LETTER TO THE RIGHT HON. W. E. GLADSTONE, M.P. PRESIDENT OF THE BOARD OF TRADE, &c. &c. IMPORTANCE IN A NATIONAL POINT OF VIEW RAILWAY EXTENSION, AND THE ENCOURAGEMENT WHICH SHOULD BE AFFORDED BY GOVERNMENT TO SUCH UNDERTAKINGS. BY G. H. LANG, ESQ,. LONDON: PRINTED BY J. B. NICHOLS AND SON, 25 , PARLIAMENT STREET. 1844 . LETTER RIGHT HON. W. E. GLADSTONE, M.P. PRESIDENT OF THE BOARD OF TRADE, &c. &c. Sir, On behalf of a large number of individuals deeply inte¬ rested in Railways, I beg with much deference to direct your attention to a few points where it appears to me, that the financial position of unsuccessful Railways maybe improved, and the general interests of the country at the same time ad¬ vanced, and I trust the importance of the subject on which I have ventured to address you, may be some apology for the liberty I have taken. The circumstance which has principally directed my at¬ tention to this subject, is the striking difference in the situation of English and French Railways. There are, at present, above one hundred Railways in Great Britain, of which the great majority are at a discount, while, I believe, every Railway in France, with one or two exceptions, is at a considerable premium. During the last five years scarcely a single new line of Railway has received the sanction of the British Parliament, as it was found impossible to raise the capital necessary for a new undertaking. During the same period of five years, nearly every Railway in France has been executed; and, instead of difficulty in procuring money. 4 there has been an eager competition among English capi¬ talists to advance any number of millions that might be required. Persons who have invested money in many of the English Railways, have therefore not only suffered loss from the failure of the undertaking, but have the additional mortification of seeing that their investment would have been successful, if made in a foreign country, less rich, less populous, and in every way less abundantly provided with resources for the support of a Railway. It becomes then an important inquiry, why so many English Railways have failed, while so many French Rail¬ ways have succeeded; and I have little hesitation in affirm¬ ing, that this has, in great measure, arisen from the different policy pursued by the government and legislature of the two countries. In England, every possible difficulty is opposed to a Railway Company, and the obtaining an Act of Incorpora¬ tion is a work of great uncertainty and expense. The Acts of Incorporation of the South Western Railway Company cost . . £41,467 Manchester and Leeds .... 48,500 London and Birmingham .... 72,868 Great Western.88,710 The Parliamentary and other preliminary ex¬ penses of the Manchester and Birmingham Railway Company amounted to . . £157,745 London and Brighton to about . . . 300,000 The time required for the formation of a Railway is lengthened, and the cost of construction, and of subsequent maintenance is increased, by the deep cuttings and high embankments necessary in consequence of the Standing Order of Parliament, which requires a Railway to be carried under or over every public road by a bridge. If a few acres of barren heath are taken by a Railway Company, 5 they are assessed for Prisons, Police, and Poor, upon a pro¬ portion of their entire revenue, corresponding to the length of the Railway in that county, without reference to the value of the land taken, and although the Company do not derive a shilling of revenue from that county; and Govern¬ ment levy a tax of 5 per cent, on the gross revenue from passengers, although nearly the entire receipts of the Railway may be absorbed by the expense of working. In France, Railway Companies are not only exempt from every one of these drawbacks, but the French Government in every case give a large loan, without interest during the construction of the works, and at three per cent, afterwards. It need not, therefore, excite surprise that English capital¬ ists are desirous to invest in French Railways, while dis¬ inclined to do so in England; and unless measures are ere long adopted, by which the condition of many of the existing lines may be improved, and some encouragement given to the extension of Railways, it is to be feared that the advan¬ tages which might have been derived by this country, from the permanent investment of its surplus wealth, in im¬ provement of our means of internal communication, will not only be lost to Great Britain, but these advantages will be transferred to foreign countries. Many persons imagine, that the Railway Proprietors of this country have been the parties chiefly enriched by those undertakings. No opinion can be more erroneous; and I believe it may not be wholly without use, to take a cursory glance at the present position of Railways, the benefits they have conferred upon the other interests of this country, the efforts which are now being made by foreign nations to secure similar, or even greater, advantages to themselves, and the danger to be apprehended from the increase of foreign Railways, unless met by a corresponding extension in this country; and, in conclusion, I shall take the liberty of sug- 6 gesting a few simple and inexpensive measures, by which it appears to me these dangers may be avoided, and permanent advantage secured to this country. 