivalent for the services performed, it thereby betrayed its trust.*

Even at first, when it was problematical whether the adventurers should lose the capital they embarked, or be rewarded by success, ten per cent. on their outlay was fixed by the legislature as the limit of their profits. This extravagant return was continued in all the subsequent Acts, though a much smaller one had then become a sufficient encouragement for the investment of capital in Railways. But, whatever the rate, it is quite clear that the Companies have no right to more; and if, through the negligence of the legislature, they have been permitted to violate their contract by all manner of fraudulent evasions, a great wrong has been suffered by the public. The limitation of their profits to ten per cent. necessarily invests the public with the right to ascertain, through an impartial audit, what profits are made by the Companies,

"In the instance of Railway legislation, the public interests have been overlooked to a degree that is not very excusable.”— M'Culloch's British Empire, 3rd edition, vol. ii. p. 59.

in order that effect may be given to the stipulation, when the 10 per cent. is exceeded. In disregard, however, of every principle of justice and equity, the Companies have been suffered, by the guardians of the public interests, to treat with contempt the conditions on which they obtained their cessions. It will be shown in the following pages, that the impunity with which Railway Companies have been suffered to violate their agreements with the public, by the evasion of the provisions for limiting their profits, and the exaction of fares and charges not justified by their outlay, has produced a host of evils, and ultimately an extraordinary amount of distress.

A departure from sound principles in commercial legislation can never be hazarded with impunity. The failure of the legislature to place our Railway system on a proper footing has been attended with the most disastrous results to trade and industry. The prospect of returns far beyond the usual rates of profit, which the success of the early constructed Lines went far to justify, led necessarily to the devotion of a disproportionate amount of capital to Railways. When, however, the success of the Liverpool and Manchester Line had removed all doubts as to the possibility of executing Railways with profit, and supplied the public with data for their guidance in similar undertakings, a fair return was all that was required to encourage enterprise. To allow Companies to obtain Acts, enabling them to receive from the public a disproportionate return on their investments, was not a legitimate encouragement of enterprise, but a stimulus to extravagant speculation. Had parliament interposed in time, and distinctly told Railway Companies, "You shall be

allowed a rate of profit sufficient to indemnify you for your outlay, and to encourage the investment of the additional capital required for similar undertakings; but we shall secure to the public a right to participate directly in such further advantages as may result from the invention," Railway speculation, while it received a healthy stimulus, would not have exceeded its proper limits; and such an amount of capital only would have been devoted to it, as the savings of the country could have afforded, without injuriously interfering with trade and industry. To parliament, therefore, as the source of the evil, is chiefly attributable the heavy calamities which the extravagant expenditure on Railways has inflicted on the country. Individuals are merely puppets put in motion by the legislature. Day does not succeed night with greater certainty, than a high rate of profit attracts capital to the channels of enterprise, in which there is a fair prospect of its being obtained.

It is not easy to overrate the disastrous influence of the abuse of Railway speculation. There is not a nook or cranny throughout the land into which it has not found an entrance. The experience of every man has rendered him familiar with its effects. Allured by the prospect of immense gains and rapid fortunes, all classes rushed eagerly into Railroad speculations. The manufacturers and traders starved their business that they might buy shares; and even resorted to the most desperate expedients for raising money. Some idea of the enormous sums which have been withdrawn from industry by Railway speculation may be formed from the recent statement of a Chairman of one of the Lines,

(the South-Eastern,) that the people of Liverpool and Manchester only have within the last four years supplied three millions to that Line. If these two towns have supplied three millions to one Line, what must the aggregate of their advances amount to?

Are we to be astonished then at the phenomena which have lately been witnessed in the money market? There is now, indeed, but one opinion among those who from their position and acquirements are looked up to as authorities in these matters,-that the late panic in the money market was chiefly caused by the extravagant expenditure on Railways. That other causes, such as the Irish famine, and a deficiency in our own crops, contributed to our difficulties, may be safely admitted; but the funds for payment of our importations of food could have been supplied without materially trenching on the capital required for the wants of commerce and industry. It was the heavy and constantly increasing drains of the Railways, continued during considerable periods, and the infliction on the trade and industry of the country, of a competition in the money market with shareowners, whose engagements often rendered it necessary for them to borrow on the most extravagant terms to avoid a total wreck, that led to that extraordinary rise in the rate of interest, which commerce was utterly unable to support. When a rise in the rate of interest is caused by high commercial profits, it is an unequivocal evidence of prosperity; but in this case, the rate of interest actually exceeded the rate of profits. For months and months no money was raised for Railway purposes at a lower rate of interest than 10 per cent., and for at least a month 20 per cent. and even more was

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