Abortive as individual protests thus generally turn out, it may possibly be that nothing effectual will be done until there arises some organized resistance to this invisible despotism, by which our modes and habits are dictated. It may happen, that the government of Manners and Fashion will be rendered less tyrannical, as the political and religious governments have been, by some antagonistic union. Alike in Church and State, men’s first emancipations from excesses of restriction were achieved by numbers, bound together by a common creed or a common political faith. What remained undone while there were but individual schismatics or rebels, was effected when there came to be many acting in concert. It is tolerably clear that these earliest instalments of freedom could not have been obtained in any other way; for so long as the feeling of personal independence was weak and the rule strong, there could never have been a sufficient number of separate dissentients to produce the desired results. Only in these later times, during which the secular and spiritual controls have been growing less coercive, and the tendency towards individual liberty greater, has it become possible for smaller and smaller sects and parties to fight against established creeds and laws; until now men may safely stand even alone in their antagonism. The failure of individual nonconformity to customs, suggests that an analogous series of changes may have to be gone through in this case also. It is true that the lex non scripta differs from the lex scripta in this, that, being unwritten, it is more readily altered; and that it has, from time to time, been quietly ameliorated. Nevertheless, we shall find that the analogy holds substantially good. For in this case, as {49} in the others, the essential revolution is not the substituting of any one set of restraints for any other, but the limiting or abolishing the authority which prescribes restraints. Just as the fundamental change inaugurated by the Reformation, was not a superseding of one creed by another, but an ignoring of the arbiter who before dictated creeds—just as the fundamental change which Democracy long ago commenced, was not from this particular law to that, but from the despotism of one to the freedom of all; so, the parallel change yet to be wrought out in this supplementary government of which we are treating, is not the replacing of absurd usages by sensible ones, but the dethronement of that power which now imposes our usages, and the assertion of the rights of individuals to choose their own usages. In rules of living, a West-end clique is our Pope; and we are all papists, with but a mere sprinkling of heretics. On those who decisively rebel, comes down the penalty of excommunication, with its long catalogue of disagreeable and, indeed, serious consequences. The liberty of the subject asserted in our constitution, and ever on the increase, has yet to be wrested from this subtler tyranny. The right of private judgment, which our ancestors wrung from the church, remains to be claimed from this dictator of our habits. Or, as before said, to free us from these idolatries and superstitious conformities, there has still to come a protestantism in social usages. Parallel, therefore, as is the change to be wrought out, it seems not improbable that it may be wrought out in an analogous way. That influence which solitary dissentients fail to gain, and that perseverance which they lack, may come into existence when they unite. That persecution which the world now visits upon them from mistaking their nonconformity for ignorance or disrespect, may diminish when it is seen to result from principle. The penalty which exclusion now entails may disappear when they become numerous enough to form {50} visiting circles of their own. And when a successful stand has been made, and the brunt of the opposition has passed, that large amount of secret dislike to our observances which now pervades society, may manifest itself with sufficient power to effect the desired emancipation.
Whether such will be the process, time alone can decide. That community of origin, growth, supremacy, and decadence, which we have found among all kinds of government, suggests a community in modes of change also. On the other hand, Nature often performs substantially similar operations, in ways apparently different. Hence these details can never be foretold.
Meanwhile, let us glance at the conclusions that have been reached. On the one side, government, originally one, and afterwards subdivided for the better fulfilment of its function, must be considered as having ever been, in all its branches—political, religious, and ceremonial—beneficial; and, indeed, absolutely necessary. On the other side, government, under all its forms, must be regarded as subserving an office, made needful by the unfitness of aboriginal humanity for social life; and the successive diminutions of its coerciveness in State, in Church, and in Custom, must be looked upon accompanying the increasing adaptation of humanity to its conditions. To complete the conception, there requires to be borne in mind the third fact, that the genesis, the maintenance, and the decline of all governments, however named, are alike brought about by the humanity to be controlled; from which may be drawn the inference that, on the average, restrictions of every kind cannot last much longer than they are wanted, and cannot be destroyed much faster than they ought to be. Society, in all its developments, undergoes the process of exuviation. These old forms which it successively throws off, have all been once vitally united with it—have severally served as the protective envelopes within which a higher humanity {51} was being evolved. They are cast aside only when they become hindrances—only when some inner and better envelope has been formed; and they bequeath to us all that there was in them of good. The periodical abolitions of tyrannical laws have left the administration of justice not only uninjured, but purified. Dead and buried creeds have not carried with them the essential morality they contained, which still exists, uncontaminated by the sloughs of superstition. And all that there is of justice and kindness and beauty, embodied in our cumbrous forms of etiquette, will live perennially when the forms themselves have been forgotten.