1. Present position of Railways. During the months of November and December last, an increase in the value of Railway stock has taken place to the extent of above six millions sterling; and it appears, from a calculation made at the close of 1843, that taking seventy-four of the principal Railways (excluding eight trunk lines) the premiums were £2,493,202, and the dis¬ counts £6,838,056. The calculation, however, from which this extract is made, although containing all the premiums, does not by any means embrace all the discounts, as there are at least thirty Railways in Great Britain, of which the value is never quoted by any broker, because no one ever thinks of inquiring about their shares. The' nital of each of these lines may not be large, yet in the aggregate it amounts to a formidable sum; and I have little hesitation in affirming, that nearly all these unquoted lines are not only at a discount, but in many of them the shares are un¬ saleable; and if a further addition is made, for loss of interest during the last eight or ten years, it will appear that a large proportion of the Railway shareholders of Eng¬ land, instead of having been enriched have been impove¬ rished to the extent of not less than eight or nine millions; and this, notwithstanding the recent rise of six millions in the value of Railway property. 2. Benefit derived by other interests from, Railways. The next subject I propose for inquiry is, the advantage derived from Railways by every other interest in this country; and I believe it is scarcely possible to over¬ estimate the amount. Between the years 1827 and 1839, 7 nearly fifty-eight millions were spent upon Railways, being upon the average nearly five millions per annum. At least one-half of this immense sum has been expended in wages, thereby supporting the labouring classes during a period of depressed trade and deficient harvests, and the remainder has been expended in the price of laird, build¬ ing materials, and iron; every shilling, therefore, was spent in the country, and remained in the country: and as Rail¬ way receipts for the year from 1841 to 1842 exceeded four millions, and Railway Companies pay income tax, passenger tax, poor’s rate, and other public and parochial burdens, it is evident that the establishment of Railways has made a greater positive addition to the fixed capital and resources of this country, than if another county had been added to England. It is frequently assumed, by persons who have not paid much attention to the subject, that the revenue of Railway Companies is withdrawn from other channels, more especially from Turnpike Trusts, but this is not the case. In 1834, when, excepting the Liverpool and Manchester, there was scarcely a passenger line in operation in Great Britain, the re¬ venue of all the Turnpike Trusts in Eng¬ land and Wales amounted to . . £1,431,609 In 1839, when most of the principal Rail¬ ways had been opened, it amounted to . 1,532,956 £ 101,347 Instead, therefore, of Turnpike Trusts declining as Rail¬ ways came into operation, their revenue increased about 7 per cent.; and what renders this result still more remarkable is, that the largest increase occurred in the counties most intersected by Railways, viz. 8 1835. 1839. Stafford . . . . £ 48,553 £ 54,648 Lancaster .... 123,126 142,653 York .... 147,569 171,522 This result, although unexpected and surprising, can be expressed in figures; but who can estimate the addition made to the landed, and more especially the mineral, wealth of this country, by the introduction of Railways ? I cannot form even an approximation, but I may give a few examples, and believe I could not select any more striking than are afforded by the parishes of Monkland, in the county of Lanark. This district had long been known to abound in minerals, but they remained unproductive and valueless from want of the means of transport. In 1775 a canal was formed for the purpose of conveying coal, ironstone, and lime to Glasgow, but it proved a ruinous undertaking; for thirty-two years the receipts scarcely paid the expense of working, few mines were opened, and the value of the landed and mineral property of the district remained nearly un¬ altered. In 1807 the canal for the first time paid a small dividend; and during the next twenty years there was a gradual increase. Railways were then projected through the same district. The Monkland and Kirkintilloch Rail¬ way was opened in 1828; the Glasgow and Garnkirk in 1831; and the Ballochney, Slamannan, Wishaw and Colt- ness, and Wilsontown Railways, followed in rapid succes¬ sion. The results have been almost incredible. The Canal now pays a dividend of 150 per cent, per annum; an estate, which a few years since produced £600 per annum, is now let upon a long lease at £13,000 per annum; and a farm which was purchased for £1,500, near one of these Rail¬ ways shortly before it opened, has yielded above £1000 per annum ever since. I believe, however, the most striking 9 proof I can give of the effect produced on this district by Railways, and the consequent extension of the coal and iron trade, is the increase of inhabitants. The population of the parishes of Monldand in 1821 was 14,345 1831 — 19,447 1841 — 40,190 I regret to add, that the great majority of the Railway proprietors, by whose enterprise and capital these surprising changes have been effected, have not shared in the general prosperity. The Garnkirk has only lately begun to pay a dividend. The Wishaw for some time after its opening, paid no dividend, and has not paid any dividend for the last year. The Wilsontown is just about to open, yet its shares are at a considerable discount; and the Slamannan, which has been in operation for nearly three years, has never paid any dividend, and the shares are almost un¬ saleable. The advantages arising from the establishment of Rail¬ ways to the manufacturing and trading interests of this country are perhaps too obvious to require illustration, but I may remark that in almost every case the previous esti¬ mates of traffic have been