Rambles on Railways

by Sir Cusack P. Roney

On the 31st December, 1863, the capital paid up was £404,215,802; the traffic receipts were £31,156,397; the working expenses, £15,027,234. The amount of debenture capital, taken as usual at a third of the total capital, was £134,738,600, the interest upon it, at 5 per cent., £6,736,930. Deducted from £16,129,163, the amount of the total net receipts, £9,392,233 remains for dividend upon £269,477,202 share capital, or nearly 3½ per cent. This would be satisfactory, as compared with the amount divisible upon share capital in previous years; but, unfortunately, the amount of preferential, in proportion to total share capital, had not only increased considerably between 1853 and 1863, but the rate of dividend had also advanced. The London and North-Western issued some at 5, the Lancashire and Yorkshire at 6; so also the London, Brighton and South Coast, then one of the most highly thought of companies for investment; and the London and South-Western, a company established, apparently, upon a very solid basis, had to issue preference capital at as high as 7 per cent. Nevertheless, although for present calculation, and for that of 1865, next to follow, one-third of the share capital is considered as preference capital, the rate is taken as not raised higher than 5½ per cent. £4,940,414 must therefore be deducted as dividend on preference capital, leaving only £4,451,819 for division upon £179,651,468, or at the rate of just under 2½ per cent. But as several of the companies—many of them large ones—paid dividends of 4, 5, 5½, 6, 6½, and some few as high as 7 per cent., a considerable portion of ordinary share capital received at the rate of 1 and 1½ per cent., and an equally large portion did not receive, as is well known, any dividend at all.

We close our recapitulations with the year 1865, the latest to which the published returns of the Board of Trade extend. On the 31st of December of that year the total capital paid up was £455,478,143; the traffic receipts[53] were £35,890,113; the working expenses, £17,149,073; the amount of the debenture capital, taken, as before, at a third of the whole, was £151,826,044, the interest upon it, at five per cent. was £7,591,302. Deducted from £18,602,582 the amount of the total net receipts, £11,011,280 remains for dividend upon the total share capital, which amounted to £303,652,099, equal to £3. 13s. per hundred pounds.[54] But deducting £5,566,900, dividend upon £101,218,000 as preference share capital, 5½ per cent., there remain only £5,444,380 for dividend upon £192,434,000, or at the rate of £2. 16s. 10d. for each £100 invested. What was stated at the conclusion of the calculations of 1863 applies with at least equal force to 1865, very small dividends for a very considerable portion of railway share capital, and none at all for at least an equal amount.

On the 31st of March, 1866, the National Debt of the United Kingdom was composed as follows: funded, £773,313,219; the estimated capital of terminable annuities £23,351,043; unfunded, £7,956,800; total, £804,842,949,[55] or only £349,364,806 more than the total of railway investments at that period. The “interest and management” of the national debt in the year ending the 31st March, 1866, was £26,233,288; but as the Banks of England, of Ireland, and of Scotland, are the chief managers of the debt, in exchange for privileges accorded to them, the item for management cannot be great—not sufficient to reduce the average rate of interest below £3. 5s. per £100 invested. The case, therefore, stands thus, if viewed as between the creditors of the British nation and the investors (apart from debenture and preference shareholders) in the railway capital of the United Kingdom: the former receive interest guaranteed on the faith, credit, and honour of the most powerful nation—at all events commercially—in the world, eight shillings per cent. per annum more than those who have embarked their money in commercial enterprises that, in our opinion at all events, have been second only to Free Trade[56] in achieving the present commercial grandeur of England.

There is not an article of commerce that the railway cannot move—does not move; there is not an article of commerce that the railway does not move at speed never less than eight and generally ten times as great as it was by canal, until competition stimulated the pace of the latter. To what extent? From the once normal rate of two to that of three miles an hour—no more. But now, the merchant of London, who a few years ago could not have what he required from the manufacturing towns of the north in less than ten days, receives in the morning, goods that were in the warehouses of Manchester, Leeds, Sheffield, or any other of such-like towns in the north of England on the previous afternoon. The important consumers of timber, 150 to 180 miles from London attend sales there, in preference to places nearer home, and purchase largely, with such advantage that the difference of price pays the difference of railway carriage three and four times over. We once saw chests of tea, that on a fluctuation of markets to the extent of a half-penny a pound, passed twice from Liverpool to London and twice back again. They were enabled to be moved about in this way because collection, carriage and delivery cost £1. 10s. a ton, or at the rate of a fourth of a half-penny a pound for 200 miles. Fish circulates through the small as well as the great arterial systems of the kingdom with the regularity and precision of the post, because it is unceasingly carried from the fishing ports inland by the fastest trains and by those that convey the mail bags. The Irish railways alone transported 1,092 tons of salmon last year—301 tons more than in 1865,—and now, with our protected fisheries, this amount will be rapidly added to. Ice, an article of modern commerce, is already beginning to find its way south by means of the railway, and there is not the slightest reason why elevated Northern Scotland should not grow the commodity, just as it has for many years been made to grow in Massachusetts, and more recently in Norway.[57] It is unnecessary to pursue this subject, for we each of us see, know, and feel that the railway is the great and grand distributor of whatever we require for our wants, and of all that energy and enterprise require for the development of national industry.