{52}
RAILWAY MORALS AND RAILWAY POLICY.
[First published in the Edinburgh Review for October 1854.]
Believers in the intrinsic virtues of political forms, might draw an instructive lesson from the politics of our railways. If there needs a conclusive proof that the most carefully-framed constitutions are worthless, unless they be embodiments of the popular character—if there needs a conclusive proof, that governmental arrangements in advance of the time will inevitably lapse into congruity with the time; such proof may be found over and over again repeated in the current history of joint-stock enterprises. As devised by Act of Parliament, the administrations of our public companies are almost purely democratic. The representative system is carried out in them with scarcely a check. Shareholders elect their directors, directors their chairman; there is an annual retirement of a certain proportion of members of the board, giving facilities for superseding them; and, by this means, the whole ruling body may be changed in periods varying from three to five years. Yet, not only are the characteristic vices of our political state reproduced in each of these mercantile corporations—some even in an intenser degree—but the very form of government, while remaining nominally democratic, is substantially so remodelled as to become a miniature of our national constitution. The direction, ceasing to fulfil its theory as a {53} council formed of members who possess equal powers, falls under the control of some one member of superior cunning, will, or wealth, to whom the majority become so subordinate, that the decision on every question depends on the course he takes. Proprietors, instead of constantly exercising their franchise, allow it to become on all ordinary occasions a dead letter. Retiring directors are so habitually re-elected without opposition, and have so great a power of insuring their own election when opposed, that the board becomes practically a close body; and it is only when the misgovernment grows extreme enough to produce a revolutionary agitation among the shareholders, that any change can be effected. Thus, a mixture of the monarchic, the aristocratic, and the democratic elements, is repeated with such modifications only as the circumstances involve. The modes of action, too, are substantially the same; save in this, that the copy outruns the original. Threats of resignation, which ministries hold out in extreme cases, are commonly made by railway-boards to stave off disagreeable inquiries. By no means regarding themselves as servants of the shareholders, directors rebel against dictation from them; and construe any amendment to their proposals into a vote of want of confidence. At half-yearly meetings, disagreeable criticisms and objections are met by the chairman with the remark, that if the shareholders cannot trust his colleagues and himself, they had better choose others. With most, this assumption of offended dignity tells; and, under fear that the company’s interests may suffer from any disturbance, measures quite at variance with the wishes of the proprietary are allowed to be carried. The parallel holds yet further. If it be true of national administrations, that those in power have the support of public employés; it is not less true of incorporated companies, that the directors are aided by the officials in their struggles with shareholders. If, in times past, there have been ministries who spent public money to secure party ends; there are, in {54} times present, railway-boards who use the funds of the shareholders to defeat the shareholders. Nay, even in detail, the similarity is maintained. Like their prototype, joint-stock companies have their expensive election contests, managed by election committees, employing election agents; they have their canvassing with its sundry illegitimate accompaniments; they have their occasional manufacture of fraudulent votes. And, as a general result, that class-legislation, which has been habitually charged against statesmen, is now habitually displayed in the proceedings of these trading associations: constituted though they are on purely representative principles.
These last assertions will surprise not a few. The general public who never see a railway-journal, and who skip the reports of half-yearly meetings which appear in the daily papers, are under the impression that dishonesties like those gigantic ones so notorious during the mania, are no longer committed. They do not forget the doings of stags and stock-jobbers and runaway-directors. They remember how men-of-straw held shares amounting to £100,000, and even £200,000; how numerous directorates were filled by the same persons—one having a seat at twenty-three boards; how subscription-contracts were made up with signatures bought at 10s and even 4s each, and porters and errand-boys made themselves liable for £30,000 and £40,000 a-piece. They can narrate how boards kept their books in cipher, made false registries, and refrained from recording their proceedings in minute-books; how in one company, half-a-million of capital was put down to unreal names; how in another, directors bought for account more shares than they issued, and so forced up the price; and how in many others, they repurchased for the company their own shares, paying themselves with the depositors’ money. But, though more or less aware of the iniquities which have been practised, the generality think of them solely as the accompaniments {55} of bubble schemes. More recent enterprises they know to have been bonâ fide ones, mostly carried out by old-established companies; and knowing this, they do not suspect that in the getting-up of branch lines and extensions, there are chicaneries near akin to those of Capel Court; and quite as disastrous in their ultimate results. Associating the ideas of wealth and respectability, and habitually using respectability as synonymous with morality, it seems to them incredible that many of the large capitalists and men of station who administer railway affairs, should be guilty of indirectly enriching themselves at the expense of their constituents. True, they occasionally meet with a law-report disclosing some enormous fraud; or read a Times leader, characterising directorial acts in terms which are held libellous. But they regard the cases thus brought to light as entirely exceptional; and, under that feeling of loyalty which ever idealises men in authority, they constantly tend towards the conviction, if not that directors can do no wrong, yet that they are very unlikely to do wrong.