exceeded, and this increase is the surest test of the extension of trade that has invariably fol¬ lowed their formation. In 1821, when the Stockton and Darlington Railway was projected, its promoters only ven¬ tured to anticipate as the greatest possible export of coal from the river Tees 10,000 tons per annum; but in 1835 the quantity so shipped amounted to 704,781 tons. The estimated traffic of the Newcastle and Carlisle Railway was £2S,000 per annum, but in 1838 it amounted to £61,255. The revenue anticipated by the Liverpool and Manchester Railway Company was £62,500, but in 1838 it amounted to 10 £260,303. And what renders this last example still more remarkable is, that the Turnpike revenue of Lancashire during the period between the opening of the Liverpool Railway, and the year 1S38, increased about 15 per cent. The limits within which I must confine myself, do not permit me to take a more extended view of the effects pro¬ duced by Railways, but I believe I have already advanced enough to establish my position, that they have been of incalculable advantage, and that other interests in this country have frequently derived benefit from undertakings, which have entailed loss, or even ruin, on the Railway shareholder. 3. Foreign Haihvays. I am aware you must be much better acquainted than I am, with the position of foreign Railways, and the encourage¬ ment they receive from all the Continental Governments; but, addressing you on the subject I now do, I hope I may be pardoned for taking a very imperfect glance at a few of these undertakings. In Belgium the Railway system may be regarded as nearly complete. The whole country is embraced in one comprehensive scheme, and each town of the smallest note is placed in direct railway communication with every other town and district of that kingdom. The whole of the Rail¬ ways belong to Government; I believe many of the lines do little more than pay the expense of working, but that viewed as a whole they pay about three per cent, on the capital expended. The Belgian Government, however, do not re¬ gard Railways as a direct subject of revenue; the fares are fixed at the lowest remunerating point; no tax is levied on Railway communication; and Government with a wise policy look for a return in the increased prosperity of the country. In France a different system is pursued. The lines to be 11 executed are first determined by Government, and tlien a conceded” to private Companies, on terms varying with the circumstances, but in every case with such an amount of assistance from Government, as to render the success of the undertaking nearly certain. The Company receive their incorporation without expense; they are not compelled to cross every insignificant public road by an expensive bridge, and in every case receive a loan from Government to the extent of one-third of their capital, for a long term of years at three per cent. These are the least favourable conditions ever offered to a Railway Company; and in the last “ concession,” being that to the Havre and Rouen Railway Company, the terms were, a grant of £320,000, on which neither interest nor dividend were to be payable, and a loan of £400,000 without inte¬ rest for three years, and afterwards at three per cent. In other cases, when a doubt existed whether the traffic might be sufficient to yield an adequate return on the capital required, the French Government have purchased the land, and are forming the earthworks, bridges, and stations; and it is understood to be their intention to offer a long lease to a Company who will be required to lay the rails, and pro¬ vide the necessary establishment for working the line, the Government repaying to the Company the value of their establishment at the termination of the lease. The most conclusive evidence, however, I can give of the anxiety of the French Government to extend Railways is, that it formed a prominent subject in the speech of the French King at the recent opening of the Chamber of Deputies; and the best proof that efficient encouragement is given, is the eagerness with which English capitalists embark in these undertakings. Holland, although so abundantly provided with inland navigations, has recognised the necessity of following the 12 example of neighbouring states; and, although it does not yet possess so great an extent of Railways as Belgium, is actively engaged in carrying out a regular and extended system. Prussia, from the level character of the country, has already made considerable advances. Four lines radiate from Berlin. The first to Potsdam; the second to Stettin; the third to Frankfort-on-the-Oder; the fourth to Dessau; whence on the one hand it is . carried to Magdeburgh, and on the other to Leipsic and Dresden. Another chain of Rail¬ ways unites the Prussian provinces on the right and left banks of the Rhine, and joins the Belgian Railways at Liege; and another Railway is nearly completed from the city of Breslau, which will connect Silesia on the one hand with Cracow and Warsaw, and on the other with Vienna. These are the most important fines yet executed in Prussia, and already place Berlin in direct communication with the Baltic and North Sea, with the capital of Saxony, and with the important navigations of the Elbe and Oder. All these lines, however, are capable of almost indefinite prolongation, and are but the nucleus of a much more extended system which is in rapid progress. Vienna naturally forms the centre of the Austrian Rail¬ ways. The principal fine extends from the capital to Cra¬ cow and Warsaw in Russian, and to Breslau in Prussian Poland. A second connects Vienna with Presburg, the ancient capital of Hungary, and is thence to be carried for¬ ward to Pest and Buda; a third extends from Vienna to Glocknitz and Raab; a fourth is projected from Vienna to Prague and Dresden; and there cannot be a doubt that ere long a Railway will be carried from Glocknitz to Trieste, as it has long been an object of much solicitude with the Austrian Government to bring the Italian provinces into closer contact with the capital of the Empire. 