ENGLISH RAILWAYS.

Colonist, Volume IV, Issue 431, 10 December 1861, Page 3

ENGLISH RAILWAYS.

The terrible accidents which have lately occurred have concentrated public attention so much upon railway misdeeds, that railway misfortunes havebeen almost forgotten. The connexion between collisions and low dividends is rather remote, though; thereare many things which inevitably render an unprosperous line more hazardous totravellers than one which is able to pay; remunerative dividends. The public, as well as (he shareholders, are interested in the financial well-beirig of the great lines communication, and would be damaged in more ways than one, by a continuance of the almost universal depression which railway property has suffered during the Jast year,.'* With very few exceptions, the Reports which have followed so close upon one another during the last few weeks have told the same gloomy tale of diminished traffic, increased expenses, and unsatisfactory dividends. The Great Western has •divided only 2-} per cent, and the Eastern Counties only If per cent, -The South Eastern, though still able to pay more than 4 per cent., is obliged to submit to a decline; and the Bristol and Exeter Company is in a similar 1 position. The Great Railway returns only 3| per cent., and the London and North-Western—-so long considered, and with good reason, the safest of all railway investments—asks it shareholders to be content with the same rate of dividend. v

Yo?jr after year, the most sanguine hopes have been indulged that the era of railway prosperity, was about to commence, and that the same steady improvement might be looked for which in the long run in* variably attends -all other well-managed commercial enterprises. That this expectation is entertained as strongly as ever is: proved by the high prices which the better, description, of railway 6tock maintain in; spite o£ the falling-ofF in the dividends of: the year. Purchasers of Consuls have recently been getting from 3J to 3-Vper cent.5 for- their money; and yet the" prices of North-Western and Great Northern stock are such that.there would.be scarcely more< than 4 per cent, in the one case, and less than -3-£. per cent, in the other, to be obtained by a purchase at this moment, on the assumption that the dividends of the present year fairly represented the value of the property. The same disproportion.between the market price of shares' and the current rate of dividend may be observed in many other Companies; and it may therefore be assumed that the causes ot the present depression are,1, in the opinion of

those most interested in the inquiry, .of an essentially temporary kind. What these causes are it is not difficult to say. Every, Chairman of a. Railway Company has offered the same consolation to his disappointed shareholders. Kail way receipts rise and . fall with the prosperty of the country; and the bad harvest of IB6o—much worse, as is now known, than was imagined at the time,—has to bear the blame of nine tenths of the loss which the Railway Companies have suffered. Not only has the agricultural traffic been enormously diminished, but trade has felt as it always does, a sympathetic depression, and this again has reacted upon railway profits. An equally marked effect has been produced on the pleasure traffic; nor can it be matter of surprise that, when the country is driven to expend many millions beyond the average demand for foreign corn, it has less to squander upon unnecessary travelling. Railway traffic, in short, is the most sensitive barometer by which to test material prosperity; and when the sky is overcast, as it has been for the last twelve months, the barometer cannot choose but fall.

If this were the sole, as it probably is the chief cause of the distress of the railway interest, there would be nothing more to say than that the year had been exceptionally bad, and that reasonable hopes might be entertained of better times to come. But besides the immediate influence of the deficient harvest, there are other causes in operation, less important in the extent of their influence, but far more serious from their permanent character.

It is not fair to contrast recent railway experience with the days of ten per cent, dividends. At that time, as the Chairman of the London and North-Western reminded his audience, everybody supposed that engines and permanent ways would never wear out, or at any rate acted upon that hypothesis, by setting aside nothing, oat of their income for the renewals which are now found so heavy a charge. In other words, the ten per cent, dividends were paid, but were never earned, and the subsequent falling-off of apparent profits, when a sounder system of finance was forced upon the Companies, is not to be looked upon as any evidence of a decline in railway prosperity.

The truth is that the trunk lines already in existence are substantially all that the country requires; and local extensions are the most that can be needed to extend the benefits of railway communication to every corner of Great Britain. There is nothing to tempt any one to project new competing lines except the standing inducement which is appreciated by the professional gentlemen who concern themselves in such projects, and it may be anticipated* at any rate until a great improvement in dividends occurs, that the existing lines will continue to represent the railway system of the country. If these Companies cannot work amicably without impoverishing themselves by ruinous contests, it will be their own fault; and from the instant that a term is put to the further progress of competition, the steady and continuous improvement of railway property is as much a matter of certainty as the progressive advance of the national expenditure, the onward march of trade, the increased productiveness of taxation, or even as the permanence of the Income-tax itself. The past growth of railway traffic has surpassed the most sanguine expectations, and dividends have only not kept pace with it from the fact that competition has progressed as fast or faster. Traffic will go on increasing with population and wealth ; and if we could only be sure that competitionhad attained its full development, and would remain comparatively stationary at the point it has reached, the steady increase of railway dividends might be predicted with as much confidence as the recurrence of summer and winter. There are some grounds for believing that, for a time, at any rate, the competitive principle which has been so disastrous to railway shareholders has received an effectual check; and with this conviction we can comprehend the high estimation which railway investments command, notwithstanding the meagre returns which they have lately given.-— 'Saturday Meview.