HOW BRANCHES SHOULD BE CONSTRUCTED.

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But," it will be urged, "a branch that would be unremunerative as an independent property, is often remunerative to the company that has made it, in virtue of the traffic it brings to the trunk line. Though yielding mea gre returns on its own capital, yet, by increasing the returns on the capital of the trunk line, it compensates, or more than compensates. Were the existing company, however, forbidden to extend its undertaking, such a branch would not be made, and injury would result.' This is all true, with the exception of the last assertion, that such a branch would not be made. Though in its corporate capacity the company owning the trunk line would be unable to join in a work of this nature, there would be nothing to prevent individual shareholders in the trunk line from doing so to any extent they thought fit: and were the prospects as favourable as is assumed, this course, being manifestly advantageous to individual shareholders, would be pursued by many of them. If, acting in concert with others similarly circumstanced, the owner of £10,000 worth of stock in the trunk line, could aid the carrying out of a proposed feeder promising to return only 2 per cent. on its cost, by taking shares to the extent of £1,000, it would answer his purpose to do this, providing the extra traffic it brought would raise the trunk-line dividend by one-fourth per cent. Thus, under a limited proprietary contract, companies would still, as now, foster extensions where they were wanted; the only difference being, that in the absence of guaranteed dividends, some caution would be shown, and the poorer shareholders would not, as at present, be sacrificed to the richer.

In brief, our position is, that whenever, by the efforts of all parties to be advantaged-local landowners, manufacturers, merchants, trunk-line shareholders, &c., the capital for an extension can be raised-whenever it becomes

clear to all such, that their indirect profits plus their direct profits will make the investment a paying one; the fact is proof that the line is wanted. On the contrary, whenever the prospective gains to those interested are insufficient to induce them to undertake it, the fact is proof that the line is not wanted so much as other things are wanted, and therefore ought not to be made. Instead, then, of the principle we advocate being objectionable as a check to railway enterprise, one of its merits is, that by destroying the artificial incentives to such enterprise, it would confine it within normal limits.

A perusal of the evidence given before the Select Committee will show that it has sundry other merits, which we have space only to indicate.

It is estimated by Mr. Laing-and Mr. Stephenson, while declining to commit himself to the estimate, “does not believe he has overstated it "-that out of the £280,000,000 already raised for the construction of our railways, £70,000,000 has been needlessly spent in contests, in duplicate lines, in "the multiplication of an immense number of schemes prosecuted at an almost reckless expense;" and Mr. Stephenson believes that this sum is "a very inadequate representative of the actual loss in point of convenience, economy, and other circumstances connected with traffic, which the public has sustained by reason of parliamentary carelessness in legislating for railways." Under an equitable interpretation of the proprietary contract, the greater part of this would have been avoided.

The competition between rival companies in extension and branch-making, which has already done vast injury, and the effects of which, if not stopped, will, in the opin ion of Mr. Stephenson, be such that "property now paying 5 per cent. will in ten years be worth only 3 per cent. and that on twenty-one millions of money"-this compe tition could never have existed in its intense and delet rious form under the limiting principle we advocate.

NEED OF NORMAL COMPETITION.

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Prompted by jealousy and antagonism, our companies have obtained powers for 2,000 miles of railway which they have never made. The millions thus squandered in surveys and parliamentary contests-"food for lawyers and engineers"-would nearly all have been saved, had each supplementary line been obtainable only by an independent body of proprietors with no one to shield them from the penalties of reckless scheming.

It is admitted that the branches and feeders constructed from competitive motives have not been laid out in the best directions for the public. To defeat, or retaliate upon, opponents, having been one of the ends—often the chief end—in making them, routes have been chosen especially calculated to effect this end; and the local traffic has in consequence been ill provided for. Had these branches and feeders, however, been left to the enterprise of their respective districts, aided by such other enterprise as they could attract, the reverse would have been the fact: seeing that on the average, in these smaller cases, as in the greater ones, the routes which most accommodate the public must be the routes most profitable to projectors.

Were the illegitimate competition in extension-making done away, there would remain between companies justthat normal competition which is advantageous to all. It is not true, as is alleged, that there cannot exist between railways a competition analogous to that which exists between traders. The evidence of Mr. Saunders, the Secretary of the Great Western Company, proves the contrary. He shows that where the Great Western and the North Western railways communicate with the same towns, as at Birmingham and Oxford, each has tacitly adopted the fare which the other was charging; and that while there is thus no competition in fares, there is competition in speed and accommodation. The results are, that each takes that portion of the traffic, which, in virtue of its po

sition and local circumstances, naturally falls to its share; that each stimulates the other to give the greatest advantages it can afford; and that each keeps the other in order by threatening to take away its natural share of the traf fic, if, by ill-behaviour or inefficiency, it counterbalances the special advantages it offers. Now, this is just the form which competition eventually assumes between tradAfter it has been ascertained by underselling what is the lowest remunerative price at which any commodity can be sold, the general results are, that that becomes the established price; that each trader is content to supply those only who, from proximity or other causes, naturally come to him; and that only when he treats his customers badly, need he fear that they will inconvenience themselves by going elsewhere for their goods.

ers.

Is there not, then, pressing need for an amendment of the laws affecting the proprietary contract-an amendment which shall transform it from an unlimited into a limited contract; or rather not transform it into such, but recognize it as such? If there be truth in our argument, the absence of any limitation has been the chief cause of the manifold evils of our railway administration. The share-trafficking of directors; the complicated intrigues of lawyers, engineers, contractors, and others; the betrayal of proprietaries-all the complicated corruptions which we have detailed, have primarily arisen from it, have been made possible by it. It has rendered travelling more costly and less safe than it would have been; and while apparently facilitating traffic, has indirectly hindered it. By fostering antagonism, it has led to the ill laying-out of supplementary lines; to the wasting of enormous sums in useless parliamentary contests; to the loss of an almost incredible amount of national capital in the making of railways for which there is no due requirement. Regarded

EXTENT OF THE INTERESTS INVOLVED.

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in the mass, the investments of shareholders have been reduced by it to less than half the average productiveness which such investments should possess; and, as all authorities admit, railway property is, even now, kept below its real value, by the fear of future depreciations consequent on future extensions.

Considering, then, the vastness of the interests at stake-considering that the total capital of our companies will soon reach £300,000,000-considering, on the one hand, the immense number of persons owning this capital (many of them with no incomes but what are derived from it), and, on the other hand, the great extent to which the community is concerned, both directly as to its commercial facilities, and indirectly as to the economy of its resources-considering all this, it becomes extremely important that railway property should be placed on a secure footing, and railway enterprise confined within normal bounds. The change is demanded alike for the welfare of shareholders and the public; and it is one which equity manifestly dictates. No charge of over-legislation can be brought against it. It is simply an extension to joint-stock contracts, of the principle applied to all other contracts; it is merely a fulfilment of the State's judicial function in cases hitherto neglected; it is nothing but a better admin istration of justice.