13 It appears then that only four links are awanting to com¬ plete a great chain of continental Railways, viz, from Paris to Lyons, Paris to Lisle, Elberfeld to Halle, and Vienna to Dresden; and all these lines are either in actual progress or en projet determine. When completed, this chain will connect nearly all the great navigable rivers of Europe, the Seine, Loire, Rhine, Elbe, Oder, Vistula, and Danube; it will form a complete intercommunication between the Atlantic, the North Sea, the Baltic, and the Mediterranean, and will unite the Railways of France, Belgium, Prussia, Saxony, Bohemia, Austria, Hungary, and Poland, into one continuous and unbroken system. Great, however, as has been the progress of continental nations, it sinks into insignificance when compared with the achievements of America. The United States already pos¬ sess 143 Railways, with an aggregate length of about 5000 miles. One great chain stretches in nearly a continuous line from Portsmouth in New Hampshire, to Pensacola in Florida, a distance of about 1600 miles; another extends from Boston in Massachusets, to Buffalo on Lake Erie, a distance of 530 miles; a third from New York, to Dun¬ kirk on Lake Erie, and will -when completed, be about 450 miles long; a fourth connects Philadelphia with the town of Erie on Lake Erie, a distance of 420 miles; a fifth extends from Baltimore to Wheeling on the Ohio, a distance of 280 miles; the sixth route consists of a chain of Canals and Railways 394 miles long, extending from Philadelphia to Pittsburg, the central portion of this line being the Portage Railway, which is carried over the summit of the Alleghany mountains, and in a distance of thirty-six miles, has a rise and fall of 2571 feet. These are the principal lines; but there are many others of less importance. There are besides several hundred miles of Railway in progress, and some thousand miles in contemplation, which will probably be 14 executed on the return of more prosperous times, if the capitalists of England have no encouragement to invest at home, and shall then have forgotten the word “repu¬ diation.” The recent improvements, however, in the United States, are not confined to Railways. There are upwards of 3000 miles of Canals and Slackwater Navigation, about one half of which have been formed at the expense of the different States; and a few years since the “National road” from Baltimore on the Atlantic to St. Louis on the Mississippi, a distance of 700 miles, was constructed at the expense of the General Government. If the American almanacks can be regarded as sufficient authority, the success of some of these Railways is even more remarkable than their extent. The Camden Railway, in the State of New Jersey, sixty-one miles long, was opened in 1833; and in 1839 there was an increase of 65 per cent, in passengers, and of 123 per cent, in merchandize; and the aggregate nett receipts, during the first six years, greatly ex¬ ceeded the entire cost of the line. There are other Railways even more prosperous; and the tolls on the line from Syra¬ cuse to Utica, a distance of fifty-three miles, already pay 35 per cent, on the total cost of the undertaking. Many of the American Railways passed through unculti¬ vated and thinly peopled districts, and were at first nearly unproductive. It would, therefore, have been impossible to execute such lines without assistance from the States; and it appears from returns made to the Secretary of the General Government, and laid by him before Congress on 25th j! June 1842, that the different States of the Union had ad¬ vanced, by way of subscriptions and loans, to Railway and Canal Companies, above 77,000,000 of dollars, or about | £15,000,000. This was a rvise policy; for it is of the nature of these undertakings, to attract inhabitants, promote 15 cultivation, and create trade, by the facilities they afford, so that Railways which were at first unproductive, soon became profitable; and it appears, from a calculation made during the recent stagnation of trade, that, viewed as a whole, the American Railways even then, returned a dividend or interest of about 5-1 per cent, per annum, and there cannot be a doubt that the return now, will be considerably higher. 4. Effect of Foreign Railways upon this Country . I have thus attempted to give a slight sketch of the gigantic strides lately made by foreign nations towards the formation of extended, or what may not improperly be termed, national, Railways; and it becomes a question of no ordinary importance, to inquire what effect these foreign undertakings have produced, or are likely to produce, on our own country. On this point, an instructive commentary is afforded by the recent Tariff of the German Zoll-verein, or Union of Customs, and by the American Tariff of 1S42. The Zoll-verein includes Saxony, Prussia, Bavaria, Wurtemburg, Baden, and nearly all the other States of the German Confederation. A few years since, when these States did not possess any Railways, and had slender means of intercommunication, British merchandize was admitted at moderate rates of duty, proportioned to the value of the goods imported. Now, when the German system of Rail¬ ways is far advanced, the duties are levied on weight, without reference to value, so that a cwt. of the finest lace and of the coarsest woollens, pays the same amount of duty. This operates, as it was intended to do, as an absolute pro¬ hibition against all the great staple manufactures of this country, and 1 may state a few examples of the former and present rates of duty levied in Saxony, on each centner, or weight of 1134 lbs. 16 Former duty. £. s. d. Woollen manufactures, common .080 Cotton manufactures, plain ..030 Linen mixed with cotton ... 