CHAPTER VI.
RAILWAY RECEIPTS, WORKING EXPENSES, AND PROFITS IN THE UNITED KINGDOM—DELAYS AND ACCIDENTS.
However vastly the United Kingdom has been benefited by railways, we shall show presently that it is far otherwise with those who have invested their money in their construction. Those first opened in England were, no doubt, profitable to their shareholders, because they were great arterial lines that connected the leading places of the Kingdom together. Along such lines there always had been large traffic, and it was no doubt greatly stimulated by the facilities which the new mode of locomotion afforded for its expansion. But as fresh railways were completed, and as the capital invested in them increased, the profits receded. Even at the present time, with larger receipts per mile than have ever been taken, the position of railway investment is almost from every point of view, unsatisfactory.
The tide of the early prosperity of railways began to turn in 1840.
Proceeding at once to the middle of 1843, we learn that at that date the amount of capital invested was £76,280,000, and the gross traffic receipts were only £4,535,189. If 45 per cent. be deducted for working expenses, the amount for division among investors was only £2,494,358. If one-third of the capital invested be considered debenture capital bearing an interest of not more than 4 per cent., it leaves only £1,391,360 for dividend upon £51,000,000, or a little more than 2½ per cent.
In 1848 the capital invested in British railways was £152,640,000, the gross traffic receipts were £9,933,552. Deducting 45 per cent. for working expenses—amount £4,660,097,—a balance of £5,273,455 is available for division among investors. Taking one-third of the capital paid up as debenture capital, bearing interest at only 4 per cent., it leaves £3,021,455 for dividend upon £100,760,000 of share capital, or at the rate of less than 3 per cent.
At the end of 1853, the capital paid up was £273,324,514 and the traffic receipts had risen to £18,035,879. The working expenses, at 45 per cent. of the receipts, were £8,116,151, leaving £9,919,728 available for division, but between 1848 and 1853 the rate of interest upon debentures rose to fully 5 per cent. Taking, as before, one-third of the capital paid up, as debenture capital, it leaves £5,364,320 for dividend upon £182,216,343 of share capital, or at the rate of a little less than 3 per cent.
Five years later—at the end of 1858—the capital paid up was £325,375,507; the traffic receipts were £23,956,749; the working expenses, £11,668,225. Taking the debenture capital as one-third of the whole, it leaves £6,245,310 for dividend upon £216,917,205 share capital—or a very little less than 3 per cent. But as by 1858, fully 25 per cent. of the share capital was preferential, and bore a dividend on the average of 5 per cent., there remains, after payment of a dividend upon this capital of £2,711,450, only £3,533,860 for division upon the £162,687,905 “ordinary” or unguaranteed share capital, that was then invested in railways—not quite 2¼ per cent.