And, as regards personal locomotion, how grand and sublime are the powers of the railway. We leave Edinburgh to-night. We travel warmly in the cold season; luxuriously at all seasons, and with complete unconsciousness of the fact that as each hour passes, we are nearly forty miles farther from our starting point. The break at London in the morning gives us the margin necessary for ablution and refreshment; that evening we are in Paris, in ample time, and some to spare, for starting by any of the rapid trains that convey passengers and mails east, south, and west. If our destination be the Mediterranean, we are at Marseilles at noon the next day, exactly 41 hours from the time we had left Edinburgh; yet, Edinburgh, by railway, combined with a short sea passage, and Marseilles, are exactly 1,239 miles apart. Our pace, including breaks and stops, has been over thirty miles an hour, whilst getting over the whole distance; excluding the breaks and stops, five and thirty. We can commence the ascent of an Alpine pass, or one across the Pyrenees, precisely at the same time as we should reach the Mediterranean, had our destination been in that direction.

In 1834, when the late Duke of Wellington despatched Mr. Hudson, belonging to one of the Government offices, to Rome, to inform Sir Robert Peel that he had been called upon by King William IV. to form a Ministry on the compulsive retirement of Lord Melbourne and his colleagues,[58] it was thought a marvel that the messenger was able to complete his journey on the twelfth day from that on which he left London. Bound on an analagous mission, a Mr. Hudson of the present day, would be a sluggard indeed, if he occupied even a quarter of twelve days. Without the superscription, such as our ancestors (who could write) put on their letters, “Haste! post haste!”[59] one put quietly into a London post office “receptacle” on a Monday morning, would, as the clock of St. Peter’s[60] was tolling 9·45 on Wednesday evening, be found within the precincts of the Eternal City. The distance? 1,355 miles.

But why need we multiply instances. Let us then pass to say a word or two about what railways have done for the humbler part of our population. Have they not attained facilities for their pursuits as well as for their enjoyments that were not dreamt of thirty,—twenty years ago? How prosperous the working classes now are; their labour is at a premium, and in demand such as it has never before experienced. They have never been remunerated so handsomely, and they have earned their pay with shorter hours, better ventilation, better food and more of it, than they ever had before. Unions and combinations, however deplorable in their course of action, at all events, are signs and manifestations of power;[61] and, now-a-days, we find combinations and strikes extended even to agricultural labourers. Why? Because they know—stupid, heavy, unintelligent, and unenlightened though they may be—that, thanks to the railway, they can get at least as good employment elsewhere as in their own villages and hamlets. The farmer knows—feels—and, farmer-like, grumbles at this, but he also knows, that, thanks to free trade, and thanks to cheap railway conveyance, he is enabled to obtain, in the first instance, the highest possible fertilisation for his land, and, in the second, when his crops are gathered, that he can dispose of them, notwithstanding immense cereal and other eatable imports, in markets far distant, and at prices which not only leave him nothing to complain of, but much to be satisfied with. We no longer hear the old party cries, “Protection to native industry,” and such like. The modern cultivator does not require the protection which the old law gave him. He finds he can protect himself in a far better manner without it.

Material prosperity is spread broad-cast over the land. It is true we have recently had a financial crash, and a financial crisis; but we have had no crush, nor are we going to have one. It is also true that our exports for the first six months of this year are, as a consequence of somewhat diminished trade, less than they were in the corresponding period of 1866. But, how much are they less? Not 7 per cent. of their gross aggregate. They are, however, 3 per cent. better than they were for the like time one year previously; and, note also, that they are in those six months, £2,000,000 more than they were in the whole twelve months of fifteen years ago.