0 1 6 Silk.5 13 0 Present duty. £. s. d. 4 10 0 7 10 0 7 10 0 16 10 0 The American Tariff affords an instance equally striking. Previous to 1830 the United States only possessed 1 da- miles, and previous to 1832 only 175 miles of Railway. At this period they levied high duties, avowedly for the purpose of preventing the admission of foreign goods. Chiefly, however, from the want of sufficient facility of transport, it was found that the manufactures of America could not com¬ pete with those of England, and in 1832 Congress passed Mr. Clay’s Bill for gradually diminishing these duties until they were reduced to an uniform rate of 20 per cent, ad valorem. In ten years circumstances had changed in the United States. In 1842 they possessed upwards of 5000 miles of Railway in actual operation. Accordingly the entire system of import duties was altered; the duty on cotton manufac¬ tures was raised to 30, and on woollen cloths to 40 per cent. ad valorem, being an increase in the one case of 50, and in the other of 100 per cent, on the duties fixed by Mr. Clay’s Bill. This change has been severely felt, and the circulars lately issued by the principal brokers in the manufacturing districts of this country, are almost unanimous in stating, that the increased demand for British goods in the East does little more than compensate for the falling off in the American market. It appears, then, that foreign governments are aware of the importance of Railways, and assist in their formation; that trade and manufactures flourish in proportion as facili¬ ties of intercommunication are afforded; and as foreign 17 Railway save extended, that Tariffs injurious to the interests of Great Britain, make simultaneous progress. • Before leaving this portion of the subject, may I beg you to contemplate for one moment, what might have been the situation of this country, if the protracted opposition to the Liverpool and Manchester, and London and Birmingham Railways had been successful. England would now have been without Railways; the assistance derived during a period of deficient harvests and depressed trade, from the ex¬ penditure of nearly sixty millions, would have been awanting. This immense sum, which was then seeking investment, would have been sent abroad, and the continental system of Railways would have. been completed. If, with all the advantages derived from Railways, England is still pressed by foreign competition, w'hat would have been our position, if England had remained without Railways, and these advan¬ tages been transferred to her rivals? Can it be doubted that ere now, many branches of trade Avould have sunk under foreign competition ; and large masses of the manu¬ facturing population of this country must have been reduced to a state of suffering, from which no effort of skill or power on the part of Government could have relieved them ? I respectfully submit to you whether, in these circum¬ stances, it is good policy for the Government and Legisla¬ ture of this country to withhold all encouragement to the formation of Railways of unquestionable national utility, although it may he doubtful whether the traffic on these lines would at first yield a sufficient return to induce private parties to bring forward the whole capital required. There is at this moment a great amount of unemployed capital in this country, and I have already shown that Railways of immense extent are in progress on the Continent, and several projected links, yet awanting to complete the great continental chain, are only delayed from want of the neces- 18 sary funds. A very small measure of encouragement to Railways on the part of Government, would be sufficient to retain permanently this surplus capital, to the incalcu¬ lable advantage of this country; and a continuance of the present system of discouragement will, I fear, be sufficient to send this capital abroad, to the enrichment of foreign countries, and the lasting and irreparable injury of Great Britain. I shall now take the liberty of suggesting, with as much brevity as is consistent with the importance of the subject, a few simple and inexpensive measures, by which it appears to me these dangers may be avoided, and benefit at the same time be secured to this country. 1. Alteration of Standing Order requiring Deposit of ten per cent. It is a considerable drawback to persons who propose to become subscribers to a new Railway, that they are not only obliged to incur a large expense in applying for an Act of Incorporation, which, after all, they may not succeed in ob¬ taining ; but before they can even present a petition to Par¬ liament, they are compelled, by a Standing Order of the House of Commons, to deposit ten per cent, of the estimate in the Court of Chancery; so that if the Great Western Railway Company had now been applying for their Act of Incorporation they must have deposited £650,000. It is an inconvenience, inseparable from new undertakings, that shareholders must remain without interest on the money they have invested until a certain period after the works are completed. This delay is sufficiently distressing to many persons, and it is surely unnecessary to increase it by obliging them to deposit so great a sum nearly a year before the works can even he commenced. If