"As regards the revision of rates, no Government would undertake to try experiments in reducing rates on an independent company whose income they must guarantee; and efficient or economical administration could scarcely be expected from a railway company whose rates were cut down and whose dividend at ten per cent was guaranteed by Government.
"Whatever value there may be in the notice given to the companies by this Act of their liability to compulsory purchase by the State, over and above the general right of expropriation possessed by the latter in such cases, its terms do not appear suited to the present condition of railway property or likely to be adopted by Parliament in case of any intention at any future time on the part of Parliament to purchase the railways."
The proposals contained in the Bill, and modified into the Act of 1844, were, of course, simply a further development of the then established policy of the State in taking precautions against the evils that might result from railway monopoly.
A greater degree of apparent success was, at first, to attend those further precautionary measures which took the form of encouraging the construction of competing lines, leading both to new and to existing companies invading the so-called "territory" of other companies, as distinct from the provision of lines in districts which had no railways at all.
There was at this time much discussion as to the rights of established companies.
When the proposal for the appointment of the Committee of 1840 was under discussion in the House of Commons, Sir Robert Peel had contended that a material distinction was to be drawn between new companies approaching Parliament for the first time and companies which, relying on the faith of Parliament, had invested their capital in the construction of railways. "Parliament, it was true, might repent of the indiscretion and levity with which it had granted those powers ... but he would advise Parliament to be very cautious how it interfered with the profits or management of companies which had been called into existence by the authority, and had invested their money on the faith, of Parliament." Mr Gladstone's Committee of 1844 also declared that they had been "governed throughout their consideration of the subject by the strongest conviction that no step should be taken by Parliament which would either induce so much as a reasonable suspicion of its good faith with regard to the integrity of privileges already granted, and not shown to have been abused, or which would prospectively discourage the disposition now so actively in operation to extend the railway system by the formation of new lines."
On the other hand, there was that ever-present and ever-active dread of what might happen if the railway companies did become grasping and merciless monopolists. There was, also, the fact that while there would be direct competition between two railways having the same terminal points, each line might further serve a more or less considerable and important intermediate stretch of country which otherwise would be left without railway accommodation at all.
For one or other of these reasons competing lines continued to be sanctioned, notwithstanding Special Committees' recommendations and railway companies' protests. One such protest, giving a specific example of the tendencies of the day, was made in a memorial to the Board of Trade, dated June 26, 1857, and headed, "Proposed Remedies for Railway Grievances." The memorial, signed by Sir John Hall, Bart., and six others, and addressed to Lord Stanley of Alderley, president, and Mr Robert Lowe, vice-president, of the Board of Trade, had been drawn up at the request of those two gentlemen as a more detailed statement of facts to which their attention had already been called. Five specific grievances were dealt with, and the first of these was "The Tendency of Parliament to concede competing or otherwise unnecessary lines." Under this head the memorialists state:—
"It is not our desire that the railway system should be legislatively restricted within its present limits, or that existing shareholders should by any process whatever be nominally or practically gifted with a monopoly of the means of railway transit. We should submit to the introduction of new lines of railway wherever called for by absolute public necessity.... In such cases, however, we consider that the Legislature would only be doing justice to its previous enactments in giving former applicants time to complete their engagements so that they might be able, at the proper time, to exhibit their ability and their willingness to consider the wants of the public as well as their proper remuneration."
The memorialists mention the fact that in 1853 several new lines were sanctioned, the period fixed for their completion being 1858, and they proceed:—