A history of railway management and railway intrigue, however, would quickly undeceive them. In such a history, the tricks of projectors and the mysteries of the share-market would occupy less space than the analysis of the multiform dishonesties which have been committed since 1845, and the genesis of that elaborate system of tactics by which companies are betrayed into ruinous undertakings which benefit the few at the cost of the many. Such a history would not only have to detail the doings of the personage famed for “making things pleasant;” nor would it have merely to add the misdeeds of his colleagues; but it would have to describe the kindred corruptness of other railway administrations. From the published report of an investigation-committee, it would be shown how, not many years since, the directors of one of our lines allotted among themselves 15,000 new shares then at a premium in the {56} market; how to pay the deposits on these shares they used the company’s funds; and how one of their number thus accommodated himself in meeting both deposits and calls to the extent of more than £80,000. We should read in it of one railway chairman who, with the secretary’s connivance, retained shares exceeding a quarter of a million in amount, intending to claim them as his allotment if they rose to a premium; and who, as they did not do so, left them as unissued shares on the hands of the proprietors, to their vast loss. We should also read in it of directors who made loans to themselves out of the company’s floating balances at a low rate of interest, when the market rate was high; and who paid themselves larger salaries than those assigned: entering the difference in an obscure corner of the ledger under the head of “petty disbursements.” There would be a description of the manœuvres by which a delinquent board, under impending investigation, gets a favourable committee nominated—“a whitewashing committee.” There would be documents showing that the proxies enabling boards to carry contested measures, have in some cases been obtained by garbled statements; and, again, that proxies given for a specified purpose have been used for other purposes. One of our companies would be proved to have projected a line, serving as a feeder, for which it obtained shareholders by offering a guaranteed dividend, which, though understood by the public to be unconditional, was really contingent upon a condition not likely to be fulfilled. The managers of another company would be convicted of having carried party measures by the aid of preference-shares standing in the names of station-masters; and of being aided by the proxies of the secretary’s children too young to write.
That the corruptions here glanced at are not exceptional evils, but result from some deep-seated vice in our system of railway-government, is sufficiently proved by the fact, that notwithstanding the falling of railway-dividends {57} produced by the extension policy, that policy has been year after year continued. Does any tradesman, who, having enlarged his shop, finds a proportionate diminution in his rate of profits, go on, even under the stimulus of competition, making further enlargements at the risk of further diminutions? Does any merchant, however strong his desire to take away an opponent’s markets, make successive mortgages on his capital, and pay for each sum thus raised a higher interest than he gains by trading with it? Yet this course, so absurd that no one would insult a private individual by asking him to follow it, is the course which railway-boards, at meeting after meeting, persuade their clients to pursue. Since 1845, when the dividends of our leading lines ranged from 8 to 10 per cent., they have, notwithstanding an ever-growing traffic, fallen from 10 per cent. to 5, from 8 to 4, from 9 to 3 1⁄4; and yet the system of extensions, leases, and guarantees, notoriously the cause of this, has been year by year persevered in. Is there not something needing explanation here—something more than the world is allowed to see? If there be any one to whom the broad fact of obstinate persistence in unprofitable expenditure does not alone carry the conviction that sinister influences are at work, let him read the seductive statements by which shareholders are led to authorize new projects, and then compare these with the proved results. Let him look at the estimated cost, anticipated traffic, and calculated dividend on some proposed branch line; let him observe how the proprietary before whom the scheme is laid, are induced to approve it as promising a fair return; and then let him contemplate, in the resulting depreciation of stock, the extent of their loss. Is there any avoiding the inference? Railway-shareholders can never have habitually voted for new undertakings which they knew would be injurious to them. Every one knows, however, that these new undertakings have almost uniformly proved injurious to them. Obviously, therefore, railway-shareholders have been {58} continually deluded by false representations. The only possible escape from this conclusion is in the belief that boards and their officers have been themselves deceived; and were the discrepancies between promises and results occasional only, there would be grounds for this lenient interpretation. But to suppose that a railway-government should repeatedly make such mistakes, and yet gain no wisdom from disastrous experiences—should after a dozen disappointments again mislead half-yearly meetings by bright anticipations into dark realities, and all in good faith—taxes credulity somewhat too far. Even, then, were there no demonstrated iniquities to rouse suspicion, we think that the continuous depreciation in the value of railway-stock, the determined perseverance of boards in the policy which has produced this depreciation, and the proved untruth of the statements by which they have induced shareholders to sanction this policy, would of themselves suffice to show the viciousness of railway-administration.