it is not considered advisable to repeal this Standing Order altogether, I would 19 humbly venture to suggest for consideration, whether the Standing Order of the House of Commons might not be assimilated to that of the House of Peers, which only re¬ quires a deposit of five per cent. 2. Alteration of Standing Order as to crossing roads. The greatest discouragement, however, to the extension of Railways, is the enormous cost that has hitherto attended their formation. This may be ascribed to a variety of cir¬ cumstances, but one of the chief causes certainly has been the expensive cuttings and embankments, and the numerous viaducts, bridges and culverts, rendered necessary by the Standing Order which requires a Railway to be carried either under or over every public road. It is impossible to estimate the amount of injury that has been inflicted on the Railways of England by this Standing Order. Even upon unsuccessful Railways the traffic has in general equalled expectations, but the estimate of cost has in every case been enormously exceeded; and this excess, and the consequent failure of the undertaking, may in great measure be traced to this Standing Order. I might illus¬ trate this by many examples, but shall satisfy myself with two, viz. the Eastern Counties Railway, which for the whole distance from London to Romford, a distance of above ten miles, is nearly a continued series of viaducts and bridges, and in fifty-one miles from London to Colchester, has 365 bridges, arches, and culverts; and the Glasgow and Green¬ ock Railway, which, in a distance of twenty-two and a half miles, has two hundred and twenty-two arches and culverts, and four miles of retaining walls. In order to pass under a public road between Glasgow and Paisley, without altering the level, the Railway Com¬ pany were forced into a deep cutting nearly two miles long, 20 partly through rock, and partly through running sand and mud, and to execute other expensive works, at a cost of nearly £20,000; and, in the. immediate neighbourhood of this road, they were required by their Act of Incorporation to carry another road over the Railway by an embankment twenty feet high. This, however, would have made the road so inconvenient, that, after the works were commenced, the road trustees, and all the neighbouring proprietors and residents, concurred in presenting a petition to the Railway Company, requesting that a crossing might be made upon the level, which was accordingly done, and the sanction of Parliament afterwards obtained to the deviation. There are other important considerations involved in this Standing Order. At the first introduction of Railways, and when the locomotive engine was weak and imperfect, it was considered necessary to encounter deep cuttings and high embankments, in order to obtain level gradients. In these circumstances, the cuttings, embankments, and bridges were made, not merely in obedience to this Standing Order, but in consequence of a supposed necessity to maintain a level. It has, however, now been established, that the locomotive can surmount inclinations which a few years since were deemed impracticable; and it is by availing themselves of these im¬ provements, and forming their Railways as much as pos¬ sible on the natural surface of the ground, that foreign engineers have been enabled to exhibit so much greater economy in construction than the engineers of England. In the case of the Northampton and Peterborough Railway, Major-General Pasley, the Inspector-General of Railways, reported that, if proper precautions are taken, level crossings are perfectly safe; and he referred to the case of the Northern and Eastern Railway, where there are nineteen or twenty level crossings in a distance of twenty-eight miles. He stated that although a large traffic passes along that line, 21 no accident had ever happened at any of these crossings, and that in level districts, if Railways were required to pass under or over every road by a bridge, it would amount to an absolute prohibition. It is evident, then, that the enforcement of this Standing Order renders cheap construction impossible, and prevents Railway Companies from deriving full advantage from the improved locomotive, by adapting their works to the charac¬ ter of the country. The inhabitants of level countries are prohibited from making a level Railway, and the inhabitants of hilly districts are prohibited from making one (as far as practicable) upon the undulating surface of the ground. They are required, in the one case, to make expensive embankments and steep inclinations in plains; and, in the other, to make expensive cuttings and needless levels in undulating districts. I have already shown that these cut¬ tings, embankments, and bridges cause immense expense to Railway Companies, and sometimes inconvenience to the public; that the supposed engineering necessity no longer exists; and that level crossings are safe. I trust, therefore, that Parliament may be induced to repeal this Standing Order, and by so doing, they would afford an amount of assistance to Railway undertakings which is beyond the reach of calculation. 3. Exemption of low fares from taxation. These measures, which I have ventured to suggest, would only affect new Railways, but I believe there is no way by which such works could be more effectually promoted than by improving the condition of existing Railways; the failure of former undertakings being one of the greatest discourage¬ ments to embark in new ones of a similar character. It was proved by the evidence laid before a Select Com- 22 mittee of the House of Commons, that one of the chief advantages to be expected from the establishment of Rail¬ ways, was the cheap and rapid conveyance of the labour¬ ing classes to the places where their labour was most re¬ quired, and would be most highly remunerated. And it is remarkable, that during the late stagnation in trade the number of third class passengers, instead of being diminished, had increased. The number of third class passengers last year exceeded six millions, while first class passengers only amounted to about three millions. This proves that movement by Railway is doubly more necessary to the poor than to the rich, and that even in times of the utmost poverty and distress, it is employed by them to double the extent. Railway conveyance is a luxury to the rich, and affords them the means of increased enjoyment, but to the poor it is necessary, in order to procure the means of living. It is therefore unfortunate that the Railways which have charged the lowest fares, and carried the greatest number of the labouring classes, have been the most unsuccessful. If the shareholders in these low fare Railways could have anticipated the almost total failure of their undertakings, it is certain these lines would not have been executed; and unless the present position of these Companies can be considerably improved, Railways will never again be made in England on the principle, and with the intention of charging low fares. The system of low fares was introduced into England on the authority of the Belgian Railways; it may be of use, therefore, to inquire what has been the result in that coun¬ try. It appears from an investigation recently made by the Chief of the Board of Railway Management at Brussels, as to the influence exercised by fares on the traffic and receipts upon Railways, that the first tariff of fares was fixed in 1840 at the rate of 23 10 centimes per kilometre for 1st class 6 . . . .2nd — A\ ... . 3rd — This was considered rather too high, and in 1841 the fares were reduced to 8 centimes per kilometre for 1st class 5 ... . 2nd — 3 . . . . 3rd — and in 1842 the fares were raised to a scale intermediate between the tariffs of 1840 and 1841. The result has been an increase in the nett receipt but a considerable decrease in the circulation of passengers; the movement of passengers, under the tariff of 1841, having been 7000 per kilometre, which was reduced by the tariff of 1842 to 6000 per kilo¬ metre. It appears, then, that the experiment of low fares has not succeeded, as they have already been raised in Belgium, and several Railways in this country have followed the example. On all the great lines of communication. Railways have nearly superseded every other means of conveyance; and if third class fares are generally raised, the poor will be reduced to this dilemma,—they will be deprived of their former means of travelling, and unable to pay for the new mode of conveyance. Although this may cause regret, it is unavoidable; for, unless the position of many of the un¬ profitable Railways, passing through manufacturing and poor districts, can be improved, or some inducement held out to them to continue their present low rates of charge, it is obvious that third class fares will in general be raised to the highest scale consistent with keeping down compe¬ tition, so that the poor, instead of being benefited, will in some cases be injured by the introduction of Railways. This is a case deserving serious consideration, but one 24 where it is difficult to apply a remedy, as it is obviously impossible to compel Railway Companies to carry passengers at fares that will not remunerate. I may, however suggest a measure which would not perceptibly diminish the public revenue, and at the same time would be a great boon to the low fare Railways, and no more than an act of justice to the labouring classes. I allude to an exemption of all fares, at and under a penny per mile, from the operation of the pas¬ senger tax. Before the establishment of Railways the poorer classes did not travel in taxed conveyances, but in untaxed canal- boats, waggons, and carts, so that the duty on Railway pas¬ sengers was the first tax ever imposed on the movement of the poor. It appears from the tables of fares of 48 of the principal Railways of Great Britain that only eight out of that number carry passengers at a third-class fare not ex¬ ceeding a penny per mile, and these eight lines carry about 2,000,000 passengers at that fare. These eight Railways cost about £6,000,000, and the stock of seven of them is at a ruinous discount. It is evident, therefore, that such lines not only stand in need of assistance, but that they have some claim to the equitable consideration of Government on ac¬ count of the accommodation they afford to the labouring classes, without any corresponding benefit to themselves. I observe from the last Report of the Officers of the Railway Department, that during the preceding year there had travelled on the Railways of Great Britain about 3 millions 1st class. 9 — 2d — 6 — 3d — And taking the average fares of the different classes at 3d. 2d. and Id., it follows that the receipts from third-class passengers amount to about one-sixth of the whole, and accordingly pay one-sixth part of the passenger tax. If, 25 then, two millions of third-class passengers were exempted from duty, it would only diminish the present passenger tax by one-eighteenth. The loss to the public revenue would be insignificant, and there is no way in which the sacrifice of so small a sum would be productive of such important results. It would relieve the poorest portion of the labouring classes from a new tax on what will soon be their only mode of conveyance, and would tend to secure to them a continuance of low fares; and it would improve the condition of those Railway Companies, whose want of success and discouraging, example, has caused so many millions of English capital to be employed in foreign Railways, to the permanent in¬ jury of this country. 4. Extension of existing Railways. The condition of existing Railways might also be mate¬ rially improved, if facilities were given for the extension of main lines, and the formation of branches. This would operate in two -ways:— 1st. The cost per mile of locomotive power would be diminished in proportion to the distance travelled; and— 2nd. The expense of the establishment would be diffused over a wider surface. The best proof I can give of the first is the result of an examination made in 1839 by the contractor for supplying locomotive power on the London and Birmingham Railway. The inquiry extended to thirty-six engines, and it was ascer¬ tained that the largest performance of any one passenger engine in six months was 14,822 miles of distance run, and 650,246 tons conveyed one mile. The engine of smallest performance ran 2275 miles in the same time, and the load conveyed was equal to 89,338 tons conveyed one mile. The average load per mile run being nearly the same in both cases. It was found that the engine which had run the least 26 distance, or in other words had-made the shortest trips, had cost 66 per cent, or two-thirds more than the engine which had run the greatest distance. Thus proving that the ex¬ pense of working a Railway diminishes as its length increases. A still more practical example of the benefit of increasing the length of the line is afforded by the Leeds and Selby In 1837 the expenses absorbed 89 per cent, of the receipts. „ 1838 the expenses exceeded the receipts. „ 1839 the expenses absorbed 87 per cent, of the receipts. It is unnecessary to add that the shareholders received no dividend, and that the stock was almost unsaleable. It was then leased to the York and North Midland Railway at 5 per cent, on its cost, and from the greater economy of working it as a branch of a longer line, the York and North Midland Railway in the first year not only realised the rent of £17,000 per annum, but made a profit on the lease. The York Company have now purchased the line at par, and a dividend of 10 per cent, is to be paid on a stock which a few years since was almost valueless. Another striking example of the advantage of a long over a short line is afforded by two of the Newcastle Railways, viz, the Newcastle and Carlisle, and Newcastle and North Shields Railways; the first has at present a weekly receipt of about £22 per mile, and the second a weekly receipt of about £44 per mile; but the first is 61 miles, and the second only 7 miles long. Accordingly, the Newcastle and Carlisle, with its traffic of £22, paid last year a dividend of 4 per cent, while the Newcastle and Shields, with a traffic of £44 per mile, although a cheaply and well-managed line, only paid 1 per cent. This difference in the nett receipts, may be traced to a variety of circumstances, but is chiefly to be ascribed to the less cost in working a long, than a short line. 27 5. Loan by Government to Railivay Companies. The last suggestion I shall venture to make is, perhaps, the most important of all, viz. that Government should adopt the policy which has been so successfully followed in other countries, and grant loans to Railway Companies on mortgage, to the extent of one-third of the cost of the Rail¬ way, at three per cent. By so doing, Government would not encounter any outlay, as a loan could readily be pro¬ cured at that rate, and they would not encounter any risk, as the entire undertaking would be mortgaged in security of the loan. In order to shew how complete the security would be, I may suppose the case of a Railway which had cost £450,000 raised as follows By shares ...... £300,000 „ mortgage. 100,000 „ loan notes. 50,000 £450,000 And that the nett revenue, after paying the expense of work¬ ing, was only £10,500, which was applied as follows:— Interest on mortgage .... £5,000 „ loan notes .... 2,500 Dividend.3,000 £10,500 A Railway could scarcely be in a worse financial position than this, yet even here there would be no risk. The Go¬ vernment would have the security of a property which cost £450,000 for the repayment of £150,000; and they would have the security of a nett revenue of £10,500 for the pay¬ ment of an annual interest of £4,500. So far as regards the shareholders, the effect of such a loan from Government would be as follows:— 28 Nett revenue, as before .... £10,500 Deduct interest to Government on £150,000 at 3 per cent. 4,500 Leaves divisible among, Shareholders . . £6,000 The dividend to the shareholders would therefore be doubled, and the value of their stock would be increased to the same extent. I do not anticipate that any large amount of relief to the unprofitable lines is to be found within the compass of a single measure; but if Government will facilitate the forma¬ tion of extension and branch lines, thereby opening new sources of revenue, without materially increasing the expense of working; and if they will grant loans at a moderate rate of interest, and exempt low fares from taxation, I enter¬ tain a confident belief that nearly every Railway in this, country may yet be rendered a fair investment for the money expended in its formation. I regret that this letter has so far exceeded the limits within which I had wished to confine my observations, and hoping you will pardon the great liberty I have taken in addressing you, I have the honour to be, Sir, Your most obedient, humble servant, 11, Parle Street, Westminster, 18 Jan. 1844. London: J. B. Nichols and Son, Printers, 25, Parliament-street.